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Signals™ Headlines - July 3, 2003

Controlled Carrier List Updated by FMC: Six Government Controlled Carriers Listed

The Federal Maritime Commission has updated its listing of ocean common carriers operating in the USA-foreign trade that are owned or controlled by foreign governments. These controlled carriers are subject to special regulatory oversight by the Commission under Section 9 of the Shipping Act. These regulations ensure that controlled carriers do not engage in unreasonable below-market pricing practices which could disrupt trade or harm privately-owned shipping companies.

The updated listing includes one new carrier, Sino Trans Container Lines Co., Ltd. d/b/a Sinolines, whose assets or operations are controlled, directly or indirectly, by the government of the People’s Republic of China. Several carriers were removed from the listing. China National Foreign Trade Transportation (Group) Corp. d/b/a Sinotrans was removed because it no longer does business in the US trades. Four carriers were removed from the list because they no longer operate vessels or conduct business in the US trades: Black Sea Shipping Company (Ukraine), Polish Ocean Lines and POL-America, Inc. (Poland), International Transport Enterprise Co. (GETDD) Ltd. (China) and Shanghai Hai Hua Shipping Co., Ltd. (China). Three other carriers were removed because they no longer operate vessels in the US trades, but they do appear to continue to operate as NVOCCs; these are: Tientsin Marine Shipping Company (China), Pakistan National Shipping Corporation, and Egyptian Navigation Company d/b/a Egyptian National Line.

The updated listing of controlled carriers as of June 3, 2003 is as follows:

Ceylon Shipping Corporation (FMC No. 016589) Sri Lanka

COSCO Container Lines Company, Limited (FMC No. 015614) China

China Shipping Container Lines Co., Ltd. (FMC No. 016435) China

Compagnie Nationale Algerienne de Navigation (FMC No. 000787) Algeria

Sinotrans Container Lines Co., Ltd. d/b/a Sinolines (FMC No. 017703) China

Shipping Corporation of India Ltd., The (FMC No. 001141) India


Indamex Conference Investigated by FMC: Agreement Amendment Stalled

A proposal by the Indamex Agreement to delete all conference-related provisions from the agreement has been stalled by the FMC. This conference of three ocean carriers serving trade between the USA and Indian sub-continent, South East Asia and other ports is now required to provide further information to the FMC. The Indamex Agreement is designated as FMC Conference Agreement No. 202-011692; members are: CMA-CGM, S.A., Containership Containerlines (a division of CP Ships UK Limited), and The Shipping Company of India Ltd.

The Indamex carriers amended their agreement earlier this year to delete vessel-sharing and space chartering authority from the agreement; however, Indamex remains party to an agreement with American President Lines for sharing vessel space. The agreement and its members were directed by the FMC on May 30, 2003 to respond to Section 15 Orders along with the Transpacific Stablization Agreement (TSA) for alleged violations of the Shipping Act. The addition of the three Indamex Agreement members brings the total number of carriers involved in this investigation to eighteen.

FMC Revokes OTI License of Cargo Carriers Ltd.: Docket No. 01-12

The Federal Maritime Commission has issued an order revoking the license it granted to Cargo Carriers Ltd. (CCL) to operate in the USA as an Ocean Transportation Intermediary (FMC-OTI No. 13507NF). CCL was alleged to have made false and misleading statements in its application for the license. These led the FMC to find its proposed Qualifying Individual lacks the necessary character required by law for the license. In a decision approved by all of the current Commissioners in Docket No. 01-12 on June 11, 2003 the Commission also ordered CCL and its sister company, Commonwealth Shipping Ltd., cancel their ocean freight tariffs. Commonwealth Shipping was registered with the FMC as a vessel operating carrier, however, the FMC has found no evidence that is operates any vessels serving the US foreign trades. Both CCL and Commonwealth, as well as its Directors, Martyn Merritt and Mary Anne Merritt, have been directed to cease and desist from committing any further violations of the Shipping Act. Mr. Merritt has an extensive history with the Commission dating back to 1987 due to his involvement with the Ariel Maritime Group. In 1995 the Commission ordered Mr. Merritt and corporate respondents cease and desist from committing violations of the Shipping Act, and assessed civil penalties totaling $335,000. In 1993 Mr. Merritt pled guilty in U.S. District Court to conspiracy to commit fraud that involved the submission of false bills of lading and was sentenced to five years in prison.

WTSA Carriers Launch Web Site: Tariff Surcharges & Increases Posted

The Westbound Transpacific Stabilization Agreement (WTSA) has launched a new web site at www.wtsacarriers.org that provides useful information about surcharges assessed by its member carriers. WTSA is a discussion group of 13 major ocean container shipping lines operating in the trade lane from the USA to Asia. This web site includes accurate data for both current and future effective surcharges, additionals and terminal charges, including bunker surcharges and currency adjustment factors. A summary of rate adjustments (increases) organized by commodity item is also provided. This summarizes data filed in the individual FMC tariffs of each of the WTSA member carriers.

New West Coast Marine Terminal Agreement Approved by FMC: Agreement No. 201143

A new discussion agreement of 11 leading terminal operators has been approved by the Federal Maritime Commission. The West Coast MTO Discussion Agreement allows the parties to discuss and agree on rates, charges, rules, regulations, procedures, practices, terms and other conditions of service pertaining to the transport handling, receipt or delivery of cargo. An objection to the agreement was filed with the FMC by the International Brotherhood of Teamsters, but this did not prompt FMC to delay or deny the agreement.

New California state regulations are one key reason why the terminal operators decided to form this agreement. Effective July 1, 2003 a state air quality agency began issuing notices of violation to marine terminal operators that allow trucks to idle their engines for more than 30 minutes while waiting to pick up or deliver containers. Terminal operators will be assessed fines ranging from $250 to $750 for violations. These regulations and fines are required by Assembly Bill 2650, which was designed to reduce air pollution caused by excessive truck idling. California Assemblyman Alan Lowenthal, D-Long Beach, was the author of the bill, which was signed into law by Governor Davis in 2002. The new regulations do include exemptions for terminals that implement computerized appointment systems for container pick and drop.

The new West Coast MTO Discussion Agreement will allow members be able to meet, discuss and agree on plans to address the new California regulations. Members of the agreement are: California United Terminals, Inc., Husky Terminals, Inc., International Transportation Service, Inc., Long Beach Container Terminal, Inc., Marine Terminals Corp., Metropolitan Stevedore Company, Pasha Stevedoring & Terminals, L.P., SSA Marine, Trans Bay Container Terminal, Inc., Trans Pacific Container Service Corporation, and Yusen Terminals, Inc.

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