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Signals™ Headlines - July 3, 2013

FMC Seeks Comments on Proposed Amendments to OTI Regulations: Docket 13-05

The U.S. Federal Maritime Commission (FMC) seeks comments on recently issued proposed amendments to its rules governing the licensing, financial responsibility requirements and duties of Ocean Transportation Intermediaries (OTI). These rules regulate U.S. and foreign based non-vessel-operating common carriers (NVOCC) serving the US trades and ocean freight forwarders in the USA. This proposed rulemaking includes a new two-year renewal requirement for OTI licenses and FMC registrations (for NVOCCs outside of the USA), increased bond requirements and new bond procedures, and new requirements for the use of agents by OTIs. Comments may be submitted to FMC Secretary Karen Gregory at secretary@fmc.gov by July 31, 2013.

In its Advanced Notice of Proposed Rulemaking, the Commission proposes OTI licenses and FMC registrations will be issued for two-year terms. The proposed rule also requires registered NVOCCs to submit updated registration forms to renew for sequential two-year terms. A similar procedure will be required of licensed OTIs who will submit a license renewal application form sixty days prior to the expiration dates of their licenses. This is a significant change from the current OTI regulations which have no requirement to renew the NVOCC registration or OTI license once granted. In other words, current registrations and licenses do not have expiration dates.

A key provision of the proposed rule increases the bond requirements. The ocean freight forwarder bond amount increases from US$ 50,000 to US$ 75,000. The licensed NVOCC bond amount increases from US$ 75,000 to US$ 100,000. Registered NVOCCs outside the USA will be required to increase their bonds from US$ 150,000 to US$ 200,000. New procedures for notifying the Commission of claims against bonds and payments of claims will establish a priority system to provide more protection to shippers. The bonding requirement of US$ 10,000 per branch office in the USA is eliminated by this rule making proposal.

Commissioners stressed the importance of industry input during the sixty-day notice and comment period which will be held before the final rule publication. After the comment period, the FMC will likely issue a revised and final rule and the effective date. At this time, the effective date of these proposed new rules is not set.

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Vern W. Hill Appointed as FMC Managing Director

Chairman Mario Cordero has appointed Vern W. Hill as Managing Director of the Federal Maritime Commission (FMC), effective June 2, 2013. Mr. Hill replaces Ronald Murphy, who has retired. Mr. Hill joined the Commission in 1987 as a Trial Attorney with the Commission’s former Bureau of Hearing Counsel, becoming Deputy Director of that Bureau in 1990. In 1995 he became a member of the Commission’s Senior Executive Service, and the Director of the Bureau of Enforcement. Mr. Hill served for two years as the Director of the Office of Consumer Affairs and Dispute Resolution. Most recently, he served as Director of the Bureau of Certification and Licensing. Before joining the FMC, Mr. Hill practiced law in Washington, D.C. representing transportation entities, shippers and transportation-related associations in commercial, regulatory and labor concerns. A native of Los Angeles, CA, Mr. Hill received both undergraduate and law degrees from Brigham Young University.

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Transpacific Eastbound Carriers File Peak Season Surcharges Effective August 1

Carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223 serving the East Asia/USA trade lanes file Peak Season Surcharges (PSS). Several TSA member carriers have updated their FMC tariffs to provide a PSS effective August 1, 2013 of US$ 400 per FEU to all U.S. destinations. PSS for LCL and non-container shipments varies from carrier to carrier.

General Rate Increase (GRI) of US$ 400 per FEU to the U.S. West Coast and US$ 600 per FEU to all other USA destinations filed by several TSA member carriers became effective July 1, 2013.

The TSA’s New Formula Bunker Adjustment Factor (BAF) for the July to September 2013 quarter, which includes the low-sulfur fuel component, is US$ 527 per 40ft container (FEU) to U.S. West Coast Ports and US$ 980 per FEU to U.S. East and Gulf Coast Ports, with other sizes as per the formula. The new BAF to IPI/MLB destinations moving via the U.S. West Coast is US$ 891 per FEU. This IPI/MLB BAF includes the Inland Fuel Surcharge (IFC) component. The Currency Adjustment Factor (CAF) for the same period is 13% for shipments from Japan.

The TSA’s fifteen carrier members are: American President Lines, CSCL, CMA-CGM, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai Merchant Marine, “K” Line, Maersk Line, Mediterranean Shipping, NYK Line, OOCL, Yang Ming Marine, and Zim Integrated Shipping Services. The group’s web site at www.tsacarriers.org provides additional information.

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TSA Westbound Carriers Reduced BAF, IFC, CAF Effective July to September 2013

Members of the Transpacific Stabilization Agreement Westbound (TSA), FMC Agreement No. 011223, whose member carriers serve the USA/East Asia trade lanes reduced several key surcharges for the July to September 2013 quarter.

TSA Westbound Bunker Adjustment Factor (BAF) for the July-September 2013 quarter, which includes the low-sulfur fuel component, is US$ 1084 per 20ft dry container, US$ 1349 per 40ft/45ft dry container, and US$ 1785 per 40ft/45ft reefer container for shipments from and via U.S. Atlantic/Gulf Coast Ports. BAF for shipments from or via U.S. Pacific Coast Ports is US$ 565 per 20ft dry container, US$ 703 per 40ft/45ft dry container, and US$ 984 per 40ft/45ft reefer container. The Inland Fuel Charges (IFC) for the same period is US$ 364 per container for rail and intermodal rail/truck shipments and US$ 105 per container for local/regional truck shipments. Currency Adjustment Factors (CAF) for the same period is 6% for Taiwan and 21% for Singapore.

The Westbound Transpacific Stabilization Agreement (WTSA), FMC Agreement No. 011325, whose member carriers served the USA to Asia trade lanes, is suspended as of May 1, 2013. TSA members finalized a proposal with the FMC on April 14, 2013 to expand the scope of the agreement to include the entire transpacific round trip, both eastbound from Asia to the USA, and westbound from the USA to Asia. For more information, visit www.tsa-westbound.org.

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