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Signals™ Headlines - June 2, 2022

FMC Increases Monitoring of Alliance Carrier Operations


The U.S. Federal Maritime Commission (FMC) announced increased monitoring requirements for alliance carrier operations. The three global ocean carrier alliances (2M Alliance, Ocean Alliance, and The Alliance) and each of their member companies will now be required to provide enhanced pricing and capacity information. This information will help the FMC assess ocean carrier behavior and marketplace competitiveness.

The Commission’s Bureau of Trade Analysis (BTA) will use this information to gain insights into pricing of individual trade lanes by container and service type. The information will also provide more immediate information regarding capacity management decisions of ocean carriers and alliances. The BTA is continuously monitoring the carriers’ compliance with alliance agreements to determine if agreements have an anticompetitive impact on the marketplace.

The FMC announced these new requirements in early May 2022 following a year-long examination by the BTA to determine the data needed to properly analyze carrier behavior and marketplace trends. Under the new requirements, carriers participating in an alliance will need to submit pricing information about cargo they move on the major trade lanes, and both carriers and alliances will be mandated to submit comprehensive information related to capacity management.

The three ocean carrier alliances are already subject to frequent monitoring requirements and regularly provide the FMC with detailed operational data and minutes from meetings among agreement principals. They also participate in regularly scheduled meetings with Commission staff to address issues of concern.

Commissioner Dye Issues Fact Finding 29 Final Recommendations


FMC Commissioner Rebecca Dye released twelve recommendations for supply chain improvement in her Final Report for Fact Finding 29 (FF 29) on the effects of Covid-19 on the international ocean transportation supply chain. This final report is the culmination of a two-year investigation involving hundreds of ocean transportation industry stakeholders. FF 29’s twelve new recommendations include:

  • A new Commission “International Ocean Shipping Supply Chain Program” to study supply chain issues and propose solutions;
  • A rulemaking to provide coherence and clarity on Empty Container Return practices;
  • A rulemaking to provide coherence and clarity on Earliest Return Date practices;
  • Continued Commission support for the new FMC “Ocean Carrier Compliance Program” including a new requirement for ocean common carriers, seaports, and marine terminals to employ an FMC Compliance Officer;
  • An FMC Outreach Initiative to provide more information to the shipping public about FMC competition enforcement, service contracts, forecasting, and shippers associations, among other topics;
  • Enhanced cooperation with the federal agency most experienced in agricultural export promotion, the Department of Agriculture, concerning container availability and other issues;
  • A Commission investigation into practices relating to the numerous charges assessed by ocean common carriers and seaports and marine terminals through tariffs;
  • A rulemaking to provide coherence and clarity on merchant haulage and carrier haulage;
  • A new “National Seaport, Marine Terminal, and Ocean Carrier Advisory Committee” to work cooperatively with the Commission’s National Shipper Advisory Committee;
  • A revival of the Export Rapid Response Team program as agreed by all ocean carrier alliance CEOs;
  • An FMC Supply Chain Innovation Teams engagement to discuss blank sailing coordination and information availability; and
  • A reinvigorated focus on the extreme supply chain equipment dislocations in Memphis railheads, other rail facilities, and other facilities around the country.

This is the second set of recommendations arising out of FF 29. In July 2021, Commissioner Dye presented eight Interim Recommendations mostly dealing with FMC’s dispute processes. The full Final Report and recommendations are available on the Commission’s website.

Federal Maritime Commission Meeting – May 18, 2022


The Federal Maritime Commission (FMC) met on May 18, 2022 in open session to discuss Fact Finding 29, intermodal chassis and container manufacturing, the Vessel-Operating Common Carrier (VOCC) Audit Program, and the recent Notice of Proposed Rulemaking on Carrier Automated Tariffs. The Commission also met in closed session to further discuss the VOCC Audit Program.

Commissioner Rebecca Dye presented her Final Report of Fact Finding 29 (FF 29) and recommendations. The FMC initiated FF 29 in March 2020 to study the impacts of Covid-19 on the ocean freight transportation sector. Commissioner Dye identified two major concerns of importers and exporters: the high cost of shipping cargo, and excessive demurrage and detention charges. She also presented her final recommendations for ocean transportation improvements that the FMC can take action on. The Commission is expected to review and vote on the recommendations at their next meeting.

Commissioner Carl Bentzel briefed the Commission on his Assessment of the People’s Republic of China’s Control of Container and Intermodal Chassis Manufacturing. Commissioner Bentzel reported that production of containers and chassis is dominated by three China-based manufacturers who collectively control almost 90 percent of the world’s supply of both intermodal containers and chassis. Commissioner Bentzel expressed concern about this heavy reliance on a single source for this vital equipment. 

The Commission also received a brief update from the Vessel-Operating Common Carrier Audit Program. The Audit Team continues to review reporting on detention and demurrage from the top nine ocean carriers. The team reported that in 2021 the top nine ocean carriers combined collected around US $4 billion of US $5.3 billion in detention and demurrage charges issued. The ocean carriers combined only waived or refunded US $646.7 million in detention and demurrage charges in 2021. The team expressed concern at the lack of waivers and refunds issued and plans to review this issue with the ocean carriers.  

The Audit Team also reported on their export findings. The team found that some non-pandemic related developments, such as the loss of key markets for wastepaper and scrap materials, have impeded the ability of U.S. companies to export. The team will continue to seek ways to address U.S. shippers exporting needs.

Commission staff also presented a summary of the recently issued Notice of Proposed Rulemaking (NPRM) on Carrier Automated Tariffs (Docket No. 21-03). The NPRM requested comments from the shipping public on whether ocean carriers should post their tariffs free of charge on their websites, if the definition of co-loading should apply only to less than container loads, and if documentation accompanying full container load (FCL) shipments should be annotated with the names of all non-vessel operating common carriers (NVOCCs) with the cargo carried in a container. The NPRM also proposed changes to Commission regulations to allow NVOCCs to cross-reference certain aspects of other carriers’ terms in their tariffs and to clarify the ability of NVOCCs to reflect increases in certain charges passed through by other entities without notice. So far no comments have been filed with the Commission, although Commissioner Dye and Chairman Daniel  Maffei both reported that they have heard concerns from industry participants on the updated definition of co-loading and the requirement for NVOCCs to list all NVOCCs involved in an FCL shipment on shipping documents.  

The next Commission meeting has not yet been announced.

Transpacific Eastbound Carriers Adjust Fuel Surcharges Effective July 1, 2022

Several carriers serving the East Asia/USA trade lanes (U.S. Imports) have adjusted fuel surcharges effective July 1 through September 30, 2022. Details are as follows. Here is a table of BAF amounts posted by carriers:

TRANSPACIFIC EASTBOUND (Asia to USA)
BUNKER ADJUSTMENT FACTOR (BAF), Jul – Sep 2022, in USD, per 40ft ctr, except as noted below
Carrier
To US Atlantic/Gulf Coast Ports
To US Pacific Coast Ports
To IPI/MLB via US Pacific Coast
Dry
Reefer
Dry
Reefer
Dry
Reefer
CMA CGM
(see notes 1, 7)

1358

1630

894

1073

894

1073

COSCO
(see note 2)

1806

3048 952 1607 952 1607
Evergreen
(see note 7)
1723 2489 747 1188 747 1188
HMM
(see notes 3, 8)
1796 987 1567
ONE
(see notes 4, 7)
884 1402 556 782 1084 1310
OOCL
(see notes 5, 8)
1710 2886 955 1612 1480 2498
Yang Ming
(see note 7)
1296 1866 708 1020 708 1020
ZIM
(see notes 6, 7, 8)
1456 2184 853 1279 853 1279

NOTE 1:  CMA CGM calls the above surcharge the Bunker Adjustment Factor Surcharge (BAF03), Tariff Rule No. 010.08. Low Sulphur Surcharge IMO2020 (LSS20) is not applicable at this time.

NOTE 2:  COSCO calls the above surcharge the Bunker Charge (BUC), Tariff Rule No. 010-003.

NOTE 3:  HMM calls the above surcharge the Bunker Charge, Tariff Rule No. 2-63. HMM also filed in its FMC Tariff Rule No. 2-95, Environmental Compliance Charge (ECC), effective July 1, 2022.  The ECC amounts are USD 581/645/726/817 per 20/40/40HC/45ft, respectively, for destination USWC/USWC Local/IPI/MLB; and USD 1009/1121/1261/1419 per 20/40/40HC/45ft, respectively, for destination USEC (all water)/USGC/RIPI.

NOTE 4:  ONE calls the above surcharge the ONE Bunker Surcharge (OBS). Any reference to Bunker Adjustment Factor (BAF) or Fuel Adjustment Factor (FAF) within a duly filed service contract shall be construed as referencing the same surcharge as ONE Bunker Surcharge (OBS) as detailed within tariff Rule No. 102.001, whether as an exception or as a reference to this charge.

NOTE 5:  OOCL calls the above surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge are already applied or included in the base rate.  The Fuel Cost Recovery Charge is effective June 1, 2022, until further notice.

NOTE 6:  ZIM calls the above surcharge the New Bunker Factor – Far East (NBF), Rule No. 010-NB. Service contract cargoes subject to Carrier’s published BAF and/or EBS shall not be subject to NBF.

NOTE 7:  Subject to Low Sulphur Fuel Charge (LSF or LSS).

NOTE 8:  Updated on a monthly basis.

Each carrier maintains its own tariffs and controls its own pricing.

Transpacific Eastbound Carriers File GRIs Effective June 15, 2022, and July 1, 2022

Several leading carriers serving the Transpacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective June 15, 2022, including COSCO, Evergreen, HMM Company Limited, Ocean Network Express (ONE), Yang Ming, and ZIM. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The June 15th GRIs will be the twelfth GRI of 2022 for the East Asia/USA trade lane.

TRANSPACIFIC EASTBOUND (Asia to USA)
GENERAL RATE INCREASE (GRI)
Effective  June 15, 2022
Carrier
in USD, per 40ft ctr
COSCO (see note 1) 1000
Evergreen (see note 2) 1000 / 2000
HMM (see note 3) 1000 / 2000
ONE 1000
Yang Ming (see note 4) 1000 / 2000
ZIM 1000

NOTE 1:  COSCO GRIs apply on all cargo moving under service contracts only. The GRIs previously effective 01Jun2022 were postponed to effective 15Jun2022.

NOTE 2:  Evergreen GRIs will be USD 1000 per 40ft dry container for dry cargo, and USD 2000 per reefer container. GRI amounts for all other container sizes are as per formula.

NOTE 3:  HMM GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI. GRI amounts for all other container sizes are as per formula.

NOTE 4:  Yang Ming GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI. GRI amounts for all other container sizes are as per formula.

Some carriers also updated their tariffs to include new General Rate Increases (GRIs) effective July 1, 2022, including COSCO, Evergreen, HMM Company Limited, Ocean Network Express (ONE), Yang Ming, and ZIM. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The July 1st GRIs will be the thirteenth GRI of 2022 for the East Asia/USA trade lane.

TRANSPACIFIC EASTBOUND (Asia to USA)
GENERAL RATE INCREASE (GRI)
Effective July 1, 2022
Carrier
in USD, per 40ft ctr
COSCO (see note 1) 1000
Evergreen (see note 2) 1000 / 2000
HMM (see note 3) 1000 / 2000
ONE 1000
Yang Ming (see note 4) 1000 / 2000
ZIM 1000

NOTE 1:  COSCO GRIs apply on all cargo moving under service contracts only. The GRIs previously effective 15Jan2022 were postponed to 15Feb2022, then to 15Mar2022, and subsequently postponed to effective 15Apr2022, then to effective 01May2022, then to effective 15May2022, then to effective 01Jun2022, and now to effective 01Jul2022.

NOTE 2:  Evergreen GRIs will be USD 1000 per 40ft dry container for dry cargo, and USD 2000 per reefer container. GRI amounts for all other container sizes are as per formula.

NOTE 3:  HMM GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI.  GRI amounts for all other container sizes are as per formula.

NOTE 4:  Yang Ming GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI.  GRI amounts for all other container sizes are as per formula.

Transpacific Westbound Carriers Update Fuel Surcharges Effective July 1, 2022

Several carriers serving the USA/East Asia trade lanes (U.S. Exports) have adjusted their fuel surcharges for the July to September 2022 quarter. Here is a table of carriers that have posted BAF amounts:

TRANSPACIFIC WESTBOUND (USA to Asia)
BUNKER ADJUSTMENT FACTOR (BAF), Jul – Sep 2022, in USD, per 40ft ctr, except as noted below
Carrier
Dry Cargo
Reefer Cargo
From US Atlantic/Gulf Coast Ports
From US Pacific Coast Ports
From US Atlantic/Gulf Coast Ports
From US Pacific Coast Ports
CMA CGM
(see notes 1, 8)

144

194

72

122
COSCO
(see note 2)
283 425

155

233
HMM
(see note 3)
290 421

2462

1410
Evergreen
(see note 8)
409 205

1089

579
ONE
(see notes 4, 8)
424 942 282 508
OOCL
(see notes 5, 9)
192 156 288 234
Yang Ming
(see notes 6, 8)
600 360 1866 1020
ZIM
(see notes 7, 9)
146 85 218 128

NOTE 1:  CMA CGM calls the above surcharge the Bunker Adjustment Factor Surcharge (BAF-03), Tariff Rule No. 010.4.  Low Sulphur Surcharge IMO2020 (LSS20) is not applicable at this time.

NOTE 2:  COSCO calls the above surcharge the Bunker Surcharge (BUC), Tariff Rule No. 010-001.

NOTE 3:  HMM calls the above surcharge the Bunker Surcharge (BUC) Rule No. 10-02A. It has been in effect in the FMC tariff since April 1, 2022. HMM also filed in its FMC Tariff Rule No. 10-02F, Environmental Compliance Charge (ECC), effective since April 1, 2022. The ECC since April 1, 2022 amounts are USD 63/125/125/125 per 20/40/40HC/45ft, respectively, for dry cargo moving via West Coast; and USD 50/101/101/101 per 20/40/40HC/45ft, respectively, for dry cargo moving via East Coast, Gulf.

NOTE 4:  ONE calls the above surcharge the ONE Bunker Surcharge (OBS). Any reference to Bunker Adjustment Factor (BAF) or Fuel Adjustment Factor (FAF) within a duly filed service contract shall be construed as referencing the same surcharge as ONE Bunker Surcharge (OBS) as detailed within Tariff Rule No. 102.001, whether as an exception or as a reference to this charge.

NOTE 5:  OOCL calls the surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge are already applied or included in the base rate. The Fuel Cost Recovery Charge is effective June 1, 2022, until further notice.

NOTE 6:  Yang Ming calls the above surcharge the New Bunker Charge, Tariff Rule No. 10-AH.

NOTE 7:  ZIM calls the above surcharge the New Bunker Factor – Far East (NBF), Tariff Rule No. 010-NB.

NOTE 8:  Subject to Low Sulphur Fuel Charge (LSF or LSS).

NOTE 9:  Updated on a monthly basis.

Each carrier maintains its own tariffs and controls its own pricing.

The information contained herein is obtained from reliable sources. It is subject to change at any time, however, depending on changes in laws and regulations. While we continually attempt to monitor this information, we do not guarantee its accuracy and are not responsible for any damages suffered by any party in reliance on it.

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