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Signals™ Headlines - June 3, 2015

FMC Compliance Programs in Focus

The Federal Maritime Commission’s Bureau of Enforcement (BOE) actively fosters industry compliance with the Shipping Act and other statutes and regulations within the Commission’s authority. BOE promotes voluntary compliance through outreach and education to the shipping public and regulated industry, and works closely with the Commission’s Area Representatives and the Bureau of Certification and Licensing to help OTIs understand their responsibilities and how to comply with the Shipping Act and the Commission’s regulations.

BOE’s Ocean Transportation Intermediary Compliance Program regularly reviews both licensed OTIs and NVOCCs based outside the USA who are registered with the Commission. This program focuses on bonding levels, tariffs, and current operating status of NVOCCs and ocean freight forwarders to determine whether additional actions are needed to comply with Commission requirements. These audits also may include review of entities holding themselves out as vessel-operating common carriers (VOCCs) where Commission staff can find no indication of current vessel operations. BOE then works with the OTI, its tariff publisher, and bonding company, as necessary, to assist the OTI in bringing its operations into compliance. Many OTI reviews are completed quickly with no problems identified.

A typical compliance audit starts with a letter of introduction that explains BOE’s authority and purpose for conducting the audit. Included with BOE’s letter is a multi-page questionnaire that requests specific information. Many of the questions are similar to those provided in the OTI license application; several questions also focus on recent shipping activity and related tariff updates. In some audits bills of lading, freight invoices, and related data for specific shipments may be required. A list of OTI regulatory obligations also is provided at the commencement of each compliance audit. The completed questionnaire and any supporting documents must be returned within 30 days. Prompt and complete responses are required. Failure to respond can prompt FMC to conduct an on-site review and audit. In the worst case, an OTI review can prompt a formal investigation that identifies possible violations of the Shipping Act.

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Docket No. 15-03, FMC Orders Investigation of Barbour Auto Sales

A formal order of investigation has been issued by the FMC to determine if John T. Barbour, an individual trading and doing business as Barbour Auto Group, Barbour Auto Sales, Barbour Shipping, and Barbour Shipping and Transportation Inc has violated the Shipping Act by operating as an unlicensed ocean transportation intermediary (OTI). Barbour is based in Fall River, Massachusetts. FMC Docket No. 15-03, issued May 27, 2015, alleges Barbour signed service contracts with Liberty Global Logistics LLC and Maersk Line, and in these contracts Barbour certified it was the owner of the cargo. Between July 2013 and December 3, 2014, Barbour shipped 1,108 or more vehicles from points in the U.S. to points in the Middle East under these service contracts. It is alleged in Docket 15-03 that Barbour was not the owner of the cargo, but handled these shipments as an NVOCC without the required OTI license, bond, and tariff. The Commission’s investigation will determine if these allegations can be proven. In the event violations of the Shipping Act are found, the proceeding will determine whether civil penalties should be assessed against Barbour, and in what amount; and whether appropriate cease and desist orders should be entered.

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Transpacific Eastbound Carriers Adjust Surcharges for 3rd Quarter and Implement GRIs

Several carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223 serving the East Asia/USA trade lanes, have adjusted bunker surcharges (BAF) effective July 1, 2015. The inland fuel charges will decrease to USD 222 per forty-foot equivalent unit (FEU). The Currency Adjustment Factor (CAF) on shipments from Japan will remain at 0%. BAF effective July 1 are as follows:

To US Atlantic/Gulf Coast Ports * (increased)
To US Pacific Coast Ports * (decreased)
To IPI/MLB via US Pacific Coast */** (decreased)
USD 684 per 40ft ctr ( ↑ )
USD 365 per 40ft ctr ( ↓ )
USD 587 per 40ft ctr ( ↓ )

BAF amounts shown with the asterisk (*) include the low-sulfur fuel component. For IPI/MLB destinations, the BAF includes both low-sulfur fuel component and the Inland Fuel Surcharge (IFC) component (**). BAF for other container sizes is as per formula. These BAF amounts are effective thru September 30, 2015.

Several TSA carrier members implemented General Rate Increases (GRIs) effective June 1, 2015 of USD 600 per FEU, including American President Lines (APL), CMA CGM, COSCO, Hanjin, Hapag Lloyd, and Yang Ming. Carrier member Evergreen reduced its GRI to USD 250 per FEU for origins other than India, Sri Lanka, Pakistan, Bangladesh, to U.S. West Coast, Group 4, and IPI destinations, and to USD 50 per FEU for all other destinations; Hanjin cancelled its GRI for rates applicable from Japan and the Indian Sub-continent; Hyundai postponed its GRI to June 14, 2015 for origin Sub-continent and June 30, 2015 for origin Japan; OOCL cancelled this GRI. Many of the TSA member carriers have also filed GRIs effective July 1, 2015 of USD 600 per FEU; GRI amount for all other container sizes are as per formula.

The TSA’s fifteen member carriers are American President Lines, China Shipping Container Lines, CMA CGM, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag-Lloyd AG, 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; however, each carrier maintains its own tariffs and controls its own pricing. The TSA Carrier group only issues recommended guidelines to its member carriers. Website addresses for all carriers are listed on www.fmc.gov.

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TSA Westbound Carriers Update Surcharges, Effective July thru September 2015

Several members of the Transpacific Stabilization Agreement Westbound (TSA), FMC Agreement No. 011223, whose member carriers serve the USA/East Asia trade lanes, have adjusted their bunker surcharges (BAF) for the July to September 2015 quarter. CAF on shipments to Taiwan will decrease from 7% to 6% and to Singapore from 22% to 18%, thru September 30, 2015. TSA Westbound Bunker Adjustment Factors (BAF) for the Jul-Sep 2015 quarter, which include the low-sulfur fuel component, are USD 700 per 20′ dry container, USD 874 per 40’/45′ dry container, and USD 1125 per 40’/45′ reefer container for shipments from and via U.S. Atlantic/Gulf Coast Ports. BAF for shipments from or via U.S. Pacific Coast Ports will be USD 374 per 20′ dry container, USD 467 per 40’/45′ dry container, and USD 614 per 40’/45′ reefer container. The Inland Fuel Charges (IFC) for the Jul-Sep 2015 quarter will decrease to USD 222 per container for rail and intermodal rail/truck shipments and USD 64 per container for local/regional truck shipments. For more information, visit www.tsa-westbound.org.

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