Home / Signals™ / Signals™ Headlines – June 4, 2014

Signals™ Headlines - June 4, 2014

CKYHE Alliance Carriers Seek FMC Approval for Discussion Agreement

The Federal Maritime Commission (FMC) has received a request from five leading container carriers for authorization to form the CKYHE Discussion Agreement, FMC Agreement No. 012280. Parties to this agreement are Cosco Container Lines Company Limited (COSCON), Kawasaki Kisen Kaisha, Ltd. (K Line), Yangming (UK) Ltd. (YMUK), Hanjin Shipping Company, Ltd. (HJS), and Evergreen Line Joint Service Agreement (ELJSA). These five carriers have been cooperating in various foreign-foreign trades with considerable success. The purpose of this FMC Agreement is to authorize them to discuss and determine whether and how the synergies and efficiencies that have characterized their foreign-foreign cooperation might be replicated in the U.S. foreign trades.

The geographic scope of this Agreement is all trades between the United States and foreign countries; it is not limited to a specific trade lane. The Agreement authorizes the carriers to discuss and agree upon any and all forms of operational and administrative cooperation in the Trade permissible under the Shipping Act of 1984, but not competitive cooperation about the rates and charges for their customers. This Agreement does not provide specifics as to the vessels or slots on vessels that the carriers might potentially share. However, it should be noted the CKYH Carriers have had an FMC approved agreement in place for worldwide vessel sharing and slot allocation since 2002, FMC Agreement No. 011794, and the CKYH Carriers and Evergreen Line have an FMC approved agreement in place for their Trans-Atlantic Express Service, FMC Agreement No. 012076, since 2009.

CKYHE Discussion Agreement is unlike the P3 Network Vessel Sharing Agreement or the G6 Alliance Agreement in that it does not seek authorization to operate any Network Centre (NC) or Service Centers (GSC) to manage the services operated under the agreement. Unless the FMC requests further details or takes action to delay its implementation, the CKYHE Discussion Agreement, FMC Agreement No. 012280, will become effective on July 6, 2014. According to information compiled from PIERS, the data division of JOC Group Inc, the CKYHE Discussion Agreement members carried 20.7% of U.S. containerized export trade and 26.8% of U.S. containerized import trade in 2013; these are totals for all U.S. trade lanes.

Back to top

FMC Issues Industry Advisory on Port Congestion Surcharges

In recent months, many vessel operating common carriers and NVOCCs have updated their FMC tariff rules to provide surcharges of USD 1000 per FEU to be imposed in the event of port congestion due to labor disruption, lockouts, or strikes. The contract between the International Longshore and Warehouse Union (ILWU) and vessel operators represented by the Pacific Maritime Association expires June 30, 2014 and negotiations for a new contract are underway. The Federal Maritime Commission (FMC) has issued an industry advisory reminding all parties that any tariff rule (including surcharges) that results in an increased cost to a shipper may not be effective earlier than 30 days after publication. Furthermore, tariff rules applicable to any given shipment are those in effect on the date the cargo is received by the carrier the origin port or inland point. These regulations apply to both U.S. imports and exports.

Back to top

Transpacific Eastbound Carriers Adjust Surcharges for July thru September Quarter

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, 2014 thru September 30, 2014. The currency adjustment factor will remain the same. The inland fuel charges will increase to USD 369 per forty-foot equivalent unit (FEU). The Currency Adjustment Factor (CAF) on shipments from Japan remains 10% thru September 30, 2014. Bunker Adjustment Factors (BAF) effective July 1, 2014 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 990 per 40ft ctr ( ↑ )
USD 516 per 40ft ctr ( ↓ )
USD 885 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.

The TSA’s fifteen carrier members 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.

Back to top

TSA Westbound Carriers Update Surcharges, Effective July thru September

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 2014 quarter. CAF on shipments to Taiwan will remain 7%, and to Singapore 22%, thru September 30, 2014.

TSA Westbound Bunker Adjustment Factors (BAF) for the Jul-Sep 2014 quarter, which include the low-sulfur fuel component, are USD 1098 per 20ft dry container, USD 1363 per 40ft/45ft dry container, and USD 1799 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 will be USD 554 per 20ft dry container, USD 689 per 40ft/45ft dry container, and USD 961 per 4-ft/45ft reefer container. The Inland Fuel Charges (IFC) for the Jul-Sep 2014 quarter will increase to USD 369 per container for rail and intermodal rail/truck shipments and USD 107 per container for local/regional truck shipments. For more information, visit www.tsa-westbound.org.

Back to top

China Customs Advance Manifest (CCAM) Regulation Effective June 28, 2014

Several leading carriers have updated the FMC tariff rules in anticipation official notice from China Customs of new regulations regarding the new China Customs Advance Manifest (CCAM) system starting June 28, 2014. These regulations require carriers to submit vessel manifests for China bound cargo 24 hours before loading at ports outside China. Some carriers, including NYK Line, have amended their tariffs to provide an Advance Manifest Submission (AMS) Fee of USD 30 per master bill of lading (BL).

Back to top

to top

Celebrating 45 Years of Navigating the Regulatory Seas

Need help with U.S. Federal Maritime Commission compliance?

Get in touch