The Federal Maritime Commission (FMC) announced it has completed compromise agreements with six non-vessel operating common carriers (NVOCCs) recovering a total of USD 465,000 in civil penalties. These NVOCCs agreed to terminate the practices, which were the basis of the alleged violations, and to pay FMC penalties as noted below, but did not admit to violations of the Shipping Act or Commission regulations. Details are as follows. Links to the compromise agreements are provided.

Separate compromise agreements with Golden Padlock, LLC of San Gabriel, CA and Young-Ko Trans Co., Ltd. of Carson, CA, alleged that in 2015 these NVOCCs knowingly and willfully engaged in an arrangement in which Young-Ko misrepresented to the carrier party of its service contract that Golden Padlock was an affiliate thereby allowing an unrelated, non-contract party to enjoy the benefits of the contract to which it was not entitled and obtain transportation at less than the rates and charges that would otherwise apply. Young-Ko paid FMC USD 75,000 in compromise. Golden Padlock paid FMC USD 50,000 in compromise.

A joint compromise agreement with DSV Air & Sea Inc. of Clark, NJ and DSV Ocean Transport A/S of Denmark was entered following their voluntary disclosure describing their service in the liner trade over a five-year period of time that was not in accordance with their published NVOCC tariffs. In addition, the compromise agreement included alleged misrepresentations of affiliates in various service contracts, and operation by DSV Air & Sea Inc. without an FMC approved Qualifying Individual for a period in excess of one year. These two companies jointly paid FMC USD 175,000 in compromise.

NZS Worldwide, Inc. was alleged to have knowingly and willfully accepted cargo from one or more ocean transportation intermediaries that did not have a published tariff, bond, or other surety as required by the Shipping Act. It was also alleged that this San Francisco, CA based NVOCC provided transportation that was not in accordance with the rates and charges set forth in its published tariff, or in any lawful non-tariff alternative. NZS Worldwide paid FMC USD 50,000 in compromise.

The compromise agreement with Translink Shipping, Inc. alleged this Seattle, WA based NVOCC knowingly and willfully obtained transportation at less than applicable rates and charges by improperly utilizing rates contained in service contracts limited to certain named shipper accounts for unrelated shipments of cargo. The compromise agreement also alleged that Translink Shipping, Inc. failure to publish active rates and charges in its tariff or any lawful non-tariff alternative occurred between December 2015 and February 2017. Translink Shipping paid FMC USD 115,000 in compromise.

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The Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, has cancelled its FMC agreement, closed its office and deleted its websites http://www.tsacarriers.org/ and www.tsa-westbound.org This agreement of ocean carriers was initially effective March 5, 1989 and operated until February 8, 2018, when it was cancelled at the request of its member carriers.

The TSA carrier group was a rate discussion agreement of FMC regulated ocean carriers serving the Transpacific trade. For much of its nearly thirty-year tenure the TSA Carrier Group had tremendous influence over ocean freight pricing in the trade, including general rate increases, peak season surcharges, and fuel surcharges. The group’s administrative office maintained an extensive database of fuel costs reported by its member carriers, which it used to calculate and recommend bunker fuel surcharge levels. The group’s websites provided quarterly updates to bunker surcharges reliably and transparently since 2004. In recent years the group’s membership and influence over ocean freight pricing declined, but its website continued to be a reliable source of bunker fuel surcharge levels.

There were thirteen initial members of the Transpacific Stabilization Agreement (TSA) in March 1989: APL, Evergreen, Hanjin, Hyundai, “K” Line, Maersk, Mitsui OSK Lines, Neptune Orient Lines, Nippon Liner System, NYK, OOCL, Sea-Land Service, and Yang Ming Line. After the implementation of the Ocean Shipping Reform Act in 1999, and the demise of the major conferences of ocean carriers serving the U.S. trades, the TSA Carrier group’s membership grew to include nearly all the leading ocean carriers in the trade. By February 2002, its members also included CMA-CGM, COSCO Container Line, Hapag-Lloyd, and Mediterranean Shipping Company (MSC).

In recent years, several members quit the group, including its founding members, NYK Line and “K” Line. In December 2017, Maersk Line tendered its resignation; the decision to scuttle the group quickly followed Maersk’s exit. Brian Conrad, who served as the group’s Executive Administrator, said “TSA has for many years served a valuable function to the carriers and other industry stakeholders.” However, he noted the commercial and operational environment in the transpacific trade has changed significantly the past few years, and it became apparent that the TSA’s original mission was no longer viable.

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Acting FMC Chairman Michael A. Khouri has appointed Rachel Dickon the Commission’s Secretary and Brian Troiano as Director, Bureau of Enforcement. These designations became effective February 18, 2018.

Ms. Dickon began her career with the Federal Maritime Commission in 1998 serving in the FMC Office of the Secretary and subsequently in the Office of General Counsel, the Office of the Chairman, and the Office of Operations as Deputy Director. She earned a Bachelor of Arts degree from the University of Texas at Austin and a Juris Doctorate degree from the George Washington University School of Law. Mr. Troiano joined the FMC in 2008 and has served in the FMC Bureau of Enforcement. Prior to his government service, Mr. Troiano was in private law practice where he represented motor carriers before the Interstate Commerce Commission and Surface Transportation Board. He earned a Bachelor of Arts degree from Ohio University and a Juris Doctorate degree from the University of Tennessee College of Law.

“I am pleased to be able to make these personnel announcements today. Both Ms. Dickon and Mr. Troiano are excellent government executives and dedicated public servants. They are well acquainted with the roles and responsibilities of the important jobs they are assuming. The Commission and the American public will benefit from their long experience in these assignments,” said Acting Chairman Khouri.

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Several carriers serving the East Asia/USA trade lanes (U.S. Imports) have adjusted fuel surcharges effective April 1 through June 30, 2018. Details are as follows.

Note 1: Hapag Lloyd has changed its Bunker and Low Sulphur Fuel Charge (LSF) cycle from quarterly to monthly for all applicable trades, including the East Asia/USA trade lanes (U.S. Imports). The above Bunker will apply for 01Apr2018 thru 30Apr2018.

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Several carriers updated their respective tariffs to include new General Rate Increases (GRIs) effective March 15, 2018, including APL, COSCO, Evergreen, Hapag Lloyd, Hyundai Merchant, K Line, and Yang Ming. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The March 15th GRIs will be the fifth GRI of 2018 for the East Asia/USA trade lane.

Instead of filing an increase in its FMC tariff, Maersk announced a contract increase for effective March 15, 2018 for the Far East Asia/USA trade lane. The contract increase will affect those with service contract (SC) rates that expire March 14, 2018, who want new SC rates valid March 15, 2018 and beyond. The contract increase will be USD 480/600/600/750 per 20ft/40ft/40HC/45HC dry container, respectively. Once SC rates expire on March 14, 2018, tariff rates will apply until a SC written agreement is finalized to reflect the contract increase. Filing of original SCs with FMC is required on or before the effective date; the deadline for filing SC amendments with FMC is within 30 days of scheduled effective date.

Note 1: COSCO GRIs apply on all cargo moving under service contracts only.

Several carriers updated their respective tariffs to include new General Rate Increases (GRIs) effective April 1, 2018, including APL, CMA CGM, COSCO, Evergreen, Hapag Lloyd, Hyundai Merchant, K Line, and Yang Ming. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The April 1st GRIs will be the sixth GRI of 2018 for the East Asia/USA trade lane.

Note 1: COSCO GRIs apply on all cargo moving under service contracts only.

Instead of filing an increase in its tariff, Maersk announced a contract increase for effective April 1, 2018 for the Far East Asia/USA trade lane. The contract increase will affect those with service contract (SC) rates that expire March 31, 2018, who want new SC rates valid April 1, 2018 and beyond. The contract increase will be USD 480/600/600/750 per 20ft/40ft/40HC/45HC dry container, respectively.

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

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Several carriers serving the USA/East Asia trade lanes (U.S. Exports) have adjusted their fuel surcharges for the April to June 2018 quarter. Here is a table of carriers that have posted BAF amounts:

NOTE 1: Yang Ming calls the above Bunker surcharge the New Bunker Charge (NBC). Yang Ming also filed an Emergency Bunker Surcharge (EBS) in its FMC tariff. Rates, which are subject to the above NBC, are exempt from the EBS.

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Effective April 1, 2018, the container liner operations of ‘K’ Line, MOL, and NYK will be integrated into the newly formed Ocean Network Express Pte. Ltd. This ocean carrier’s website and e-commerce applications are already in operation, and provide access to its USA trade tariffs and to the essential terms of its service contracts in the form and manner required by the FMC.

Ocean Network Express Pte. Ltd. is a member of the “THE Alliance Agreement,” FMC Agreement No. 012439, a vessel-operating common carrier agreement which authorizes the member carriers to charter and exchange space on one another’s vessels and to rationalize, coordinate and cooperate with respect to the their transportation services and operations in the US trades. Hapag Lloyd and Yang Ming Marine are also members of THE Alliance Agreement. This carrier agreement was recently amended to include Ocean Network Express Pte. Ltd. as member carrier replacing ‘K’ Line, MOL, and NYK, effective April 1, 2018, and to add Guatemala and India to the scope of this agreement.

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