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Signals™ Headlines - March 4, 2004

Deans Overseas Shipping, Inc. Pays $50,000 in Settlement with FMC

Deans Overseas Shippers, Inc., a New York based household goods mover, has paid the FMC $50,000 in settlement of alleged violations of the Shipping Act. According to FMC Docket No. 03-11 Deans Overseas was suspected of operating since October 2000 as an NVOCC without a license, bond or tariff. Deans Overseas allegedly held out to provide NVOCC services from the United States to destinations in the Caribbean, including advertising its services in newspapers and issuing its own NVOCC house bill of lading to the actual shippers. The company is also believed to have misrepresented itself as an actual cargo owner in order to enter into service contracts with common ocean carriers’ and conceal the fact that it was not an NVOCC. By certifying that Deans Overseas was a cargo owner the company was able to obtain transportation at rates lower than those published in common ocean carriers’ tariffs.

In April 2003, the owner of Deans Overseas, Ms. Sharon Deans, filed an application with the Commission seeking an ocean freight forwarder license on behalf of a recently established company, Deans International Shipping Co., Ltd. In July 2003, the FMC Bureau of Consumer Complaints and Licensing issued a letter of intent to deny this application. Deans subsequently withdrew that application. Now that this settlement has been approved Deans has filed a new application for a license, and this is under consideration by the FMC.

FMC to Investigate Nick International Shipping For Possible Ship Act Violations/B>

Nick International Shipping, Inc., a New York based company, and its primary owner, company President Ms. Olimpia Sandoval a.k.a. Marisela Cordero, are the subjects of an FMC investigation into possible violations of the Shipping Act. According to FMC Docket No. 04-03 Nick International is suspected of operating as an NVOCC without a bond, tariff or license since August of 2000, transporting cargo primarily between the United States and the Dominican Republic.

A public hearing to determine whether Nick International violated the Shipping Act has not yet been scheduled. An initial decision by an FMC Administrative Law Judge is expected by February 8th, 2005. A final decision is to be issued by June 8th, 2005. If violations are found, the Commission may impose civil penalties of as much as $30,000 for each violation knowingly committed, and $6,000 for other violations. A cease and desist order may also be issued.

US House of Representatives Committee to Review FMC Budget for 2005

FMC Chairman Steven Blust will appear before the US House of Representatives Committee on Transportation and Infrastructure to review the FMC budget for 2005 this Thursday, March 4th. The Bush Administration has requested $19.5 million for the operation of the Federal Maritime Commission for fiscal year 2005.  Approximately $18.4 million was appropriated for FMC operations in fiscal year 2004.

In September of 2003 the US Senate approved Senate Bill S.1244 “The Federal Maritime Authorization Act of 2003.” This bill is currently pending in the US House of Representatives. It would authorize FMC budgets of $19.5 million for fiscal year (FY) 2005, $20.75 million for FY 2006, $21.5 million for FY 2007 and $22.575 million for FY 2008. In this proposed legislation Congress also asks the FMC to work more closely with other federal agencies to improve port security, and to assist law enforcement and anti-terrorism efforts.

TSA Carriers File General Rate Increases and Increase Surcharges

The Carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No.: 011223, serving the East Asia/USA trade lane have recently filed or announced they will file General Rate Increases (GRIs) and increased surcharges in their FMC Tariffs. A Peak Season Surcharge (PSS) for this year has also been filed. Details are as follows; all charges are in US dollars and apply per container; increases for less than container load (LCL) cargo vary.

GENERAL RATE INCREASE (GRI), Effective: 01May2004, To US West Coast Ports and US Inland Points: $340/20′, $450/40′ $510/40′ high cube (HC), $570/45’ – To US Atlantic & Gulf Ports: $450/20′, $600/40′, $675/40′ HC, $760/45’

PEAK SEASON SURCHARGE, Effective: 15Jun2004 thru 31Oct2004, $300/20′, $400/40′, $450/40′ HC, $505/45’

BUNKER SURCHARGE, Effective: 01Apr2004, $175/20′, $230/40′, $260/40’HC, $290/45′

PANAMA CANAL TRANSIT FEE was recently increased to $115 per container.

TSA Member Carriers are: American President Lines, Maersk Sealand, CMA-CGM,; COSCO Container Lines Ltd., Evergreen Marine Corp., Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai Merchant Marine, ‘K’ Line, Mitsui O.S.K. Lines, NYK Line; OOCL, P&O Nedlloyd, and Yangming Marine. Many other carriers and NVOCCs serving the East Asia/USA trades have filed similar increases, or will file these soon in their tariffs. FMC regulations require these increases to be filed in ocean carrier or NVOCC tariffs at least 30 days before the effective dates.

Comment Period for Optional NVOCC Bond Rider Extended

The comment period in Docket No. 04-02, Optional Rider for Proof of Additional NVOCC Financial Responsibility, has been extended. This proposed new FMC rule will allow licensed NVOCCs a use single surety bond to satisfy both FMC and Chinese government requirements. The FMC approved requests to extend the comment period on this docket made by The American Surety Association and The Surety Association of America.

The proposed Optional Rider rule was issued in response to
Petition No. 10-03
filed by the National Customs Brokers and Forwarders Association of America,
The rule would allow NVOCCs licensed by the FMC to increase bond amounts from $75,000 to $96,000
in order to satisfy Chinese government requirements of financial responsibility. Comments on this
rulemaking were due by February 27, 2004, and are now under review at the Commission. This proposed
rule will not take effect until at least 45 days after it is approved by the FMC Commissioners.

 FMC Issues Annual Performance Plan for Fiscal Year 2005

The Annual Performance Plan of the Federal Maritime Commission for Fiscal Year 2005 has recently been issued. This annual planning document always provides insights into the Commission’s priorities. The FY 2005 Plan continues efforts to take better advantage of technology to offer time/cost saving e-services to regulated entities and the public at large. Among those goals in the FY 2005 Plan that might have a significant impact are plans to review OTI rules in response to industry concerns. The Commission plans to devote resources to a review of petitions filed by NVOCCs seeking exemption from tariff publication requirements and requesting service contracting authority, and this is expected to take some time – fiscal year 2005 does not begin until October 1, 2004.

The Commission also wants to develop options for modernizing its Rules of Practice & Procedure, which may include electronic filing for docketed proceedings. Another goal is to redesign the Bureau of Consumer Complaint’s section of the FMC website at www.fmc.gov to increase awareness of services and assistance provided by the Bureau. Furthermore, the Commission plans to improve efficiency of its SERVCON confidential service contract filing system.

     Volume 8  Number 03     March, 2004    

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