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Signals™ Headlines - March 5, 2008

Docket 06-08: FMC Denies Petition to Allow Unlicensed OTI Agents in the USA

The Federal Maritime Commission has decided not
to change its regulations for licensing of ocean transportation intermediaries (OTI) to allow the use of unlicensed
agents in the USA.  In Docket 06-08, the Commission gave careful consideration to the Petition For Declarative
submitted by Team Ocean Services, an OTI based in Texas, in August 2006
requesting a declarative order that would authorize the use of unlicensed agents to perform OTI services on behalf
of licensed OTIs in the USA.  In its recent ruling, the Commission denied this Petition, and ruled that its
regulations clearly indicate that any person or separately incorporated entity in the USA acting as an OTI must
obtain a license from the FMC before beginning OTI operations. This applies to ocean freight forwarders, NVOCCs and
their agents in the USA; it does not apply to operations conducted outside the USA.

According to its Petition, Team Ocean Services is licensed as an OTI-Forwarder and OTI-NVOCC, and has 20 bonded
branch offices in the USA staffed with its bona fide employees.  In accordance with FMC regulations,
these branch offices are permitted to share Team Ocean’s OTI licenses, and Team Ocean is required to list the
address of each office on its bonds, and provide an additional $10,000 in bonding for each branch office.
 According to the Petition, Team Ocean sought to alter its business model to employ unrelated and unlicensed
agents to provide OTI services in its name, in lieu of maintaining branch offices staffed with its employees.

In 2003, Team Ocean entered into a settlement agreement with the Commission, and paid a penalty of $100,000 for allegedly
violating the Commission’s regulations; the alleged violations included permitting entities to use its license that
were not its legitimate branch offices or bona fide employees.  In its Petition, Team Ocean relied
heavily on an Opinion written by the FMC’s General Counsel, Ms. Amy Larson, in January 2006 that stated that
if an OTI had a “principal-agency relationship” with an unlicensed agent, such a relationship would not
violate the Shipping Act.  In its Petition for the declaratory order, Team Ocean was seeking a clear decision
by the whole of the Commission.

The Commission denied the Petition for several reasons. It found that the Larson’s Opinion “addressed
only the principles of agency law and did not consider the requirements of the 1984 Act or the statutory obligations
of the Commission,” and ruled that regardless of a bona fide agency relationship, an unqualified agent may not
provide licensed services on behalf of a licensee.  The Commission also concluded that change to agency
practice would undermine homeland security efforts, and “go against the current trend toward more effective
regulation in support of a secure and transparent supply chain.”  Accordingly, Team Ocean’s
Petition was “denied on the grounds that the current licensing and bonding requirements protect the shipping
public from incompetent, inexperienced, and potentially unscrupulous OTI operators; and further the nation’s
security interests.”

Federal Maritime Commission Appoints Peter J. King as Acting General Counsel

The Federal Maritime Commission has appointed Peter J. King as Acting
General Counsel, replacing Amy W. Larson.  Prior to this appointment, Mr. King served as the FMC’s
Director of Administration.  In this capacity, he oversaw the FMC’s Office of Financial Management,
Office of Human Resources, Office of Information Technology, and Office of Management Services.  Mr. King is a
member of the FMC’s Senior Executive Service, which is a requirement for its General Counsel.  Mr. King
first joined the Commission as a Trial Attorney in the Bureau of Enforcement (BOE) in 1987, and later became that
Bureau’s Deputy Director.  He also served as Deputy Director of the Commission’s Bureau of Certification and
Licensing.  Mr. King began his career as an associate attorney with the law firm of Hoppel Mayer &
in Washington D.C., practicing in the areas of transportation, vessel financing and customs law.

TSA Carriers Reduce Bunker Adjustment Factors and Increase Inland Fuel Charges

The carrier members of the Transpacific Stabilization Agreement (TSA), serving the East Asia/USA
trade lane have announced they will reduce Bunker Adjustment Factors (BAF) for the month of April 2008. The TSA
Carriers also announced increases to Inland Fuel Surcharges (IFC) for the month of April.

Effective April 1 to 30, 2008 IFC will be increased to US$ 290 per container for MLB and IPI shipments moving via
rail, and to US$ 84 per container for truck transport to Group 4 points in California, Oregon and Washington, and
for East Coast local store-door truck moves.  BAF for the same period will be reduced to US$ 688 per 20ft
container, US$ 860 per 40ft container, US$ 968 per 40ft hi-cube container, US$ 1089 per 45ft container, and US$ 19
per WM.  The TSA Carriers will also increase Suez Canal Charges and Panama Canal Charges in April and May,
respectively.  The Suez Canal Charge will increase effective April 1, 2008 to US$ 65 per 20ft container and US$
130 per 40ft container.  The Panama Canal Charge will increase effective May 1, 2008 to US$ 260 per 40ft
container, US$ 14 per W or US$ 6 per M.

The 15 members of the TSA are American President Lines, CSCL, CMA-CGM, COSCO Container Lines, Evergreen
Marine, Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai Merchant Marine, “K” Line, Mediterranean
Shipping, Mitsui O.S.K. Lines, NYK Line, OOCL, Yang Ming Marine,
and Zim Integrated Shipping
Visit www.tsacarriers.org for
additional information.

WTSA Carriers to Charge Additional Bunker Surcharges, Reduce BAF, Increase IFC

The Westbound Transpacific Stabilization Agreement (WTSA), FMC Agreement No. 011325, whose member
lines serve the US export trades from the USA to East Asia, have announced the Bunker Adjustment Factors (BAF) for
April will be reduced from current levels.  Inland Fuel Surcharges (IFC) for the month of April 2008 will be
increased.  WTSA will increase Currency Adjustment Factors (CAF) effective April 1, 2008.

BAF for April 2008 will be reduced to US$ 688 per 20ft container, US$ 860 per 40ft/45ft container, and US$ 42 per
WM.  IFC effective April 2008 will be increased to US$ 290 per container for rail and intermodal rail/truck
shipments, and US$ 84 per container for local/regional truck shipments. Currency Adjustment Factors (CAF) effective
April 1, 2008 thru June 30, 2008 are as follows: Japan 0%, Korea 0%, Taiwan 6% (up from 5%) and Singapore 17% (up
from 14%).

The WTSA Carriers have also announced a new effort to recover fuel costs.  Many of the service contracts of
the WTSA Carriers have not been subject to the BAF surcharges published in their tariffs.  Effective April 1,
the WTSA Carriers will begin assessing shipments moving under these contracts an additional bunker surcharge of US$
200 for wastepaper shipments, and US$ 300 per 40ft container for agricultural products, chemicals, clay, forest
products, hay, metal scrap, plastic scrap and freight-all-kinds (FAK) mixed container shipments.  Shipments of
other sizes and cargo not rated on a per-container basis will be charged proportionate fees.

WTSA member carriers are American President Lines, COSCO Container Lines, Evergreen Marine Corp., Hanjin
Shipping, Hapag-Lloyd Container Line, Hyundai Merchant Marine, “K” Line, NYK Line, OOCL
and Yang Ming Marine.   For more info visit www.wtsacarriers.org.

TACA Maintain Current Bunker Surcharges and Currency Adjustment Factor

The Trans-Atlantic Conference Agreement (TACA), whose member carriers serve the trade between the
USA and North Europe, United Kingdom and Ireland, Scandinavia and Baltic Ports, announced current Bunker Adjustment
Factor (BAF) will remain unchanged until at least April 15, 2008.  Details are as follows: BAF to/from/via US
Atlantic/Gulf Coast Ports will be US$ 607 per 20ft ctr, US$ 1214 per 40ft/45ft ctr, US$ 61/WM, and BAF to/from/via
US Pacific Coast Ports will be US$ 911 per 20ft ctr, US$ 1822 per 40ft/45ft ctr, and US$ 91/WM.  Currency
Adjustment Factors (CAF) for the same period will remain at the current 12 percent.

TACA members are Atlantic Container Line, Maersk Line, Mediterranean Shipping Co., NYK Line,
and OOCL.  Visit www.tacaconf.com for more information.

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Vol. 12 No. 3, March 5, 2008

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
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