In response to increased administrative costs due to the new Automated Manifest System (AMS) filing requirements of the US Customs Service many ocean carriers and NVOCCs have imposed new surcharges on all shipments to US destinations. Many carriers have imposed an AMS Surcharge or Cargo Declaration Data Charge of US$25 per bill of lading or entry, and US$40 per amendment, but there are a wide variety of exceptions. The amendment charge applies in the event the Carrier is required to correct a previously submitted AMS filing due to an error or omission by the Shipper.

To comply with FMC regulations these surcharges must be filed in the carriers’ tariffs for 30 days before they are effective. For this reason, and due to market conditions, some carriers have not yet imposed the AMS surcharge. The FMC or US Customs do not set the amount of this surcharge, each carrier may determine the amount of the AMS surcharge, if any, but it must be properly filed in the tariff. Exceptions may be made in tariffs or service contracts by filing a notation to specify “Not Subject to AMS Surcharge” or “Rate includes AMS Surcharge.”

According to the terms of most of the AMS Surcharge rules when a carrier is required by US Customs to submit multiple AMS entries for consolidated shipments tendered by an NVOCC the AMS Surcharge applies for each of the NVOCC’s “house bills of lading.” NVOCCs who have made arrangements for direct AMS filing with the US Customs Service avoid the $25 charge per house b/l, but are still assessed the $25 charge for each master bill of lading submitted to the ocean carrier. This point has been challenged by some NVOCCs, who suggest that in due their AMS filing certifications ocean carriers should not assess the AMS surcharge on any of their shipments.

Along with or in addition to the AMS Surcharge, many carriers have also filed new tariff rules that limit their liability for any charges accrued as a result of failure by shippers to provide complete information required US Customs. Here is an example: If assessed a Civil Penalty or denied permission to unload cargo, then any and all Shippers, Consignees, Cargo Owners that failed to provide the information required by this Rule and/or by the regulations of the U.S. Customs Service in a complete and accurate manner shall be jointly and severally liable to indemnify and reimburse the Carrier for any such penalty and any all costs incurred by the Carrier as a result of the denial of permission to unload cargo. Carrier may have a lien on cargo in its possession for amounts due and may hold cargo until such amounts (and any other unpaid freight charges) are paid or sell such cargo after a reasonable period.

Federal Maritime Commission Chairman Steven Blust has announced the Commission is initiating a series of informational seminars to be conducted by its Area Representatives and other personnel at various locations around the country. The seminars will provide information to the industry and the shipping public with respect to the FMC’s functions and services, as well as instruction regarding the regulatory obligations of providers and users of ocean liner shipping services it regulates. The first seminar was held in Miami, FL and the second will be in New Orleans, LA on March 19, 2003. Other locations scheduled for upcoming months include Seattle, WA, Los Angeles, CA and New York, NY. There will be no charge for the seminars, but registration is required. Dates, times and locations of the seminars will be posted on the FMC website, www.fmc.gov, as available. For the New Orleans seminar, contact Alvin Kellogg on tel: 504-589-6662 or E-mail: alvink@fmc.gov.

The Federal Maritime Commission has recently terminated the licenses of Ocean Transportation Intermediaries (OTIs). Most of these licenses were terminated due to failure by these OTIs to maintain valid surety bonds, some were surrendered voluntarily by OTIs who are no longer active. FMC license numbers ending with the letter “F” are issued to OTI-Freight Forwarders; license numbers ending with “N” are for OTI-NVOCCs. Reissued licenses are also summarized on the next page.

The FMC has recently reissued the licenses of several Ocean Transportation Intermediaries (OTIs). These licenses were terminated due to failure to maintain valid surety bonds, however, in each case, the surety rescinded its cancellation of the bond, or the OTI obtained a new bond. There has been an increase in this type of activity recently, and more licenses will be reissued shortly. FMC license numbers ending with the letter “F” are issued to OTI-Freight Forwarders; license numbers ending with “N” are for OTI-NVOCCs.

Green Master Int’l Freight Services, Ltd., a Taiwan based NVOCC with offices in Taipei and Kaoshiung, has been ordered by the FMC to pay a civil penalty of $1,530,000 due to violations of the Shipping Acts. The Initial Decision in Docket No. 01-10 was issued in July 2003 by FMC’s Administrative Law Judge. Attorneys representing Green Master responded to this decision, and challenged many of its findings. Green Master also filed a motion to re-open the proceeding to submit new evidence. These actions proved unsuccessful. In a report and order affirming the initial decision, the FMC Commissioners held Green Master knowingly and willfully violated the Shipping Acts by accessing service contracts it was not party to, and ordered it to pay the civil penalty of $1,530,000.

The violations in this case involved an organized scheme during 1997 and 1998 in which Green Master assumed the identity of another NVOCC, Hudson Shipping (HK) Ltd., in order to enjoy the service contract rates that Senator Line and Hyundai Merchant had provided to Hudson. Green Master paid Hudson $20 for each container it was able to ship under these service contracts. Green Master denied it had accessed service contracts it was not party to, and claimed it acted as the “authorized agent” of Hudson Shipping. The FMC did not agree, and found the evidence provided by its Bureau of Enforcement proved Green Master violated the Shipping Acts on 48 occasions. 20 additional violations were committed by Green Master in failing to file the rates charged to its customers in its FMC tariff. The decision affirmed on February 28, 2003 by the Commission applies a penalty of $22,500 for each of the 68 violations.

In a related development, the Commission amended the order of investigation in Docket No. 02-06 – its investigation into possible violations of the Shipping Act by Hudson Shipping (Hong Kong) Ltd. This investigation was initiated in April 2002 due to allegations that Hudson violated the Shipping Act by misuse of service contracts with several ocean carriers. A decision in this matter has not yet been issued by the Commission, however, the amendment adds to the potential civil penalties Hudson could be subject to. While Hudson’s surety bond was cancelled effective September 4, 2002, and its tariff has also been cancelled, the Bureau of Enforcement has recently submitted new evidence in the form of bills of lading which appear to indicate that at least three ocean common carriers have transported cargo for Hudson since the cancellation of its bond. If proven, these would be violations of section 19(b)(1) of the Shipping Act of 1984, which prohibits NVOCCs serving the foreign commerce of the USA from operating with a valid bond, proof of insurance, or other surety to insure its financial responsibility.

The Federal Maritime Commission has ruled that the Canaveral Port Authority (CPA) has violated the Shipping Act by unreasonably refusing to deal or negotiate with an applicant for a tug franchise at the port. The decision in Docket No. 02-02 could result in significant civil penalties. The FMC Bureau of Enforcement maintains that the Canaveral Port has been in violation of the Shipping Act for 600 to 800 days. Under the Shipping Act “each day of a continuing violation constitutes a separate offense.” The parties in this proceeding have been directed to submit briefs concerning the appropriate amount of civil penalties.

Docket 02-02 was instituted as a result of information developed by former Commissioner Antony Merck in his Fact Finding Investigation into Exclusive Tug Arrangements in Florida Ports conducted in 2001. The decision issued February 24, 2003 finds Canaveral Port Authority in violation of Section 10(b)(10) of the Shipping Act due to its refusal to consider a the application by another Tugz International to serve the port. This application was submitted on June 13, 2000 and updated on September 18, 2001. Seabulk International is the exclusive provider of tug services at the port.