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Signals™ Headlines - May 2, 2008

House Subcommittee Chairman Blasts FMC Commissioners at Budget Hearing

Federal Maritime Commissioners were severely criticized by members of Congress for poor agency management and low
employee morale at a recent budget hearing.  All four Commissioners were in attendance at the April 15th
hearing in which FMC Commissioner Paul Anderson presented the fiscal year 2009
FMC budget request
in a statement before the U.S. House of
Representatives Subcommittee on Coast Guard and Maritime Transportation
.  The subcommittee is taking a
close look at the FMC because its five year congressional budget authorization will expire at the end of fiscal year
2008.  The subcommittee will be making a report to Congress regarding the agency and its budget authorization.

The FMC’s proposed fiscal year 2009 budget request provides for $23,953,000 – an increase of 7.8
percent over the fiscal year 2008 budget.  This increase will cover salary increases, increased official
travel, and increases in rent and other contracts.  In his remarks before the House subcommittee, Commissioner
Anderson outlined the FMC’s activities over the past year, and spoke about FMC’s role in monitoring
China’s shipping regulations, and the Port of Los Angeles/Long Beach Clean Trucks Program.  Anderson also
stressed the role the FMC plays in improving maritime security, and said the FMC is more closely scrutinizing
licensees and other regulated transportation entities.

Congressman Elijah E. Cummings (D-MD), Chairman of the
subcommittee, opened the hearing by summarizing the results of a 2006 survey of FMC employees and a 2005-2006 study
by an outside management consultant.  He said that “the evidence we have before us presents a picture of
an agency that appears to be broken.”  The 2006 survey found that only 56.3 percent of employees believed
the FMC was a good place to work, and only 40 percent felt agency leaders generated motivation.  Only 27.3
percent of workers felt pay raises were dependant on how well employees performed.  The 2005-2006 study found
that no staff meetings were being held, and that the agency was adverse to change.

Commissioners responded to these allegations by agreeing they needed to do better.  Commissioner
Harold J. Creel, Jr.
admitted “we have got to start working together as a group.”  Commissioner
Joseph E. Brennan
compared the agency to a “four-headed monster,” to make the point that with four
commissioners and no chairman the agency is nearly impossible to run. The commission has been without a chairman
since Steven Blust resigned in November 2006.
 Commissioner Paul Anderson was nominated for the position of FMC Chairman by President Bush in the summer of
2007, but has not been confirmed by the U.S. Senate.  The
House subcommittee firmly requested the FMC Commissioners prepare to meet with the subcommittee again in 60 days to
report on progress and further discuss agency management and directional issues.

FMC Commissioners Hold Meeting 30April2008: Open and Closed Sessions

The Federal Maritime Commission (FMC) discussed a number of
important issues at open and closed sessions of a Commission meeting held April 30, 2008.  In the open session
of the meeting, the agenda focused on FMC meeting processes/procedures, and its 2007 Annual Employee Survey –
which is now available on its website: www.fmc.gov  This
October 2007 survey indicated 52 percent of FMC employees were satisfied with their jobs, and 23% were “very
satisfied.”  The FMC’s Office of Inspector General Semiannual Report for the Oct 2007 thru March 2008 period, and FMC Docket No. 06-05 – Verucci
Motorcycles, LLC v. Senator International Ocean, LLC
were also discussed.

In the closed session of the meeting, Commissioners discussed internal administrative practices and personnel
matters.  Directions were also given to staff regarding requests for information from the House Subcommittee on
Coast Guard and Maritime Transportation. The proposed Los Angeles/Long Beach Port /Terminal Operator Administration
and Implementation Agreement, FMC Agreement No. 201178, was also discussed.  The Commissioners have requested
additional information from the Port of Los Angeles
and the Port of Long Beach concerning this Agreement.  The
timing and substance of this meeting did respond to the criticism the Commissioners received from the U.S. House of
Representatives Subcommittee on Coast Guard and Maritime Transportation
 at the recent budget hearing.
 Another meeting of the FMC Commissioners with open and closed sessions is scheduled for May 7, 2008.

TSA Carriers File GRIs, Peak Season Surcharges and Increase BAF and IFC

The carrier members of the Transpacific Stabilization Agreement (TSA), serving the East Asia/USA
trade lane will increase Bunker Adjustment Factors (BAF) and Inland Fuel Charges (IFC) for the month of June 2008.
 The TSA Carriers also announced Peak Season Surcharges (PSS) of US$ 400 per 40’ container effective June
1 to October 31, 2008.

In a recent press release, the TSA Carriers announced they will not extend any contracts.  In addition to
re-establishing full floating bunker surcharges in all contracts for the 2008-09 season, the TSA Carriers have also
filed general rate increases (GRI) effective May 1, 2008.  The GRI amounts are US$400 per 40ft ctr to US West
Coast ports, and US$ 600 per 40’ft ctr for intermodal and East Coast all-water shipments, with GRIs for other
container sizes as per formula.  “Admittedly, the carriers have sent mixed signals to the market in the
past about whether we were truly serious in addressing revenue and cost issues in our pricing,” said Ronald D.
Widdows, CEO of Singapore-based container line APL Ltd. and Chairman of the TSA Carriers, but he went on to say
“this time – out of necessity – the lines are quite serious.”

BAF effective for the month of June 2008 will increase to US$ 832 per 20ft ctr, US$ 1040 per 40ft ctr, US$ 1170 per
40ft hi-cube ctr, US$ 1317 per 45ft ctr, and US$ 23 per WM.  IFC for June 2008 will increase to US$ 385 per ctr
for MLB and IPI shipments moving via rail, and to US$ 111 per ctr for truck transport to Group 4 points in
California, Oregon and Washington, and for East Coast local store-door truck moves.  The Panama Canal Surcharge
was increased to US$ 260 per ctr and $14 per weight ton or $6 per measure ton for LCL as of May 1, 2008.

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 Increase BAF and Inland Fuel Charges

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 increases to their Bunker Adjustment
Factors (BAF) and Inland Fuel Charges (IFC) for the month of June.  BAF for June 2008 will be increased to US$
832 per 20ft ctr, US$ 1040 per 40ft/45ft ctr, and US$ 50 per WM.  IFC for the same period will be increased to
US$ 385 per ctr for rail and intermodal rail/truck shipments, and US$ 111 per ctr for local/regional truck

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 Increases Panama Canal Charge and CAF, Maintain Current Bunker Surcharges

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 an increase to their
Currency Adjustment Factor (CAF) and Panama Cannel Surcharge.  TACA will raise the Panama Canal Surcharge to
US$ 260 from US$ 212 effective May 8, 2008.  This increase is in response to implementation of a toll increase
by the Panama Canal Authority (PCA) effective
May 1, 2008.  The PCA is raising tolls to fund expansion of the waterway.  CAF for the period of May 16 thru June 15, 2008 will be
increased from 12 to 15 percent.

Bunker Adjustment Factors (BAF) will remain at current levels thru at least June 15: BAF to/from/via US
Atlantic/Gulf Coast Ports – US$ 607 per 20ft ctr, US$ 1214 per 40ft/45ft ctr, US$ 61/WM, and BAF to/from/via US
Pacific Coast Ports – US$ 911 per 20ft ctr, US$ 1822 per 40ft/45ft ctr, and US$ 91/WM.

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. 5, May 2, 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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