Federal
Maritime Commission Chairman Steven R. Blust appeared before the Antitrust Modernization Commission, October 19, 2006 to discuss ocean carriers’ antitrust
immunity under the Shipping Act.  The Antitrust Modernization Commission (AMC) was established in 2002 by
Congress.  It is charged with reviewing all antitrust immunity laws and preparing a report for the President
and Congress of its findings.  The Commission consists of 12 members, with four members appointed each by the
President, the Senate, and the leadership of the House of
Representatives.

Ocean carriers serving the US trades have enjoyed exemption from antitrust laws since the 1916
Shipping Act.  This exemption is most commonly used today by carriers and marine terminal operators to
create agreements or discussion groups for the establishment of uniform surcharges, space-sharing and price-fixing.
 FMC Chairman
Blust appeared before the AMC to provide members with a background history of antitrust immunity in the
shipping industry and current usage of the immunity in today’s US shipping industry.  Blust also
expressed to the AMC the Commission’s opinion regarding the necessity of antitrust immunity.  He stated
that current antitrust immunity in the shipping industry is working as Congress intended, and it helps to bring
about cooperation resulting in higher efficiency and facilitates environmental protection.  Chairman Blust
mentioned the PierPASS program in Southern California as an
example of an agreement of terminal operators that helps solve environmental problems. He stressed that all
agreements dealing with price-fixing are strictly regulated and under constant monitoring by the FMC.

The FMC did not stand as one on the issue of antitrust immunity.  FMC
Commissioner Joseph E. Brennan filed dissenting comments
with the AMC.  Commissioner Brennan commented that antitrust immunity was no longer necessary and price-fixing
agreements were the cause of artificially high shipping rates that are passed on to the American consumer.
 Brennan also stressed that while the Shipping Act’s antitrust immunity was designed by Congress to
protect American consumer and business interests, it is not being enjoyed by U.S. flag ocean carriers, but
“almost exclusively” by foreign-owned ocean carriers.  Brennan did note, however, that antitrust
exemptions should remain for agreements aimed at creating operational efficiencies only.

Many members of the Antitrust Modernization Commission pointed to the recent decision by the European Union on all carrier conference systems as a
sign of changing world industry standards.  After a long study, the EU recently decided to prohibit conference
systems from allowing ocean carriers to set rates collectively.  This change will take effect October 18, 2008.
 Fabrizia Benini
filed comments for the Directorate
General of Competition for the EU, with the AMC in which she outlined the EU’s decision to end ocean
carrier conference systems.  Benini stated this change will result in lower shipping prices for the EU, and is
aimed at bringing the shipping industry in line competitively with other industries.  In response to this, AMC
members commented that the U.S. was falling behind the EU.  Members were also skeptical of the FMC’s
ability to regulate all agreements and root out price-fixing abuse.

Shipping industry leaders, however, expressed varied opinions.  Stanley Sher of the World Shipping Council noted that as carriers are now
allowed to enter into individual service contracts, rather than price-fixing, antitrust immunity allows the industry
to create solutions to environmental and infrastructure problems that are not addressed by the government. 
However, Edward
Greenberg of the National Customs Brokers and Forwarders
Association of America commented that antitrust immunity is an “extraordinary protection” which is
no longer needed.  Comments were also made by Jean Godwin of the American Association of Port Authorities, Prof. Chris
Sagers of Cleveland State University for the American Bar Association and Greg P. Stefflre for
the Intermodal
Motor Carriers Conference.  The AMC expects to issue its recommendations in a report to Congress by April
2007.

The Westbound Transpacific Stabilization Agreement (WTSA), whose member lines serve the US export
trade from the USA to East Asia, announced reductions to Bunker Adjustment Surcharges and Inland Fuel Surcharges for
December 2006.  Details are as follows:  Bunker Adjustment Factors effective December 1 – December
31, 2006: US$ 364 per 20ft container, US$ 455 per 40ft /45ft container and US$ 24 per WM.  Inland Fuel Charges
for December will be US$ 179 per container for rail and intermodal rail/truck shipments, and US$ 52 per container
for local/regional truck shipments.

The 11 member carriers of WTSA are American President Lines, China Shipping Container 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 information
visit www.wtsacarriers.org

The Alameda Corridor Charge will increase effective November 24, 2006.  This charge is applied by most
carriers serving the ports of Los Angeles and Long Beach to recover charges assessed by the Alameda Corridor Transportation Authority (ACTA) on all cargo
moving via rail through these ports.  To apply these charges, ocean carriers and NVOCCs must file these in
their FMC Tariffs.  Details are as follows:

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 there will be significant
reductions to current bunker surcharges through December 15, 2006.  TACA’s current Currency Adjustment
Factor (CAF) of 8 percent will remain unchanged at least until December 15, 2006.  Bunker Adjustment Factor
(BAF) for November 16 – December 15, 2006 are as follows:  to/from Atlantic/Gulf Coast Ports, US$
395/20ft, US$ 790/40ft/45ft and US$ 40/WM; to/from Pacific Coast Ports, US$ 593/20ft, US$ 1186/40ft/45ft and US$
59/WM.

TACA members are Atlantic Container Line, Maersk Line, Mediterranean Shipping Co., NYK Line and
OOCL. Revisions to surcharges are published in TACA’s relevant FMC tariffs, and are shown at its
website: www.tacaconf.com

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223,
serving the East Asia/USA trade lane have amended their FMC tariffs to provide for significant reductions to Bunker
Adjustment Factors and Inland Fuel Surcharges in December. Effective December 1 – December 31, 2006, Bunker
Adjustment Factors will be as follows:  US$ 345 per 20ft container, US$ 455 per 40ft container,  US$ 510
per 40ft hi-cube container, US$ 580 per 45ft container, and US$ 10 per WM.  December Inland Fuel Charges will
be as follows:  US$ 179 per container for mini-land bridge (MLB) and inland point intermodal shipments moving
via rail, and US$ 52 per container for local and regional truck transport to “Group 4” points in
California, Oregon and Washington, and for East Coast local store-door truck moves.

TSA member carriers are American President Lines, 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 and Yang Ming Marine.  Visit http://www.tsacarriers.org/adjustments.html
for additional information.