FMC Collects USD 503,000 in Penalties
The Federal Maritime Commission (FMC) announced it has entered into compromise agreements recovering a total of USD 503,000 in civil penalties. The agreements were reached with five non-vessel-operating common carriers (NVOCCs), two unlicensed entities, and one vessel-operating common carrier. The parties settled and agreed to penalties, but did not admit to violations of the Shipping Act or the Commission’s regulations. Details of these compromise agreements as announced by FMC are as follows.
Hayek Services Inc. of Miami, FL, was alleged to have violated the Shipping Act by acting as an ocean freight forwarder without an FMC license. Hayek Services paid USD 20,000 in compromise of these allegations.
ABC Trucking and Logistics LLC of Atlanta, GA, was alleged to have acted as an NVOCC without obtaining the required FMC license and bond and without publishing a tariff. It paid FMC USD 23,000 in compromise.
FCC Logistics Inc. is a licensed and bonded NVOCC located in Rancho Dominguez, CA. FMC staff alleged that FCC Logistics violated the Shipping Act by knowingly and willfully obtaining transportation at less than applicable rates by means of improperly accessing service contracts to which it was not a party, and by misdescribing commodities and misdeclaring the names of shipper accounts under certain service contracts. Under the terms of the compromise, FCC Logistics paid USD 70,000.
Sea Central Shipping Corp is a licensed and bonded NVOCC located in Tampa FL. Commission staff alleged that Sea Central accepted cargo from, and transported cargo for, the account of ocean transportation intermediaries, none of which had a published tariff or surety bond. Sea Central paid USD 85,000.
China Container Line Ltd. is a licensed NVOCC and freight forwarder located in Santa Fe Springs, CA. China Container Line (SHA) Ltd. is a registered NVOCC located in Shanghai, China. FMC alleged these companies violated the Shipping Act by knowingly and willfully obtaining transportation at less than applicable rates by misdescribing commodities and misrepresenting the names of shipper accounts under certain service contracts. Under the terms of the compromise, these two companies jointly paid FMC USD 100,000.
Orient Star Transport International Ltd., an NVOCC based in Taiwan, was alleged to have violated the Shipping Act by knowingly and willfully obtaining transportation at less than applicable rates by misrepresenting the names of shipper accounts under certain service contracts, and to have provided transportation that was not in accordance with its NVOCC tariff. Under the terms of the compromise, Orient Star Transport paid USD 100,000.
Eastern Car Liner Ltd. (ECL) is a vessel-operating common carrier based in Japan. Commission staff alleged that ECL operated pursuant to an unfiled space charter agreement with another carrier, in violation of the Shipping Act. This agreement has since been filed with the Commission. ECL was also alleged to have provided service that was not in accordance with its filed service contracts or published tariff. ECL made a payment of USD 105,000 in compromise of these allegations.
TSA Carriers to Establish Minimum Rate Levels, File Another GRI and New Surcharges
Carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lanes, announced a new pricing objective for upcoming 2015-2016 contract season rates. The objective is to establish minimum contract rate levels in place of scheduled general rate increase (GRIs). These minimum rates reflect rising costs, including costs associated with loading and handling cargo, inland rail and truck transport capacity shortages and congestion issues. Previous GRIs have failed to be fully realized. However, carriers expect to continue to analyze the need for GRIs and will implement as needed.
Most TSA carrier members have quietly filed yet another General Rate Increase (GRI) effective November 15, 2014. For most carriers, the GRI amounts are USD 480/600/675/760 per 20’/40’/40’HC/45’HC, respectively. However, Hapag-Lloyd filed USD 510 per 20′, and Yang Ming and APL filed USD 540 per 20′. Also, for this November GRI, some carriers have made exceptions for cargo moving from India, Pakistan, Bangladesh, or Sri Lanka to the U.S., including OOCL, Evergreen, Maersk, and Hapag Lloyd. These carriers reduced the initial filing of their GRI amounts of USD 600 to USD 200 per FEU, and postponed the effective date from November 15 to effective November 20, 2014. GRI amounts for 20′, 40’HC, and 45′ container sizes vary by carrier.
Some carrier members also filed a new Intermodal Door Delivery Surcharge (IDD), effective November 15, 2014, in view of unexpected increases in the cost of inland transport and door delivery in recent months, including extensive port congestion, truck driver shortages, sharply increased rail volumes with increasing limitations on rail shipments, extreme weather, and increased inland carriage costs. IDD amounts differ by carrier. APL and OOCL have filed USD 90/100/115/125 per 20’/40’/40’HC/45′. NYK Line has filed USD 90/100/100/100 per 20’/40’/40’HC/45′. Evergreen, Hanjin, Hapag Lloyd, and Yang Ming have filed USD 100 per container. MOL has filed USD 90/100/115/125 per 20’/40’/40’HC/45′, effective November 19. Maersk’s USD 100 per container IDD is effective November 25, 2014.
Some carrier members also expect to revise their low sulfur fuel charge (LSF) rates for cargo moving to the U.S. West Coast and East Coast ports, as they switch to low sulfur fuel to address new environmental regulations in emissions control areas (ECAs), effective January 1, 2015. Carriers have the option to switch to low sulfur marine gas oil (MGO), to install sulfur scrubbers, or use liquefied natural gas, to meet environmental regulations, and switching fuel use is the most cost effective means. The ECAs cover the North American coastline as well as the English Channel, and the Baltic Sea.
The TSA’s fifteen carrier members are: American President Lines, China Shipping Container Lines, CMA CGM, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag Lloyd AG, Hyundai Merchant Marine, “K” Line, Maersk Line, Mediterranean Shipping, NYK Line, OOCL, Yang Ming Marine, and Zim Integrated Shipping Services. The group’s web site at www.tsacarriers.org provides additional information; however, each carrier maintains its own tariffs and controls its own pricing. The TSA Carrier group only issues recommended guidelines to its member carriers. Website addresses for all carrier tariffs are listed at www.fmc.gov.
TSA-Westbound Carriers Set Minimum Rate Guidelines and File GRI
Carrier members of the Transpacific Stabilization Agreement Westbound (TSA), FMC Agreement No. 011223, whose member carriers serve the USA/East Asia trade lanes, announced a recommendation to set minimum container ocean freight rates for low-margin, high-value cargo, effective November 1, 2014, particularly for shipments of waste paper, hay, and metal and plastic scrap to China base ports. Some carrier members have filed General Rate Increases (GRI) effective December 1, 2014 for USD 100 per FEU.