Home / Signals™ / Signals™ Headlines – November 6, 2001

Signals™ Headlines - November 6, 2001

Supreme Court to Review FMC v. South Carolina State Ports Authority

The US Supreme Court will review a case involving Federal Maritime Commission’s jurisdiction over the activities of state owned ports. The Court has agreed to review the decision of the U.S. Court of Appeals for the Fourth Circuit in South Carolina State Ports Authority v. Federal Maritime Commission and United States of America, 243 F.2d 165. That Fourth Circuit decision overturned the FMC’s ruling in South Carolina Maritime Services, Inc. v. South Carolina State Ports Authority in which the FMC found that the Eleventh Amendment and principles of state sovereign immunity from suit do not bar privately-initiated administrative adjudications against state-run marine terminal operators. The South Carolina State Ports Authority (SCSPA) successfully appealed that ruling to the Fourth Circuit Court.

FMC Chairman Hal Creel was pleased by the Supreme Court’s determination to review the Fourth Circuit’s decision. “The Commission has believed throughout this proceeding that the agency’s authority to hear administrative complaints against ports, whether they are state-run marine terminals or privately-run marine terminals, is crucial to effective and evenhanded regulation under the Shipping Act of 1984. I am glad that the Supreme Court has agreed that the issue is important.” The case is entitled Federal Maritime Commission v. South Carolina State Ports Authority, Supreme Court Docket No. 01-46.

This case began with the filing of a complaint by South Carolina Maritime Services, Inc. (Maritime Services) in October 1999 (FMC Docket 99-21). Maritime Services asserted that the South Caroline States Ports Authority (SCSPA) refused to give berthing space at Charleston, South Carolina, to its vessel, the M/V TROPIC SEA, which permits gambling activities on board when the vessel is in international waters. The denial of berthing space was due to SCSPA’s purported policy of refusing to berth ships whose primary purpose is gambling. Maritime Services averred that SCSPA did provide berthing to another cruise operator, Carnival Cruise Lines, who allegedly provided gambling services. Because of this apparently disparate treatment, Maritime Services claimed that SCSPA violated the Shipping Act of 1984 by unreasonably refusing to deal, and by unduly and unreasonably preferring Carnival, and unduly and unreasonably prejudicing or disadvantaging Maritime Services. This proceeding is still pending before the FMC, pending the outcome of the Supreme Court’s decision.

FMC Investigation of Florida Ports Continues: Focus Shifts to Tugs at Port Canaveral

The FMC’s investigation into exclusive arrangements for tug services at Florida ports are now focused on Port Canaveral. This investigation, which began in June 2001, has already helped create new competition for tug services at Port Everglades. On October 31 and November 1, 2001, FMC Commissioner Antony Merck held private hearings at Port Canaveral. Like Port Everglades, Port Canaveral has been served by a served by a single tug company for more than forty years, Hvide Marine, and its subsidiary Seabulk International, Inc. In its Order of Investigation, the FMC noted the Canaveral Port denied the application of Petchem, Inc., a competing tug operator, to begin serving commercial vessels at the Port. Petchem serves US military vessels at the port. In this investigation Commissioner Merck has been assigned to develop a record on possible harm caused by the tug monopolies, and the factors which may be offered as justification for the port’s actions in preventing competition for tug services. The Canaveral Port District Board of Commissioners is a marine terminal operator (MTO), and as such is subject to the Shipping Acts of 1984 and 1998 and FMC regulations.

NVOCC Ordered to Pay $1,340,000 for Shipping Act Violations: FMC Docket 99-18

The Federal Maritime Commission (FMC) has ordered Stallion Cargo, Inc., a Miami, FL based non-vessel-operating common carrier (NVOCC) to pay a civil penalty of $1,340,000 and to cease and desist from operating in the United States as an ocean transportation intermediary. This decision overturns an earlier FMC Order that imposed a penalty of only $50,000 and allowed Stallion Cargo to keep its license. According to Docket 99-18, Stallion Cargo was found to have willfully and knowingly obtained transportation at less than the rates and charges otherwise applicable through the means of misdescription of the commodities actually shipped. Additionally, Stallion did not comply with FMC tariff publication regulations; it invoiced rates and charges that were not on file in its NVOCC tariff. A total of 167 violations were committed during a three-year period.

In its Order of Investigation on Docket 99-18 the FMC described several shipments made by Stallion Cargo with King Ocean Service de Venezuela, S.A. (King Ocean) and SeaFreight Line, Ltd. (SeaFreight). Stallion was a regular shipper in the trade from Port Everglades, Florida to the port of Oranjestad, Aruba, Netherlands Antilles.

On these shipments Stallion declared only one type of commodity to King Ocean and SeaFreight, who subsequently rated the commodities in accordance with the inaccurate description. Stallion’s house bills of lading, however, describe the specific commodities being shipped, and indicate that Stallion was fully cognizant that the shipments actually consisted of commodities different from those listed on King Ocean’s and SeaFreight’s bills of lading. Stallion also failed to charge the rates on file in its NVOCC tariff. At one point during the FMC’s investigation the only commodity rate published in Stallion’s tariff was for Cargo, N.O.S. Comparing the filed Cargo, N.O.S. rate applicable under Stallion’s tariff with the ocean freight assessed by Stallion, the FMC found Stallion did not assess the rate filed in its tariff, and undercharged its shippers on eighty (80) shipments.

In the Initial Decision in this case, issued on March 15, 2001, FMC’s Administrative Law Judge (ALJ) Norman D. Kline found Stallion committed violations knowingly and willfully, and continued a number of them for a time even after warning by the FMC. However, in view of mitigating factors presented by attorneys representing Stallion, Judge Kline did not suspend Stallion’s OTI license and NVOCC tariff. These factors included Stallion’s small size, its weak financial situation, its corrections to its tariff, albeit belated, lack of evidence of continuing violations, and its expressed willingness to reform.

In their recent decision in this case, the FMC overturned Judge Kline’s more generous rulings. The Commission emphasized that willful and knowing violations of the Shipping Acts will result in severe penalties. See Stallion Cargo, Inc., Docket No. 99-18 for full details.

Docket 01-06, Mississippi Tugs, New Procedural Schedule: Decision Due July 1, 2002

The Federal Maritime Commission (FMC) has set new deadlines in its investigation into exclusive tug franchises on the Lower Mississippi (Docket 01-06). Earlier this year the FMC served twelve (12) Marine Terminal Operators with Show Cause Orders that ask each of these companies why they should not be found in violation of the Shipping Acts due to the exclusive tug assist service arrangements required at their marine terminals. The initial deadline for responses by the terminal operators was July 18, 2001; however, the Commission has received many petitions and requests that have delayed the proceedings. The terminal operators are not acting in concert, and each is anxious to review the information submitted to the FMC by the other terminals and by carriers and agents who were compelled by the FMC to provide information on these matters.

The proceeding has now been assigned in its entirety for expedited hearing before an FMC Administrative Law Judge,
who will dispose of outstanding motions currently before the Commission as necessary. A new procedural schedule has
been set for petitions and rulings on these. The discovery portion of the proceeding will recommence on November 5,
2001, and an initial decision is due by July 1, 2002. The full text of the FMC’s recent Order in this matter may be
viewed on the Commission’s home page at www.fmc.gov The Commission’s
Active Docket Logs provide a summary of actions taken
by the FMC and requests and petitions received.

FMC Terminates Licenses of 97 OTI-Freight Forwarders and NVOCCs

FMC #

Legal Name and Trade Name (if any)

State

Date Revoked

777NF

A.W. FENTON COMPANY, INC.

OH

4JUN2001

4014F

AIR CARGO CENTRALAM, INC.

FL

11AUG2001

14685N

AIR-SEA TRANSPORT (SEATTLE) LTD.

WA

25MAY2001

13733N

ALL-CONNECTIONS EXPRESS (U.S.A.) INC.

FL

4JULY2001

1980F

ALMAR INTERNATIONAL FORWARDERS, INC.

FL

25 APR2001

13140N

AMERICAN CARIBBEAN EXPRESS SHIPPING CO., INC. D/B/A A.C.E. SHIPPING

NY

14JUN2001

2543

ANKA INTERNATIONAL FREIGHT FORWARDING CORP.

FL

16AUG2001

14738N

ATLAS CONTAINER, INC.

CA

29APR2001

15759N

BEN L. POBLETE D/B/A APC WORLD FREIGHT SERVICES

CA

18APR2001

10520N

BRITISH MOTORS OF CALIFORNIA D/B/A A.F.L. INTERNATIONAL

CA

15APR2001

16125N

BULK CONNECTION, INC.

CT

22JUN2001

14520N

BULKMATIC TRANSPORT COMPANY

IN

26MAR2001

14687N

BWT WHSE & DIST., INC

IL

29MAR2001

17101N

CARGOCARE LOGISTICS, LTD. * SURRENDERED LICENSE VOLUNTARILY

NJ

27JUL2001

16629N

CARGOMANIA INTERNATIONAL, INC

NY

15MAR2001

4359F

CHADWICK, VERNON PAUL. * SURRENDERED LICENSE VOLUNTARILY

NC

18OCT2000

65F

CHASE, LEAVITT (CUSTOMHOUSE BROKERS), INC.

ME

23MAR2001

3994NF

COREXPORT CORPORATION D/B/A CORE MARINE CARRIERS

NC

18FEB2001

4207F

CORTINA & ROTH, INC. * SURRENDERED LICENSE VOLUNTARILY

FL

4APR2001

4556NF

CROSS TRANS SERVICE USA, INC.

IL

24MAY2001

4561NF

CROSSBAR, INC.

MO

16JUN2001

14998N

D.S.C.V. TRANSPORT, INC.

VA

27MAY2001

14995N

DANIEL HYUNG KEUN CHO D/B/A TRANSTECH WORLDWIDE LINE

CA

21JUN2001

13944N

DIRECTIONAL TRANSPORTATION SERVICES, INC. D/B/A DTS, INC.

TX

31MAY2001

1732F

DON HANCOCK, CO., INC.

TX

27APR2001

16191N

EDCO EXPORT & OCEAN FREIGHT CORPORATION

FL

31AUG2001

11621N & 11621F

FEDERATED TRANSPORT SYSTEMS, INC.

CA

25APR2001 &amp 6MAY2001

6248N

FLAGSHIP CONTAINER & DISTRIBUTION, INC. * SURRENDERED LICENSE VOLUNTARILY

CA

31MAY2001

14642N

FREIGHT IFS, INC.

IL

4JUL2001

16441NF

FREIGHTEX, INC. D/B/A FREIGHTEX MARINE

TX

13JUL2001

17056NF

FROM2.COM, INC.

FL

25JUL2001

7078N

GATEWAY EXPRESS CO., INC.

CA

12MAY2001

15980N

GATEWAY, INC.

FL

4JULY2001

4329F

GENE MOLLARD D/B/A GFAST

TX

3MAY2001

4048F

GENERAL CONSTRUCTION & INTDUSTRIAL EQUIPTMENT, INC. D/B/A GENCIE

FL

8NOV2001

3731F

GLOBAL FREIGHT INC.

NY

12JUL2001

15701N

GLOBAL SHIIPPING & TRAVEL SERVICE, INC.

NY

14JAN2001

15877N

GLORY HARBOR INTERNATIONAL INC. * SURRENDERED LICENSE VOLUNTARILY

CA

17APR2001

3826F

GRAEBEL/HOUSTON MOVERS, INC.

TX

23JUN2001

11356N

HANMI EXPRESS CORPORATION D/B/A HANMI EXPRESS

CA

27AUG2001

16880F

HANOVER NAVIGATION LIMITED

CA

9MAY2001

2878F

HIROYUKI WADA D/B/A AMEX TRANSWORLD COMPANY

CA

10MAY2001

4055N

INTERNATIONAL CARGO SERVICES, INC.

CA

28JUN2001

3453N

INTERNATIONAL CARGO SERVICES, INC. D/B/A BELUGA CARRIERS

MD

30MAY2001

16049F

INTERNATIONAL CARGO TRANSPORTERS, INC.

FL

21JUN2001

4390F

INTERNATIONAL FINANCIAL RESOURCES, INC.

GA

4MAY2001

16324N

INTERNATIONAL OCEANCARGO INC.

NJ

22JUN2001

6082N

INTERNATIONAL TRANSPORT, INCORPORATED

CA

11JUL2001

1678F

INTERNATIONAL TRANSPORTATION SERVICES, INC. D/B/A ITRANS.

WA

2APR2001

14011F

INVERFREIGHT, INC.

FL

23MAR2001

14011N

INVERFREIGHT, INC.

FL

14JUN2001

3483F

ITOCHU EXPRESS (AMERICA) INC.

NY

4MAY2001

3903N

JARGRO CALIFORNIA, INC.

CA

30MAR2001

3790F

JORGE H. VASQUES D/B/A PACIFIC KING

CA

25APR2001

16061F

JO-YU A. WU D/B/A OPUS ONE USA * SURRENDERED LICENSE VOLUNTARILY

CA

18JUN2001

4204F

KOTA SHIPPING CORP.

FL

5APR2001

3413N & 3413F

LIFT FORWARDERS, INC.

OR

1JUN2001 &amp 25JUL2001

1868F

MARCELO V. CASTRO D/B/A UNIVERSAL FORWARDERS

CA

5JUL2001

12701N

MARITRANS INC. * SURRENDERED LICENSE VOLUNTARILY

NY

11APR2001

11179N

MERCATOR SHIPPING, LTD. D/B/A FLAMINGO LINE

FL

8JUL2001

11082NF

NASCO MARITIME INC.

CA

7JUN2001

14140N

NETWORK INTERNATIONAL, INC.

NY

13JUL2001

17270N

NEUTRAL LINE (U.S.A) INC.

FL

8JUL2001

13141N

NORTH STAR AIRLINES, INC. D/B/A NORTH STAR OCEAN SERVICES

NY

17MAR2001

3305F

NOVA ENTERPRISES LTD.

IL

16AUG2001

4105F

OVERSEAS MAHANM INC.

NY

14JUL2001

8438N

PACON EXPRESS, INC.

CA

24MAY2001

4196NF

PAN ATLANTIC CARRIERS SERVICES, INC.

FL

20JUN2001

1110F

PHIL THOMAS & SON INTERNATIONAL CO.

IL

19MAY2001

2634

PLI, INC. D/B/A PROCUREMENT LOGISTICS INTERNATIONAL

TX

28FEB2001

3691F

PRINCESS FORWARDING, INC.

KY

11AUG2001

17146N

RELOTRANS INTERNATIONAL, INC.

MA

27JUL2001

4368F

RENCOR, INC.

FL

16AUG2001

4147F

RMG INTERNATIONAL, INC.

TX

4MAY2001

1335F

ROYAL SALES & SHIPPING * SURRENDERED LICENSE VOLUNTARILY

CA

7MAY2001

16403N

RTW CO FOR SHIPPING & TRAD D/B/A J&M SHIPPING

CA

17MAY2001

10853N

SENKO LOGISTICS COMPANY, INC. D/B/A SENKO CONTAINER LINE D/B/A SENKO LOGISTICS (USA), INC.

WA

20APR2001

13647N

SHIPPING MOVING & STORAGE, INC.

NJ

14JUN2001

2247F

SINA INTERNATIONAL FORWARDERS, INC.

CA

7JUN2001

12256N

SINGLE SOURCE TRANSPORTATION, INC.

MI

23JUL2001

3896N

SINO AM CARGO, INC.

CA

4APR2001

14953N

SPEEDWAY CARGO SERVICES, INC. * SURRENDERED LICENSE VOLUNTARILY

NY

27AUG2001

672F

STONE & DOWNER COMPANY

MA

22MAY2001

16994N

TOTAL TRANSPORT INTERNATIONAL GROUP

CA

30MAR2001

4594F

TRANSPORTATION SYSTEMS, INC.

CA

16JUN2001

4577F

TRANSTAR SHIPPING, INC.

CA

27JUL2001

4470

TRI-PMEX, INC.

CA

31MAY1999

14698N

TRIVEX INC. D/B/A LUXOR OCEAN LINE

NY

29MAY2001

16345N

TWIN MODAL, INC. * SURRENDERED LICENSE VOLUNTARILY

MN

29MAR2001

12540N

U-STATES FORWARDING SERVICES CORP.

CA

5AUG2001

13930NF

VICTORIA LINE, INC. * SURRENDERED LICENSE VOLUNTARILY

FL

25APR2001

4195F

WESTRANS AIR EXPRESS (USA) INC.

CA

3JULY2001

1830F

WESTWIND OVERSEAS LIMITED

NY

3JUN2001

4134F

WORLD EXCHANGE, INC.

CA

18AUG2001

4052F

XONEX INTERNATIONAL, INC. D/B/A XONEX INTERNATIONAL

DE

22JUN2001

Back
to top

Celebrating 45 Years of Navigating the Regulatory Seas

Need help with U.S. Federal Maritime Commission compliance?

Get in touch