Home / Signals™ / Signals™ Headlines – October 3, 2008

Signals™ Headlines - October 3, 2008

President Bush Nominates MARAD�s Sean Connaughton to Chair FMC

President George W. Bush nominated Sean T. Connaughton to be a Federal
Maritime Commissioner and designated as Chairman of the Commission upon appointment for the remainder of a five-year
term ending June 2012.  Connaughton is currently the administrator of the Maritime Administration at the Department of Transportation (MARAD).  Before taking up
his post at MARAD in 2006, Connaughton served as Counsel at Troutman Sanders LLP and Chairman of the Prince William (VA) Board of County Supervisors.  Earlier in his career, he served in the
United States Coast Guard.  Connaughton received his
bachelor’s degree from the United States Merchant Marine
, his master’s degree from Georgetown
and his JD from George Mason University.

Since the resignation of FMC Commissioner Paul A. Anderson in April of this year, the FMC has operated with only
three Commissioners.  The FMC is authorized to have five Commissioners, one of whom is designated as Chairman.
Anderson, who joined the Commission in 2003, was nominated by President Bush for a second term in August 2007, but
was never confirmed by the U.S. Senate and resigned shortly after Congressional criticism of the agency.
 President Bush officially nominated Connaughton September 9, but because the Democratic-controlled U.S. Senate
must approve this nomination before he can begin serving at the FMC, it is not clear at this time if Connaughton
will ever take up this post.

Docket 08-05: Federal Maritime Commission Launches Clean Truck Investigation

The Federal Maritime Commission has begun an investigation into
the Port of Long Beach and the Port of Los Angeles Clean Truck Programs for possible
Shipping Act violations.  The FMC is now closely examining elements of both programs, and is particularly
scrutinizing the Los Angeles program.  The ports’ Clean Truck Programs aim to reduce air pollution in and
around the ports by progressively banning older trucks from hauling cargo to and from the ports.  The first of
the progressive bans on older trucks began October 1 and barred all pre-1989 trucks from the ports.  The
ports’ plans require all pre-2007 trucks to be replaced or retrofitted by the year 2013.

According to Docket No.
, served September 24, 2008, the FMC is taking a closer look at the programs’ concession agreements
and fee exemption standards.  The FMC Docket notes that neither port has “published criteria or standards
governing the granting or denial of a concession.”  The Commission is also further examining the Port of
Los Angeles’ program’s financial incentives, ban on independent owner operators and concession agreement
requirements.  The Port of Los Angeles is offering extensive financial incentives to companies that operate
2007 EPA compliant-trucks.  The program provides $20,000 per clean truck and up to $10,000 in further
incentives during the program’s first year.  Incentive payments will come from the port’s Clean
Truck Fund and other port funds.  According to the Docket, successful applicants for the incentive
will be chosen at the “sole discretion of the port.”

The Ports of Long Beach and Los Angeles are marine terminal operators and under Section 10 of the Shipping Act of
1984 are required “to establish, observe, and enforce just and reasonable regulations and practices relating
to or connected with receiving, handling, storing or delivering property.”  If Shipping Act violations
are found the ports could be subject to penalties.  An initial decision in this investigation will be issued by
the FMC no later than Sept. 24, 2009.

The FMC’s investigation does not prevent the ports from implementing the Clean Truck Programs. However,
implementation of the $35 per TEU Clean Truck Fee (CTF) has been delayed.  Both ports decided more time was
needed to complete computer programs designed to collect the fees.  The fees are expected to take effect by
November 1, 2008 and will apply on all containers moved by trucks that do not comply with the new Clean Truck

Gov. Schwarzenegger Vetos California Port Investment Fee of $30 per TEU

California Governor Arnold Schwarzenegger has vetoed the proposed
California Port Investment Fee (CPIF), which would have imposed a fee of up to $30 per TEU on
containers moving through the ports of Los Angeles, Long Beach and Oakland.  The proposed fee, a part of Senate
Bill 974 sponsored by California State Sen. Alan
(D-Long Beach), was approved by the California State Assembly and Senate this summer, and was
expected to generate around $300 million to be used for infrastructure projects aimed at reducing air pollution.
 In his veto statement, Gov. Schwarzenegger said he supports the policy objectives of the bill, but vetoed it
because it “does not provide necessary assurances that projects will achieve the greatest cost-effectiveness,
emission reductions, and public health protection.”  The Governor noted California Proposition 1B, which
was approved by voters in 2006, will provide $1 billion in funding to improve air quality and this will directly
benefit the communities in and around the Ports of Long Beach, Los Angeles, and Oakland.

US Exports to Asia Trade Lane: WTSA Implements New BAF Formula, Maersk Increases BAF

The Westbound Transpacific Stabilization Agreement (WTSA), FMC Agreement No. 011325, whose member
lines serve the US export trades from the USA to East Asia, announced reductions to Bunker Adjustment Factors (BAF)
and Inland Fuel Charges (IFC) for the month of November.  The WTSA also rolled out a new BAF formula.
 Under the new formula, BAF will be calculated and charged separately for the US Pacific (West) Coast and
Atlantic (East) Coast.  WTSA member lines have filed tariff rules implementing the new formula for dry
cargo.  Some service contracts are still subject to the old formula BAF.  Similar new guidelines for
refrigerated cargo will be announced soon.  WTSA’s new BAF formula uses a straight average of Hong Kong
and Los Angeles bunker prices for the West Coast BAF; and Hong Kong and New York bunker prices for the East Coast

BAF for November under the old formula will be US$ 976 per 20ft ctr, US$ 1220 per 40ft/45ft ctr and US$ 58 per WM.
November BAF calculated using the new formula for dry container cargo is as follows: from/via US Atlantic/Gulf Coast
Ports – US$ 720 per 20ft ctr and US$ 900 per 40ft/45ft ctr; from/via US Pacific Coast Ports – US$ 614 per 20ft ctr
and US$ 767 per 40ft/45ft ctr. Refrigerated container shipments from/via all US Ports will be subject to November
BAF of US$ 976 per 20ft ctr, US$ 1220 per 40ft ctr. Inland Fuel Charges (IFC) for November will be reduced to US$
375 per container for rail and intermodal rail/truck shipments, and US$ 108 per container for local/regional truck

The 10 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.

In the same trade lane, Maersk Line is
increasing its quarterly bunker surcharges.  Maersk Line is not a WTSA member carrier. Maersk’s BAF for
October thru December 2008 for both dry and reefer containers is as follows: from/via US Atlantic/Gulf Coast Ports –
US$ 190 per 20ft ctr and US$ 380 per 40/45ft ctr; from/via US Pacific Coast Ports – US$ 125 per 20ft ctr and US$ 250
per 40/45ft ctr.  Visit http://baf.maerskline.com for
more info.

TSA Carriers Announce Reductions to Bunker Surcharge and Inland Fuel Charges

The carrier members of the Transpacific Stabilization Agreement (TSA), serving the East Asia/USA
trade lane announced reductions to Bunker Adjustment Factors (BAF) and Inland Fuel Charges (IFC) for November 2008.
 BAF for November will be US$ 976 per 20ft ctr, US$ 1220 per 40ft ctr, US$ 1373 per 40ft hi-cube ctr, US$ 1545
per 45ft ctr and US$ 27 per WM.  November IFC is US$ 375 per container for MLB and IPI shipments moving via
rail, and to US$ 108 per container for truck transport to Group 4 points in California, Oregon and Washington, and
for East Coast local store-door truck moves.

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.

SIGNALS™ is provided as a service to its customers
by Distribution-Publications, Inc. © 2006. All rights reserved.

All Issues of SIGNALS™ are available on the web at

Distribution-Publications, Inc.
180 Grand Avenue, Suite 430
Oakland, CA 94612-3750

Tel: 1-510-273-8933, or 1-800-204-3622, Fax: 1-510-273-8959,

E-mail: signals@dpiusa.com Web: www.dpiusa.com

“Navigating the Regulatory Seas” is a service mark of Distribution-Publications, Inc.

Vol. 12 No. 10, October 3, 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
for any damages suffered by any party in reliance on it.
to top

Celebrating 45 Years of Navigating the Regulatory Seas

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

Get in touch