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Signals™ Headlines - October 5, 2000

Delmond Won Appointed to a Second Term: Hawaii Democrat has served since 1994

The US Senate has approved the nomination of Delmond Won to serve a second term on the Federal Maritime Commission. President Clinton appointed the Hawaii Democrat to the FMC in 1994. Commissioner Won’s initial term expired in 1997, but he continued to serve pending approval of a second term by the Senate. His new term is confirmed through June 2002. Commissioner Won is best known for his role as Investigative Officer in the FMC’s Fact Finding Investigation No. 23, which focused on alleged abuses by ocean carriers in the Trans Pacific Eastbound Trade during the peak shipping season of 1998. After a series of public hearings and the release of a summary report, this investigation ended quietly with minimal enforcement action by the FMC.

FMC Issues Strategic Plan for 2001-2005: Goals include better analysis of service contracts

The Federal Maritime Commission recently made its Strategic Plan for fiscal years 2001 through 2005 available to the public. The plan focuses on improving the effectiveness of the Commission and its staff as it pursues its mission to “ensure the Nation’s interests are met through and efficient, competitive, market-driven, and non-discriminatory ocean transportation system that is free of unfair foreign maritime trade practices.” Four key goals are identified by FMC in its Strategic Plan, and specific action steps to achieve these goals are noted. Briefly summarized, these are:

1. Efficient Regulatory Process: new initiatives and fast track processes will be developed to streamline and expedite the process of formal docketed proceedings, rule makings and the agreement review process. Current procedures will be re-assessed; expanded use of information technology, including the Commission’s web site, will be considered. The FMC already has a policy to encourage Alternative Dispute Resolution (ADR), and this will be emphasized more frequently.

2. Balanced Enforcement: the FMC is charged with the responsibility to enforce the Shipping Act of 1984, but it is also required by the Ocean Shipping Reform Act of 1998 (OSRA) to minimize its intervention in the marketplace, and keep regulatory costs to a minimum. The Commission plans to increase its ongoing dialogue with consumer, industry and government groups to educate, receive feedback, and encourage voluntary compliance with its regulations. At the same time, the FMC is clearly focused on ensuring ocean carriers do not abuse their antitrust immunity to implement unreasonable rate increases or service decreases. More efficient review processes for service contracts to identify competitive problems and malpractices are planned.

3. Increase Compliance: new programs will be developed to identify ocean freight forwarders and NVOCCs who are not in compliance with the FMC’s licensing, bonding and tariff publication requirements. The Commission’s service contract system will be upgraded to ensure its long-term viability. The OSRA impact report, due on July 31, 2000, is a key part of the plan, because it will help identify industry trends and practices.

4. Improve Internal Capabilities: the Commission will continue develop and monitor its internal performance plans to ensure these support its strategic plan. In February 2000 the Commission staff was significantly reorganized; this will be re-assessed to ensure the Agency is effectively utilizing its limited budget.

Docket 00-07: FMC Decides Not to Set “Reasonable Fees” for Tariff Access

At a meeting of the Federal Maritime Commission on September 20, 2000, the Commissioners declined to decide on exactly what is a “reasonable fee” for access to tariffs published by ocean carriers, marine terminal operators and NVOCCs. Instead, the FMC staff was directed to issue a circular letter to provide guidance to carriers and tariff publishers concerning reasonable charges for access to tariffs. This circular letter has not yet been released. The proposed rule making was an initiative of the FMC staff, who have received complaints about unreasonable access fees and minimum subscription requirements charged by some carriers. In one example cited in Docket 00-07, a carrier required an advance payment of nearly $1500 for access to its tariff.

The fee for unlimited access to all the FMC tariffs published by Distribution-Publications, Inc. (DPI) at its web site: www.dpiusa.com is $50 per month, with a minimum of 3 months. DPI’s web site provides free access to tariff title pages, tariff rules and regulations, and its SIGNALS newsletter. Over 500 FMC tariffs are maintained.

Controlled Carrier Listing Updated by FMC: Carriers Subject to Special Oversight

The Federal Maritime Commission has updated its list of Controlled Carriers. These are ocean common carriers operating in U.S.-foreign trades that are owned or controlled by foreign governments. These carriers are subject to special regulatory oversight by the FMC under the Shipping Act of 1984.

Section 9(a) of the Shipping Act prohibits Controlled Carriers from maintaining tariffs or service contracts that below a “just and reasonable” level. This restriction was enacted by Congress to ensure that Carriers controlled by foreign governments would not engage in below-market pricing or other practices unfavorable to US foreign commerce. Controlled Carriers are subject to several additional regulations administered by the FMC. For example, all tariff items published by controlled carriers may not, unless the Commission has granted special permission, become effective sooner than the 30th day after the date of publication. The updated listing follows:

Black Sea Shipping Company (Ukraine)
Ceylon Shipping Corporation (Sri Lanka)

China National Foreign Trade Transportation (Group) Corp. dba SINOTRANS (China)

China Ocean Shipping Company (China)

China Shipping Container Lines Co. Ltd. (China)

Compagnie Nationale Algerienne de Navigation (Algeria)

Egyptian National Line, International Transport Enterprise Co. (GETDD) Ltd. (China)

Pakistan National Shipping Corporation (Pakistan)

POL-America, Inc. (Poland)

Polish Ocean Lines (Poland)

Shipping Corporation of India (India)

Tientsin Marine Shipping Company (China)

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