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Signals™ Headlines - October 5, 2009

FMC Considers Passenger Vessel Rules, Statutory Re-codification at Sept. 15 Meeting

The Federal Maritime Commission (FMC) discussed a number of important issues at open and closed
sessions of a Commission meeting held Sept. 15, 2009.  In the open session of the meeting, the agenda focused on Docket No. 06-01: Worldwide
Relocations, Inc.
, Docket
No. 02-15: Passenger Vessel Financial Responsibility
, and a statutory re-codification of FMC regulations as
published in the U.S. Code of Federal Regulations, 46 C.F.R.
Docket No. 06-01 commenced in 2006 after the Commission received over 250 consumer complaints against a group of
nine unlicensed household good movers and several individuals associated with these firms, including Worldwide
Relocations, Inc.; Moving Services, L.L.C.; International Shipping Solutions, Inc.; Dolphin International Shipping,
Inc.; Boston Logistics Corp.; Tradewind Consulting, Inc.; and Global Direct Shipping.  Complaints from shippers
included allegations that these companies failed to deliver international ocean shipments of household goods,
personal effects and vehicles, refused to return pre-paid ocean freight, lost cargo, and charged shippers for marine
insurance, but never obtained insurance coverage for shipment.  In many cases, shippers were forced to pay another
carrier or warehouse a second time in order to have their cargo released.  The FMC has continually investigated
these claims and possible Shipping Act violations since 2006.  This is the sixth time the FMC has extended the
decision date for this docket.  The initial decision is now due February 15, 2010.  A final decision is due June 14,

At the recent meeting FMC Commissioners also voted unanimously to discontinue a pending rulemaking in Docket No.
02-15: Passenger Vessel Financial Responsibility.  Commissioners noted significant changes in the industry and the
economy since the proceeding first commenced in 2002.  FMC Chairman Lidinsky directed the FMC staff to present
current research and review methods to assess adequacy of financial responsibility for passenger vessel operators
within 60 days.  The Commission also announced it is considering a public hearing to receive input from industry
stakeholders. Also in the meeting’s open session, FMC Commissioners discussed re-codification of FMC regulations.
The Code of Federal Regulations (CFR) contains all general and permanent rules for all executive departments and
agencies of the U.S. federal government. The CFR is divided into 50 titles representing broad areas subject to
federal regulation.  FMC regulations for enforcing the Shipping Act are published under Title 46 C.F.R. Part 500. 

In the meeting’s closed session, Commissioners discussed the global economic downturn, its impact on the maritime
industry, passenger vessel operator regulatory initiatives, and internal administrative practices and personnel

FMC to Participate in First U.S. – Hosted World Maritime Day Green Event

The Federal Maritime Commission will be a sponsor of the 2009 International Maritime Organization (IMO) World Maritime Day Parallel Event .  This event will highlight the maritime community’s
commitment to meeting the challenges of global climate change.  The event, which is hosted by the U.S. Coast Guard,
will be held October 16th in New York City.  New FMC Chairman Richard Lidinsky will be making his first public
appearance at this event.  Lidinsky will be working to raise the profile of the maritime industry and the large role
it can play in improving the environment. He also will be educating attendees on FMC programs and operations
supporting maritime industry’s efforts to implement responsible environmental practices at seaports and throughout
the maritime logistics chain.

As part of the event, the FMC is also sponsoring the American Maritime Industry Quilt Project.  Four quilts will be
created by various maritime companies to commemorate World Maritime Day.  The quilts will be distributed to various
U.S. dignitaries, including President Barack Obama.  One quilt will be auctioned off to provide funds for school
children to visit the exhibit and tour ships during the event.

WTSA Lines Reaffirm Adherence to Bunker Charge Formula, Steep Increases in BAF

The Westbound Transpacific Stabilization Agreement (WTSA), FMC Agreement No. 011325, whose member
lines serve the U.S. export trades from the USA to East Asia, announced it has no plans to back down from recent
increases to Bunker Adjustment Factors (BAF).  Last month the WTSA announced the following increases to BAF
applicable for the period of October 1, 2009 to December 31, 2009:

WTSA Bunker Adjustment Factors (BAF), effective: Oct. 1, 2009 – Dec. 31, 2009


Traffic to/from and via:


US Atlantic/Gulf Coast Ports

US Pacific Coast Ports


US$ 730 per 20ft dry ctr 

US$ 367 per 20ft dry ctr


US$ 913 per 40ft/45ft dry ctr   

US$ 459 per 40ft/45ft dry ctr


US$ 1216 per 40ft/45ft reefer ctr  

US$ 646 per 40ft/45ft reefer ctr

WTSA claims these increases reflect higher fuel prices paid by shipping lines during the summer. The WTSA adopted
the current BAF calculation formula in late 2008.  This formula tracks average bunker fuel loading prices at Hong
Kong and Los Angeles for the West Coast, and Hong Kong and New York for the East and Gulf Coasts.  It then
translates fuel price fluctuations into per container fuel-related costs for a typical transpacific West Coast or
East/Gulf Coast sailing.

“WTSA lines have come under pressure to mitigate their bunker charge adjustments after general rate increases
taken in early September,” explained WTSA executive administrator Brian M. Conrad.  In September the WTSA
recommended members implement GRIs of US$ 120 per 20ft container and US$ 150 per 40ft container for all shipments
via U.S. West Coast ports, and US$ 160 per 20ft container and US$ 200 per 40ft container for intermodal moves and
shipments via U.S. East and Gulf Coast ports. “The lines recognize this is an especially challenging market
environment and that certain westbound commodities are highly price-sensitive. But it’s important to keep in mind
that the bunker charge addresses specific costs in carriers’ operations that must be recovered; it is distinct
from rates, follows a set formula and is not intended to be either increased or mitigated to offset movement in
freight rates,” said Conrad.

WTSA is a voluntary discussion and research forum of 10 container shipping lines serving the trade from ports and
inland points in the U.S. to destinations throughout Asia. The WTSA’s 10 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.

 TSA Carriers Reduce “Old Formula” BAF Effective November

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223,
serving the East Asia/USA trade lane announced reductions to Bunker Adjustment Factors (BAF) effective November 1,
2009, calculated using the group’s old monthly BAF formula.  November 2009 Bunker Adjustment Factors (BAF),
calculated using TSA’s old monthly BAF formula, will be reduced to US$ 616 per 20ft ctr, US$ 770 per 40ft ctr, US$
866 per 40ft hi-cube ctr, US$ 975 per 45ft ctr, and US$ 17 per WM (LCL).   These old formula BAF amounts are filed
in the tariffs of most of the TSA Carriers and apply to cargo moving under tariff rates or 2008 service contracts
that remain in effect.  

The TSA’s 14 carrier members 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, NYK Line, OOCL, Yang Ming Marine
and Zim Integrated Shipping Services.
The group’s web site at www.tsacarriers.org
provides additional information.

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Vol. 13 No. 10, October 5, 2009

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
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