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Signals™ Headlines - October 5, 2015

FMC Collects USD 135,000 Penalty Payment from Siem Car Carriers AS

The Federal Maritime Commission (FMC) announced that it has entered into a compromise agreement with Siem Car Carriers AS, a vessel-operating common carrier based in Oslo, Norway. Earlier this year, Siem Car Carriers submitted a voluntary disclosure to the Commission, identifying certain unfiled space charter agreements with respect to its provision of Roll-On Roll-Off (RO-RO) transport services for the movement of new and used automobiles and other rolling stock in U.S. trades. These agreements had not been filed with the Commission, or become effective under the Shipping Act, as required under 46 U.S.C. § 41102(b).

Siem Car Carriers worked cooperatively with the FMC Bureau of Enforcement to address and correct the potential violations. The carrier has agreed to provide ongoing cooperation with other FMC investigations with respect to these activities. In addition, all agreements in which Siem Car Carriers currently shares space with other RO-RO operators have since been filed with the Commission. In light of the remedial measures undertaken and the voluntary nature of this disclosure, a compromise agreement was reached under which Siem Car Carriers paid USD 135,000 in penalties.

Chairman Cordero stated, “Carriers who fail to properly file their agreements affecting carrier working relationships in the U.S. oceanborne trades are liable for civil penalties, no matter the size of the trade or the market share of the carrier involved. Voluntary disclosures can serve to diminish carrier exposure to very significant monetary penalties, while assisting the Commission’s regulatory efforts in pursuing other carriers involved in such unfiled space chartering arrangements.”

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FMC Docket 15-08; General Motors Files Complaint with FMC

The Federal Maritime Commission (FMC) has issued its Docket 15-08 to give notice of the complaint filed by General Motors LLC against Nippon Yusen Kabushiki Kaisha (NYK), Wallenius Wilhemsen Logistics AS, and EUKOR Car Carriers Inc. In its complaint, General Motors alleges these three roll-on roll-off (RO-RO) ocean carriers, the world’s largest providers of deep-sea vehicle transport services, entered in to secret, unfiled, and/or unlawful agreements to allocate customers, raise and fix prices, and rig bids in violation of the Shipping Act. These activities are alleged to have begun in February 1997 and continued through September 2012.

General Motors alleges it was deprived of the benefits of free, open, and unrestricted competition, and paid supracompetitive prices for vehicle carrier services. The complaint seeks reparations in a sum to be proven under the Shipping Act and reasonable attorney’s fees, and also requests General Motors be awarded double its actual proven injury. Section 41105(1) of the Shipping Act prohibits carriers from taking “concerted action resulting in unreasonable refusal to deal.” Section 41305(c) of the Shipping Act authorizes the Commission to order the payment of up to double the amount of the actual injury. The full text of the complaint can be found on the FMC’s website at www.fmc.gov/15-08. This proceeding has been assigned to the FMC Office of Administrative Law Judges. The initial decision in this proceeding shall be issued by September 6, 2016, and the final decision of the Commission shall be issued by March 6, 2017.

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Transpacific Eastbound Carriers Postpone General Rate Increases (GRIs) for October

Several carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223 serving the East Asia/USA trade lanes, have postponed their General Rate Increases (GRIs) of USD 600 per FEU, until October 15, 2015; carrier members include American President Lines (APL), COSCO, CMA CGM, Evergreen, Hanjin, Hapag Lloyd, Hyundai, and Yang Ming. GRI amounts for all other container sizes are as per formula. These GRIs were initially filed to become effective on October 1 or October 7. This will be the tenth GRI of the year for the East Asia/USA trade lane.

Some carrier members implemented GRIs in September. CMA CGM, Hanjin, and Yang Ming implemented GRIs of USD600 per FEU, effective September 15, 2015. However, Hanjin cancelled GRIs for cargo from origins in Japan, India, Pakistan, Bangladesh, and Colombo (Sub-Continent). American President Lines (APL) withdrew its GRI for reefer cargo; reduced the amount to USD300 per FEU for cargo to USA Pacific Coast Ports/IPI/MLB; reduced the amount to USD400 per FEU for cargo to USA Atlantic Coast Ports/RIPI; and did not apply these GRIs for cargo from Japan. Hapag Lloyd has postponed its GRI for cargo from the Indian Subcontinent (ISC) to December 1, 2015, and the amount will be USD 200 per FEU. Evergreen withdrew its September GRIs.

Most of the TSA carrier members have just filed a new GRI, effective November 1, 2015, of USD 600 per FEU; all other container sizes are as per formula. This is the eleventh GRI of the year for the East Asia/USA trade lane; however, most of these GRIs have been cancelled, postponed, or withdrawn.

The TSA’s fifteen member carriers 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 website at www.tsacarriers.org provides additional information; however, each carrier maintains its own tariffs and controls its own pricing.

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TSA Westbound Carriers and October GRIs: Some Implement, Some Cancel, Some Postponed

Some members of the Transpacific Stabilization Agreement Westbound (TSA), FMC Agreement No. 011223, whose member carriers serve the USA/East Asia trade lanes, cancelled General Rate Increases (GRI) that were initially filed effective October 1, 2015, of USD 300 per FEU, for dry cargo. Westbound TSA members COSCO, Hyundai, and OOCL cancelled this GRI. Evergreen withdrew this GRI. However, Hanjin, K Line, and Yang Ming implemented the GRIs, effective October 1. APL and CMA CGM postponed the GRI effective date until November 1. GRI amounts for all other container sizes are as per formula. For more information, visit www.tsa-westbound.org.

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Members of the U.S./Australasia Discussion Agreement Announce GRIs (Correction 19Oct2015)

Carrier members of the United States/Australasia Discussion Agreement, FMC Agreement No. 011117, whose member carriers serve the USA/Australia and New Zealand trade lanes, announced General Rate Increases (GRIs), effective November 15, 2015. Members ANL Singapore Pte Ltd, CMA CGM, and Hapag Lloyd updated their FMC tariffs to reflect a GRI of USD 100 per 20’ container and USD 200 per 40’ container on rates applicable on non-refrigerated cargo from or via U.S. East and Gulf Coast ports. The agreement members are Hamburg Sud, CMA CGM, Compagnie Maritime Marfret S.A. (Marfret), Pacific International Lines (PTE) Ltd, Hapag Lloyd AG, and ANL Singapore Pte Ltd. Maersk Line is no longer a member of this discussion agreement, but announced a GRI of USD 100 per 20’ container and USD 200 per 40’ container for this trade lane, effective November 1, 2015. Also note, in our SIGNALS issue of October 5, 2015 we incorrectly reported CMA-CGM filed a GRI of USD 300 per FEU effective November 1, 2015 for this trade lane; we regret this error.

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