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Signals™ Headlines - September 4, 2014

FMC to Host Public Forums on Port Congestion Issues

The Federal Maritime Commission (FMC) will hold a public forum on U.S. Port Congestion: Examining Causes, Impact on Stakeholders, and Exploring Possible Solutions on Monday, September 15, 2014, from 9:30 am to 4:00 pm at the Port of Los Angeles Administration Building, 425 S. Palos Verdes Street, San Pedro, CA 90731. This forum will be moderated by FMC Chairman Mario Cordero. Participants may register by contacting the FMC Secretary via email: secretary@fmc.gov or phone: (202) 523-5725. The forum’s goal is to promote dialogue on the causes and implications of congestion at U.S. ports. Industry stakeholders, regulators, and the general public are encouraged to take part.

Additionally, FMC Commissioner William P. Doyle plans to host a Mid-Atlantic and Northeast public forum on U.S. Port Congestion, tentatively scheduled for October 1, 2014 at the World Trade Center, Baltimore Inner Harbor. More information on this forum will be provided shortly and will be posted on www.fmc.gov.

FMC has confirmed this event. Registration is required due to building security requirements. To register please contact David Tubman, counsel to Commissioner Doyle, at dtubman@fmc.gov. Please be prepared to present photo ID to the building security.

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FMC Docket 14-11 – Petition of LCL Logistix for a Declaratory Order

Pursuant to FMC’s Rules of Practice and Procedure, 46 C.F.R. §502.68, LCL Logistix (India) Pvt. Ltd. dba LCL Lines, an NVOCC licensed by the Commission under FMC-OTI No. 021538N, requests that the Commission issue a declaratory order to remove uncertainty and terminate a controversy in regard to the justness and reasonableness of the demurrage practices of Mediterranean Shipping Company (MSC). This Petition is assigned FMC Docket No. 14-11.

The controversy giving rise to this matter is a proceeding in the U.S. Federal Court, Southern District of New York, in which MSC has sued LCL Lines for demurrage charges. The question on which LCL Lines seeks a Declaratory Order from the FMC is whether it is a reasonable practice for MSC to wait to assert a claim for demurrage on containers for more than three years after the parties with an interest in the goods abandoned the cargo in those containers and authorized MSC to dispose of it, when MSC’s delay resulted in the accrual of demurrage charges exceeding USD 230,000 – which is many times greater than the value of the containers themselves. LCL Lines requests the FMC issue an order declaring that the demurrage practices of MSC as described in its petition are unjust and unreasonable in violation of the Shipping Act of 1984.

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Members of the U.S./Australasia Discussion Agreement File General Rate Increases

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, filed General Rate Increases (GRIs) effective October 1, 2014. Members Hapag Lloyd, Hamburg Sud, and ANL Singapore have updated their FMC tariffs to reflect GRIs in the amount of USD 500 per FEU for cargo moving from or via the US West Coast or US Gulf Coast, and USD 300 per FEU from the US East Coast, with all other sizes per usual formula.

Maersk Line is no longer a member of this discussion agreement, but has filed a similar GRI in its FMC tariff. Maersk’s GRI will be USD 500 per FEU for cargo moving from the US West Coast, and USD 300 per FEU from the US East Coast or US Gulf Coast, with GRIs for other container other sizes per its usual formula.

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Transpacific Eastbound Carriers Adjust Surcharges for 4th Quarter and Implement GRI

Carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lanes, have adjusted bunker surcharges (BAF) effective October 1, 2014. The inland fuel charges will decrease to USD 353 per forty-foot equivalent unit. The Currency Adjustment Factor (CAF) on shipments from Japan remains 10% thru December 31, 2014. BAF effective October 1 are as follows:

To US Atlantic/Gulf Coast Ports * (decreased)
To US Pacific Coast Ports * (increased)
To IPI/MLB via US Pacific Coast */** (decreased)
USD 980 per 40ft ctr ( ↓ )
USD 519 per 40ft ctr ( ↑ )
USD 872 per 40ft ctr ( ↓ )

BAF amounts shown with the asterisk (*) include the low-sulfur fuel component. For IPI/MLB destinations, the BAF includes both low-sulfur fuel component and the Inland Fuel Surcharge (IFC) component (**). BAF for other container sizes is as per formula. These amounts are effective thru December 31, 2014.

Several TSA carrier members who updated their FMC tariffs in late-July to reflect General Rate Increases (GRI) have now implemented these GRIs effective September 1, 2014. Several carriers implemented GRIs in the amount of USD 600 per 40ft container (FEU) for cargo moving to all USA destinations, with the GRI amounts for all other sizes as per usual formula. MOL postponed the GRI it had scheduled to take effective August 28, 2014 until September 1, 2014, and the amount implemented is USD 800 per FEU. Hapag Lloyd implemented GRIs in the amount of USD 600 per FEU effective August 20, 2014, and USD 600 per FEU effective September 1, 2014, with all other sizes as per formula. Evergreen Line reduced its GRI on rates applicable to US Pacific Coast Ports and IPI points to USD 450 per FEU.

The TSA’s fifteen carrier members 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 web site at www.tsacarriers.org provides additional information; however, each carrier maintains its own tariffs and controls its own pricing. The TSA Carrier group only issues recommended guidelines to its member carriers. Website addresses for all carriers are listed on www.fmc.gov.

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TSA Westbound Carriers Update Surcharges, Effective October thru December

Several members of the Transpacific Stabilization Agreement Westbound (TSA), FMC Agreement No. 011223, whose member carriers serve the USA/East Asia trade lanes, have adjusted their bunker surcharges (BAF) for the October to December 2014 quarter. CAF on shipments to Taiwan will remain 7%, and to Singapore 22%, thru December 31, 2014.

TSA Westbound Bunker Adjustment Factors (BAF) for the Oct-Dec 2014 quarter, which include the low-sulfur fuel component, are USD 1079 per 20ft dry container, USD 1349 per 40ft/45ft dry container, and USD 1785 per 40ft/45ft reefer container for shipments from and via U.S. Atlantic/Gulf Coast Ports. BAF for shipments from or via U.S. Pacific Coast Ports will be USD 555 per 20ft dry container, USD 694 per 40ft/45ft dry container, and USD 966 per 40ft/45ft reefer container. The Inland Fuel Charges (IFC) for the Oct-Dec 2014 quarter will decrease to USD 353 per container for rail and intermodal rail/truck shipments and USD 102 per container for local/regional truck shipments. For more information, visit www.tsa-westbound.org.

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