In response to FMC allegations of multiple violations of the Shipping Act, Direct Container Line Inc. (DCL) entered into a settlement agreement whereby DCL paid FMC $800,000, and the FMC discontinued proceedings against DCL and its President, Mr. Owen Glen. Docket No. 99-01, issued in January 1999, alleged DCL obtained transportation from ocean common carriers at less than applicable tariff or service contract rates though the device of mis-declaring cargo weights or measurements, and that DCL charged its customers freight rates not filed in its NVOCC tariff. Docket No. 99-06 alleged DCL was paid unlawful rebates on shipments from the USA to South America. The FMC believes it is in the best interest of the shipping public to avoid litigation, and to enter into settlement agreements. DCL also agreed to institute measures designed to eliminate the practices alleged in the FMC dockets.

In this Docket served August 13, 1999 the FMC alleges West Indies Shipping and Trading, Inc., of Miami, FL has operated as an NVOCC without a license, tariff or bond. According to Docket 99-15 West Indies Shipping and Trading did have a bond and tariff for parts of 1998 and 1999, but its bond was cancelled on May 13, 1999, and it has failed to publish and maintain an NVOCC tariff in approved private system. It is further alleged that West Indies Shipping provided inaccurate descriptions of cargo to ocean common carriers to obtain lower rates for shipments from Miami to Caribbean destinations. An investigation was instituted to determine whether West Indies Shipping and its owner, David P. Kelly, violated the Shipping Act. In the event violations are found, the investigation will determine the amount of penalties to be assessed, and whether a cease and desist order should be issued. A public hearing before an FMC Administrative Law Judge will be scheduled in this proceeding.

On July 12, 1999, FMC Administrative Law Judge Fredrick M. Dolan approved a settlement agreement between the Commission’s Bureau of Enforcement and Hsueh L. “Frank” Wu and I Chen “Jenny” Chiang d/b/a Prestige Forwarding Co. In Docket 99-03 FMC alleged Prestige Forwarding, FMC Forwarder No. 4038 based in Southern California, collected forwarder compensation from ocean carriers without providing any forwarding services. Shipments on which Prestige Forwarding collected forwarder compensation were tied primarily to accounts serviced by Ms. Chiang’s husband, Frank Wu, a sales representative of Hyundai Merchant Marine Co.

In the settlement agreement, Ms. Chiang and Mr. Wu did not admit any violations of the Shipping Act. In compromise of possible civil penalties, Ms. Chiang surrendered her FMC freight forwarding license, and agreed not to engage in any business activities as an ocean transportation intermediary (OTI) for the next five (5) years. Ms. Chiang and Mr. Wu paid the FMC $105,000. Docket 99-03 is discontinued; the FMC agreed not to pursue any further penalties against Ms. Chiang and Mr. Wu in this matter.

New licensing requirements for Ocean Transportation Intermediaries (OTIs) in the USA have created a backlog of applications at the FMC. By mid-August the Commission had received 2,100 applications from previously approved ocean freight forwarders and NVOCCs who were required to submit applications by April 30, 1999. This does not include 1,600 new applications for OTI licenses received by the Commission. New applicants may not provide ocean transportation intermediary services in the foreign commerce of the USA until their licenses are issued. The FMC Bureau of Tariffs, Certification and Licensing has prioritized new applicants, but due to the backlog some applicants have waited four months for approval, or for the unwelcome news that their applications have been rejected.

Ocean Transportation Intermediaries are required by FMC regulations to print their OTI license numbers on shipping documents and stationary. For NVOCCs who were registered with the FMC prior to May 1, 1999 OTI numbers are based on the FMC organization numbers used on NVOCC tariffs. For ocean freight forwarders licensed prior to May 1st OTI license numbers are the same as the previously issued FMC forwarder license numbers, with the addition of an “F” at the end to designate freight forwarder.

In late July, the FMC issued this docketed proceeding to formally institute an investigation in to possible violations of the Shipping Act of 1984 by Expeditors International of Washington, Inc. According to FMC documents, this well known NVOCC and ocean freight forwarder is alleged to have mis-described commodities on numerous shipments from Hong Kong to the USA during 1997 and 1998. Additionally, the docket alleges Expeditors International charged rates other than those on file in its FMC tariff. In response, Expeditors International filed a motion with FMC to dismiss the order, or to amend it.

The FMC alleges Expeditors International, as a shipper, furnished inaccurate cargo descriptions to Hanjin Shipping Co. in order to obtain transportation at favorable rates as specified in its service contract with Hanjin. During the same time period, FMC alleges Expeditors International, acting as an NVOCC, assessed rates and charges that “bear no relation to the specified commodity rates set forth in (its) ATFI tariff then on file with the Commission.” Docket 99-11 offers an example of a freight rate for electronic goods filed by Expeditors International in its FMC-ATFI tariff which was effective on August 15, 1995, and not subsequently revised. The docket notes US Import data provided to the FMC by the Journal of Commerce, and suggests the FMC also obtained information on shipments from US Customs.

A public hearing and an FMC investigation were instituted to determine whether Expeditors International violated sections 10(a)(1) and 10(b)(1) of the 1984 Act. If such violations are proven, the Commission will determine whether the tariff of Expeditors International should be suspended, whether its Ocean Transportation Intermediary license should be suspended or revoked, and any penalties to apply.