FMC REQUESTS CONTRACTS INFORMATION FOR TSA INVESTIGATION
The U.S. Federal Maritime Commission has put more pressure on 16 transpacific carriers, and ordered them to provide service contract information and copies of internal documents and communications relating to the 2002-2003 season, for the agency’s investigation into alleged malpractices.
The investigation concerns the service contract practices of Transpacific Stabilization Agreement carriers, including allegations of discrimination against non-vessel-operating common carriers operating in this trade.
Commissioner Joseph Brennan, the investigative officer, has used the FMC’s authority under section 15 of the Shipping Act of 1984 to ask the TSA and affiliated ocean carriers to report in writing on facts and transactions relevant to the investigation. The carriers involved — APL, CMA CGM, COSCO Container Lines, Evergreen, Hanjin Shipping, Hapag-Lloyd, Hyundai, “K” Line, Maersk Sealand, MOL, NYK, Orient Overseas Container Line, P&O Nedlloyd, Yang Ming Marine, Hatsu Marine and Lloyd Triestino — and the secretariat of the Transpacific Stabilization Agreement, must now answer 23 probing questions raised by the TMC, in writing and under oath.
The carriers must give the regulator:
* Copies of all memoranda and other documents issued by the TSA to carrier members and sent by carrier members to the TSA since May 2001.
* Copies of “all formal or informal minutes” (including handwritten notes) about all TSA meetings and teleconferences over the same period.
* Copies of all documents and communications to carrier marketing or sales staff, from May 2001, that “suggest, advise, instruct or recommend” general rate increases, a peak-season surcharge or other surcharges in the eastbound transpacific trade.
* Copies of all documents and communications sent to NVOCCs and proprietary shippers about general rate increases, the peak-season surcharge or other surcharges in the transpacific trade.
* A report identifying which rate information carriers sent to, or received from the INTTRA, GT Nexus and CargoSmart multicarrier portals.
* A matrix that analyzes, by class and size of shipper or NVOCC, whether their 2002-03 service contracts include higher or lower rates than last year, and whether they are subject to general rate increases and peak season surcharges.
* Copies of complaints made by NVOCCs about general rate increases and peak season surcharges.
* Copies of all internal studies about competition from NVOCCs in the transpacific.
* A list of all TSA committees and groups that make recommendations on pricing and service issues.
* Copies of all surveys of service contracts and of recent TSA surveys of market conditions.
* Copies of a cost data worksheet discussed among TSA carriers.
* Consultants’ reports or studies on the transpacific trade used by carriers.
The investigation follows a petition filed on May 10 by the National Customs Brokers and Forwarders Association of America and the International Association of NVOCCs. The petition alleged that TSA liner carrier members used discriminatory practices against NVOCCs during the 2002-03 contract season.
The TSA is a group of ocean carriers that has the authority to agree on rate increase and surcharge “recommendations.” The non-binding price recommendations are, in turn, implemented on a voluntary basis by individual carriers.
“I assume the commission is going to hold hearings, and I would not be surprised if the commission subpoenaed witnesses, particularly from carriers,” said Ed Greenberg, counsel to the National Customs Brokers and Forwarders Association of America.
“After the NCBFAA/IANVOCC petition was filed, the commission’s Bureau of Trade Analysis did perform a preliminary sample of service contracts,” an official at the FMC told American Shipper. “On the basis of that analysis, the commission determined to launch this fact-finding investigation. The preliminary sampling did raise the concern that TSA members may have discriminated against NVOCCs during the 2002 contracting season.”