FMC GOES AFTER EXCLUSIVE TUG FRANCHISES
The U.S. Federal Maritime Commission has begun a formal investigation into the practice of marine terminal operators on the lower Mississippi River requiring vessels calling at their facilities to use a single franchise tug company.
In an “order to show cause”, 12 marine terminal operators were ordered by the FMC to justify the exclusive franchises and to give reasons why they should not be found in violation of the 1984 Shipping Act.
The FMC issued the order after receiving information from marine terminal operators, vessel operators, four tug companies, four ports, 10 carrier agents and the Steamship Association of Louisiana.
The FMC said the tug assist charges that vessel operators must now pay at the closed terminals are higher than those paid before the exclusive tug franchises were granted. The increases range from a low of 12 percent to a high of 51 percent.
Under the arrangements, the marine terminal operators are profiting on the difference between the amount paid to the MTO by vessel operators and the amount paid by the MTO to the exclusive tug company, the FMC said.
“The effect of the exclusive arrangements is the elimination of competition for tug services at the closed terminal facilities as well as increased costs for tug services to the detriment of vessel operators,” the FMC said.
The arrangements do away with the vessel operator’s choice of a tug company, the FMC said.
The targeted marine terminal operators are: ADM/Growmark River Systems Inc., Bunge Corp., Cargill Inc., Cenex Harvest States Cooperatives, CGB Buoys, Gulf Elevator & Transfer Co., International Marine Terminals, L&L Fleeting Inc., Ormet Primary Aluminum Corp., Peavey Co., St. James Stevedoring Co. Inc., and Zen-Noh Grain Corp.
The investigation covers marine terminal operators located from Baton Rouge, La., south to the mouth of the Mississippi, and includes the ports of Baton Rouge, New Orleans, Plaquemines, St. Bernard and South Louisiana.
The MTOs must file affidavits and memoranda of law with the FMC by July 18. A request for a hearing or oral argument must be filed with the FMC by Sept. 17. A final decision will be issued by March 18.