[Federal Register Volume 59, Number 204 (Monday, October 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26211]
[[Page Unknown]]
[Federal Register: October 24, 1994]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
14 CFR Parts 221 and 292
[Docket No. 49827; Notice No. 94-18]
RIN 2137-AC48
Exemption From Property Tariff-Filing Requirements
AGENCY: Office of the Secretary, DOT.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Department proposes to adopt a new Part 292 that would
exempt U.S. and foreign air carriers from the statutory and regulatory
duty to file international property (``cargo'') tariffs with DOT,
subject to the reimposition of the duty in specific cases when
consistent with the public interest. Commencing with the effective date
of the final rule, currently effective cargo tariffs would be canceled
as a matter of law, pending tariff applications would be dismissed, and
new tariffs would not be accepted for filing. This action is taken on
the Departments initiative.
DATES: Comments should be received no later than December 23, 1994.
Proposed Effective Date: Since the proposal would eliminate a
requirement and create no additional burden, the exemption provisions
would be effective immediately upon issuance of a final rule.
ADDRESSES: Comments should be sent to the Docket Clerk, Docket No.
49827, U.S. Department of Transportation, 400 7th Street, SW., Room
4107, Washington DC 20590-0002, and should plainly refer to this
docket. To facilitate consideration of the comments, we ask commenters
to file twelve copies of each comment. We encourage commenters who wish
to do so also to submit comments to the Department through the
Internet; our Internet address is dot-dockets@postmaster.dot.gov. Note,
however, that at this time the Department considers only the paper
copies filed with the Docket Clerk to be the official comments.
Comments will be available for inspection at this address from 9:00
a.m. to 5:00 p.m., Monday through Friday. To receive an acknowledgment
of receipt of comments, include a stamped, self-addressed postcard
which the Docket Clerk will time and date-stamp, and return.
FOR FURTHER INFORMATION CONTACT:
Mr. Keith A. Shangraw or Mr. John H. Kiser, Office of the Secretary,
Office of International Aviation, X-43, Department of Transportation,
at the address above. Telephone: (202) 366-2435.
SUPPLEMENTARY INFORMATION:
Background
Section 41504 of Title 49 of the United States Code, formerly
section 403(a) of the Federal Aviation Act of 1958, as amended,
requires every U.S. and foreign air carrier to file with the
Department, and to keep open for public inspection, tariffs showing all
prices for foreign air transportation between points served by that
carrier, as well as all rules relating to that transportation to the
extent required by the Department. This includes prices for carriage of
cargo, known as cargo ``rates.'' Over the years, international cargo
tariffs have provided U.S. regulatory authorities with a means to
exercise close regulatory supervision over cargo pricing, either for
public policy or consumer protection reasons, or in the context of
bilateral aviation relations. Increasingly, however, we have come to
see that the cargo tariff is a device that is no longer necessary for
us to meet our public interest objectives, and that this tariff regime
is costly and burdensome to everyone connected with it.
Cargo rates fall into two broad categories: (1) General commodity
rates (GCRs), and (2) special rates. Special rates include specific
commodity rates (SCRs), contract rates, container rates and exception
rates, all of which are based on the characteristics of particular
types of traffic, as well as expedited, door-to-door rates for
documents and small packages, which are based on a premium service.
In the cargo area, only international scheduled service tariffs
continue to be filed with the Department. Domestic scheduled service
cargo tariffs were eliminated in 1978 by Regulation ER-1080, 43 FR
53635, November 16, 1978. Similarly, both domestic and international
cargo charter tariffs were eliminated in 1979 by ER-1125, 44 FR 33056,
June 8, 1979. Domestic and international tariffs of air freight
forwarders (part of a class of carriers called ``indirect cargo air
carriers'' or ``foreign indirect air carriers'') were eliminated by ER-
1094, 44 FR 6634, February 1, 1979, and by ER-1159, 44 FR 69635,
December 4, 1979, respectively.
The Department's regulatory policy regarding international cargo
rate tariffs appears at 14 CFR 399.41.\1\ Under this policy,
independently-set carrier prices in most international cargo rate
categories are effectively deregulated.\2\ Barring extreme
circumstances, the only tariff rates over which the Department
continues to exercise regulatory supervision are GCRs up to and
including the 500 kilogram weight break, and certain exception
rates.\3\ Even this oversight is not applicable to markets governed by
a liberal entry and pricing regime.
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\1\This policy was originally established by the Department's
predecessor agency in this area, the Civil Aeronautics Board (CAB),
in 1983. The Department assumed jurisdiction over international
cargo tariffs and cargo rate regulation upon CAB sunset, January 1,
1985.
\2\Agreements containing international cargo rates, which
carriers coordinate through the tariff conferences and procedures of
the International Air Transport Association (IATA), must be filed
with and approved by the Department before tariffs can be filed or
other steps taken for their implementation. These agreements are
subject to economic justification requirements and Department
analysis which are independent of its tariff policy and procedures.
The proposed rule will not affect the review of IATA agreements in
any way.
\3\Section 399.41 sets zones of pricing flexibility for GCRs up
to 500 kilograms, and establishes a Standard Foreign Rate Level
(SFRL) for each market as the basis for these zones of flexibility.
The SFRL is calculated periodically to reflect changes in the cost
experiences of the carriers. The SFRL zones also govern exception
rates, priced at levels higher than comparable GCRs, for shipments
of live animals, perishable goods and other kinds of specialized
cargo. However, the other special rate categories are not subject to
any zone constraints.
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Since its adoption in 1983, section 399.41 has proved adequate.
Virtually no complaints have been received against filed cargo tariffs,
whether against rates or against rules stating conditions of
service.\4\ In many markets, carriers have not used the upward
flexibility available to them to raise rates to the SFRL ceilings. The
international cargo market has continued to evolve to the point where
today the Department tentatively believes that it no longer needs to
rely on the routine government supervision of cargo tariffs to protect
the public.
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\4\The basic conditions of service for the international air
transportation of cargo are also stated in the carriers' air
waybills, and most areas of potential shipper concern are governed
directly by provisions of the Warsaw Convention.
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Many shippers who now tender shipments directly to carriers are
large volume forwarders or ``consolidators.'' These shippers have a
sufficient position in the market to shop around and negotiate the best
service/price options. Many small volume or irregular shippers are now
generally served either by consolidators or, increasingly, by small
package specialists offering premium services. The filing of
consolidator tariffs was discontinued in 1979 with no apparent adverse
effect on the public. Nor has the Department received any complaints
about small package rates, which have not been regulated in keeping
with its liberal pricing policy on all optional premium services.
The U.S. Government has also actively pursued the liberalization of
international cargo prices with other countries. It has concluded
aviation agreements which effectively deregulate cargo prices in a
number of major markets, including the United Kingdom, Belgium,
Germany, and the Netherlands. We have had no bilateral pricing disputes
involving cargo rates in recent years, and the Department expects that
deregulation of international cargo prices will continue to be a
routine objective in future bilateral or multilateral discussions.
Indeed, a few foreign countries are considering, or have already
decided, not to require carriers to file international cargo rate
tariffs with their aviation authorities.
Carriers are thus filing, and the Department is processing,
thousands of pages of cargo tariff material each year with little, if
any, meaningful regulatory consequence.\5\ Requiring the continued
routine carrier filing of cargo tariffs would burden the industry
unnecessarily, and continuing the physical processing and storage of
such tariffs would needlessly burden the Department in an era of scarce
and diminishing governmental resources without consequent benefits. In
these circumstances, the Department tentatively has determined to end
the routine filing and review of detailed price and other tariff
information relating to the carriage of cargo by air.\6\
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\5\In 1993 alone, The Department received and processed 8,591
pages of cargo tariffs.
\6\International air transport agreements routinely permit, but
do not obligate, each party to require tariffs to be filed with its
aeronautical authorities.
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The proposed rule would exempt U.S. and foreign air carriers from
their statutory and regulatory duty to file tariffs with DOT containing
rates and any other rules or conditions of service for the carriage of
cargo to/from U.S. points, and it would not permit them to do so.
Existing tariffs would be cancelled, and pending tariff applications
would be dismissed. The exemption would encompass all material
currently filed in international cargo tariffs with DOT.
However, existing regulations of the Department, set forth in 14
CFR Part 249 and in section 221.177 of 14 CFR Part 221, would continue
to require each carrier, individually and through its agents, to
maintain pertinent information on its cargo prices and rules, and to
make that information available to the public upon request.
This rule will not materially lessen the Department's ability to
intervene in cargo pricing and related matters should that be
necessary. First, Departmental review of IATA cargo agreements will
continue. Second, the Department has always had statutory authority to
take action directly against unfiled cargo prices and rules under a
variety of circumstances.\7\ And third, the Department will reserve the
option under the proposed rule of revoking the exemption in whole or in
part, thus reinstating the tariff-filing obligation, with regard to a
particular carrier or carriers where consistent with the public
interest. This would make available to the Department, in a timely
manner, the full panoply of tariff-filing requirements and review
procedures that are currently applicable, although the Department would
not necessarily implement them all in any particular case.\8\
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\7\See, e.g., 49 U.S.C. sections 41712, 41507 and 41310.
\8\For example, the Department could require filings, but grant
a waiver from all or some of the format procedures set forth in Part
221 of the Regulations; or it might require the filing of only a
particular rate or group of rates of a particular carrier.
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To facilitate any cargo rate evaluation that may be required, the
Department proposes to leave in place its current regulatory policies,
embodied in the section 399.41 policy statement, and to continue to
recalculate the SFRL cost index. This would continue to establish
benchmark levels for GCRs and exception rates that would be, prima
facie, reasonable, and that could be used to resolve any complaints
against rates in categories regulated by the SFRL.
In addition to rates, existing cargo tariffs also contain general
material governing such subjects as notice of terms of contract of
carriage, liability for loss, claims procedures, carriage of dangerous
goods, acceptability of cargo, and other general matters of concern to
shippers and other consumers of international cargo air transportation.
The absence of cargo tariffs should have no impact in this regard. Most
such material merely restates provisions contained in the standard air
waybill or other contract of carriage, and it is not necessary for the
protection of shippers to repeat the information in filed tariffs. To
the extent that shippers have questions about the application or
interpretation of certain contract provisions, it is likely that they
consult the carrier directly rather than its tariffs. To the extent
that tariffs might set forth certain provisions in greater detail, the
Department already has an alternative framework in place to permit its
incorporation into the contract of carriage. Under section 221.177,
carriers may incorporate by reference material not actually printed on
the air waybill, provided that they make the full text of all such
incorporated terms readily available for public inspection, in either
electronic or printed medium, at each airport or other sales office of
the carrier. This procedure preempts any state laws on the same
subjects, as did 14 CFR Part 253 in the case of domestic passenger air
transportation.
Regulatory Analyses and Notices
Executive Order 12866 and DOT Regulatory Policies and Procedures
The Department has determined that this proposed rule is not
subject to review under Executive Order 12866. Moreover, the rule is
not significant under the Department's Regulatory Policies and
Procedures (44 CFR 11034; Feb. 26, 1979). A regulatory evaluation in
this Docket shows that the benefits of the proposed rule exceed the
costs to the industry and the Federal Government significantly, since
it eliminates a current regulatory burden, without imposing other
requirements.
Executive Order 12612
This proposal has been analyzed in accordance with the principles
and criteria contained in Executive Order 12612 (``Federalism''), and
the Department has determined the rule does not have sufficient
federalism implications to warrant the preparation of a Federalism
Assessment.
Regulatory Flexibility Act
I certify that this rule, if adopted, will not have a significant
economic impact on a substantial number of small entities. The tariff
filing requirements apply to scheduled service air carriers. The vast
majority of the air carriers filing international (``foreign'') air
cargo tariffs are large operators with revenues in excess of several
million dollars each year. Small air carriers operating aircraft with
60 seats or less and 18,000 pounds payload or less that offer on-demand
air-taxi service are not required to file such tariffs.
Paperwork Reduction Act
With respect to the Paperwork Reduction Act, this proposed rule
change eliminates information collection requirements that require the
approval of the Office of Management and Budget pursuant to the Act.
This proposal will reduce paperwork burden, as described in detail in
the Regulatory Evaluation in this docket.
If these proposed regulations are implemented, about 7,000 to
10,000 tariff pages encompassing cargo rates, charges and rules, and
about 500 Cargo Special Tariff Permission Applications (STPA's), would
be eliminated each year, saving the air carriers a filing fee of $2 per
cargo page and $12 per cargo STPA (which generally consists of about
three double-sided pages for each STPA form).
Such filing fees, now paid to DOT, total about $20,000 or less
annually. Air carriers and their cargo filing agents also would avoid
the burden of preparing and transmitting tariff filings, estimated to
be about 5.34 hours for each of the 7,500 cargo tariff pages and STPA
forms, or about 40,050 burden hours, which at an estimated industry
salary rate of about $10.40 an hour would indicate a savings of
approximately $416,520.
In addition, other associated costs, such as those incurred by
carriers to formulate and disseminate the cargo rate and rules pages to
their customers, may be reduced. For example, the $48 charge per
international cargo tariff page to cover 1994 publication/distribution
costs, announced by the Airline Tariff Publishing Company (ATPCO) in
Cargo Tariff Bulletin No. 19, dated November 18, 1993, might be
favorably affected. The subscription rate for each cargo tariff ranges
from $15 to $95, based upon speed of delivery (bulk/priority/or air).
Currently the charge for the delivery of the complete international
cargo tariff in the U.S., Canada or Mexico is $200, or $500 for
delivery elsewhere. Whether these subscription rates would be reduced
would be decided by the tariff agent and the air carriers.
For further information contact: The Information Requirements
Division, M-34, Office of the Secretary of Transportation, 400 Seventh
Street, S.W., Washington, D.C. 20590, (202) 366-4735 or Transportation
Desk Officer, Office of Management and Budget, New Executive Office
Building, Room 3228, Washington, DC 20503.
Any comments regarding the burden estimate or any aspect of these
information requirements, including suggestions for reducing the
burden, may be sent to: Director, Office of Airline Statistics, DAI-1,
U.S. Department of Transportation, Research and Special Programs
Administration, 400 Seventh Street, S.W., Room 4125, Washington, DC
20590-0001 as well as the above contact at OMB.
Regulation Identifier Number
A regulation identifier number (RIN) is assigned to each regulatory
action listed in the Unified Agenda of Federal Regulations. The
Regulatory Information Service Center publishes the Unified Agenda in
April and October of each year. The RIN number contained in the heading
of this document can be used to cross reference this action with the
Unified Agenda.
List of Subjects
14 CFR Part 221
Air carrier, Cargo rates, Tariffs, Reporting and recordkeeping
requirements.
14 CFR Part 292
International cargo transportation.
This rule is being issued under authority delegated in 49 CFR
1.56(j)(2)(ii). For the reasons set forth in the preamble, it is
proposed that 14 CFR Part 221 be amended and a new Part 292 be added,
to read as follows:
PART 221--TARIFFS
1. The authority citation for Part 221 continues to read as
follows:
Authority: 49 U.S.C. 40101, 40109, 40113, 46101, 46102, Chapter
411, Chapter 413, Chapter 415, and Subchapter I of Chapter 417,
unless otherwise noted.
Subpart A--[Amended]
2. Section 221.3 is amended by adding paragraph (d)(9) to read as
follows:
Sec. 221.3 Carrier's duty.
* * * * *
(d) * * *
(9) Part 292, International Cargo Transportation, except as
provided in Part 292.
* * * * *
3. A new Part 292 is added to read as follows:
PART 292--INTERNATIONAL CARGO TRANSPORTATION
Subpart A--General
Sec.
292.1 Applicability.
292.2 Definitions.
Subpart B--Exemption From Filing of Tariffs
292.10 Exemption.
292.11 Revocation of exemption.
Subpart C--Effect of Exemption
292.20 Rule of construction.
292.21 Termination of effectiveness.
Authority: 49 U.S.C. 40101, 40105, 40109, 40113, 40114, 41504,
41701, 41707, 41708, 41709, 41712, 46101; 14 CFR 1.56(j)(2)(ii).
Subpart A--General
Sec. 292.1 Applicability.
This Part applies to direct air carriers providing scheduled
transportation of cargo in foreign air transportation.
Sec. 292.2 Definitions.
For purposes of this part:
Direct air carrier means an air carrier or foreign air carrier that
directly engages in foreign air transportation under a certificate,
regulation, order or permit issued by the Department of Transportation
or its predecessor.
Cargo means property other than baggage accompanied or checked by
passengers, or mail.
Cargo tariff means a tariff containing rates, charges, or
provisions governing the application of such rates or charges, or the
conditions of service, applicable to the scheduled transportation of
cargo in foreign air transportation.
Subpart B--Exemption From Filing of Tariffs
Sec. 292.10 Exemption.
Direct air carriers are exempted from the duty to file cargo
tariffs with the Department of Transportation, as required or provided
by 49 U.S.C. 41504 and 14 CFR Part 221.
Sec. 292.11 Revocation of exemption.
(a) The Department, upon complaint or upon its own initiative, may
take action to revoke in whole or in part the exemption granted by this
Part with respect to a carrier or carriers, when such action is in the
public interest.
(b) The decisionmaker will be the Assistant Secretary for Aviation
and International Affairs.
(c) Revocations under this section will have the effect of
reinstating all applicable tariff requirements, and procedures
specified in the Department's regulations for the tariff material to be
filed, unless otherwise specified by Department order.
Subpart C--Effect of Exemption
Sec. 292.20 Rule of construction.
Carriers holding an effective exemption from the duty to file cargo
tariffs under this Part shall not, unless otherwise directed by order
of the Department, be subject to tariff posting, notification or
subscription requirements set forth in 49 U.S.C. 41504 of the Act or 14
CFR Part 221, except the requirements set forth in section 221.177 and
the requirements set forth in 14 CFR Part 249. References to
``tariffs'' in section 221.177 shall be construed to mean terms,
conditions or other provisions which are part of the contract of
carriage as permitted by that section.
Sec. 292.21 Effect of exemption.
As of [insert publication date], cargo tariffs on file with the
Department will cease to be effective as tariffs under 49 U.S.C. 41504
and 41510 and will be canceled by operation of law. Pending
applications for filing and/or effectiveness will be dismissed by
operation of law. No new filings or applications will be permitted
except as provided under section 292.11, above.
Issued in Washington, D.C. on October 18, 1994.
Patrick V. Murphy,
Acting Assistant Secretary for Aviation and International Affairs.
[FR Doc. 94-26211 Filed 10-21-94; 8:45 am]
BILLING CODE 4910-62-P
