02-27919. Advisory to Ocean Common Carriers, Conferences and Discussion Agreements of Such Carriers, Shippers, Shippers' Associations, Ocean Transportation Intermediaries and Tariff Publishers in the Foreign Commerce of the United States Regarding ...

October 29, 2002.

The Federal Maritime Commission (“Commission”) has been monitoring ongoing developments relating to the congestion and delays that recently have occurred, and may continue for some time, at U.S. West Coast ports. We also have received several inquiries from interested parties as to the legality of certain carrier actions being taken or proposed. Accordingly, the Commission wishes to remind the regulated industry and the shipping public of the general requirements of the Shipping Act of 1984, 46 U.S.C. app. § 1701 et seq. (“1984 Act”) and of the Commission's rules that govern rate changes that result in an increased cost to the shipper. These provisions should provide guidance to shippers and carriers in this situation.

Section 8(d) of the 1984 Act, and the Commission's rules on tariffs at 46 CFR 520.8, generally prohibit any “change in an existing rate that results in an increased cost to the shipper from becoming effective earlier than 30 calendar days after publication.” The Commission's rules on tariffs state that the “rates, charges, and rules applicable to any given shipment shall be those in effect on the date the cargo is received by the common carrier or its agent including originating carriers in the case of rates for through transportation.” 46 CFR 520.7(c).

With respect to service contracts, the public is reminded that the specific terms of individual service contracts generally govern the rates and service obligations of the parties. Any variance from specific terms must be authorized otherwise, either by the terms of the contract itself or by reference therein to other applicable authority, such as carrier rules tariffs which would normally be subject to the 30-day notice requirement. Of course, service contract terms always may be varied by mutual agreement of the parties reflected in an amendment duly filed with the Commission and otherwise consistent with applicable regulations and statutes.

The Commission wishes to caution the industry and the shipping public that these general rules remain in effect and that any actions inconsistent with these rules would be permissible only if they are authorized by other lawful provisions. Specifically, any surcharges published in tariffs that are designed to address the consequences of continuing congestion at U.S. West Coast ports generally should not be instituted without the required 30-day notice, and may be applied only in conformance with the applicable “effective date” rule, cited above. Again, parties to service contracts lawfully may negotiate alternative means of addressing the costs associated with this congestion through amendment of their service contacts.

The Commission recognizes that a host of differing circumstances and questions will arise as the West Coast dock situation continues to unfold. The foregoing does not attempt to address all such matters—it is intended to serve as general guidance. Involved parties who have any uncertainty as to the legality of the actions they are encountering or proposing may wish to obtain legal counsel. The Commission will continue to monitor this situation and is available to answer general questions on applicable legal requirements. Any questions relating to this Advisory or other aspects of common carriers' service in the present situation may be directed to Vern W. Hill, Director, Bureau of Enforcement, at [phone] or by electronic mail at [e-mail].

This Advisory will be posted on the Commission's website at http://www.fmc.gov,, posted in the Office of the Secretary, 800 N. Capitol Street, NW., Room 1046, Washington, DC 20573, and published in the Federal Register.

By the Commission.

Bryant L. VanBrakle,

Secretary.