[Federal Register Volume 61, Number 56 (Thursday, March 21, 1996)]
[Rules and Regulations]
[Pages 11564-11584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6600]
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FEDERAL MARITIME COMMISSION
46 CFR Part 572
[Docket No. 94-31]
Information Form and Post-Effective Reporting Requirements for
Agreements Among Ocean Common Carriers Subject to the Shipping Act of
1984
AGENCY: Federal Maritime Commission.
ACTION: Final rule.
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SUMMARY: The Federal Maritime Commission is amending its regulations
governing the information submission requirements for agreements among
ocean common carriers subject to the Shipping Act of 1984. Certain
kinds of newly filed agreements are required to be accompanied by a new
information form, which requires the submission of specific data on the
agreement member lines' cargo carryings, revenue results and port
service patterns before they entered into the agreement. In addition,
the member lines of certain kinds of effective agreements will be
required to submit reports on their operations on a regular and ongoing
basis, which will reflect the lines' cargo carryings, revenue results
and port service patterns after they entered into the agreement. The
application of this rule to a particular agreement depends primarily on
whether the agreement authorizes its carrier members to engage in
certain activities, and secondarily on the carrier members' combined
market share. An agreement that does not authorize any of the
activities specified by the rule must still be filed with the
Commission, unless it qualifies for one of the Commission's filing
exemptions, but does not have any information form or reporting
obligations. The intent of this rule is to provide the Commission with
improved information on the impact of concerted carrier practices on
the foreign commerce of the United States, and to facilitate the
processing and monitoring of ocean carrier agreements under the
standards of the Shipping Act of 1984.
EFFECTIVE DATE: April 19, 1996, except for 46 CFR 572.701(a) and 46 CFR
572.702, which are stayed until further notice.
FOR FURTHER INFORMATION CONTACT:
Robert D. Bourgoin, General Counsel, Federal Maritime Commission, 800
North Capitol Street, NW., Washington, DC 20573-0001, (202) 523-5740
[[Page 11565]]
Austin L. Schmitt, Director, Bureau of Economics and Agreement
Analysis, Federal Maritime Commission, 800 North Capitol Street, NW.,
Washington, DC 20573-0001, (202) 523-5787
SUPPLEMENTARY INFORMATION:
A. Background
The jurisdiction of the Federal Maritime Commission (``FMC'' or
``Commission'') over ocean carrier agreements in the foreign commerce
of the United States extends under section 4(a) of the Shipping Act of
1984 (``1984 Act'') to all agreements to:
(1) Discuss, fix, or regulate transportation rates, including
through rates, cargo space accommodations, and other conditions of
service;
(2) Pool or apportion traffic, revenues, earnings, or losses;
(3) Allot ports or restrict or otherwise regulate the number and
character of sailings between ports;
(4) Limit or regulate the volume or character of cargo or
passenger traffic to be carried;
(5) Engage in exclusive, preferential, or cooperative working
arrangements * * *;
(6) Control, regulate, or prevent competition in international
ocean transportation; and
(7) Regulate or prohibit * * * use of service contracts.
46 U.S.C. app. 1703(a).
The reforms in 1984 to the Shipping Act were intended in large part
to facilitate the swift effectiveness, with immunity from the antitrust
laws, of such agreements. Section 15 of the former Shipping Act, 1916
(``1916 Act''), had required carriers to secure Commission approval for
any agreement governing rates, conditions of service, or similar
matters, before such an agreement could become effective. Under
standards set forth in section 15, the Commission was permitted to
disapprove, cancel, or modify any agreement which it found to be
unjustly discriminatory or unfair, or to operate to the detriment of
the commerce of the United States, or to be contrary to the public
interest, or to be in violation of the 1916 Act. 46 U.S.C. 814 (1982).
The Commission, with Supreme Court approval, had taken the position
that agreements to set rates, pool revenues, restrict capacity, or to
engage in other activities that normally would be contrary to the
antitrust laws were presumed to be contrary to the public interest, and
would be approved only if they were shown to be ``required be a serious
transportation need, necessary to secure important public benefits or
in furtherance of a valid regulatory purpose of the Shipping Act.'' FMC
v. Svenska Amerika Linien, 390 U.S. 238, 243 (1968). The burden of
making this showing was placed upon the carrier proponents of an
agreement, on the ground that information regarding the operation and
probable future impact of an agreement ``[a]lmost uniformly * * * is in
the hands of those seeking approval * * * and it is incumbent upon
those in possession of such information to come forward with it.''
Mediterranean Pools Investigation, 9 F.M.C. 264, 290 (1966). Under
these procedures, the implementation of agreements had often been
delayed for considerable amounts of time, especially if formal protests
were made. See Marine Space Enclosures, Inc. v. FMC, 420 F.2d 577 (D.C.
Cir. 1969) (requiring that the Commission hold a hearing where a
protest raising substantial issues had been filed). In many cases,
protests were filed by other carriers, who effectively delayed or
blocked the approval of their competitors' business plans.
The 1984 Act did away with the requirement that an agreement had to
be approved by the Commission before it could lawfully operate.
Instead, agreements now generally become effective forty-five days
after they are filed. As a partial counterbalance to this liberalized
approach, conference agreements \1\ are required by section 5(b) of the
Act, 46 U.S.C. app. 1704(b), to include a number of procompetitive
provisions, and the Commission may reject a conference agreement that
does not meet this standard. Especially noteworthy is the requirement
that all conference agreements must clearly state that any member line
may take ``independent action'' (``IA'') on any rate or service item
required to be filed in a tariff with the Commission; this empowers any
member line to set an individual rate below (or above) the conference
rate, without having to obtain approval of the rate from the other
member lines. The conference is then required to publish the IA rate in
its conference tariff upon no more than ten days' notice.
\1\ Under the 1984 Act, a conference is an association of ocean
common carriers that engage in concerted activities and utilize a
common tariff. Section 3(7), 46 U.S.C. app. 1702(7).
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The Commission may also prescribe the ``form and manner'' in which
agreements of any kind must be filed, and may reject an improperly
drafted agreement. In addition, the Commission may request information
and documents in connection with a newly filed agreement and, if its
demand is not ``substantially'' met, may seek a delay in the
agreement's effective date or other relief from the United States
District Court for the District of Columbia.\2\
\2\ Sections 6 (d) and (i) of the 1984 Act, 46 U.S.C. app. 1705
(d) and (i).
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The 1984 Act sets forth an extensive list of prohibited acts,
barring many anticompetitive practices that previously had been
outlawed under the broad ``public interest'' standard of section 15 of
the 1916 Act. For example, section 10(b)(6) of the 1984 Act, 46 U.S.C.
app. 1709(b)(6), carries forward section 15's prohibition of agreements
that are unfair or unjustly discriminatory between shippers or ports.
Sections 10(c) (1)-(3) and (5) of the 1984 Act, id. app. 1709(c) (1)-
(3) and (5), prohibit boycotts, restrictions on technological
innovations, predatory practices and the denial of reasonable freight
forwarded compensation, all of which the Commission previously had
found violated section 15.\3\
\3\ See S. Rep. No. 3, 98th Cong., 1st Sess. 35-37 (1984).
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If the Commission has indications that an agreement may be
operating in violation of the 1984 Act, it may institute an
investigation of the agreement and its member lines. In addition, the
Commission may ask any U.S. district court to temporarily enjoin the
agreement while the investigation proceeds.\4\ If the court should find
that continued operation of the agreement would be inequitable, it can
issue an order barring further effectiveness of the agreement until ten
days after issuance of the Commission's final decision. If the
Commission should find in its final decision that violations of the
1984 Act in fact occurred, it may ``disapprove, cancel or modify'' the
agreement,\5\ which would in effect supersede the existing court
injunction. In addition, the Commission may assess fines against the
agreement member lines.\6\
\4\ Section 11(h)(1) of the 1984 Act, 46 U.S.C. app. 1710(h)(1).
\5\ Section 11(c) of the 1984 Act, 46 U.S.C. app. 1710(c).
\6\ Section 13(a) of the 1984 Act, 46 U.S.C. app. 1712(a).
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The other procedure provided by the 1984 Act by which the
Commission can prevent an agreement from going into effect, or prevent
further operation of an existing agreement, is set forth in section
6(g). This provision authorizes the Commission to seek an injunction in
the U.S. District Court for the District of Columbia against an
agreement that is ``likely, by a reduction in competition, to produce
an unreasonable reduction in transportation service or an unreasonable
increase in transportation cost.'' 46 U.S.C. app. 1705(g). A proceeding
under section 6(g) does not involve questions of discrimination or
[[Page 11566]]
unfairness, which are covered by the section 10 prohibited acts, nor
does it involve questions of statutory violations or fines against the
carriers. Section 6(g) was meant to provide a way of dealing with
``unusual or severe cases not addressed by other prohibitions in the
Act,'' \7\ and the only remedy available under the provision is an
injunction against the agreement itself.
\7\ H.R. Rep. No. 600, 98th Cong., 2d Sess. 37 (1984).
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B. The Commission's Agreement Program
The Commission's procedures for evaluating and monitoring carrier
agreements reflect the responsibilities and limitations imposed by the
1984 Act. When an agreement is first filed, its provisions are
immediately reviewed to ensure that they contain the 1984 Act's
mandatory provisions and do not authorize activities barred by the
prohibited acts sections. In the ordinary case, that is a one-time
process and does not entail ongoing periodic review.
An agreement's effect on shippers, ports and maritime commerce is a
different matter. An agreement of significant anticompetitive
dimensions--for example, a large market share combined with authority
to fix rates and control service contracts--poses potential dangers of
unjust discrimination and unreasonable rate increases or service
reductions both when it is first filed and for as long as it remains in
effect. Thus, under the new regulatory framework established by the
1984 Act, the role of the Commission as a monitoring and surveillance
agency was greatly enhanced. In discharging that responsibility, the
Commission cannot merely examine an agreement's provisions; rather, it
must continually gather, review and interpret data on the impact of the
agreement on U.S. foreign commerce. As for the source of such
information, the 1984 Act removed the burden of proof in agreement
investigations from the carriers, but did not alter the accuracy of the
Commission's 1966 observation in Mediterranean Pools Investigation that
the primary source for information on the operation of an agreement is
the carriers that are the parties to the agreement.
C. The Proposed Rule
On December 5, 1994, the Commission published a Notice of Proposed
Rulemaking (``NPR'' or ``proposed rule'') (59 FR 62372), which proposed
significant amendments to the Commission's regulations governing the
submission of information by ocean carriers about their agreements. The
Commission explained that, while the existing regulations had served
their purpose adequately, the increasingly comprehensive and complex
agreements filed in recent years indicated a need for updating and
augmentation. The Commission pointed out that agreements with multi-
country geographic ranges are now common, new devices and arrangements
for dealing with excess capacity have appeared, rate discussion
agreements between conference and nonconference lines have become more
prevalent, and networks of vessel and space charter agreements covering
a multitude of trade lanes have been established.
In response to these industry developments, the Commission proposed
new regulations designed to elicit more detailed and specific
information on ocean carrier agreements in a more structured and
comprehensive manner. The proposed rule formulated a sliding scale of
information demands for three classes of agreements that authorized
certain specific activities, ``Class A,'' ``Class B'' and ``Class C.''
An agreement that did not authorize any of the specified activities
would still be required by law to be filed with the Commission, unless
it qualified for one of the existing exemptions established by the
Commission,\8\ but would not have any information obligations.
\8\ See 46 CFR 572.302-11.
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1. Classification of Agreements: The Six Class A/B Activities
Under the proposed rule, Class A and Class B agreements permitted
the same kinds of activities; the difference between them was market
share. An agreement would be a Class A or a Class B agreement if it
authorized any one of the following six activities:
Ratemaking. This specifically included not only
traditional conference agreements, under which a group of lines agree
upon fixed rates and practices and are bound to them under a common
tariff, but also less formal agreements which authorize discussion and
agreement upon rates on a ``non-binding'' basis. The Commission noted
that the latter types of agreements have become increasingly common,
and that their presence in a trade raises serious concerns about the
true level of competition since they can involve discussions and
agreements about rates between non-conference lines or between a
conference and its non-conference competitors.
Under the proposed rule, the ``ratemaking'' criterion would be met
if the agreement authorizes its carrier members to (1) agree on a
binding basis under a common tariff, (2) agree on a non-binding basis,
or (3) discuss any kind of basic linehaul rate. On the other hand, the
proposed rule specifically excluded those agreements that are limited
to practices that affect the manner in which rates are collected from
shippers--for example, credit conditions and the handling of delinquent
accounts--but do not concern the level of the rates themselves, and
those agreements that concern charges or payments to persons other than
shippers, e.g., inland divisions of through rates, brokerage, freight
forwarder compensation, employment of neutral bodies for self-policing
purposes, or development of cargo information systems.
Discussion or exchange of vessel-operating cost data. The
Commission has received a number of agreements that do not authorize
rate discussions or agreements of any kind, but do authorize discussion
of or exchange of cost data among the member carriers. The most
significant costs for ocean common carriers are vessel-operating costs,
which the proposed rule defined to include wages of officers and crew,
fringe benefits, consumable stores, supplies and equipment, maintenance
and repair, insurance, vessel fuel, and charter hire. The Commission
stated that it believed that agreements to discuss and exchange
information about these costs should be subjected to the same degree of
scrutiny as their close cousins, rate discussion agreements. On the
other hand, the proposed rule did not apply the ``costs'' criterion to
discussion of other types of expense that are less important for
setting rates. In order to make this distinction effective, the
proposed rule required agreements seeking to authorize discussion or
exchange of cost data to specify whether that authority includes any of
the vessel-operating costs.
Joint service. The Commission observed that, while the
introduction of a joint service into a trade by outside lines may
increase the level of competition and the range of services available
for shippers, there can be negative effects on competition and service
if the joint service is formed by lines that up to that point had been
competing in the trade, and especially if the new entity would have
substantial market power.
``Capacity management'' or ``capacity regulation.'' This
relatively new device for dealing with overtonnaging had appeared in
two major agreements, the Trans-Atlantic Conference Agreement
(``TACA'') and
[[Page 11567]]
the Transpacific Stabilization Agreement (``TSA''). It limited the
availability of vessel space to shippers, but did not reduce the real
capacity of the carriers.
Regulation or discussion of service contracts. Most
agreements engaging in this activity are conference agreements, which
would already be covered by the ``ratemaking'' criterion. However,
agreements among non-conference lines may include authority to confer
and to reach ``non-binding'' agreements on service contract terms.
Cargo or revenue pooling. The Commission explained that
such agreements are severely anticompetitive by nature and must be
closely regulated.
2. Classification of Agreements: The Importance of Market Share
The proposed rule required any agreement that authorized one or
more of the six Class A/B activities to be accompanied, upon its
initial filing, with an information form showing its parties' market
shares both for the entire agreement and in each of the sub-trades
within the overall scope of the agreement, during the most recent
calendar quarter for which complete data are available. ``Sub-trade''
was defined as all liner movements between each U.S. port range
(Atlantic, Gulf and Pacific) and each foreign country within the
overall scope of the agreement. For example, an agreement with an
overall scope of U.S. Pacific Coast to the Far East would have sub-
trades of U.S. Pacific Coast to Japan, U.S. Pacific Coast to Taiwan,
and so forth.
An agreement that authorized at least one of the six Class A/B
activities and whose parties held combined market shares of 50 percent
or more in half or more of its sub-trades would be classified as a
Class A agreement under the proposed rule.\9\ The parties to such an
agreement would be required to submit extensive historical data on the
initial information form and, if the agreement went into effect, to
submit detailed quarterly reports on their operations under the
agreement. An agreement that authorized at least one of the six
activities, but whose parties did not hold market shares of 50 percent
or more in at least half of its sub-trades, would be classified as a
Class B agreement. It would file the same information form as a Class A
agreement but, if it went into effect, would have significantly lighter
reporting obligations. Under the proposed rule, classification of an
agreement as Class A would not be permanent; the agreement's ongoing
reporting obligations would include market share data, and at the
beginning of each calendar year, the parties' sub-trade market shares
during the third calendar quarter (July-September) of the previous
calendar year would determine whether it would remain under Class A
reporting obligations for the upcoming year.
\9\ For example, if an agreement with ten sub-trades reported
that it had market shares of 50 percent or more in five or more sub-
trades, it would be a Class A agreement. By using that methodology
rather than average market share, the proposed rule sought to focus
on those agreements with significant market power spread through at
least half of their total geographic scope.
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Market share is an important measure of an agreement's potential
for abuse of economic power and unreasonable or discriminatory price
and service practices. In the NPR, the Commission explained that the
break point of 50 percent in at least half of the sub-trades was chosen
``in the belief that an agreement that is a relatively minor presence
in a majority of its sub-trades--that is, a `Class B' agreement--is
unlikely to be able to impose unreasonable or unfair rates or practices
regardless of what it authorizes its parties to do, and does not
require extensive gathering of information about its operation.'' 59 FR
at 62377. The Commission also pointed out, however, that an important
feature of the proposed rule was that the market share calculation for
a rate discussion agreement or a ``non-binding'' rate agreement between
conference and non-conference lines would add the market shares held by
the non-conference lines to those held by the conference lines for
purposes of determining whether the agreement should be classified as
Class A or Class B.
The new focus on sub-trades resulted from the increasing number of
agreements with multi-coast or even multi-continent geographic ranges.
The Commission pointed out in the NPR that in some of the more
geographically fragmented parts of the world, such as the Far East and
the South Pacific, individual countries can constitute separate and
cloistered markets, and that agreements that serve a comparatively
unified landmass, such as Europe, might still implement practices that
differ from area to area within the general market. The Commission
concluded that these factors argued for information-gathering systems
that acquire data relevant to an agreement's sub-trades, rather than
only the market defined by the agreement's total scope. Accordingly,
the information (besides market share) sought by the proposed rule for
Class A agreements was, for the most part, concerned with the
agreement's sub-trades.
3. Class A Agreements Under the Proposed Rule
The proposed rule's informtion form for a Class A agreement began
by requiring a listing of all effective agreements covering all or part
of the geographic scope of the proposed agreement, whose parties
include one or more of the parties to the proposed agreement. This
provision was designed to ensure that the Commission has accurate
information regarding the recent trend toward networks of agreements
connected by common parties. Next, the form required an identification
of all Class A/B activities that the agreement seeks to authorize.
After obtaining the market share data discussed above, the
information form then inquired into the recent agreement-wide cargo
carryings and revenue results of each of the carriers that would now
join together into the agreement. Otherwise, the information form
focused primarily on the state of affairs in each of the agreement's
sub-trades before the agreement was filed. This would be done by
reference to the major commodities carried by the carriers to and from
the United States in each sub-trade.
Using the actual commodities potentially affected by a new
agreement as the chief focus of analysis was a vital component of the
proposed rule. The proposed information form, while continuing to
require the submission of aggregate data in certain areas, mainly would
require each party to the new agreement to identify the commodities
that have made up the bulk of its cargo in each sub-trade and then to
submit data on the revenues it has realized from each of those
commodities. This information was intended to give the Commission a
reasonably thorough summary of pre-agreement activity in each sub-trade
covered by the new agreement, as well as in the agreement's entire
geographic scope. If the agreement should go into effect, that summary
would serve as a baseline for analyzing the corresponding information
later obtained through the post-implementation reports. In the NPR, the
Commission stated:
In sum, the proposed rule both changes the orientation of
agreement review to that of the cargo being affected, and also calls
for more refined and differentiated data from the carriers. These
reforms should provide the Commission with improved and more useful
indicators of the potential or actual impact of an agreement on the
needs of shippers for good service at reasonable rates, and in
particular whether the agreement might cause or has caused unfair or
unreasonable conditions for specific commodities, classes of
shippers or geographic areas.
[[Page 11568]]
59 FR at 62377.
Under the reporting requirements for effective Class A Agreements,
the parties' market shares would continue to be tracked by sub-trade.
In addition, the reporting requirements would mirror the information
form in order to provide ``before and after'' depictions of the trade,
with some additional provisions that can apply only to an effective
agreement. For example, a new section entitled ``Independent Rate
Actions'' was proposed for Class A conference agreements, which would
require the submission of information designed to allow the Commission
to monitor the level of independent rate activity (or the lack of such
activity) on specific commodities.
4. Class B Agreements Under the Proposed Rule
As already stated, the proposed rule prescribed the same
information form for Class B agreements as for Class A agreements. This
would establish the same pre-agreement baseline. However, assuming the
Class B agreement was allowed to go into effect, the reporting
requirements would be limited to quarterly updates on market share,
agreement-wide (as opposed to sub-trade) cargo and revenue results,
membership in other agreements, and changes in port service.
5. Class C Agreements Under the Proposed Rule
An agreement that authorized service rationalization, such as space
charters, coordination of service frequency and port rotations, and
coordination of the size and capacity of vessels to be deployed by the
parties, but did not authorize ``capacity management'' (or any of the
other Class A/B activities), would be a Class C agreement under the
proposed rule. The Commission noted that, although such agreements have
rarely presented serious regulatory concerns, some oversight is
necessitated by section 6(g)'s admonition against agreements that cause
unreasonable reductions in service. For a Class C agreement, the
proposed rule provided for information form and reporting requirements
regarding membership in other agreements and service at the ports
within the agreement's overall scope.
6. Other Amendments
The proposed rule contained a number of other amendments to the
Commission's existing agreement regulations. For the most part, these
amendments were not substantive and were designed to make the existing
regulations consistent with the proposed rule, to eliminate certain
outdated regulations, or to reorganize certain subparts of the existing
regulations.
7. Carrier Costs and Profits
The Commission's obligation under section 6(g) to police against
agreements that may cause, or have caused, unreasonable increases in
transportation rates, and the 1984 Act's purpose of providing an
efficient and economic transportation system in the ocean commerce of
the United States, 46 U.S.C. app. 1701(2), raised the question whether
these policies can or should be pursued by monitoring the costs or
profits of the carriers to a particular agreement. The proposed rule
did not include provisions on carrier costs or profits, but the
Commission solicited comments on the lawfulness and feasibility of such
provisions. Commenters were asked to address how such provisions might
be structured, particularly given the proposed rule's focus on
individual country sub-trades; whether costs or profits under a
particular agreement can be measured accurately, particularly if the
carriers to the agreement also have operations elsewhere; and whether
arguments that an agreement is necessary to control costs or to improve
profits are better explored in the context of an investigation of that
agreement, rather than made the subject of regulations applicable to
broad classes of agreements.
D. Summary of the Comments
The comments on the Proposed Rule were all filed by carriers or
carrier organizations. No shippers, shipper organizations, government
agencies or other maritime interests responded to the NPR. Comments
were filed by:
--TACA, the Asia North America Eastbound Rate Agreement, the
Transpacific Westbound Rate Agreement, the Inter-American Freight
Conference,and twenty-one other conferences and discussion agreements,
filing jointly (referred to below as the ``25 Agreements'');
--the Council of European & Japanese National Shipowners' Associations
(``CENSA'');
--TSA, which adopted the comments of the 25 Agreements and filed
additional comments on the special topic of capacity management
programs;
--the Trans-Pacific Freight Conference of Japan, the Japan-Atlantic and
Gulf Freight Conference, and their member lines (``Japan
Conferences'');
--the India, Pakistan, Bangladesh, Ceylon and Burma Outward Freight
Conference and the Calcutta, East Coast of India and Bangladesh/U.S.A.
Conference (the ``Associated India/Pakistan Conferences''); and
--Hanjin Shipping Co., Ltd.
1. Hanjin
Hanjin's comments attacked the lawfulness of the proposed rule. The
carrier made no counterproposals and suggested no alternatives, but
merely urged that the rule be withdrawn.
Hanjin's central objection was to the proposed rule's model of
generalized regulations that prescribe information requirements for
classes of agreements; the gist of its position was that the Commission
is restricted, as a matter of law, to requiring information only on an
``as needed'' basis for individual agreements. Hanjin contended that,
when an agreement is first filed, the FMC's only authority is to ensure
that the agreement complies with the content requirements of section 5
of the 1984 Act and does not transgress the standards of section 6(g),
and that to discharge those functions the FMC does not need the
information required under the proposed rule. Much of that information,
Hanjin argued, would be overly burdensome to produce and is not
sufficiently tied to the scope, size, or other specifics of a
particular agreement. Similarly, with respect to effective agreements,
Hanjin submitted that the Commission should act only through targeted
investigations where information demands can be properly focused and
limited.
Discussion Hanjin's arguments are incorrect. The Commission has
ample statutory authority to promulgate general regulations governing
the initial evaluation and subsequent surveillance of carrier
agreements. Section 5(a) of the 1984 Act states specifically that
``[t]he Commission may by regulation prescribe the form and manner in
which an agreement shall be filed and the additional information and
documents necessary to evaluate the agreement.'' 46 U.S.C. app. 1704(a)
(emphases added). In addition, the Commission has broad rulemaking
authority under section 17(a) of the Act, id. app. 1716(a), and there
is nothing in the language or legislative history of the Act that bars
the application of that authority to carrier agreements. Hanjin does
not acknowledge that the Commission has had in effect since 1984
extensive rulemaking-generated regulations governing the filing and
monitoring of agreements, including regulations prescribing the current
information form. It should also be pointed out that the Commission
could obtain the same information set forth in the proposed
[[Page 11569]]
rule--both the new information form data and the correlated monitoring
report data--by issuing a demand for a ``periodical or special report''
under section 15 of the 1984 Act, 46 U.S.C. app. 1714(a). However, the
Commission believes that, over the long run, regular and universally
applicable information gathering is less burdensome on the industry
than ad hoc section 15 orders or investigative subpoenas, because it
enhances predictable and consistent regulation and the information
obtained can persuade the agency that more formal and costly
investigations are not necessary.
2. Other Comments
Of the other commenters, none challenged the proposed rule's
central thesis that changes to the FMC's information-gathering
processes were required by the changes in the nature, scope and
complexity of carrier agreements since 1984. The Japan Conferences, for
example, said that they ``* * * do not oppose the concept embodied in
the Proposed Rule which would enable the Commission to become better
informed relative to newly filed agreement activity and their post-
effective implementation.'' (Comments at 3). None of these commenters
objected to the intensified treatment under the rule of rate discussion
agreements, ``non-binding'' rate agreements, and agreements to discuss
or exchange vessel-operating cost data. None argued against the rule's
proposal to distinguish between Class A and Class B agreements on the
basis of market share, and there were no objections to the rule's
proposed demarcation of a 50 percent market share. None argued against
the rule's intention to monitor the impact of effective agreements
according to the revenue realized from leading commodities. None took
issue with the rule's proposal to require by regulation--rather than by
negotiated consent--the submission of reports at regular intervals for
effective agreements, although issues were raised regarding the
frequency of such reports.
E. Specific Issues
The following analysis of the specific issues raised by the
comments is organized by subject matter. In general, the issues raised
by the comments apply both to the proposed rule's revised information
form and to the rule's new post-effective monitoring reports. Where an
issue raised special concerns for either the information form or for
the monitoring reports, that is indicated in the text.
1. Class A/B Activities
(a) Duplicative Filings
The members of the Japan Conferences are also members of three
inter-conference ``policy agreements'' (FMC Nos. 206-010838, 206-
008600, and 206-010707) that contain authority to discuss and agree on
rate and service contract issues of common interest. The Conferences
did not object to the fact that these agreements would be Class A/B
agreements under the proposed rule, but argued that they should not be
required to submit the same information for both the basic conference
agreements and the inter-conference agreements:
These supplementary agreements involve the identical Conference
parties, the same TPFCJ and JAGFC trades and subtrades, the same
vessels and services, and the same Conference rates and service
contracts. . . . [T]he Proposed Rule should be revised to permit the
information which is required to be submitted by the relevant
conference to qualify as the supplementary arrangement's economic
information submission.
(Comments at 6).
Discussion It is unnecessary to amend the rule to deal with this
concern. Complaints from the members of an agreement that they are
being asked to submit information that duplicates information submitted
in connection with another agreement can and will be handled on a case-
by-case basis, under the rule's waiver procedure.
(b) Non-binding Rate Authority That Can Only Be Implemented Through
Other Agreements
A related issue was also raised by the Japan Conference lines,
which stated that they ``also operate under space charter and sailing
agreements within the Conference trades, as well as in other trades and
beyond.'' (Comments at 2). Such agreements typically contain authority
to discuss and agree upon rates on a ``non-binding'' basis, a Class A/B
activity. The Japan Conferences argued, however, that under the terms
of these agreements, any rate agreements arrived under them can only be
implemented through the Conferences themselves, and so all relevant
information about the impact of the smaller agreements would be
provided to the Commission through the Conferences' submissions.
Discussion Again, such discrete, fact-specific situations will be
left for the rule's waiver procedure. A waiver may well be appropriate
for side agreements between two or more conference members that are
subject to reporting requirements through their membership in the
conference agreement itself. However, a different situation would be
presented by an agreement allowing ``non-binding'' rate discussions
between a conference line and non-conference line.
2. Information Form for Class A/B Agreements
(a) Scope of Requirement
The Japan Conferences raised a general objection to the proposed
rule's requirement that all new agreements authorizing any of the Class
A/B activities must file an information form, and to the Commission's
intention, as stated in the proposed rule, to require all effective
agreements that authorize any of the Class A/B activities to file
equivalents of information forms in order to establish baselines for
future monitoring. The Japan Conferences proposed instead that such
requirements be imposed only on agreements with a 35 percent market
share. This change, it was argued, would excuse ``smaller agreements
which are likely never to threaten dominance in the trade they serve or
ever to imperil the (section 6(g)) general standard * * *.'' (Comments
at 10).
Discussion This suggested modification is rejected. The information
form requirement for Class A/B agreements is triggered by the
anticompetitive activities that such agreements authorize, rather than
by market share. This is because the collusion on price or service that
a Class A/B agreement would introduce into a trade has sufficiently
serious implications for shippers and the foreign commerce of the
United States that extensive information on the parties' pre-agreement
prices and services is necessary. If the parties have a low market
share initially, that may ease the agreement's initial review under
section 6(g). However, the agreement's potential for unreasonable price
increases or service reductions would always be present, particularly
since the Commission cannot lawfully impose a term limit on an
agreement's effectiveness. 46 U.S.C. app. 1705(f). If the parties
should eventually obtain a high market share and if the agreement
became the subject of a section 6(g)-- investigation, comparisons with
the pre-agreement profile of the trade would clearly be relevant. In
addition, even a 35 percent market share may make the agreement parties
the price leaders in the trade if the remaining 65 percent is spread
out among many other carriers.
(b) Actual Versus Authorized Activity
The Associated India/Pakistan Conferences suggested that ``[a]s an
additional question or, in the
[[Page 11570]]
alternative, the information form could query whether the parties
actually do discuss or exchange data on operating costs, pool cargoes
or revenues, etc., as the case may be.'' (Comments at 1).
Discussion This suggested amendment is rejected. It would be
impractical to attempt to adjust the level of regulation according to
whether the parties were or were not using the authority contained in
the agreement. Agreements must be taken at face value, and permitted
activities must be assumed to be actual activities. With regard to the
information form, it should be noted that the parties would be
violating the Shipping Act and the antitrust laws if they were already
engaged in the activities that the newly filed agreement sought to
authorize.
3. Market Share
As stated above, no commenter objected to the proposed rule's
provision that an agreement that authorized at least one of the Class
A/B activities and held market shares of 50 percent or more in half or
more of its sub-trades would be classified as a Class A agreement for
purposes of the rule's monitoring report requirements. However, there
were some comments on how market share should be calculated.
(a) Definition of ``Sub-trade''
As stated above, the proposed rule defined ``sub-trade'' as all
liner movements between each U.S. port range (Atlantic, Gulf and
Pacific) and each foreign country within the overall scope of the
agreement.
The 25 Agreements (joined by TSA) said that carriers ``do not
necessarily'' collect and maintain data on cargo movements according to
the proposed rule's definition, and that using that definition would
result in a ``huge'' amount of data for some conferences. (Comments at
4). They would narrow the definition in two ways.
First, the United States should be considered as one unit (i.e., no
port ranges). The same argument was made by CENSA.
Second, it was argued that the Commission should * * *
* * * recognize that agreements may cover a large number of
foreign countries, many of which are small and may be considered
together by the agreement as one market. In such a case, the
agreement should be allowed to provide data to the Commission
regarding this group of foreign countries, rather than having to
break down the data on a country-by-country basis. Accordingly, the
Conferences suggest that the Commission allow the members of an
agreement to provide the data in the manner in which they define
their markets. If, in a particular case, the Commission believes
more detailed data is required, it can request additional
information.
(Comments at 5-6). A similar, though less specific, argument was made
by the Japan Conferences, which contended that the Commission should
allow the substitution of ``broader geographic ranges of countries
wherever possible,'' in order to reduce the burden of complying with
the Rule. (Comment at 13).
Discussion The question of how to define an agreement's sub-trades
is extremely important, because much of the substantive information
required by the final rule--not just market share--is to be collected
and submitted by sub-trade.
Any deviation from the rule's definition of sub-trade, for either
the U.S. side or for the foreign side, will be allowed only through the
rule's waiver procedure. Further, the burden will be on the carriers to
show that their marketing and pricing are done by multi-country regions
rather than by individual countries, or, in the case of the United
States, by the United States as one unit rather than by separate port
ranges. If such a showing is made, then an appropriate adjustment from
the rule's requirements can and should be made. The rule is intended to
measure and monitor actual economic behavior, not to impose its own
model on the industry.
It should be noted, however, that waivers of the definition of
``sub-trade'' could involve difficult issues of fact. For example, in
the case of a newly filed agreement, the information form requires data
from the agreement signatory carriers on their operations in the
agreement trade and sub-trades before the agreement was filed, when the
carriers presumably were not coordinating their marketing and pricing.
Therefore, an attempt to construct a regional definition of ``sub-
trade'' that could be used by all carriers for their information from
data submissions will succeed only if it can be shown that the
carriers, though operating individually, were nevertheless applying
essentially similar regional marketing and pricing practices.
A somewhat easier situation may be presented by the monitoring
reports, which track the market shares, services and revenue results of
the agreement parties after the agreement has been implemented. For
conference agreements at least, this would allow the use of the
agreement common tariff as the indicator of the parties' marketing and
pricing practices, and it should not be difficult to define the
agreement's sub-trades according to the construction of the agreement
tariff. Similarly, a joint service operated by a single entity, see 46
U.S.C. app. 1709(e), would presumably be utilized only one tariff.
Because efforts to agree upon an alternative definition of ``sub-
trade'' for a particular agreement may be arduous and time-consuming,
the final rule provides that a waiver of the rule's definition must be
obtained in advance of the required information submission, whether
that be an information form or a monitoring report.
(b) Market Shares of Non-member Carriers
CENSA, the Japan Conferences and the Associated India/Pakistan
Conferences argued that they should not be required to produce market
share data for carriers not parties to their agreements.
Discussion This suggested modification is rejected. The current
information form already requires the parties to a new agreement to
provide ``estimates (or precise information where available) of non-
party liner operator market share (shown either for each individual
operator or for all operators collectively).'' 46 CFR part 572, at 314
(1994). The final rule is thus only an incremental refinement of an
existing requirement. The rule requires that non-party market shares be
stated by individual liner operator in order that the true extent of
non-party competition can be gauged accurately; as observed above, an
agreement with a market share of only 35 percent could nevertheless
have significant market power if the non-party carriers all have small
market shares.
(c) Cargo Not Measured in TEUs
The proposed rule required market share, cargo carrying and revenue
results to be measured by TEUs. The 25 Agreements and the Associated
India/Pakistan Conferences pointed out that data on breakbulk and
certain other types of cargo are not available in TEUs.
Discussion The final rule clarifies that the member lines of an
agreement should include only containerized cargo (stated in TEUs) in
their information submissions, if the cargo they carry in the agreement
trade--or sub-trade, if that is the focus of the particular report--is
predominantly containerized. If the cargo they carry is predominately
non-containerized, the carriers' reports of market share, cargo
carryings and revenue results should include only non-containerized
cargo. The rule does not impose a particular unit of measure of non-
containerized cargo, requiring
[[Page 11571]]
only that the unit employed be stated clearly and applied consistently.
4. Reports on Cargo Carryings
In response to a comment by the Associated India/Pakistan
Conferences, the final rule clarifies that reports on cargo carryings
should include cargo not subject to tariff filing.
5. Reports on Carrier Revenues
The comments on the proposed rule's provisions for the submission
of carrier revenue data focused on the commercial sensitivity of such
data. The commenters--the 25 Agreements, CENSA and the Japan
Conferences--were apparently concerned that reporting individual
carrier revenue data to the Commission, as the rule would require, will
result in exposure of confidential business information. Three
protective limitations were proposed:
--Conferences with four or more members would provide total revenue and
average-revenue-per-TEU but on an aggregated, agreement-wide basis
rather than on a line-by-line basis. It was argued that this would give
the Commission the necessary information on the agreement's impact,
while safeguarding the confidentiality of the revenue data.
--Conferences with three or fewer members should be exempt from
providing revenue data altogether. The 25 Agreements contended that
even the aggregate approach is not sufficiently protective for smaller
conferences ``***because even with an average, there are so few figures
contributing to the average, the average revenue per line is likely to
be fairly obvious.'' (Comments at 7). It was also submitted that small
conferences often do not have secretariats or other central staff who
can protect sensitive information, and that the demands of the proposed
rule would be especially burdensome for small conferences.
--Rate discussion agreements which do not have binding rate-making
authority should be exempt from providing revenue data if their
membership includes carriers who belong to a conference. The rationale
was that in such cases the Commission would obtain the carriers'
revenue data through the conference's reporting. It was also argued
that, like small conferences, discussion agreements generally do not
have a central staff to collect the data from the member lines and
maintain its confidentiality.
Discussion These limitations are rejected. By requiring individual
carrier revenue data, the rule recognizes that Shipping Act agreements,
unlike a merger, maintain the separate trade identities of their
parties (with the limited exception of joint services). Thorough and
accurate regulation of these ongoing price and service consortia
requires knowledge of the business results of the actual operating
entities. The rule's emphasis on sub-trades also requires individual
carrier data, since a particular agreement sub-trade may not be served
by all the parties to the agreement. Similarly, individual carrier data
will further appropriate oversight of multiple agreements that are
connected by common parties.
The comments would have the form and manner of appropriate
regulation determined, not by the carriers that are the regulated
entities under the Shipping Act, but by the form of organization that
the carrier choose for themselves. The requirement for individual
carrier data accommodates the apparent trend in ocean shipping away
from traditional conferences, which have featured relatively
independent chairmen and established central offices, and toward looser
discussion agreements administered in some cases by rotation among the
member lines. If this trend should continue, the excuse offered by the
comments as to why even aggregate data should not be required from some
agreements might eventually be raised for all agreements.
Taken on its own terms, the suggested distinction between
conference is flawed: A three-member conference serving a small trade
may well have a dominant market share, and therefore require careful
monitoring. More generally, small conferences do not necessarily mean
small member lines; a relatively small conference may have as members
large carriers with established and sophisticated information systems.
The proposal for rate discussion agreements would be workable only if
all of the members of a particular discussion agreement were also
members of a conference and if the discussion agreement and the
conference agreement had identical geographic scopes. In such a
situation, a waiver might be merited to avoid duplicative reporting as
discussed above, but a general exemption is unworkable and in
appropriate.
With regard to the carriers' concern about disclosure of their
revenue data, there is no reasonable ground for anticipating improper
public use of such data by the Commission. Once received by the
Commission, revenue data is protected under section 6(j) of the 1984
Act and is exempt from disclosure under the Freedom of Information
Act.\10\
\10\ 5 U.S.C. 552(b)(4); see, e.g., Gulf & Western Industries,
Inc. v. United States, 615 F.2d 527, 529 (D.C. Cir. 1979).
---------------------------------------------------------------------------
6. Carriage and Revenues Data by Leading Commodities in Each Sub-trade
The heart of the proposed rule can be found in parts VI and VII of
the information form for Class A/B agreements and the corresponding
parts VI and VII of the monitoring report for Class A agreements. These
provisions required each member line of such an agreement to submit
extensive data for each ``top 10'' commodity carried in each sub-trade.
The provisions triggered strong opposition from most of the
commenters, particularly the requirement in the two parts VII that each
carrier provide detailed information on how it carried each major
commodity in each sub-trade (i.e., TEUs carried port-to-port under
tariff rates; TEUs carried under intermodal tariff rates; TEUs carried
port-to-port under service contracts; and TEUs carried in intermodal
service under service contracts) and then the average revenue per TEU
realized by the carrier from each type of carriage. The 25 Agreements,
for example, contended:
Determining the method by which cargo moves, e.g., tariff vs.
service contract, port-to-port vs. intermodal, would likely require
a review of every bill of lading for every shipment in the trade.
The potential cost and burden of performing such a review is
staggering.
(Comments at 11).
Discussion Significant revisions to these sections of the proposed
rule are warranted in response to the concerns of the commenters.
Specifically, each member line will be required to provide total
carriage and average revenue data for each leading commodity in each
sub-trade, but will no longer be required to calculate such data
separately for port-to-port and intermodal services, or for tariff and
service contract services. This modification essentially adopts an
alternative offered by the 25 Agreements (except that the Agreement
urged limitations on reporting revenue data which were identical to
those already rejected above (i.e., aggregate instead of individual
line data, no reporting for small conferences, and so on)). As revised,
the new regulations will obtain cargo and revenue data most directly
relevant to review of an agreement under the section 6(g) general
standard, while eliminating the aspects of the
[[Page 11572]]
proposed rule that would have placed the greatest burden on the
industry.
The comments addressed the ``top 10'' scheme only in passing; in
response to a comment by the Associated India/Pakistan Conferences, the
final rule clarifies that individual commodities should be identified
at the 4-digit level of customarily used commodity coding schedules.
7. Port Service Data
Part VIII of the proposed information form required data on the
number of calls by each member-line during the most recent 12-month
period at each port covered by the agreement, and any change in the
nature or type of service to be effected immediately ``by the
agreement,'' including base port designations and frequency of vessel
calls. Similar data was required by the proposed monitoring report for
Class A agreements.
The 25 Agreements (joined by CENSA) suggested that ``port'' be
limited to U.S. ports, ``* * * since the FMC does not require
information regarding calls at foreign ports to fulfill its regulatory
responsibilities.'' (Comments at 12). Also, they proposed that changes
in service be clarified to mean only those changes ``* * * that are
required by the agreement, rather than any changes made by an
individual carrier for its own commercial reasons.'' (Id.).
Discussion The Commission disagrees that the impact of agreements
on liner service in U.S. foreign trades can be adequately monitored by
reference only to U.S. ports, but will make other modifications to this
part of the Rule. The phrase ``by the agreement'' will be deleted from
the information form, so that it is clear that each member line of a
new agreement should state whether it (rather than ``the agreement'')
will be making any changes in the nature or frequency of its service at
any port covered by the agreement, once the agreement goes into effect.
In the corresponding part of the monitoring report, the requirement
that each member line list the number of calls at each port during the
previous calendar quarter is deleted; instead, the lines are simply
asked to describe any changes in the nature of their services at each
agreement port, e.g., serving a port by substituted rather than direct
service.
8. Capacity Management Programs
The special provisions of the proposed rule that deal with
agreements authoring ``capacity management'' or ``capacity
regulation,'' including the identification of ``capacity management''
or ``capacity regulation'' as one of the Class A/B activities, are
deleted. There are now no agreements on file with the Commission
containing such programs, and accordingly there is no need at present
for specific regulations addressing this unusual and highly
controversial area of carrier activity. Any future capacity management
filings will be dealt with on a case-by-case basis. Through its
statutory authorities in section 6(d) and 15 of the 1984 Act, the
Commission will have sufficient means of analyzing any such agreements
by obtaining and reviewing all planning documents, trade reports,
capacity calculations, and any other relevant information that was used
to negotiate the capacity limits in the new agreement. If reporting is
necessary, that could be done through imposition of a permanent section
15 order.
9. Data on Independent Actions
For the monitoring reports filed by Class A conferences, the
proposed rule required each member line to state the number of IAs
taken on each leading commodity within each sub-trade, and the total
number of TEUs of that commodity covered by the IAs. The 25 Agreements
opposed this requirement on the ground of burdensomeness. The Japan
Conferences claimed that ``the Conferences'' do not maintain data on
the TEUs carried by their member lines under IA rates, and suggested
that many of their member lines do not maintain such data either.
The proposed rule also required identification of each shipper for
whom an IA was taken on a leading commodity during the calendar
quarter, and a statement as to whether the shipper was a beneficial
cargo owner, a non-vessel-operating common carrier, or a shipper's
association. The 25 Agreements responded that IAs are often not taken
for a specific shipper:
Instead, they may be taken to service a particular market so
that a carrier can break into that market or remain competitive in
it. In such instances, therefore, the carriers obviously cannot
provide any shipper information.
(Comments at 15-16). Similar objections were filed by the Japan
Conferences and CEMSA, although the Japan Conferences were willing to
provide data on the type of shipper for whom IAs had been taken.
Discussion The requirement for reporting the number of TEUs moving
under the IAs taken for each leading commodity has been deleted. The
final rule requires each member of a ``Class A'' conference to submit
data both on the number of IAs taken on each leading commodity in each
agreement sub-trade and, in part VII of the conference's monitoring
report, on the average revenue per TEU realized by the member line from
its carriage of each leading commodity in each sub-trade. The
Commission believes that it will be able to accurately monitor the true
level of IA activity within a conference by comparing and contrasting
these two sets of data.
Reductions have also been made in the amount of shipper-related IA
data. Rather than requiring the name of each shipper for whom an IA was
taken during the calendar quarter, the final rule instead requires each
member line to state how many of its total IA actions for each leading
commodity during the quarter were taken to service specific shipper
accounts (rather than for general commercial reasons) and of those, how
many were taken for NVO accounts and how many for shippers' association
accounts. These changes respond to observations of the commenters that
many IAs are taken to preserve market share or to penetrate new
markets, rather than for specific customers, and to the commenters'
concerns about protecting the identity of those shippers for whom IA
was taken.
10. Quarterly Reporting
Objections were raised to the proposed rule's requirements that
monitoring reports be submitted on a quarterly basis. The Japan
Conferences, for example, said that ``* * * economic trends in the
ocean shipping business do not ordinarily change to any significant
degree in the space of a three month period, or even over six months or
a year.'' (Comments at 4). They asked that reports be submitted
annually ``* * * or, certainly, with no greater frequency than semi-
annually.'' Id. at 5).
Discussion The final rule retains the requirement for quarterly
monitoring reports. The Commission specifically disagrees with the
Japan Conferences' characterization of the cycles of international
ocean shipping; the experience of the Pacific trades during 1995 was
certainly to the contrary. More important, given the significant
modifications and reductions made by the final rule to the information
demands of the proposed rule, there is no basis to conclude on this
record that quarterly reporting will be unduly burdensome or otherwise
unreasonable. It should be pointed out again, however, that an
individual waiver of the quarterly reporting requirement can be
obtained under the proper circumstances.
[[Page 11573]]
11. Miscellaneous
The proposed monitoring report for Class A agreements required a
statement as to whether the agreement is a conference or has capacity
management provisions. This was meant to facilitate checking of the
carriers' compliance with the special requirements for such agreements.
The 25 Agreements viewed this as ``duplicative information'' (Comments
at 15) that should be required only if there has been some change since
the last report. As discussed above, the proposed rule's provisions for
capacity management agreements have been deleted, but the requirement
that a conference identify itself as such in its monitoring reports is
retained to avoid any uncertainties from the fact that conference names
often do not include the word ``conference.''
In response to a suggestion from the Associated India/Pakistan
Conferences, the ``contact person'' provisions of the information forms
and monitoring reports have been updated to include fax and telex
numbers as well as cable addresses.
The number of copies required for an agreement filing by subpart
572.401 has been reduced from an original and ten copies to an original
and seven copies. In addition, subpart 572.701 and the instructions for
the Information Forms and Monitoring Reports have been clarified with
respect to joint services.
12. Carrier Costs and Profits
The 25 Agreements and CENSA argued that data on profits and/or
costs in the agreement trade are irrelevant to a section 6(g) analysis.
The Japan Conferences were also opposed, but took a less dogmatic
position:
The Conferences do not contend that there will never be a case
where it would be appropriate or necessary for the Commission to
review cost or profit information, or that in a proper case
involving a particular agreement, section 15 should not be used to
demand such information.
(Comments at 14). Rather, they argued that rulemaking is too broad a
procedure and is not tied to a specific need for such data. Also, they
pointed out that the proposed rule is based on sub-trade data, and that
cost and profit data by sub-trade would be very suspect.
Discussion: The Commission will not propose a further rulemaking at
this time to capture cost and profit data. However, we wish to stress
that the costs incurred and the profits realized by the carrier parties
to a particular agreement could well be relevant to a section 6(g)
analysis of that agreement, especially if purported revenue losses are
being used to justify the agreement.
For the most part, these amended regulations will become effective
thirty days after publication in the Federal Register. New agreements
then will be required to comply with the revised information form
provisions. However, the proper application of the new monitoring
report provisions in 46 CFR 572.701-705 to agreements already in effect
cannot be determined immediately, because the market share data
necessary to separate Class A/B agreements into Class A and Class B are
not readily available.
Accordingly, effectiveness of the monitoring report provisions of
the final rule is stayed until further notice. The Commission will
direct all existing Class A/B agreements to submit reports under
section 15 of the 1984 Act that will include all the information
demanded of new Class A/B agreements under the information form
regulations, including market share data. Upon review of these reports,
those agreements will be appropriately classified into Class A or Class
B, the stay of monitoring report provisions will be lifted, and the
orderly filing of the regular monitoring reports (including those
applicable to Class C agreements) will begin.
For those agreements already in effect that are subject to
negotiated reporting requirements, those requirements will remain in
effect until the stay is lifted and the new reporting requirements
become applicable. Also, the stay does not apply to the pre-existing
obligation (now codified at 572.706-708) of certain agreements to
submit minutes of their meetings.
The Federal Maritime Commission certifies, pursuant to section
605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that this
rule will not have a significant economic impact on a substantial
number of small entities, including small businesses, small
organizational units and small government jurisdictions. The ocean
carriers affected by the rule are not ``small organizations'' or
``small governmental jurisdictions'' as defined by 5 U.S.C. 601 and, as
large and predominantly foreign-based enterprises, are not ``small
business concerns'' as defined by 15 U.S.C. 632 and regulations issued
thereunder.
The collection of information requirements contained in this rule
has been approved by the Office of Management and Budget under the
provisions of the Paperwork Reduction Act of 1995, and has been
assigned OMB control number 3072-0045. Under the proposed rule, the
incremental public reporting burden was estimated to range from an
average of 46 to 144 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. With the modifications made to the proposed
rule, the incremental public reporting burden for preparing responses
to the collection of information requirements of the final rule is
estimated to range from an average of 36 to 97 hours per response. Send
comments regarding this burden estimate, including suggestions for
reducing this burden, to Bruce A. Dombrowski, Deputy Managing Director,
Federal Maritime Commission, Washington, DC 20573, and to the Office of
Information and Regulatory Affairs, Office of Management and Budget,
Washington, DC 20503.
List of Subjects in 46 CFR Part 572
Administrative practice and procedure; Maritime carriers; Reporting
and recordkeeping requirements.
Therefore, pursuant to 5 U.S.C. 553 and sections 4, 5, 6, 10, 15
and 17 of the Shipping Act of 1984, 46 U.S.C. app. 1703, 1704, 1705,
1709, 1714 and 1716, part 572 of Title 46, Code of Federal Regulations,
is amended as follows:
PART 572--AGREEMENTS BY OCEAN COMMON CARRIERS AND OTHER PERSONS
SUBJECT TO THE SHIPPING ACT OF 1984
1. The authority citation for part 572 continues to read as
follows:
Authority: 5 U.S.C. 553, 46 U.S.C. app. 1701-1707, 1709-1710,
1712 and 1714-1717.
2. In Sec. 572.103, the first sentence of paragraph (a), the first
two sentences of paragraph (b), the first sentence of paragraph (c),
and the second sentence of paragraph (d) are revised; in paragraph (e),
the third sentence is revised, the last sentence is revised, and a new
sentence is added as follows:
Sec. 572.103 Policies.
(a) The Act requires that agreements be processed and reviewed,
upon their initial filing, according to strict statutory deadlines. * *
*
(b) The Act requires that agreements be reviewed, upon their
initial filing, to ensure compliance with all applicable provisions of
the Act and empowers the Commission to obtain information to conduct
that review. This part identifies those classes of agreements which
must be accompanied by information submissions when they are first
filed, and sets forth the kind of information for each class of
agreement which the
[[Page 11574]]
Commission believes relevant to that review. * * *
(c) In order to further the goal of expedited processing and review
of agreements upon their initial filing, agreements are required to
meet certain minimum requirements as to form. * * *
(d) * * * In order to minimize delay in implementation of routine
agreements and to avoid the private and public cost of unnecessary
regulation, the Commission is exempting certain classes of agreements
from the filing requirements of this part.
(e) * * * This, however, requires greater monitoring of agreements
after they have become effective, to assure continued compliance with
all applicable provisions of the Act. * * * Only that information which
is necessary to assure that Commission monitoring responsibilities will
be fulfilled is requested. It is the policy of the Commission to keep
the costs of regulations to a minimum and at the same time obtain
information needed to fulfill its statutory responsibility.
* * * * *
3. In Sec. 572.104, paragraphs (ee) and (ff) are redesignated (ii)
and (jj); (dd) is redesignated (hh); (z) through (cc) are redesignated
(dd) through (gg); (y) is redesignated (cc); (s) through (x) are
redesignated (u) through (z); and (e) through (r) are redesignated (f)
through (s); new paragraphs (e), (t), (aa), (bb), and (kk) are added;
in newly redesignated (g), the last sentence is revised; newly
redesignated (j) is revised; the heading of newly redesignated (o) is
revised; newly redesignated (cc) is revised; and in newly redesignated
(hh), the last sentence is revised to read as follows:
Sec. 572.104 Definitions.
* * * * *
(e) Capacity management or capacity regulation agreement means an
agreement between two or more ocean common carriers which authorizes
withholding some part of the capacity of the parties' vessels from a
specified transportation market, without reducing the real capacity of
those vessels. The term does not include sailing agreements or space
charter agreements.
* * * * *
(g) Conference agreement * * * The term does not include joint
service, pooling, sailing, space charter, or transshipment agreements.
* * * * *
(j) Effective agreement means an agreement approved pursuant to the
Shipping Act, 1916, or effective pursuant to an exemption under that
act, or effective under the Act.
* * * * *
(o) Joint service agreement * * *
* * * * *
(t) Monitoring report means the report containing economic
information which must be filed at defined intervals with regard to
certain kinds of agreements that are effective under the Act.
* * * * *
(aa) Rate, for purposes of this part, includes both the basic price
paid by a shipper to an ocean common carrier for a specified level of
transportation service for a stated quantity of a particular commodity,
from origin to destination, on or after a stated effective date or
within a defined time frame, and also any accessorial charges or
allowances that increase or decrease the total transportation cost to
the shipper.
(bb) Rate agreement means an agreement between ocean common
carriers which authorizes agreement upon, on either a binding basis
under a common tariff or on a non-binding basis, or discussion of, any
kind of rate.
(cc) Sailing agreement means an agreement between ocean common
carriers which provides for the rationalization of service by
establishing a schedule of ports which each carrier will serve, the
frequency of each carrier's calls at those ports, and/or the size and
capacity of the vessels to be deployed by the parties. The term does
not include joint service agreements, or capacity management or
capacity regulation agreements.
* * * * *
(hh) Space charter agreement * * * The arrangement may include
arrangements for equipment interchange and receipt/delivery of cargo,
but may not include capacity management or capacity regulation as used
in this subpart.
* * * * *
(kk) Vessel-operating costs means any of the following expenses
incurred by an ocean common carrier: Salaries and wages of officers and
unlicensed crew, including relief crews and others regularly employed
aboard the vessel; fringe benefits; expenses associated with consumable
stores, supplies and equipment; vessel fuel and incidental costs;
vessel maintenance and repair expense; hull and machinery insurance
costs; protection and indemnity insurance costs; costs for other marine
risk insurance not properly chargeable to hull and machinery insurance
or to protection and indemnity insurance accounts; and charter hire
expenses.
Sec. 572.301 [Amended]
4. In Sec. 572.301, paragraph (b) is amended by removing the words
``Information Form'' and the comma immediately thereafter.
Sec. 572.302 [Amended]
5. In Sec. 572.302, paragraph (b) is amended by removing the words
``Information Form'' and the comma immediately thereafter.
Sec. 572.303 [Amended]
6. In Sec. 572.303, paragraph (b) is amended by removing the words
``and Information Form.''
Sec. 572.304 [Amended]
7. In Sec. 572.304, paragraph (b) introductory text is amended by
removing the words ``and Information Form.''
Sec. 572.305 [Amended]
8. In Sec. 572.305, paragraph (b) is amended by removing the words
``and Information Form.''
Sec. 572.306 [Amended]
9. In Sec. 572.306, paragraph (b) is amended by removing the words
``and Information Form.''
Sec. 572.308 [Amended]
10. In Sec. 572.308, paragraph (b) is amended by removing the words
``and Information Form.''
Sec. 572.309 [Amended]
11. In Sec. 572.309, paragraph (a) introductory text, is amended by
removing the words ``Information Form'' and the comma immediately
thereafter.
12. In subpart D, the heading is revised to read as follows:
Subpart D--Filing of Agreements
13. In Sec. 572.401, the heading and paragraphs (a)(1), (a)(2),
(c), (d), and (e) are revised to read as follows:
Sec. 572.401 General requirements.
(a) * * *
(1) A true copy and 7 additional copies of the filed agreement;
(2) Where required by this part, an original and five copies of the
completed Information Form Referenced at subpart E of this part; and
* * * * *
(c) Any agreement which does not meet the filing requirements of
this section, including any applicable Information Form requirements,
shall be rejected in accordance with Sec. 572.601.
(d) Assessment agreements shall be filed and shall be effective
upon filing.
(e) Parties to agreements with expiration dates shall file any
[[Page 11575]]
modification seeking renewal for a specific term or elimination of a
termination date in sufficient time to accommodate the waiting period
required under the Act.
* * * * *
Sec. 572.402 [Amended]
14. In Sec. 572.402, paragraph (e)(2) is amended by revising the
reference to ``Secs. 572.501 and 572.502'' to read ``Secs. 572.403 and
572.404,'' paragraph (f) is amended by revising the reference to
``Secs. 572.501(b)(3), 572.501(b)(6) and 572.502(a)(1)'' to
``Secs. 572.403(b)(3), 572.403(b)(6) and 572.404(a)(1),'' and paragraph
(h) is removed.
Sec. 572.403 [Redesignated as Sec. 572.405 and Amended]
15. Section 572.405 is removed and Sec. 572.403 is redesignated
Sec. 572.405 with paragraphs (a) and (g)(3) revised as follows:
Sec. 572.405 Modifications of agreements.
* * * * *
(a) Agreement modifications shall be: filed in accordance with the
provisions of 572.401 and in the format specified in 572.402; with the
content and organization specified in 572.403 and 572.404 and in
accordance with this section.
* * * * *
(g) * * *
(3) The filing of a republished agreement, as described in
paragraph (g)(2) of this section, may be accomplished by filing only an
executed original true copy. No Information Form requirements apply to
the filing of a republished agreement.
Sec. 572.501 [Redesignated as Sec. 572.403 and Amended]
16. Section 572.501 is redesignated 572.403 and paragraphs (a) and
(b) are amended by revising the references to ``Sec. 572.502'' to read
``Sec. 572.404.''
Sec. 572.406 [Redesignated as Sec. 572.407]
Sec. 572.404 [Redesignated as Sec. 572.406]
17. Section 572.406 is redesignated Sec. 572.407 and 572.404 is
redesignated Sec. 572.406 and revised to read as follows;
Sec. 572.406 Application for waiver.
(a) Upon showing of good cause, the Commission may waive the
requirements of Secs. 572.401, 572.402, 572.403, 572.404 and 572.405.
(b) Requests for such a waiver shall be submitted in advance of the
filing of the agreement to which the requested waiver would apply and
shall state:
(1) The specific provisions from which relief is sought;
(2) The special circumstances requiring the requested relief; and
(3) Why granting the requested waiver will not substantially impair
effective regulation of the agreement.
Sec. 572.202 [Redesignated as Sec. 572.404 and Amended]
18. Section 572.502 of subpart E is redesignated Sec. 572.404 and
paragraphs (a) and (b)(1) are amended by revising the reference to
``Sec. 572.501'' to read ``Sec. 572.403.''
19. The heading of subpart E is removed and new subpart E is added
as follows:
Subpart E--Information Form Requirements
Sec.
572.501 General requirements.
572.502 Subject agreements.
572.503 Information form for Class A/B agreements.
572.504 Information form for Class C agreements.
572.505 Application for waiver.
Subpart E--Information Form Requirements
Sec. 572.501 General requirements.
(a) Certain agreements must be accompanied, upon their initial
filing, with an Information Form setting forth information and data on
the filing parties' prior cargo carryings, revenue results and port
service patterns.
(b) The filing parties to an agreement subject to this subpart
shall complete and submit an original and five copies of the applicable
Information Form at the time the agreement is filed. Copies of the
applicable Form may be obtained at the Office of the Secretary or by
writing to the Secretary of the Commission.
(c) A complete response in accordance with the instructions on the
Information Form shall be supplied to each item. Whenever the party
answering a particular part is unable to supply a complete response,
that party shall provide either estimated data (with an explanation of
why precise data are not available) or a detailed statement of reasons
for noncompliance and the efforts made to obtain the required
information.
(d) The Information Form for a particular agreement may be
supplemented with any other information or documentary material.
(e) The Information Form and any additional information submitted
in conjunction with the filing of a particular agreement shall not be
disclosed except as provided in Sec. 572.608.
Sec. 572.502 Subject agreements.
Agreements subject to this subpart are divided into two classes,
Class A/B and Class C. When used in this subpart:
(a) Class A/B agreement means an agreement that is one or more of
the following:
(1) A rate agreement as defined in Sec. 572.104(aa) and
Sec. 572.104(bb);
(2) A joint service agreement as defined in Sec. 572.104(o);
(3) A pooling agreement as defined in Sec. 572.104(y);
(4) An agreement authorizing discussion or exchange of data on
vessel-operating costs as defined in Sec. 572.104(kk); or
(5) An agreement authorizing regulation or discussion of service
contracts as defined in Sec. 572.104(dd).
(b) Class C agreement means an agreement that is one or more of the
following:
(1) A sailing agreement as defined in Sec. 572.104(cc); or
(2) A space charter agreement as defined in Sec. 572.104(hh).
Sec. 572.503 Information form for Class A/B agreements.
The Information Form for Class A/B agreements, with accompanying
instructions that are intended to facilitate the completion of the
Form, is set forth in appendix A of this part.
The instructions should be read in conjunction with the Shipping
Act of 1984 and with this part 572.
Sec. 572.504 Information form for Class C agreements.
The Information Form for Class C agreements, with accompanying
instructions that are intended to facilitate the completion of the
Form, is set forth in appendix B of this part. The explanation and
instructions should be read in conjunction with the Shipping Act of
1984 and 46 CFR part 572.
Sec. 572.505 Application for waiver.
(a) Upon a showing of good cause, the Commission may waive any part
of the information form requirements of Sec. 572.503 or Sec. 572.504.
(b) A request for such a waiver must be approved in advance of the
filing of the information form to which the requested waiver would
apply. The Commission will take into account the presence or absence of
shipper complaints in considering an application for a waiver. Requests
for a waiver shall state:
(1) The specific requirements from which relief is sought;
(2) The special circumstances requiring the requested relief; and
(3) Why granting the requested waiver will not substantially impair
effective regulation of the agreement, either during pre-implementation
review or during post-implementation monitoring.
[[Page 11576]]
20. In Sec. 572.601, paragraph (a) and the first sentence of
paragraph (b)(1) are revised, as follows:
Sec. 572.601 Preliminary review--rejection of agreements.
(a) The Commission shall make a preliminary review of each filed
agreement to determine whether the agreement is in compliance with the
filing requirements of the Act and this part and, where applicable,
whether the accompanying Information Form is complete or, where not
complete, whether the deficiency is adequately explained or is excused
by a waiver granted by the Commission under Sec. 572.505.
(b)(1) The Commission shall reject any agreement that otherwise
fails to comply with the filing and Information Form requirements of
the Act and this part. * * *
* * * * *
21. In Sec. 572.608, paragraph (b)(2) is revised, as follows:
Sec. 572.608 Confidentiality of submitted materials.
* * * * *
(b) * * *
(2) It is disclosed to either body of Congress or to a duly
authorized committee or subcommittee of Congress.
* * * * *
22. In Sec. 572.701, paragraphs (b), (c) and (d) are removed,
paragraph (f) is redesignated (i) and is revised, paragraph (e) is
redesignated (f) and is revised, paragraph (a)(1) is redesignated (d)
and is revised, paragraph (a)(2) is redesignated (e) and the second
sentence thereof is revised, a new paragraph (a) is added, a new
paragraph (b) is added, a new paragraph (c) is added, a new paragraph
(g) is added, and a new paragraph (h) is added, as follows:
Sec. 572.701 General requirements.
(a) Certain agreements are required to submit quarterly Monitoring
Reports on an ongoing basis for as long as they remain in effect,
setting forth information and data on the agreement member lines' cargo
carryings, revenue results and port service patterns under the
agreement.
(b) Certain agreements are required to submit minutes of their
meetings for as long as they remain in effect.
(c) Joint Services. For purposes of the requirements of this
Subpart, a joint service filing its own Monitoring Report shall file as
one carrier. If a joint service is a party to another agreement that is
otherwise subject to the requirements of this Subpart, the joint
service shall be treated as one member of that agreement for purposes
of that agreement's Monitoring Reports.
(d) Address. Monitoring Reports and minutes required by this
subpart should be addressed to the Commission as follows: Director,
Bureau of Economics and Agreement Analysis, Federal Maritime
Commission, Washington, DC 20573-0001. Copies of the applicable
Monitoring Report form may be obtained from the Bureau of Economics and
Agreement Analysis. The lower, left-hand corner of the envelope in
which each Monitoring Report or set of minutes is forwarded should
indicate the nature of its contents and the related agreement number.
For example: ``Monitoring Report, Agreement 5000'' or ``Minutes,
Agreement 5000.''
(e) Electronic filing. * * * Detailed information on electronic
transmission is available from the Commission's Bureau of Economics and
Agreement Analysis.
* * * * *
(f) Time for filing. Monitoring Reports shall be filed within 30
days of the end of each calendar quarter. Other documents shall be
filed within 30 days of the end of a quarter-year, a meeting, or the
receipt of a request for documents.
(g) A complete response in accordance with the instructions on the
applicable Monitoring Report shall be supplied to each item. Whenever
the party answering a particular part is unable to supply a complete
response, that party shall provide either estimated data (with an
explanation of why precise data are not available) or a detailed
statement of reasons for noncompliance and the efforts made to obtain
the required information.
(h) A Monitoring Report for a particular agreement may be
supplemented with any other information or documentary material.
(i) Confidentiality. (1) The Monitoring Reports, minutes, and any
other additional information submitted for a particular agreement will
be exempt from disclosure under 5 U.S.C. 552, except to the extent:
(i) It is relevant to an administrative or judicial action or
proceeding; or
(ii) It is disclosed to either body of Congress or to a duly
authorized committee or subcommittee of Congress.
(2) Parties may voluntarily disclose or make Monitoring Reports,
minutes or any other additional information publicly available. The
Commission must be promptly informed of any such voluntary disclosure.
Sec. 572.202 [Redesignated as Sec. 572.706 and Amended]
23. Section 572.702 is redesignated 572.706, the heading thereof is
revised, and a new paragraph (d) is added, as follows:
Sec. 572.706 Filing of minutes--including shippers' requests and
complaints, and consultations.
* * * * *
(d) Serial numbers. (1) Each set of minutes filed with the
Commission should be assigned a number. For example, a conference
filing minutes of its first meeting upon the effective date of this
rule should assign Meeting No. 1 to its minutes, the next meeting will
be assigned Meeting No. 2, and so on.
(2) Any conference or rate agreement which, for its own internal
purposes, has a system for assigning sequential numbers to its minutes
in a manner which differs from that set forth in paragraph (d)(1) of
this section may continue to utilize its own system thereof.
Sec. 572.703 [Redesignated as Sec. 572.707 and Amended]
24. Section 572.703 is redesignated 572.707, and the reference to
``Sec. 572.702'' in the introductory text is revised to read
``Sec. 572.706.''
Sec. 572.704 [Redesignated as Sec. 572.909 and Revised]
25. Section 572.704 is redesignated 572.709 and is revised as
follows:
Sec. 572.709 Application for waiver.
(a) Upon a showing of good cause, the Commission may waive any
requirement of this subpart.
(b) A request for such a waiver must be approved in advance of the
filing of the Monitoring Report or minutes to which the requested
waiver would apply. The Commission will take into account the presence
or absence of shipper complaints in considering an application for a
waiver. Requests for a waiver shall state:
(1) The specific requirements from which relief is sought;
(2) the special circumstances requiring the requested relief; and
(3) why granting the requested waiver will not substantially impair
effective regulation of the agreement.
26. A new Sec. 572.702 is added to read as follows:
Sec. 572.702 Agreements subject to Monitoring Report requirements.
(a) Agreements subject to the Monitoring Report requirements of
this subpart are divided into three classes, Class A, Class B and Class
C. When used in this subpart:
[[Page 11577]]
(i) Class A agreement means an agreement that is subject to the
definition set forth in Sec. 572.502(a) and has market shares of 50
percent or more in half or more of its sub-trades.
(2) Class B agreement means an agreement that is subject to the
definition set forth in Sec. 572.502(a) but does not have market shares
of 50 percent or more in half or more of its sub-trades.
(b) Classification of an agreement as ``Class A'' or ``Class B''
for purposes of its reporting obligations under this subpart shall be
done by the Bureau of Economics and Agreement Analysis, based in the
first instance on the market share data reported on the agreement's
Information Form pursuant to Sec. 572.503, or on similar data otherwise
obtained. Thereafter, at the beginning of each calendar year, the
Bureau of Economics and Agreement Analysis shall determine whether the
agreement should be classified as ``Class A'' or ``Class B'' for that
year, based on the market share data reported on the agreement's
quarterly Monitoring Report for the third quarter (July-September) of
the previous calendar year.
(c) Class C agreement means an agreement that is subject to the
definition set forth in Sec. 572.502(b).
27. A new Sec. 572.703 is added, as follows:
Sec. 572.703 Monitoring report for Class A agreements.
The Monitoring Report form for Class A agreements, with
accompanying instructions that are intended to facilitate the
completion of the Report, is set forth in appendix C of this part. The
instructions should be read in conjunction with the Shipping Act of
1984 and with 46 CFR part 572.
28. A new Sec. 572.704 is added, as follows:
Sec. 572.704 Monitoring report for Class B agreements.
The Monitoring Report form for Class B agreements, with
accompanying instructions that are intended to facilitate the
completion of the Report, is set forth in appendix D of this part. The
instructions should be read in conjunction with the Shipping Act of
1984 and with 46 CFR part 572.
29. A new Sec. 572.705 is added, as follows:
Sec. 572.705 Monitoring report for Class C agreements.
The Monitoring Report form for Class C agreements, with
accompanying instructions that are intended to facilitate the
completion of the Report, is set forth in appendix E of this part. The
explanation and instructions should be read in conjunction with the
Shipping Act of 1984 and 46 CFR part 572.
30. A new Sec. 572.708 is added as follows:
Sec. 572.708 Retention of records.
Each agreement required to file minutes pursuant to this subpart
shall retain a copy of each document listed in said minutes for a
minimum period of 3 years after the date the document is distributed to
the members. Such documents may be requested by the Director, Bureau of
Economics and Agreement Analysis, in writing by reference to a specific
minute, and shall indicate that the documents will be received in
confidence. Requested documents shall be furnished by the parties
within the time specified.
31. Section 572.902 is revised as follows:
Sec. 572.702 Falsification of reports.
Knowing falsification of any report required by the Act or this
part, including knowing falsification of any item in any applicable
Information Form or Monitoring Report, is a violation of the rules of
this part and is subject to the civil penalties set forth in section
13(a) of the Act and may be subject to the criminal penalties provided
for in 18 U.S.C. 1001.
Sec. 572.991 [Amended]
32. Section 572.991 is amended by revising the reference to ``the
Paperwork Reduction Act of 1980, Public Law 96-511'' to read ``the
Paperwork Reduction Act of 1995, Public Law 104-13'' and by revising
the reference to ``section 3507(f)'' to read ``section 3507(a)(3).''
33. Appendix A to Part 572 is revised to read as follows:
Appendix A to Part 572--Information Form for Class A/B Agreements and
Instructions
Instructions
All agreements between ocean common carriers that are Cass A/B
agreements as defined in 46 CFR 572.502(a) must be accompanied by a
completed Information Form for such agreements. A complete response
must be supplied to each part of the Form. Where the party answering
a particular part is unable to supply a complete response, that
party shall provide either estimated data (with an explanation of
why precise data are not available) or a detailed statement of
reasons for noncompliance and the efforts made to obtain the
required information. For purposes of the requirements of this Form,
if one of the agreement signatories is a joint service operating
under an effective agreement, that signatory shall respond to the
Form as a single agreement party. All sources must be identified.
Part I
Part I requires a statement of the full name of the agreement as
also provided under 46 CFR 572.403.
Part II
Part II requires a list of all effective agreements covering all
or part of the geographic scope of the filed agreement, whose
parties include one or more of the parties to the filed agreement.
Part III(A)
Part III(A) requires a statement as to whether the agreement
authorizes the parties to collectively fix rates under a common
tariff, to agree upon rates on a non-binding basis, or to discuss
rates. Such rate activities may be authorized by a conference
agreement, an interconference agreement, an agreement among one or
more conferences and one or more non-conference ocean common
carriers, an agreement between two or more conference member lines,
an agreement between one or more conference member lines and one or
more non-conference ocean common carriers, or an agreement among two
or more non-conference ocean common carriers.
Part III(B)
Part III(B) requires a statement as to whether the agreement
authorizes the parties to establish a joint service.
Part III(C)
Part III(C) requires a statement as to whether the agreement
authorizes the parties to pool cargo or revenues.
Part III(D)
Part III(D) requires a statement as to whether the agreement
authorizes the parties to discuss or exchange data on vessel-
operating costs as defined in 46 CFR 572.104(kk).
Part III(E)
Part III(E) requires a statement as to whether the agreement
authorizes the parties to regulate or discuss service contracts.
Part IV
Part IV requires the market shares of all liner operators within
the entire geographic scope of the agreement and in each sub-trade
within the scope of the agreement, during the most recent calendar
quarter for which complete data are available. A joint service shall
be treated as a single liner operator, whether it is an agreement
line or a non-agreement line. Sub-trade is defined as the scope of
all liner movements between each U.S. port range within the scope of
the agreement and each foreign country within the scope of the
agreement. Where the agreement covers both U.S. inbound and outbound
liner movements, inbound and outbound market shares should be shown
separately.
U.S. port ranges are defined as follows:
Atlantic--Includes ports along the eastern seaboard from the
northern boundary of Maine to, but not including, Key West, Florida.
Also includes all ports bordering upon the Great Lakes and their
connecting
[[Page 11578]]
waterways as well as all ports in the State of New York on the St.
Lawrence River.
Gulf--Includes all ports along the Gulf of Mexico from Key West,
Florida, to Brownsville, Texas, inclusive. Also includes all ports
in Puerto Rico and the U.S. Virgin Islands.
Pacific--Includes all ports in the States of Alaska, Hawaii,
California, Oregon and Washington. Also includes all ports in Guam,
American Samoa, Northern Marianas, Johnston Island, Midway Island
and Wake Island.
An application may be filed for a waiver of the definition of
``sub-trade,'' under the procedure described in 46 CFR 572.505. In
any such application, the burden shall be on the filing carriers to
show that their marketing and pricing practices have been done by
ascertainable multi-country regions rather than by individual
countries or, in the case of the United States, by broader areas
than the port ranges defined herein. The carriers must further show
that, though operating individually, they were nevertheless applying
essentially similar regional practices.
The formula for calculating market share in the entire agreement
scope or in a sub-trade is as follows:
The total amount of liner cargo carried on each liner operator's
liner vessels in the entire agreement scope or in the sub-trade
during the most recent calendar quarter for which complete data are
available, divided by the total liner movements in the entire
agreement scope or in the sub-trade during the same calendar
quarter, which quotient is multiplied by 100. The calendar quarter
used must be clearly identified. The market shares held by non-
agreement lines as well as by agreement lines must be provided,
stated separately in the format indicated.
If 50 percent or more of the total liner cargo carried by the
agreement lines in the entire agreement scope or in the sub-trade
during the calendar quarter was containerized, only containerized
liner movements (measured in TEUs) must be used for determining
market share. If 50 percent or more of the total liner cargo carried
by the agreement lines was non-containerized, only non-containerized
liner movements must be used for determining market share. The unit
of measure used in calculating amounts of non-containerized cargo
must be specified clearly and applied consistently.
Liner movements is the carriage of liner cargo by liner
operators. Liner cargoes are cargoes carried on liner vessels in a
liner service. A liner operator is a vessel-operating common carrier
engaged in liner service. Liner vessels are those vessels used in a
liner service. Liner service refers to a definite, advertised
schedule of sailings at regular intervals. All these definitions,
terms and descriptions apply only for purposes of the Information
Form.
Part V
Part V requires, for each agreement member line that served all
or any part of the geographic area covered by the agreement during
all or any part of the most recent 12-month period for which
complete data are available, a statement of each line's total liner
cargo carryings within the geographic area, total liner revenues
within the geographic area, and average revenue.
If 50 percent or more of the total liner cargo carried by all
the agreement member lines in the geographic area covered by the
agreement during the 12-month period was containerized, each
agreement member line should report only its total carryings of
containerized liner cargo (measured in TEUs) within the geographic
area, total revenues generated by its carriage of containerized
liner cargo, and average revenue per TEU. Conversely, if 50 percent
or more of the total liner cargo carried by all the agreement member
lines in the geographic area covered by the agreement during the 12-
month period was non-containerized, each line should report only its
total carryings of non-containerized liner cargo (specifying the
unit of measurement used), total revenues generated by its carriage
of non-containerized liner cargo, and average revenue per unit of
measurement.
The Information Form specifies the format in which the
information is to be reported. Where the agreement covers both U.S.
inbound and outbound liner movements, inbound and outbound data
should be stated separately.
Part VI
Part VI requires a list, for each sub-trade within the scope of
the agreement, of the top 10 liner commodities (including
commodities not subject to tariff filing) carried by all the
agreement member lines during the same 12-month period used in
responding to Part V, or a list of the commodities accounting for 50
percent of the total liner cargo carried by all the agreement member
lines during the 12-month period, whichever list is longer. If 50
percent or more of the total liner cargo carried by all the
agreement member lines in the sub-trade during the 12-month period
was containerized, this list should include only containerized
commodities. If 50 percent or more of the total liner cargo carried
by all the agreement member lines in the sub-trade during the 12-
month period was non-containerized, this list should include only
non-containerized commodities. Commodities should be identified at
the 4-digit level of customarily used commodity coding schedules.
Where the agreement covers both U.S. inbound and outbound liner
movements, inbound and outbound sub-trades should be stated
separately.
Part VII
Part VII requires a statement of the cargo volume and revenue
results experienced by each of the parties to the proposed agreement
from each major commodity in each subtrade. The Information Form
specifies the format in which the information is to be reported.
Part VIII
Part VIII is concerned with the levels of service at each port
within the entire geographic scope of the agreement. Each of the
agreement lines is required to provide the number of calls it made
at each port over the 12-month period used in responding to Parts V,
VI and VII, and also to indicate any immediate change it plans to
make in the nature or type of service at a particular port after the
agreement goes into effect.
Part IX(A)
Part IX(A) requires the name, title, address, telephone number
and cable address, telex or fax number of a person the Commission
may contact regarding the Information Form and any information
provided therein.
Part IX(B)
Part IX(B) requires the name, title, address, telephone number
and cable address, telex or fax number of a person the Commission
may contact regarding a request for additional information or
documents.
Part IX(C)
Part IX(C) requires that a representative of the agreement lines
sign the Information Form and certify that the information in the
Form and all attachments and appendices are, to the best of his or
her knowledge, true, correct and complete. The representative is
also required to indicate his or her relationship with the parties
to the agreement.
Federal Maritime Commission
Information Form For Certain Agreements By Or Among Ocean Common
Carriers
Agreement Number-------------------------------------------------------
(Assigned by FMC)
Part I Agreement Name:
Part II Other Agreements
Lists all effective agreements covering all or part of the
geographic scope of this agreement, whose parties include one or
more of the parties to this agreement.
Part III Agreement Type
(A) Rate Agreements
Does the agreement authorize the parties to collectively fix
rates on a binding basis under a common tariff, or to agree upon
rates on a non-binding basis, or to discuss rates?
Yes {time} No {time}
(B) Joint Service Agreements
Does the agreement authorize the parties to establish a joint
service?
Yes {time} No {time}
(C) Pooling Agreements
Does the agreement authorize the parties to pool cargoes or
revenues?
Yes {time} No {time}
(D) Vessel-Operating Costs
Does the agreement authorize the parties to discuss or exchange
data on vessel-operating costs?
Yes {time} No {time}
(E) Service Contracts
Does the agreement authorize the parties to discuss or agree on
service contract terms and conditions, on either a binding or non-
binding basis?
Yes {time} No {time}
Part IV Market Share Information
Provide the market shares of all liner operators within the
entire scope of the agreement and within each agreement sub-trade
during the most recent calendar quarter
[[Page 11579]]
for which complete data are available. The information should be
provided in the format below:
Market Share Report for (Indicate Either Entire Agreement Scope, or Sub-
Trade Name) Time Period
------------------------------------------------------------------------
TEUs or
other unit
of Percent
measurement
------------------------------------------------------------------------
Agreement Market Share:
Line A........................................ X,XXX XX
Line B........................................ X,XXX XX
Line C........................................ X,XXX XX
-----------------------
Total Agreement Market Share................ X,XXX XX
-----------------------
Non-Agreement Market Share:
Line X........................................ X,XXX XX
Line Y........................................ X,XXX XX
Line Z........................................ X,XXX XX
-----------------------
Total Non-Agreement Market Share............ X,XXX XX
-----------------------
Total Market.............................. X,XXX 100
------------------------------------------------------------------------
Part V Cargo and Revenue Results Agreement-Wide
For each party that served all or any part of the geographic
area covered by the entire agreement during all or any part of the
most recent 12-month period for which complete data are available,
state total cargo carrying in TEUs or other unit of measurement
within the entire geographic area, total revenues within the
geographic area, and average revenue per TEU or other unit of
measurement. The same 12-month period must be used for each party.
The information should be provided in the format below:
Time Period
------------------------------------------------------------------------
Avg.
Total TEUs revenue per
or other Total TEU or
Carrier unit of revenues other unit
measurement of
measurement
------------------------------------------------------------------------
A................................... ........... $ $
B................................... ........... $ $
C................................... ........... $ $
Etc................................. ........... $ $
------------------------------------------------------------------------
Part VI Leading Commodities
For each sub-trade within the scope of the agreement, list the
top 10 commodities carried by all the parties during the same time
period used in responding to Part V, or list the commodities
accounting for 50 percent of the total carried by all the parties
during the same 12-month period, whichever list is longer. The same
12-month period must be used in reporting for each sub-trade. The
information should be provided in the format below:
Time Period (Same as That Used in Responding to Part V)
I. Sub-Trade
A. First leading commodity
B. Second leading commodity
C. Third leading commodity etc.
II. Sub-Trade
A. First leading commodity etc.
Part VII Cargo and Revenue Results by Sub-Trade
For the same time period used in responding to Parts V and VI,
and for each sub-trade within the scope of the agreement, and for
each of the leading commodities listed for each sub-trade in the
response to Part VI, and for each party, state the total TEUs (or
other unit of measurement) carried and average gross revenue per TEU
(or other unit of measurement).
The information should be provided in the format below:
Time Period (Same as That Used in Responding to Part V)
I. Sub-trade A
A. First leading commodity
1. Carrier A
(a) Total TEUs (or other unit of measurement) carried
(b) Average gross revenue per TEU (or other unit of measurement)
2. Carrier B
(a) etc.
B. Second leading commodity
1. Carrier A
(a) etc.
II. Sub-trade B
A. First leading commodity
1. etc.
Part VIII Port Service
For each port within the entire geographic scope of the
agreement, state the number of port calls by each of the parties
over the same time period used in responding to Parts V, VI and VII.
The information should be provided in the format below:
Time Period
[Same as that used in responding to Part V]
----------------------------------------------------------------------------------------------------------------
Port Port Port Port Port
----------------------------------------------------------------------------------------------------------------
Carrier A......................................
Carrier B......................................
Carrier C......................................
Etc............................................
----------------------------------------------------------------------------------------------------------------
Also, for each party, indicate any planned change in the nature
or type of service (such as base port designation, frequency of
vessel calls, use of indirect rather than direct service, etc.) to
be effected at any port within the entire geographic scope of the
agreement after the effective date of the agreement.
Part IX
(A) Identification of Person(s) to Contact Regarding the
Information Form
(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------
(B) Identification of an Individual Located in the United States
Designated for the Limited Purpose of Receiving Notice of an
Issuance of a Request for Additional Information or Documents (see
46 CFR 572.606).
(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------
(C) Certification
This Information Form, together with any and all appendices and
attachments thereto, was prepared and assembled in accordance with
instructions issued by the Federal Maritime Commission. The
information is, to the best of my knowledge, true, correct, and
complete.
Name (please print or type)
----------------------------------------------------------------------
Title------------------------------------------------------------------
Relationship with parties to agreement
----------------------------------------------------------------------
----------------------------------------------------------------------
Signature--------------------------------------------------------------
Date-------------------------------------------------------------------
34. A new appendix B to part 572 is added to read as follows:
Appendix B to Part 572--Information Form for Class C Agreements and
Instructions.
Instructions
All agreements between or among ocean common carriers that are
Class C agreements as defined in 46 CFR 572.502(b) must be
[[Page 11580]]
accompanied by a completed Information Form for such agreements. A
complete response must be supplied to the Form. Where the filing
party is unable to supply a complete response, that party shall
provide either estimated data (with an explanation of why precise
data are not available) or a detailed statement of reasons for
noncompliance and the efforts made to obtain the required
information. For purposes of the requirements of this Form, if one
of the agreement signatories is a joint service operating under an
effective agreement, that signatory shall respond to the Form as a
single agreement party. All sources must be identified.
Part I
Part I requires a statement of the full name of the agreement as
also provided under 46 CFR 572.403.
Part II
Part II requires a list of all effective agreements covering all
or part of the geographic scope of the filed agreement, whose
parties include one or more of the parties to the filed agreement.
Part III
Part III is concerned with the level of service at each port
within the entire geographic scope of the agreement. Each agreement
line is required to state the number of calls it made at each port
over the most recent 12-month period for which complete data are
available, and also to indicate any immediate change it plans to
make in the nature or type of service at a particular port after the
agreement goes into effect.
Part IV(A)
Part IV(A) requires the name, title, address, telephone number
and cable address, telex or fax number of a person the Commission
may contact regarding the Information Form and any information
provided therein.
Part IV(B)
Part IV(B) requires the name, title, address, telephone number
and cable address, telex or fax number of a person the Commission
may contact regarding a request for additional information or
documents.
Part IV(C)
Part IV(C) requires that a representative of the agreement lines
sign the Information Form and certify that the information in the
Form and all attachments and appendices are, to the best of his or
her knowledge, true, correct and complete. The representative is
also required to indicate his or her relationship with the parties
to the agreement.
Federal Maritime Commission
Information Form For Certain Agreements By or Among Ocean Common
Carriers
Agreement Number-------------------------------------------------------
(Assigned by FMC)
Part I Agreement Name:
----------------------------------------------------------------------
Part II Other Agreements
List all effective agreements covering all or part of the
geographic scope of this agreement, whose parties include one or
more of the parties to this agreement.
Part III Port Service
For each port within the entire geographic scope of the
agreement, state the number of port calls by each of the parties
over the most recent 12-month period for which complete data are
available. The information should be provided in the format below.
Time Period
----------------------------------------------------------------------------------------------------------------
Port Port Port Port Port
----------------------------------------------------------------------------------------------------------------
Carrier A
Carrier B
Carrier C
Etc............................................
----------------------------------------------------------------------------------------------------------------
Also, for each party, indicate any planned change in the nature
or type of service (such as base port designation, frequency of
vessel calls, use of indirect rather than direct service, etc.) to
be effected at any port within the entire geographic scope of the
agreement after the effective date of the agreement.
Part IV
(A) Identification of Person(s) to Contact Regarding the
Information Form
(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------
(B) Identification of an Individual Located in the United States
Designated for the Limited Purpose of Receiving Notice of an
Issuance of a Request for Additional Information or Documents (see
46 CFR 572.606).
(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------
(C) Certification
This Information Form, together with any and all appendices and
attachments thereto, was prepared and assembled in accordance with
instructions issued by the Federal Maritime Commission. The
information is, to the best of my knowledge, true, correct, and
complete.
Name (please print or type)
----------------------------------------------------------------------
Title------------------------------------------------------------------
Relationship with parties to agreement
----------------------------------------------------------------------
Signature--------------------------------------------------------------
Date-------------------------------------------------------------------
36. A new appendix C to part 572 is added to read as follows:
Appendix C to Part 572--Monitoring Report for Class A Agreements and
Instructions
Instructions
A complete response must be supplied to each part of the Report.
Where the party answering a particular part is unable to supply a
complete response, that party shall provide either estimated data
(with an explanation of why precise data are not available) or a
detailed statement of reasons for noncompliance and the efforts made
to obtain the required information. All sources must be identified.
Part I
Part I requires a statement of the full name of the agreement,
and the assigned FMC number.
Part II
Part II requires a statement of any change occurring during the
calendar quarter to the list of other agreements set forth in Part
II of the Information Form.
Part III
Part III requires the filing party to indicate whether the
agreement authorizes the parties to operate as a conference.
Part IV
Part IV requires the market shares of all liner operators within
the entire geographic scope of the agreement and in each sub-trade
within the scope of the agreement during the calendar quarter. A
joint service shall be treated as a single liner operator, whether
it is an agreement line or a non-agreement line.
Sub-trade is defined as the scope of all liner movements between
each U.S. port range within the scope of the agreement and each
foreign country within the scope of the agreement. Where the
agreement covers both U.S. inbound and outbound line movements,
inbound and outbound market shares should be shown separately.
U.S. port ranges are defined as follows:
Atlantic--Includes ports along the eastern seaboard from the
northern boundary of
[[Page 11581]]
Maine to, but not including, Key West, Florida. Also includes all
ports bordering upon the Great Lakes and their connecting waterways
as well as all ports in the State of New York on the St. Lawrence
River.
Gulf--Includes all ports along the Gulf of Mexico from Key West,
Florida, to Brownsville, Texas, inclusive. Also includes all ports
in Puerto Rico and the U.S. Virgin Islands.
Pacific--Includes all ports in the States of Alaska, Hawaii,
California, Oregon and Washington. Also includes all ports in Guam,
American Samoa, Northern Marinas, Johnston Island, Midway Island and
Wake Island.
An application may be filed for a waiver of the definition of
``sub-trade,'' under the provisions described in 46 CFR 572.709. In
any such application, the burden shall be on the agreement carriers
to show that their marketing and pricing practices are done by
ascertainable multi-country regions rather than by individual
countries or, in the case of the United States, by broader areas
than the port ranges defined herein. The Commission will also
consider whether the alternate definition of ``sub-trade'' requested
by the waiver application is reasonably consistent with the
definition of ``sub-trade'' applied in the original Information Form
filing for the agreement.
The formula for calculating market share in the entire agreement
scope or in a sub-trade is as follows:
The total amount of liner cargo carried on each liner operator's
liner vessels in the entire agreement scope or in the sub-trade
during the calendar quarter, divided by the total liner movements in
the entire agreement scope or in the sub-trade during the calendar
quarter, which quotient is multiplied by 100. The market shares held
by non-agreement lines as well as by agreement lines must be
provided, stated separately in the format indicated.
If 50 percent or more of the total liner cargo carried by the
agreement lines in the entire agreement scope or in the sub-trade
during the calendar quarter was containerized, only containerized
liner movements (measured in TEUs) must be used for determining
market share. If 50 percent or more of the total liner cargo carried
by the agreement lines was non-containerized, only non-containerized
liner movements must be used for determining market share. The unit
of measure used in calculating amounts of non-containerized cargo
must be specified clearly and applied consistently.
Liner movements is the carriage of liner cargo by liner
operators. Liner cargoes are cargoes carried on liner vessels in a
liner service. A liner operator is a vessel-operating common carrier
engaged in liner service. Liner vessels are those vessels used in a
liner service. Liner service refers to a definite, advertised
schedule of sailings at regular intervals. All these definitions,
terms and descriptions apply only for purposes of the Monitoring
Report.
Part V
Part V requires each agreement member line's total liner cargo
carryings within the entire geographic area covered by the agreement
during the calendar quarter, each line's total liner revenues within
the geographic area during the calendar quarter, and average
revenue.
If 50 percent or more of the total liner cargo carried by all
the agreement member lines in the geographic area covered by the
agreement during the calendar quarter was containerized, each
agreement member line should report only its total carryings of
containerized liner cargo (measured in TEUs) during the calendar
quarter within the geographic area, total revenues generated by its
carriage of containerized liner cargo, and average revenue per TEU.
Conversely, if 50 percent or more of the total liner cargo carried
by all the agreement member lines in the geographic area covered by
the agreement during the calendar quarter was non-containerized,
each agreement member line should report only its total carryings of
non-containerized liner cargo during the calendar quarter
(specifying the unit of measurement used), total revenues generated
by its carriage of noncontainerized liner cargo, and average revenue
per unit of measurement.
The Monitoring Report specifies the format in which the
information is to be reported. Where the agreement covers both U.S.
inbound and outbound liner movements, inbound and outbound data
should be stated separately.
Part VI
Part VI requires a list, for each sub-trade within the scope of
the agreement, of the top 10 liner commodities (including
commodities not subject to tariff filing) carried by all the
agreement member lines during the calendar quarter, or a list of the
commodities accounting for 50 percent of the total liner cargo
carried by all the agreement member lines during the calendar
quarter, whichever list is longer. If 50 percent or more of the
total liner cargo carried by all the agreement member lines in the
sub-trade during the calendar quarter was containerized, this list
should include only containerized commodities. If 50 percent or more
of the total liner cargo carried by all the agreement member lines
in the sub-trade during the calendar quarter was noncontainerized,
this list should include only non-containerized commodities.
Commodities should be identified at the 4-digit level of customarily
used commodity coding schedules. Where the agreement covers both
U.S. inbound and outbound liner movements, inbound and outbound sub-
trades should be stated separately.
Part VII
Part VII requires a statement of the cargo volume and revenue
results experience by each of the agreement lines from each major
commodity in each sub-trade during the calendar quarter. The
Monitoring Report specifies the format in which the information is
to be reported.
Part VIII
Part VIII is required to be completed if Part III is answered
``YES.'' Each conference line is required to indicate the extent to
which it has taken independent rate actions on each of the leading
commodities in each of the sub-trades. Part VIII also inquires into
the type of shipper for whom independent rate actions have been
taken. The Monitoring Report specifies the format in which the
information is to be reported.
Part IX
Part IX requires each of the agreement lines to indicate any
change in the nature or type of service it provided at any port
within the entire geographic range of the agreement during the
calendar quarter.
Part X(A)
Part X(A) requires the name, title, address, telephone number
and cable address, telex or fax number of a person the Commission
may contact regarding the Monitoring Report and any information
provided therein.
Part X(B)
Part X(B) requires that a representative of the agreement lines
sign the Monitoring Report and certify that the information in the
Report and all attachments and appendices are, to the best of his or
her knowledge, true, correct and complete. The representative is
also required to indicate his or her relationship with the parties
to the agreement.
Federal Maritime Commission
Monitoring Report For Class A agreements Between or Among Ocean Common
Carriers
Agreement Number-------------------------------------------------------
(Assigned by FMC)
Part I Agreement Name:
----------------------------------------------------------------------
Part II Other Agreements
Indicate any change occurring during the calendar quarter to the
list of other agreements set forth in Part II of the Information
Form.
Part III Conference Agreements
Does the agreement authorize the parties to operate as a
conference?
Yes {time} No {time}
Part IV Market Share Information
Provide the market shares of all liner operators within the
entire geographic scope of the agreement and within each agreement
sub-trade during the calendar quarter. The information should be
provided in the format below:
Market Share Report for Calendar Quarter
[Indicate either entire agreement scope, or sub-trade name]
------------------------------------------------------------------------
TEUs or
other unit
of Percent
measurement
------------------------------------------------------------------------
Agreement Market Share:
Line A...................................... X,XXX XX%
Line B...................................... X,XXX XX%
Line C...................................... X,XXX XX%
-------------------------
[[Page 11582]]
Total Agreement Market Share............ X,XXX XX%
Non-Agreement Market Share:
Line X...................................... X,XXX XX%
Line Y...................................... X,XXX XX%
Line Z...................................... X,XXX XX%
-------------------------
Total Non-Agreement Market Share........ X,XXX XX%
Total Market............................ X,XXX 100%
------------------------------------------------------------------------
Part V Cargo and Revenue Results Agreement-Wide
For each agreement member line, provide total cargo carryings
(measured in TEUs or other unit of measurement) during the calendar
quarter within the entire geographic area covered by the agreement,
total revenues within the geographic area during the calendar
quarter, and average revenue per TEU or other unit of measurement.
The information should be provided in the format below:
Calendar Quarter
------------------------------------------------------------------------
Acg.
Total TEUs Revenue per
or other Total TEU or
Carrier unit of revenues other unit
measurement of
measurement
------------------------------------------------------------------------
A................................... ........... $ $
B................................... ........... $ $
C................................... ........... $ $
Etc................................. ........... $ $
------------------------------------------------------------------------
Part VI Leading Commodities
For each sub-trade within the scope of the agreement, list the
top 10 commodities carried by all the parties during the calendar
quarter, or list the commodities accounting for 50 percent of the
total carried by all the parties during the calendar quarter,
whichever list is longer. The information should be provided in the
format below:
Calendar Quarter
I. Sub-trade
A. First leading commodity
B. Second leading commodity
C. Third leading commodity etc.
II. Sub-trade
A. First leading commodity etc.
Part VIII Cargo and Revenue Results by Sub-Trade
For each sub-trade within the scope of the agreement, and for
each of the leading commodities listed for each sub-trade in the
response to Part VI, and for each party, state the total TEUs (or
other unit of measurement) carried and average gross revenue per TEU
(or other unit of measurement).
The information should be provided in the format below:
Calendar Quarter
I. Sub-trade A
A. First leading commodity
1. Carrier A
(a) Total TEUs (or other units of measurement) carried
(b) Average gross revenue per TEU (or other unit of measurement)
2. Carrier B)
(a) etc.
II. Sub-trade B
A. First leading commodity
1. etc.
Part VIII Independent Rate Actions (if applicable)
For each sub-trade within the scope of the agreement, and for
each of the leading commodities listed for each sub-trade in the
response to Part VI, and for each party, state (a) the total number
of independent rate actions taken during the calendar quarter
applicable to that commodity moving in that sub-trade; (b) how many
of the total were independent rate actions taken to service specific
shipper accounts; (c) of those, how many were for non-vessel-
operating common carriers, and how many were for shippers'
associations. The information should be provided in the format
below:
Calendar Quarter
I. Sub-trade A
A. First leading commodity
1. Carrier A
(a) Number of IA rate actions
(i) Number of IA rate actions taken to service specific shipper
accounts
(i)(a) Number taken to service non-vessel-operating common
carrier accounts
(1)(b) Number taken to service shippers' association accounts
2. Carrier B
(a) etc.
B. Second leading commodity
1. Carrier A
(a) etc.
II. Sub-trade B
A. First leading commodity
1. etc.
Part IX Port Service
For each party, state any change in the nature or type of
service (such as base port designation, frequency of vessel calls,
use of indirect rather than direct service, etc.) effected at any
port within the entire geographic scope of the agreement during the
calendar quarter.
Part X
(A) Identification of Person(s) to Contact Regarding the Monitoring
Report
(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------
(B) Certification
This Monitoring Report, together with any and all appendices and
attachments thereto, was prepared and assembled in accordance with
instructions issued by the Federal Maritime Commission. The
information is, to the best of my knowledge, true, correct, and
complete.
Name (please print or type)
----------------------------------------------------------------------
Title------------------------------------------------------------------
Relationship with parties to agreement
----------------------------------------------------------------------
Signature--------------------------------------------------------------
Date-------------------------------------------------------------------
37. A new appendix D to Part 572 is added to read as follows:
Appendix D to Part 572--Monitoring Report for Class B Agreements and
Instructions.
Instructions
A complete response must be supplied to each part of the Report.
Where the party answering a particular part is unable to supply a
complete response, that party shall provide either estimated data
(with an explanation of why precise data are not available) or a
detailed statement of reasons for noncompliance and the efforts made
to obtain the required information. All sources must be identified.
Part I
Part I requires a statement of the full name of the agreement,
and the assigned FMC number.
Part II
Part II requires a statement of any change occurring during the
calendar quarter to the list of other agreements set forth in Part
II of the Information Form.
Part III
Part III requires the market shares of all liner operators
within the entire geographic scope of the agreement and in each sub-
trade within the scope of the agreement during the calendar quarter.
A joint service shall be treated as a single liner operator, whether
it is an agreement line or a non-agreement line.
Sub-trade is defined as the scope of all liner movements between
each U.S. port range within the scope of the agreement and each
foreign country within the scope of the agreement. Where the
agreement covers both U.S. inbound and outbound liner movements,
inbound and outbound market shares should be shown separately.
U.S. port ranges are defined as follows:
Atlantic--Includes ports along the eastern seaboard from the
northern boundary of Maine to, but not including, Key West, Florida.
Also includes all ports bordering
[[Page 11583]]
upon the Great Lakes and their connecting waterways as well as all
ports in the State of New York on the St. Lawrence River.
Gulf--Includes all ports along the Gulf of Mexico from Key West,
Florida, to Brownsville, Texas, inclusive. Also includes all ports
in Puerto Rico and U.S. Virgin Islands.
Pacific--Includes all ports in the State of Alaska, Hawaii,
California, Oregon and Washington. Also includes all ports in Guam,
American Samoa, Northern Marinas, Johnston Island, Midway Island and
Wake Island.
An application may be filed for a waiver of the definition of
``sub-trade,'' under the provisions described in 46 CFR 572.709. In
any such application, the burden shall be on the agreement carriers
to show that their marketing and pricing practices are done by
ascertainable multi-country regions rather than by individuals
countries or, in the case of the United States, by broader areas
than the port ranges defined herein. The Commission will also
consider whether the alternate definition of ``sub-trade'' requested
by the waiver application is reasonably consistent with the
definition of ``sub-trade'' applied in the original Information Form
filing for the agreement.
The formula for calculating market share in the entire agreement
scope or in a sub-trade is as follows:
The total amount of liner cargo carried on each liner operator's
liner vessels in the entire agreement scope or in the sub-trade
during the calendar quarter, divided by the total liner movement in
the entire agreement scope or in the sub-trade during the calendar
quarter, which quotient is multiplied by 100. The market shares held
by non-agreement lines as by agreement lines must be provided,
stated separately in the format indicated.
If 50 percent or more of the total liner cargo carried by the
agreement lines in the entire agreement scope or in the sub-trade
during the calendar quarter was containerized, only containerized
liner movements (measured in TEUs) must be used for determining
market share. If 50 percent or more of the total liner cargo carried
by the agreement lines was non-containerized cargo, only non-
containerized liner movements must be used for determining market
share. The unit of measure used in calculating amounts of non-
containerized cargo must be specified clearly and applied
consistently.
Liner movements is the carriage of liner cargo by liner
operators. Liner cargoes are cargoes carried on liner vessels in a
liner service. A liner operator is a vessel-operating common carrier
engaged in liner service. Liner vessels are those vessels used in a
liner service. Liner service refers to a definite, advertised
schedule of salings at regular intervals. All these definitions,
terms and descriptions apply only for purposes of the Monitoring
Report.
Part IV
Part IV requires each agreement member line's total liner cargo
carrying within the entire geographic area covered by the agreement
during the calendar quarter, each line's total liner revenues within
the geographic area during the calendar quarter, and average
revenue.
If 50 percent or more of the total liner cargo carried by all
the agreement member lines in the geographic area covered by the
agreement during the calendar quarter was containerized, each
agreement member line should report only its total carrying of
containerized liner cargo (measured in TEUs) during the calender
quarter within the geographic area, total revenues generated by its
carriage of containerized liner cargo, and average revenue per TEU.
Conversely, if 50 percent or more of the total liner cargo carried
by all the agreement member lines in the geographic area covered by
the agreement during the calendar quarter was non-containerized,
each agreement member line should report only its total carryings of
non-containerized liner cargo during the calendar quarter
(specifying the unit of measurement used), total revenues generated
by its carriage of non-containerized cargo, and average revenue per
unit of measurement.
The Monitoring Report specifies the format in which the
information is to be reported. Where the agreement covers both U.S.
inbound and outbound liner movements, inbound and outbound data
should be stated separately.
Part V
Part V requires each of the agreement member lines to indicate
any change in the nature or type of service it provided at any port
within the entire geographic scope of the agreement during the
calendar quarter.
Part VI(A)
Part VI(A) requires the name, title, address, telephone number
and cable address, telex or fax number of a person the Commission
may contact regarding the Monitoring Report and any information
provided therein.
Part VI(B)
Part VI(B) requires that a representative of the agreement lines
sign the Monitoring Report and certify that the information in the
Report and all attachments and appendices are, to the best of his or
her knowledge, true, correct and complete. The representative is
also required to indicate his or her relationship with the parties
to the agreement.
Federal Maritime Commission
Monitoring Report For Class B Agreements Between or Among Ocean Common
Carriers
Agreement Number-------------------------------------------------------
(Assigned by FMC)
Part I Agreement
Name:
----------------------------------------------------------------------
Part II Other Agreements
Indicate any change occurring during the calendar quarter to the
list of other agreements set forth in Part II of the Information
Form.
Part III Market Share Information
Provide the market shares of all liner operators within the
entire geographic scope of the agreement and within each sub-trade
during the calendar quarter. The information should be provided in
the format below:
Market Share Report for Calendar Quarter
[Indicate either entire agreement scope, or sub-trade name]
------------------------------------------------------------------------
TEUs or
other unit
of Percent
measurement
------------------------------------------------------------------------
Agreement Market Share:
Line A.......................................... X,XXX XX
Line B.......................................... X,XXX XX
Line C.......................................... X,XXX XX
-----------------------
Total Agreement Market Share.................. X,XXX XX
=======================
Non-Agreement Market Share:
Line X.......................................... X,XXX XX
Line Y.......................................... X,XXX XX
Line Z.......................................... X,XXX XX
-----------------------
Total Non-Agreement Market Share.............. X,XXX XX
Total Market.................................. X,XXX 100
------------------------------------------------------------------------
Part IV Cargo and Revenue Results Agreement-Wide
For each agreement member line, provide total cargo carryings
(measured in TEUs or other unit of measurement) during the calendar
quarter within the entire geographic area covered by the agreement,
total revenues within the geographic area during the calendar
quarter, and average revenue per TEU or other unit of measurement.
The information should be provided in the format below:
Calendar Quarter
------------------------------------------------------------------------
Avg.
Total TEUs revenue per
or other Total TEU or
Carrier unit of revenues other unit
measurement of
measurement
------------------------------------------------------------------------
A................................... ........... $ $
B................................... ........... $ $
C................................... ........... $ $
Etc................................. ........... $ $
------------------------------------------------------------------------
Part V Port Service
For each party, state any change in the nature or type of
service (such as base port designation, frequency of vessel calls,
use of indirect rather direct service, etc.) effected at any port
within the entire geographic scope of the agreement during the
calendar quarter.
Part VI
(A) Identification of Person(s) to Contact Regarding the Monitoring
Report
(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
[[Page 11584]]
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------
(B) Certification
This Monitoring Report, together with any and all appendices and
attachments thereto, was prepared and assembled in accordance with
instructions issued by the Federal Maritime Commission. The
information is, to the best of my knowledge, true, correct, and
complete.
Name (please print or type)
----------------------------------------------------------------------
Title------------------------------------------------------------------
Relationship with parties to agreement
----------------------------------------------------------------------
Signature--------------------------------------------------------------
Date-------------------------------------------------------------------
38. A new appendix E to part 572 is added to read as follows:
Appendix E to Part 572--Monitoring Report for Class C Agreements and
Instructions
Instructions
A complete response must be supplied to the Report. Where the
filing party is unable to supply a complete response, that party
shall provide either estimated data (with an explanation of why
precise data are not available) or a detailed statement of reasons
for noncompliance and the efforts made to obtain the required
information. All sources must be identified.
Part I
Part I requires a statement of the full name of the agreement,
and the assigned FMC number.
Part II
Part II requires a statement of any change occurring during the
calendar quarter to the list of other agreements set forth in Part
II of the Information Form.
Part III
Part III requires a statement of any change in the nature or
type of service at any of the ports within the entire geographic
scope of the agreement.
Part IV(A)
Part IV(A) requires the name, title, address, telephone number
and cable address, telex or fax number of a person the Commission
may contact regarding the Monitoring Report and any information
provided therein.
Part IV(B)
Part IV(B) requires that a representative of the agreement lines
sign the Monitoring Report and certify that the information in the
Report and all attachments and appendices are, to the best of his or
her knowledge, true, correct and complete. The representative is
also required to indicate his or her relationship with the parties
to the agreement.
Federal Maritime Commission
Monitoring Report For Class C Agreements Between or Among Ocean Common
Carriers
Agreement Number-------------------------------------------------------
(Assigned by FMC)
Part I Agreement
Name:
----------------------------------------------------------------------
Part II Other Agreements
Indicate any change occurring during the calendar quarter to the
list of other agreements set forth in Part II of the Information
Form.
Part III Port Service
For each party, state any change in the nature or type of
service (such as base port designation, frequency of vessel calls,
use of indirect rather direct service, etc.) effected at any port
within the entire geographic scope of the agreement during the
calendar quarter.
Part IV
(A) Identification of Person(s) to Contact Regarding the Monitoring
Report
(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------
(B) Certification
This Monitoring Report, together with any and all appendices and
attachments thereto, was prepared and assembled in accordance with
instruments issued by the Federal Maritime Commission. The
information is, to the best of my knowledge, true, correct, and
complete.
Name (please print or type)
----------------------------------------------------------------------
Title------------------------------------------------------------------
Relationship with parties to agreement
----------------------------------------------------------------------
----------------------------------------------------------------------
Signature--------------------------------------------------------------
Date-------------------------------------------------------------------
By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 96-6600 Filed 3-20-96; 8:45 am]
BILLING CODE 6730-01-M
