64398 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

1OCCA includes the following FMC-filed 

agreements and carriers that participate in them: 

ABC Discussion Agreement; Australia/United States 

Containerline Association; Australia/United States 

Discussion Agreement; Caribbean Shipowners 

Association; Central America Discussion 

Agreement; East Coast of South America Discussion 

Agreement; Eastern Mediterranean Discussion 

Agreement; Florida Bahamas Shipowners 

Association; Grand Alliance Agreement II; 

Hispaniola Discussion Agreement; Israel Trade 

Conference; New Caribbean Service Rate 

Agreement; New Zealand/United States Inter-carrier 

and Conference Discussion Agreement; New 

Zealand/United States Container Lines Association 

Conference; Trans-Atlantic Conference Agreement; 

Transpacific Stabilization Agreement; United 

States/Australasia Discussion Agreement; United 

States/South Europe Conference; Venezuelan 

Discussion Agreement; West Coast of South 

America Discussion Agreement; and Westbound 

Transpacific Stabilization Agreement. 

The individual carriers are: A.P. Moller-Maersk 

A/S; Allianca Navegacao e Logistica Ltda.; 

American President Lines, Ltd. and APL Co. PTE 

Ltd.; Arawak Line Ltd.; Atlantic Container Line AB; 

Australia-New Zealand Direct Line and Contship 

Containerlines, divisions of CP Ships (UK) Limited; 

Bahamas Ro Ro Service (Freeport), Inc.; Bernuth 

Lines, Ltd.; Caicos Cargo Ltd. d/b/a Turks Island 

Shipping Line; China Shipping Container Lines Co., 

Ltd.; CMA CGM, S.A.; Compagnie Maritime Marfret 

S.A.; Companhia Libra de Navegacao; Compania 

Chilena de Navigacion Interoceania, S.A.; 

Compania Sud Americana de Vapores, S.A.; COSCO 

Container Lines Company Limited; Crowley Liner 

Services, Inc.; Dole Ocean Cargo Express; Evergreen 

Marine Corporation (Taiwan) Limited; Farrell Lines, 

Inc.; FESCO Ocean Management Inc.; Frontier Liner 

Services, Inc.; G&G Marine, Inc.; Hamburg 

Sudamerikanische Dampfschifffahrts-Gesellschaft 

KG; Hanjin Shipping Co., Ltd.; Hapag-Lloyd 

Container Linie GmbH; Hyundai Merchant Marine 

Co., Ltd.; Interline Connection, N.V.; Kawasaki 

Kisen Kaisha, Ltd.; King Ocean Services Limited; 

King Ocean Services de Venezuela; LauritzenCool 

AB; Seatrade Group N.V.; Lykes Lines Limited, 

LLC; Mediterranean Shipping Co. S.A.; Mitsui 

O.S.K. Lines, Ltd.; Montemar Maritima S.A.; 

Nippon Yusen Kaisha; Orient Overseas Container 

Line Inc., Orient Overseas Container Line Limited, 

and Orient Overseas Container Line (Europe) 

Limited; P&O Nedlloyd B.V and P&O Nedlloyd 

Limited; Pioneer Shipping, Ltd.; Seafreight Line, 

Ltd.; Seaboard Marine, Ltd.; South Pacific Shipping 

Co., Ltd.; Tecmarine Lines, Inc.; Trinity Shipping 

Line, S.A.; Tropical Shipping & Construction, Ltd.; 

Turkon Container Transportation and Shipping, 

Inc.; Wallenius Wilhelmsen Lines AS; Yangming 

Marine Transport Corp.; and Zim Israel Navigation 

Co., Ltd. 

FEDERAL MARITIME COMMISSION 

46 CFR Parts 501 and 535 

[Docket No. 03–15] 

RIN 3072–AC28 

Ocean Common Carrier and Marine 

Terminal Operator Agreements Subject 

to the Shipping Act of 1984; Final Rule 

AGENCY: Federal Maritime Commission. 

ACTION: Final rule. 

SUMMARY: The Federal Maritime 

Commission issued a Notice of 

Proposed Rulemaking on December 2, 

2003, that set forth proposed changes in 

the Commission’s regulations for Ocean 

Common Carrier and Marine Terminal 

Operator Agreements Subject to the 

Shipping Act of 1984. The proposal also 

included changes to the delegation of 

authority to the Commission’s Bureau of 

Trade Analysis. The Commission 

requested that comments be filed by 

January 30, 2004. This notice of Final 

Rule summarizes the comments 

submitted and revises the proposed 

regulations based on those comments. 

DATES: This rule is effective on January 

3, 2005, except for §§ 535.702 and 

535.703, which are effective February 2, 

2005, and § 535.701(e), which is stayed 

until further notice. 

FOR FURTHER INFORMATION CONTACT: 

Amy W. Larson, General Counsel, 

Federal Maritime Commission, 800 

North Capitol Street, NW., Room 

1018, Washington, DC 20573–0001, 

(202) 523–5740, E-mail: 

GeneralCounsel@fmc.gov. 

Florence A. Carr, Director, Bureau of 

Trade Analysis, Federal Maritime 

Commission, 800 North Capitol 

Street, NW., Room 940, Washington, 

DC 20573–0001, (202) 523–5796, Email: tradeanalysis@fmc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

The Notice of Proposed Rulemaking 

(‘‘NPR’’) (68 FR 67510, Dec. 2, 2003) 

sought to amend the Commission’s 

regulations governing the filing of 

agreements pursuant to the Shipping 

Act of 1984, 46 U.S.C. 1701–1719 

(‘‘Shipping Act’’). In particular, the NPR 

addressed the concerns that had been 

raised by regulated entities that are 

parties to agreements regarding 

regulatory certainty, flexibility, and 

confidentiality. These concerns were 

raised in comments submitted in 

response to a Notice of Inquiry 

published by the Commission on 

August 3, 1999. 64 FR 42057. 

Specifically, in the NPR the 

Commission proposed the following 

changes to 46 CFR parts 501 and 535: 

the addition of new delegations of 

authority to the Commission’s Director, 

Bureau of Trade Analysis (‘‘BTA’’); 

revisions to the requirements for the 

content of filed agreements, including a 

new exemption for ‘‘low market share’’ 

agreements (proposed 46 CFR 535.311) 

and a new term ‘‘capacity 

rationalization’’ (proposed 46 CFR 

535.104(e)); revisions to its current 

exemptions for ‘‘non-substantive’’ and 

‘‘miscellaneous’’ modifications and 

transshipment agreements (proposed 46 

CFR 535.302, 535.309, 535.104(jj) and 

535.306(a)); a revision to 46 CFR 

535.602(a) (to indicate that the 

Commission will submit a notice to the 

Federal Register for publication of all 

filed agreements); revised requirements 

for information to be submitted in 

conjunction with filed agreements 

(proposed 46 CFR part 535, subparts E 

and G); and miscellaneous changes to 

update, clarify, and remove obsolete 

language from its rules (proposed 46 

CFR 535.303, 535.304, 535.403, 535.605, 

535.606, 535.607). 

Six comments on the NPR were 

received. These came from Maersk 

Sealand (‘‘MSL’’); American President 

Lines, Ltd. and APL Co. Pte., Ltd. 

(‘‘APL’’); P&O Nedlloyd Limited 

(‘‘PONL’’); FESCO Ocean Management 

Limited (‘‘FOML’’); Trans-Net, Inc. 

(‘‘Trans-Net’’); and the Ocean Common 

Carriers and Agreements (‘‘OCCA’’).1

Trans-Net also made oral presentations 

to individual Commissioners. 

II. Agreement Content and 

Transshipment Agreements 

A. Agreement Content—Generally and 

Proposed Exemptions 

1. Summary of Comments 

APL notes that the operations of 

global alliances are extremely complex 

and fluid, and are affected by factors 

outside the U.S. trades. APL at 1. APL 

stresses: (1) the critical importance that 

alliances and vessel sharing agreements 

(‘‘VSAs’’) have flexibility to make 

operating decisions on a timely and 

efficient basis; and (2) that a major 

alliance is a continuous work in 

progress. Id. at 2. Although APL takes 

no issue with the NPR’s assertions about 

the effect of the capacity/demand 

relationship on rates, APL urges the 

Commission to consider that alliances 

and other VSAs give carriers the ability 

to achieve efficiencies and cost savings, 

which in turn result in benefits to 

shippers through improved service 

levels and increases in capacity. Id. at 

2–3. 

APL describes the operational matters 

of alliance agreements as often evolving 

via e-mail exchanges augmenting the 

original document, an ‘‘implementing 

agreement’’ and separate documents 

that may set forth particular aspects of 

cooperation. Id. at 3. APL believes that 

it is not entirely realistic to suggest that 

the commercial agreement among 

alliance partners is ‘‘relatively static 

once signed, or that the full commercial 

agreement is contained in a readily 

identifiable single document.’’ Id. at 4. 

On the other hand, APL believes that 

the NPR achieves a balanced approach 

through the combination of specified 

exemptions to the filing requirements 

for operations-related matters paired 

with an increase in monitoring report 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64399 

obligations. It strongly supports the 

NPR’s codification of current practice as 

outlined in proposed section 535.408(b). 

Id. at 4, 5. 

OCCA and MSL support the 

elimination of the 45-day waiting period 

for space charters and other operational 

agreements, particularly in instances 

where the parties’ combined market 

shares do not give rise to serious 

competitive concerns. OCCA at 9; MSL 

at 1. MSL also argues that eliminating 

the waiting period for space charters 

and similar agreements would not 

undermine the Commission’s regulatory 

oversight, as the proposed exemption 

would not relieve the subject 

agreements from either the substantive 

requirements of the Shipping Act or its 

filing requirement. MSL at 2. 

Nevertheless, OCCA and MSL believe 

that the market share threshold for a 

‘‘low market share’’ agreement should be 

increased from 15 percent to 30 percent 

if operating within a pricing agreement, 

and from 20 percent to 35 percent if not. 

OCCA at 11; MSL at 2. OCCA argues 

that the market share considered for the 

low market share exemption should 

include the entire agreement scope 

because doing so would increase the 

relief provided by the exemption. OCCA 

at 10. OCCA submits that an agreement 

with low overall market share that 

includes one or more small sub-trades 

in which it has a large market share 

should not be disqualified from the 

exemption. Id. OCCA argues that the 

Commission has read the Antitrust 

Guidelines for Collaborations Among 

Competitors (‘‘Antitrust Guidelines’’) too 

narrowly, and believes that the types of 

agreements which would be eligible for 

the proposed low market share 

exemption are just the types of 

efficiency enhancing and/or 

competitively neutral arrangements 

contemplated by those Guidelines. Id. at 

11–12. Further, OCCA points out that 

the European Commission regulation 

levels are set at 30 percent and 35 

percent. OCCA also recommends that 

the Commission’s regulations state that 

the time period used to determine 

market share will be the most recent 

calendar quarter for which such data is 

available, because this is the same 

period the Information Form rules 

require. Id. at 10–11. 

In addition to its other suggestions, 

OCCA urges the Commission to include 

specific activities in proposed section 

535.408(b) exempting certain activities 

from amendment filing, namely: 

insurance; procedures for resolution of 

disputes relating to loss and/or damage 

of cargo; maintenance of books and 

records; force majeure clauses; 

procedures for allocating space and 

forecasting demand; and schedule 

adjustments. Id. at 12–13. OCCA argues 

that the catch-all provision in section 

535.408(b)(5), which it asserts generally 

covers operational matters and is not 

restricted to a specific list, would not 

require modification to include these 

matters. Id. at 13. 

Finally, OCCA requests that the 

Commission adopt a new exemption 

from the notice and waiting 

requirements to allow agreement 

amendments reflecting a change in party 

due to corporate acquisition to become 

effective upon filing. Id. This, OCCA 

asserts, would prevent a gap in antitrust 

immunity due to matters over which the 

Commission has no jurisdiction. Id. at 

14. OCCA also requests that the disused 

term ‘‘classes’’ in sections 535.103(b) 

and 535.103(d) be replaced with a 

generic term such as ‘‘types’’; and that 

‘‘or a portion thereof’’ be added to the 

end of the provision in section 

535.302(b)(1) to indicate that 

cancellation of an agreement, in part or 

in whole, is a ‘‘miscellaneous 

modification’’ which may take effect 

upon filing. Id. at 15. OCCA believes 

these technical revisions would codify 

current practice and conform to other 

portions of the Commission’s rules. Id. 

OCCA also recommends that the 

Commission provide agreement parties 

some period of time (for example, six 

months) from the effective date of the 

regulations to comply with the new 

requirements, and to prevent the revised 

regulation from having retroactive 

application. Id. at 16. 

B. Discussion 

The Commission is gratified that the 

comments generally recognize and agree 

with the NPR’s stated purpose and 

approach in proposing an exemption 

from the statutory 45-day waiting period 

for agreements that contain neither 

capacity rationalization nor pricing 

authority. In response to the 

commenters’ specific suggestions, the 

Commission has determined to revise 

the proposed rule as discussed below. 

1. 46 CFR 535.402 

The NPR included a proposal to 

replace sections 535.103(g) and 

535.407(a) with a new section 535.402 

to serve as a single controlling rule 

reasserting and clarifying the 

Commission’s interpretation of the 

Shipping Act’s requirements for the 

content of a filed agreement. The 

Commission agrees with APL’s 

comments that the approach it has 

taken, namely reaffirming its 

interpretation of the Shipping Act to 

require the filing of the true and 

complete agreement balanced by 

additional exemptions and reductions 

in the filing, waiting period, and 

reporting requirements of the 

Commission’s rules, achieves the 

balance the Commission articulated in 

the NPR. 

2. 46 CFR 535.103(b), 535.103(d) 

The Commission agrees with OCCA’s 

suggestion that the term ‘‘classes’’ as it 

appears in proposed section 535.103(b), 

in light of the Commission’s new 

approach to its information submission 

requirements, is no longer appropriate. 

The Final Rule changes the term, as 

suggested by OCCA, from ‘‘classes’’ to 

‘‘types.’’ However, as to the 

Commission’s use of the term ‘‘classes’’

in proposed section 535.103(d), 

describing the Commission’s exemption 

authority for ‘‘classes of agreements’’

from requirements of the Shipping Act 

or these rules, the Commission has 

determined to retain the term as it 

mirrors the language of section 16 of the 

Shipping Act, 46 U.S.C. app. 1715. 

3. 46 CFR 535.302(b)(1) 

We agree with OCCA’s suggestion that 

‘‘or a portion thereof’’ be included in 46 

CFR 535.302(b)(1), which will therefore 

allow cancellation of an agreement, or a 

portion thereof, to become effective 

upon filing. Much like amendments that 

delete an agreement party (46 CFR 

535.302(b)(2)), the Commission believes 

cancellation of a portion of an 

agreement that, for example, would 

reduce the geographic scope or 

authority of an agreement, appears 

unlikely to have any potentially 

detrimental effects and therefore may 

become effective upon filing. The Final 

Rule reflects these changes. 

4. 46 CFR 535.602(a) 

No comments were received opposing 

the proposed changes to this provision 

indicating the Commission will transmit 

notices of all filed agreements, and their 

amendments, to the Federal Register for 

publication, and it is adopted in this 

Final Rule. 

5. 46 CFR 535.311 

The Commission proposed a new 

exemption from the Shipping Act’s 

standard 45-day waiting period for ‘‘low 

market share agreements.’’ The Final 

Rule reflects commenters’’ request that 

the market share level of such low 

market share agreements be raised, but 

the Commission declines to expand the 

definition of ‘‘market’’ for the 

exemption. 

The commenters are correct to note 

that the Commission’s proposed rule 

used the Antitrust Guidelines and 

64400 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

European regulations, which outline the 

types and size of competitor 

collaborations those regulators have 

represented they would presume lawful 

under generally-applicable competition 

laws, as points of departure for an 

exemption it may reasonably establish 

within the confines of section 16 of the 

Shipping Act. As such, the Commission 

is persuaded that the sub-trade market 

share levels for this exemption may be 

raised without exceeding the limitations 

of section 16 of the Shipping Act. We 

therefore adopt OCCA’s and MSL’s 

suggestion to permit certain agreements 

with less than 35 percent market share 

in any sub-trade in which they operate, 

or 30 percent market share if operating 

within another agreement with the 

authorities listed in 46 CFR 502(b), to be 

exempt from the 45-day notice and 

waiting period and the Information 

Form requirements (subpart E of this 

part), and thereby become effective 

upon filing. 

We have revised the provision to 

clarify that such low market share 

agreements do not include agreements 

containing any of the authorities listed 

at section 535.502(b). The provision is 

revised thus: 

(a) Low market share agreement means an 

agreement among ocean common carriers 

which contains none of the authorities listed 

in 535.502(b) and for which the combined 

market share of the parties in any of the 

agreement’s sub-trades is either: 

(1) Less than 30 percent, if all parties are 

members of another agreement in the same 

trade or sub-trade containing any of the 

authorities listed in § 535.502(b); or 

(2) Less than 35 percent, if all parties are 

not members of another agreement in the 

same trade or sub-trade containing any of the 

authorities listed in § 535.502(b). 

This is consistent with agreements 

required to file minutes under section 

535.704(a)(1). 

We decline, however, to adopt the 

commenters’ suggestion to make the 

exemption based upon the entire 

agreement trade, and find that basing 

the market share limit on sub-trades is 

a better measure for competitive 

concerns, as the geographic scope of an 

agreement may be extremely broad. We 

note that the definition of a sub-trade in 

section 535.104(hh) is revised by 

combining the U.S. East Coast and U.S. 

Gulf Coast segments of the trade and 

that this combination will provide 

regulatory relief to filers of agreements 

that are unlikely to have major 

implications on competition. Section 

535.311 of the Final Rule is revised to 

reflect this change. 

In response to the commenters’

request for guidance on market shares 

for purposes of determining whether an 

agreement may be eligible for the low 

market share exemption, and in the 

interests of consistency, we have 

determined that the appropriate period 

should be the same as that found in the 

Commission’s Information Form rules 

(appendix A to this part), namely the 

latest available calendar quarter. We 

encourage parties to seek the opinion of 

the Director, BTA, available under 

section 535.311(c), as to whether a 

proposed agreement may qualify for the 

exemption prior to filing. As with other 

exemptions, filers wishing to invoke 

this low market share exemption should 

note such a desire in the transmittal 

letter accompanying the filing. In the 

Final Rule, the Commission has added 

a cross-reference to the appropriate 

filing fee for low-market share 

agreements in new section 535.311(d). 

We are confident that the exemptions 

reflected in this Final Rule provide the 

industry flexibility for the matters it has 

identified as requiring flexibility within 

the confines of the Shipping Act. As 

such, we have revised the proposed rule 

at section 535.408 to include all the 

matters OCCA’s comments suggest, and 

to codify current Commission practice. 

The term ‘‘such as,’’ which appeared in 

proposed section 535.408(b)(5), is 

removed in the Final Rule in the interest 

of certainty. As proposed, section 

535.408(a)reads, 

(a) Agreements that arise from authority of 

an effective agreement but whose terms are 

not fully set forth in the effective agreement 

to the extent required by § 535.402 are 

permitted without further filing only if they: 

(1) Are themselves exempt from the filing 

requirements of this part (pursuant to subpart 

C—Exemptions of this part); or 

(2) Concern matters set forth in paragraph 

(b) of this section. 

The Final Rule revises section 

535.408(a)(2) to read, ‘‘(2) are listed in 

paragraph (b) of this section’’ instead of 

‘‘concern matters set forth in paragraph 

(b) of this section.’’ This more 

accurately reflects the Commission’s 

intent, as explained in the NPR, that it 

will no longer interpret what may fall 

under ‘‘operational’’ activities on an ‘‘ad 

hoc’’ basis. 

Proposed section 535.408(b)(2) is 

revised to codify the Commission’s 

existing policy as to what may be acted 

upon without further amendment to a 

filed agreement. The NPR proposed, 

‘‘The terms and conditions of space 

allocation and slot sales, the 

establishment of space charter rates, and 

terms and conditions of charter parties.’’

The Final Rule revises the section as 

follows: 

(2) The terms and conditions of space 

allocations and slot sales, the procedures for 

allocating space, the establishment of space 

charter rates, and the terms and conditions of 

charter parties. 

The Commission intends ‘‘procedures 

for allocating space’’ to mean the 

method by which parties will make 

requests for space or notification of 

space availability, e.g., whether by email, telephone, etc., and to which 

individual or department such requests 

or notices should be directed. 

Similarly, section 535.408(b)(4) as 

proposed is revised to add two matters 

correctly identified by the commenters 

as reasonable to include in the 

exemption from further filing, namely, 

procedures for anticipating parties’

space requirements and the 

maintenance of books and records. The 

Final Rule revises the proposed 

language: 

(4) The following administrative matters: 

(i) Scheduling of agreement meetings; 

(ii) Collection, collation and circulation of 

data and reports from or to members; 

(iii) Procurement, maintenance, or sharing 

of office facilities, furnishings, equipment 

and supplies, the allocation and assessment 

of costs thereof, or the provisions for the 

administration and management of such 

agreements by duly appointed individuals; 

(iv) Procedures for anticipating parties’

space requirements; 

(v) Maintenance of books and records; and 

(vi) Details as to the following matters as 

between parties to the agreement: insurance; 

procedures for resolutions of disputes 

relating to loss and/or damage of cargo; and 

force majeure clauses. 

For clarity’s sake, the Commission notes 

its intention that ‘‘procedures for 

anticipating parties’ space 

requirements’’ includes changes to how 

members inform one another of their 

anticipated needs, but does not include 

changes to how parties discuss market 

demand on a broader level. 

As noted in the NPR, the Commission 

finds it possible to exempt changes to 

the number of vessels or slots to be 

operated by an agreement if the 

originally-filed agreement contains an 

adequately described range of slots of 

vessels to be used under the agreement 

and if the changes fall within that range. 

68 FR 67518, December 2, 2003. See 

also, infra, discussion of 46 CFR 

535.704(d). Section 535.408(b)(5) is also 

revised to adopt the commenters’

suggestion to allow changes in vessel 

substitution or replacement to become 

effective upon filing, and for clarity 

removes the phrase, ‘‘and there is no 

significant change in capacity’’ thus: 

(5) the following operational matters: 

(i) port rotations and schedule adjustments; 

and 

(ii) changes in vessel size, number of 

vessels, or vessel substitution or replacement, 

if the resulting change is within a capacity 

range specified in the agreement. 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64401 

2As proposed, the definition changed and 

replaced the existing definition of ‘‘capacity 

management’’ at section 535.104(e) of the 

Commission’s rules as follows: 

(e) Capacity rationalization means a concerted 

reduction, stabilization, withholding, or other 

limitation in any manner whatsoever by ocean 

common carriers on the size or number of vessels 

or available space offered collectively or 

individually to shippers in any trade or service. The 

term does not include sailing agreements or space 

charter agreements. 

3 In Red Sage, a covenant not to compete in a 

lease was held valid. 

The Commission declines to include 

in this Final Rule an exemption from 

the 45-day waiting period for a change 

in agreement parties due to corporate 

acquisition as there may be situations in 

which such a change significantly alters 

the competitive landscape in a trade. 

Filing parties are always free to request 

expedited review for such amendments. 

B. Agreement Content—Definition of 

‘‘Capacity Rationalization’’

The Commission received comments 

from APL and OCCA in response to its 

proposal to introduce a new term, 

‘‘capacity rationalization,’’ to describe 

authority that may be contained in some 

agreements. Inclusion of such authority 

would prevent an agreement from being 

eligible for the low market share 

exemption at section 535.311 and would 

subject filing parties to certain periodic 

reporting requirements under the 

Commission’s monitoring program.2

OCCA objects not only to the 

proposed definition of the new term, but 

also to the removal of the existing 

definition of ‘‘capacity management.’’

OCCA at 4. OCCA argues that the 

proposed definition would include 

activities of certain ‘‘operational’’

agreements, such as alliance, cross slot 

charter, space charter or vessel sharing 

agreements, that preclude members, 

under certain expressed conditions, 

from initiating services independently 

in the agreement trade. Such 

restrictions, according to OCCA, have 

been recognized as legitimate 

commercial restrictions that are part of 

the quid pro quo to share space or 

vessels and serve a valid purpose. 

OCCA cites, for example, European 

Commission Regulation 823/2000, 

Article III(3)(a), Lektro-Vend Corp. v. 

Vendo Co., 660 F.2d 255 (7th Cir. 1981), 

and Red Sage Ltd. Partnership v. Despa 

Deutsche, 254 F.3d 1120 (D.C. Cir. 2001) 

(‘‘Red Sage’’).3 OCCA contends that the 

types of restrictions the Commission’s 

proposal would include within the 

meaning of capacity rationalization are 

similar to those held valid in Red Sage, 

and, therefore, do not require closer 

monitoring. 

However, assuming arguendo that the 

Commission retains the proposed level 

of monitoring for agreements that 

contain certain types of restrictions on 

their members, OCCA proposes that it 

should nevertheless revise the proposed 

definition of ‘‘capacity rationalization.’’

OCCA argues that the proposed 

definition is too broad and goes beyond 

the Commission’s expressed intent of 

focusing on restrictions imposed on 

capacity to be offered outside the terms 

of a filed agreement. OCCA suggests that 

the Commission may wish to rewrite the 

capacity rationalization definition to 

avoid inadvertently capturing legitimate 

activities that it believes the 

Commission should not subject to 

heightened reporting requirements, such 

as adjustments in capacity within a 

range specified in an agreement. OCCA 

also contends that the definition is 

unacceptably vague because it includes 

the term ‘‘stabilization,’’ which is not 

itself defined. Id. at 6. OCCA suggests 

that the Commission replace its 

definition of capacity rationalization 

with one that focuses on three specific 

restrictions. OCCA proposes the 

following definition: 

Capacity rationalization means any 

agreement between or among two or more 

ocean common carriers that: (i) Restricts or 

limits the ability of any or all of those carriers 

to provide transportation in a trade on 

vessels other than those utilized under that 

agreement; (ii) restricts or limits the ability of 

any or all of those carriers to provide services 

that are alternate to or in competition with 

the services provided under that agreement; 

or (iii) which results in the withholding of 

vessel capacity on vessels being operated in 

the trade covered by that agreement. The 

term does not include adjustments to 

capacity made by adding or removing vessels 

or strings of vessels pursuant to and within 

the authority of sailing agreements, consortia, 

vessel sharing agreements or space charter 

agreements. 

Id. 

We decline to adopt the definition 

suggested by OCCA, as it would omit 

some conference and discussion 

agreements that contain authority for 

members to discuss and agree upon 

rationalization of capacity by members 

in specific trades. In addition, the 

Commission continues to be of the view 

expressed in the NPR that the potential 

effects of such arrangements are heavily 

dependent on conditions particular to 

an agreement trade and how the 

agreement is related to other 

agreements. 

APL notes, without further comment, 

the OCCA suggestion that the definition 

be ‘‘clarified’’ if the Commission elects 

to adopt the proposed use of the term. 

APL at 6. APL, however, recognizing the 

Commission’s purpose in the NPR as 

increasing reporting requirements for 

agreements with such provisions rather 

than reducing the carriers’ operating 

flexibility, suggests instead that the 

Commission refine the reporting 

requirements rather than the definition. 

Id. at 6. 

In proposing this definition, the 

Commission’s purpose was to identify 

arrangements that impose restrictions 

on capacity, and to distinguish those 

from simple operational exchanges of 

space. APL correctly assesses the 

purpose of the definition; the 

Commission intends to apply a level of 

monitoring to agreements that address 

members’ participation in the market 

through manipulation or restriction of 

the potential supply of vessel capacity 

in a trade, similar to the level it applies 

to agreements covering members’

pricing activities. It also intends to 

ensure that agreements containing such 

authority continue to be accompanied 

by sufficient information and receive 

the degree of scrutiny on initial filing 

that the Commission deems appropriate, 

without the waiver of the 45-day 

waiting period and Information Form 

that would apply based solely on the 

low market share of such agreements 

pursuant to section 535.311 and as 

discussed in this Supplemental 

Information. However, the Commission 

concurs with APL’s assessment that not 

all of the heightened degree of ongoing 

reporting reflected in the proposed rule 

is necessary for agreements that contain 

authority that comes within the 

definition of capacity rationalization. 

The Final Rule will address that 

concern by revising the Monitoring 

Report regulations at section 535.703(c). 

Finally, we note that the definition of 

capacity rationalization as published in 

the NPR inadvertently included 

language that was part of the 

Commission’s existing definition of 

‘‘capacity management.’’ The last 

sentence, which reads, ‘‘The term does 

not include sailing agreements or space 

charter agreements’’ should have been 

deleted. Consistent with the 

Commission’s intention to apply its 

rules according to the authority 

contained in an agreement rather than 

by ‘‘type’’ or ‘‘class’’ of agreement, this 

language should not have been retained. 

Therefore, it is deleted from the 

definition of capacity rationalization in 

the Final Rule. 

C. Transshipment Agreements 

The Commission proposed a revision 

to the definition of a transshipment 

agreement and a corresponding change 

to the definition of a nonexclusive 

64402 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

4 § 535.104 Definitions. 

(jj) Transshipment agreement means an 

agreement between an ocean common carrier 

serving a port or point of origin and another such 

carrier serving a port or point of destination, 

whereby cargo is transferred from one carrier to 

another carrier at an intermediate port served by 

direct vessel call of both such carriers in the 

conduct of through transportation and the 

publishing carrier performs the transportation on 

one leg of the through transportation on its own 

vessel or on a vessel on which it has rights to space 

under a filed and effective agreement. 

§ 535.306 Nonexclusive transshipment 

agreements’exemption. 

(a) A nonexclusive transshipment agreement is a 

transshipment agreement by which one ocean 

common carrier * * * 

5PONL, FOML, and OCCA point out that in cases 

where a publishing carrier charters space from other 

carriers on both portions of a transshipment, the 

publishing carrier would no longer need a 

transshipment agreement because it would have 

two vessel-sharing agreements to cover its service. 

PONL at 10, FOML at 7, OCCA at 29. The 

consequence is that the publishing carrier would no 

longer be required to publish the name of the 

connecting carrier in its tariff. Given the concerns 

over national security, PONL, FOML, and OCCA 

suggest that the Commission may want to 

reconsider its proposal. However, we find their 

arguments to be unpersuasive. 

transshipment agreement.4 The changes 

would specify that a publishing carrier 

perform the transportation on one leg of 

the transshipment on its own vessel or 

on a vessel on which it has rights to 

space under a filed and effective 

agreement. The proposed changes 

would recognize the two ways by which 

an ocean common carrier may provide 

service: by operating its own vessel or 

by taking space on another carrier’s 

vessel pursuant to a filed and effective 

agreement. Comments on the proposed 

rule came from Trans-Net, PONL, 

FOML, and OCCA. 

Trans-Net, a licensed and bonded 

non-vessel-operating common carrier 

from Washington State, was the only 

commenter in favor of the proposed rule 

change. Trans-Net conveyed its views 

via written comments and meetings 

with individual Commissioners. TransNet argues that the change in the 

definition will provide greater 

transparency of carrier actions for both 

shippers and the Commission. TransNet at 3–4. At the same time, Trans-Net 

maintains that the filing of an agreement 

with the Commission would not be 

unduly burdensome to the carriers and 

that the proposed rule accommodates 

the carriers’ desire for flexibility. TransNet at 5–7. PONL, FOML, and OCCA, 

however, disagree with Trans-Net and 

the Commission in that they do not 

consider the proposed rule changes 

either necessary or desirable. 

In their comments, PONL and FOML 

challenge the Commission’s ‘‘traditional 

view’’ of a transshipment agreement as 

stated in the supplemental information 

that accompanied the proposed rule. 

The Commission’s ‘‘traditional view’’ of 

a transshipment agreement is an 

agreement ‘‘under which two ocean 

common carriers that both operate 

vessels provide a through service 

between the United States and a foreign 

port.’’ 68 FR 67520–21, December 2, 

2003. However, PONL and FOML both 

challenge this view of a transshipment 

agreement as lacking legal and factual 

basis. PONL at 5, FOML at 3. The 

Commission’s traditional view of a 

transshipment agreement is based 

mostly on experience in dealing with 

transshipment agreements filed prior to 

the current Shipping Act, when carriers 

participating in transshipment 

agreements typically operated one of the 

vessels involved in the transshipment. 

The optional provisions for 

nonexclusive transshipment agreements 

included in the Commission’s 

regulations at section 535.306(d), based 

on the manner in which transshipments 

were conducted in 1984, tend to 

reinforce the Commission’s traditional 

view. 

PONL and FOML also assert that there 

is no basis to the Commission’s 

contention that the definition needs 

clarification. PONL at 3, FOML at 1. In 

response, we note that the shipping 

industry has changed a great deal since 

1984, with the increased use of vesselsharing agreements and service 

contracts. We also note that Docket 99–

10, Ocean Common Carriers Subject to 

the Shipping Act of 1984, has reduced 

dramatically the number of 

transshipment agreements that would 

now come under the Commission’s 

jurisdiction. While the shipping 

industry has changed, the definition of 

a transshipment agreement has not 

changed, and we are taking this 

opportunity to update the definition 

accordingly. 

OCCA claims that there is already 

sufficient transparency because the 

publishing carrier is required to state 

the name of the connecting carrier in its 

tariff (pursuant to the Commission’s 

regulations for nonexclusive 

transshipment agreements). OCCA at 27. 

OCCA further maintains that most 

shippers would be aware of how their 

cargo is being transported because they 

have agreed to such service in their 

service contracts, and even if the 

shipper were unaware of how its cargo 

was being transported, the publishing 

carrier is responsible for the entire 

movement under its through bill of 

lading. OCCA at 28. Therefore, OCCA 

asserts that the rule changes are 

unnecessary. However, transparency is 

not the only issue with which the 

Commission is concerned. As stated 

earlier, we feel that the definition needs 

to be updated to reflect more accurately 

the manner in which transshipments are 

conducted at the present time. 

With regard to the Commission’s 

proposed rule, PONL, FOML, and OCCA 

are particularly concerned about the 

inclusion of the language ‘‘filed and 

effective agreement’’ in the 

Commission’s proposed rule. They 

charge that this would create two 

different meanings for the term ‘‘by 

direct vessel call’’ in the definition for 

a nonexclusive transshipment 

agreement. OCCA at 28–29, PONL at 8–

9, FOML at 5–7. According to PONL, 

FOML, and OCCA, the Commission’s 

proposed rule would stipulate that a 

carrier taking space pursuant to a space 

charter agreement may be considered to 

make a ‘‘direct vessel call’’ in the 

portion of the transshipment between 

the U.S. port and the transshipment 

port, but not in the portion of the 

transshipment between the 

transshipment port and the foreign port 

because the publishing carrier would 

not have a filed and effective agreement 

to cover that portion of the 

transshipment. 

By including the term ‘‘filed and 

effective agreement’’ in the definitions, 

PONL, FOML, and OCCA assert that the 

Commission appears to be dictating to 

carriers how they should structure their 

operations in the foreign-to-foreign 

portion of a transshipment, where, 

OCCA points out, the Commission has 

no jurisdiction. OCCA at 28–29. OCCA 

suggests that a publishing carrier that 

uses space chartered from another 

carrier in the foreign-to-foreign portion 

of a transshipment be considered as 

making a direct vessel call pursuant to 

the Commission’s definition of a 

transshipment agreement. Id. at 29. 

In consideration of those carriers that 

already participate in filed and effective 

alliance and vessel-sharing agreements, 

the Commission included the option of 

having a filed and effective agreement. 

It is not the Commission’s intent to 

create a definition for the term ‘‘direct 

vessel call.’’ With regard to the concerns 

expressed by PONL, FOML, and OCCA, 

we note that a publishing carrier would 

only be required to have a filed and 

effective agreement or operate its own 

vessel on one leg of the transshipment. 

A publishing carrier that either operates 

its own vessel or takes space from 

another carrier pursuant to a filed and 

effective agreement in the U.S. portion 

of the transshipment may transport the 

cargo in the manner that is most 

advantageous to it commercially in the 

foreign-to-foreign portion of the 

transshipment.5

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64403 

6For ease of reference, the term ‘‘pricing or 

pooling authority’’ is used herein to identify 

agreements containing any of the following 

authorities: (1) The discussion of, or agreement 

upon, whether on a binding basis under a common 

tariff or a non-binding basis, any kind of rate or 

charge; (2) the establishment of a joint service; (3) 

the pooling or division of traffic, earnings, or 

revenues and/or losses; (4) the discussion or 

exchange of data on vessel-operating costs; or (5) 

the discussion of service contract matters. These 

authorities were listed in the NPR. 68 FR 67541, 

December 2, 2003. 

OCCA also questions whether 

agreements that are otherwise exempt 

from filing, such as an agreement 

between a parent company and its 

wholly owned subsidiary, would be 

required to be filed. Id. Provided that 

the parent company is an ocean 

common carrier, it is the Commission’s 

view that the proposed rule would not 

affect that exemption. 

In addition to the arguments 

expressed above, PONL and FOML 

contend that the Commission is 

departing from its view that the 

publishing carrier may be the carrier 

serving the foreign-to-foreign portion of 

a transshipment. PONL at 9, FOML at 6. 

According to PONL and FOML, under 

the revised definition a publishing 

carrier that does not operate a vessel 

involved in the transshipment would 

have to be the origin carrier in the 

export trade of the United States and the 

destination carrier in the import trade of 

the United States because of the 

requirement that the publishing carrier 

have a filed and effective agreement. We 

disagree with this assessment on the 

grounds that pursuant to the 

Commission’s regulations a publishing 

carrier is only the carrier offering the 

service. The Commission’s regulations 

do not include the terms ‘‘origin carrier’’

and ‘‘destination carrier’’ or seek to 

dictate whether the publishing carrier 

should be the carrier serving the port of 

origin or the carrier serving the port of 

destination. The regulations refer to the 

‘‘publishing carrier’’ and the 

‘‘nonpublishing carrier’’ or 

‘‘participating, connecting or feeder 

carrier.’’

PONL and FOML further claim that 

they would be forced to discontinue 

many of their current transshipment 

arrangements because they would not be 

able to conduct them subject to 

transshipment agreements. PONL at 9–

10, FOML at 7. In response to PONL’s 

and FOML’s complaint, we note that 

PONL and FOML may enter into vesselsharing agreements that would enable 

them to continue those arrangements. 

Furthermore, under the changes 

outlined above for ‘‘low market share’’

agreements, those vessel-sharing 

agreements may become effective upon 

filing. 

III. Information Form and Monitoring 

Report, 46 CFR Part 535, Subparts E 

and G 

A. Background 

The NPR issued by the Commission 

replaced the current Information Form 

and Monitoring Report regulations with 

modified regulations that update the 

reporting requirements for carrier 

agreements. The modified regulations 

account for changes in carrier 

agreements that have occurred since the 

Ocean Shipping Reform Act of 1998, 

Public Law No. 105–258 (‘‘OSRA’’) 

became effective. As such, the 

Commission seeks to obtain the most 

relevant and accurate agreement 

information from carriers for its analysis 

of agreements under the Shipping Act, 

without placing an undue regulatory 

burden on carriers. In addition, the 

regulations were modified to reduce, 

where possible, the reporting burden on 

carriers. 

The Information Form and Monitoring 

Report provide the Commission with 

essential information on an agreement 

from the parties to the agreement, and 

the Commission has consistently found 

that parties to an agreement are the most 

reliable source of information on the 

agreement. See Dkt. No. 94–13, 

Information Form and Post-Effective 

Reporting Requirements for Agreements 

Among Ocean Common Carriers Subject 

to the Shipping Act of 1984, 61 FR 

11564, 11565–11566, March 21, 1996. 

The regulations in subpart E of part 535 

require that an Information Form 

accompany a filed agreement and 

certain modifications to an existing 

agreement in effect under the Shipping 

Act. The Information Form is used in 

the agreement review process to analyze 

the probable competitive impact of a 

filed agreement or an agreement 

modification. Carrier agreements are 

initially reviewed upon filing to assess 

their compliance with the Shipping Act, 

particularly with respect to section 6(g) 

and the prohibited acts in section 10. 

Upon review, the Commission 

determines whether any action under 

the Shipping Act is necessary within the 

45-day waiting period before an 

agreement becomes effective. 

Once an agreement goes into effect 

under the Shipping Act, the regulations 

in subpart G of part 535 require that 

certain agreements submit ongoing 

revenue and/or operational data on the 

parties’ activities for as long as the 

agreement remains in effect. As such, 

the Monitoring Report enables the 

Commission to track and analyze the 

ongoing competitive effects of an 

agreement after it becomes effective and, 

accordingly, determine whether any 

action under the Shipping Act may be 

necessary. Monitoring Reports also help 

the Commission to stay informed of 

agreement activity in the U.S. trades, 

and to address agreement issues that 

might arise in connection with 

investigations, complaints, inquiries, or 

petitions for Commission action on an 

agreement. 

1. Information Form Regulations 

The NPR revised the Information 

Form regulations by requiring all carrier 

agreements to submit an Information 

Form upon filing with the Commission. 

Specifically, proposed section 

535.502(a) requires that all carrier 

agreements identified in section 

535.201(a), except low market share 

agreements identified in section 

535.311, submit an Information Form 

when the agreement is filed with the 

Commission. Proposed section 

535.502(b) requires an Information Form 

when a modification to an existing 

agreement is filed that adds the 

authority to discuss, or agree on, 

capacity rationalization, or adds pricing 

or pooling authority.6 A modification 

that expands the geographic scope of an 

agreement with such authority must 

also submit an Information Form as 

required in proposed section 535.502(c). 

Proposed section 535.504 provides 

waiver procedures whereby carriers may 

request relief from any of the 

Information Form requirements in 

subpart E of part 535. 

2. Information Form 

The Commission’s proposed rule 

replaced the format of the Information 

Form in current sections 535.503 and 

535.504 with one form under section 

535.503(a) divided into sections I 

through V, as set forth in appendix A of 

part 535. Proposed section 535.503(b) 

requires that agreement parties complete 

each section of the Information Form 

applicable to the agreement and the 

authority contained in the agreement. 

Sections I and V apply to all carrier 

agreements subject to the Information 

Form requirements. Sections II, III and 

IV apply based on the authority 

contained in the agreement. 

a. Section I 

Section I of the Information Form 

applies to all carrier agreements subject 

to the Information Form requirements as 

identified in section 535.502(a) of the 

proposed rule. Parties to such 

agreements must complete parts 1 

through 4 of section I with information 

on the following topics: the name of the 

agreement, narrative statements on the 

64404 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

7 ‘‘Pricing or pooling authority’’ as referred to in 

the Monitoring Report regulations is identical to the 

use of the term in the Information Form regulations; 

i.e., it refers to any of the following authorities: (1) 

The discussion of, or agreement upon, whether on 

a binding basis under a common tariff or a nonbinding basis, any kind of rate or charge; (2) the 

establishment of a joint service; (3) the pooling or 

division of cargoes, earnings, or revenues and/or 

losses; (4) the discussion or exchange of data on 

vessel-operating costs; or (5) the discussion of 

service contract matters. 68 FR 67544, December 2, 

2003. 

8The Commission’s market share threshold of 35 

percent for monitoring pricing or pooling 

agreements is analogous to the Horizontal Merger 

Guidelines issued jointly by the U.S. Department of 

Justice and the Federal Trade Commission in 1992. 

1992 Horizontal Merger Guidelines (‘‘1992 

Guidelines’’), 57 FR 41552, Sept. 10, 1992. In 

analyzing horizontal mergers between firms, the 

1992 Guidelines set forth economic standards that 

the agencies use to apply antitrust law. 

Accordingly, the agencies find that: 

[w]here the merging firms have a combined 

market share of at least thirty-five percent, merged 

firms may find it profitable to raise price and 

reduce joint output below the sum of their 

premerger outputs because the lost markups on the 

foregone sales may be outweighed by the resulting 

price increase on the merged base of sales. 

57 FR 41561, Sept. 10, 1992. 

9Under section 535.703(b) of the proposed rule, 

the Commission’s Director of BTA will determine 

the Monitoring Report obligations of agreements 

with pricing or pooling authority using the 35 

percent market share threshold. For newly filed 

agreements, this will be based on the market share 

data from the Information Form submitted with the 

agreement. Thereafter, at the beginning of each 

calendar year, BTA will notify such agreements of 

any change in their reporting obligations based on 

the market share data from their Monitoring Reports 

for the previous second calendar quarter (April–

June). 

10Since the NPR was published, some carrier 

agreements on file at the Commission have been 

canceled. The Commission now estimates that a 

total of 57 agreements will be subject to the 

Monitoring Report regulations under the Final Rule. 

11These cases may occur when a pricing or 

pooling agreement with a market share below 35 

percent constitutes the major rate agreement in a 

trade, or poses unique anti-competitive or statutory 

concerns that require close monitoring. The 

proposed rule delegates the Commission’s authority 

under section 535.702(c) to the Director of BTA in 

section 501.26(o). 

12The Commission may find it necessary to 

prescribe alternative reporting requirements when 

an agreement contains unique authority, the effects 

of which may require monitoring, that is not 

captured under the standard Monitoring Report. 

The Commission’s authority under section 

535.702(d) is delegated to the Director of BTA in 

section 501.26(o). 

purpose of and commercial 

circumstances for the agreement, a list 

of the parties’ other agreement 

participation within the geographic 

scope of the filed agreement, and the 

identification of the authorities and 

provisions contained in the agreement. 

b. Section II 

Section II of the Information Form 

applies to carrier agreements that 

contain simple operational authority 

including vessel space charter, and 

sailing or service rationalization 

arrangements. This authority does not 

include the establishment of a joint 

service as defined in section 535.104(o), 

or capacity rationalization as defined in 

section 535.104(e), of the proposed rule. 

Parties to such agreements must 

complete all items in part 1 of section 

II with information on their vessel calls 

at ports along with a narrative statement 

on any changes in port service that are 

anticipated or planned to occur when 

the agreement goes into effect. 

c. Section III 

Section III of the Information Form 

applies to carrier agreements with the 

authority to discuss, or agree on, 

capacity rationalization as defined in 

section 535.104(e) of the proposed rule. 

Parties to such agreements must 

complete parts 1 through 3 of section III 

with information on their vessel 

capacity and capacity utilization, their 

vessel calls at ports, and a narrative 

statement on any anticipated or planned 

changes in their vessel capacity and/or 

liner services (including ports) that 

would be implemented under the 

agreement when it goes into effect. 

d. Section IV 

Section IV of the Information Form 

applies to carrier agreements with 

pricing or pooling authority. Section 

535.503(b)(4) of the proposed rule 

specifically identifies these authorities 

as: (a) The discussion of, or agreement 

upon, whether on a binding basis under 

a common tariff or a non-binding basis, 

any kind of rate or charge; (b) the 

establishment of a joint service; (c) the 

pooling or division of cargo traffic, 

earnings, or revenues and/or losses; (d) 

the discussion or exchange of data on 

vessel-operating costs; or (e) the 

discussion of, or agreement on, any 

service contract matter. 

Parties to agreements with any of 

these authorities must complete parts 1 

through 5 of section IV with information 

on the following topics: market share, 

total average revenue, cargo volume and 

revenue results for the top 10 

agreement-wide commodities, vessel 

capacity and capacity utilization, and 

port service. The agreement parties must 

also provide narrative statements on any 

changes in their vessel capacity or port 

service that are anticipated or planned 

to occur when the agreement goes into 

effect. Changes in vessel capacity are 

qualified to mean ‘‘significant changes 

in the amounts of vessel capacity,’’ as 

defined in part 4(C) of section IV. 

e. Section V 

Section V requires that parties to all 

subject agreements identify contact 

persons for the Information Form and 

the agreement, and that the Information 

Form be certified and signed by a 

representative of the parties. 

3. Monitoring Report Regulations 

The proposed rule modified the 

Monitoring Report regulations to require 

reporting only from parties to 

agreements with certain authority. For 

agreements that contain pricing or 

pooling authority,7 the proposed rule 

limited the application of the 

regulations to include only those 

agreements with a combined market 

share of 35 percent or more.8

Specifically, proposed section 

535.702(a) requires Monitoring Reports 

from agreements with pricing or pooling 

authority where the parties to such 

agreements hold a combined market 

share of 35 percent or more in the entire 

U.S. inbound or outbound geographic 

scope of the agreement.9 It also requires 

Monitoring Reports from all agreements 

with the authority to discuss, or agree 

on, capacity rationalization. At the time 

of the NPR, the Commission estimated 

that 63 agreements would be subject to 

the modified Monitoring Report 

regulations; this would be a reduction 

from 213 agreements.10

For exceptional agreements, proposed 

section 535.702(c) provides that the 

Commission may, as necessary, require 

Monitoring Reports from an agreement 

with pricing or pooling authority with a 

market share below the 35 percent 

threshold.11 Further, section 535.702(d) 

clarifies the Commission’s authority by 

providing that in addition to or instead 

of the Monitoring Report, the 

Commission may, as necessary, 

prescribe alternative periodic reporting 

requirements on parties to any 

agreement subject to section 535.201.12

As with the Information Form 

regulations, proposed section 535.705 

provides waiver procedures whereby 

carriers may request relief from any of 

the reporting requirements in subpart G 

of part 535. 

4. Monitoring Report Form 

The proposed rule replaced the format 

of the Monitoring Report in current 

sections 535.703, 535.704, and 535.705 

with one form in proposed section 

535.703(a) divided into sections I 

through III, as set forth in appendix B 

of part 535. Section 535.703(b) of the 

proposed rule requires that parties to an 

agreement complete each section of the 

Monitoring Report applicable to the 

agreement and the authority contained 

in the agreement. Sections I and II apply 

based on the authority contained in the 

agreement, and section III applies to all 

agreements required to submit 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64405 

13The former regulations required that parties to 

certain agreements, categorized as Class A, report 

their cargo volume and revenue results for each 

major agreement commodity in each sub-trade 

within the geographic scope of the agreement. For 

purposes of reporting, sub-trade is defined to mean 

all liner movements between each U.S. port range 

and each foreign country within the scope of the 

agreement. 

14Sub-trade commodity data may be necessary 

when an agreement with extremely high market 

share covers a broad trade area comprised of 

distinct sub-trades or regions, and establishes rates 

distinctly by sub-trade or region. In addition, such 

data may be necessary where unique anticompetitive concerns are present, or where 

competitive issues exist that affect pricing for 

certain commodities. Proposed section 501.26(p) 

would delegate this authority to the Director of 

BTA. 

15Section 535.502(b)(2) of the proposed rule 

reads as, ‘‘The discussion of, or agreement on, 

capacity rationalization.’’

Monitoring Reports under proposed 

section 535.702(a). 

a. Section I 

Section I of the Monitoring Report 

applies to all agreements with the 

authority to discuss, or agree on, 

capacity rationalization, as defined in 

section 535.104(e) of the proposed rule. 

Parties to such agreements must 

complete parts 1 through 3 of section I 

with quarterly information on their 

vessel capacity and capacity utilization. 

In addition, proposed section 

535.703(c), as set forth in part 3 of 

section I, requires that a narrative 

statement of any changes in vessel 

capacity and/or liner services (including 

ports) that the parties plan to implement 

under the agreement be submitted to the 

Commission’s Director of BTA no later 

than 15 days after a change has been 

agreed upon by the parties but prior to 

the implementation of the change. 

b. Section II 

As proposed, section II of the 

Monitoring Report applies to 

agreements in which the parties hold a 

combined market share, based on cargo 

volume, of 35 percent or more in the 

entire U.S. inbound or outbound 

geographic scope of the agreement and 

the agreement contains any of the 

following authorities: (a) The discussion 

of, or agreement upon, whether on a 

binding basis under a common tariff or 

a non-binding basis, any kind of rate or 

charge; (b) the establishment of a joint 

service; (c) the pooling or division of 

cargo traffic, earnings, or revenues and/ 

or losses; (d) the discussion or exchange 

of data on vessel-operating costs; or (e) 

the discussion of, or agreement on, any 

service contract matter. 

Parties to such agreements must 

complete parts 1 through 6 of section II 

with the following quarterly 

information: Market share, total average 

revenue, cargo volume and revenue 

results on the top 10 agreement-wide 

commodities, vessel capacity and 

capacity utilization, and narrative 

statements on any significant changes 

that occurred in vessel capacity and 

service at ports. The meaning of 

significant changes for these items is 

qualified in parts 5(C) and 6 of section 

II. The proposed rule substantially 

reduced the reporting burden for major 

agreement commodities by requiring 

parties to report their data on an 

agreement-wide basis, instead of a subtrade basis.13 For exceptional 

agreements, however, section 535.703(d) 

of the proposed rule provides that the 

Commission may, in its discretion, 

require sub-trade commodity data from 

agreements subject to section II of the 

Monitoring Report.14

c. Section III 

Section III requires that parties to all 

subject agreements identify a contact 

person for the Monitoring Report, and 

that the Monitoring Report be certified 

and signed by a representative for the 

parties. 

B. Summary of Comments and 

Discussion 

Comments directly addressing the 

Information Form and Monitoring 

Report regulations of the proposed rule 

were submitted by OCCA and APL. As 

noted above, OCCA represents most of 

the conference and rate discussion 

agreements and their members in the 

U.S. trades. As a member of OCCA, APL 

endorses OCCA’s comments on the 

proposed rule. APL at 1. However, APL 

also submitted separate comments as a 

supplement to OCCA’s comments to 

elaborate on particular aspects of the 

proposed rule. Id. Summaries of the 

issues raised by the commenters as they 

pertain to the Information Form and 

Monitoring Report regulations proposed 

in the NPR are provided below with the 

Commission’s discussion on each issue. 

OCCA expressed its view that since 

OSRA became effective, the current 

Information Form and Monitoring 

Report regulations for carrier 

agreements are unduly burdensome and 

unnecessary given: (1) The extensive 

use of individual service contracts in 

the shipment of cargo, (2) the 

confidentiality of service contract terms, 

and (3) the reduction in the number of 

conference agreements in the U.S. 

trades. OCCA at 16–17. Overall, OCCA 

recognizes the Commission’s efforts to 

reduce the current reporting burden on 

carriers and supports most of the 

proposed changes pertaining to the 

Information Form and Monitoring 

Report regulations. Id. at 17. 

Nonetheless, OCCA raises the following 

issues and recommendations that would 

in its view further improve the rule. Id. 

1. Reporting Requirements for 

Agreements With Capacity 

Rationalization Authority 

OCCA objects to the heightened 

reporting requirements on agreements 

that authorize capacity rationalization, 

as the term is defined in section 

535.104(e) of the proposed rule. Id. at 5. 

OCCA interprets the meaning of 

capacity rationalization to include 

certain types of agreements, based upon 

its reading of the supplementary 

information of the NPR. Id. at 4. These 

are: (1) An agreement that prohibits or 

restricts the introduction of vessels into 

the agreement trade in a service other 

than that operated under the agreement; 

(2) an agreement that prohibits or 

restricts the use of space on nonagreement vessels in the agreement 

trade by an agreement party; and (3) an 

agreement that results in an artificial 

withholding of vessel capacity. Id. 

OCCA argues that operational 

agreements with restrictive provisions 

on its members’ activities within the 

agreement trade are legitimate, 

understandable, and serve a valid 

purpose. Id. at 5. OCCA’s objections to 

the new term ‘‘capacity rationalization’’

and its suggestions for changes to the 

definition, as well as our response to 

OCCA’s suggestions, are addressed 

earlier, in Part II(B) of the Supplemental 

Information. 

On a related issue, OCCA 

recommends that the Commission 

delete the term ‘‘discussion of’’ when 

identifying agreement modifications 

that add capacity rationalization 

authority in section 535.502(b)(2).15 Id. 

at 15. OCCA argues that an agreement 

modification to discuss capacity 

rationalization does not require an 

Information Form because such 

authority does not permit the parties to 

engage in any capacity rationalization. 

Id. OCCA believes that an Information 

Form would only be necessary when an 

agreement modification is filed that 

permits the parties to engage in capacity 

rationalization, and thus, it finds section 

535.502(b)(2) of the proposed rule, as it 

presently reads, to be unnecessarily 

duplicative and burdensome. Id. 

OCCA also opposes proposed section 

535.703(c), as set forth in part 3 of 

section I of the Monitoring Report, that 

requires parties to an agreement 

authorizing capacity rationalization to 

report to the Commission their planned 

vessel capacity and/or liner service 

64406 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

16For an agreement that authorizes capacity 

rationalization, section 535.703(c), as set forth in 

part 3 of section I of the Monitoring Report, requires 

a narrative statement of any planned changes in the 

vessel capacity and/or liner services that the parties 

will implement under the agreement. This 

statement shall be submitted to the Director, BTA, 

no later than 15 days after a vessel capacity and/ 

or liner service change has been agreed upon by the 

parties but prior to the implementation of the actual 

change under the agreement. 

17The instructions in appendices A and B to part 

535 provide that where an agreement containing 

multiple authorities is subject to duplicate reporting 

requirements in the various sections of the 

Information Form or Monitoring Report, the parties 

may provide only one response so long as the 

reporting requirements within each section are fully 

addressed. 

changes prior to implementation.16 Id. 

at 19. OCCA recommends that the 

Commission delete section 535.703(c) 

and part 3 of section I of the Monitoring 

Report. Id. It argues that a requirement 

to provide advance notice is not 

synchronous with the Monitoring 

Report, which must be submitted on a 

historical quarterly basis. Id. at 19–20. It 

also notes that major agreements of this 

nature publicly announce their vessel 

capacity changes. Id. at 20. 

OCCA further believes the advance 

notice requirement to be unnecessary 

and duplicative because the rule 

requires vessel capacity data from many 

agreements in their quarterly 

Monitoring Reports. Id. Moreover, it 

argues that advance notice of capacity 

changes serves no legitimate regulatory 

purpose because carriers may lawfully 

act in concert to reduce capacity under 

the authority of a filed agreement, e.g., 

the authority to operate a number of 

vessels within a specified range. Id. 

In its supplemental comments, APL 

endorses OCCA’s position to delete the 

advance notice requirement in section 

535.703(c) of the proposed rule, and 

part 3 of section I of the Monitoring 

Report, for agreements authorizing 

capacity rationalization. APL at 6. As an 

alternative, however, APL suggests that 

the Commission limit the advance 

notice requirement to cover only 

concerted actions that reduce the total 

vessel capacity of such agreements. Id. 

at 6–7. It notes that increases in vessel 

capacity could be adequately reported 

on a quarterly basis in the regular 

Monitoring Report. Id. at 7. Further, 

APL suggests that the Commission 

qualify the meaning of vessel capacity 

and/or liner service changes to exclude 

temporary or minor changes that have 

little or no impact, regardless of whether 

reported in advance or on a historical 

quarterly basis. Id. APL finds the 

prospect of reporting such temporary or 

minor changes to be unduly 

burdensome and of no useful regulatory 

purpose. Id. 

For the reasons discussed above in 

Part II of the Supplementary 

Information, we are not adopting 

OCCA’s suggested definition of capacity 

rationalization. We are retaining the 

definition in proposed section 

535.104(e), with the last sentence 

deleted in the Final Rule. This section 

addresses the reporting requirements for 

agreements that authorize capacity 

rationalization. 

Based on its reading of the 

Supplementary Information in the NPR, 

OCCA interprets the intention of the 

reporting requirements for agreements 

authorizing capacity rationalization as 

primarily limited to certain types of 

operational agreements with restrictive 

provisions on their members’ activities 

in the agreement trade. OCCA’s 

interpretation is not entirely accurate. 

We addressed operational agreements in 

the Supplementary Information of the 

NPR to distinguish and illustrate some 

of the agreements that are included in 

the definition of capacity 

rationalization. Specifically, we 

determined that operational agreements 

included in the definition of capacity 

rationalization are those that affect the 

supply of vessel capacity in a trade or 

market and prohibit or place conditions 

on its members’ independent agreement 

participation with other carriers and/or 

competing liner services outside of the 

agreement within the agreement trade. 

We discussed these agreements to 

distinguish them from simple 

operational agreements, which do not 

place such restrictions on their 

members, so that the agreement filing 

and reporting regulations would be 

understood and applied correctly. In 

focusing our discussion on operational 

agreements, it was not our intention to 

imply that the reporting requirements 

for agreements authorizing capacity 

rationalization are limited to certain 

types of agreements. 

The proposed rule explicitly 

eliminated the identification of 

agreements by type or class in the 

Information Form and Monitoring 

Report regulations. The current 

regulations, which identify carrier 

agreements by type or class for the 

purpose of assigning reporting 

requirements, have become outdated 

and inadequate in relation to the 

changes that have occurred in carrier 

agreements and their increasingly 

complex authorities, as was explained 

in the Supplementary Information to the 

NPR: 

The current agreement classification 

regulations in section 535.502 provide 

procedures for assigning specific reporting 

requirements to specific types of agreements. 

Agreements filed at the Commission, 

however, have evolved since the current 

classification regulations were implemented, 

especially under OSRA. Now, multiple or 

complex forms of authority may be contained 

in a single agreement that might not neatly 

fall under one specific agreement type or 

class. Further, the reporting requirements 

assigned to a particular type or class of 

agreement may not adequately address the 

full authority of the agreement. For instance, 

the current reporting requirements for Class 

C agreements do not distinguish between 

simple operational agreements, such as 

vessel space charter arrangements, and the 

more complex and anticompetitive 

operational agreements with capacity 

rationalization authority that include global 

alliance arrangements. 

68 FR 67525, December 2, 2003. 

To address these concerns, the 

proposed rule modified the regulations 

to assign reporting requirements to 

specific authorities contained in 

agreements. In this regard, we stated 

that: 

While no rule can cover all circumstances, 

the Commission believes that this approach 

would more directly address the elements of 

concern within the agreement, i.e., the 

parties’ authority and the concerted activities 

they may pursue with such authority. 

Id. 

The Information Form and Monitoring 

Report regulations in the proposed rule 

provide that any agreement authorizing 

the discussion of, or agreement on, 

capacity rationalization is subject to the 

reporting requirements. The regulations 

include all carrier agreements with such 

authority, regardless of agreement type. 

In addition to operational agreements 

with capacity rationalization authority, 

there are a number of conference and 

rate discussion agreements with 

authority to discuss, or agree on, 

capacity rationalization. Such 

agreements will be subject to the 

reporting requirements for capacity 

rationalization authority in addition to 

all other reporting requirements 

applicable to their pricing or pooling 

authority under this Final Rule.17

In assigning reporting requirements to 

capacity rationalization authority, the 

Commission is intentionally increasing 

the level of its analysis and monitoring 

of the concerted actions that are 

planned or implemented by carriers 

under this authority of their agreements. 

We believe this increase in reporting is 

reasonable, judicious, and proportional 

to the increasing prevalence and use of 

capacity rationalization authority 

occurring in agreements between or 

among carriers in the U.S. trades. The 

Commission views these reporting 

requirements as a necessary measure 

within its authority under section 5(a) 

and based on its statutory 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64407 

responsibilities under the Shipping Act, 

particularly with respect to the section 

6(g) standard for agreements. 46 U.S.C. 

app. 1704(a) and 1705(g). 

By promulgating reporting 

requirements for capacity 

rationalization authority, the 

Commission does not dispute, as OCCA 

argues, the legitimacy of such authority 

in agreements. Further, we do not 

dispute the lawfulness of carriers to act 

in concert under such authority within 

the standards of the Shipping Act. In the 

Supplementary Information to the NPR, 

we acknowledged that operational 

agreements, even those with capacity 

rationalization authority, can achieve 

efficiencies in a trade or market by 

lowering operational costs and even 

enhancing ocean liner services to the 

benefit of the shipping public. Id. at 

67524. The efficiencies associated with 

capacity rationalization authority in 

conference or rate discussion 

agreements, however, are less apparent 

and would seem to be aimed at 

achieving the rate objectives of the 

agreement. Further, in the NPR, we 

cautioned that a concerted reduction in 

vessel capacity and the restrictions 

imposed by capacity rationalization 

authority can result in a shortage of 

vessel space in a trade leading to an 

unreasonable decrease in service. Id. A 

concerted reduction in vessel capacity 

can also produce an artificially-induced 

upward pressure on rate levels, 

potentially leading to an unreasonable 

increase in rates in violation of section 

6(g). Id. 

The reporting requirements for 

agreements authorizing capacity 

rationalization should not be viewed in 

any way as a punitive measure against 

such agreements. Rather, the purpose of 

the reporting requirements is to provide 

the Commission with necessary 

information to gauge the reasonableness 

of the parties’ actions under such 

authority in accordance with the 

standards of the Shipping Act, and 

within the prevailing market conditions 

of the agreement trade. 

We do not believe that reporting 

vessel capacity information places any 

undue regulatory burden on carriers 

because carriers engaged in capacity 

rationalization have such information 

readily available. Moreover, the Final 

Rule provides regulations that allow 

carriers to request a waiver, with a 

showing of good cause, from any of the 

Information Form and Monitoring 

Report requirements. Accordingly, in 

conjunction with the definition in 

section 535.104(e) of the Final Rule, all 

agreements identified in sections 

535.502 and 535.702(a) that authorize 

the discussion of, or agreement on, 

capacity rationalization are subject to 

the applicable reporting requirements in 

subparts E and G of the Final Rule, as 

modified below. 

With respect to section 535.502(b)(2) 

of the proposed rule, the Commission 

rejects OCCA’s recommendation to 

delete the term ‘‘discussion of’’ for 

agreement modifications that add 

capacity rationalization authority. The 

term accurately reflects the intention of 

the Commission’s reporting 

requirements. We view the ‘‘discussion 

of’’ capacity rationalization as 

potentially anti-competitive, especially 

within conference and rate discussion 

agreements, similar to the anticompetitive authority to discuss pricing 

information. 

Adding authority for the discussion of 

capacity rationalization, or the 

discussion of pricing information, to an 

existing agreement alters the 

competitive composition of the 

agreement, and the agreement must be 

re-examined with a new Information 

Form. Absent such a reporting 

requirement, the Commission would 

have to request vessel capacity 

information from parties to an 

agreement modification authorizing the 

discussion of capacity rationalization 

after the modification was filed, which 

could delay the effective date. Further, 

deleting the term ‘‘discussion of’’ for 

agreement modifications would conflict 

with the reporting requirements for 

newly filed agreements, which require 

information on the authority to discuss, 

or agree on, capacity rationalization. 

The Commission believes that authority 

to discuss capacity rationalization 

would not be any less anti-competitive 

based solely on it being filed as a 

modification to an existing agreement 

than it would be if filed in a new 

agreement. 

On the issue of proposed section 

535.703(c), and part 3 of section I of the 

Monitoring Report, the Commission 

does not agree with OCCA’s 

recommendation to delete the reporting 

requirement for notice to the 

Commission of planned vessel capacity 

and/or liner service changes prior to 

implementation from parties to 

agreements authorizing capacity 

rationalization. OCCA incorrectly infers 

that the reporting requirement is an 

unnecessary imposition by the 

Commission that ignores or negates the 

legality of carriers to act within the 

authority of their agreements. As 

previously stressed, we do not dispute 

the lawfulness of carriers to act in 

concert under the authority of their 

agreements within the reasonable 

standards of the Shipping Act. 

The reporting requirement is a 

judicious regulatory measure that 

enables the Commission to gauge the 

reasonableness of a pending action that 

the parties plan to implement under the 

authority of their agreement. With such 

reporting, the Commission can receive 

timely notice to take any necessary 

action under the Shipping Act to 

prevent a concerted action by carriers 

that would likely cause harm in the 

agreement trade prior to its 

implementation. 

To make this determination, the 

Commission must first be informed in 

advance of the parties’ pending action 

under the agreement. The Commission 

must also be able to weigh the severity 

of such action within the prevailing 

market conditions of the agreement 

trade. While an agreement may specify 

a range of vessel capacity within which 

the parties intend to operate, this range 

of vessel capacity may be broad 

spanning multiple trade lanes and liner 

services under the geographic scope of 

the agreement, especially in cases where 

the geographic scope covers all the U.S. 

trades. Moreover, market conditions in 

the agreement trade might have 

substantially changed from the time 

when the Commission initially analyzed 

the likely competitive impact of the 

agreement upon filing. Therefore, 

accurate and current information on the 

likely effects of a pending action under 

an agreement is required directly from 

the parties to the agreement. In 

accordance with the jurisdictional 

authority of the Commission governing 

agreements in effect under the Shipping 

Act, we find it both prudent and 

necessary to retain section 535.703(c) in 

the Final Rule for notice prior to 

implementation of pending actions 

planned by parties to agreements 

authorizing capacity rationalization. 

We do not believe that this reporting 

requirement places any undue 

regulatory burden on carriers. As OCCA 

noted, parties to agreements often 

publish this information. Therefore, we 

believe that they can easily and readily 

submit the required information to the 

Commission. We do, however, concur 

with the alternative modifications 

suggested by APL for this reporting 

requirement. 

APL correctly discerns that the 

underlying intention of the Commission 

for this reporting requirement focuses 

on receiving advance notice of 

concertedly planned reductions in 

vessel capacity that might potentially 

violate the standards of reasonableness 

under the Shipping Act. Further, as APL 

surmises, it is our intention that such 

reporting be limited to reductions in 

vessel capacity that would be 

64408 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

18Sugar Institute, Inc. v. United States, 297 U.S. 

553 (1936), and American Column & Lumber Co. v. 

United States, 257 U.S. 377 (1921). 

19See Docket No. 94–31, 59 FR 62372, 62376, 

December 5, 1994. 

20United States v. National Malleable Steel & 

Castings Co., 1957 Trade Cas. (CCH) ¶68,890 (N.D. 

Ohio 1957) aff’d per curiam 358 U.S. 38 (1958). 

21These references are cited as proposed sections 

535.104(kk), 535.502(b)(v), 535.503(b)(iv), 

535.702(a)(2)(iv), and 535.704(a)(1). 

22Part 2 of section I requires that the parties 

provide narrative statements on the purpose of, and 

the commercial circumstances for, the filed 

agreement. Part 4(D) of section I requires the parties 

to identify whether the agreement authorizes the 

parties to discuss or exchange vessel-operating cost 

data. Part 4(J) of section I requires the parties to 

identify any other authority contained in the 

agreement that is not otherwise covered in part 4 

of section I of the Information Form. 

significant. Such a qualification 

includes reductions in vessel capacity 

that are strategically planned to be 

implemented for a period of time, or 

intended to be more permanent in 

nature. It excludes incidental alterations 

in vessel capacity that would be 

temporary in nature, or operational 

changes in vessel capacity that would 

have little or no impact on the amount 

of vessel capacity offered in a liner 

service or a trade. In addition, it is our 

intention that all reporting requirements 

set forth in appendices A and B of part 

535 for similar information on changes 

in vessel capacity, or vessel calls at 

ports, be limited and qualified for 

reporting purposes to mean significant 

changes. 

Therefore, section 535.703(c) has been 

modified in the Final Rule to require 

notice prior to implementation of any 

significant reductions in vessel capacity 

under the agreement. Part 3 of section 

I of the Monitoring Report in the 

proposed rule has been modified and 

parts 2(C) and 2(D) of section I have 

been added in the Final Rule. Part 2(C) 

of section I sets forth instructions on 

reporting significant reductions in 

vessel capacity prior to implementation. 

Part 2(D) of section I sets forth 

instructions on reporting other 

significant changes in vessel capacity 

for the preceding calendar quarter. Part 

3 of section I of the Monitoring Report 

in the Final Rule has been modified and 

now sets forth instructions on reporting 

significant changes in vessel calls at 

ports for the preceding calendar quarter. 

In a similar manner, all other reporting 

requirements in appendices A and B of 

part 535 in the Final Rule have been 

modified and qualified for reporting 

purposes to mean significant changes in 

vessel capacity, or vessel calls at ports. 

2. Reporting Requirements for 

Agreements With Authority To Discuss 

or Exchange Vessel-Operating Cost Data 

OCCA objects to the heightened 

reporting requirements on agreements 

that contain the authority to discuss or 

exchange data on vessel-operating costs. 

OCCA at 7. OCCA notes that reporting 

on such authority was first adopted by 

the Commission in its rulemaking in 

Information Form and Post-Effective 

Reporting Requirements for Agreements 

Among Ocean Common Carriers Subject 

to the Shipping Act of 1984, FMC 

Docket No. 94–31, which established 

the current Information Form and 

Monitoring Report regulations. Id. It 

argues that the Commission’s initial 

rationale for assigning heightened 

reporting requirements to such authority 

was, and continues to be, questionable 

from both a legal and a practical 

perspective. Id. at 7–8. 

Specifically, OCCA refers to the 

Commission’s application of Supreme 

Court cases,18 where the Commission 

stated that ‘‘the sharing of pricing 

information can have a significant 

impact on price competition.’’ 19 Id. at 7. 

It argues that these Supreme Court cases 

involved the sharing of price 

information rather than cost 

information, and therefore, it questions 

the validity of the Commission’s 

previous legal analysis in FMC Docket 

No. 94–31. Id. at 7–8. OCCA further 

cites case law where it was found that 

the sharing of cost information by 

competing manufacturers was lawful 

because it improved efficiency and 

lowered costs.20 Id. at 8. 

From a practical perspective, OCCA 

argues that the authority to discuss or 

exchange vessel-operating cost data has 

no meaningful impact on pricing 

because carriers price based on total 

costs, in addition to market conditions, 

and vessel-operating costs are only a 

portion of total costs. Id. Moreover, 

OCCA points out that most vesseloperating cost data is publicly available 

information and can be readily obtained 

or discerned regardless of whether 

carriers are authorized to share such 

data. Id. at 8–9. Further, OCCA believes 

that heightened reporting requirements 

on such authority creates an excessive 

burden for carriers that obstructs 

efficiency because carriers generally 

discuss or exchange such data within 

their vessel-sharing agreements, which 

promote cost-effective services. Id. at 9. 

For these reasons, it recommends that 

the Commission delete all references to 

such authority from the rule, including 

the Information Form and Monitoring 

Report.21 Id. 

The Commission disagrees that its 

legal or economic rationale in FMC 

Docket No. 94–31 was misguided, as 

OCCA argues. The Commission 

considers the ‘‘sharing of pricing 

information’’ between parties to an 

agreement, which affects price 

competition in a market, to include the 

authority to discuss or exchange cost 

information. In the case of the ocean 

shipping industry, such information 

includes vessel-operating cost data. 

We recognize, however, that it is 

unnecessarily redundant to subject such 

authority to reporting requirements 

where vessel-operating cost data is 

shared by carriers for pricing purposes 

in agreements. Agreements that contain 

authority to discuss, or agree upon, 

pricing are already subject to the 

reporting requirements. Further, we 

agree that the authority to share vesseloperating cost data in agreements that 

do not contain pricing authority, such as 

a vessel-sharing agreement, is for 

operational purposes. 

It is not our intention in this rule to 

subject such an agreement to a level of 

reporting on par with agreements 

containing potentially highly anticompetitive authorities when such 

reporting is not necessary or required. 

Therefore, the reference to the authority 

to discuss or exchange data on vesseloperating costs has been deleted from 

sections 535.502, 535.503, 535.702, and 

appendices A and B of part 535 of the 

Final Rule. The definition of vesseloperating costs, however, has been 

retained in section 535.104(kk) in the 

Final Rule for any future reference that 

may be necessary in 46 CFR part 535. 

3. Section I of the Information Form in 

Appendix A of Part 535 

OCCA recommends that the 

Commission delete parts 2, 4(D), and 

4(J) of section I of the Information Form 

in the proposed appendix A.22 Id. at 18. 

In general, OCCA views these reporting 

requirements as unnecessary, 

duplicative, and burdensome. Id. at 19. 

It notes that information on these 

matters can instead be obtained from the 

content of the agreement itself. Id. It 

further argues that these proposed 

requirements neither serve a legitimate 

regulatory purpose, nor advance the 

Commission’s analysis of agreements 

with respect to the section 6(g) 

standards of the Shipping Act. Id. at 18–

19. 

The Commission declines to adopt 

OCCA’s recommendation to delete parts 

2(A) and 2(B) of section I of the 

Information Form that require narrative 

statements elaborating on the purpose 

and commercial aspects of an agreement 

between or among carriers filed at the 

Commission. We disagree with OCCA’s 

arguments that such information has no 

regulatory purpose nor advances the 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64409 

23The former Information Form for Class A/B 

agreements and Monitoring Report for Class A 

agreements require each party to report its cargo 

volume and revenue results for each major 

commodity for each sub-trade within the 

geographic scope of the agreement. The 

Commission retained these requirements in the 

proposed rule, but reduced the amount of reporting 

to each party’s cargo volume and revenue results on 

only the top 10 agreement-wide commodities. 

Commission’s analysis of agreements 

under section 6(g). In the 

Supplementary Information of the NPR, 

we explained that: 

Section I [of the Information Form] 

requires carriers to supply relevant 

agreement information to the Commission at 

the start of the review process. This 

information would be used in the initial 

review and analysis of an agreement, and 

would help to avoid formal requests for 

additional information which delay the 

effective date of the agreement. 

68 FR 67525, December 2, 2003. 

With respect to part 2 of section I, we 

further explained that this specific 

information provides the Commission 

with a clearer understanding of the 

parties’ collective objectives under the 

agreement in relation to their services 

within the agreement trade. Id. at 67526. 

We noted that such information would 

be relevant to the Commission’s review 

of the agreement, but might not be 

readily apparent by the terms of the 

agreement without seeking additional 

information from the parties. Id. 

The statutes and regulations 

governing the filing of agreements under 

the Shipping Act only require that 

conference agreements contain a 

statement of purpose. For other 

agreements, it is at the discretion of the 

parties as to whether a statement of 

purpose is contained in the filed 

agreement. As such, the Commission 

cannot always rely on the content of 

agreements to disclose such 

information. The Commission has a vast 

amount of experience in reviewing and 

analyzing agreement filings under the 

Shipping Act. Accordingly, we have 

found that agreements filed at the 

Commission are generally crafted to 

meet the legal requirements of the 

Shipping Act, and very little additional 

information elaborating on the purpose 

or commercial aspects of an agreement 

accompanies the agreement filing. As 

previously noted, the authority of the 

Commission to promulgate rules on the 

form and manner of filed agreements 

and any additional information and 

documents that need to accompany the 

agreement filings is set forth in section 

5(a) of the Shipping Act. 

In some instances, parties to an 

agreement publish relevant information 

on the purpose and/or commercial 

circumstances pertaining to the 

agreement. The Commission uses any 

published information that is available 

to gain a clearer understanding of an 

agreement for its analysis. However, we 

find it wholly inadequate and inefficient 

that the receipt of relevant information 

useful to the Commission’s review and 

analysis of an agreement may be 

dependent upon whether the parties 

choose to publish information, and 

limited to whatever sort of information 

they may choose to publish about the 

agreement. Instead, we believe that the 

relevant and straightforward agreement 

information required in part 2 of section 

I of the Information Form can be easily 

and readily submitted by the parties at 

the time that the agreement is first filed 

at the Commission. 

When questions arise about an 

agreement that cannot be addressed by 

the content of the agreement or any 

published information, the Commission 

can request additional information from 

the parties, which could delay the 

effective date of the agreement. Part 2 of 

section I provides carriers with the 

opportunity to avoid requests for 

additional information on their 

agreements, and it is in their best 

interest to respond accordingly with 

meaningful agreement information that 

fully addresses this reporting 

requirement. 

We do, however, see a need to modify 

this part of the Information Form. We 

believe that the purpose and 

commercial aspects of an agreement are 

interrelated and may more easily be 

addressed in a single narrative 

statement. Therefore, parts 2(A) and 

2(B) have been consolidated into a 

requirement for one narrative statement 

in part 2 of section I of the Information 

Form in appendix A of part 535 of the 

Final Rule. 

Regarding OCCA’s issues with the 

other parts of section I of the 

Information Form, part 4(D) on the 

authority to discuss or exchange data on 

vessel-operating costs has been deleted 

from the Final Rule for the reasons 

previously stated. Further, we agree that 

agreements filed under the Shipping Act 

must comply with 46 CFR 535.402, and 

thus, part 4(J) of section I of the 

Information Form is unnecessary and 

has been deleted from the Final Rule 

because the complete and specific 

authorities between the parties can be 

obtained from the content of the 

agreement. 

4. Reporting Requirements on the Cargo 

Volume and Revenue Results for the 

Top 10 Agreement-Wide Commodities 

OCCA strongly urges the Commission 

to eliminate all reporting requirements 

for cargo volume and revenue data on 

agreement commodities.23 OCCA at 17. 

It stresses that eliminating such 

reporting is the ‘‘single most significant 

change’’ the Commission could make to 

reduce the current burden on the 

industry. Id. OCCA believes that the 

modification in the proposed rule that 

reduces reporting to the top 10 

agreement-wide commodities still 

imposes a significant burden because 

carriers generally do not track revenue 

on a per-commodity basis. Id. It 

questions the value of this data given 

the wide use of confidential service 

contracts, where many such contracts 

apply a single rate for multiple 

commodities, such as a rate for General 

Department Store Merchandise, or 

Freight All Kinds. Id. It further 

questions whether fluctuations in this 

data for a particular carrier can be 

directly attributed to an agreement 

action, or to numerous other factors 

external to the agreement. Id. at 18. It 

argues that even if this data is of some 

use to the Commission, the burden of 

continually reporting such data 

outweighs its usefulness. Id. As an 

alternative, OCCA suggests that the 

Commission could require this data on 

an ‘‘as needed’’ basis to address specific 

issues or concerns for a particular 

agreement. Id. 

In the Supplementary Information of 

the NPR, the Commission acknowledged 

that since OSRA became effective, 

collective pricing under conference 

agreements has declined in favor of 

voluntary rate authority under 

discussion agreements. 68 FR 67524, 

December 2, 2003. Nevertheless, we 

stated that although coordination is 

voluntary, discussion agreements 

contain considerable and broad 

authority to influence tariff rates, 

service contract rates, and other service 

matters spanning large geographic areas 

in the U.S. trades. Id. We explained that: 

OSRA prohibited any mandatory 

restrictions on individual service contracts, 

but it allowed agreements to adopt voluntary 

service contract guidelines on their parties’

individual contracts. On a voluntary basis, 

carriers may collectively set and adhere to 

rates and terms for their individual service 

contracts. Thus, while agreement carriers are 

pricing more independently under OSRA, 

they still have the power to exert their 

collective influence over contract rates and 

terms. 

Id. 

For this reason, the Commission 

declines to adopt OCCA’s 

recommendation to eliminate part 3 of 

section IV of the Information Form 

(appendix A of part 535) and part 4 of 

section II of the Monitoring Report 

64410 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

24Pooling authority in a carrier agreement 

provides for the division of cargo carryings [cargo 

traffic], earnings, or revenues and/or losses between 

or among the parties in accordance with an 

established formula or scheme, as defined in 46 

CFR 535.104(x). Such authority affects pricing by 

reducing price competition between the parties in 

the agreement trade. 

25As discussed supra, the Commission modified 

the Monitoring Report regulations in the rule to 

limit reporting from agreements with pricing or 

pooling authority to those with a combined market 

share of 35 percent or more, recognizing that such 

higher market share agreements possess greater 

market power to affect competition and pricing in 

the marketplace. 

(appendix B of part 535) that require 

reporting on each party’s cargo volume 

and revenue results on the top 10 

agreement-wide commodities for 

agreements that contain pricing or 

pooling 24 authority. 

A review of the voluntary service 

contract guidelines filed with the 

Commission indicates that parties to 

most major agreements with pricing 

authority, whether a conference or a 

discussion agreement, collectively set 

guidelines on rate levels and/or rate 

increases for specific commodities. 

Parties to such agreements may use and 

adhere to the commodity rate guidelines 

in their individual service contracts. As 

such, agreements with authority to 

affect pricing, even with the changes 

that have occurred under OSRA, can 

and do affect commodity-specific freight 

rates in the ocean transportation of 

cargo moving under the individual 

service contracts of their members. 

As stressed throughout this rule, the 

Commission is assigned the 

responsibility of overseeing and 

regulating the concerted behavior of 

ocean common carriers that, but for the 

Shipping Act, would otherwise be 

subject to the antitrust laws. 49 U.S.C. 

app. 1706. To carry out its statutory 

duty, the Commission must assess the 

competitive effects of the concerted 

behavior of agreement parties on the 

ocean carriage of cargo in the foreign 

commerce of the United States. Where 

parties to an agreement have authority 

to affect cargo freight rates and charges 

collectively, reporting requirements for 

specific information pertaining to such 

potentially anti-competitive authority is 

necessary for the Commission to gauge 

the reasonableness of the parties’

behavior in accordance with the 

standards of the Shipping Act. 

It is our view that in most major 

agreements with pricing authority the 

parties set freight rates for specific 

commodities, whether in tariffs or in 

service contracts, and adopt voluntary 

service contract guidelines that can 

affect the cargo freight rates of specific 

commodities. To regulate this behavior 

properly, it remains necessary for the 

Commission to receive some 

commodity-specific information directly 

from parties to agreements with 

authority that may affect pricing. 

As such, we disagree with OCCA’s 

arguments regarding the value and 

usefulness of the commodity specific 

data collected under the Commission’s 

reporting requirements. This 

information provides the Commission 

with meaningful insight on the trends 

in, and the direction of, pricing under 

agreements for major commodity 

movements in the U.S. trades. By 

examining these data trends for an 

agreement, the Commission can more 

accurately gauge the competitive effects 

of the concerted pricing behavior of the 

parties in the agreement trade. The 

ability of the Commission to analyze 

pricing under an agreement is especially 

important in cases where the combined 

market share of the parties is 

inordinately high, which gives them 

considerable market power to affect 

pricing.25

The commodity information from the 

reporting requirements is also used by 

the Commission for guidance in 

addressing inquiries, complaints, and 

petitions for Commission action on an 

agreement in cases where such issues 

involve specific commodities. Issues on 

the pricing behavior of agreement 

parties continue to be brought before the 

Commission under OSRA. 

We recognize the problems and 

burden for carriers associated with the 

former reporting requirements for 

agreement commodity data. 

Consequently, we modified these 

requirements by adding definitions and 

qualifications with better instructions in 

the proposed rule to assist carriers in 

preparing their data, and to improve the 

consistency and accuracy of the data 

reported to the Commission. We further 

substantially reduced the amount of 

required commodity data to ease the 

reporting burden on carriers. 

We believe that the modified 

reporting requirements for the 

commodity data in the proposed rule 

represent a fair and reasonable 

compromise for carriers, and are 

compatible with the changes that have 

occurred in agreements under ORSA. 

Further, we believe that most major 

carriers maintain records of some form 

on their cargo volume and revenue 

results by commodity in the agreement 

trades that they serve. Accordingly, we 

do not believe that the modified 

reporting requirements for agreement 

commodity data in the proposed rule 

place an undue regulatory burden on 

carriers. Therefore, these requirements 

have been retained in this Final Rule. In 

cases where unique compliance 

problems or issues arise, a carrier may 

request relief, with a showing of good 

cause, from any of the Information Form 

and Monitoring Report requirements 

under the waiver procedures provided 

in the Final Rule. 

C. Implementation of the Information 

Form and Monitoring Report 

Regulations 

In the Supplementary Information of 

the NPR, the Commission indicated that 

the new Information Form regulations 

shall become effective 30 days after 

publication of a Final Rule in the 

Federal Register, and the new 

Monitoring Report regulations shall 

become effective 90 days after 

publication. To make this section 

consistent with the balance of the Final 

Rule, the effective date for the new 

Information Form regulations has been 

extended to 60 days after publication. 

The effective date for the new 

Monitoring Report regulations remains 

at 90 days after publication. 

IV. Minutes, 46 CFR Part 535, Subpart 

G 

A. Background 

In the NPR, the Commission proposed 

to replace its current regulations in 

sections 535.706 through 535.708 on the 

filing requirements for minutes of 

meetings between parties to certain 

agreements with modified regulations in 

proposed section 535.704. The 

Commission found that modifications to 

the regulations were necessary to 

address problems it had encountered in 

the quality of information being 

reported in agreement minutes. As such, 

the proposed rule updated the 

regulations to require more descriptive 

reporting on relevant matters discussed 

at meetings between parties at levels 

that are pertinent to the decisionmaking process of the agreement. The 

proposed rule also sought to 

accommodate the changes in agreements 

that have occurred since OSRA. 

Specifically, the NPR proposed to 

modify the current regulations to: (1) 

Require minutes from agreements based 

on the authority contained in the 

agreement; (2) eliminate the filing 

requirement that limits reporting to 

meetings at which the parties are 

authorized to take ‘‘final action;’’ (3) 

clarify the level of detail required to 

describe matters discussed or 

considered at agreement meetings; (4) 

establish a new requirement that each 

document distributed, discussed, or 

exchanged at meetings be submitted 

with the minutes; (5) clarify the 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64411 

26Section 535.704(a)(1) of the proposed rule 

reads: 

[t]his section applies to agreements authorized to 

engage in any of the following activities: discussion 

or establishment of any type of rates, whether in 

tariffs or service contracts; pooling or 

apportionment of cargo; discussion of revenues, 

losses, or earnings; discussion or exchange of 

vessel-operating costs; discussion or agreement on 

service contract matters, including the 

establishment of voluntary service contract 

guidelines.’’

68 FR 67545, December 2, 2003. 

27OCCA suggests that a new paragraph be added 

to section 535.704(d) to state, 

[t]o the extent a space charter, sailing or capacity 

rationalization agreement contains one or more 

types of the authority set forth in § 535.704(a), the 

minutes of meetings of the agreement need only 

reflect discussions held and agreements reached 

pursuant to such authority, and need not reflect 

discussion of or agreement upon routine 

operational matters such as those identified in 

§§ 535.508(b)(2), (b)(3), (b)(4) and (b)(5). 

OCCA at 22. 

28These sections include the following 

operational and administrative matters: (1) The 

terms and conditions of space allocation and slot 

sales, the procedures for allocating space, the 

establishment of space charter rates, and the terms 

and conditions of charter parties; (2) stevedoring, 

terminal, and related services including the 

operation of tonnage centers or other joint container 

marshaling facility; (3) procurement, maintenance, 

or sharing of office facilities, furnishings, 

equipment and supplies, the allocation and 

assessment of costs thereof, or the provisions for the 

administration and management of such agreements 

by duly appointed individuals; (4) procedures for 

anticipating parties’ space requirements; (5) 

Continued 

sequential numbering of minutes; (6) 

reduce the filing time from 30 days to 

15 days from the date of the meeting; 

and (7) update definitions and BTA 

designations, and, in particular, replace 

references to ‘‘conference [agreements]’’

with the term ‘‘agreement.’’ The 

Commission set forth these changes to 

improve the coverage of substantive 

issues in the filed minutes of meetings 

while deterring agreement parties from 

submitting minutes with insufficient 

descriptions of the relevant matters 

discussed at their meetings. 

B. Summary of Comments and 

Discussion 

Comments on the minutes 

requirements of the NPR were submitted 

by OCCA, APL, and PONL. Commenters 

acknowledged the need for the 

Commission to receive meaningful 

minutes of agreement meetings in a 

timely fashion. OCCA at 20. In general, 

however, they believe that the proposed 

minutes requirements are overly broad 

and unduly burdensome. OCCA at 21–

22, APL at 8. In their view, if 

promulgated as proposed, the minutes 

regulations would overwhelm both the 

carriers and the Commission’s staff with 

unnecessary paperwork and 

information. Id. They raise the following 

specific issues with respect to the 

proposed minutes regulations. 

1. Agreements Subject to the Minutes 

Requirements 

OCCA and APL take issue with 

section 535.704(a)(1) of the proposed 

rule, which assigned minutes 

requirements to agreements based on 

the authority contained in the 

agreement, as opposed to the former 

regulations, which assigned minutes 

requirements based on defined types of 

agreements.26 Id. They are particularly 

concerned with the effects of the 

proposed minutes requirements on 

operational agreements that contain rate 

authority. Id. Specifically, OCCA points 

out that operational agreements with 

rate authority would be required to file 

minutes of meetings not only related to 

rate matters, but also to the ‘‘business of 

the agreement,’’ which includes routine 

operational matters such as the 

scheduling of vessels, terminal and 

stevedoring arrangements, and other 

day-to-day functions. OCCA at 21–22. 

OCCA believes that minutes reporting 

on everyday operational issues imposes 

a significant burden on carriers and 

exceeds the intent of the rule. Id. To 

reduce this burden, OCCA recommends 

that the Commission revise the 

exemption provisions in section 

535.704(d) to limit minutes reporting for 

types of operational agreements to 

matters solely relating to the authorities 

identified in section 535.704(a)(1) of the 

proposed rule.27 Id. 

APL concurs with OCCA’s comments, 

and also recommends that the 

Commission delete the discussion or 

exchange of vessel-operating costs as an 

authority subject to the minutes 

requirements in section 535.704(a)(1). 

APL at 9. Among its comments, APL 

argues that parties to operational 

agreements, such as alliance 

arrangements, must, by the very nature 

of their agreements, discuss vesseloperating costs. Id. at 7. It asserts that 

the discussion of such costs is 

inherently relevant to making vessel 

deployment and operational decisions, 

which achieve efficiencies and cost 

savings. Id. Moreover, as mentioned 

above, APL questions the validity of the 

Commission’s decision in FMC Docket 

No. 94–31, which originally assigned 

reporting requirements to agreements 

with such authority. Id. at 8. 

It is not the intention of the 

Commission to elicit unnecessary 

information or impose an unjust 

reporting burden on agreement members 

under the minutes requirements. As 

such, we advise carriers to examine the 

authorities contained in their 

agreements, and where appropriate, 

eliminate any unnecessary or 

underutilized authority identified in 

section 535.704(a)(1) in the Final Rule, 

as modified below. While the 

Commission recognizes that revisions to 

the proposed rule would provide greater 

clarity and reduce any unnecessary 

reporting burden, particularly with 

respect to minor administrative and 

operational matters, the Commission 

disagrees with OCCA’s recommendation 

on the exemption provisions in section 

535.704(d). 

To exempt types of agreements and to 

tie minutes reporting to discussions 

solely relating to the authorities in 

section 535.704(a)(1), as OCCA 

recommends, would undermine the 

clear intent of this rule. As previously 

discussed, the proposed rule updates 

the regulations to identify agreements 

by their authorities instead of narrowly 

defined agreement types. Similarly, the 

Commission believes that limiting 

minutes reporting to the authorities in 

section 535.704(a)(1) might also be 

interpreted too narrowly and relevant 

information might be omitted from the 

minutes. 

The authorities in an agreement are 

interrelated, and the decisions reached 

pursuant to one authority may have a 

bearing on the decisions reached under 

the other authorities of the agreement. 

Without clear reporting in the minutes, 

the cause and effect relationship 

between the authorities in an agreement 

might not be apparent to the 

Commission. For instance, the 

discussion by parties of substantive 

operational matters that would affect the 

supply of vessel capacity under an 

agreement that also has rate authority 

would be relevant because supply can 

have a direct impact on the level of 

pricing in the marketplace. 

Consequently, such discussions must be 

fully addressed in minutes filed with 

the Commission. 

Instead of specifically identifying 

which relevant issues need to be 

addressed in the minutes, the 

Commission believes that the correct 

approach to add clarity and reduce the 

reporting burden is to identify those 

matters that can be exempted from the 

minutes for all agreements subject to 

this section. Therefore, section 

535.704(d) has been revised to include 

the following exemptions in the Final 

Rule: 

(d) Exemptions. For parties to agreements 

subject to this section, the following 

exemptions shall apply: 

(1) Minutes of meetings between parties are 

not required to reflect discussions of matters 

set forth in §§ 535.408(b)(2), (b)(3), (b)(4)(iii), 

(b)(4)(iv), (b)(4)(v) and (b)(4)(vi); 28

64412 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

maintenance of books and records; and (6) details 

as to the following matters as between parties to the 

agreement: Insurance, procedures for resolutions of 

disputes relating to loss and/or damage of cargo, 

and force majeure clauses. 

29The Commission’s revisions to sections 

535.704(a)(1) and 535.704(d) of the Final Rule 

lessen the reporting burden on carriers and reduce 

the number of minutes filings that would have been 

required by the proposed rule, while focusing 

minutes reporting on the substantive issues 

discussed in meetings between agreement parties. 

(2) Minutes of meetings between parties are 

not required to reflect discussions of matters 

set forth in § 535.408(b)(5) to the extent that 

such discussions involve minor operational 

matters that have little or no impact on the 

frequency of vessel calls at ports or the 

amount of vessel capacity offered by the 

parties in the geographic scope of the 

agreement; and 

(3) Minutes of meetings between parties are 

not required to reflect discussions of or 

actions taken with regard to rates that, if 

adopted, would be required to be published 

in an appropriate tariff. This exemption does 

not apply to discussions concerning general 

rate policy, general rate changes, the opening 

or closing of rates, service contracts, or time/ 

volume rates. 

It should be noted that section 

535.408(b)(4)(ii) regarding the 

collection, collation, and circulation of 

data and reports from or to members of 

an agreement is omitted from the 

exemptions in section 535.704(d) in the 

Final Rule. The collection and 

circulation of commercial information 

in an agreement can directly impact 

competition between the agreement 

parties and in the agreement trade. To 

analyze the competitive impact of an 

agreement properly, it is important for 

the Commission to remain aware of how 

and what commercial information is 

being shared and used under the 

agreement. Consequently, a full account 

of the discussions in meetings between 

parties on administrative matters for 

sharing information within the 

agreement must be addressed in the 

minutes. For agreement filing purposes, 

however, the Commission recognizes 

that the regulations must provide parties 

with enough flexibility to perform their 

daily administrative functions pursuant 

to the express enabling authority of their 

agreements without requiring the filing 

of continuous agreement modifications 

on such matters. The Commission can 

remain informed of the information 

sharing activities of the parties through 

filed minutes. 

With respect to the discussion or 

exchange of vessel-operating cost data, 

the Commission finds it unnecessarily 

redundant to include such authority in 

section 535.704(a)(1), as was similarly 

the Commission’s finding for the 

Information Form and Monitoring 

Report regulations. We are primarily 

concerned with the sharing of pricing 

information, which includes costs, as 

such information sharing affects price 

competition. Where vessel-operating 

cost data is shared for pricing purposes, 

the agreement would already be subject 

to the minutes requirements because it 

contains pricing authority. Agreements 

authorizing the exchange of vesseloperating cost data without any of the 

other authorities in section 

535.704(a)(1), such as a simple vesselsharing arrangement, are operational in 

nature, and, therefore, not subject to the 

minutes requirements. Accordingly, the 

requirement to file minutes based on 

agreement authority to discuss or 

exchange vessel-operating cost data has 

been deleted from section 535.704(a)(1) 

in the Final Rule. 

The Commission believes that these 

revisions in the Final Rule provide 

carriers with a sufficient degree of 

reporting relief sought under the 

minutes requirements. It should also be 

noted that parties to an agreement 

subject to this section may request a 

waiver for good cause from any of the 

minutes requirements in accordance 

with the procedures provided in section 

535.705. The Commission would 

consider granting a waiver of some or all 

of the minutes requirements in cases 

where the parties could specifically 

demonstrate that the agreement raises 

little or no anti-competitive concern 

under the Shipping Act, or where the 

parties could demonstrate that such 

reporting would be irrelevant or would 

create an undue burden. 

2. Definition of Meetings 

OCCA contends that the definition of 

the term ‘‘meeting’’ proposed in section 

535.704(b) would increase the number 

of minutes filings and impose a 

significant burden on carriers by 

eliminating ‘‘authority to take final 

action’’ as a precondition to the minutes 

requirements and by including 

discussions among as few as two parties 

within the meaning of the term. OCCA 

at 21. PONL raises a number of 

questions on what constitutes a meeting 

under the Commission’s proposed 

definition. PONL at 2. As such, PONL 

recommends that the Commission 

clarify the definition of a meeting for it 

to be meaningful, enforceable, and one 

to which carriers can adhere. Id. 

Specifically, PONL suggests that the 

Commission make clear that informal 

discussions outside the context of an 

agreement, especially when the 

representatives do not have 

responsibilities relating to the 

agreement, should not be included in 

the minutes requirements. Id. 

The Commission believes that the 

definition in proposed section 

535.704(b) clearly conveys the meaning 

and intent of the term ‘‘meeting,’’ and 

has adopted this definition in the Final 

Rule without any further revision.29 In 

the NPR, we explained that: 

[T]he current definition of ‘‘meeting’’ is 

ambiguous and causes confusion over which 

meetings or discussions held under an 

agreement are subject to the requirement to 

file minutes with the Commission. Further, 

differing interpretations of the regulations 

have resulted in minutes of meetings not 

being filed when such meetings covered 

substantive issues. Questions have arisen 

over whether the minutes filing requirement 

is based on the level of authority of the 

participants at a given meeting (i.e., carrier 

representatives, committees, and 

subcommittees authorized to take final action 

on behalf of the agreement, even if the 

discussions did not result in ‘‘final’’

decisions), or on whether ‘‘final action’’ was 

taken. 

68 FR 67531, December 2, 2003. 

Accordingly, the Commission finds 

the current ‘‘final action’’ concept for 

meetings to be unworkable because of 

the persistently inadequate information 

we have received in agreement minutes. 

The definition in the Final Rule corrects 

this deficiency to ensure that the 

Commission receives sufficient 

information on the substantive issues 

discussed among parties to agreements 

subject to the minutes requirements, as 

such discussions relate to the business 

of the agreement. Where informal 

discussions occur among three or more 

parties pertaining to the business of the 

agreement, this constitutes a meeting as 

defined in section 535.704(b) of the 

Final Rule, and minutes of such 

discussions must be filed with the 

Commission. The business of the 

agreement includes all of the authorities 

provided for in the filed agreement. If 

the discussion in a meeting is of a 

nature that implicates an authority 

contained in the filed agreement, 

minutes of the discussion must be filed 

with the Commission unless specifically 

exempted under section 535.704(d). 

With respect to electronic 

communication, we noted in the NPR 

that ‘‘it is not the intent of the 

Commission to require the filing of 

minutes for such discussions as twoparty electronic communication.’’ Id. 

For further clarity, we add that a 

meeting subject to this section would 

take place where electronic 

communication is used by three or more 

parties to discuss the business of the 

agreement, or where an agreement is 

reached between any number of parties 

via electronic communication. More 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64413 

30Where a meeting subject to this section has 

occurred, actual copies of any textual 

communications, which were electronically 

transmitted between the parties, are not required to 

be filed with the Commission, except for those that 

constitute documents as identified in section 

535.704(c)(4) of the Final Rule. Rather, the minutes 

of such a meeting that must be filed with the 

Commission should contain a description of the 

discussions that took place via electronic 

communication. 31OCCA suggests that section 535.704(c)(3) be 

revised to state, 

[a] description of discussions detailed enough so 

that a non-participant reading the minutes could 

reasonably gain a clear understanding of the nature 

[and extent]of the discussions and, where 

applicable, any decisions reached. Such description 

need not disclose the identity of the parties that 

participated in the discussion or the votes taken. 

OCCA at 24. 

32Specifically, OCCA suggests that section 

535.704(c)(4) be revised to read, 

[a]ny report, statistical compilation, analytical 

study, or other similar work in written or electronic 

format which is distributed, exchanged or discussed 

at the meeting. Memoranda or proposals prepared 

by one or more member lines or the agreement 

secretariat (other than reports, statistical 

compilations, analytical studies or similar works) 

need not be provided if the minutes reflect 

discussion of the subject of the memorandum or 

proposal. 

OCCA at 25. 

33We note that documents circulated at meetings 

pertaining to matters exempted in section 

535.704(d) of the Final Rule are not required to be 

submitted with minutes filings. 

precisely, a meeting would occur where 

electronic communication performs the 

functional equivalent of a person-toperson discussion between parties to an 

agreement. Such a meeting is subject to 

the minutes requirements.30 This would 

include polls of the agreement 

membership conducted via electronic 

communication or telephone. The 

electronic transmission of information 

between or among the parties, which 

does not contemplate discussion among 

the parties, however, would not be 

considered a meeting subject to the 

minutes requirements. 

3. Content of Minutes 

OCCA objects to section 535.704(c)(3) 

of the proposed rule in that it omits 

language in the current regulations 

which provides that the content of 

minutes need not disclose the identity 

of parties that participate in discussions 

or the votes taken. OCCA at 23. OCCA 

argues that if the proposed minutes 

requirements intend for participants in 

discussions to be identified, agreement 

parties would be reluctant to make 

proposals and state their positions 

clearly, which would have a ‘‘chilling 

effect’’ on agreement meetings. Id. at 

23–24. To remedy this concern, OCCA 

recommends that the Commission revise 

section 535.704(c)(3) to include similar 

language as formerly provided.31 Id. 

OCCA further objects to section 

535.704(c)(4) of the proposed rule that 

requires the submission of documents 

distributed, discussed, or exchanged at 

meetings between agreement parties. Id. 

OCCA argues that the proposed 

requirement is so expansive that it 

would disclose documents reflecting 

individual positions or proposals 

circulated at meetings whether or not 

such matters were adopted by the 

agreement. Id. OCCA also claims that 

disclosing the identity of the individual 

positions or proposals of parties under 

the proposed minutes requirements 

would have a ‘‘chilling effect’’ on 

agreement meetings, and that the 

submission of documents, as proposed, 

would create a huge burden for the 

carriers and the Commission. Id. at 23–

25. OCCA recommends that the 

Commission revise section 535.704(c)(4) 

to limit the submission of documents to 

only those relating to the subject matter 

for which minutes would be filed.32 Id. 

at 25. In this manner, OCCA believes 

that the minutes requirements would 

preserve anonymity by enabling 

agreement minutes to reflect proposals 

and discussions without attributing 

them to a particular party. Id. 

The Commission agrees with OCCA to 

the extent that the proposed minutes 

requirements were not intended to 

disclose the identity of parties to 

individual proposals, positions, or votes 

that transpired at agreement meetings. 

Accordingly, section 535.704(c)(3) has 

been revised to include OCCA’s 

recommended language in the Final 

Rule. 

With respect to the submission of 

documents, the Commission believes 

that OCCA’s recommendation to 

provide minutes reporting in lieu of 

submitting certain types of documents 

would undermine the intent of this 

requirement. Specifically, this 

requirement is aimed at uncovering and 

obtaining copies of all relevant 

documents circulated at agreement 

meetings.33

In the NPR, we explained that: 

[I]n instances where a document is 

identified in the minutes, Commission staff 

must then determine its importance and 

attempt to obtain a copy of the document. We 

believe it is more likely that many 

documents, collectively prepared or used by 

agreement members, remain unknown to the 

Commission. 

68 FR 67532, December 2, 2003. 

On the issue of burden, we further 

noted in the NPR that: 

The Commission considered, as an 

alternative, requiring agreements to submit a 

summary of all documents discussed at 

minuted meetings in lieu of the actual 

document. However, we rejected this 

proposal, believing that requiring agreements 

to create a summary, simply for filing 

purposes, would be more burdensome than 

requiring submission of the documents 

themselves. In addition, this approach would 

be less burdensome on the Commission’s 

staff as it would reduce the utilization of 

scarce resources in tracking down 

documents, and instead allow us to focus on 

review and analysis of concerted activities. 

Id. 

The above notwithstanding, the 

Commission understands OCCA’s 

concerns for protecting the anonymity 

of the individual parties with respect to 

the submission of documents. The 

Commission is not overly concerned 

with who circulated a proposal at a 

meeting, but rather what proposals were 

circulated and the discussions or 

decisions that took place. Consistent 

with the revised language added to 

section 535.704(c)(3), section 

535.704(c)(4) in the Final Rule has been 

revised to add the following statement: 

[a]ny documents submitted to the 

Commission pursuant to this section need 

not disclose the identity of the party or 

parties that circulated the document at the 

meeting. 

4. Filing Time for Minutes 

OCCA objects to the shorter filing 

time for minutes as proposed in the 

NPR, which was reduced from 30 days 

to 15 days after a meeting. OCCA at 26. 

It argues that under the new minutes 

requirements, and the resulting increase 

in the number of minutes filings, 

agreements will need more time, not 

less, to file minutes in compliance with 

the regulations. Id. OCCA recommends 

that if a shorter period is necessary, the 

Commission revise the rule by adjusting 

the filing time to 21 days after a 

meeting. Id. PONL concurs with OCCA’s 

recommendation and further 

recommends that minutes of meetings 

between two or three agreement parties 

be permitted to file within 30 days 

because an administrator for the 

agreement might not necessarily be 

present at such a meeting. PONL at 3. 

OCCA requests that the Commission 

stay the implementation of the shorter 

filing time for six months after the Final 

Rule becomes effective, whereby 

agreement parties may acclimate to the 

new regulations. OCCA at 26–27. OCCA 

also seeks clarification to ensure that the 

new regulations will only apply to 

meetings after the Final Rule becomes 

effective. Id. at 27. 

In consideration of these concerns, we 

have revised the Final Rule by adjusting 

the time for filing minutes to 21 days 

after a meeting. The revised filing time, 

however, shall apply to all meetings 

subject to the minutes requirements of 

the Final Rule regardless of the number 

64414 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

34Again, the Commission believes that the 

revisions to the minutes requirements in the Final 

Rule, which reduce the reporting burden and the 

number of minutes filings that would have been 

required by the NPR, provide sufficient relief for 

agreement parties subject to this section. 

35For some agreements, the Commission has 

granted a waiver to allow each party to file its 

commercially sensitive data separately under the 

Monitoring Report requirements. These are usually 

smaller agreements that do not employ a third party 

to handle such matters. Nevertheless, where one 

party fails to file its required data, the entire 

agreement fails to meet the Monitoring Report 

requirements in violation of the Commission’s 

regulations and may be subject to civil penalties 

under section 13(a) of the Shipping Act. 46 U.S.C. 

app. 1712(a). 36We have also clarified the proposed rule at 

section 535.902 regarding falsification of reports to 

encompass all of the information and reporting 

requirements contained in subparts E and G of part 

535. 

of agreement parties participating in a 

meeting. To craft regulations with 

varying filing periods based on the 

number of participants in a meeting 

would overly complicate the filing 

process. Moreover, we anticipate that, in 

general, minutes of meetings between 

two or three agreement parties would be 

less involved, and thus easier to prepare 

for filing, than minutes of meetings with 

more attendees. 

OCCA’s request for a stay on the 

implementation of the shorter filing 

time is denied.34 As with other sections 

of this rule, the new minutes 

requirements shall become effective 60 

days after the Final Rule is published in 

the Federal Register, at which time 

meetings between parties in agreements 

identified in section 535.704(a)(1) of the 

Final Rule shall be subject to the new 

regulations. 

5. Liability for the Filing of Minutes 

In response to the proposed minutes 

requirements, PONL raises questions 

regarding who has the obligation to file 

minutes and who is liable for any 

violation of the filing requirements. 

PONL at 2. PONL believes that the 

failure of two or three agreement parties 

to file minutes of their meetings should 

not extend liability to the other 

agreement parties that did not 

participate in the meetings. Id. at 3. 

The Commission disagrees with 

PONL’s view regarding the liability of 

agreement parties to file minutes of their 

meetings. It is our policy that the 

obligation and liability for complying 

with filing requirements pertaining to 

an agreement, whether minutes, 

Information Forms, Monitoring Reports, 

or other documentation, are shared 

equally by all parties to the agreement. 

In terms of the filing practices of 

agreements, we note that agreements 

often choose to divide the various filing 

requirements among themselves or 

through a third party, such as an 

agreement secretariat or a filing counsel. 

Even though some agreements file 

portions of their data individually, such 

as Monitoring Report information, all 

parties of an agreement are jointly liable 

for the failure of the agreement to 

comply with the regulations.35 By 

promulgating this rule, the Commission 

has not altered liability for violations. 

One party’s failure to file imposes 

liability on the entire agreement, as well 

as its members. Under the new 

regulations, a party to an agreement 

continues to be liable for the actions, 

and failures, of the other parties to the 

agreement.36

V. Statutory Reviews 

The reporting, recordkeeping, and 

disclosure requirements contained in 

this Final Rule have been submitted to 

the Office of Management and Budget 

(OMB). Public burden for this collection 

of information is estimated to average 37 

hours per response for agreement filings 

(including Information Forms); 250 

hours per quarterly response for 

Monitoring Reports from major pricing 

agreements; 170 hours per quarterly 

response for Monitoring Reports from 

less anti-competitive pricing 

agreements; 40 hours per quarterly 

response for Monitoring Reports from 

capacity rationalization agreements; and 

two hours per response for minutes 

filing. The overall estimated burden is 

35,770 hours per annum, a reduction of 

59.8 percent from the current estimated 

burden of 88,970 hours per annum. 

These estimates include, as applicable, 

the time needed to review instructions, 

develop, acquire, install, and utilize 

technology and systems for the purposes 

of collecting, validating, and verifying 

information, processing and 

maintaining information, and disclosing 

and providing information; adjust the 

existing ways to comply with any 

previously applicable instructions and 

requirements; train personnel to 

respond to a collection of information, 

search existing data sources, gather and 

maintain the data needed, and complete 

and review the collection of 

information; and transmit or otherwise 

disclose the information. 

The Chairman of the Federal Maritime 

Commission certifies, pursuant to 

section 605 of the Regulatory Flexibility 

Act, 5 U.S.C. 605, that this Final Rule 

will not have a significant impact on a 

substantial number of small entities. 

The affected universe of parties is 

limited to ocean common carriers, 

passenger vessel operators, and marine 

terminal operators. The Commission has 

determined that these entities do not 

come under the program and policies 

mandated by the Small Business 

Regulatory Enforcement Fairness Act as 

they typically exceed the threshold 

figures for number of employees or 

annual receipts or both to qualify as a 

small entity under the Small Business 

Administration Guidelines. 

List of Subjects 

46 CFR Part 501 

Authority delegations, Organization 

and functions, Seals and insignia. 

46 CFR Part 535 

Freight, Maritime carriers, Reporting 

and recordkeeping requirements. 

■ The Federal Maritime Commission is 

amending parts 501 and 535 of 

subchapter A and subchapter B, 

respectively, of chapter IV of title 46 of 

the Code of Federal Regulations as 

follows: 

PART 501—THE FEDERAL MARITIME 

COMMISSION—GENERAL 

■ 1. The authority citation for part 501 

continues to read as follows: 

Authority: 5 U.S.C. 551–557, 701–706, 

2903, and 6304; 31 U.S.C. 3721; 41 U.S.C. 

414 and 418; 44 U.S.C. 501–520 and 3501–

3520; 46 U.S.C. app. 876, 1111, and 1701–

1720; Reorganization Plan No. 7 of 1961, 26 

FR 7315, August 12, 1961; Pub. L. 89–56, 79 

Stat. 195; 5 CFR part 2638; Pub. L. 89–777, 

80 Stat. 1356; Pub. L. 104–320, 110 Stat. 

3870. 

■ 2. Amend § 501.26 by revising 

paragraphs (c) and (d), and adding new 

paragraphs (o) and (p) to read as 

follows: 

§ 501.26 Delegation to the Director, Bureau 

of Trade Analysis. 

* * * * * 

(c) Authority to grant or deny 

applications filed under § 535.504 of 

this chapter for waiver of the 

Information Form requirements in 

subpart E of part 535. 

(d) Authority to grant or deny 

applications filed under § 535.705 of 

this chapter for waiver of the reporting 

requirements in subpart G of part 535 of 

this chapter. 

* * * * * 

(o) Authority to require Monitoring 

Reports from, or prescribe alternative 

periodic reporting requirements for, 

parties to agreements under § 535.702(c) 

and (d) of this chapter. 

(p) Authority to require parties to 

agreements subject to the Monitoring 

Report requirements in § 535.702(a)(2) 

of this chapter to report their agreement 

commodity data on a sub-trade basis 

pursuant to § 535.703(d) of this chapter. 

■ 3. Revise part 535 to read as follows: 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64415 

PART 535—OCEAN COMMON 

CARRIER AND MARINE TERMINAL 

OPERATOR AGREEMENTS SUBJECT 

TO THE SHIPPING ACT OF 1984 

Subpart A—General Provisions 

Sec. 

535.101 Authority. 

535.102 Purpose. 

535.103 Policies. 

535.104 Definitions. 

Subpart B—Scope 

535.201 Subject agreements. 

535.202 Non-subject agreements. 

Subpart C—Exemptions 

535.301 Exemption procedures. 

535.302 Exemptions for certain 

modifications of effective agreements. 

535.303 Husbanding agreements—

exemption. 

535.304 Agency agreements—exemption. 

535.305 Equipment interchange 

agreements—exemption. 

535.306 Nonexclusive transshipment 

agreements—exemption. 

535.307 Agreements between or among 

wholly-owned subsidiaries and/or their 

parent—exemption. 

535.308 Marine terminal agreements—

exemption. 

535.309 Marine terminal services 

agreements—exemption. 

535.310 Marine terminal facilities 

agreements—exemption. 

535.311 Low market share agreements—

exemption. 

535.312 Vessel charter party—exemption. 

Subpart D—Filing of Agreements 

535.401 General requirements. 

535.402 Complete and definite agreements. 

535.403 Form of agreements. 

535.404 Agreement provisions. 

535.405 Organization of conference 

agreements. 

535.406 Modification of agreements. 

535.407 Application for waiver. 

535.408 Activities that may be conducted 

without further filings. 

Subpart E—Information Form Requirements 

535.501 General requirements. 

535.502 Agreements subject to the 

Information Form requirements. 

535.503 Information Form. 

535.504 Application for waiver. 

Subpart F—Action on Agreements 

535.601 Preliminary review—rejection of 

agreements. 

535.602 Federal Register notice. 

535.603 Comment. 

535.604 Waiting period. 

535.605 Requests for expedited review. 

535.606 Requests for additional 

information. 

535.607 Failure to comply with requests for 

additional information. 

535.608 Confidentiality of submitted 

material. 

535.609 Negotiations. 

Subpart G—Reporting Requirements 

535.701 General requirements. 

535.702 Agreements subject to Monitoring 

Report and alternative periodic reporting 

requirements. 

535.703 Monitoring Report form. 

535.704 Filing of minutes. 

535.705 Application for waiver. 

Subpart H—Mandatory and Prohibited 

Provisions 

535.801 Independent action. 

535.802 Service contracts. 

535.803 Ocean freight forwarder 

compensation. 

Subpart I—Penalties 

535.901 Failure to file. 

535.902 Falsification of reports. 

Subpart J—Paperwork Reduction 

535.991 OMB control numbers assigned 

pursuant to the Paperwork Reduction 

Act. 

Appendix A To Part 535—Information Form 

and Instructions 

Appendix B To Part 535—Monitoring Report 

and Instructions 

Authority: 5 U.S.C. 553; 46 U.S.C. 1701–

1707, 1709–1710, 1712 and 1714–1718; Pub. 

L. 105–258, 112 Stat. 1902 (46 U.S.C. 1701 

note); Sec. 424, Pub. L. 105–383, 112 Stat. 

3440. 

Subpart A—General Provisions 

§ 535.101 Authority. 

The rules in this part are issued 

pursuant to the authority of section 4 of 

the Administrative Procedure Act (5 

U.S.C. 553), sections 2, 3, 4, 5, 6, 7, 8, 

10, 11, 13, 15, 16, 17, and 19 of the 

Shipping Act of 1984 (‘‘the Act’’), and 

the Ocean Shipping Reform Act of 1998, 

Pub. L. 105–258, 112 Stat. 1902. 

§ 535.102 Purpose. 

This part implements those 

provisions of the Act that govern 

agreements by or among ocean common 

carriers and agreements among marine 

terminal operators and among one or 

more marine terminal operators and one 

or more ocean common carriers. This 

part also sets forth more specifically 

certain procedures provided for in the 

Act. 

§ 535.103 Policies. 

(a) The Act requires that agreements 

be processed and reviewed, upon their 

initial filing, according to strict statutory 

deadlines. This part is intended to 

establish procedures for the orderly and 

expeditious review of filed agreements 

in accordance with the statutory 

requirements. 

(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 types of agreements that must be 

accompanied by information 

submissions when they are first filed, 

and sets forth the kind of information 

for certain agreements that the 

Commission believes relevant to that 

review. Only information that is 

relevant to such a review is requested. 

It is the policy of the Commission to 

keep the costs of regulation to a 

minimum and at the same time obtain 

information needed to fulfill its 

statutory responsibility. 

(c) 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. These 

requirements are intended to ensure 

expedited review and should assist 

parties in preparing agreements. These 

requirements as to form do not affect the 

substance of an agreement and are 

intended to allow parties the freedom to 

develop innovative commercial 

relationships and provide efficient and 

economic transportation systems. 

(d) The Act itself excludes certain 

agreements from the filing requirements 

and authorizes the Commission to 

exempt other classes of agreements from 

any requirement of the Act or this part. 

To minimize delay in the 

implementation of routine agreements 

and to avoid the private and public cost 

of unnecessary regulation, certain 

classes of agreements are exempt from 

the filing requirements of this part. 

(e) Under the regulatory framework 

established by the Act, the role of the 

Commission as a monitoring agency has 

been enhanced. The Act favors greater 

freedom in allowing parties to form 

their commercial arrangements. This, 

however, requires greater monitoring of 

agreements after they have become 

effective to assure their continued 

compliance with all applicable 

provisions of the Act. The Act 

empowers the Commission to impose 

certain recordkeeping and reporting 

requirements. This part identifies those 

agreements that require specific record 

retention and reporting to the 

Commission and prescribes the 

applicable period of record retention, 

the form and content of such reporting, 

and the applicable time periods for 

filing with the Commission. Only 

information that is necessary to assure 

that the Commission’s monitoring 

responsibilities will be fulfilled is 

requested. 

(f) The Act requires that conference 

agreements contain certain mandatory 

provisions. Each conference agreement 

must: 

(1) State its purpose; 

64416 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

(2) Provide reasonable and equal 

terms and conditions for admission and 

readmission to membership; 

(3) Allow for withdrawal from 

membership upon reasonable notice 

without penalty; 

(4) Require an independent neutral 

body to police the conference, if 

requested by a member; 

(5) Prohibit conduct specified in 

sections 10(c)(1) or 10(c)(3) of the Act; 

(6) Provide for a consultation process; 

(7) Establish procedures for 

considering shippers’ requests and 

complaints; and 

(8) Provide for independent action. 

(g) To promote competitive and 

efficient transportation and a greater 

reliance on the marketplace, the Act 

places limits on carriers’ agreements 

regarding service contracts. Carriers may 

not enter into an agreement to prohibit 

or restrict members from engaging in 

contract negotiations, may not require 

members to disclose service contract 

negotiations or terms and conditions 

(other than those required to be 

published), and may not adopt 

mandatory rules or requirements 

affecting the right of an agreement 

member or agreement members to 

negotiate and enter into contracts. 

However, agreement members may 

adopt voluntary guidelines covering the 

terms and procedures of members’

contracts. 

§ 535.104 Definitions. 

When used in this part: 

(a) Agreement means an 

understanding, arrangement, or 

association, written or oral (including 

any modification, cancellation or 

appendix) entered into by or among 

ocean common carriers and/or marine 

terminal operators, but does not include 

a maritime labor agreement. 

(b) Antitrust laws means the Act of 

July 2, 1890 (ch. 647, 26 Stat. 209), 15 

U.S.C. 1, as amended; the Act of October 

15, 1914 (ch. 323, 38 Stat. 730), 15 

U.S.C. 12, as amended; the Federal 

Trade Commission Act (38 Stat. 717), 15 

U.S.C. 41, as amended; sections 73 and 

74 of the Act of August 27, 1894 (28 

Stat. 570), 15 U.S.C. 8, 9, as amended; 

the Act of June 19, 1936 (ch. 592, 49 

Stat. 1526), 15 U.S.C. 13, as amended; 

the Antitrust Civil Process Act (76 Stat. 

548), 15 U.S.C. 1311, note as amended; 

and amendments and Acts 

supplementary thereto. 

(c) Appendix means a document 

containing additional material of 

limited application and appended to an 

agreement, distinctly differentiated from 

the main body of the basic agreement. 

(d) Assessment agreement means an 

agreement, whether part of a collective 

bargaining agreement or negotiated 

separately, that provides for collectively 

bargained fringe benefit obligations on 

other than a uniform man-hour basis 

regardless of the cargo handled or type 

of vessel or equipment utilized. 

(e) Capacity rationalization means a 

concerted reduction, stabilization, 

withholding, or other limitation in any 

manner whatsoever by ocean common 

carriers on the size or number of vessels 

or available space offered collectively or 

individually to shippers in any trade or 

service. 

(f) Common carrier means a person 

holding itself out to the general public 

to provide transportation by water of 

passengers or cargo between the United 

States and a foreign country for 

compensation that: 

(1) Assumes responsibility for the 

transportation from the port or point of 

receipt to the port or point of 

destination; and 

(2) Utilizes, for all or part of that 

transportation, a vessel operating on the 

high seas or the Great Lakes between a 

port in the United States and a port in 

a foreign country, except that the term 

does not include a common carrier 

engaged in ocean transportation by ferry 

boat, ocean tramp, or chemical parcel 

tanker, or by a vessel when primarily 

engaged in the carriage of perishable 

agricultural commodities: 

(i) If the common carrier and the 

owner of those commodities are wholly 

owned, directly or indirectly, by a 

person primarily engaged in the 

marketing and distribution of those 

commodities; and 

(ii) Only with respect to those 

commodities. 

(g) Conference agreement means an 

agreement between or among two or 

more ocean common carriers that 

provides for the fixing of and adherence 

to uniform tariff rates, charges, 

practices, and conditions of service 

relating to the receipt, carriage, handling 

and/or delivery of passengers or cargo 

for all members. The term does not 

include joint service, pooling, sailing, 

space charter, or transshipment 

agreements. 

(h) Consultation means a process 

whereby a conference and a shipper 

confer for the purpose of promoting the 

commercial resolution of disputes and/ 

or the prevention and elimination of the 

occurrence of malpractices. 

(i) Cooperative working agreement 

means an agreement that establishes 

exclusive, preferential, or cooperative 

working relationships that are subject to 

the Act, but that do not fall precisely 

within the parameters of any 

specifically defined agreement. 

(j) Effective agreement means an 

agreement effective under the Act. 

(k) Equal access agreement means an 

agreement between ocean common 

carriers of different nationalities, as 

determined by the incorporation or 

domicile of the carriers’ operating 

companies, whereby such ocean 

common carriers associate for the 

purpose of gaining reciprocal access to 

cargo that is otherwise reserved by 

national decree, legislation, statute or 

regulation to carriage by the merchant 

marine of the carriers’ respective 

nations. 

(l) Independent neutral body means a 

disinterested third party, authorized by 

a conference and its members to review, 

examine, and investigate alleged 

breaches or violations of the conference 

agreement and/or the conference’s 

properly promulgated tariffs, rules, or 

regulations by any member of the 

conference. 

(m) Information Form means the form 

containing economic information that 

must accompany the filing of certain 

agreements and modifications. 

(n) Interconference agreement means 

an agreement between conferences. 

(o) (1) Joint service agreement means 

an agreement between ocean common 

carriers operating as a joint venture 

whereby a separate service is 

established that: 

(i) Holds itself out in its own distinct 

operating name; 

(ii) Independently fixes its own rates, 

charges, practices, and conditions of 

service or chooses to participate under 

its operating name in another agreement 

that is duly authorized to determine and 

implement such activities; 

(iii) Independently publishes its own 

tariff or chooses to participate under its 

operating name in an otherwise 

established tariff; 

(iv) Issues its own bills of lading; and 

(v) Acts generally as a single carrier. 

(2) The common use of facilities in a 

joint service may occur, and there is no 

competition between members for cargo 

in the agreement trade; but they 

otherwise maintain their separate 

identities. 

(p) Marine terminal facilities means 

one or more structures (and services 

connected therewith) comprising a 

terminal unit, including, but not limited 

to docks, berths, piers, aprons, wharves, 

warehouses, covered and/or open 

storage space, cold storage plants, grain 

elevators and/or bulk cargo loading and/ 

or unloading structures, landings, and 

receiving stations, used for the 

transmission, care and convenience of 

cargo and/or passengers or the 

interchange of same between land and 

ocean common carriers or between two 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64417 

ocean common carriers. This term is not 

limited to waterfront or port facilities 

and includes so-called off-dock 

container freight stations at inland 

locations and any other facility from 

which inbound waterborne cargo may 

be tendered to the consignee or 

outbound cargo may be received from 

shippers for vessel or container loading. 

(q) Marine terminal operator means a 

person engaged in the United States in 

the business of furnishing wharfage, 

dock, warehouse, or other terminal 

facilities in connection with a common 

carrier, or in connection with a common 

carrier and a water carrier subject to 

subchapter II of chapter 135 of title 49 

U.S.C. This term does not include 

shippers or consignees who exclusively 

furnish marine terminal facilities or 

services in connection with tendering or 

receiving proprietary cargo from a 

common carrier or water carrier. 

(r) Maritime labor agreement means a 

collective-bargaining agreement 

between an employer subject to the Act 

or group of such employers, and a labor 

organization representing employees in 

the maritime or stevedoring industry, or 

an agreement preparatory to such a 

collective-bargaining agreement among 

members of a multi-employer bargaining 

group, or an agreement specifically 

implementing provisions of such a 

collective-bargaining agreement or 

providing for the formation, financing or 

administration of a multi-employer 

bargaining group; but the term does not 

include an assessment agreement. 

(s) Modification means any change, 

alteration, correction, addition, deletion, 

or revision of an existing effective 

agreement or to any appendix to such an 

agreement. 

(t) Monitoring Report means the report 

containing economic information that 

must be filed at defined intervals with 

regard to certain agreements that are 

effective under the Act. 

(u) Ocean common carrier means a 

common carrier that operates, for all or 

part of its common carrier service, a 

vessel on the high seas or the Great 

Lakes between a port in the United 

States and a port in a foreign country, 

except that the term does not include a 

common carrier engaged in ocean 

transportation by ferry boat, ocean 

tramp, or chemical parcel-tanker. 

(v) Ocean freight forwarder means a 

person in the United States that 

dispatches shipments from the United 

States via common carriers and books or 

otherwise arranges space for those 

shipments on behalf of shippers; and 

processes the documentation or 

performs related activities incident to 

those shipments. 

(w) Person means individuals, 

corporations, partnerships and 

associations existing under or 

authorized by the laws of the United 

States or of a foreign country. 

(x) Pooling agreement means an 

agreement between ocean common 

carriers that provides for the division of 

cargo carryings, earnings, or revenue 

and/or losses between the members in 

accordance with an established formula 

or scheme. 

(y) Port means the place at which an 

ocean common carrier originates or 

terminates (and/or transships) its actual 

ocean carriage of cargo or passengers as 

to any particular transportation 

movement. 

(z) 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. 

(aa) Rate agreement means an 

agreement between ocean common 

carriers that authorizes the discussion of 

or agreement on, either on a binding 

basis under a common tariff or on a nonbinding basis, any kind of rate or charge. 

(bb) Sailing agreement means an 

agreement between ocean common 

carriers to provide service by 

establishing a schedule of ports that 

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 rationalization 

agreements. 

(cc) Service contract means a written 

contract, other than a bill of lading or 

a receipt, between one or more shippers 

and an individual ocean common 

carrier or an agreement between or 

among ocean common carriers in which 

the shipper or shippers makes a 

commitment to provide a certain 

volume or portion of cargo over a fixed 

time period, and the ocean common 

carrier or the agreement commits to a 

certain rate or rate schedule and a 

defined service level, such as assured 

space, transit time, port rotation, or 

similar service features. The contract 

may also specify provisions in the event 

of nonperformance on the part of any 

party. 

(dd) Shipper means: 

(1) A cargo owner; 

(2) The person for whose account the 

ocean transportation is provided; 

(3) The person to whom delivery is to 

be made; 

(4) A shippers’ association; or 

(5) A non-vessel-operating common 

carrier (i.e., a common carrier that does 

not operate the vessels by which the 

ocean transportation is provided and is 

a shipper in its relationship with an 

ocean common carrier) that accepts 

responsibility for payment of all charges 

applicable under the tariff or service 

contract. 

(ee) Shippers’ association means a 

group of shippers that consolidates or 

distributes freight on a nonprofit basis 

for the members of the group in order 

to secure carload, truckload, or other 

volume rates or service contracts. 

(ff) Shippers’ requests and complaints 

means a communication from a shipper 

to a conference requesting a change in 

tariff rates, rules, regulations, or service; 

protesting or objecting to existing rates, 

rules, regulations or service; objecting to 

rate increases or other tariff changes; 

protesting allegedly erroneous service 

contract or tariff implementation or 

application, and/or requesting to enter 

into a service contract. Routine 

information requests are not included in 

the term. 

(gg) Space charter agreement means 

an agreement between ocean common 

carriers whereby a carrier (or carriers) 

agrees to provide vessel space for use by 

another carrier (or carriers) in exchange 

for compensation or services. The 

arrangement may include arrangements 

for equipment interchange and receipt/ 

delivery of cargo, but may not include 

capacity rationalization as defined in 

this subpart. 

(hh) Sub-trade means the scope of 

ocean liner cargo carried between each 

U.S. port range and each foreign country 

within the scope of the agreement. U.S. 

port ranges are defined as follows: 

(1) Atlantic and Gulf shall encompass 

ports along the eastern seaboard and the 

Gulf of Mexico from the northern 

boundary of Maine to Brownsville, 

Texas. It also includes all ports 

bordering on the Great Lakes and their 

connecting waterways, all ports in the 

State of New York on the St. Lawrence 

River, and all ports in Puerto Rico and 

the U.S. Virgin Islands; and 

(2) Pacific shall encompass all ports 

in the States of Alaska, Hawaii, 

California, Oregon, and Washington. It 

also includes all ports in Guam, 

American Samoa, Northern Marianas, 

Johnston Island, Midway Island, and 

Wake Island. 

(ii) Through transportation means 

continuous transportation between 

origin and destination for which a 

through rate is assessed and which is 

offered or performed by one or more 

64418 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

carriers, at least one of which is an 

ocean common carrier, between a 

United States point or port and a foreign 

point or port. 

(jj) Transshipment agreement means 

an agreement between an ocean 

common carrier serving a port or point 

of origin and another such carrier 

serving a port or point of destination, 

whereby cargo is transferred from one 

carrier to another carrier at an 

intermediate port served by direct vessel 

call of both such carriers in the conduct 

of through transportation and the 

publishing carrier performs the 

transportation on one leg of the through 

transportation on its own vessel or on a 

vessel on which it has rights to space 

under a filed and effective agreement. 

Such an agreement does not provide for 

the concerted discussion, publication or 

otherwise fixing of rates for the account 

of the cargo interests, conditions of 

service or other tariff matters other than 

the tariff description of the 

transshipment service offered, the port 

of transshipment and the participation 

of the nonpublishing carrier. An 

agreement that involves the movement 

of cargo in a domestic offshore trade as 

part of a through movement of cargo via 

transshipment involving the foreign 

commerce of the United States shall be 

considered to be in the foreign 

commerce of the United States and, 

therefore, subject to the Act and this 

part. 

(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. 

Subpart B—Scope 

§ 535.201 Subject agreements. 

(a) Ocean common carrier 

agreements. This part applies to 

agreements by or among ocean common 

carriers 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 

among themselves or with one or more 

marine terminal operators; 

(6) Control, regulate, or prevent 

competition in international ocean 

transportation; or 

(7) Discuss and agree on any matter 

related to service contracts. 

(b) Marine terminal operator 

agreements. This part applies to 

agreements among marine terminal 

operators and among one or more 

marine terminal operators and one or 

more ocean carriers to: 

(1) Discuss, fix, or regulate rates or 

other conditions of service; or 

(2) Engage in exclusive, preferential, 

or cooperative working arrangements, to 

the extent that such agreements involve 

ocean transportation in the foreign 

commerce of the United States. 

§ 535.202 Non-subject agreements. 

This part does not apply to the 

following agreements: 

(a) Any acquisition by any person, 

directly or indirectly, of any voting 

security or assets of any other person; 

(b) Any maritime labor agreement; 

(c) Any agreement related to 

transportation to be performed within or 

between foreign countries; 

(d) Any agreement among common 

carriers to establish, operate, or 

maintain a marine terminal in the 

United States; and 

(e) Any agreement among marine 

terminal operators that exclusively and 

solely involves transportation in the 

interstate commerce of the United 

States. 

Subpart C—Exemptions 

§ 535.301 Exemption procedures. 

(a) Authority. The Commission, upon 

application or its own motion, may by 

order or rule exempt for the future any 

class of agreement involving ocean 

common carriers and/or marine 

terminal operators from any 

requirement of the Act if it finds that the 

exemption will not result in substantial 

reduction in competition or be 

detrimental to commerce. 

(b) Optional filing. Notwithstanding 

any exemption from filing, or other 

requirements of the Act and this part, 

any party to an exempt agreement may 

file such an agreement with the 

Commission. 

(c) Application for exemption. 

Applications for exemptions shall 

conform to the general filing 

requirements for exemptions set forth at 

§ 502.67 of this title. 

(d) Retention of agreement by parties. 

Any agreement that has been exempted 

by the Commission pursuant to section 

16 of the Act shall be retained by the 

parties and shall be available upon 

request by the Bureau of Trade Analysis 

for inspection during the term of the 

agreement and for a period of three 

years after its termination. 

§ 535.302 Exemptions for certain 

modifications of effective agreements. 

(a) Non-substantive modifications to 

effective agreements. A non-substantive 

modification to an effective agreement 

between ocean common carriers and/or 

marine terminal operators, acting 

individually or through approved 

agreements, is one which: 

(1) Reflects changes in the name of 

any geographic locality stated therein, 

the name of the agreement or the name 

of a party to the agreement, the names 

and/or numbers of any other section 4 

agreement or designated provisions 

thereof referred to in an agreement; 

(2) Corrects typographical and 

grammatical errors in the text of the 

agreement or renumbers or reletters 

articles or sub-articles of agreements 

and references thereto in the text; or 

(3) Reflects changes in the titles of 

persons or committees designated 

therein or transfers the functions of such 

persons or committees to other 

designated persons or committees or 

which merely establishes a committee. 

(b) Other Miscellaneous Modifications 

to effective agreements. A miscellaneous 

modification to an effective agreement is 

one that: 

(1) Cancels the agreement or a portion 

thereof; 

(2) Deletes an agreement party; 

(3) Changes the parties to a conference 

agreement or a discussion agreement 

among passenger vessel operating 

common carriers that is open to all 

ocean common carriers operating 

passenger vessels of a class defined in 

the agreements and that does not 

contain ratemaking, pooling, joint 

service, sailing or space chartering 

authority; or 

(4) Changes the officials of the 

agreement and delegations of authority. 

(c) A copy of a modification described 

in (a) or (b) of this section shall be 

submitted to the Commission but is 

otherwise exempt from the waiting 

period requirement of the Act and this 

part. 

(d) Parties to agreements may seek a 

determination from the Director of the 

Bureau of Trade Analysis as to whether 

a particular modification is a nonVerDate Aug<04>2004 16:46 Nov 03, 2004 Jkt 205001 PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 E:\FR\FM\04NOR2.SGM 04NOR2
Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64419 

substantive or other miscellaneous 

modification within the meaning of this 

section. 

(e) The filing fee for non-substantive 

or other miscellaneous modifications is 

provided in § 535.401(g). 

§ 535.303 Husbanding agreements—

exemption. 

(a) A husbanding agreement is an 

agreement between an ocean common 

carrier and another ocean common 

carrier or marine terminal operator, 

acting as the former’s agent, under 

which the agent handles routine vessel 

operating activities in port, such as 

notifying port officials of vessel arrivals 

and departures; ordering pilots, tugs, 

and linehandlers; delivering mail; 

transmitting reports and requests from 

the Master to the owner/operator; 

dealing with passenger and crew 

matters; and providing similar services 

related to the above activities. The term 

does not include an agreement that 

provides for the solicitation or booking 

of cargoes, signing contracts or bills of 

lading and other related matters, nor 

does it include an agreement that 

prohibits the agent from entering into 

similar agreements with other carriers. 

(b) A husbanding agreement is exempt 

from the filing requirements of the Act 

and of this part. 

(c) The filing fee for optional filing of 

husbanding agreements is provided in 

§ 535.401(g). 

§ 535.304 Agency agreements—

exemption. 

(a) An agency agreement is an 

agreement between an ocean common 

carrier and another ocean common 

carrier or marine terminal operator, 

acting as the former’s agent, under 

which the agent solicits and books 

cargoes and signs contracts of 

affreightment and bills of lading on 

behalf of the ocean common carrier. 

Such an agreement may or may not also 

include husbanding service functions 

and other functions incidental to the 

performance of duties by agents, 

including processing of claims, 

maintenance of a container equipment 

inventory control system, collection and 

remittance of freight and reporting 

functions. 

(b) An agency agreement as defined 

above is exempt from the filing 

requirements of the Act and of this part, 

except those: 

(1) Where a common carrier is to be 

the agent for a competing ocean 

common carrier in the same trade; or 

(2) That permit an agent to enter into 

similar agreements with more than one 

ocean common carrier in a trade. 

(c) The filing fee for optional filing of 

agency agreements is provided in 

§ 535.401(g). 

§ 535.305 Equipment interchange 

agreements—exemption. 

(a) An equipment interchange 

agreement is an agreement between two 

or more ocean common carriers for: 

(1) The exchange of empty containers, 

chassis, empty LASH/SEABEE barges, 

and related equipment; and 

(2) The transportation of the 

equipment as required, payment 

therefor, management of the logistics of 

transferring, handling and positioning 

equipment, its use by the receiving 

carrier, its repair and maintenance, 

damages thereto, and liability incidental 

to the interchange of equipment. 

(b) An equipment interchange 

agreement is exempt from the filing 

requirements of the Act and of this part. 

(c) The filing fee for optional filing of 

equipment interchange agreements is 

provided in § 535.401(g). 

§ 535.306 Nonexclusive transshipment 

agreements—exemption. 

(a) A nonexclusive transshipment 

agreement is a transshipment agreement 

by which one ocean common carrier 

serving a port of origin by direct vessel 

call and another such carrier serving a 

port of destination by direct vessel call 

provide transportation between such 

ports via an intermediate port served by 

direct vessel call of both such carriers 

and at which cargo will be transferred 

from one to the other and which 

agreement does not: 

(1) Prohibit either carrier from 

entering into similar agreements with 

other carriers; 

(2) Guarantee any particular volume 

of traffic or available capacity; or 

(3) Provide for the discussion or fixing 

of rates for the account of the cargo 

interests, conditions of service or other 

tariff matters other than the tariff 

description of the service offered as 

being by means of transshipment, the 

port of transshipment and the 

participation of the nonpublishing 

carrier. 

(b) A nonexclusive transshipment 

agreement is exempt from the filing 

requirements of the Act and of this part, 

provided that the tariff provisions set 

forth in paragraph (c) of this section and 

the content requirements of paragraph 

(d) of this section are met. 

(c) The applicable tariff or tariffs shall 

provide: 

(1) The through rate; 

(2) The routings (origin, 

transshipment and destination ports); 

additional charges, if any (i.e. port 

arbitrary and/or additional 

transshipment charges); and 

participating carriers; and 

(3) A tariff provision substantially as 

follows: 

The rules, regulations, and rates in 

this tariff apply to all transshipment 

arrangements between the publishing 

carrier or carriers and the participating, 

connecting or feeder carrier. Every 

participating connecting or feeder 

carrier which is a party to 

transshipment arrangements has agreed 

to observe the rules, regulations, rates, 

and routings established herein as 

evidenced by a connecting carrier 

agreement between the parties. 

(d) Nonexclusive transshipment 

agreements must contain the entire 

arrangement between the parties, must 

contain a declaration of the 

nonexclusive character of the 

arrangement and may provide for: 

(1) The identification of the parties 

and the specification of their respective 

roles in the arrangement; 

(2) A specification of the governed 

cargo; 

(3) The specification of responsibility 

for the issuance of bills of lading (and 

the assumption of common carriageassociated liabilities) to the cargo 

interests; 

(4) The specification of the origin, 

transshipment and destination ports; 

(5) The specification of the governing 

tariff(s) and provision for their 

succession; 

(6) The specification of the particulars 

of the nonpublishing carrier’s 

concurrence/participation in the tariff of 

the publishing carrier; 

(7) The division of revenues earned as 

a consequence of the described carriage; 

(8) The division of expenses incurred 

as a consequence of the described 

carriage; 

(9) Termination and/or duration of the 

agreement; 

(10) Intercarrier indemnification or 

provision for intercarrier liabilities 

consequential to the contemplated 

carriage and such documentation as 

may be necessary to evidence the 

involved obligations; 

(11) The care, handling and liabilities 

for the interchange of such carrier 

equipment as may be consequential to 

the involved carriage; 

(12) Such rationalization of services 

as may be necessary to ensure the cost 

effective performance of the 

contemplated carriage; and 

(13) Such agency relationships as may 

be necessary to provide for the pickup 

and/or delivery of the cargo. 

(e) No subject other than as listed in 

paragraph (d) of this section may be 

included in exempted nonexclusive 

transshipment agreements. 

64420 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

(f) The filing fee for optional filing of 

nonexclusive transshipment agreements 

is provided in § 535.401(g). 

§ 535.307 Agreements between or among 

wholly-owned subsidiaries and/or their 

parent’exemption. 

(a) An agreement between or among 

wholly-owned subsidiaries and/or their 

parent means an agreement under 

section 4 of the Act between or among 

an ocean common carrier or marine 

terminal operator subject to the Act and 

any one or more ocean common carriers 

or marine terminal operators which are 

ultimately owned 100 percent by that 

ocean common carrier or marine 

terminal operator, or an agreement 

between or among such wholly-owned 

carriers or terminal operators. 

(b) All agreements between or among 

wholly-owned subsidiaries and/or their 

parent are exempt from the filing 

requirements of the Act and this part. 

(c) Ocean common carriers are exempt 

from section 10(c) of the Act to the 

extent that the concerted activities 

proscribed by that section result solely 

from agreements between or among 

wholly-owned subsidiaries and/or their 

parent. 

(d) The filing fee for optional filing of 

these agreements is provided in 

§ 535.401(g). 

§ 535.308 Marine terminal agreements—

exemption. 

(a) Marine terminal agreement means 

an agreement, understanding, or 

association written or oral (including 

any modification or appendix) that 

applies to future, prospective activities 

between or among the parties and that 

relates solely to marine terminal 

facilities and/or services among marine 

terminal operators and among one or 

more marine terminal operators and one 

or more ocean common carriers that 

completely sets forth the applicable 

rates, charges, terms and conditions 

agreed to by the parties for the facilities 

and/or services provided for under the 

agreement. The term does not include a 

joint venture arrangement among 

marine terminal operators to establish a 

separate, distinct entity that fixes its 

own rates and publishes its own tariff. 

(b) Marine terminal conference 

agreement means an agreement between 

or among two or more marine terminal 

operators and/or ocean common carriers 

for the conduct or facilitation of marine 

terminal operations that provides for the 

fixing of and adherence to uniform 

maritime terminal rates, charges, 

practices and conditions of service 

relating to the receipt, handling, and/or 

delivery of passengers or cargo for all 

members. 

(c) Marine terminal discussion 

agreement means an agreement between 

or among two or more marine terminal 

operators and/or marine terminal 

conferences and/or ocean common 

carriers solely for the discussion of 

subjects including marine terminal 

rates, charges, practices, and conditions 

of service relating to the receipt, 

handling and/or delivery of passengers 

or cargo. 

(d) Marine terminal interconference 

agreement means an agreement between 

or among two or more marine terminal 

conference and/or marine terminal 

discussion agreements. 

(e) All marine terminal agreements, as 

defined in § 535.308(a), with the 

exception of marine terminal 

conference, marine terminal 

interconference, and marine terminal 

discussion agreements as defined in 

§ 535.308(b), (c), and (d), are exempt 

from the waiting period requirements of 

the Act and this part and will, 

accordingly, be effective on filing with 

the Commission. 

(f) The filing fee for marine terminal 

agreements is provided in § 535.401(g). 

§ 535.309 Marine terminal services 

agreements—exemption. 

(a) Marine terminal services 

agreement means an agreement, 

contract, understanding, arrangement, 

or association, written or oral, 

(including any modification or 

appendix) between a marine terminal 

operator and an ocean common carrier 

that applies to marine terminal services 

that are provided to and paid for by an 

ocean common carrier. These services 

include: checking, dockage, free time, 

handling, heavy lift, loading and 

unloading, terminal storage, usage, 

wharfage, and wharf demurrage and 

including any marine terminal facilities 

that may be provided incidentally to 

such marine terminal services. The term 

marine terminal services agreement 

does not include any agreement that 

conveys to the involved carrier any 

rights to operate any marine terminal 

facility by means of a lease, license, 

permit, assignment, land rental, or 

similar other arrangement for the use of 

marine terminal facilities or property. 

(b) All marine terminal services 

agreements as defined in § 535.309(a) 

are exempt from the filing and waiting 

period requirements of the Act and this 

part on condition that: 

(1) They do not include rates, charges, 

rules, and regulations that are 

determined through a marine terminal 

conference agreement, as defined in 

§ 535.308(b); and 

(2) No antitrust immunity is conferred 

under the Act with regard to terminal 

services provided to an ocean common 

carrier under a marine terminal services 

agreement that is not filed with the 

Commission. 

(c) The filing fee for optional filing of 

terminal services agreements is 

provided in § 535.401(g). 

§ 535.310 Marine terminal facilities 

agreement—exemption. 

(a) Marine terminal facilities 

agreement means any agreement 

between or among two or more marine 

terminal operators, or between one or 

more marine terminal operators and one 

or more ocean common carriers, to the 

extent that the agreement involves 

ocean transportation in the foreign 

commerce of the United States, that 

conveys to any of the involved parties 

any rights to operate any marine 

terminal facility by means of lease, 

license, permit, assignment, land rental, 

or other similar arrangement for the use 

of marine terminal facilities or property. 

(b) All marine terminal facilities 

agreements as defined in § 535.310(a) 

are exempt from the filing and waiting 

period requirements of the Act and this 

part. 

(c) Parties to marine terminal facilities 

agreements currently in effect shall 

provide copies to any requesting party 

for a reasonable copying and mailing 

fee. 

(d) The filing fee for optional filing of 

terminal facilities agreements is 

provided in § 535.401(g). 

§ 535.311 Low market share agreements—

exemption. 

(a) Low market share agreement 

means any agreement among ocean 

common carriers which contains none 

of the authorities listed in 535.502(b) 

and for which the combined market 

share of the parties in any of the 

agreement’s sub-trade is either: 

(1) Less than 30 percent, if all parties 

are members of another agreement in 

the same trade or sub-trade containing 

any of the authorities listed in 

§ 535.502(b); or 

(2) Less than 35 percent, if all parties 

are not members of another agreement 

in the same trade or sub-trade 

containing any of the authorities listed 

in § 535.502(b). 

(b) Low market share agreements are 

exempt from the waiting period 

requirement of the Act and this part, 

and are effective on filing. 

(c) Parties to agreements may seek a 

determination from the Director, Bureau 

of Trade Analysis, as to whether a 

proposed agreement meets the general 

definition of a low market share 

agreement. 

(d) The filing fee for low market share 

agreements is provided in § 535.401(g). 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64421 

§ 535.312 Vessel charter party-exemption. 

(a) For purposes of this section, vessel 

charter party shall mean a contractual 

agreement between two ocean common 

carriers for the charter of the full reach 

of a vessel, which agreement sets forth 

the entire terms and conditions 

(including duration, charter hire, and 

geographical or operational limitations, 

if any) under which the vessel will be 

employed. 

(b) Vessel charter parties, as defined 

in paragraph (a) of this section, are 

exempt from the filing requirements of 

the Act and this part. 

(c) The filing fee for optional filing of 

vessel charter parties is provided in 

§ 535.401(g). 

Subpart D—Filing of Agreements 

§ 535.401 General requirements. 

(a) All agreements (including oral 

agreements reduced to writing in 

accordance with the Act) subject to this 

part and filed with the Commission for 

review and disposition pursuant to 

section 6 of the Act, shall be submitted 

during regular business hours to the 

Secretary, Federal Maritime 

Commission, Washington, DC 20573. 

Such filing shall consist of: 

(1) A true copy and seven additional 

copies of the executed 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 

(3) A letter of transmittal as described 

in paragraph (b) of this section. 

(b) The letter of transmittal shall: 

(1) Identify all of the documents being 

transmitted including, in the instance of 

a modification to an effective agreement, 

the full name of the effective agreement, 

the Commission-assigned agreement 

number of the effective agreement and 

the revision, page and/or appendix 

number of the modification being filed; 

(2) Provide a concise, succinct 

summary of the filed agreement or 

modification separate and apart from 

any narrative intended to provide 

support for the acceptability of the 

agreement or modification; 

(3) Clearly provide the typewritten or 

otherwise imprinted name, position, 

business address, and telephone number 

of the filing party; and 

(4) Be signed in the original by the 

filing party or on the filing party’s 

behalf by an authorized employee or 

agent of the filing party. 

(c) To facilitate the timely and 

accurate publication of the Federal 

Register Notice, the letter of transmittal 

shall also provide a current list of the 

agreement’s participants where such 

information is not provided elsewhere 

in the transmitted documents. 

(d) Any agreement that does not meet 

the filing requirements of this section, 

including any applicable Information 

Form requirements, shall be rejected in 

accordance with § 535.601(b). 

(e) Assessment agreements shall be 

filed and shall be effective upon filing. 

(f) Parties to agreements with 

expiration dates shall file any 

modification seeking renewal for a 

specific term or elimination of a 

termination date in sufficient time to 

accommodate the 45-day waiting period 

required under the Act. 

(g) Fees. The filing fee is $1,834 for 

new agreements requiring Commission 

review and action; $931 for agreement 

modifications requiring Commission 

review and action; $442 for agreements 

processed under delegated authority (for 

types of agreements that can be 

processed under delegated authority, 

see 46 CFR 501.26(e)); and $145 for 

carrier and terminal exempt agreements. 

(h) The fee for a copy of the 

Commission’s agreement database 

report is $32. 

§ 535.402 Complete and definite 

agreements. 

An agreement filed under the Act 

must be clear and definite in its terms, 

must embody the complete, present 

understanding of the parties, and must 

set forth the specific authorities and 

conditions under which the parties to 

the agreement will conduct their 

operations and regulate the 

relationships among the agreement 

members, unless those details are 

matters specifically enumerated as 

exempt from the filing requirements of 

this part. 

§ 535.403 Form of agreements. 

The requirements of this section 

apply to all agreements except marine 

terminal agreements and assessment 

agreements. 

(a) Agreements shall be clearly and 

legibly written. Agreements in a 

language other than English shall be 

accompanied by an English translation. 

(b) Every agreement shall include a 

Title Page indicating: 

(1) The full name of the agreement; 

(2) Once assigned, the Commissionassigned agreement number; 

(3) If applicable, the expiration date of 

the agreement; and 

(4) The original effective date of the 

agreement whenever the Title Page is 

revised. 

(c) Each agreement page (including 

modifications and appendices) shall be 

identified by printing the agreement 

name (as shown on the agreement title 

page) and, once assigned, the applicable 

Commission-assigned agreement 

number at the top of each page. For 

agreement modifications, the 

appropriate amendment number for 

each modification should also appear on 

the page along with the basic agreement 

number. 

(d) Each agreement and/or 

modification filed will be signed in the 

original by an official or authorized 

representative of each of the parties and 

shall indicate the typewritten full name 

of the signing party and his or her 

position, including organizational 

affiliation. Faxed or photocopied 

signatures will be accepted if replaced 

with an original signature as soon as 

practicable before the effective date. 

(e) Every agreement shall include a 

Table of Contents indicating the 

location of all agreement provisions. 

§ 535.404 Agreement provisions. 

Generally, each agreement should: 

(a) Indicate the full legal name of each 

party, including any FMC-assigned 

agreement number associated with that 

name, and the address of its principal 

office (not the address of any agent or 

representative not an employee of the 

participating party); 

(b) State the ports or port ranges to 

which the agreement applies as well as 

any inland points or areas to which it 

also applies; and 

(c) Specify, by organizational title, the 

administrative and executive officials 

determined by the agreement parties to 

be responsible for designated affairs of 

the agreement and the respective duties 

and authorities delegated to those 

officials. At a minimum, the agreement 

should specify: 

(1) The official(s) with authority to 

file the agreement and any modification 

thereto and to submit associated 

supporting materials; and 

(2) A statement as to any designated 

U.S. representative of the agreement 

required by this chapter. 

§ 535.405 Organization of conference 

agreements. 

Each conference agreement shall: 

(a) State that, at the request of any 

member, the conference shall engage the 

services of an independent neutral body 

to fully police the obligations of the 

conference and its members. The 

agreement must include a description of 

any such neutral body authority and 

procedures related thereto. 

(b) State affirmatively that the 

conference parties shall not engage in 

conduct prohibited by sections 10(c)(1) 

or 10(c)(3) of the Act. 

(c) Specify the procedures for 

consultation with shippers and for 

handling shippers’ requests and 

complaints. 

64422 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

(d) Include provisions for 

independent action in accordance with 

§ 535.801 of this part. 

§ 535.406 Modification of agreements. 

The requirements of this section 

apply to all agreements except marine 

terminal agreements and assessment 

agreements. 

(a) Agreement modifications shall be 

filed in accordance with the provisions 

of §§ 535.401, 535.402, and 535.403. 

(b) Agreement modifications shall be 

made by reprinting the entire page on 

which the matter being changed is 

published (‘‘revised page’’). The revised 

page shall indicate the consecutive 

denomination of the revision (e.g., ‘‘1st 

Revised Page 7’’). Additional material 

may be published on a new original 

page. New original pages inserted 

between existing effective pages shall be 

numbered with an alpha suffix (e.g., a 

page inserted between page 7 and page 

8 shall be numbered 7a). 

(c) Each revised page shall be 

accompanied by a duplicate page, 

submitted for illustrative purposes only, 

indicating the language being modified 

in the following manner: 

(1) Language being deleted or 

superseded shall be struck through; and, 

(2) New and initial or replacement 

language shall immediately follow the 

language being superseded and be 

underlined. 

(d) If a modification requires the 

relocation of the provisions of the 

agreement, such modification shall be 

accompanied by a revised Table of 

Contents page that shall indicate the 

new location of the provisions. 

§ 535.407 Application for waiver. 

(a) Upon a showing of good cause, the 

Commission may waive the 

requirements of §§ 535.401, 535.403, 

535.404, 535.405, and 535.406. 

(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 

review of the agreement. 

§ 535.408 Activities that may be conducted 

without further filings. 

(a) Agreements that arise from 

authority of an effective agreement but 

whose terms are not fully set forth in the 

effective agreement to the extent 

required by § 535.402 are permitted 

without further filing only if they: 

(1) Are themselves exempt from the 

filing requirements of this part 

(pursuant to subpart C—Exemptions of 

this part); or 

(2) Are listed in paragraph (b) of this 

section. 

(b) Unless otherwise exempt in 

subpart C of this part, only the following 

technical or operational matters of an 

agreement’s affairs established pursuant 

to express enabling authority in an 

agreement are considered part of the 

effective agreement and do not require 

further filing under section 5 of the Act: 

(1) Establishment of tariff rates, rules 

and regulations and their joint 

publication; 

(2) The terms and conditions of space 

allocation and slot sales, the procedures 

for allocating space, the establishment 

of space charter rates, and the terms and 

conditions of charter parties; 

(3) Stevedoring, terminal, and related 

services including the operation of 

tonnage centers or other joint container 

marshaling facilities; 

(4) The following administrative 

matters: 

(i) Scheduling of agreement meetings; 

(ii) Collection, collation and 

circulation of data and reports from or 

to members; 

(iii) Procurement, maintenance, or 

sharing of office facilities, furnishings, 

equipment and supplies, the allocation 

and assessment of costs thereof, or the 

provisions for the administration and 

management of such agreements by duly 

appointed individuals; 

(iv) Procedures for anticipating 

parties’ space requirements; 

(v) Maintenance of books and records; 

and 

(vi) Details as to the following matters 

as between parties to the agreement: 

insurance, procedures for resolutions of 

disputes relating to loss and/or damage 

of cargo, and force majeure clauses; 

(5) The following operational matters: 

(i) Port rotations and schedule 

adjustments; and 

(ii) Changes in vessel size, number of 

vessels, or vessel substitution or 

replacement, if the resulting change is 

within a capacity range specified in the 

agreement; and 

(6) Neutral body policing (limited to 

the description of neutral body 

authority and procedures related 

thereto). 

Subpart E—Information Form 

Requirements 

§ 535.501 General requirements. 

(a) Agreements and modifications to 

agreements identified in § 535.502 shall 

be accompanied by an Information Form 

containing information and data on the 

agreement and the parties’ authority 

under the agreement. 

(b) Parties to an agreement subject to 

this subpart shall complete and submit 

an original and five copies of the 

Information Form at the time the 

agreement is filed. A copy of the Form 

in Microsoft Word and Excel format may 

be downloaded from the Commission’s 

home page at http://www.fmc.gov, or a 

paper copy of the Form may be obtained 

from the Bureau of Trade Analysis. In 

lieu of submitting paper copies, parties 

may complete and submit their 

Information Form in the Commission’s 

prescribed electronic format, either on 

diskette or CD–ROM. 

(c) A complete response in 

accordance with the instructions on the 

Information Form shall be supplied to 

each item. If a party to the agreement 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) Agreement parties may 

supplement the Information Form with 

any additional information or material 

to assist the Commission’s review of an 

agreement. 

(e) The Information Form and any 

additional information submitted in 

conjunction with the filing of an 

agreement shall not be disclosed by the 

Commission except as provided in 

§ 535.608. 

§ 535.502 Agreements subject to the 

Information Form requirements. 

Agreements and modifications to 

agreements between or among ocean 

common carriers subject to this subpart 

are: 

(a) All agreements identified in 

§ 535.201(a), except for low market 

share agreements identified in 

§ 535.311; 

(b) Modifications to an agreement that 

add any of the following authorities: 

(1) The discussion of, or agreement 

upon, whether on a binding basis under 

a common tariff or a non-binding basis, 

any kind of rate or charge; 

(2) The discussion of, or agreement 

on, capacity rationalization; 

(3) The establishment of a joint 

service; 

(4) The pooling or division of cargo 

traffic, earnings, or revenues and/or 

losses; or 

(5) The discussion of, or agreement 

on, any service contract matter; and 

(c) Modifications that expand the 

geographic scope of an agreement 

containing any authority identified in 

§ 535.502(b). 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64423 

§ 535.503 Information Form. 

(a) The Information Form, with 

instructions, for agreements and 

modifications to agreements subject to 

this subpart, are set forth in sections I 

through V of appendix A of this part. 

The instructions should be read in 

conjunction with the Act and this part. 

(b) The Information Form shall apply 

as follows: 

(1) Sections I and V shall be 

completed by parties to all agreements 

identified in § 535.502; 

(2) Section II shall be completed by 

parties to agreements identified in 

§ 535.502(a) that contain any of the 

following authorities: the charter or use 

of vessel space in exchange for 

compensation or services; or the 

rationalization of sailings or services 

relating to a schedule of ports, the 

frequency of vessel calls at ports, or the 

size and capacity of vessels for 

deployment. Such authorities do not 

include the establishment of a joint 

service, nor capacity rationalization; 

(3) Section III shall be completed by 

parties to agreements identified in 

§ 535.502 that contain the authority to 

discuss or agree on capacity 

rationalization; and 

(4) Section IV shall be completed by 

parties to agreements identified in 

§ 535.502 that contain any of the 

following authorities: 

(i) The discussion of, or agreement 

upon, whether on a binding basis under 

a common tariff or a non-binding basis, 

any kind of rate or charge; 

(ii) The establishment of a joint 

service; 

(iii) The pooling or division of cargo 

traffic, earnings, or revenues and/or 

losses; or 

(iv) The discussion of, or agreement 

on, any service contract matter. 

§ 535.504 Application for waiver. 

(a) Upon a showing of good cause, the 

Commission may waive any part of the 

Information Form requirements in this 

subpart. 

(b) A request for such a waiver must 

be submitted and approved by the 

Commission in advance of the filing of 

the Information Form to which the 

requested waiver would apply. Requests 

for a waiver shall be submitted in 

writing to the Director, Bureau of Trade 

Analysis, Federal Maritime 

Commission, Washington, DC 20573–

0001, and shall state: 

(1) The specific requirements from 

which relief is sought; 

(2) The special circumstances 

requiring the requested relief; 

(3) Relevant trade and industry data 

and information to substantiate and 

support the special circumstances 

requiring the requested relief; 

(4) Why granting the requested waiver 

will not substantially impair effective 

review of the agreement; and 

(5) A description of the full 

membership, geographic scope, and 

authority of the agreement or the 

agreement modification that is to be 

filed with the Commission. 

(c) The Commission may take into 

account the presence or absence of 

shipper complaints as well as the past 

compliance of the agreement parties 

with any reporting requirement under 

this part in considering an application 

for a waiver. 

Subpart F—Action on Agreements 

§ 535.601 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 

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 

§ 535.504. 

(b)(1) The Commission shall reject 

any agreement that fails to comply 

substantially with the filing and 

Information Form of the Act and this 

part. The Commission shall notify the 

filing party in writing of the reason for 

rejection of the agreement. The original 

filing, along with any supplemental 

information or documents submitted, 

shall be returned to the filing party. 

(2) Should a rejected agreement be 

refiled, the full 45-day waiting period 

will apply to the refiled agreement. 

§ 535.602 Federal Register notice. 

(a) A notice of any filed agreement 

will be transmitted to the Federal 

Register within seven days of the date 

of filing. 

(b) The notice will include: 

(1) A short title for the agreement; 

(2) The identity of the parties to the 

agreement and the filing party; 

(3) The Federal Maritime Commission 

agreement number; 

(4) A concise summary of the 

agreement’s contents; 

(5) A statement that the agreement is 

available for inspection at the 

Commission’s offices; and 

(6) The final date for filing comments 

regarding the agreement. 

§ 535.603 Comment. 

(a) Persons may file with the Secretary 

written comments regarding a filed 

agreement. Such comments will be 

submitted in an original and ten (10) 

copies and are not subject to any 

limitations except the time limits 

provided in the Federal Register notice. 

Late-filed comments will be received 

only by leave of the Commission and 

only upon a showing of good cause. If 

requested, comments and any 

accompanying material shall be 

accorded confidential treatment to the 

fullest extent permitted by law. Such 

requests must include a statement of 

legal basis for confidential treatment 

including the citation of appropriate 

statutory authority. Where a 

determination is made to disclose all or 

a portion of a comment, 

notwithstanding a request for 

confidentiality, the party requesting 

confidentiality will be notified prior to 

disclosure. 

(b) The filing of a comment does not 

entitle a person to: 

(1) A reply to the comment by the 

Commission; 

(2) The institution of any Commission 

or court proceeding; 

(3) Discussion of the comment in any 

Commission or court proceeding 

concerning the filed agreement; or 

(4) Participation in any proceeding 

that may be instituted. 

§ 535.604 Waiting period. 

(a) The waiting period before an 

agreement becomes effective shall 

commence on the date that an 

agreement is filed with the Commission. 

(b) Unless suspended by a request for 

additional information or extended by 

court order, the waiting period 

terminates and an agreement becomes 

effective on the latter of the 45th day 

after the filing of the agreement with the 

Commission or on the 30th day after 

publication of notice of the filing in the 

Federal Register. 

(c) The waiting period is suspended 

on the date when the Commission, 

either orally or in writing, requests 

additional information or documentary 

materials pursuant to section 6(d) of the 

Act. A new 45-day waiting period 

begins on the date of receipt of all the 

additional material requested or of a 

statement of the reasons for 

noncompliance, and the agreement 

becomes effective in 45 days unless the 

waiting period is further extended by 

court order or the Commission grants 

expedited review. 

§ 535.605 Requests for expedited review. 

(a) Upon written request of the filing 

party, the Commission may shorten the 

waiting period. In support of a request, 

the filing party should provide a full 

explanation, with reference to specific 

facts and circumstances, of the necessity 

for a shortened waiting period. In 

64424 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

reviewing requests, the Commission 

will consider the parties’ needs and the 

Commission’s ability to complete its 

review of the agreement’s potential 

impact. In no event, however, may the 

period be shortened to less than 

fourteen (14) days after the publication 

of the notice of the filing of the 

agreement in the Federal Register. 

When a request for expedited review is 

denied, the normal 45-day waiting 

period will apply. Requests for 

expedited review will not be granted 

routinely and will be granted only on a 

showing of good cause. Good cause 

would include, but is not limited to, the 

impending expiration of the agreement; 

an operational urgency; Federal or State 

imposed time limitations; or other 

reasons that, in the Commission’s 

discretion, constitute grounds for 

granting the request. 

(b) A request for expedited review 

will be considered for an agreement 

whose 45-day waiting period has begun 

anew after being stopped by a request 

for additional information. 

§ 535.606 Requests for additional 

information. 

(a) The Commission may request from 

the filing party any additional 

information and documents necessary to 

complete the statutory review required 

by the Act. The request shall be made 

prior to the expiration of the 45-day 

waiting period. All responses to a 

request for additional information shall 

be submitted to the Director, Bureau of 

Trade Analysis, Federal Maritime 

Commission, Washington, DC 20573. 

(b) Where the Commission has made 

a request for additional information, the 

agreement’s effective date will be 45 

days after receipt of the complete 

response to the request for additional 

information. If all questions are not fully 

answered or requested documents are 

not supplied, the parties must include a 

statement of reasons why questions 

were not fully answered or documents 

supplied. In the event all material is not 

submitted, the agreement’s effective 

date will be 45 days after receipt of both 

the documents and information which 

are submitted, if any, and the statement 

indicating the reasons for 

noncompliance. The Commission may, 

upon notice to the Attorney General, 

and pursuant to sections 6(i) and 6(k) of 

the Act, request the United States 

District Court for the District of 

Columbia to further extend the 

agreement’s effective date until there 

has been substantial compliance. 

(c) A request for additional 

information may be made orally or in 

writing. In the case of an oral request, 

a written confirmation of the request 

shall be mailed to the filing party within 

seven days of the oral request. 

(d) The Commission will publish a 

notice in the Federal Register that it has 

requested additional information and 

serve that notice on any commenting 

parties. The notice will indicate only 

that a request was made and will not 

specify what information is being 

sought. Interested parties will have 

fifteen (15) days after publication of the 

notice to file further comments on the 

agreement. 

§ 535.607 Failure to comply with requests 

for additional information. 

(a) A failure to comply with a request 

for additional information results when 

a person filing an agreement, or an 

officer, director, partner, agent, or 

employee thereof fails to substantially 

respond to the request or does not file 

a satisfactory statement of reasons for 

noncompliance. An adequate response 

is one which directly addresses the 

Commission’s request. When a response 

is not received by the Commission 

within a specified time, failure to 

comply will have occurred. 

(b) The Commission may, pursuant to 

section 6(i) of the Act, request relief 

from the United States District Court for 

the District of Columbia when it 

considers that there has been a failure 

to substantially comply with a request 

for additional information. The 

Commission may request that the court: 

(1) Order compliance with the 

request; 

(2) Extend the review period until 

there has been substantial compliance; 

or 

(3) Grant other equitable relief that 

under the circumstances seems 

necessary or appropriate. 

(c) Where there has been a failure to 

substantially comply, section 6(i)(2) of 

the Act provides that the court shall 

extend the review period until there has 

been substantial compliance. 

§ 535.608 Confidentiality of submitted 

material. 

(a) Except for an agreement filed 

under section 5 of the Act, all 

information submitted to the 

Commission by the filing party will be 

exempt from disclosure under 5 U.S.C. 

552. Included in this disclosure 

exemption is information provided in 

the Information Form, voluntary 

submission of additional information, 

reasons for noncompliance, and replies 

to requests for additional information. 

(b) Information that is confidential 

pursuant to paragraph (a) of this section 

may be disclosed, however, to the 

extent: 

(1) It is relevant to an administrative 

or judicial action or proceeding; or 

(2) It is disclosed to either body of 

Congress or to a duly authorized 

committee or subcommittee of Congress. 

(c) Parties may voluntarily disclose or 

make information publicly available. If 

parties elect to disclose information 

they shall promptly inform the 

Commission. 

§ 535.609 Negotiations. 

At any time after the filing of an 

agreement and prior to the conclusion of 

judicial injunctive proceedings, the 

filing party or an authorized 

representative may submit additional 

factual or legal support for an agreement 

or may propose modifications of an 

agreement. Such negotiations between 

Commission personnel and filing parties 

may continue during the pendency of 

injunctive proceedings. Shippers, other 

government departments or agencies, 

and other third parties may not 

participate in these negotiations. 

Subpart G—Reporting Requirements 

§ 535.701 General requirements. 

(a) Parties to agreements identified in 

§ 535.702(a) shall submit quarterly 

Monitoring Reports on an ongoing basis 

for as long as the agreement remains in 

effect, containing information and data 

on the agreement and the parties’

authority under the agreement. 

(b) Parties to agreements identified in 

§ 535.704 are required to submit 

minutes of their meetings for as long as 

their agreements remain in effect. 

(c) If a joint service is a party to an 

agreement that is 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) Monitoring Reports and minutes 

required to be filed by this subpart 

should be submitted to: Director, Bureau 

of Trade Analysis, Federal Maritime 

Commission, Washington, DC 20573–

0001. A copy of the Monitoring Report 

form in Microsoft Word and Excel 

format may be downloaded from the 

Commission’s home page at http:// 

www.fmc.gov, or a paper copy may be 

obtained from the Bureau of Trade 

Analysis. In lieu of submitting paper 

copies, parties may complete and 

submit their Monitoring Reports in the 

Commission’s prescribed electronic 

format, either on diskette or CD–ROM. 

(e)(1) The regulations in this 

paragraph (e) are stayed until further 

notice. 

(2) Reports and minutes required to be 

filed by this subpart may be filed by 

direct electronic transmission in lieu of 

hard copy. Detailed information on 

electronic transmission is available from 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64425 

the Commission’s Bureau of Trade 

Analysis. Certification and signature 

requirements of this subpart can be met 

on electronic transmissions through use 

of a pre-assigned Personal Identification 

Number (PIN) obtained from the 

Commission. PINs can be obtained by 

submission by an official of the filing 

party of a statement to the Commission 

agreeing that inclusion of the PIN in the 

transmission constitutes the signature of 

the official. Only one PIN will be issued 

for each agreement. Where a filing party 

has more than one official authorized to 

file minutes or reports, each additional 

official must submit such a statement 

countersigned by the principal official 

of the filing party. Each filing official 

will be issued a unique password. A PIN 

or designation of authorized filing 

officials may be canceled or changed at 

any time upon the written request of the 

principal official of the filing party. 

Direct electronic transmission filings 

may be made at any time except 

between the hours of 8:30 a.m. and 2 

p.m. Eastern time on Commission 

business days. 

(f) Time for filing. Except as otherwise 

instructed, Monitoring Reports shall be 

filed within 75 days of the end of each 

calendar quarter. Minutes of meetings 

shall be filed within 21 days after the 

meeting. Other documents shall be filed 

within 15 days of the receipt of a 

request for documents. 

(g) A complete response in 

accordance with the instructions on the 

Monitoring Report shall be supplied to 

each item. If a party to an agreement 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 relevant 

information or documentary material. 

(i) Confidentiality. (1) The Monitoring 

Reports, minutes, and any other 

additional information submitted by 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. 

(j) Monitoring Report or alternative 

periodic reporting requirements in this 

subpart shall not be construed to 

authorize the exchange or use by or 

among agreement members of 

information required to be submitted. 

§ 535.702 Agreements subject to 

Monitoring Report and alternative periodic 

reporting requirements. 

(a) Agreements subject to the 

Monitoring Report requirements of this 

subpart are: 

(1) An agreement that contains the 

authority to discuss or agree on capacity 

rationalization; or 

(2) Where the parties to an agreement 

hold a combined market share, based on 

cargo volume, of 35 percent or more in 

the entire U.S. inbound or outbound 

geographic scope of the agreement and 

the agreement contains any of the 

following authorities: 

(i) The discussion of, or agreement 

upon, whether on a binding basis under 

a common tariff or a non-binding basis, 

any kind of rate or charge; 

(ii) The establishment of a joint 

service; 

(iii) The pooling or division of cargo 

traffic, earnings, or revenues and/or 

losses; or 

(iv) The discussion of, or agreement 

on, any service contract matter. 

(b) The determination of an 

agreement’s reporting obligation under 

§ 535.702(a)(2) in the first instance shall 

be based on the market share data 

reported on the agreement’s Information 

Form pursuant to § 535.503. Thereafter, 

at the beginning of each calendar year, 

the Bureau of Trade Analysis will notify 

the agreement parties of any changes in 

its reporting requirements based on 

market share data reported on the 

agreement’s quarterly Monitoring Report 

for the previous second quarter (AprilJune). 

(c) The Commission may require, as 

necessary, that the parties to an 

agreement with market share below the 

35 percent threshold, as identified and 

defined in § 535.702(a)(2), submit 

Monitoring Reports pursuant to 

§ 535.703. 

(d) In addition to or instead of the 

Monitoring Report in § 535.703, the 

Commission may prescribe, as 

necessary, alternative periodic reporting 

requirements for parties to any 

agreement identified in § 535.201. 

§ 535.703 Monitoring Report form. 

(a) For agreements subject to the 

Monitoring Report requirements in 

§ 535.702(a), the Monitoring Report 

form, with instructions, is set forth in 

sections I through III of appendix B of 

this part. The instructions should be 

read in conjunction with the Act and 

this part. 

(b) The Monitoring Report shall apply 

as follows: 

(1) Section I shall be completed by 

parties to agreements identified in 

§ 535.702(a)(1); 

(2) Section II shall be completed by 

parties to agreements identified in 

§ 535.702(a)(2); and 

(3) Section III shall be completed by 

parties to all agreements identified in 

§ 535.702(a). 

(c) In accordance with the 

requirements and instructions in 

appendix B of this part, parties to an 

agreement subject to part 2(C) of section 

I of the Monitoring Report shall submit 

a narrative statement on any significant 

reductions in vessel capacity that the 

parties will implement under the 

agreement. The term ‘‘a significant 

reduction’’ is defined in appendix B. 

The narrative statement shall be 

submitted to the Director, Bureau of 

Trade Analysis, no later than 15 days 

after a significant reduction in vessel 

capacity has been agreed upon by the 

parties but prior to the implementation 

of the actual reduction under the 

agreement. 

(d)(1) The Commission may require, 

in its discretion, that the information on 

the top agreement commodities in part 

4 of section II of the Monitoring Report 

be reported on a sub-trade basis, as 

defined in appendix B of this part, 

rather than on an agreement-wide basis. 

When commodity sub-trade information 

is required under this section, the 

Commission shall notify the parties to 

the agreement. 

(2) For purposes of § 535.703(d)(1), 

the top agreement commodities shall 

mean the top 10 liner commodities 

(including commodities not subject to 

tariff publication) carried by all the 

agreement parties in each sub-trade 

within the geographic scope of the 

agreement during the calendar quarter. 

Where the agreement covers both U.S. 

inbound and outbound liner 

movements, inbound and outbound subtrades shall be stated separately. All 

other instructions, definitions, and 

terms shall apply as specified and 

required in appendix B of this part. 

§ 535.704 Filing of minutes. 

(a) Agreements required to file 

minutes. 

(1) This section applies to agreements 

authorized to engage in any of the 

following activities: discussion or 

establishment of any type of rates or 

charges, whether in tariffs or service 

contracts; pooling or apportionment of 

cargo traffic; discussion of revenues, 

losses, or earnings; or discussion or 

64426 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

agreement on service contract matters, 

including the establishment of 

voluntary service contract guidelines. 

(2) Each agreement to which this 

section applies shall file with the 

Commission, through a designated 

official, minutes of all meetings defined 

in paragraph (b) of this section, except 

as provided in paragraph (d) of this 

section. 

(b) Meetings. For purposes of this 

subpart, the term meeting shall include 

all discussions at which any agreement 

is reached among any number of the 

parties to an agreement relating to the 

business of the agreement, and all other 

discussions among three or more 

members of the agreement (or all 

members if fewer than three) relating to 

the business of the agreement. This 

includes, but is not limited to, meetings 

of the members’ agents, principals, 

owners, officers, employees, 

representatives, committees, or 

subcommittees, and communications 

among members facilitated by 

agreement officials. Discussions 

conducted by telephone, electronic 

device, or other means are included. 

(c) Content of minutes. Minutes shall 

include the following: 

(1) The date, time, and place of the 

meeting; 

(2) A list of participants and 

companies represented; 

(3) A description of discussions 

detailed enough so that a nonparticipant reading the minutes could 

reasonably gain a clear understanding of 

the nature and extent of the discussions 

and, where applicable, any decisions 

reached. Such description need not 

disclose the identity of the parties that 

participated in the discussion or the 

votes taken; and 

(4) Any report, circular, notice, 

statistical compilation, analytical study, 

survey, or other work distributed, 

discussed, or exchanged at the meeting, 

whether presented by oral, written, 

electronic, or other means. Where the 

aforementioned materials are reasonably 

available to the public, a citation to the 

work or relevant part thereof is 

acceptable in lieu of the actual work. 

Any documents submitted to the 

Commission pursuant to this section 

need not disclose the identity of the 

party or parties that circulated the 

document at the meeting. 

(d) Exemption. For parties to 

agreements subject to this section, the 

following exemption shall apply: 

(1) Minutes of meetings between 

parties are not required to reflect 

discussions of matters set forth in 

§ 535.408(b)(2), (b)(3), (b)(4)(iii), 

(b)(4)(v), and (b)(4)(vi); 

(2) Minutes of meetings between 

parties are not required to reflect 

discussion of matters set forth in 

§ 535.408(b)(5) to the extent that such 

discussions involve minor operational 

matters that have little or no impact on 

the frequency of vessel calls at ports or 

the amount of vessel capacity offered by 

the parties in the geographic scope of 

the agreement; and 

(3) Minutes of meetings between 

parties are not required to reflect 

discussions of or actions taken with 

regard to rates that, if adopted, would be 

required to be published in an 

appropriate tariff. This exemption does 

not apply to discussions concerning 

general rate policy, general rate changes, 

the opening or closing of rates, service 

contracts, or time/volume rates. 

(e) Serial numbers. Each set of 

minutes filed with the Commission 

shall include the agreement name and 

FMC number and a unique 

identification number indicating the 

sequence in which the meeting took 

place during the calendar year. 

§ 535.705 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 submitted and approved by the 

Commission in advance of the filing of 

the Monitoring Report or minutes to 

which the requested waiver would 

apply. Requests for a waiver shall be 

submitted in writing to the Director, 

Bureau of Trade Analysis, Federal 

Maritime Commission, Washington, DC 

20573–0001, and shall state and provide 

the following: 

(1) The specific requirements from 

which relief is sought; 

(2) The special circumstances 

requiring the requested relief; 

(3) Relevant trade and industry data 

and information to substantiate and 

support the special circumstances 

requiring the requested relief; and 

(4) Why granting the requested waiver 

will not substantially impair effective 

monitoring of the agreement. 

(c) The Commission may take into 

account the presence or absence of 

shipper complaints as well as the past 

compliance of the agreement parties 

with any reporting requirement under 

this part in considering an application 

for a waiver. 

Subpart H—Mandatory and Prohibited 

Provisions 

§ 535.801 Independent action. 

(a) Each conference agreement shall 

specify the independent action (‘‘IA’’) 

procedures of the conference, which 

shall provide that any conference 

member may take independent action 

on any rate or service item upon not 

more than 5 calendar days’ notice to the 

conference and shall otherwise be in 

conformance with section 5(b)(8) of the 

Act. 

(b)(1) Each conference agreement that 

provides for a period of notice for 

independent action shall establish a 

fixed or maximum period of notice to 

the conference. A conference agreement 

shall not require or permit a conference 

member to give more than 5 calendar 

days’ notice to the conference, except 

that in the case of a new or increased 

rate the notice period shall conform to 

the tariff publication requirements of 

this chapter. 

(2) A conference agreement shall not 

prescribe notice periods for adopting, 

withdrawing, postponing, canceling, or 

taking other similar actions on 

independent actions. 

(c) Each conference agreement shall 

indicate the conference official, single 

designated representative, or conference 

office to which notice of independent 

action is to be provided. A conference 

agreement shall not require notice of 

independent action to be given by the 

proposing member to the other parties 

to the agreement. 

(d) A conference agreement shall not 

require a member who proposes 

independent action to attend a 

conference meeting, to submit any 

further information other than that 

necessary to accomplish the publication 

of the independent tariff item, or to 

comply with any other procedure for the 

purpose of explaining, justifying, or 

compromising the proposed 

independent action. 

(e) A conference agreement shall 

specify that any new rate or service item 

proposed by a member under 

independent action (except for exempt 

commodities not published in the 

conference tariff) shall be included by 

the conference in its tariff for use by that 

member effective no later than 5 

calendar days after receipt of the notice 

and by any other member that notifies 

the conference that it elects to adopt the 

independent rate or service item on or 

after its effective date. 

(f)(1) As it pertains to this part, 

‘‘adopt’’ means the assumption in 

identical form of an originating 

member’s independent action rate or 

service item, or a particular portion of 

such a rate or service item. If a carrier 

adopts an IA at a lower rate than the 

conference rate when there is less than 

30 days remaining on the original IA, 

the adopted IA should be made to 

expire 30 days after its effectiveness to 

comply with the statutory 30-day notice 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64427 

requirement. In the case of an 

independent action time/volume rate 

(‘‘IA TVR’’), the dates of the adopting IA 

may vary from the dates of the original 

IA, so long as the duration of the 

adopting IA is the same as that of the 

originating IA. Furthermore, no term 

other than ‘‘adopt’’ (e.g., ‘‘follow,’’

‘‘match’’) can be used to describe the 

action of assuming as one’s own an 

initiating carrier’s IA. Additionally, if a 

party to an agreement chooses to take on 

an IA of another party, but alters it, such 

action is considered a new IA and must 

be published pursuant to the IA 

publication and notice provisions of the 

applicable agreement. 

(2) An IA TVR published by a member 

of a ratemaking agreement may be 

adopted by another member of the 

agreement, provided that the adopting 

member takes on the original IA TVR in 

its entirety without change to any aspect 

of the original rate offering (except 

beginning and ending dates in the time 

period) (i.e., a separate TVR with a 

separate volume of cargo but for the 

same duration). Any subsequent IA TVR 

offering that results in a change in any 

aspect of the original IA TVR, other than 

the name of the offering carrier or the 

beginning date of the adopting IA TVR, 

is a new independent action and shall 

be processed in accordance with the 

provisions of the applicable agreement. 

The adoption procedures discussed 

above do not authorize the participation 

by an adopting carrier in the cargo 

volume of the originating carrier’s IA 

TVR. Member lines may publish and 

participate in joint IA TVRs, if 

permitted to do so under the terms of 

their agreement; however, no carrier 

may participate in an IA TVR already 

published by another carrier. 

(g) A conference agreement shall not 

require or permit individual member 

lines to be assessed on a per carrier 

usage basis the costs and/or 

administrative expenses incurred by the 

agreement in processing independent 

action filings. 

(h) A conference agreement may not 

permit the conference to unilaterally 

designate an expiration date for an 

independent action taken by a member 

line. The right to determine the duration 

of an IA remains with the member line, 

and a member line must be given the 

opportunity to designate whatever 

duration it chooses for its IA, regardless 

if the duration is for a specified period 

or open ended. Only in instances where 

a member line gives its consent to the 

conference, or where a member line 

freely elects not to provide for the 

duration of its IA after having been 

given the opportunity, can the 

conference designate an expiration date 

for the member line’s IA. 

(i) Any new conference agreement or 

any modification to an existing 

conference agreement that does not 

comply with the requirements of this 

section shall be rejected pursuant to 

§ 535.601 of this part. 

(j) If ratemaking is by sections within 

a conference, then any notice to the 

conference required by § 535.801 may 

be made to the particular ratemaking 

section. 

§ 535.802 Service contracts. 

(a) Ocean common carrier agreements 

may not prohibit or restrict a member or 

members of the agreement from 

engaging in negotiations for service 

contracts with one or more shippers. 

(b) Ocean common carrier agreements 

may not require a member or members 

of the agreement to disclose a 

negotiation on a service contract, or the 

terms and conditions of a service 

contract, other than those terms or 

conditions required by section 8(c)(3) of 

the Act. 

(c) Ocean common carrier agreements 

may not adopt mandatory rules or 

requirements affecting the right of an 

agreement member or agreement 

members to negotiate or enter into 

service contracts. 

(d) An agreement may provide 

authority to adopt voluntary guidelines 

relating to the terms and procedures of 

an agreement member’s or agreement 

members’ service contracts if the 

guidelines explicitly state the right of 

the members of the agreement not to 

follow these guidelines. 

(e) Voluntary guidelines shall be 

submitted to the Director, Bureau of 

Trade Analysis, Federal Maritime 

Commission, Washington, DC 20573–

0001. Voluntary guidelines shall be kept 

confidential in accordance with 

§ 535.608 of this part. Use of voluntary 

guidelines prior to their submission is 

prohibited. 

§ 535.803 Ocean freight forwarder 

compensation. 

No conference or group of two or 

more ocean common carriers may: 

(a) Deny to any member of such 

conference or group the right, upon 

notice of not more than 5 calendar days, 

to take independent action on any level 

of compensation paid to an ocean 

freight forwarder; or 

(b) Agree to limit the payment of 

compensation to an ocean freight 

forwarder to less than 1.25 percent of 

the aggregate of all rates and charges 

applicable under the tariff assessed 

against the cargo on which the 

forwarding services are provided. 

Subpart I—Penalties 

§ 535.901 Failure to file. 

Any person operating under an 

agreement, involving activities subject 

to the Act pursuant to sections 4 and 

5(a) of the Act and this part and not 

exempted pursuant to section 16 of the 

Act or excluded from filing by the Act, 

that has not been filed and that has not 

become effective pursuant to the Act 

and this part is in violation of the Act 

and this part and is subject to the civil 

penalties set forth in section 13(a) of the 

Act. 

§ 535.902 Falsification of reports. 

Knowing falsification of any report 

required by the Act or this part, 

including knowing falsification of any 

item in any applicable agreement 

information and/or reporting 

requirements pursuant to subparts E and 

G of this part, 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. 

Subpart J—Paperwork Reduction 

§ 535.991 OMB control numbers assigned 

pursuant to the Paperwork Reduction Act. 

This section displays the control 

number assigned to information 

collection requirements of the 

Commission in this part by the Office of 

Management and Budget pursuant to the 

Paperwork Reduction Act of 1995, Pub. 

L. 104–13. The Commission intends that 

this section comply with the 

requirements of section 3507(a)(3) of the 

Paperwork Reduction Act, which 

requires that agencies display a current 

control number assigned by the Director 

of the Office of Management and Budget 

(OMB) for each agency information 

collection requirement in the following 

table: 

Section Current OMB 

control No. 

535.101 through 535.902 ..... 3072–0045 

Appendix A to Part 535—Information 

Form and Instructions 

Information Form Instructions 

1. All agreements and modifications to 

agreements between or among ocean 

common carriers identified in 46 CFR 

535.502 must be accompanied by a 

completed Information Form to the full 

extent required in sections I through V of this 

Form. Sections I and V must be completed 

by all such agreements. In addition, sections 

II, III and IV must be completed, as 

applicable, in accordance with the authority 

contained in each agreement. Where an 

64428 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

agreement containing multiple authorities is 

subject to duplicate reporting requirements 

in the various sections of this Form, the 

parties may provide only one response so 

long as the reporting requirements within 

each section are fully addressed. The 

Information Form specifies the data and 

information which must be reported for each 

section and the format in which it must be 

provided. If a party to an agreement is unable 

to supply a complete response to any item of 

this Form, 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 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. 

2. For clarification of the agreement 

terminology used in this Form, the parties 

may refer to the definitions provided in 46 

CFR 535.104. In addition, the following 

definitions shall apply for purposes of this 

Form: liner movement means the carriage of 

liner cargo by liner operators; liner cargo 

means cargo carried on liner vessels in a liner 

service; liner operator means a vesseloperating common carrier engaged in liner 

service; liner vessel means a vessel used in 

a liner service; liner service means a definite, 

advertised schedule of sailings at regular 

intervals; and TEU means a unit of 

measurement equivalent to one 20-foot 

shipping container. Further, when used in 

this Form, the terms ‘‘entire geographic scope 

of the agreement’’ or ‘‘agreement-wide’’ refer 

to the combined U.S. inbound trade and/or 

the combined U.S. outbound trade as such 

trades apply to the geographic scope of the 

agreement, as opposed to the term ‘‘subtrade,’’ which is defined for reporting 

purposes as the scope of all liner movements 

between each U.S. port range and each 

foreign country within the scope of the 

agreement. Whether required on a combined 

trade basis or a sub-trade basis, the U.S. 

inbound trade (or sub-trades) and the U.S. 

outbound trade (or sub-trades) shall always 

be stated separately. 

Section I 

Section I applies to all agreements 

identified in 46 CFR 535.502. Parties to such 

agreements must complete parts 1 through 4 

of this section. The authorities listed in part 

4 of this section do not necessarily include 

all of the authorities that must be set forth in 

an agreement filed under the Act. The 

specific authorities between the parties to an 

agreement, however, must be set forth, 

clearly and completely, in a filed agreement 

in accordance with 46 CFR 535.402. 

Part 1 

State the full name of the agreement. 

Part 2 

Provide a narrative statement describing 

the specific purpose(s) of the agreement 

pertaining to the parties’ business activities 

as ocean common carriers in the foreign 

commerce of the United States, and the 

commercial or other relevant circumstances 

within the geographic scope of the agreement 

that led the parties to enter into the 

agreement. 

Part 3 

List all effective agreements that cover all 

or part of the geographic scope of this 

agreement, and whose parties include one or 

more of the parties to this agreement. 

Part 4(A) 

Identify whether the agreement authorizes 

the parties to discuss, or agree upon, whether 

on a binding basis under a common tariff or 

a non-binding basis, any kind of rate or 

charge. 

Part 4(B) 

Identify whether the agreement authorizes 

the parties to establish a joint service. 

Part 4(C) 

Identify whether the agreement authorizes 

the parties to pool cargo traffic or revenues. 

Part 4(D) 

Identify whether the agreement authorizes 

the parties to discuss, or agree on, any service 

contract matter. 

Part 4(E) 

Identify whether the agreement authorizes 

the parties to discuss or agree on capacity 

rationalization as defined in 46 CFR 

535.104(e). 

Part 4(F) 

Identify whether the agreement contains 

provisions that place conditions or 

restrictions on the parties’ agreement 

participation, and/or use or offering of 

competing services within the geographic 

scope of the agreement. 

Part 4(G) 

Identify whether the agreement authorizes 

the parties to charter or use vessel space in 

exchange for compensation or services. This 

authority does not include capacity 

rationalization as referred to in part 4(E) of 

this section. 

Part 4(H) 

Identify whether the agreement authorizes 

the parties to rationalize sailings or services 

relating to a schedule of ports, the frequency 

of vessel calls at ports, or the size and 

capacity of vessels for deployment. This 

authority does not include the establishment 

of a joint service or capacity rationalization 

as referred to in parts 4(B) and 4(E) of this 

section. 

Section II 

Section II applies to agreements identified 

in 46 CFR 535.502(a) that contain any of the 

following authorities: a) the charter or use of 

vessel space in exchange for compensation or 

services; or b) the rationalization of sailings 

or services relating to a schedule of ports, the 

frequency of vessel calls at ports, or the size 

and capacity of vessels for deployment. Such 

authorities do not include the establishment 

of a ‘‘joint service,’’ nor ‘‘capacity 

rationalization’’ as these terms are defined in 

46 CFR 535.104 (o) and (e). Parties to 

agreements identified in this section must 

complete all items in part 1. 

Part 1(A) 

For the most recent 12-month period for 

which complete data are available, provide 

the number of vessel calls each party made 

at each port for its liner services that would 

be covered by the agreement within the 

entire geographic scope of the agreement. 

Part 1(B) 

Provide a narrative statement on any 

significant changes, anticipated or planned to 

be implemented when the agreement goes 

into effect, in the number of vessel calls at 

a port for the parties’ liner services that 

would be covered by the agreement within 

the entire geographic scope of the agreement. 

Specifically, explain the nature of the 

significant change and its effect on the 

frequency of vessel calls at the port for the 

liner service that would be subject to the 

change. For purposes of this part, a 

significant change refers to an increase or a 

decrease in the number of vessel calls at a 

port for a fixed, seasonally planned, or 

indefinite period of time. A significant 

change excludes an incidental or temporary 

alteration in the number of vessel calls at a 

port, or an operational change in vessel calls 

that would have little or no impact on the 

number of vessel calls at a port. If no 

significant change is anticipated or planned, 

it shall be noted with the term ‘‘none’’ in 

response to part 1(B) of this section. 

Section III 

Section III applies to agreements identified 

in 46 CFR 535.502 that contain the authority 

to discuss or agree on capacity rationalization 

as defined in 46 CFR 535.104(e). Parties to 

such agreements must complete parts 1 and 

2 of this section. 

Part 1(A) 

1. For the most recent calendar quarter for 

which complete data are available, provide 

the amount of vessel capacity for each party 

for each of its liner services that would be 

covered by the agreement within the entire 

geographic scope of the agreement, stated 

separately for the U.S. inbound and 

outbound trades as applicable to the 

geographic scope of the agreement. For 

purposes of this Form, vessel capacity means 

a party’s total commercial liner space on linehaul vessels, whether operated by it or other 

parties from whom space is obtained, sailing 

to and/or from the continent of North 

America for each of its liner services that 

would be covered by the agreement. 

2. When 50 percent or more of the total 

liner cargo carried by all the parties in the 

geographic scope of the agreement during the 

calendar quarter was containerized, the 

amount(s) of vessel capacity for each party 

shall be reported in TEUs. When 50 percent 

or more of the total liner cargo carried by all 

the parties in the geographic scope of the 

agreement during the calendar quarter was 

non-containerized, the amount(s) of vessel 

capacity for each party shall be reported in 

non-containerized units of measurement. The 

unit of measurement used in calculating the 

amounts of non-containerized vessel capacity 

must be specified clearly and consistently 

applied. 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64429 

Part 1(B) 

Provide the percentage of vessel capacity 

utilization for each party for each of its liner 

services that would be covered by the 

agreement within the entire geographic scope 

of the agreement, corresponding to the 

figures and time period used in part 1(A) of 

this section, stated separately for the U.S. 

inbound and outbound trades as applicable 

to the geographic scope of the agreement. For 

purposes of this Form, the percentage of 

vessel capacity utilization means a party’s 

total volume of liner cargo, for each of its 

liner services that would be covered by the 

agreement, carried on any vessel space 

counted under part 1(A) of this section, 

divided by its total vessel capacity as defined 

and derived in part 1(A) of this section, 

which quotient is multiplied by 100. 

Part 1(C) 

Provide a narrative statement on any 

significant changes, anticipated or planned to 

be implemented when the agreement goes 

into effect, in the amounts of vessel capacity 

for the parties’ liner services that would be 

covered by the agreement within the entire 

geographic scope of the agreement. 

Specifically, explain the nature of and the 

reasons for the significant change and its 

effects on the liner service and the total 

amount of vessel capacity for such service 

that would be subject to the change. For 

purposes of this part, a significant change 

refers to the removal from or addition to a 

liner service of vessels or vessel space for a 

fixed, seasonally planned, or indefinite 

period of time. A significant change excludes 

instances when vessels may be temporarily 

repositioned or shifted from one service to 

another, or when vessel space may be 

temporarily altered, or when vessels are 

removed from a liner service and vessels of 

similar capacity are substituted. It also 

excludes operational changes in vessels or 

vessel space that would have little or no 

impact on the amount of vessel capacity 

offered in a liner service or a trade. If no 

significant change is anticipated or planned, 

it shall be noted with the term ‘‘none’’ in 

response to part 1(C) of this section. 

Part 2(A) 

For the most recent 12-month period for 

which complete data are available, provide 

the number of vessel calls each party made 

at each port for its liner services that would 

be covered by the agreement within the 

entire geographic scope of the agreement. 

Part 2(B) 

Provide a narrative statement on any 

significant changes, anticipated or planned to 

be implemented when the agreement goes 

into effect, in the number of vessel calls at 

a port for the parties’ liner services that 

would be covered by the agreement within 

the entire geographic scope of the agreement. 

Specifically, explain the nature of the 

significant change and its effect on the 

frequency of vessel calls at the port for the 

liner service that would be subject to the 

change. For purposes of this part, a 

significant change refers to an increase or a 

decrease in the number of vessel calls at a 

port for a fixed, seasonally planned, or 

indefinite period of time. A significant 

change excludes an incidental or temporary 

alteration in the number of vessel calls at a 

port, or an operational change in vessel calls 

that would have little or no impact on the 

number of vessel calls at a port. If no 

significant change is anticipated or planned, 

it shall be noted with the term ‘‘none’’ in 

response to part 2(B) of this section. 

Section IV 

Section IV applies to agreements identified 

in 46 CFR 535.502 that contain any of the 

following authorities: a) the discussion of, or 

agreement upon, whether on a binding basis 

under a common tariff or a non-binding 

basis, any kind of rate or charge; b) the 

establishment of a joint service; c) the 

pooling or division of cargo traffic, earnings, 

or revenues and/or losses; or d) the 

discussion of, or agreement on, any service 

contract matter. Parties to such agreements 

must complete parts 1 through 5 of this 

section. 

Part 1 

1. For the most recent calendar quarter for 

which complete data are available, provide 

the market shares of all liner operators for the 

entire geographic scope of the agreement and 

in each sub-trade within the scope of the 

agreement. A joint service shall be treated as 

a single liner operator, whether it is an 

agreement line or a non-agreement line. Subtrade 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 shall be shown separately. 

2. U.S. port ranges are defined as follows: 

a. Atlantic and Gulf—Includes ports along 

the eastern seaboard and the Gulf of Mexico 

from the northern boundary of Maine to 

Brownsville, Texas. Also includes all ports 

bordering upon the Great Lakes and their 

connecting waterways, all ports in the State 

of New York on the St. Lawrence River, and 

all ports in Puerto Rico and the U.S. Virgin 

Islands. 

b. 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. 

3. An application may be filed for a waiver 

of the definition of ‘‘sub-trade’’ under the 

procedures described in 46 CFR 535.504. In 

any such application, the burden shall be on 

the parties 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 parties 

must further show that, though operating 

individually, they were nevertheless 

applying essentially similar regional 

practices. 

4. The formula for calculating market share 

in the entire agreement scope or in a subtrade 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 nonagreement lines as well as by agreement lines 

must be provided, stated separately in the 

format indicated. 

5. If 50 percent or more of the total liner 

cargo carried by the parties in the entire 

agreement scope 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 

parties was non-containerized, only noncontainerized liner movements must be used 

for determining market share. The unit of 

measurement used in calculating amounts of 

non-containerized cargo must be specified 

clearly and applied consistently. 

Part 2 

1. For each party that served all or any part 

of the geographic scope of the agreement 

during all or any part of the most recent 12- 

month period for which complete data are 

available, provide each party’s total liner 

revenues within the geographic scope, total 

liner cargo carried within the geographic 

scope, and average revenue. For purposes of 

this Form, total liner revenues means the 

total revenues, in U.S. dollars, of each party 

corresponding to its total cargo carried for its 

liner services that would fall under the 

agreement, inclusive of all ocean freight 

charges, whether assessed on a port-to-port 

basis or a through intermodal basis; 

accessorial charges; surcharges; and charges 

for inland cargo carriage. Average revenue 

shall be calculated as the quotient of each 

party’s total liner revenues within the 

geographic scope divided by its total cargo 

carried within the geographic scope. 

2. When 50 percent or more of the total 

liner cargo carried by all the parties in the 

geographic scope of the agreement during the 

12-month period was containerized, each 

party shall report only its total carryings of 

containerized liner cargo (measured in TEUs) 

within the geographic scope, total revenues 

generated by its carriage of containerized 

liner cargo, and average revenue per TEU. 

When 50 percent or more of the total liner 

cargo carried by all the parties in the 

geographic scope of the agreement during the 

12-month period was non-containerized, 

each party shall 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. When the agreement covers 

both U.S. inbound and outbound liner 

movements, inbound and outbound data 

shall be stated separately. 

Part 3(A) 

For the same 12-month period used in part 

2 of this section, provide a list, for the entire 

geographic scope of the agreement, of the top 

10 liner commodities (including 

64430 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

commodities not subject to tariff publication) 

carried by all the parties for their liner 

services that would fall under the agreement. 

For purposes of this Form, commodities shall 

be identified at the 4-digit level of 

customarily used commodity coding 

schedules. When 50 percent or more of the 

total liner cargo carried by all the parties in 

the geographic scope of the agreement during 

the 12-month period was containerized, this 

list shall include only containerized 

commodities. When 50 percent or more of 

the total liner cargo carried by all the parties 

in the geographic scope of the agreement 

during the 12-month period was noncontainerized, this list shall include only 

non-containerized commodities. When the 

agreement covers both U.S. inbound and 

outbound liner movements, inbound and 

outbound data shall be stated separately. 

Part 3(B) 

Provide the cargo volume and revenue 

results for each party for each of the major 

commodities listed in part 3(A) of this 

section, corresponding to the same 12-month 

period and unit of measurement used. For 

purposes of this Form, revenue results means 

the revenues, in U.S. dollars, earned by each 

party on the cargo volume of each major 

commodity listed in part 3(A) of this section, 

inclusive of all ocean freight charges, 

whether assessed on a port-to-port basis or a 

through intermodal basis; accessorial 

charges; surcharges; and charges for inland 

cargo carriage. If a party has no cargo volume 

and revenue results for a commodity listed in 

part 3(A) of this section, it shall be noted by 

using a zero for that party in response to part 

3(B) of this section. 

Part 4(A) 

For the same calendar quarter used in part 

1 of this section, provide the amount of 

vessel capacity for each party for each of its 

liner services that would fall under the 

agreement within the entire geographic scope 

of the agreement, stated separately for the 

U.S. inbound and outbound trades as 

applicable to the geographic scope of the 

agreement. For purposes of this Form, vessel 

capacity means a party’s total commercial 

liner space on line-haul vessels, whether 

operated by it or other parties from whom 

space is obtained, sailing to and/or from the 

continent of North America for each of its 

liner services that would fall under the 

agreement. When 50 percent or more of the 

total liner cargo carried by all the parties in 

the geographic scope of the agreement during 

the calendar quarter was containerized, the 

amount(s) of vessel capacity for each party 

shall be reported in TEUs. When 50 percent 

or more of the total liner cargo carried by all 

the parties in the geographic scope of the 

agreement during the calendar quarter was 

non-containerized, the amount(s) of vessel 

capacity for each party shall be reported in 

non-containerized units of measurement. The 

unit of measurement used in calculating the 

amounts of non-containerized vessel capacity 

must be specified clearly and consistently 

applied. 

Part 4(B) 

Provide the percentage of vessel capacity 

utilization for each party for each of its liner 

services that would fall under the agreement 

within the entire geographic scope of the 

agreement, corresponding to the figures and 

time period used in part 4(A) of this section, 

stated separately for the U.S. inbound and 

outbound trades as applicable to the 

geographic scope of the agreement. For 

purposes of this Form, the percentage of 

vessel capacity utilization means a party’s 

total volume of liner cargo, for each of its 

liner services that would fall under the 

agreement, carried on any vessel space 

counted under part 4(A) of this section, 

divided by its total vessel capacity as defined 

and derived in part 4(A) of this section, 

which quotient is multiplied by 100. 

Part 4(C) 

Provide a narrative statement on any 

significant changes, anticipated or planned 

for when the agreement goes into effect, in 

the amounts of vessel capacity for the parties’

liner services that would fall under the 

agreement within the entire geographic scope 

of the agreement. Specifically, explain the 

nature of and reasons for the significant 

change and its effects on the liner service and 

the total amount of vessel capacity for such 

service that would be subject to the change. 

For purposes of this part, a significant change 

refers to the removal from or addition to a 

liner service of vessels or vessel space for a 

fixed, seasonally planned, or indefinite 

period of time. A significant change excludes 

instances when vessels may be temporarily 

repositioned or shifted from one service to 

another, or when vessel space may be 

temporarily altered, or when vessels are 

removed from a liner service and vessels of 

similar capacity are substituted. It also 

excludes operational changes in vessels or 

vessel space that would have little or no 

impact on the amount of vessel capacity 

offered in a liner service or a trade. If no 

significant change is anticipated or planned, 

it shall be noted with the term ‘‘none’’ in 

response to part 4(C) of this section. 

Part 5(A) 

For the same 12-month period used in 

parts 2 and 3 of this section, provide the 

number of vessel calls each party made at 

each port for its liner services that would fall 

under the agreement within the entire 

geographic scope of the agreement. 

Part 5(B) 

Provide a narrative statement on any 

significant changes, anticipated or planned 

for when the agreement goes into effect, in 

the number of vessel calls at a port for the 

parties’ liner services that would fall under 

the agreement within the entire geographic 

scope of the agreement. Specifically, explain 

the nature of the significant change and its 

effect on the frequency of vessel calls at the 

port for the liner service that would be 

subject to the change. For purposes of this 

part, a significant change refers to an increase 

or decrease in the number of vessel calls at 

a port for a fixed, seasonally planned, or 

indefinite period of time. A significant 

change excludes an incidental or temporary 

alteration in vessel calls at a port, or an 

operational change in vessel calls that would 

have little or no impact on the number of 

vessel calls at a port. If no significant change 

is anticipated or planned, it shall be noted 

with the term ‘‘none’’ in response to part 5(B) 

of this section. 

Section V 

Section V applies to all agreements 

identified in 46 CFR 535.502. Parties to such 

agreements must complete all items in part 

1 of this section. 

Part 1(A) 

State the name, title, address, telephone 

and fax numbers, and electronic mail address 

of a person the Commission may contact 

regarding the Information Form and any 

information provided therein. 

Part 1(B) 

State the name, title, address, telephone 

and fax numbers, and electronic mail address 

of a person the Commission may contact 

regarding a request for additional information 

or documents. 

Part 1(C) 

A representative of the parties shall 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 also shall indicate his or her 

relationship with the parties to the 

agreement. 

Privacy Act and Paperwork Reduction Act 

Notice 

1. The collection of this information is 

authorized generally by section 15 of the 

Shipping Act of 1984, 46 U.S.C. app. § 1714. 

The submission of this form is mandatory for 

parties to agreements that contain certain 

authorities. 

2. You are not required to provide 

information requested on a form that is 

subject to the Paperwork Reduction Act 

unless the form displays a valid OMB control 

number. The valid control number for this 

information collection is 3072–0045. 

3. The time needed to complete and submit 

this form will vary depending on individual 

circumstances. The total estimated average 

time to complete this form is about 30 hours. 

This estimate includes reading the 

instructions, collecting necessary data, and 

compiling that data. 

4. If you have any comments concerning 

the accuracy of the above estimate or have 

any suggestions for simplifying the form, 

please contact Secretary, Federal Maritime 

Commission, 800 North Capitol Street, NW., 

Washington, DC 20573–0001; or by e-mail 

secretary@fmc.gov. 

FMC Form–150 OMB Control No. 3072–0045 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64431 

FEDERAL MARITIME COMMISSION 

INFORMATION FORM FOR 

AGREEMENTS BETWEEN OR AMONG OCEAN COMMON CARRIERS 

Section I 

Part 1 

Agreement Name: llllllllllllllllllllllllllllllllllllllllllllllllllllllll

Part 2 

Narrative statement on agreement purpose, and commercial or other circumstances requiring the agreement: lllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Part 3 

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 4 

This agreement includes: 

(A) Authority to discuss or agree upon rates or charges? ............................................................................................. Yes b No b 

(B) Joint service? .............................................................................................................................................................. Yes b No b 

(C) Pooling of cargo traffic or revenues? ........................................................................................................................ Yes b No b 

(D) Authority to discuss or agree on service contracts and their terms? ..................................................................... Yes b No b 

(E) Authority to discuss or agree on capacity rationalization? ..................................................................................... Yes b No b 

(F) Conditions or restrictions on the parties’ agreement participation, and/or use or offering of competing services in the geographic scope? ...................................................................................................................................... Yes b No b 

(G) Authority to charter vessel space? ........................................................................................................................... Yes b No b 

(H) Authority to rationalize sailings or services? .......................................................................................................... Yes b No b 

Section II 

Part 1 

(A) Vessel Calls 

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name 

Time Period: [12-Months] 

[Port Names] Port 1 Port 2 Port 3 Port 4 Etc. . . . 

Carrier A [Name] 

Carrier B 

Carrier C 

Etc. . . . 

(B) Narrative statement on significant changes in vessel calls: llllllllllllllllllllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Section III 

Part 1 Vessel Capacity And Utilization 

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name 

Time Period: [Calendar Quarter] 

(A) 

Vessel 

Capacity 

[TEUs or 

other units] 

(B) 

Utilization 

[percent] 

Carrier A [Name] 

Liner Service 1 [Name] ................................................................................................................................... XX,XXX XX 

Liner Service 2 ................................................................................................................................................. XX,XXX XX 

Liner Service 3 ................................................................................................................................................. XX,XXX XX 

Etc. . . . 

Carrier B 

Liner Service 1 ................................................................................................................................................. XX,XXX XX 

Liner Service 2 ................................................................................................................................................. XX,XXX XX 

Liner Service 3 ................................................................................................................................................. XX,XXX XX 

Etc. . . . 

Etc. . . . 

(C) Narrative statement on significant changes in vessel capacity: lllllllllllllllllllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Part 2 Vessel Calls 

(A) Agreement-Wide Trade: U.S. Inbound (or Outbound) Name 

Time Period: [12-Months] 

[Port Names] Port 1 Port 2 Port 3 Port 4 Etc. . . . 

Carrier A [Name] 

64432 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

Carrier B 

Carrier C 

Etc. . . . 

(B) Narrative statement on anticipated or planned changes: llllllllllllllllllllllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Section IV 

Part 1 Market Share 

Agreement-Wide Trade (or Sub-Trade): U.S. Inbound (or Outbound) Name 

Time Period: [Calendar Quarter] 

TEUs 

[or other 

units] 

Percent 

Agreement Market Share: 

Line A [Name] ................................................................................................................................................. X,XXX XX 

Line B ............................................................................................................................................................... X,XXX XX 

Line C ............................................................................................................................................................... X,XXX XX 

Etc. . . . 

Total Agreement ....................................................................................................................................... X,XXX XX 

Non-Agreement Market Share: 

Line X ............................................................................................................................................................... X,XXX XX 

Line Y ............................................................................................................................................................... X,XXX XX 

Line Z ............................................................................................................................................................... X,XXX XX 

Etc. . . . 

Total Non-Agreement ............................................................................................................................... X,XXX XX 

Total Trade [or Sub-Trade] .................................................................................................................................... X,XXX 100 

Part 2 Total Liner Cargo and Revenues 

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name 

Time Period: [12-Months] 

[Name] Total 

revenues 

TEUs 

[or other 

units] 

Average 

revenue 

Carrier A ...................................................................................................................................... $ X,XXX $

Carrier B ...................................................................................................................................... $ X,XXX $

Carrier C ...................................................................................................................................... $ X,XXX $

Etc. . . . 

Part 3 Top Liner Commodities 

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name 

Time Period: [Same 12-Months in part 2 of this section] 

[Name] Carrier A Carrier B Etc. . . . 

Commodity 1 [Name and 4-Digit Code]: 

TEUs [or other units] ........................................................................................................... X,XXX X,XXX 

Revenues .............................................................................................................................. $ $

Commodity 2: 

TEUs ..................................................................................................................................... X,XXX X,XXX 

Revenues .............................................................................................................................. $ $

Etc. . . . 

Part 4 Vessel Capacity and Utilization 

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name 

Time Period: [Same Calendar Quarter in part 1 of this section] 

(A) 

Vessel 

capacity 

[TEUs or 

other units] 

(B) 

Utilization 

[percent] 

Carrier A [Name] 

Liner Service 1 [Name] ................................................................................................................................... XX,XXX XX 

Liner Service 2 ................................................................................................................................................. XX,XXX XX 

Liner Service 3 ................................................................................................................................................. XX,XXX XX 

Etc. . . . 

Carrier B 

Liner Service 1 ................................................................................................................................................. XX,XXX XX 

Liner Service 2 ................................................................................................................................................. XX,XXX XX 

Liner Service 3 ................................................................................................................................................. XX,XXX XX 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64433 

(A) 

Vessel 

capacity 

[TEUs or 

other units] 

(B) 

Utilization 

[percent] 

Etc. . . . 

Etc. . . . 

(C) Narrative statement on significant changes in vessel capacity: lllllllllllllllllllllllllllllllllll lllll

Part 5 

(A) Vessel Calls 

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name 

Time Period: [Same 12-Months in parts 2 and 3 of this section] 

[Port Names] Port 1 Port 2 Port 3 Port 4 Etc. . . . 

Carrier A [Name] 

Carrier B 

Carrier C 

Etc. . . . 

(B) Narrative statement on significant changes in vessel calls: llllllllllllllllllllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Section V 

Contact Persons and Certification 

(A) Person(s) to Contact Regarding Information Form. 

(1) Name llllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

(2) Title lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

(3) Firm Name and Business lllllllllllllllllllllllllllllllllllllllllllllllllll

(4) Business Telephone Number llllllllllllllllllllllllllllllllllllllllllllllllll

(5) Fax Number lllllllllllllllllllllllllllllllllllllllllllllllllllllllll

(6) E-Mail Address llllllllllllllllllllllllllllllllllllllllllllllllllllllll

(B) 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 535.606). 

(1) Name llllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

(2) Title lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

(3) Firm Name and Business lllllllllllllllllllllllllllllllllllllllllllllllllll

(4) Business Telephone Number llllllllllllllllllllllllllllllllllllllllllllllllll

(5) Fax Number lllllllllllllllllllllllllllllllllllllllllllllllllllllllll

(6) E-Mail Address llllllllllllllllllllllllllllllllllllllllllllllllllllllll

(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) llllllllllllllllllllllllllllllllllllllllllllllllllll

Title llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Relationship with parties to agreement lllllllllllllllllllllllllllllllllllllllllllllll

Signature llllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Date llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Appendix B to Part 535—Monitoring 

Report and Instructions 

Monitoring Report Instructions 

1. All agreements between or among ocean 

common carriers identified in 46 CFR 

535.702(a) must submit completed 

Monitoring Reports to the full extent required 

in sections I through III of this Report. 

Sections I and II must be completed, as 

applicable, in accordance with the authority 

contained in each agreement. Section III must 

be completed by all agreements subject to 

Monitoring Report requirements. 

2. Where an agreement containing multiple 

authorities is subject to duplicate reporting 

requirements in the various sections of this 

Report, the parties may provide only one 

response so long as the reporting 

requirements within each section are fully 

addressed. The Monitoring Report specifies 

the data and information which must be 

reported for each section and the format in 

which it must be provided. If a party to an 

agreement is unable to supply a complete 

response to any item of this Report, 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 this Report, if one of the 

agreement signatories is a joint service 

operating under an effective agreement, that 

signatory shall respond to the Report as a 

single agreement party. 

3. For clarification of the agreement 

terminology used in this Report, the parties 

may refer to the definitions provided in 46 

CFR 535.104. In addition, the following 

definitions shall apply for purposes of this 

Report: liner movement means the carriage of 

liner cargo by liner operators; liner cargo 

means cargo carried on liner vessels in a liner 

service; liner operator means a vesseloperating common carrier engaged in liner 

service; liner vessel means a vessel used in 

a liner service; liner service means a definite, 

advertised schedule of sailings at regular 

intervals; and TEU means a unit of 

measurement equivalent to one 20-foot 

shipping container. Further, when used in 

this Report, the terms ‘‘entire geographic 

scope of the agreement’’ or ‘‘agreement-wide’’

refer to the combined U.S. inbound trade 

and/or the combined U.S. outbound trade as 

such trades apply to the geographic scope of 

the agreement, as opposed to the term ‘‘subtrade,’’ which is defined for reporting 

purposes as the scope of all liner movements 

64434 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

between each U.S. port range and each 

foreign country within the scope of the 

agreement. Whether required on a combined 

trade basis or a sub-trade basis, the U.S. 

inbound trade (or sub-trades) and the U.S. 

outbound trade (or sub-trades) shall always 

be stated separately. 

Section I 

Section I applies to agreements, identified 

in 46 CFR 535.702(a)(1), that contain the 

authority to discuss or agree on capacity 

rationalization as defined in 46 CFR 

535.104(e). Parties to such agreements must 

complete parts 1 through 3 of this section. 

Part 1 

State the full name of the agreement and 

the agreement number assigned by the FMC. 

Part 2(A) 

1. For the preceding calendar quarter, 

provide the amount of vessel capacity for 

each party for each of its liner services that 

is covered by the agreement within the entire 

geographic scope of the agreement, stated 

separately for the U.S. inbound and 

outbound trades as applicable to the 

geographic scope of the agreement. For 

purposes of this Report, vessel capacity 

means a party’s total commercial liner space 

on line-haul vessels, whether operated by it 

or other parties from whom space is 

obtained, sailing to and/or from the continent 

of North America for each of its liner services 

that is covered by the agreement. 

2. When 50 percent or more of the total 

liner cargo carried by all the parties in the 

geographic scope of the agreement during the 

calendar quarter was containerized, the 

amount(s) of vessel capacity for each party 

shall be reported in TEUs. When 50 percent 

or more of the total liner cargo carried by all 

the parties in the geographic scope of the 

agreement during the calendar quarter was 

non-containerized, the amount(s) of vessel 

capacity for each party shall be reported in 

non-containerized units of measurement. The 

unit of measurement used in calculating the 

amounts of non-containerized vessel capacity 

must be specified clearly and consistently 

applied. 

Part 2(B) 

For the preceding calendar quarter, provide 

the percentage of vessel capacity utilization 

for each party for each of its liner services 

that is covered by the agreement within the 

entire geographic scope of the agreement, 

corresponding to the figures used in part 2(A) 

of this section, stated separately for the U.S. 

inbound and outbound trades as applicable 

to the geographic scope of the agreement. For 

purposes of this Report, the percentage of 

vessel capacity utilization means a party’s 

total volume of liner cargo, for each of its 

liner services that is covered by the 

agreement, carried on any vessel space 

counted under part 2(A) of this section, 

divided by its total vessel capacity as defined 

and derived in part 2(A) of this section, 

which quotient is multiplied by 100. 

Part 2(C) 

Provide a narrative statement on any 

significant reductions, to be implemented 

under the agreement, in the amounts of 

vessel capacity for the parties’ liner services 

that are covered by the agreement within the 

entire geographic scope of the agreement. 

Specifically, explain the nature of and the 

reasons for the significant reduction and its 

effects on the liner service and the total 

amount of vessel capacity for such service 

that would be subject to the reduction. The 

narrative statement for part 2(C) of this 

section shall be submitted to the Director, 

Bureau of Trade Analysis, no later than 15 

days after a significant reduction in the 

amount of vessel capacity has been agreed 

upon by the parties but prior to the 

implementation of the actual reduction under 

the agreement. For purposes of this part, a 

significant reduction refers to the removal 

from a liner service of vessels or vessel space 

for a fixed, seasonally planned, or indefinite 

period of time. A significant reduction 

excludes instances when vessels may be 

temporarily repositioned or shifted from one 

service to another, or when vessel space may 

be temporarily altered, or when vessels are 

removed from a liner service and vessels of 

similar or greater capacity are substituted. It 

also excludes operational changes in vessels 

or vessel space that would have little or no 

impact on the amount of vessel capacity 

offered in a liner service or a trade. 

Part 2(D) 

Excluding those changes already reported 

in part 2(C) of this section, provide a 

narrative statement on any other significant 

changes, implemented under the agreement 

during the preceding calendar quarter, in the 

amounts of vessel capacity for the parties’

liner services that are covered by the 

agreement within the entire geographic scope 

of the agreement. Specifically, explain the 

nature of and the reasons for the significant 

change and its effects on the liner service and 

the total amount of vessel capacity for such 

service that was subject to the change. For 

purposes of this part, a significant change 

refers to the addition to a liner service of 

vessels or vessel space for a fixed, seasonally 

planned, or indefinite period of time. A 

significant change excludes instances when 

vessels were temporarily repositioned or 

shifted from one service to another, or when 

vessel space was temporarily altered, or 

when vessels were removed from a liner 

service and vessels of similar capacity were 

substituted. It also excludes operational 

changes in vessels or vessel space that had 

little or no impact on the amount of vessel 

capacity offered in a liner service or a trade. 

If no significant change was implemented, it 

shall be noted with the term ‘‘none’’ in 

response to part 2(D) of this section. 

Part 3 

Provide a narrative statement on any 

significant changes, implemented under the 

agreement during the calendar quarter, in the 

number of vessel calls at a port for the 

parties’ liner services that are covered by the 

agreement within the entire geographic scope 

of the agreement. Specifically, explain the 

nature of the significant change and its effect 

on the frequency of vessel calls at the port 

for the liner service that was subject to the 

change. For purposes of this part, a 

significant change refers to an increase or a 

decrease in the number of vessel calls at a 

port for a fixed, seasonally planned, or 

indefinite period of time. A significant 

change excludes an incidental or temporary 

alteration in the number of vessel calls at a 

port, or an operational change in vessel calls 

that had little or no impact on the number 

of vessel calls at a port. If no significant 

change was implemented, it shall be noted 

with the term ‘‘none’’ in response to part 3 

of this section. 

Section II 

Section II applies to agreements, identified 

in 46 CFR 535.702(a)(2), where the parties to 

the agreement hold a combined market share, 

based on cargo volume, of 35 percent or more 

in the entire U.S. inbound or outbound 

geographic scope of the agreement and the 

agreement contains any of the following 

authorities: a) the discussion of, or agreement 

upon, whether on a binding basis under a 

common tariff or a non-binding basis, any 

kind of rate or charge; b) the establishment 

of a joint service; c) the pooling or division 

of cargo traffic, earnings, or revenues and/or 

losses; or d) the discussion of, or agreement 

on, any service contract matter. Parties to 

such agreements must complete parts 1 

through 6 of this section. 

Part 1 

State the full name of the agreement and 

the agreement number assigned by the FMC. 

Part 2 

1. For the preceding calendar quarter, 

provide the market shares of all liner 

operators for the entire geographic scope of 

the agreement and in each sub-trade within 

the scope of the agreement. A joint service 

shall be treated as a single liner operator, 

whether it is an agreement line or a nonagreement 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 shall be shown 

separately. 

2. U.S. port ranges are defined as follows: 

a. Atlantic and Gulf—Includes ports along 

the eastern seaboard and the Gulf of Mexico 

from the northern boundary of Maine to 

Brownsville, Texas. Also includes all ports 

bordering upon the Great Lakes and their 

connecting waterways, all ports in the State 

of New York on the St. Lawrence River, and 

all ports in Puerto Rico and the U.S. Virgin 

Islands. 

b. 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. 

3. An application may be filed for a waiver 

of the definition of ‘‘sub-trade’’ under the 

procedures described in 46 CFR 535.705. In 

any such application, the burden shall be on 

the parties 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 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64435 

the port ranges defined herein. The 

Commission will also consider whether the 

alternative definition of ‘‘sub-trade’’

requested by the waiver application is 

reasonably consistent with the definition of 

‘‘sub-trade’’ applied in the original 

Information Form for the agreement. 

4. The formula for calculating market share 

in the entire agreement scope or in a subtrade 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 market shares held by non-agreement 

lines as well as by agreement lines must be 

provided, stated separately in the format 

indicated. 

5. If 50 percent or more of the total liner 

cargo carried by the parties in the entire 

agreement scope 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 

parties was non-containerized, only noncontainerized liner movements must be used 

for determining market share. The unit of 

measurement used in calculating amounts of 

non-containerized cargo must be specified 

clearly and applied consistently. 

Part 3 

1. For the preceding calendar quarter, 

provide each party’s total liner revenues in 

the entire geographic scope of the agreement, 

total liner cargo carried in the entire 

geographic scope of the agreement, and 

average revenue. For purposes of this Report, 

total liner revenues means the total revenues, 

in U.S. dollars, of each party corresponding 

to its total cargo carried for its liner services 

that fall under the agreement, inclusive of all 

ocean freight charges, whether assessed on a 

port-to-port basis or a through intermodal 

basis; accessorial charges; surcharges; and 

charges for inland cargo carriage. Average 

revenue shall be calculated as the quotient of 

each party’s total liner revenues in the entire 

geographic scope divided by its total cargo 

carried in the entire geographic scope. 

2. When 50 percent or more of the total 

liner cargo carried by all the parties in the 

geographic scope of the agreement during the 

calendar quarter was containerized, each 

party shall report only its total carryings of 

containerized liner cargo (measured in TEUs) 

during the calendar quarter, total revenues 

generated by its carriage of containerized 

liner cargo, and average revenue per TEU. 

When 50 percent or more of the total liner 

cargo carried by all the parties in the 

geographic scope of the agreement during the 

calendar quarter was non-containerized, each 

party shall 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 liner 

cargo, and average revenue per unit of 

measurement. When the agreement covers 

both U.S. inbound and outbound liner 

movements, inbound and outbound data 

shall be stated separately. 

Part 4(A) 

For the preceding calendar quarter, provide 

a list, for the entire geographic scope of the 

agreement, of the top 10 liner commodities 

(including commodities not subject to tariff 

publication) carried by all the parties for 

their liner services that fall under the 

agreement. For purposes of this Report, 

commodities shall be identified at the 4-digit 

level of customarily used commodity coding 

schedules. When 50 percent or more of the 

total liner cargo carried by all the parties in 

the geographic scope of the agreement during 

the calendar quarter was containerized, this 

list shall include only containerized 

commodities. When 50 percent or more of 

the total liner cargo carried by all the parties 

in the geographic scope of the agreement 

during the calendar quarter was noncontainerized, this list shall include only 

non-containerized commodities. When the 

agreement covers both U.S. inbound and 

outbound liner movements, inbound and 

outbound data shall be stated separately. 

Part 4(B) 

For the preceding calendar quarter, provide 

the cargo volume and revenue results for 

each party for each of the major commodities 

listed in part 4(A) of this section, 

corresponding to the same unit of 

measurement used. For purposes of this 

Report, revenue results means the revenues, 

in U.S. dollars, earned by each party on the 

cargo volume of each major commodity listed 

in part 4(A) of this section, inclusive of all 

ocean freight charges, whether assessed on a 

port-to-port basis or a through intermodal 

basis; accessorial charges; surcharges; and 

charges for inland cargo carriage. If a party 

has no cargo volume and revenue results for 

a commodity listed in part 4(A) of this 

section, it shall be noted by using a zero for 

that party in response to part 4(B) of this 

section. 

Part 5(A) 

For the preceding calendar quarter, provide 

the amount of vessel capacity for each party 

for each of its liner services that falls under 

the agreement within the entire geographic 

scope of the agreement, stated separately for 

the U.S. inbound and outbound trades as 

applicable to the geographic scope of the 

agreement. For purposes of this Report, 

vessel capacity means a party’s total 

commercial liner space on line-haul vessels, 

whether operated by it or other parties from 

whom space is obtained, sailing to and/or 

from the continent of North America for each 

of its liner services that falls under the 

agreement. When 50 percent or more of the 

total liner cargo carried by all the parties in 

the geographic scope of the agreement during 

the calendar quarter was containerized, the 

amount(s) of vessel capacity for each party 

shall be reported in TEUs. When 50 percent 

or more of the total liner cargo carried by all 

the parties in the geographic scope of the 

agreement during the calendar quarter was 

non-containerized, the amount(s) of vessel 

capacity for each party shall be reported in 

non-containerized units of measurement. The 

unit of measurement used in calculating the 

amounts of non-containerized vessel capacity 

must be specified clearly and consistently 

applied. 

Part 5(B) 

For the preceding calendar quarter, provide 

the percentage of vessel capacity utilization 

for each party for each of its liner services 

that falls under the agreement within the 

entire geographic scope of the agreement, 

corresponding to the figures used in part 5(A) 

of this section, stated separately for the U.S. 

inbound and outbound trades as applicable 

to the geographic scope of the agreement. For 

purposes of this Report, the percentage of 

vessel capacity utilization means a party’s 

total volume of liner cargo, for each of its 

liner services that falls under the agreement, 

carried on any vessel space counted under 

part 5(A) of this section, divided by its total 

vessel capacity as defined and derived in part 

5(A) of this section, which quotient is 

multiplied by 100. 

Part 5(C) 

Provide a narrative statement on any 

significant changes in the amount of vessel 

capacity that occurred during the preceding 

calendar quarter for the parties’ liner services 

that fall under the agreement within the 

entire geographic scope of the agreement. 

Specifically, explain the nature of and the 

reasons for the significant change and its 

effects on the liner service and the total 

amount of vessel capacity for such service 

that was subject to the change. For purposes 

of this part, a significant change refers to the 

removal from or addition to a liner service of 

vessels or vessel space for a fixed, seasonally 

planned, or indefinite period of time. A 

significant change would exclude instances 

when vessels were temporarily repositioned 

or shifted from one service to another, or 

when vessel space was temporarily altered, 

or when vessels were removed from a liner 

service and vessels of similar capacity were 

substituted. It also excludes operational 

changes in vessels and vessel space that had 

little or no impact on the amount of vessel 

capacity offered in a liner service or a trade. 

If no significant change occurred during the 

calendar quarter, it shall be noted with the 

term ‘‘none’’ in response to part 5(C) of this 

section. 

Part 6 

Provide a narrative statement on any 

significant changes in the number of vessel 

calls at a port that occurred during the 

preceding calendar quarter for the parties’

liner services that fall under the agreement 

within the entire geographic scope of the 

agreement. Specifically, explain the nature of 

the significant change and its effect on the 

frequency of vessel calls at the port for the 

liner service that was subject to the change. 

For purposes of this part, a significant change 

refers to an increase or a decrease in the 

number of vessel calls at a port for a fixed, 

seasonally planned, or indefinite period of 

time. A significant change excludes an 

incidental or temporary alteration in the 

number of vessel calls at a port, or an 

operational change in vessel calls that had 

little or no impact on the number of vessel 

calls at a port. If no significant change 

occurred during the calendar quarter, it shall 

64436 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

be noted with the term ‘‘none’’ in response 

to part 6 of this section. 

Section III 

Section III applies to all agreements 

identified in 46 CFR 535.702(a). Parties to 

such agreements must complete all items in 

part 1 of this section. 

Part 1(A) 

State the name, title, address, telephone 

and fax numbers, and electronic mail address 

of a person the Commission may contact 

regarding the Monitoring Report and any 

information provided therein. 

Part 1(B) 

A representative of the parties shall 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 also shall indicate his or her 

relationship with the parties to the 

agreement. 

Privacy Act and Paperwork Reduction Act 

Notice 

1. The collection of this information is 

authorized generally by section 15 of the 

Shipping Act of 1984, 46 U.S.C. app. § 1714. 

The submission of this form is mandatory for 

parties to agreements that contain certain 

authorities. 

2. You are not required to provide 

information requested on a form that is 

subject to the Paperwork Reduction Act 

unless the form displays a valid OMB control 

number. The valid control number for this 

information collection is 3072–0045. 

3. The time needed to complete and submit 

this form will vary depending on individual 

circumstances. The total estimated average 

time to complete this form is about 63.5 

hours. This estimate includes reading the 

instructions, collecting necessary data, and 

compiling that data. 

4. If you have any comments concerning 

the accuracy of the above estimate or have 

any suggestions for simplifying the form, 

please contact Secretary, Federal Maritime 

Commission, 800 North Capitol Street, NW., 

Washington, DC 20573–0001; or by e-mail 

secretary@fmc.gov. 

FMC Form–151 OMB Control No. 3072–0045 

FEDERAL MARITIME COMMISSION 

MONITORING REPORT FOR 

AGREEMENTS BETWEEN OR AMONG OCEAN COMMON CARRIERS 

Section I 

Part 1 

Agreement Name: llllllllllllllllllllllllllllllllllllllllllllllllllllllll

FMC Number: llllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Part 2 Vessel Capacity and Utilization 

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name 

Time Period: [Calendar Quarter] 

(A) 

Vessel capacity 

[TEUs or 

other units] 

(B) 

Utilization 

[percent] 

Carrier A [Name]: 

Liner Service 1 [Name] ................................................................................................................................... XX,XXX XX 

Liner Service 2 ................................................................................................................................................. XX,XXX XX 

Liner Service 3 ................................................................................................................................................. XX,XXX XX 

Etc. . . ..

Carrier B: 

Liner Service 1 ................................................................................................................................................. XX,XXX XX 

Liner Service 2 ................................................................................................................................................. XX,XXX XX 

Liner Service 3 ................................................................................................................................................. XX,XXX XX 

Etc. . . . 

Etc. . . . 

(C) Narrative statement on significant reductions in vessel capacity to be implemented (submit statement no later than 15 days after a 

reduction has been agreed upon but prior to the implementation of the reduction): lllllllllllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

(D) Narrative statement on other significant changes in vessel capacity implemented during the calendar quarter: lllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Part 3 Vessel Calls 

Narrative statement on significant changes in vessel calls implemented during the calendar quarter: lllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Section II 

Part 1 

Agreement Name: llllllllllllllllllllllllllllllllllllllllllllllllllllllll

FMC Number: llllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Part 2 Market Share 

Agreement-Wide Trade (or Sub-Trade): U.S. Inbound (or Outbound) Name 

Time Period: [Calendar Quarter] 

TEUs 

[or other 

units] 

Percent 

Agreement Market Share: 

Line A [Name] ................................................................................................................................................. X,XXX XX 

Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 64437 

TEUs 

[or other 

units] 

Percent 

Line B ............................................................................................................................................................... X,XXX XX 

Line C ............................................................................................................................................................... X,XXX XX 

Etc. . . . 

Total Agreement ....................................................................................................................................... X,XXX XX 

Non-Agreement Market Share: 

Line X ............................................................................................................................................................... X,XXX XX 

Line Y ............................................................................................................................................................... X,XXX XX 

Line Z ............................................................................................................................................................... X,XXX XX 

Etc. . . . 

Total Non-Agreement ............................................................................................................................... X,XXX XX 

Total Trade [or Sub-Trade] .................................................................................................................................... X,XXX 100 

Part 3 Total Liner Cargo and Revenues 

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name 

Time Period: [Calendar Quarter] 

[Name] Total revenues 

TEUs [or 

other units] 

Average revenue 

Carrier A ...................................................................................................................................... $ X,XXX $

Carrier B ...................................................................................................................................... $ X,XXX $

Carrier C ...................................................................................................................................... $ X,XXX $

Etc. . . . 

Part 4 Top Liner Commodities 

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name 

Time Period: [Calendar Quarter] 

[Name] Carrier A Carrier B Etc. . . 

Commodity 1 [Name and 4-Digit Code]: 

TEUs [or other units] ........................................................................................................... X,XXX X,XXX 

Revenues .............................................................................................................................. $ $ 

Commodity 2: 

TEUs ..................................................................................................................................... X,XXX X,XXX 

Revenues .............................................................................................................................. $ $ 

Etc. . . . 

Part 5 Vessel Capacity and Utilization 

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name 

Time Period: [Calendar Quarter] 

(A) 

Vessel capacity 

[TEUs or 

other units] 

(B) 

Utilization 

[percent] 

Carrier A [Name]: 

Liner Service 1 [Name] ................................................................................................................................... XX,XXX XX 

Liner Service 2 ................................................................................................................................................. XX,XXX XX 

Liner Service 3 ................................................................................................................................................. XX,XXX XX 

Etc. . . ..

Carrier B: 

Liner Service 1 ................................................................................................................................................. XX,XXX XX 

Liner Service 2 ................................................................................................................................................. XX,XXX XX 

Liner Service 3 ................................................................................................................................................. XX,XXX XX 

Etc. . . . 

Etc. . . . 

(C) Narrative statement on significant changes in vessel capacity that occurred during the calendar quarter: llllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Part 6 Vessel Calls 

Narrative statement on significant changes in vessel calls that occurred during the calendar quarter: lllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Section III 

Part 1 Contact Person and Certification 

(A) Person(s) To Contact Regarding Monitoring Report. 

(1) Name llllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

(2) Title lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

64438 Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / Rules and Regulations 

(3) Firm Name and Business lllllllllllllllllllllllllllllllllllllllllllllllllll

(4) Business Telephone Number llllllllllllllllllllllllllllllllllllllllllllllllll

(5) Fax Number lllllllllllllllllllllllllllllllllllllllllllllllllllllllll

(6) E-Mail Address llllllllllllllllllllllllllllllllllllllllllllllllllllllll

(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) llllllllllllllllllllllllllllllllllllllllllllllllllll

Title llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Relationship with parties to agreement lllllllllllllllllllllllllllllllllllllllllllllll

Signature llllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

Date llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

By Order of the Commission. 

Bryant L. VanBrakle, 

Secretary. 

[FR Doc. 04–24438 Filed 11–3–04; 8:45 am] 

BILLING CODE 6730–01–P