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[Federal Register Volume 60, Number 30 (Tuesday, February 14, 1995)]
[Notices]
[Pages 8386-8387]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3754]

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FEDERAL MARITIME COMMISSION

[Docket No. 94-29 et al.]

Trans-Atlantic Agreement

    In the matter of; docket No. 94-29, practices of the Trans-
Atlantic Agreement and its members with respect to independent 
action; docket No. 94-30, container pool practices of the Trans-
Atlantic Agreement and its members; fact finding investigation No. 
21, activities of the Trans-Atlantic Agreement and its members, 
order inviting amicus curiae filings.

    On February 2, 1995, the Trans-Atlantic Conference Agreement 
(``TACA'' or ``Conference'') and its member lines, the Commission's 
Bureau of Hearing Counsel (``Hearing Counsel'') and the Investigative 
Officers in Fact Finding Investigation No. 21 submitted a proposed 
settlement of these proceedings. The settlement is now before the 
Commission for review.
    By this Order, the Commission is inviting any interested member of 
the public to comment on the settlement. This is being done pursuant to 
the Commission's amicus curiae procedure, 46 CFR 502.76, whereby the 
Commission at its own initiative may solicit expressions of views on 
matters of law or policy.
    Under the terms of the settlement, the TACA lines would agree to 
certain undertakings, including broad rate reductions; amendments to 
the TACA agreement provisions on service contracts, independent action 
(``IA'') and other matters; cancellation of other agreements; and 
increased reporting to the Commission. These undertakings are described 
in more detail below. In exchange, the Commission would terminate or 
withdraw Dockets Nos. 94-29, 94-30, Fact Finding Investigation No. 21 
and its outstanding subpoenas, and certain other orders issued under 
section 15 of the Shipping Act of 1984 (``1984 Act''). TACA and its 
members would not admit to any violations of law. In addition, the 
settlement agreement would bar the Commission from commencing any new 
actions or proceedings against the Conference or its members for 
possible violations or actions in contravention of sections 5, 6, and 
10 of the 1984 Act, Commission regulations, or Commission orders, if 
such possible violations arose from activities or practices disclosed 
to the Commission through one of the following sources: Fact Finding 
Investigation No. 21; documents or depositions furnished by TACA in 
Dockets Nos. 94-29 or 94-30; documents furnished pursuant to the 
settlement agreement; minutes or conference documents provided by TACA 
to the Commission; additional information requested by the Commission 
pursuant to section 6(d) of the 1984 Act; and documents furnished by 
TACA in response to the Commission's section 15 compulsory orders of 
March 28 and July 17, 1994.
    The settlement includes the following commitments from TACA and its 
member lines: [[Page 8387]] 
     Rate Reductions: TACA would suspend all rate increases 
implemented under its 1995 Business Plan. Specifically, within fifteen 
(15) days after approval of the settlement by the Commission, TACA 
would reduce its current tariff rates to those in effect on December 
31, 1994. In addition, the Conference would offer to amend current 
service contracts to undo 1995 rate increases and replace them with the 
rates offered in 1994. The suspension of the 1995 increases would 
remain in effect through December 31, 1995, for both tariff rates and 
service contract rates. In a joint memorandum in support of the 
settlement proposal, Hearing Counsel estimate that the value to the 
shipping public of the rate reductions would be $60-70 million, 
depending on such factors as cargo volumes and trade growth.
     Service Contracts: (1) TACA agreement provisions would be 
revised to provide that shippers may negotiate with the carrier of the 
shippers' choice; however, the Conference Secretariat could elect to 
participate in such negotiations. (2) NVOCC service contracts would be 
amended to remove volume caps and geographic limits. (3) TACA would 
offer to remove or revise certain restrictions in existing service 
contracts, including 7-day booking notice requirements and requirements 
that cargo must be owned by the shipper. (4) TACA may not adopt a 
general policy of treating shippers who did not sign service contracts 
in a prior period less favorably than those who did sign contracts.
     IA: TACA agreement provisions would be revised as follows: 
(1) When a TACA member communicates an IA rate to the Conference 
Secretariat, the Secretariat would be required to publish the IA rate 
immediately, rather than first notifying other members. (2) The lines 
could not agree that they must discuss IA with other members. (3) Each 
line would be free to designate who within its company is authorized to 
take IA. (4) Quarterly IA reporting would be made to the Commission.
     Withdrawal from Discussion Agreements: the TACA lines 
would withdraw from membership in, or cancel, a number of rate 
discussion and rate-setting agreements, including the Eurocorde 
Discussion Agreement, FMC No. 202-010829, and the Gulfway Agreement, 
FMC No. 203-011141, which authorize discussions about rates between 
TACA lines and independent lines.
    Furthermore, under the settlement, the TACA lines would also 
eliminate much of their current broad space charter authority; instead, 
long-term charter arrangements between Conference lines would be 
covered by separate and discrete filed agreements. Also, all connecting 
carrier agreements with NVOCCs would be cancelled, and applicable 
tariffs and service contracts would set forth the terms by which 
containers and equipment will be made available to shippers. Beginning 
in September 1995, representatives of TACA and the Commission would 
meet semi-annually to discuss TACA activities and plans.
    As with the proposed rate reductions, the settlement agreement ties 
the proposed changes to TACA to the date of any settlement approval by 
the Commission.
    As a matter of clarification, it should be noted that the 
amendments to TACA called for by the settlement are in addition to 
those which the Commission obtained from the Conference in October 
1994, i.e.:
     removal of the Conference's ``capacity regulation'' 
program, whereby the TACA lines had withheld part of their vessel 
capacity from the shippers;
     authorization allowing Conference carriers not 
participating in a TACA service contract to unilaterally negotiate 
different rates with the shippers during a 15-day window following 
filing of the TACA contract;
     reduction of the IA notice on rates from five to three 
days;
     reduction of the number of Conference carriers required to 
approve a service contract from a ``majority-minus-two'' formula to 
five favorable votes;
     outright elimination of the 100 TEU or $100,000 minimum 
volume or value requirement for service contracts; and
     the deletion of provisions authorizing TACA carriers to 
collectively negotiate with inland carriers concerning European inland 
segments of through transportation, and to enter into agreements with 
other parties.
    The Commission believes that this solicitation of public comment 
pursuant to the agency's amicus curiae procedure is warranted by the 
general importance of the TACA investigations, which require us to 
consider any settlement under broad public interest considerations as 
well as by the usual settlement criteria such as cost savings and 
effective law enforcement. For that reason and because the rate 
reduction and other provisions of the settlement could have a direct 
and immediate effect on the economic interests of shippers currently 
doing business with TACA, the Commission wishes to allow an opportunity 
for any interested person to express its opinion on the settlement 
before we act upon it. The Commission has already received comments 
opposing the settlement from the National Industrial Transportation 
League, Container Freight International I/S and Danish Consolidation 
Services, and favorable comments from the North American Shippers 
Association, Inc., and the New York/New Jersey Foreign Freight 
Forwarders and Brokers Association, Inc. These comments will be 
considered as filed in response to this Order, and need not be refiled.
    As a matter of fairness to all parties, the Commission wishes to 
resolve the status of this proposed settlement as quickly as possible. 
For that reason, comments from shippers and other interested persons 
must be received by the Commission no later than February 21, 1995. The 
Commission intends to meet on the settlement on February 24, 1995.
    Therefore, it is ordered, That pursuant to Rule 76 of the 
Commission's Rules of Practice and Procedure, 46 CFR 502.76, the 
Commission hereby grants permission to any interested person to file 
comments as amicus curiae on the proposed settlement of these 
proceedings;
    It is further ordered, That an original and fifteen copies of such 
comments must be physically lodged with the Secretary of the Commission 
on or before February 21, 1995.

    By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 95-3754 Filed 2-13-95; 8:45 am]
BILLING CODE 6730-01-M
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