Eleventh A

o

Federal Marit

Fiscal Year E

For sale by the Superintendent of 

Washington DC20402 Price Paper cove

Stock 
FEDERAL M

WAS

J

HELEN DELIC

ASHTON C B

JAMES V DA

GEORGE H H

CLARENCE MO
LETTER OF 

19mre of tNeOryatrman

7feda

Wh

TO THE SENATE AND HO

Pursuant to sec

No 7 of 1961 and s

Act 1936 I respec

the Federal Maritime 
r

H

U

Wrr

u

rO

O

G7

a

s

a

v

w

iv
Table o

SCOPE OF AUTHORITY AND BA

HIGHLIGHTS AND REFLECTIONS 

Problems 

Significant Decisions 

International Relations 

UNITED STATES OCEANBORNE 

Freight Rates and Surcharges 

Disparities 

Intermodal Development 

Terminal Operations 

Domestic Offshore Commerce 

SURVEILLACOMPLIAENFORCEM

Agreement Review 

Informal Complaints 

Tariff Review 

Ocean Freight Forwarding 

Oil Pollution Financial Responsib

Passenger Indemnity Certificatio

SPECIAL STUDIES AND PROJEC

Military Rates 

USCanadian Trade Diversion 

Economic Stabilization Program 

Disparity on Recycled Materials 

Tariff Rules Revision 

FORMAL PROCEEDINGS 

Adjudicatory Proceedings 

Initial Decisions 

FINAL DECISIONS OF THE CIIN

Decisions Completed 

Rulemaking Proceedings 

ACTION IN THE COURTS 

Significant Cases 

Non Adjudicatory Matters 

LEGISLATIVE DEVELOPMENT 

Changes in Penalties for Violatio

Intermodal Legislation Proposed 

Enforcement Provisions Proposed 

Other Legislative Activity 

AD NIINISTRATION 

Organization Chart 

Statement of Appropriations and 

APPENDIX A

Statistical Abstracts of Filings 

SCOPE OF AUTH

FUN

The Federal Maritime Com

pendent agency by Reorganiza

1961 Its basic regulatory auth

Act 1916 Merchant Marine A

1933 Merchant Marine Act 

her 6 1966 and Public Law 9

The Commission is compos

by the President with the ad

Commissioners are appointed 

three of the Commissioners be

party The President designate

Chairman who also serves as 

officer of the agency

The statutory authorities a

brace the following principa

practices and agreements of 

other persons engaged in the f

2 acceptance rejection or 

carriers engaged in the foreig

regulation of rates fares cha

and practices of common car

trades of the United States 4 

forwarders 5 investigation 

sifications and practices in th

Executive Order 17548 dated Ju

Commission the responsibility and a

Quality Improvement Act of 1970 

the certification by the Commission o

to meet the liability to the United St
shore commerce 6 issu

responsibility of vessel ow

personal injury or death 

formance of voyages or c

dencing financial respons

operators to meet the liabi

of oil and 8 rendering 

rules and regulations gove

water terminal operators 

subject to the Commission s

The Commission sheadq

Washington DC 20573 

follows

Atlantic District

Pacific Distr

Pacific District Souther

fornia

Gulf District

Puerto Rico Office

V
HIGHLIGHTS AN

THE 

Fiscal 1972 found the Fede

year as an accepted and respect

regulation as envisioned by the 

various Shipping Statutes over 

The shipping industry in 1

Federal regulatory authority c

vexing ocean transport proble

grips with the peculiar and ofte

in which commerce and econ

bound to the wellbeing and de

Tough Problems Tackled

The Commission displayed 

areas of shipping and shipper c

than palliatives

In the field of military rate 

forward to assure a more equ

in studying the effect of cut

The Commission fully shou

of examining military rates to 

transport burden upon UStra

The Chairman testified su

Navy because it understood 

allowed to retain a control pos

Intermodalism Spurred

On intermodalism the Co

through shipping on simplifie

rates and singlefactor license

492039 0 73 2
Travel agents gained a 

when the Federal Maritime 

demonstrated need for mor

There has been in 1972 

standing in the United Stat

to require a steady flow of b

mation is used to better ass

protection to the worldwid

Clashes Carefully Avoided

Outstanding in fiscal 19

FMCregulation created a

ity and those whom we r

Negotiations with Canada 

Problems in Japan are d

which it is believed will 

In the vital area of m

exhaustively studied the p

Maritime Administration 

Military Sealift Command 

Relationships Grow Firme

Relationships with the 

Commission grateful for th

mittee of the Senate and th

mittee the Armed Service

Foreign Commerce Committ

In our dealings with the 

of State the Interstate Comm

Board the Price Commissio

and others fiscal year 1972 

In the field of freight fo

in that industry sprofession

latory requirements

Position Fluid Dynamic

In the shipping world of 

ground of burgeoning techn

4
and philosophy of the Fede

and dynamic

There has been a great need 

accumulated knowledge to a

changing theories and transport

pressures for change where pr

changes have not been subst

Shipoperator consolidations 

cepts faced the Commission in 

US lines merger proposal an

tainer consortium

TheFMCcontinues to wei

sitions in keeping with our 

firm conviction to actively ad

Commission activity will exert 

and improved ocean shipping 

Significant Decisions

Significant decisions of the 

the period covered by this rep

tory activity which have been o

These decisions it is hoped 

as malpractices in the ocean 

agreements in major ports th

theFMCsresponsibilities a

fixing of surcharges to compe

or specific operating costs

While decisions of the Fede

in other pages of this repor

portance and it is believed the

will be of a continuing and rec

Malpractices Bring Fines

Docket No 6844Malpra

On December 13 1971 the 

proceeding wherein responden

Netumar Norton Line Comp

Empresa Lineas Maritimas A
SA Navem were found to 

Shipping Act 1916 by al

at less than the regular ra

tion 18b3 of the Ship

ferent compensation for the 

the applicable tariff

This decision was the cu

started in October 1968 a

of widespread rebating an

gulf coastBrazil trades

Upon issuance of its find

enforcement claims against 

eral Claims Collection Act 

ment of the claims with the 

payments as penalty for the 

Cooperative Working Pacts

Docket No 6957Agr

Association Cooperative W

Dockets Nos 712 718 

Trailer Transport Inc Se

Inc Chandris America Lin

Agency Inc Incres Line v 

Docket No 6957 involv

into the approvability unde

an agreement of the New Y

assessment formula for its 

obligations in collective barg

Longshoremen sUnion

The Commission first iss

ber 11 1970 However up

opened and remanded to an 

for consolidation with vario

new and related issues

In its latest report served J

mined to approve the asses

certain modifications

As modified all cargoes t

New York would obtain pa

6
assessments for cargo excepte

lower level than other cargo

Automobile and newsprint i

assessments at lower levels 

agreement The June 14 1972 decision 

of Appeals for the Second Circ

Labor Relations

Docket No 703United S

ping AssociationThe Comm

this proceeding November 9 1

Boston Shipping Association 

unit was subject to the Shipping 

Also found subject to sectio

papers and bylaws forming th

cation of labor gangs among 

and between the association m

tem implemented via the labor 

Evidence was insufficient to 

tion in regard to these agreem

17 of the act

The Commission affirmed th

of January 19 1972

Remand Obtained

As a result of the views ex

Labor and the National Labo

to review in the First Circu

sought and obtained a reman

of these parties who had not 

matter was reopened by ord

the end of the year

Interna

The Federal Maritime C

merous occasions directed 

tional field which aTected US
The Commission noted a 

American shipping which 

space and services in Japan 

bia which favored national 

carriers

Spotlight on Discriminatio

Discriminatory governm

percentage of most Latin A

While the impact varies th

American shipping industry 

carrier to Chile southboun

nage moved in 1967 to 195

conversely was reported to 

percent during the same per

Studying practices in var

mission noted that in the pa

been applied through taxes a

dollar amounts Tax and cus

solution by countervailing d

the Merchant Marine Act o

access provisions were pres

sion as a means of counter

viding trade stability

FMCConcern Deepens

Two factors in the past y

concern The Commission ha

take the form of cargo reserv

Traditional pooling is oft

answer because of the incre

criminatory practices

The Federal Maritime C

laxity on the part of foreign 

equitably to agreement provis

Merchants who might pr

themselves facing a dilemm

restrictions against USflags

8
Associated Status Ambiguities

In the past years much Com

assuring carrier status for Am

the cooperation between the 

thorities which resulted in the d

carrier status and adoption 

that shipments in UStrade a

of Brazilian companies or ship

The Commission has noted 

tracted cases of US ships e

crimination of Americanflag 

loss and arriving after substa

inferior position in a given tra

Solutions Under Study

The Commission must unde

on the question of equitable 

commerce

There must be new serious 

lay the groundwork for Ioter

legitimate right of other nati

trade while protecting the eq

riers to a fair share of USo

In maintaining close liaiso

concern the Federal Maritim

Third Session of the United N

opment in Chile April 13 to 

Pact Held UnApprovable

In the South American sh

mission Hearing Examiner h

ment between PrudentialGra

de Vapores covering pooling 

access to Government contro

Commission was asked to he

Canad

The Chairman of the Fed

and 9 1972 met with top 
international trade matter

States Canada overseas trad

US ports from time 

cargoflow patterns in areas 

On Wednesday June 21 

of United States Canadian 

the Commission by Manaly

This study concluded tha

Canada and the United State

ure to the advantage of Cana

JapanT

In keeping with a contin

freight rates and the treatm

tries the Federal Maritime 

partment of State and with 

review of alleged rate disp

trade

At the close of Fiscal 19

LASH ships in Japanese po

10
US OCEANBOR

RE

Freight Rates and Surchar

Worldwide inflation continu

result numerous general rate 

conferences engaged in our fo

attributed to rising costs of 

handling charges and admini

maintained to cover bunker c

Curren

Since the official devaluatio

time it was being implemente

required to advise many dual 

a currency surcharge would ha

terms of the Merchants Freigh

such advice was the postponem

tariff filings were filed a

implementation

In instances in which a ca

dual rate system wider the 

rency surcharges could not 

notice unless good cause was 

be put into effect prior to 30 d

Por

Where port surcharges are 

at foreign ports the Departm

information concerning cond

ment of State sinformation 

492039 0 73 3
the validity of port surch

necessary to request that a 

Bu

The price of bunker fue

but most carriers and confe

as filed with some increase

trend in prices and subseq

voluntarily others at the 

War 

Following the India Pakis

bodian and Vietnam port 

contact with the Insurance D

partment of Commerce in o

ferences that had established 

or eliminated such charges 

or eliminate was accomplish

of the Commission

Wharfage and Handling 

The Associated Latin Ame

a group of 10 active conferen

Steamship Companies operat

Gulf ports and ports in Ce

neighboring islands

In the latter part of 1971 

rules regarding wharfage an

shift the assessment of such c

from carrier to cargo

This resulted in the asses

which varied in amount from 

States

Protests Received

The Commission received 

from the Governors of the Sta

Jersey and Maryland

12
Complaints were also receiv

istration the Baltimore Marin

delphia Marine Terminal Ass

On November 19 1971 the 

proceeding Docket No 7187 

7188The Commission found on Ja

that the rules at issue contra

Marine Act 1936 and therefo

within the meaning of section 

Subsequent thereto the que

tariffs This action resolved th

proceeding was discontinued

Disparities

North A

The Commission is serious

rate disparities which advers

freight rates on the same or si

in one direction than the othe

investigates and where neces

carriers for the elimination o

An extensive study was m

North Atlantic Continental Eu

were found where rate dispa

of American exporters Since 

moved through informal neg

riers proved unsuccessful th

to a close was considering 

to remove any unjust discri

rate structures

Talking Agreements

The introduction of talkin

to rationalize service in the N

On November 20 1970 th

9899 among seven container 

of three months to exchange 

ping information concerning 
between USAtlantic ports 

them to determine whether 

tices and procedures would 

carriers in these trades

Reports Required

One of the terms of the 

report in writing to the Com

exchange discussion or agr

The result of this agreem

No 10000 which was pla

7217 Most recently the 

98996 extending approva

carriers position was that 

agreement until the final de

Fa

Alleged rate disparities i

actively pursued with the fo

Additionally meetings were 

Japanese Government The c

cation to the Commission fo

rate matters involving both t

Some progress has been m

tion of tariffs thus enabling 

rate situations

Further some rate adjustm

made of the tariffs filed by t

this trade Rate disparities tha

can exporters were called to th

priate steps be taken to elimi

Pressing For Progress

These carriers have confirm

matter The Commission is 

negotiations for more progress 

resolution at the informal lev

disparities in a formal proceed

14
At present full containership 

ports and ports in the Far East 

Lines Orient Overseas Conta

Lines competes through its lan

On June 71972 the Commis

authorizing four Japanese lin

number of their containershi

Agreement No 97314 was a

two other Japanese lines to incr

their containerships in the Jap

More Rationalization Due

More of such agreements 

competition between themselv

parties to realize maximum inc

Latin A

The trend to bilateralism th

agreements between America

or controlled Latin American 

year 1972 There are presen

additional agreement of this 

PrudentialGrace Lines Inc 

trade from US Pacific coa

before the Commission in Doc

The US Atlantic and Gu

9449 was terminated on May 

party to the agreement On January 20 1972 

American Freight Conference

Area Agreement No 9968 

Brazil and ports in Puerto R

A stock purchase agreeme

town Corp and W R Grace 

of the capital stock of the L

was the Gulf South Ame

subsidiary was approved by 

Lykes Youngstown bough

stock in LyGra The five ves
American Steamship Co 

Steamship Co Inc in Tra

ports and the west coast of S

Intermodal Developmen

Section 18bof the Sh

riers by water in the foreig

the rates charged by them 

applicable over any through

Historically tariffs prov

merce set forth only those 

United States and ports in 

1960 srates were filed to 

There are no conflicts as to 

the water portion of the rate 

Planning Facilitated

On April 21 1970 this 

regulations to keep pace wit

then indicated a need for 

offering of through intermo

of the problems posed by m

ments however it did fos

common carriers by water 

intermodal networks to inlan

Through services to and 

with ocean carriers did not 

lag to uncertainties which e

Act and its administration an

of immunity from operation 

LandBridge MiniBridge

However in December o

filed the first of the socalled l

applicable from and to Eur

and from US west coast port

US east coast ports via the 

16
services involve joint offerings 

and connecting railroads

On March 30 1972 the C

15054 extending to the Tran

authority to offer through inter

and inland points in the Un

Prior to this action a num

filed with the Commission sca

for through waterrail servic

points using domestic rail s

At the close of the fiscal yea

petitions to modify four ot

our trade with Japan or othe

Significant Portent

This development toward 

portends a significant impact 

particularly concerning the 

serving west coast ports to e

serving Japan to or from eas

Commission is maintaining 

area in order to insure tha

not harm our overall public 

If the regulatory statutes a

mission it is expected that int

hundreds perhaps thousands 

The Commission has app

agreements extending applic

States andor inland points 

Inland Rates on File

Up to the present only o

file with the Commission ie 

Association Agreement No 

of Inland Charges in Engla

plements the Association sMC

from Grcat Britain and No

South Atlantic ports of the