50th
 

Annual Report
 

Federal Maritime Commission
 

Fiscal Year 2011
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

FEDERAL MARITIME 

 COMMISSION 

50th

 ANNUAL REPORT 

for 

Fiscal Year 

2011 
TABLE OF C NTS 

LETTER OF TRANSMITTAL... ... ... ..... i 

EMBERS OF THE CO M SSION ............ ..... iii 

SENIOR COMM SSI N OFFICIALS... ... ... ..... v 

FMC M SSION ... ...... .. ..... vii 

I. THE CO MISSION 

A. Functions ...... ....... ..... 1 

B. Organization ............ ......... ..... 3 

II. TH YEAR IN REVIEW... ...... 5 

A Efficiency and Competition... ....... ...... 6 

B. Pro ecting the Shipping Public ....... ...... 11 

III. DEVELOPMENTS IN MAJOR U.S. FOREIGN TRADES 

A. North Europe.................. ......... ...... 17 

B. Mediterranean............... .................. ...... 18 

C. Indian Subcontinent and the Middle East ...... 19 

D. Australia and Oce nia...................................... ...... 20 

E. Central America and the Caribbean... ... ....... ...... 21 

F. Asia.............................. ................. ...... 22 

G. South America ......... ................ ...... 24 

H. Africa........................... ........ ....... 27 

I. Worldwide... ........... ... ....... 27 

IV. THE FOREIGN SHIPPING P ICES ACT OF 1988 

A. In General... ... ...... ........ 29 

B. Top Twenty U.S. Liner Cargo 

Trading Partners ...... ......... ........ 30 

TABLE OF CONTEONTENTS 

 

LETTER OF TRANSMITTAL....................................................................................... ..... i 

MEMMBERS OF THE COMMMISSIION.................................................................. ..... iii
 

SENIOR COMMISSIIONOOFFICIALS..................................................................... ..... v 

FMC MISSIION......................................................................................................................... ..... vii 

 

I.	 THE COMMMISSION 

 A.	 Functions ........................................................................................... ..... 1 

 B.	 Organization........................................................................... ..... 3 

 

II.	 THE YEEAR IN REVIEW.............................................................................. ...... ... 5 

 A Efficiency and Competition.................................................... ...... 6 

 B.	 Protectting the Shipping Public........................................... ...... 11 

 

III.	 DEVELOPMENTS IN MAJOR U.S. FOREIGN TRADES 

 A.	 Worldwide.............................................................................. 17 

 B.	 Asia............................................................................. 18 

 C.	 Australia and Oceania ......................................................... 20 

 D.	 Indian Subcontinent aand the Middle East..................... 21
 

 E.	 North Europe............................................................... 22 

 F.	 Mediterranean............................................................... 24 

 G.	 Africa ................................................................................... 25 

 H.	 Central America...................................................................... 26 

 I.	 South America.................................................................... .................. 27 

IV.	 THE FOREIGN SHIPPING PRACTRACTICES ACT OF 1988 

 A.	 In General.......................................................................................... ........ 31 

 B.	 Top Twenty U.S. Liner Cargo 

 Trading Partners..................................................................... ........ 32 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
V. SIGNIFICANT ACTIVITIES BY ORGANIZATIONAL UNIT 

A. Office of the Secretary........................................ ... 35 

B. Office of Administrative Law Judges..................... 41 

C. Office of the General Counsel................................ 53 

D. Office of Equal Employment Opportunity .............. 63 

E. Office of the Inspector General.............................. 65 

F. Office of Consumer Affairs and Dispute Resolution 

Services......................................................... 69 

G. Office of the Managing Director............................. 73 

H. Bureau of Certification and Licensing................... 89 

I. Bureau of Enforcement....................................... 99 

J. Bureau of Trade Analysis.................................. 105 

APPENDICES 

A. Organization Chart............................................ 123 

B. Commission Proceedings................................... 124 

C. Agreement Filings and Status............................... 125 

D. Form FMC-1 Tariff Location Addresses -

Electronic Service Contract Filings 

and Special Permission Applications..................... 126 

E. Civil Penalties Collected..................................... 127 

F. Statement of Appropriations, Obligations 

and Receipts.................................................. 128 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

V.	 SIGNIFICANT ACTIVITIES BY ORGANIZATIONAL UNIT 

A.	 Office of the Secretary........................................ ... 37
 

B.	 Office of Administrative Law Judges..................... 43
 

C.	 Office of the General Counsel................................ 55
 

D.	 Office of Equal Employment Opportunity.............. 65
 

E.	 Office of the Inspector General.............................. 67
 

F.	 Office of Consumer Affairs and Dispute Resolution
 

Services......................................................... 71
 

G.	 Office of the Managing Director............................. 75
 

H.	 Bureau of Certification and Licensing................... 91
 

I. Bureau of Enforcement....................................... 101
 

J.	 Bureau of Trade Analysis.................................. 107
 

APPENDICES 

A.	 Organization Chart............................................ 125
 

B.	 Commission Proceedings................................... 126
 

C.	 Agreement Filings and Status............................... 127
 

D.	 Form FMC-1 Tariff Location Addresses -

Electronic Service Contract Filings
 

and Special Permission Applications..................... 128
 

E.	 Civil Penalties Collected..................................... 129
 

F.	 Statement of Appropriations, Obligations
 

and Receipts.................................................. 130
 

FEDERAL MARITIME COMMISSION 

WASHINGTON, D.C. 20573-0001
 

 March 31, 2012 

To the United States Senate and House of Representatives: 

Pursuant to section 103(e) of Reorganization Plan No. 7 of 

1961, and section 208 of the Merchant Marine Act, 1936, as amended, 

at 46 U.S.C. §306(a), I am pleased to submit the 50th Annual Report of 

the activities of the Federal Maritime Commission for fiscal year 2011. 

 

 Sincerely, 

 

 Richard A. Lidinsky, Jr. 

 Chairman 
 

 

 

 

 

 

 

 

 

MEMBERS OF THE COMMISSION
 

Richard A. Lindsky, Jr.
 

Chairman
 

Appointed 2009
 

Term Expires 2012
 

Joseph E. Brennan Rebecca F. Dye


 Commissioner Commissioner


 Appointed 1999 Appointed 2002


 Term Expired 2008 Term Expires 2015
 

Michael A. Khouri Mario Cordero


 Commissioner Commissioner


 Appointed 2009 Appointed 2011


 Term Expires 2016 Term Expires 2014
 

iii 
v 

SENIOR COMMISSION OFFICIALS 

Counsel to Chairman Lidinsky...................Lowry A. Crook 

Counsel to Commissioner Brennan .......Steven D. Najarian 

Counsel to Commissioner Dye ..............Edward L. Lee, Jr. 

Counsel to Commissioner Khouri................John A. Moran 

Counsel to Commissioner Cordero.............Mary T. Hoang 

General Counsel .........................Rebecca A. Fenneman 

Secretary............................................Karen V. Gregory 

Chief Administrative Law Judge..............Clay G. Guthridge 

Director, Office of Consumer 

Affairs and Dispute Resolution Services..........Vern W. Hill 

Director, Office of 

Equal Employment Opportunity .................Keith I. Gilmore 

Inspector General ...............................Adam R. Trzeciak 

Managing Director...............................Ronald D. Murphy 

Deputy Managing Director......................Florence A. Carr 

Director, Bureau of Certification 

and Licensing .................................Sandra L. Kusumoto 

Director, Bureau of Enforcement ..................Peter J. King 

Director, Bureau of 

Trade Analysis ...................................Austin L. Schmitt 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SENIOR COMMISSION OFFICIALS
 

Chief of Staff.........................................Lowry A. Crook 

Counsel to Commissioner Brennan .......Steven D. Najarian 

Counsel to Commissioner Dye ..............Edward L. Lee, Jr. 

Counsel to Commissioner Khouri................John A. Moran 

Counsel to Commissioner Cordero.............Mary T. Hoang 

General Counsel .........................Rebecca A. Fenneman 

Secretary............................................Karen V. Gregory 

Chief Administrative Law Judge..............Clay G. Guthridge 

Director, Office of Consumer 

Affairs and Dispute Resolution Services..........Vern W. Hill 

Director, Office of 

Equal Employment Opportunity .................Keith I. Gilmore 

Inspector General ...............................Adam R. Trzeciak 

Managing Director...............................Ronald D. Murphy 

Deputy Managing Director......................Florence A. Carr 

Director, Bureau of Certification 

and Licensing .................................Sandra L. Kusumoto 

Director, Bureau of Enforcement ..................Peter J. King 

Director, Bureau of Trade Analysis..........Austin L. Schmitt 
 

Mission 

To foster a fair, efficient and reliable international ocean transportation system 

and to protect the public from unfair and deceptive practices. 

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Federal Maritime Commission
 

Fiscal Year 2011
 

I 

THE COMMISSION 

A. FUNCTIONS 

The Federal Maritime Commission is an independent agency responsible for the regulation of oceanborne transportation in the foreign 

commerce of the United States for the benefit of U.S. exporters, importers, 

and the U.S. consumer. The principal statutes administered by the Commission are the Shipping Act of 1984 (1984 Act), the Foreign Shipping 

Practices Act of 1988 (FSPA), section 19 of the Merchant Marine Act, 1920 

(1920 Act), and sections 2 and 3 of Pub. L. No. 89-777, 80 Stat. 1350. These 

statutes are now codified in Title 46 of the U.S. Code at sections 40101 

through 44106. 

The Commission’s regulatory responsibilities include: 

•	 Reviewing and monitoring agreements among ocean common carriers and marine terminal operators (MTOs) relating to service in the 

U.S. foreign oceanborne trades, to ensure that they do not cause substantial increases in transportation costs or decreases in transportation 

services. Under the Shipping Act, the general antitrust laws do not apply to certain agreements between or among ocean common carriers 

and marine terminal operators. The Commission conducts preliminary reviews and performs ongoing oversight of such agreements and 

can take action to address agreement activity that does not meet the 

requirements of the Shipping Act, or that cause effects prohibited by 

the Shipping Act. 

•	 Maintaining and reviewing confidentially filed service contracts and 

NVOCC Service Arrangements between ocean common carriers and 

shippers to guard against detrimental effects to shipping in the U.S. 

foreign trades. 
Federal Maritime Commission 

Fiscal Year 2011 

•	 Providing a forum for exporters, importers, and other members of the 

shipping public to obtain relief from ocean shipping practices or disputes that impede the flow of commerce and otherwise cause economic 

harm. 

•	 Ensuring common carriers’ tariff rates and charges are published in private, automated tariff systems and electronically available to the shipping public. 

•	 Monitoring rates, charges, and rules of government-owned or -controlled carriers to ensure that they are just and reasonable. 

•	 Issuing passenger vessel certificates evidencing financial responsibility 

of vessel owners or charterers to pay claims for personal injury or death, 

and to reimburse passengers in the event of nonperformance of a voyage 

or cruise. 

•	 Licensing ocean transportation intermediaries (OTIs) in the U.S. to 

protect the public from unqualified, insolvent, or dishonest companies. 

•	 Ensuring that OTIs maintain financial responsibility to protect the shipping public from financial loss. 

•	 Protecting the shipping public from economic harm by investigating 

rates, charges, classifications, and practices of common carriers, MTOs, 

and OTIs operating in the foreign commerce of the United States, and 

acting to stop unjust or unlawful practices that violate the Shipping Act. 

•	 Taking action to address unfavorable conditions arising out of foreign 

government or business practices in the U.S. foreign shipping trades. 

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Federal Maritime Commission
 

Fiscal Year 2011
 

The Commission carries out its regulatory responsibilities by conducting informal and formal investigations. It holds hearings, considers evidence, renders decisions, and issues appropriate orders and regulations. The 

Commission also adjudicates and mediates disputes involving regulated entities, the shipping public, and other affected individuals or interest groups. 

B. ORGANIZATION 

The Commission is composed of five Commissioners appointed by 

the President with the advice and consent of the Senate. Commissioners 

serve five-year, staggered terms, and no more than three members of the 

Commission may belong to the same political party. The President designates one of the Commissioners to serve as Chairman. The chairman is the 

chief executive and administrative officer of the agency. 

The Commission’s organizational units consist of: Office of the 

General Counsel; Office of the Secretary (including the Library); Office of 

Consumer Affairs and Dispute Resolution Services; Office of Administrative Law Judges; Office of Equal Employment Opportunity; Office of the 

Inspector General; Office of the Managing Director; the Offices of Human 

Resources, Budget and Finance, Management Services, and Information 

Technology; the Bureaus of Certification and Licensing, Enforcement, and 

Trade Analysis; and the Commission’s Area Representatives. In fiscal year 

2011, the Commission had a total appropriation of $24,086,730. That appropriation supported the actual employment of 128 full-time equivalent 

positions during the fiscal year. The majority of the Commission’s personnel 

are located in Washington, D.C., with Area Representatives in Houston, Los 

Angeles, New Orleans, New York, Seattle, and South Florida. 

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Federal Maritime Commission
 

Fiscal Year 2011
 

II 

THE YEAR IN REVIEW 

In 2011, the Federal Maritime Commission marked its 50th year 

since its establishment as an independent agency by President John F. Kennedy. The Commission commemorated the anniversary year with a series 

of events, including a Chairman’s Roundtable that featured seven current 

and former FMC Chairmen discussing past, present, and future issues faced 

by the FMC, as well as an awards ceremony luncheon with current and past 

FMC employees. 

The commercial ocean transportation system returned to a more 

normal state in fiscal year 2011, as vessel capacity returned to service in the 

U.S. inbound and outbound trades, reflecting the recovery begun in fiscal 

year 2010 from the industry’s worst recession in over 60 years. As additional 

vessel capacity was brought back on line, foreign container manufacturers 

brought plants back on line and began producing shipping containers again, 

after being shut down as a result of the recession. The shortage of both vessel capacity and containers in fiscal year 2010 had severely impacted U.S. 

importers and exporters, who as a result of the shortages encountered difficulty arranging for shipment of their cargo. In addition, shippers frequently 

faced rapid and substantial increases in transportation costs from the lows of 

2009, often with little advance warning. Throughout the first three quarters 

of fiscal year 2011, carriers relieved that strain on our transportation system 

by deploying additional vessels and containers. By the end of the fourth 

quarter of fiscal year 2011, however, carriers began again to scale back vessel 

capacity, stating that existing capacity exceeded demand. At the same time, 

alarms were sounded that soon shippers would again encounter significant 

container shortages. 

To more closely monitor concerted activity, the Commission in 

2010 imposed additional reporting requirements on the major outbound 

and inbound transpacific rate discussion agreements and in early 2011 

imposed additional reporting requirements on global alliances. The Commission then extended the reporting requirements for the transpacific rate 

discussion agreements through April 2012. The Commission has devoted 

significant staff time to close monitoring of those agreements and alliances. 

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Federal Maritime Commission 

Fiscal Year 2011 

The Federal Maritime Commission’s mission is to foster a fair, efficient and reliable international ocean transportation system, and to protect 

the public from unfair and deceptive practices. The highlighted actions under each of the Commission’s strategic goals provide an overview of agency 

activities in pursuit of its mission. Central to all of these actions were recognition of the ever changing economic environment and avoiding reoccurrence of capacity issues and shipping difficulties encountered during the 

recovery from the severe maritime industry recession of fiscal year 2009. 

Strategic Goal 1: Maintain an Efficient and Competitive International 


Ocean Transportation System
 

The FMC is charged with ensuring competitive and efficient ocean 

transportation services for the shipping public. Competition in U.S. trades 

helps to foster competitive rates and encourage diverse service offerings for 

the benefit of U.S. exporters and importers, and ultimately consumers. The 

Shipping Act of 1984 grants ocean carriers and marine terminal operators 

limited antitrust immunity for activities pursuant to agreements they file 

with the Commission. The Commission conducts preliminary reviews and 

performs ongoing oversight of such agreements. The Commission can take 

action to address activities of such agreements that do not meet the requirements of the Shipping Act or that cause effects prohibited by the Shipping 

Act. 

Fiscal year 2011 was an active year for the Commission, which continued to concentrate on facilitating U.S. exporters’ access to foreign markets via ocean transportation, supporting the economic recovery, protecting 

U.S. consumers, encouraging a sustainable ocean transportation industry, 

enhancing safety and security, and monitoring foreign practices to protect 

U.S. jobs. The Commission’s Bureau of Trade Analysis focused on collecting 

and analyzing data for the Commission’s study of the impact of the October 

2008 European Union (EU) repeal of its block competition law exemption 

for liner conferences. Data analyzed included information regarding changes in carrier market structures, competition, services, vessel capacity, rates, 

and surcharges. The Commission also established a dialogue with officials 

of the European Commission, Directorate-General for Competition. 

6 

Federal Maritime Commission
 

Fiscal Year 2011
 

The Commission increased its monitoring of concerted activities 

of carriers, particularly in the transpacific trades, to ensure that agreement 

members did not cause unreasonable increases in rates or unreasonable 

reductions in service. In addition, the Commission assessed the impact of 

slow steaming practices in reducing fuel consumption and carbon emissions, as well as the question of whether fuel costs savings accrued from 

slow steaming were passed on to the shipping public. 

Supporting U.S. Exports and the Economic Recovery: Following the worst 

year in the maritime industry since the invention of the containership, fiscal year 2010 began with a recovery in ocean trade that was stronger than 

many anticipated. Demand for cargo space and containers outstripped supply, and U.S. exporters and importers saw supply chain disruptions such as 

abruptly cancelled bookings, cargo rolled to the next sailing, and successive 

surcharges and price increases. Early in 2010, President Obama also announced his National Export Initiative to double exports over the next five 

years, directing agencies “to use every available federal resource” in pursuit 

of that goal. During fiscal year 2011, exports in goods continued to show 

strong growth, on pace to meet the National Export Initiative’s goal, while 

vessel capacity and container availability met or exceeded demand. 

Addressing Supply Chain Problems: The FMC conducted an aggressive 

search for solutions to supply chain problems that threatened to impede 

the growth of exports and the continued recovery. In fiscal year 2010, the 

Commission initiated Fact Finding Investigation No. 26, Vessel Capacity 

and Equipment Availability in the United States Export and Import Liner 

Trades, and the investigation continued into fiscal year 2011. The fact finding team held more than 170 interviews with a wide variety of companies 

and organizations involved in international ocean shipping, led a series of 

best-practices discussion meetings between shippers and carriers, and began internet-based collaborative efforts to develop solutions to container 

7
 
 

Federal Maritime Commission 

Fiscal Year 2011 

availability issues. During fiscal year 2011, the fact finding officer issued 

her final report, which led to the Commission taking several recommended 

steps: 

•	 Rapid Response Teams: The Commission established ongoing Rapid 

Response Teams to provide prompt solutions for commercial disputes 

between carriers and their customers. Major ocean carriers named 

high-level liaison officials to work with the Rapid Response Teams to 

cut through red tape and respond to specific shipper concerns within 

24 hours. The Commission has strongly encouraged shippers, ocean 

transportation intermediaries, and ocean carriers to contact the Commission’s Rapid Response Teams with commercial issues or disputes that 

need immediate attention. 

•	 Increased TSA and WTSA Oversight: Throughout fiscal year 2011, the 

Commission closely monitored activities of the rate discussion agreements in the United States’ largest trade lane -- the inbound Transpacific 

Stabilization Agreement (TSA) and the outbound Westbound Transpacific Stabilization Agreement (WTSA). Verbatim transcripts of agreement meetings were required and reviewed by Commission staff. The 

transcript requirement has enabled the Commission to better evaluate 

assertions by many shippers that member carriers may have been improperly discussing issues, such as collective capacity reductions, that 

are not authorized by their agreements. 

•	 Increased Carrier Alliance Oversight: In fiscal year 2011, the Commission increased its oversight of global vessel alliances, which have authority to set capacity collectively. The Commission required the major alliances to submit minutes of certain meetings, monthly capacity reports, 

and advanced notice of capacity changes. Staff reviewed the submissions 

for potential capacity shortages and to ensure compliance with agreement authority. 

8 

Federal Maritime Commission
 

Fiscal Year 2011
 

•	 Service Contract Enhancement Project: The Commission also determined to assist small U.S. exporters and importers improve their service 

contracting practices through education and outreach. 

In addition, the Commission has been assisting ocean carriers, the 

U.S. Department of Agriculture’s Agricultural Marketing Service, and agricultural exporters on a pilot project to give more transparency and visibility 

to the chronic problem of locating empty containers for exports. The Agricultural Marketing Service has completed the pilot project to show container availability at 18 U.S. port and inland locations. Beginning in February 2012, the Agricultural Marketing Service plans to collect container 

availability data from at least ten leading ocean carriers, which will assist 

U.S. exporters determine weekly container availability, as well as container 

availability projections two weeks in the future. 

Economic Relief to Small Businesses: In fiscal year 2011, the Commission 

approved a rule change to conditionally exempt more than 3,500 licensed 

non-vessel-operating common carriers (NVOCCs) from the costs and burdens of publishing in tariffs the rates they charge for cargo shipments. Most 

NVOCCs are small businesses who could see significant savings from the 

exemption. 

Marine Environmental Committee and Clearinghouse: The FMC has seen 

environmental issues become increasingly central to the agreements and 

shipping practices we monitor. The Commission’s Marine Environmental 

Committee reviews filings at the agency for best environmental practices 

that the Commission can put forward as models for adoption by other ports 

and companies. The Commission also has created a webpage to serve as 

an environmental issues clearinghouse for information on maritime environmental issues, news, resources, laws and regulations, and best practices. 

The Commission is monitoring decisions of the International Maritime Organization’s Marine Environment Protection Committee for their potential 

impacts on the U.S. ocean transportation industry. 

9
 
Federal Maritime Commission 

Fiscal Year 2011 

Encouraging An Efficient, Sustainable Ocean Transportation System: In fiscal 

year 2010, the Commission allowed TSA’s member lines to work together to implement slow steaming and other environmental initiatives. Slow 

steaming, or operating at reduced speeds, allows vessels to save fuel, which 

reduces their emissions and affords substantial cost savings. TSA member 

lines have indicated that they may also use their new authority to work to 

increase use of alternative fuels, cold ironing, and other pollution-reducing 

technologies. In fiscal year 2011, the Commission reviewed the impact of 

these practices to ensure that they do not cause unreasonable constraints on 

the supply chain, and to determine whether fuel cost savings were passed on 

to shippers. 

EU Study: The Commission was actively engaged in gathering and analyzing data for its study of the impact of the October 2008 EU repeal of its block 

competition law exemption for liner shipping conferences. Data include 

information regarding changes in carrier market structures, competition, 

services, vessel capacity, rates and surcharges. A dialogue also was established with officials of the European Commission, Directorate-General for 

Competition. The Commission will issue the results of its study to Congress 

and the public during the second quarter of fiscal year 2012. 

Coordination with the International Trade Administration, U.S. Department 

of Commerce: Commission staff coordinated with the International Trade 

Administration (ITA) to support export growth and discuss means of addressing exporters’ challenges in obtaining containers or vessel space for 

their shipments. 

Container Freight Rate Indices and Derivatives: In fiscal year 2011, the Commission began receiving service contracts with rates that adjusted based on 

container freight rate indices, and some players in the industry began engaging in derivative transactions based on those indices. In response, the 

Commission launched a Container Freight Index and Derivatives Working 

Group that studied how index-based contracts and derivatives impact the 

ocean transportation industry and comport with Commission statutes and 

regulations. 

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Federal Maritime Commission
 

Fiscal Year 2011
 

Strategic Goal 2: Protect the Public from Unlawful, Unfair, and Deceptive 

 Practices and Resolve Shipping Disputes 

The FMC has a wide variety of responsibilities to protect the public 

from financial harm, including assisting in the resolution of disputes related 

to the shipment of goods or the carriage of passengers, investigating and 

prosecuting unreasonable or unjust practices, and ruling on formal complaints alleging violation of the Shipping Act. The FMC also contributes 

to the integrity and security of the nation’s supply chain and transportation 

system by (1) identifying unlicensed operations and licensing only those 

OTIs with appropriate character and financial responsibility, (2) ensuring 

financial responsibility of cruise vessel operations so that in the event of 

non-performance, passengers do not forfeit deposits made to the cruise 

lines, and (3) enforcing prohibitions against mislabeling cargo shipped to 

or from the United States. In carrying out these regulatory responsibilities, 

the Commission undertook a number of significant actions during fiscal 

year 2011 to address issues affecting U.S. consumers who ship their personal 

goods overseas or take cruises. 

Key Accomplishments in Fiscal Year 2011 

Household Goods Shipments: The Commission conducted Fact Finding Investigation No. 27, Potentially Unlawful, Unfair or Deceptive Ocean Transportation Practices Related to the Movement of Household Goods or Personal 

Property in U.S.-Foreign Oceanborne Trades, to identify and address issues 

that individual consumers have experienced when shipping their personal 

household goods overseas. Each year, the FMC receives a substantial number of complaints from individuals who have experienced problems with 

their international household goods shipments. Between 2005 and 2009, 

the Commission received over 2,500 such consumer complaints related to 

household goods, moving companies transporting personal effects and vehicles. In fiscal year 2011, the Fact Finding Officer concluded the investigation with a report containing a number of recommendations, which were 

adopted by the Commission, including: 

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Federal Maritime Commission 

Fiscal Year 2011 

•	 Consumer education: The Commission determined to upgrade its website to better assist customers shopping for international shipping options; engage in formal cooperation with other governmental agencies 

who protect consumers moving household goods; enhance cooperation with trade associations representing household goods movers; develop information for ocean transportation intermediaries to distribute 

to consumers moving household goods; target outreach to local communities that regularly ship household goods overseas; and encourage 

household goods movers to link their websites to the FMC’s website for 

consumer information. 

•	 Industry best practices and model forms: The Commission also voted to 

work with industry groups and consumers to develop a set of best practices and model shipping forms that address issues consumers have encountered when shipping household goods. 

•	 Licensing issues: As the Commission works to update its licensing regulations, it will include recommendations for adjustments that specifically address issues with household goods shipments. 

•	 Enforcement: Commission staff worked to enhance joint law enforcement efforts to protect consumers and also address problem household 

goods movers. An interagency memorandum of understanding (MOU) 

was under negotiation with the Federal Motor Carrier Safety Administration (FMCSA) to address household goods issues. The Commission 

also voted to develop enforcement strategies targeted to entities offering 

services related to household goods shipments. 

•	 Alternative Dispute Resolution (ADR): The Commission also decided to 

move forward with initiatives to better promote its Ombuds and other 

ADR services to assist consumers who experience problems when moving their household goods overseas. 

12
 

Federal Maritime Commission
 

Fiscal Year 2011
 

Passenger Vessel Non-performance Coverage: After considering extensive 

input from cruise lines, the Commission determined to increase protections 

available to passengers, while reducing the burden of Commission coverage 

requirements on smaller vessel operators. A proposed rule to that effect 

was issued in late fiscal year 2011. The Commission also worked to ensure 

compensation of passengers affected by the demise of Cruise West, a cruise 

line with significant sailings from the Pacific Northwest to Alaska. 

Monitoring Foreign Practices to Protect U.S. Jobs: The Commission was also 

vigorous in carrying out its charge to monitor and prevent practices by foreign governments or entities that adversely affect U.S. commerce. Following 

concerns raised by U.S. shippers, the FMC’s Chairman visited the Shanghai 

Shipping Exchange (SSE) to seek and obtain assurances regarding protections for confidential information of U.S. companies that must be filed with 

the Exchange. The Commission followed up by raising these issues and the 

concerns of U.S. NVOCCs in October 2010, as part of the U.S. delegation 

to bilateral consultations with the Chinese Ministry of Transport under the 

U.S.-China Maritime Agreement. A reciprocal visit of the SSE to the FMC 

took place in early fiscal year 2012. The Commission will continue to follow 

developments and work with China and our other major trading partners 

to ensure that no unreasonable conditions exist that would impair U.S. commerce. 

13
 
 

 

Federal Maritime Commission 

Fiscal Year 2011 

Dispute Resolution: During fiscal year 2011, 565 complaints were received 

that necessitated the opening of cases to provide dispute resolution services. 

This was a 33% increase over the volume of cases in fiscal year 2010 and 

included 127 passenger complaints about cruise line issues, 250 complaints 

with respect to household goods shipments, and 188 complaints involving 

other cargo shipment matters. 

Participation of the parties in confidential ADR services can provide a 

means for immediate, cost-effective resolution through cooperation between parties. Cargo shipment complaints are increasingly complex. Problems involving ocean transportation intermediaries with overextended finances and inability to complete ocean transportation continued to be an 

issue. In addition, many household goods complaints pertained to initial 

charges quoted vis á vis the actual charges billed, often due to measurement 

discrepancies. 

Enforcement Actions to Protect the Shipping Public and Address Market Distorting Activities: The Commission’s Bureau of Enforcement and Area Representatives continued their efforts to investigate and prevent practices that 

are unfair and deceptive. The targeted violations included misdescription of 

cargo, which also poses a serious safety and security risk because it prevents 

vessel operators and port officials from knowing when dangerous goods are 

being transported on vessels into the United States. 

During 2011, the Commission collected $2.1 million in penalties for such 

violations. The Commission concluded a compromise agreement with a 

major Japanese-flag shipping line, resolving alleged Shipping Act violations 

affecting more than 1,000 shipments. Violations included providing transportation services to intermediaries that did not have the required tariff, 

license, or bond; misdescribing cargo; allowing shipment under service 

contracts by persons who were not parties to those contracts; and providing 

transportation that was not in accordance with the rates and 

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Federal Maritime Commission
 

Fiscal Year 2011
 

charges set forth in published tariffs or service contracts. Commission staff 

alleged that these practices persisted over a period of several years and involved numerous service contracts. Under the settlement, the ocean common carrier terminated those activities, and paid $1,200,000 in civil penalties to the Commission. Two major formal investigations were concluded 

during fiscal year 2011 when formal settlement agreements were approved 

in FMC Docket Nos. 10-09, Sinicway International Logistics Ltd. and 11-04, 

Worldwide Logistics Co., Ltd. The investigations addressed whether certain 

Shanghai-based NVOCCs used intentional misdescriptions of commodities 

as an unfair device or means to obtain ocean transportation at less than the 

rates that would otherwise apply, in violation of section 10(a) of the Shipping Act. The settlements resulted in payment of substantial civil penalties 

by each of the NVOCCs, and termination of alleged violative practices. 

In conjunction with formal proceedings instituted against an unlicensed 

freight forwarder in FMC Docket No. 11-06, Indigo Logistics LLC, et al, the 

Commission also sought and obtained a Federal court order enjoining the 

Indigo Logistics defendants from further unlawful activities. 

Technology and Stewardship of Resources: Strategic management of the 

FMC’s human resources, property management, financial, and procurement 

practices and other vital support activities is essential to meet the agency’s 

regulatory and programmatic goals. The FMC continued its efforts to use 

new information technology (IT) to improve agency business processes and 

augment the accessibility of the public conducting licensing or legal business with the agency. In fiscal year 2011, it became apparent that significant 

systems were outdated and in need of substantial updating and revision to 

comply with government-wide standards and to improve efficiency of operations. These systems are critical to the Commission’s ability to carry out 

its mission, especially in an era of increasing demands but declining human 

resources. After reviewing its IT needs, the Commission determined to terminate an existing major IT contract and proceed to recompete for services 

to meet more defined needs, considering improved technologies. 

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Federal Maritime Commission 

Fiscal Year 2011 

On the human resources front, the Commission designed a new performance appraisal system for Non-Senior Executive Service (SES) personnel, obtained approval from OPM, provided training to all employees, and 

implemented the new system for the appraisal period beginning September 

1, 2011. The revised system demands greater communication between staff 

and managers and explicitly identifies at least twenty standards of performance for each employee. It was developed by an internal task force composed of supervisory and non-supervisory personnel, equally distributed. 

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III 

DEVELOPMENTS IN MAJOR 

U.S. FOREIGN TRADES 

A. WORLDWIDE 

The world’s container trade expanded by approximately 7 percent in 

fiscal year 2011 compared to an expansion of almost 10 percent in 2010. As 

the fiscal year came to a close, 156 containerships lay idle, representing 2.5 

percent of the total fleet capacity measured in TEUs (twenty-foot equivalent 

container units). In contrast, 128 ships, representing less than 2 percent of 

the containership fleet capacity, lay idle at the end of fiscal year 2010. 

Container volumes in the U.S. liner trades in fiscal year 2011 expanded 7 percent to 29.5 million TEUs, compared to 27.7 million last year. 

The U.S. share of the world’s container trades was 19 percent. U.S. container 

imports continued to increase, expanding by 5 percent to 17.6 million TEUs, 

compared to 16.8 million in 2010. This was still well below the record of 19.4 

million TEUs reached in fiscal year 2007. U.S. container exports grew by 9 

percent to 11.9 million TEUs compared to 10.9 million in 2010 - pushing 

U.S. exports to a new record high. The U.S. container imbalance improved 

slightly; for every 100 loaded containers exported from the U.S. 148 were 

imported, compared to 154 imported in fiscal year 2010. 

On a worldwide basis, the containership fleet expanded at about the 

same pace as the demand for global container shipping. This fiscal year, the 

containership fleet’s nominal capacity grew by just over 7 percent compared 

to last year. At the end of September 2011, 4,926 containerships, with a fleet 

capacity of 15.2 million TEUs, were available to serve the world’s container 

trades. Net of vessels scrapped, only 81 containerships were added to the 

world fleet, a significant decrease from last year’s 145. As of September 30, 

2011, there were orders worldwide for 655 new containerships with an aggregate capacity of 4.5 million TEUs. This amount of ship capacity on order 

is equivalent to 30 percent of the existing fleet capacity. 

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Federal Maritime Commission 

Fiscal Year 2011 

The world’s container shipping industry became slightly more concentrated during fiscal year 2011. At the end of fiscal year 2011, the top five 

container operators controlled 46 percent of the world’s containership fleet 

capacity, the top ten controlled nearly 66 percent, and the top twenty controlled almost 88 percent (compared to 43, 61 and 83 percent, respectively, 

last year). In contrast to the last two years, the carriers comprising the top 

five operators changed with COSCO Container Lines and Hapag-Lloyd entering the top flight by displacing Evergreen Line and APL. 

B. ASIA 

In fiscal year 2011, Asia accounted for 63 percent of all U.S. inbound 

and outbound containerized trade by volume. Seventy-one percent of all 

U.S. container imports originated from Asia, and the region received 52 percent of all U.S. container exports. The Ports of Los Angeles and Long Beach 

handle one-half of all containerized U.S. imports from and exports to Asia. 

The Transpacific Stabilization Agreement (TSA), a fifteen member 

rate discussion agreement with voluntary pricing authority, operates in the 

inbound container trade from northeast and southeast Asia to all of the 

United States.3

 During fiscal year 2011, TSA’s share of the U.S. inbound Asia 

trade was approximately 89 percent, down from 93 percent the previous fiscal year. This decrease in market share was due mainly to new entrants to 

the trade in 2010 and 2011, including The Containership Company, Compania Sud Americana De Vapores, Grand China Shipping Co., Hainan Pan 

3 The TSA’s geographic scope also includes parts of the Indian Subcontinent 

(Bangladesh, Pakistan, and Sri Lanka, but not India). 

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Federal Maritime Commission
 

Fiscal Year 2011
 

Ocean Shipping Co., Horizon Lines, and T.S. Lines. However, due to unfavorable market conditions in fiscal year 2011, most new entrants either 

reduced services, suspended operations, or left the trade altogether. 

For fiscal year 2011, container imports from Asia grew by nearly 3 

percent, as compared to a 12 percent growth in the prior fiscal year. Northeast Asia accounted for 87 percent of transpacific imports, with most originating in China. During the fiscal year, the United States imported 12.5 

million TEUs of Asian goods, compared to 12.1 million TEUs last year. 

Prior to the annual service contract season that began on May 1, 

2011, TSA lines proposed a general rate increase (GRI) per FEU (forty-foot 

equivalent container units) of $400 to the U.S. West Coast and $600 to the 

U.S. East Coast. TSA lines also proposed a peak season surcharge of $400 

per FEU, effective from June 15, 2011 through November 30, 2011, subject 

to adjustment based on changing market conditions. Press reports indicate 

that TSA carriers were unsuccessful in achieving the full proposed GRIs. 

In July 2011, TSA modified its bunker adjustment factor (BAF) formula to reflect net fuel cost reductions gained from the carriers’ practice of 

slow steaming.4 In August 2011, TSA published two revenue indexes, one 

to the U.S. West Coast and the other to the U.S. East and Gulf Coasts.5

 TSA 

launched these indexes to support multi-year service contracts with rates 

that fluctuate based on changes in these indexes. 

4 The BAF surcharge is added to the base freight rate to compensate for fluctuations in the price of fuel oil. Carriers slow steam vessels in order to cut 

fuel costs and greenhouse gas emissions.

 5 The indexes are based on the weighted average revenue per FEU for twelve 

of the fifteen TSA members and, except for the BAF, they are inclusive of all 

assessorial charges collected. 

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Federal Maritime Commission 

Fiscal Year 2011 

The major rate agreement in the outbound transpacific trade is the 

Westbound Transpacific Stabilization Agreement (WTSA). Like TSA, the 

10-member WTSA operates as a forum for the exchange of information 

among its members that enables them to propose rate actions for U.S. exports to Asia. WTSA’s geographic scope covers all U.S. outbound shipments 

to northeast and southeast Asia.6 During fiscal year 2011, WTSA’s share of 

the U.S. outbound Asian trade was approximately 64 percent. 

U.S. exports to Asia increased by 9 percent during fiscal year 2011. 

The U. S. exported 6.2 million TEUs of goods to the region compared to 5.7 

million TEUs in the previous fiscal year. Eighty-four percent of all U.S. container exports to Asia are destined for northeast Asia, which includes all of 

China, Taiwan, South Korea, and Japan. 

WTSA members adopt GRIs for various commodity groups at different times during the year rather than a single, annual GRI. This practice 

is dictated by the seasonality of major U.S. agricultural export crops, which 

have different harvest seasons and peak shipping seasons. WTSA members 

proposed several GRIs during the fiscal year, but reportedly were largely 

unsuccessful in achieving their revenue goals. Like TSA, WTSA modified its 

BAF formula to take into account carriers’ practice of slow steaming. 

C. AUSTRALIA AND OCEANIA 

The Oceania trade includes the nations and territories of Australia, 

New Zealand, Papua New Guinea, Western Samoa, and other South Pacific 

Islands. In fiscal year 2011, U.S. exports to the region grew by 8 percent. 

The top U.S. exports included general cargo, auto parts, paper, and grocery 

products. In the inbound trade, container imports from Australia/Oceania 

6

 Like TSA, WTSA’s geographic scope also includes parts of the Indian Subcontinent (i.e., Bangladesh, Pakistan and Sri Lanka, but not India). 

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Fiscal Year 2011
 

were down by 2 percent. Imports of meat and wine, the top two commodities from the region, accounted for 36 percent of the total import cargo volume in TEUs. Overall, U.S. exports shipped in the outbound trade direction 

exceeded imports. For every import TEU that moved inbound from the 

region, 1.7 TEUs of U.S. export cargo moved outbound. Hamburg Sud was 

the largest carrier operating in the trade with a market share of over 30 percent in each trade direction. 

Carriers providing direct service in the trade are linked through 

a network of agreements. There are two main rate discussion agreements 

that cover the trade. In the outbound direction, six carriers participate in 

the USADA, and in the inbound direction, five carriers participate in the 

ANZUSDA. A sizable portion of the trade is made up of carriers who provide service through transshipment arrangements. In addition, five carriers 

serving the Pacific Islands participate in the Pacific Island Discussion Agreement. The carriers that participate in these rate discussion agreements are 

also involved in a series of vessel sharing agreements. 

In June 2011, Pacific International Line (PIL) extended its weekly 

China transpacific service calling at the port of Long Beach by adding direct 

calls at ports in Australia and New Zealand. MSC announced plans for the 

start of the next fiscal year to offer direct calls in the trade at U.S. Pacific and 

Atlantic ports by obtaining space through the vessel sharing agreements of 

the established carriers. In turn, the carriers in the vessel sharing agreements announced plans to add more capacity by upgrading the size of their 

vessels. 

D. INDIAN SUBCONTINENT AND THE MIDDLE EAST 

For fiscal year 2011, U.S. container exports to the Indian Subcontinent grew by 9 percent, the same rate as in fiscal year 2010. U.S. container 

exports to the Middle East grew by 12 percent in fiscal year 2011, compared 

21
 
Federal Maritime Commission 

Fiscal Year 2011 

to a 10 percent increase in the previous fiscal year. The United States exported approximately 444,000 TEUs to the Indian Subcontinent, and 582,000 

TEUs to the Middle East. Also, the United States container imports from 

the Indian Subcontinent increased by 8 percent, and by 9 percent from the 

Middle East. The U.S. imported approximately 660,000 TEUs from the Indian Subcontinent and 163,000 TEUs from the Middle East in fiscal year 2011. 

WTSA is the only major rate discussion agreement that operates in 

the U.S. export trade in the region. WTSA’s geographic scope covers U.S. 

exports to the Indian Subcontinent countries of Bangladesh, Pakistan, and 

Sri Lanka (but not India or the Middle East).1

 For the fiscal year, WTSA’s 

market share for U.S. exports to Bangladesh, Pakistan, and Sri Lanka was 

only 32 percent, down slightly from 35 percent in the previous fiscal year. 

No major rate discussion agreement covers U.S. exports to the Middle East. 

TSA is the only major rate discussion agreement that operates in the 

U.S. import trades from the Indian Subcontinent countries of Bangladesh, 

Pakistan and Sri Lanka. 2 For the fiscal year, TSA lines had a 93 percent 

combined market share for U.S. imports from the countries of Bangladesh, 

Pakistan and Sri Lanka. During the fiscal year, Maersk Line, along with its 

subsidiary Safmarine, and APL moved nearly half of all container imports 

from the three Indian Subcontinent countries to the United States. No major 

rate agreement covers Middle East imports to the United States. 

E. NORTH EUROPE 

In fiscal year 2011, the U.S. and North Europe saw a sizable increase in container cargo growth in both trade directions. Compared to 

1

 WTSA’s geographic scope also includes northeast and southeast Asia. 

2

 Like WTSA, TSA’s geographic scope also includes northeast and southeast 

Asia. 

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Fiscal Year 2011
 

fiscal year 2010, U.S. exports grew by 12 percent. In terms of commodities, 

containers of (used) automobiles rebounded from the recessionary slump 

to retake the position as the top U.S. liner export in the trade. Auto exports 

having surged by over 125 percent from the 2010 fiscal year levels. Other 

top container exports included paper, wood pulp, and auto parts. In the 

inbound trade, the volume of liner imports from North Europe grew by 10 

percent. Beer and ale remained the top liner import from North Europe, 

accounting for 10 percent of the total cargo volume of imports in TEUs. 

Other top container imports from North Europe included auto parts, paper, 

furniture, and beverages. Continued growth is expected in both directions. 

There were a number of service and agreement changes that added 

vessel capacity to the trade. Compania Sud Americana de Vapores S. A. 

(CSAV) entered the trade by launching a weekly loop service with CMA 

CGM under the CMA CGM/CSAV Victory Bridge Vessel Sharing Agreement. Orient Overseas Container Line Limited (OOCL) opted to charter 

space on the new service under the CMA CGM/OOCL Victory Bridge 

Space Charter Agreement. Compania Chilena De Navegacion Interoceania, S. A. (CCNI) also entered the trade by forming a weekly loop service 

with Hamburg Sud under the HSDG-CCNI USWC-Europe Vessel Sharing 

Agreement. In March 2011, Hapag Lloyd resumed its suspended Atlantic 

Express Shuttle between New York, Hamburg, and Antwerp. Mediterranean 

Shipping Company (MSC) upgraded the size of the vessels that it deploys in 

both of the service loops that it operates in the trade. By the end of the fiscal 

year, total annualized vessel capacity increased by 11 percent in each direction. The increase in vessel capacity was matched by the increase in cargo 

volume. The average utilization of vessel capacity for the fiscal year was reported to have been in the high 80 percent range in both trade directions. 

During the fiscal year, many of the major carriers proposed general 

rate increases (GRIs) of $125 to $350 per TEU. According to reports by industry analysts, Freight-All-Kinds (FAK) per FEU increased from $2,500 

23
 
Federal Maritime Commission 

Fiscal Year 2011 

to $2,750 in the inbound direction, and from $1,500 to $1,700 in the outbound direction. Additional GRI proposals were announced for the beginning of next fiscal year. 

In December 2010, the World Liner Data Agreement (WLDA) took 

effect. WLDA, a new carrier information exchange agreement, replaced the 

Container Trade Statistics Agreement (CTSA), which was formed in October 2008 as an information exchange agreement among carriers operating 

in the liner trades between the U.S. and the European Union. WLDA has the 

same authority as CTSA to collect and disseminate trade data. However, its 

geographic scope includes all of the U.S. liner trades worldwide. CTSA was 

formally terminated in June 2011. 

F. MEDITERRANEAN 

Despite the financial uncertainty facing eurozone nations in South 

Europe, there was positive cargo volume growth in both trade directions 

in fiscal year 2011. Overall, container exports to the Mediterranean grew 

by 3 percent. Leading U.S. exports included paper, cotton, wood pulp, and 

lumber. In particular, U.S. exports of cotton to the region rose by 28 percent 

due to production losses in other parts of the world. Much of that cotton 

was shipped to textile manufacturers in Turkey. In the inbound direction, 

container imports from the Mediterranean grew by 12 percent. Shipments 

of wine, the top container import, were notably robust, increasing by 28 

percent and accounting for 9 percent of the total import cargo in TEUs. The 

future outlook for cargo growth is positive but expected to be weaker due to 

the ongoing eurozone crisis. 

The top four carriers in the trade (MSC, Hapag Lloyd, Maersk Line, 

and Zim) moved 70 percent of the total container cargo. Throughout the 

fiscal year, these major carriers proposed GRIs ranging from $100 to $300 

per TEU in both directions of the trade. A number of notable service and 

agreement changes also occurred during the fiscal year. Specifically, MSC 

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Federal Maritime Commission
 

Fiscal Year 2011
 

initiated a new weekly loop service between the U.S. Pacific Coast and South 

Europe with port calls in Panama. Maersk Line and Hapag Lloyd began 

exchanging vessel space on their services between the U.S. Atlantic/Gulf 

and South Europe under the Maersk Line/HLAG West Med Slot Exchange 

Agreement. Further, Maersk Line terminated the U.S. leg of its pendulum 

service between the U.S. Pacific Coast, Asia, and the Mediterranean and removed vessel space from the trade. Service changes over the course of the 

fiscal year resulted in a slight increase in vessel capacity of 2 percent in each 

direction. 

G. AFRICA 

Cargo volumes between the United States and Africa increased by 

10 percent in fiscal year 2011. The increase in cargo volumes included an 

11 percent increase in U.S. exports to Africa from the previous fiscal year 

to 267,800 TEUs. Imports from Africa increased about 8 percent from the 

previous fiscal year to about 90,200 TEUs. South Africa dominates the U.S. 

liner trade with Africa, accounting for about 27 percent of the overall container volume and 46 percent of the imported containers. Nigeria is the 

United States’ second largest trading partner in the region, with 15 percent 

of container volumes, and Ghana and Morocco are the third and fourth largest partners with about 10 percent and 6 percent, respectively. 

There were no significant mergers, acquisitions, or changes in liner 

services during the fiscal year. Maersk Line, Safmarine (wholly owned by 

Maersk Line), and MSC continued to operate their joint weekly AMEX service under the authorities of the Southern Africa Agreement, formerly the 

Southern Africa/Oceania Agreement. This service, which sails from the U.S. 

East Coast to Port Elizabeth, Durban, and Cape Town, utilizes eight vessels 

of about 2,400 TEUs in size. Those three carriers are the top carriers in the 

Africa trade, carrying approximately 72 percent of the containers traveling 

between the United States and Africa. 

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Federal Maritime Commission
 

Fiscal Year 2011
 

H. CENTRAL AMERICA AND THE CARIBBEAN 

In fiscal year 2011, U.S. export cargo to Central America increased 

9 percent to 569,353 TEUs. Imports from Central America increased 8 percent to 695,003 TEUs. Waste paper accounted for the largest share of U.S. 

containerized exports at 11.7 percent. The second largest export commodity category was fabrics, yarns, and raw cotton, accounting for 11.6 percent. 

Grocery products, apparel, and used automobiles accounted for about 5 percent each. Fresh fruit made up for over half of all imports from the region, 

three-quarters of which consisted of bananas. The second largest import 

category was clothing and apparel with nearly 19 percent of the total. 

Most of the largest carriers in the U.S./Central America trade participate in the Central America Discussion Agreement (CADA). In fiscal year 

2011, the combined market share of CADA members was 69 percent for 

exports and 72 percent for imports. 

In the liner trade between the United States and the Caribbean, U.S. 

exports, mainly of food, consumer goods, and manufactured products, remained largely unchanged at 516,861 TEUs. Imports to the United States 

increased a dramatic 28 percent to 171,884 TEUs. 

Carriers in the U.S./Caribbean trade participate in four rate discussion agreements covering discrete trades: (1) the Caribbean Shipowners Association, (2) the Florida-Bahamas Shipowners and Operators Association, 

(3) the Aruba Bonaire and Curacao Discussion Agreement, and (4) the Bermuda Discussion Agreement. 

Federal Maritime Commission
 

Fiscal Year 2011
 

I. SOUTH AMERICA 

In fiscal year 2011, U.S. containerized exports between the United 

States and South America increased 12.5 percent to 1,012,459 TEUs from 

the previous fiscal year. Import cargo from South America to the U.S. increased 6.6 percent to 825,733 TEUs. 

The South America region is generally divided between the West 

Coast and East Coast. Just over 48 percent of the U.S./South America cargo moved between the United States and the West Coast of South America 

in fiscal year 2011. U.S. export cargo to the West Coast of South America 

increased 13 percent to 434,000 TEUs, and imports from the region grew 

almost 7 percent to 451,705 TEUs. Waste paper accounted for the largest 

share of U.S. containerized exports at 12 percent. The second and third largest export commodities were synthetic resins and general cargo at 11 percent 

and 4 percent, respectively. Fresh fruit accounted for 31 percent of imports 

from the West Coast of South America. The second and third largest import 

commodities from the region were veneers/plywood and still wines at about 

5 percent of total imports each. 

By the end of fiscal year 2011, annualized vessel capacity in the U.S./ 

West Coast of South America trade had increased 34 percent to 1,153,000 

TEUs in the northbound trade, and increased 35 percent to 1,202,000 TEUs 

in the southbound trade. 

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Federal Maritime Commission 

Fiscal Year 2011 

Most of the carriers that provide direct service to the West 

Coast of South America are members of the West Coast of South America 

Discussion Agreement (WCSADA). There were two changes to membership 

during this fiscal year. CMA CGM joined the agreement in April 2011 and 

Maersk Line left the agreement in June 2011. At the time CMA CGM joined, 

it had a minor presence in the trade with only 2 percent market share of exports and less than a 1 percent share of imports. At the time Maersk Line 

left, its market share was 13 percent and 9 percent for exports and imports, 

respectively. The overall net effect of these changes in agreement membership was a 9 percent decrease in market share (to 70 percent) for cargo moving southbound and a 6 percent decrease (to 61 percent) for cargo moving 

northbound. 

Trade between the United States and the West Coast of South America is highly competitive. The U.S. inbound trade includes four carriers outside WCSADA membership (Dole Ocean Cargo Express, Great White Fleet, 

Network Shipping and Banacol Colombia) that mainly carry proprietary 

cargo of fresh fruits and vegetables. There are also global carriers, such as 

NYK, which serves the WCSA trade directly with its Asia Latin America 

Express service via port calls to the U.S. Pacific Coast, and Evergreen, MOL, 

and Hapag Lloyd. The latter three serve the trade via transshipment hubs in 

Panama, Mexico, and the Caribbean. Further competition exists from several regional carriers, including Tropical Shipping, Antillean Lines, Maruba 

S.C.A., Isabella Shipping, SCM Lines, Industrial Maritime Carriers, West 

Coast Industrial Express, and Swordfish Shipping. 

Liner cargo in the trade between the U.S. and the East Coast of South 

America accounted for almost 52 percent of the U.S./South America liner 

cargo. U.S. exports to the East Coast of South America increased 12 percent 

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Federal Maritime Commission
 

Fiscal Year 2011
 

 to 578,500 TEUs during fiscal year 2011. Imports from the region increased 

4 percent to 367,900 TEUs during the same period. The top export commodity was auto parts at 8 percent. Waste paper was the second top export 

commodity at 4 percent. Logs and lumber was the top import commodity 

at 7 percent. The second and third top commodities from the region were 

granite and coffee at 6 percent each. 

Unlike the West Coast of South America trade, there are no active 

rate discussion agreements in the East Coast of South America trade. 

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Federal Maritime Commission
 

Fiscal Year 2011
 

IV
 

THE FOREIGN SHIPPING 


PRACTICES ACT OF 1988
 

A. IN GENERAL 

The Foreign Shipping Practices Act of 1988 (FSPA), which became 

effective on August 23, 1988, directs the Commission to investigate and address adverse conditions affecting U.S. carriers in U.S. oceanborne trades, 

when such conditions do not exist for foreign carriers in the United States 

under U.S. law or as a result of acts of U.S. carriers or others providing maritime or maritime-related services in the United States. 

In fiscal year 2011, the Commission monitored potentially unfavorable or discriminatory shipping practices by a number of foreign governments. However, no direct FSPA action was necessary. 

31
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

________________________ 

Federal Maritime Commission
 

Fiscal Year 2011
 

B. TOP TWENTY U.S. LINER CARGO 


TRADING PARTNERS
 

Pursuant to the Foreign Shipping Practices Act, the FMC must include in its annual report to Congress “a list of the twenty foreign countries 

which generated the largest volume of oceanborne liner cargo for the most 

recent calendar year in bilateral trade with the United States,” 46 U.S.C. § 

306 (b)(1). 

The Journal of Commerce’s Port Import Export Reporting Service 

(PIERS) database was used to derive the Commission’s list of top twenty 

trading partners. The most recent complete calendar year for which data are 

available is 2010. The table on the next page lists the twenty foreign countries 

that generated the largest volume of oceanborne liner cargo in bilateral trade 

with the United States in 2010. The figures in Table 1 represent each country’s total U.S. liner imports and exports combined in thousands of TEUs. 

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Federal Maritime Commission
 

Fiscal Year 2011
 

Table 1: Top Twenty U.S. Liner Cargo 

Trading Partners (2010) 

Rank Country TEUs 

(000s) 

1 China (PRC) 10,763 

2 Japan 1,419 

3 South Korea 1,324 

4 Taiwan (ROC) 1,063 

5 Hong Kong7 1,010 

6 Germany 714 

7 India 686 

8 Vietnam 659 

9 Brazil 573 

10 Indonesia 537 

11 Belgium and Luxembourg 517 

12 Thailand 507 

13 Italy 479 

14 Netherlands 413 

15 United Kingdom 383 

16 Malaysia 333 

17 Guatemala 308 

18 Honduras 307 

19 Australia 287 

20 Chile 282 

7

Although, Hong Kong reverted to Chinese control in July 1997, PIERS continues to report data separately for Hong Kong because of its status as a 

major transshipment center. 

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Federal Maritime Commission 

Fiscal Year 2011 

There was an 11 percent year-to-year increase in liner volumes in 

the United States’ bilateral trade with its top 20 trade partners. The membership of the top 20 list remained the same as in 2009, and the top 8 countries 

remained identical. Allowing for some shifts in their individual rank order, 

the top 6 countries have topped the list for the past decade. Two of the top 

20 countries posted year-to-year volume increases of over 20 percent – Belgium & Luxemburg and Brazil. China, whose U.S. trade volumes gained 11 

percent from last year, easily led the field again in 2010. Indeed, China’s 

trade volumes exceeded the combined total for the next 15 largest U.S. trading partners. Only 2 of the top 20 countries posted year-to-year volume decreases – Guatemala and Australia. 

Federal Maritime Commission
 

Fiscal Year 2011
 

V
 

SIGNIFICANT ACTIVITIES
 

BY
 

ORGANIZATIONAL UNIT
 

34
 
Federal Maritime Commission 

Fiscal Year 2011 

A. OFFICE OF THE SECRETARY 

1. In General 

The Office of the Secretary (OS) serves as the focal point for matters 

submitted to and emanating from the Commission. It is the public’s main 

contact point with the FMC. The Office receives and processes a variety 

of documents filed by the public, including: complaints initiating adjudicatory proceedings for alleged violations of the shipping statutes and other applicable laws; special docket applications and requests to correct clerical or 

administrative errors in service contracts or NVOCC Service Arrangements 

(NSAs); all communications, petitions, notices, pleadings, briefs, or other 

legal instruments in administrative proceedings; and subpoenas served on 

the FMC, its members, or employees. 

The Office is responsible for organizing Commission Sunshine Act 

meetings, oral arguments, and public hearings; preparing and submitting 

regular and notation agenda matters for consideration by the Commission, 

and preparing and maintaining the minutes of actions taken on these agenda and notation matters; and issuing orders and notices of actions of the 

Commission. The office processes requests and ensures compliance with 

the Freedom of Information, Government in the Sunshine, and Privacy 

Acts; responds to information requests from the maritime industry and the 

public; issues publications; and authenticates instruments and documents 

of the Commission; publishes Commission historical decisions; and maintains and promulgates the Commission’s regulations. The Office maintains a 

public reference/law library and a docket activity library; oversees the maintenance, organization, and content of the Commission’s website; develops, 

monitors, and reports on the agency’s Strategic Plan; develops and implements the agency’s Plain Writing Plan; manages the agency’s document 

scanning program; and participates in the development and coordination of 

agency-wide public relations/outreach strategies and initiatives. 

During fiscal year 2011, the OS continued to administratively process and direct all filings addressed to the Commission and its component 

offices, including agreements filed under section 5 of the 1984 Act. The Office also issued 86 orders and notices in docketed proceedings on behalf of 

the Commission. 

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Federal Maritime Commission 

Fiscal Year 2011 

The Office serves as the Commission’s public information/press office. Accordingly, it prepares or coordinates the preparation of Commission 

news releases; responds to public and press inquiries or directs inquiries to 

the appropriate Commission bureau/office; and monitors the trade press for 

matters of agency interest for referral to the Chairman, Commissioners, and 

staff. 

The Secretary was designated as the agency’s Performance Improvement Officer (PIO) in February 2010. Subject to the direction of the Chairman, and in consultation with the Managing Director, the PIO oversees the 

Commission’s performance management activities, including development 

of performance goals, plans, and reports. During fiscal year 2011, the PIO 

secured OMB clearance and implemented revisions to the 2010-2015 Strategic Plan. These revisions further streamline the plan to focus all resources on mission-oriented goals. The Secretary held quarterly meetings with 

all agency components to measure progress toward specific performance 

targets setout in the Strategic Plan. The impact of potential budgetary reductions on the agency’s ability to achieve annual performance targets was 

assessed by the PIO. While some reductions and shifts in contractor and 

staff resources occurred during the fiscal year, the Commission was able to 

meet its FY 2011 performance targets. The Commission’s FY 2012 budget is 

slightly less than its FY 2011 budget. The PIO will continue to hold quarterly meetings with all agency components to track and quickly identify any 

potential issues that could potentially impact the Commission’s ability to 

meet its FY 2012 targets. 

The Office is significantly involved with the Commission’s ongoing 

objective to enhance public awareness of the agency, its programs, and services. The Office promotes transparency and accountability on behalf of the 

Commission by evaluating, developing, and implementing improvements 

to the Commission’s website. During this fiscal year, the Office increased the 

amount of information available on specific topics and issues related to the 

agency’s activities and important to stakeholders and the media. For example, the Office worked with other Commission components and sometimes 

38
 

Federal Maritime Commission
 

Fiscal Year 2011
 

other agencies to provide information on such hot topics as moving personal household goods, cruise passenger information, passenger vessel financial responsibility, U.S. export and import capacity issues, China’s new 

shipping policies, maritime environmental issues, the impact on maritime 

commerce of issues at the nuclear reactors in Fukishima, Japan following an 

earthquake and typhoon, and Negotiated Rate Agreement guidance. These 

informative online resources provide easy public access to useful information and resources, increase public awareness of how the FMC is involved 

with daily events, and help to underscore our mission to oversee oceanborne 

transportation in the foreign commerce of the U.S. 

In late FY 2011, the Office began working with an outside vendor to 

redesign the Commission’s website. This project will include a new graphical design and layout for the Homepage and interior pages, significantly improve content organization that will render a more citizen-centered website, 

enhance navigation, provide more social networking/communications capabilities, and add further improvements in search engine optimization to 

increase public visibility of the Commission’s website and services. During 

the latter part of fiscal year 2011, the Office developed and implemented 

the Commission’s Plain Writing Plan, trained key Commission staff in best 

practices for plain writing, and led an agency-wide team to begin systematic review and enhancement of website content. These efforts will continue 

during 2012. 

The process of electronically scanning/imaging Commission records 

is an ongoing function of the Office. The Office electronically converts all 

official Commission files (both current and historical); and is responsible 

for planning, scheduling, and systematically scanning documents for other agency components. This Document Management Program supports 

the agency’s initiatives for Continuity of Operations (COOP) and disaster 

recovery by: improving preservation of, and staff access to, Commission 

documents, improving staff response time to public inquiries, and providing 

direct public access to electronic files. As a result of its scanning program, 

the Office continued to make key documents filed in formal proceedings 

available through its website. 

39 
Federal Maritime Commission 

Fiscal Year 2011 

During the fiscal year, the Office continued to electronically compile 

contents of 28 bound volumes of historical Commission decisions issued 

between the years 1919 and 1987 into “electronic volumes”. It is anticipated 

that these electronic volumes will be completed and ready for posting to the 

Commission’s website during late fiscal year 2012. These historical decisions 

are no longer in publication in bound volume form, however with the completion of this project, the entire body of historical Commission decisions 

will be available on the FMC’s website. Making this information readily 

available to the public in electronic form has proven to be a useful and cost 

effective resource, especially for attorneys practicing before the Commission. During fiscal year 2011, the Office also completed scanning of FMC 

Annual Reports from 1917 to 1999, and made this historical information 

available to the public via the FMC website. 

In support of the Commission’s strategic goal to protect the public from unlawful, unfair, and deceptive ocean transportation practices and 

resolve shipping disputes, during fiscal year 2011 the Office led an agencywide team to begin the process of reviewing the Commission’s Rules of Practice and Procedure. Emphasis is on evaluating the Commission’s procedures 

against current Federal Rules of Civil Procedure and updating Commission 

procedures where appropriate. A final rule was published in February 2011 

which relieved filing burdens on the public and parties to Commission proceedings, reduced the Commission’s reliance on paper submissions, and enhanced privacy protections for the public. The team will continue to meet 

and further develop revised rules for the Commission’s consideration during FY 2012. 

Federal Maritime Commission
 

Fiscal Year 2011
 

2. Library 

The OS also oversees the Commission’s Library. The Library serves 

the needs of both the Commission and the public for research and information. It is a specialized repository of current and basic materials primarily 

covering the shipping industry, the history of shipping, and regulations covering all phases of shipping in the U.S. foreign trade. It contains a variety of 

books, directories, encyclopedias, journals, magazines, reports, microforms, 

and videos. The Library also contains material on several related fields such 

as engineering, economics, political science, and a collection of legal publications. The Library collection includes law encyclopedias, engineering 

textbooks, legal treatises, legislative materials, and selected titles of the National Reporter system. The Library’s holdings consist of approximately 

8,700 volumes and numerous microfiches, CD-ROMs, and online services. 

40
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Federal Maritime Commission 

Fiscal Year 2011 

B. OFFICE OF THE 


ADMINISTRATIVE LAW JUDGES
 

1. In General 

Under the direction and management of the Chief Administrative 

Law Judge, the Office of Administrative Law Judges (ALJ) holds hearings 

and renders initial or recommended decisions in formal rulemaking and 

adjudicatory proceedings and other matters assigned by the Commission 

as provided in the Shipping Act of 1984 and other applicable laws in accordance with the Administrative Procedure Act and the Commission’s Rules 

of Practice and Procedure. 

The Office of ALJs has the authority to administer oaths and affirmations; issue subpoenas; rule upon offers of proof and receive relevant evidence; take or cause depositions to be taken; regulate the course of hearings; 

hold conferences for the settlement or simplification of the issues by consent 

of the parties; dispose of procedural requests or similar matters; make decisions or recommend decisions; and take any other action authorized by 

agency rule consistent with the Administrative Procedure Act. 

At the beginning of fiscal year 2011, fourteen formal proceedings 

were pending (on hand) before the ALJs (07-01, 08-03, 08-04, 08-06, 09­

01, 09-08, 10-01, 10-05, 10-06, 10-07, 10-08, 10-09, 1896(F), and 1898(F)). 

During the year, twelve new formal proceedings were added (10-10, 10-11, 

11-04, 11-06, 11-07, 11-08, 11-11, 11-12, 11-13, 11-14, 11-15, and 1923(F)) 

and one formal proceeding was remanded pursuant to Commission Order 

(08-04). 

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Federal Maritime Commission 

Fiscal Year 2011 

The ALJs issued initial decisions or orders subject to review by the 

Commission in twelve proceedings: initial decisions resolving three contested proceedings (08-04, 1896(F), and 1898(F)); initial decisions approving settlements in four proceedings (10-01, 10-09, 10-10 (two initial decisions approving two settlements), and 11-04); orders of voluntary dismissal 

of claims against respondents in two proceedings (10-07 (three respondents) 

and 10-10 (one respondent)); an order granting partial summary judgment 

for respondent in one proceeding (08-03); an order granting summary judgment for respondent in one proceeding (10-07); an initial decision on attorney’s fees in one proceeding (08-04); an order granting a motion for leave 

to appeal an interlocutory order denying a motion to dismiss based on sovereign immunity in one proceeding (09-08); an order dismissing a claim 

for double damages in one proceeding (10-06); and an order dismissing a 

counterclaim in one proceeding (11-07). 

2.	 Final Action by the Office of Administrative Law Judges on Initial 

Decisions and Orders Subject to Review. 

Maher Terminals, LLC v. Port Authority of New York and New Jersey [Docket 

No. 08-03] 

Maher leases land and facilities at the Elizabeth Port Authority 

Marine Terminal from the Port Authority of New York and New Jersey 

(PANYNJ) for use as a marine terminal. On June 3, 2008, Maher filed a 

Complaint alleging that PANYNJ violated the Shipping Act, (46 U.S.C. §§ 

41106(2) and (3) and 41102(c)), because PANYNJ (a) gave and continues to 

44
 

Federal Maritime Commission
 

Fiscal Year 2011
 

give an undue or unreasonable prejudice or disadvantage with respect to 

Maher as compared to APM Terminals North America, Inc. (APM), another marine terminal operator, (b) gave and continues to give an undue or 

unreasonable preference or advantage with respect to APM, (c) has and continues unreasonably to refuse to deal or negotiate with Maher, and (d) has 

and continues to fail to establish, observe, and enforce just and reasonable 

regulations and practices relating to or connected with receiving, handling, 

storing, or delivering property. Maher and APM signed their leases in 2000. 

On February 28, 2011, PANYNJ filed a motion for summary judgment on 

the portions of the Complaint “based on supposed unreasonable discrimination in lease terms, on the ground that all such claims are barred by the 

Shipping Act’s three-year statute of limitations,” (46 U.S.C. § 41301(a)), arguing that the claim for a reparation award and the claim for a cease and 

desist order are barred. On May 16, 2011, the Administrative Law Judge 

issued an Initial Decision finding that the claim for a reparation award based 

on alleged discrimination against Maher in the negotiations that resulted in 

its lease and in the terms of the lease itself is barred by the statute of limitations. The Administrative Law Judge also found that the claim for a cease 

and desist order is not barred. The dismissal of the claim for a reparation 

award is subject to Commission review pursuant to Rule 227. Pursuant to 

Rule 153, the Administrative Law Judge certified the denial of the motion 

for summary judgment on the claim for the cease and desist order for review 

by the Commission. 

Tienshan, Inc. v. Tianjin Hua Feng Transport Agency Co., Ltd. 

[Docket No. 08-04] 

On August 19, 2008, Tienshan filed a Complaint alleging that Tianjin 

Hua Feng violated section 10(d)(1) of the Shipping Act, 46 U.S.C. § 41102(c), 

by refusing to give Tienshan, the consignee of a shipment, the original bill 

of lading that would permit it to take delivery of the shipment. On March 9, 

2011, the Administrative Law Judge issued an Initial Decision finding that 

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Federal Maritime Commission 

Fiscal Year 2011 

Tianjin Hua Feng violated the Act and entering a reparation award in the 

amount of $16,944.00 plus interest. Neither party filed exceptions to the 

Initial Decision, and on April 12, 2011, the Commission issued a Notice not 

to Review. On April 29, 2011, Tienshan filed a petition for attorney’s fees. 

On June 17, 2011, the Administrative Law Judge issued an Initial Decision 

awarding $50,433.75 in attorney’s fees. On July 20, 2011, the Commission 

issued a Notice not to Review. 

La Torre’s Enterprises, Cesar La Torre, Kaskamach SRL, Jaime La Torre, and 

Jennifer La Torre v. Natural Freight Ltd./Skytruck, Agility Logistics, and Hansa 

Transports SAC [Docket No. 1896(F)] 

On January 13, 2009, the Complainants, La Torre’s Enterprises, Cesar La Torre, Kaskamach SRL, Jaime La Torre, and Jennifer La Torre (collectively “La Torre”) filed a claim alleging that the Respondents, Natural Freight 

Ltd./Skytruck, Agility Logistics, and Hansa Transports SAC violated section 

10(d)(1) of the Shipping Act, (46 U.S.C. § 41102(c)). The case stemmed from 

the 2006 shipment of two forty-foot containers by La Torre from California, 

USA, to Callao, Peru. The bill of lading incorrectly described the inventory 

as used monitors. The containers were seized by Peruvian customs officials 

who rejected an attempt to correct the description. Complainants sought 

compensation for the loss of the shipment. On February 11, 2011, the Administrative Law Judge issued an Initial Decision dismissing the claim with 

prejudice. On March 15, 2011, the Commission served a Notice not to Review. 

DSW International, Inc. v. Commonwealth Shipping, Inc., and Abou Merhi 

Lines, LLC, and Abou Merhi Lines, SAL [Docket No. 1898(F)] 

On March 31, 2009, DSW International, Inc., filed a Complaint alleging that Respondents violated several sections of the Shipping Act when 

46
 

Federal Maritime Commission
 

Fiscal Year 2011
 

they failed to deliver two cars that DSW International shipped from Texas to 

Nigeria. DSW International requested informal adjudication of the Complaint pursuant to 46 C.F.R. Part 502, Subpart S. On May 27, 2009, Commonwealth stated that it did not consent to informal adjudication pursuant 

to Subpart S and requested that the matter be resolved pursuant to Subpart 

T. Therefore, on May 27, 2009, the Secretary referred this matter to the Office of Administrative Law Judges. On March 29, 2011, the Administrative 

Law Judge issued an Initial Decision finding that Abou Merhi Lines, SAL, violated the Act and entering a reparation award in the amount of $11,434.30 

plus interest. The Administrative Law Judge dismissed the claims against 

Commonwealth, Abou Merhi Lines, LLC, and Abou Merhi Lines (USA), 

LLC, an entity identified in the body of the Complaint and Amended Complaint, but not the caption. On April 5, 2011, the Commission issued a Notice to Review. 

SSA Terminals, LLC and SSA Terminals (Oakland), LLC v. The City of Oakland, 

Acting by and Through its Board of Port Commissioners [Docket No. 09-08] 

On December 16, 2009, Complainants SSA Terminals, LLC and SSA 

Terminals (Oakland), LLC filed a Complaint alleging that Respondent, the 

City of Oakland, acting by and through its Board of Port Commissioners 

(hereinafter “the Port”), violated the Shipping Act (46 U.S.C. §§ 41106(2) 

and (3) and 41102 (c)) by: (1) imposing an undue or unreasonable prejudice 

or disadvantage with respect to the Complainants; (2) giving an undue or 

unreasonable preference or advantage to an unrelated non-party; (3) refusing to deal or negotiate with the Complainants; and (4) failing to establish, 

observe, and enforce just and reasonable regulations and practices relating 

to or connected with receiving, handling, and storing or delivering property. 

Complainant maintained that as a consequence of the Port’s agreement with 

the unrelated non-party, Complainant had sustained and continued to incur 

injuries, including lost business, higher rents, and other payments and obligations to the Respondent, thereby suffering damages in the millions of 

47
 
Federal Maritime Commission 

Fiscal Year 2011 

dollars. On November 8, 2010, the Administrative Law Judge issued an Order denying a motion to dismiss on Eleventh Amendment sovereign immunity grounds. On December 21, 2010, the Administrative Law Judge issued 

an Order granting the Respondent’s motion for leave to appeal to the Commission and Respondent’s motion to stay the proceedings during the appeal. 

The Commission heard oral argument on the appeal on September 8, 2011. 

AMC USA, Inc. v. International First Service S.A. a/k/a IFS S.A.; International First Service Argentina a/k/a AR-IFS; International First Service USA, Inc. 

a/k/a IFS USA, Inc.; Global Wine Logistics USA Inc. a/k/a GWL USA, Inc.; Anita 

McNeil; and Ipsen Logistics GmbH [Docket No. 10-01] 

On February 4, 2010, the Complainant AMC USA filed this action 

alleging violations of the Shipping Act, including violations of sections 8, 10, 

and 19. AMC’s Complaint asserted that the Respondents violated the Shipping Act by failing to keep open to the public in an automated tariff system, 

tariffs showing all rates, charges, classifications, rules, and practices between 

all points and ports on its route and on any through transportation that has 

been established; failing to file with the Commission the service contracts 

entered into with vessel operating common carriers; engaging in a willful 

and deliberate fraudulent scheme to steal customers, employees, and proprietary information from Complainant in order to gain an unfair business 

advantage and/or in order to provide ocean transportation for property for 

less than the rates and/or charges that would otherwise have applied; operating under agreements that were required to be filed under the Shipping 

Act that were not effective pursuant to the Shipping Act; working together 

to allow parties to obtain transportation for property at less than the rates 

or charges that would have applied by unjust and unfair means; failing to 

establish, observe, and enforce just and reasonable regulations and practices 

relating to or connected with receiving, handling, and delivering property; 

and knowingly and willfully accepting cargo for the account of an ocean 

transportation intermediary that does not have a tariff and a bond, insurance, or other surety. AMC’s Complaint also alleged that the Respondents 

acted as ocean transportation intermediaries in the United States without a 

license in violation of the Shipping Act and the Commission regulations. 

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Federal Maritime Commission
 

Fiscal Year 2011
 

On March 8, 2010, Respondents IFS S.A. and IFS USA filed their 

Verified Answer and Affirmative Defenses. IFS S.A.’s Counter Complaint 

alleged that AMC’s knowingly disclosing, offering, soliciting, and receiving 

information concerning the nature, kind, quantity, destination, consignee, 

and routing of the property tendered or delivered to the common carriers 

without the consent of the shippers or consignees and using that information to the detriment and disadvantage to IFS S.A., a common carrier, and 

inappropriately disclosing that information to competitors, constituted a 

violation of Section 10(b)(13) of the Shipping Act, (46 U.S.C. § 41301(a)), 

and that AMC’s allowing for the payment of rebates constituted a violation 

of Section 10(b)(1) of the Shipping Act (46 U.S.C. § 41104(1)), which prohibits common carriers from allowing such rebates not otherwise provided 

in their tariff or NVOCC service arrangement. 

On October 4, 2010, the Administrative Law Judge approved a settlement agreement among AMC, IFS USA, IFS S.A., and Anita McNeil and 

approved a motion to dismiss International First Service Argentina a/k/a 

AR-IFS without prejudice. On November 5, 2010, the Commission served a 

Notice not to Review. 

Yakov Kobel and Victor Berkovich v. Hapag-Lloyd A.G., Hapag-Lloyd America, 

Inc., Limco Logistics, Inc., and International TLC, Inc. [Docket No. 10-06] 

On July 14, 2010, the Complaint was served alleging that Respondents violated the Shipping Act. Inter alia, the Complaint sought double 

damages pursuant to 46 U.S.C. § 41305, which permits the Commission to 

order the payment of additional amounts, not to exceed twice the amount 

of the actual injury, for violation of sections 41102(b), 41104(3), 41104(6), 

41105(1), or 41105(3). On March 10, 2011, respondents Hapag-Lloyd A.G. 

and Hapag-Lloyd America, Inc. filed a motion to dismiss and/or for summary judgment, arguing that the Complainants did not allege violations of 

the sections for which double damages are permitted; therefore, the Complaint failed to state a valid claim for double damages. On May 24, 2011, the 

motion to dismiss was granted and Complainants’ claim for double damages 

was dismissed. On June 24, 2011, the Commission issued a Notice not to 

Review. The other allegations in the Complaint remained pending. 

49 
Federal Maritime Commission 

Fiscal Year 2011 

Rendezvous International v. Chief Cargo Services, Inc., Kaiser Apparel, Inc., 

Edco Logistics, Inc., Oriental Logistics, Inc., and Razor Enterprise [Docket No. 

10-07] 

On July 19, 2010, Rendezvous International filed a Complaint alleging that Respondents violated several sections of the Shipping Act by fraudulently and unlawfully/wrongfully releasing three separate shipments to a 

customer without requiring presentation of bills of lading. On September 

17, 2010, the Administrative Law Judge issued an Initial Decision approving a settlement with Chief Cargo Services, Inc. The proceeding against 

the other Respondents continued before the Administrative Law Judge. On 

October 19, 2010, the Commission served a Notice not to Review. 

On October 15, 2010, the Administrative Law Judge issued an Initial 

Decision granting the request of Rendezvous International to dismiss without prejudice the Complaint against Kaiser Apparel, Inc., Edco Logistics, 

Inc., and Razor Enterprise, and granting the motion for summary judgment 

filed by Oriental Logistics, Inc., and dismissing the Complaint against it, 

finding that the material facts as to which there is no genuine dispute establish that Oriental Logistics, Inc., was not involved in the shipment. On 

November 16, 2010, the Commission served a Notice not to Review. 

Sinicway International Logistics Ltd. – Possible Violations of Sections 10(a)(1) 

and 10(b)(2) of the Shipping Act of 1984 [Docket No. 10-09] 

By Order of Investigation and Hearing dated August 20, 2010, the 

Commission commenced this proceeding to determine: 1) whether Sinicway violated section 10(a)(1) (46 U.S.C. § 41102(a)) of the Shipping Act by 

obtaining transportation at less than the rates and charges otherwise applicable by an unjust or unfair device or means; 2) whether Sinicway violated 

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Federal Maritime Commission
 

Fiscal Year 2011
 

section 10(b)(2) (46 U.S.C. § 41104) of the Shipping Act by providing service other than at the rates, charges, and classifications set forth in its published non-vessel-operating common carrier (NVOCC) tariff or applicable 

NVOCC service arrangement; 3) whether, in the event violations of the 

Shipping Act are found, civil penalties should be assessed against Sinicway 

and, if so, the amount of penalties to be assessed; 4) whether, in the event 

violations of the Shipping Act are found, the tariff(s) of Sinicway should be 

suspended; and 5) whether, in the event violations are found, an appropriate 

cease and desist order should be issued. On June 6, 2011, the Administrative Law Judge issued an Initial Decision approving a proposed settlement 

agreement between the parties and dismissing the proceeding. On March 

25, 2011, the Commission served a Notice not to Review. 

Damco USA, Inc., Damco A/S, A.P. Moller-Maersk A/S, Glencore Ltd., and Allegheny Alloys Trading, L.P. [Docket No. 10-10] 

Draft Cargoways filed a Complaint on October 29, 2010, alleging 

that the Damco/Maersk respondents violated sections 8(a)(1), 10(b)(2) 

(A), 10(b)(11), 10(b)(13), and 10(d)(1) of the Shipping Act, (46 U.S.C. §§ 

40501(a)(1), 41104(2), 41104(11), 41103(a), and 41102(c)). Draft Cargoways alleged that the Shipping Act was violated by the attempt to collect 

demurrage charges from it through a civil action originally filed by Damco 

USA, Inc. in the United States District Court for the Eastern District of Virginia. On December 28, 2010, Damco/Maersk filed its Answer, denying the 

allegations in the Amended Complaint, and asserting a variety of defenses. 

On June 6, 2011, the Administrative Law Judge issued an Order granting 

the parties’ motion for approval of a confidential settlement agreement and 

dismissing, with prejudice, Respondents Damco USA, Inc., Damco A/S, 

and A.P. Moller-Maersk A/S. On April 27, 2011, the Commission served a 

Notice not to Review. 

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Federal Maritime Commission 

Fiscal Year 2011 

Allegheny Alloys Trading, L.P., was named a party in an Amended Complaint served on December 8, 2010. The Amended Complaint alleged that Allegheny Alloys violated section 10(a)(1) of the Shipping Act (46 

U.S.C. § 41102(a)). Allegheny Alloys did not file an Answer to the Amended Complaint. On March 7, 2010, the Administrative Law Judge issued an 

Order granting dismissal, with prejudice, of Allegheny Alloys. On April 7, 

2011, the Commission served a Notice not to Review. 

The Amended Complaint served on December 8, 2010, also named 

Glencore as a party. Draft Cargoways alleged that Glencore violated section 

10(a)(1) of the Shipping Act (46 U.S.C. § 41102(a)), by failing to pay demurrage/detention charges. On January 27, 2011, Glencore filed a motion 

to dismiss for failure to state a claim in lieu of an Answer to the Amended 

Complaint. On April 1, 2011, the Administrative Law Judge issued an Order granting a motion for approval of a settlement agreement and dismissal, 

with prejudice, of respondent Glencore. On May 3, 2011, the Commission 

served a Notice not to Review. 

Worldwide Logistics Co., Ltd. – Possible Violations of Sections 10(a)(1) and 

10(b)(2) of the Shipping Act of 1984 [Docket No. 11-04] 

On March 30, 2011, by Order of Investigation and Hearing, the Commission commenced this proceeding to determine: 1) whether Worldwide 

Logistics violated section 10(a)(1) of the Shipping Act (46 U.S.C. § 41102(a)) 

by obtaining transportation at less than the rates and charges otherwise 

applicable by an unjust or unfair device or means; 2) whether Worldwide 

Logistics violated section 10(b)(2) of the Shipping Act (46 U.S.C. § 41104) 

by providing service other than at the rates, charges, and classifications set 

forth in its published non-vessel-operating common carrier tariff or applicable NVOCC service arrangement; 3) whether, in the event violations of 

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Fiscal Year 2011
 

the Shipping Act are found, civil penalties should be assessed against Worldwide Logistics and, if so, the amount of penalties to be assessed; 4) whether, 

in the event violations of the Shipping Act are found, the tariff(s) of Worldwide Logistics should be suspended; and 5) whether, in the event violations 

are found, an appropriate cease and desist order should be issued. On July 

21, 2011, the Administrative Law Judge issued an Initial Decision approving 

a proposed settlement agreement between the parties and dismissing the 

proceeding. On August 24, 2011, the Commission served a Notice not to 

Review. 

DNB Exports LLC and AFI Elektromekanik Ve Elektronik San. Tic. Ltd. Sti. v. 

Barsan Global Lojistiks Ve Gumruk Musavirligi A.S., Barsan International, 

Inc., and Impexia Inc. [Docket No. 11-07] 

On April 14, 2011, complainants DNB Exports LLC (DNB) and AFI 

Elektromekanik Ve Elektronik San. Tic. Ltd. Sti. (AFI) commenced this proceeding by filing a Verified Complaint with the Secretary of the Commission 

alleging that Barsan Global Lojistiks Ve Gumruk Musavirligi A.S. (BGL), 

Barsan International, Inc. (Barsan Int’l), and Impexia Inc. (Impexia) violated section 10(b)(13) of the Shipping Act of 1984 (46 C.F.R. § 41103(a)). 

BGL and Barsan Int’l jointly filed a counterclaim alleging that DNB and AFI 

breached their contract with Barsan Int’l by failing to pay Barsan Int’l for 

transportation services provided to DNB and AFI. DNB and AFI filed a 

motion to dismiss the counterclaim, arguing that BGL and Barsan Int’l did 

not allege a violation of the Shipping Act and had not attempted to rebut 

the presumption that the claim is no more than a simple breach of contract 

claim over which the Commission does not have subject matter jurisdiction. 

BGL and Barsan Int’l did not file a response to the motion to dismiss the 

counterclaim. On July 7, 2011, the Administrative Law Judge dismissed the 

counterclaim for lack of subject matter jurisdiction. On August 9, 2011, the 

Commission served a Notice not to Review. 

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Federal Maritime Commission 

Fiscal Year 2011 

3. Pending Proceedings 

At the end of fiscal year 2011, sixteen formal proceedings were pending (07-01, 08-03, 09-01, 10-05, 10-06, 10-08, 10-11, 11-06, 11-07, 11-08, 11­

11, 11-12, 11 13, 11-14, 11-15, and 1923(F)). During fiscal years 2012 and 

2013, the Office will conduct hearings and render decisions on adjudicatory 

proceedings and on such rulemaking proceedings as may be referred to the 

Office. 

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Federal Maritime Commission 

Fiscal Year 2011 

C. OFFICE OF
 

THE GENERAL COUNSEL
 

The General Counsel provides legal counsel to the Commission. 

This includes reviewing staff recommendations for Commission action for 

legal sufficiency, drafting proposed rules to implement Commission policies, and preparing final decisions, orders, and regulations for Commission 

review. In addition, the Office of the General Counsel (OGC) provides 

written and oral legal opinions to the Commission, its staff, and the general 

public in appropriate cases. As described in more detail below, the General 

Counsel also represents the Commission before courts and Congress and 

administers the Commission’s international affairs program. 

1. Rulemakings and Decisions 

The following are rulemakings and adjudications representative of matters 

prepared by the General Counsel’s Office: 

Rulemakings by the Commission 

NVOCC Negotiated Rate Arrangements [Docket No. 10-03], 31 S.R.R. 1724 

(March 2, 2011) 

A notice of proposed rulemaking was published in the Federal Register on May 7, 2010. 75 FR 25150, Commission Docket 10-03. A public 

meeting was requested and held on May 24, 2010. Written comments were 

received through June 4, 2010. The final rule was posted on the Commission’s website on February 25, 2011 and published in the Federal Register on 

March 2, 2011. On April 8, 2011, the Commission published a correction 

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Federal Maritime Commission 

Fiscal Year 2011 

to the final rule in the Federal Register. The final rule became effective on 

April 18, 2011. 

The regulation allows licensed NVOCCs to enter into negotiated rate 

agreements (NRAs) with their shipper customers. An NRA is defined “a 

written and binding arrangement between a shipper and an eligible NVOCC 

to provide particular transportation service for a particular shipment at 

a particular rate prior to the receipt of the cargo by the common carrier 

or its agent (including originating carriers in the case of rates for through 

transportation).” The regulation exempts licensed NVOCCs who enter into 

NRAs from the following requirements of the Shipping Act: the requirement 

in Section 8(a), codified at 46 U.S.C. §§ 40501(a)-(c), that each common 

carrier keep open to public inspection in an automated tariff system tariffs 

showing all its rates; Section 8(b), codified at 46 U.S.C. § 40501(d)(time volume rates); Section 8(d), codified at 46 U.S.C. § 40501(e) (tariff rate increase 

may not be effective on less than 30 days’ notice but decrease effective immediately); Section 8(e), codified at 46 U.S.C. § 40503 (carrier application 

to grant refunds); and Section 10(b)(2)(A)’s requirement of adhering to the 

published tariff rate, codified at 46 U.S.C. § 41104(2)(A). Licensed NVOCCs 

entering into NRAs must still comply with the prohibitions contained in 

Section 10(b)(4) of the Shipping Act, codified at 46 U.S.C. § 41104(4)(prohibiting common carriers from unfair or unjustly discriminatory practices 

in service pursuant to a tariff), and Section 10(b)(8), codified at 46 U.S.C. § 

41104(8)(prohibiting common carriers from undue or unreasonable preference or advantage or undue or unreasonable prejudice or disadvantage 

for tariff service). The Commission determined not to extend the ability to 

enter into NRAs to foreign-based NVOCCs who are unlicensed but bonded 

pursuant to 46 C.F.R. § 515.21(a)(3) but intends to issue a Notice of Inquiry 

requesting further information on ways to make the tariff filing exemption 

provided to licensed NVOCCS in 46 C.F.R. Part 532 more useful, including 

its possible extension to foreign-based NVOCCS not licensed by the Commission. 

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Federal Maritime Commission 

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Decisions by the Commission 

EuroUSA Shipping, Inc., Tober Group, Inc., and Container Innovations, Inc. 

– Possible Violations of Section 10 of the Shipping Act of 1984 and the Commission’s Regulations at 46 C.F.R. § 515.27 [Docket No. 06-06], 31 S.R.R. 1257 

(February 26, 2010) 

This proceeding was instituted by Order of Investigation and Hearing served May 11, 2006, to determine whether respondents violated section 

10(b)(11) of the Shipping Act and the Commission’s regulations at 46 C.F.R. 

§ 515.27, by knowingly and willfully accepting cargo from or transporting 

cargo for the account of an OTI that did not have a tariff and bond as required by sections 8 and 19 of the Act. With regard to EuroUSA, the ALJ 

approved a Settlement Agreement between EuroUSA and the Bureau of Enforcement (BOE) on October 9, 2009. With regard to Tober Group (Tober), 

the ALJ issued an Initial Decision (ID) in which he concluded that BOE did 

not prove that the unlicensed intermediaries with whom Tober did business operated as NVOCCs, and therefore Tober did not violate section 10(b) 

(11) of the Shipping Act. The ALJ also concluded that Tober violated section 

10(b)(2)(A) of the Act by providing service in the liner trade that was not 

in accordance with the rates and charges in its published tariff, but did not 

assess a penalty for these violations. BOE filed exceptions to the ALJ’s ID, 

and the Commission’s decision is pending. Finally, with regard to Container 

Innovations, the ALJ concluded that it violated section 10(b)(11) and should 

be subject to a civil penalty of $390,000 for 13 knowing and willful violations 

of the Shipping Act. The ALJ’s decision regarding Container Innovations 

became administratively final on January 7, 2010. The case is currently 

pending before the Commission. The date for issuance of the Commission’s 

final decision has been extended to February 29, 2012. 

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Federal Maritime Commission 

Fiscal Year 2011 

Parks International Shipping Inc., Cargo Express International Shipping Inc., 

et al. – Possible Violations of Sections 8(a) of the Shipping Act and the Commission’s Regulations at 46 C.F.R., Parts 515 and 520 [Docket No. 06-09], 31 S.R.R. 

1166 (February 5, 2010) 

This proceeding was instituted by Order of Investigation and Hearing served September 19, 2006, to determine whether respondents violated 

sections 8(a) and 19 of the Shipping Act and the Commission’s regulations at 

46 C.F.R. Part 520 and 46 C.F.R. Part 515. On February 5, 2010, the Administrative Law Judge issued an Initial Decision finding that on twelve shipments, Parks International Shipping, Inc. violated section 8(a) by operating 

as a common carrier without publishing tariffs showing all of its active rates 

and charges, and violated section 19 by operating as an ocean transportation 

intermediary without obtaining a license from the Commission and without 

providing proof of financial responsibility. The ALJ also found that on fourteen shipments, Cargo Express International Shipping, Inc. violated section 

8(a) by operating as a common carrier without publishing tariffs showing 

all of its active rates and charges and violated section 19 by operating as an 

ocean transportation intermediary without obtaining a license and without 

providing proof of financial responsibility. The ALJ imposed civil penalties 

on both of these parties, and ordered them to cease and desist from violating the Shipping Act. The ALJ dismissed Bronx Barrels & Shipping Supplies 

Shipping Center, Inc. and Ainsley Lewis a.k.a. Jim Parks from the proceeding. On April 6, 2010, the Commission filed a notice indicating its intention 

to review the ALJ’s Initial Decision. The case is currently pending before the 

Commission. The deadline for issuance of the Commission’s final decision 

has been extended to January 31, 2012. 

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Anderson International Transport and Owen Anderson – Possible Violations 

of Sections 8(a) and 19 of the Shipping Act [Docket No. 07-02], 31 S.R.R. 1232 

(February 23, 2010) 

This proceeding was instituted by Order of Investigation and Hearing 

served March 22, 2007, to investigate whether respondents violated sections 

8, 19(a), and 19(b) of the Shipping Act and the Commission’s regulations 

at 46 C.F.R. Part 515 and Part 520. On August 28, 2009, the Administrative Law Judge issued an Initial Decision finding that respondents violated 

section 19(a) of the Shipping Act by operating as an ocean transportation 

intermediary without obtaining a license, and also violated section 19(b) by 

operating as an ocean transportation intermediary without providing proof 

of financial responsibility. The ALJ ordered respondents to cease and desist 

from violating the Shipping Act. The ALJ did not impose a penalty, finding that the Bureau of Enforcement failed to introduce evidence regarding 

respondents’ ability to pay a civil penalty. On December 8, 2009, the Bureau 

of Enforcement filed a petition to reopen the proceeding for the purpose 

of taking further evidence regarding respondents’ ability to pay. The Commission granted this request and remanded the case to the ALJ for further 

consideration. On February 23, 2010, the ALJ issued an order on remand 

imposing a penalty on respondents. On March 9, 2010, the Commission 

filed a notice to review the ALJ’s decision, and on March 15, 2010, the Bureau of Enforcement filed exceptions to the ALJ’s decision. The case is currently pending before the Commission. The deadline for issuance of the 

Commission’s final decision has been extended to January 31, 2012. 

2. Litigation 

The General Counsel represents the Commission in litigation before courts and other administrative agencies. Although the litigation work 

largely consists of representing the Commission upon petitions for review of 

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its orders filed with the U.S. Courts of Appeals, the General Counsel also 

participates in actions for injunctions, enforcement of Commission orders, 

actions to collect civil penalties, and other cases where the Commission’s 

interest may be affected by litigation. 

The following is representative of matters litigated by the Office: 

Federal Maritime Commission v. Indigo Logistics, LLC; Liliya Ivanenko; and 

Leonid Ivanenko, U.S. District Court for the Northern District of Georgia, Case 

No. 1:11-cv-01134-TCB

 On April 8, 2011, the Commission filed a Complaint and Motion for 

a Preliminary Injunction against Indigo Logistics, LLC; Liliya Ivanenko; and 

Leonid Ivanenko (Defendants) in U.S. District Court for the Northern District of Georgia requesting that the court enjoin Defendants from violating 

the Shipping Act by acting as an ocean freight forwarder without a Commission license and without providing proof of financial responsibility. In connection with a Commission investigation, the Commission is authorized by 

46 U.S.C. § 41307 to bring a civil action to enjoin conduct in violation of the 

Shipping Act. Any injunction brought under this section remains in effect 

for a period not to exceed 10 days after the Commission has issued an order 

disposing of the issues under investigation. The basis for the Commission’s 

injunction is Docket No. 11-06, Indigo Logistics, LLC; Liliya Ivanenko; and 

Leonid Ivanenko – Possible violations of Section 19 of the Shipping Act of 

1984 and the Commission’s regulations at 46 C.F.R. Part 515. The Order initiating Docket 11-06 alleges that Indigo Logistics, LLC has been providing 

services as an ocean freight forwarder since at least 2008 without a license 

issued by the Commission and without furnishing evidence of financial responsibility to the Commission. 

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On April 15, 2011, an order was issued granting the Commission’s 

motion for a preliminary injunction. The order provides that Defendants, 

their agents, servants, employees, and attorneys, and those in active concert 

or participation with them, are restrained and enjoined from violating 46 

U.S.C. §§ 40901(a) and 40902(a) by acting and operating as an ocean transportation intermediary without a valid Commission ocean freight forwarder 

license and without furnishing a bond, proof of insurance or other surety in 

the amount of $50,000. On October 20, 2011, the Administrative Law Judge 

assigned to Docket 11-06 approved a settlement agreement between the 

Commission’s Bureau of Enforcement and the Defendants. On December 

2, 2011, the Commission issued a notice not to review the Administrative 

Law Judge’s decision and, in accordance with the settlement agreement, also 

issued an cease and desist order barring Defendants from acting as an ocean 

transportation intermediary, or as an agent of an ocean transportation intermediary, for a period of five years. On December 6, 2011, the District Court 

dissolved the preliminary injunction. 

Federal Maritime Commission v. All-In-One Shipping, Inc., et al., U.S. District 

Court for the Southern District of Florida, Case No. 06-60054 

On January 12, 2006, the Commission filed a Complaint for Injunctive Relief with the U.S. District Court for the Southern District of Florida to 

enjoin four household goods moving companies and three individuals from 

operating as NVOCCs in violation of the Shipping Act of 1984 by accepting 

cargo for transportation, and for advertising for or soliciting cargo while 

operating as an ocean transportation intermediary without a valid license, 

bond or other security on file with the Commission. The District Court issued the requested preliminary injunction by order dated January 17, 2006. 

Injunctive relief remains in force pending conclusion of agency enforcement 

proceedings in FMC Docket No. 06-01. 

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On August 16, 2010, the ALJ issued an Initial Decision in Docket 

No. 06-01 finding violations of the Shipping Act and imposing civil penalties 

on the corporate and individual parties. No parties filed exceptions to the 

Initial Decision. The Commission determined to review the Initial Decision, and its final decision is pending. 

3. Legislative Activities 

The OGC represents the Commission’s interests in all matters before 

Congress. This includes preparing testimony for Commission officials, responding to Congressional requests for information, commenting on proposed legislation, and responding to the Office of Management and Budget 

requests for views on proposed bills and testimony. 

During fiscal year 2011, 105 bills, proposals, and congressional inquiries were referred to the OGC for review or comment. OGC prepared 

and coordinated testimony for the agency’s fiscal year 2012 budget authorization hearing held before the U.S. House of Representatives’ Committee 

on Transportation and Infrastructure’s Subcommittee on Coast Guard and 

Maritime Transportation. In addition, OGC helped prepare two nominees 

for confirmation hearings before the Senate Committee on Commerce, Science and Transportation. On April 14, 2011, the Senate confirmed those 

nominees. 

In fiscal years 2012 and 2013, OGC will continue to lead in providing 

assistance and technical advice to Congress regarding issues for possible legislative consideration. The Office may also recommend legislative amendments as necessary to ensure uniformity with other Federal initiatives to 

promote efficient and secure flow of ocean transportation. 

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4. Foreign Shipping Restrictions and International Affairs 

The OGC is responsible for the administration of the Commission’s 

international affairs program. The OGC monitors potentially restrictive foreign shipping laws and practices, and makes recommendations to the Commission for investigating and addressing such practices. The Commission 

has the authority to address restrictive foreign shipping practices under section 19 of the 1920 Act and the Foreign Shipping Practices Act. Section 19 

empowers the Commission to make rules and regulations governing shipping in the foreign trade to adjust or meet conditions unfavorable to shipping. The FSPA directs the Commission to address adverse conditions that 

affect U.S. carriers in foreign trade and that do not exist for foreign carriers 

in the U.S. 

In fiscal year 2011, the Commission continued to monitor potentially restrictive shipping practices of the Government of Japan, including the 

effects of amendments to the Port Transportation Business Law enacted in 

2000 and 2005. On January 26, 2011, the Commission discontinued its proceeding and semi-annual reporting requirements from United States-flag 

and Japanese-flag vessels operating in the trades with Japan in Docket No. 

96-20, Port Restrictions and Requirements in the United States/Japan Trade. 

The OGC also pursued informally several matters that involved potentially restrictive foreign practices including implementation by the People’s Republic of China of new requirements on carriers to file tariff and 

service contract rates with a quasi-governmental entity and for that entity 

to establish a freight index. OGC served as a technical advisor to the U.S. 

delegation regarding rate filing at the quasi-governmental entity and related 

issues at the 4th U.S. - People’s Republic of China Consultations on the Maritime Bilateral Agreement held in Dalian, China in October 2010. 

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The OGC also presented at a maritime experts group workshop relating to guidelines for the regulation of non-ratemaking agreements among 

vessel-operating common carriers for the purpose of discussion on behalf 

of the United States’ delegation at the Asian-Pacific Economic Cooperation meeting of the Maritime Experts Group at the Transportation Working 

Group meeting in Japan in October 2010. 

Another responsibility of the OGC is the classification of controlled 

carriers subject to section 9 of the Shipping Act. Common carriers that are 

owned or controlled by foreign governments are required to adhere to certain requirements under the Act, and their rates are subject to Commission 

review. The OGC investigates and makes appropriate recommendations to 

the Commission regarding the status of potential controlled carriers. The 

OGC, in conjunction with other Commission components, also monitors 

the activities of controlled carriers. 

The OGC continues to take the lead in accomplishing the agency’s 

performance goals relating to eliminating restrictions that unjustly disadvantage U.S. interests. OGC monitors foreign laws and practices to determine whether there are any unjust non-market barriers to trade. Where 

appropriate, the OGC will recommend Commission action.

 5. Designated Agency Ethics Official 

The Ethics Official is designated by the Chairman and located in the 

OGC. The position is performed as a collateral duty by the attorney designated as Ethics Official. 

The Commission’s Ethics Official is responsible for administering 

public and confidential financial disclosure systems in order to prevent 

conflicts of interest from arising in the execution of the agency’s regulatory 

functions. The Ethics Official also conducts annual training and offers dayto-day advice and guidance to ensure compliance with the standards of ethical conduct that apply to Executive Branch officials. 

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D. OFFICE OF EQUAL 


EMPLOYMENT OPPORTUNITY
 

The Federal Maritime Commission Office of Equal Employment 

Opportunity Program (EEO) follows Federal EEO and personnel management laws, concepts, procedures and regulations to develop, implement and 

manage a comprehensive program of equal employment opportunity. The 

program is statutorily mandated with required activities in complaints processing, adjudication, affirmative employment program planning, workforce 

diversity management, special emphasis programs, community outreach, 

monitoring and evaluation. 

The Chairman of the Federal Maritime Commission is responsible 

for ensuring equal opportunity in the Commission. The Chairman has delegated this authority to the Director of Equal Employment Opportunity. Operational responsibility for compliance with EEO policies and programs lies 

with the Commission’s front line managers. The Director of EEO (DEEO) 

works independently under the direction of the Chairman to provide advice 

to the Commission’s senior staff and management in improving and carrying 

out its policies and program of non-discrimination, workforce diversity and 

affirmative employment program planning. The DEEO arranges for EEO 

counseling or ADR for employees who raise allegations of discrimination; 

provides for the investigation, hearing, fact-finding, adjustment, or early 

resolution of such complaints of discrimination; accepts or rejects formal 

complaints of discrimination; prepares and issues decisions for resolution 

of formal complaints; and monitors and evaluates the program’s impact and 

effectiveness. In addition, the DEEO represents the agency on several intergovernmental committees, coordinates all affirmative program planning 

efforts, directs programs of special emphasis, and coordinates the activities 

of the Selective Placement and Federal Equal Opportunity Recruitment Coordinators. The DEEO also supervises two collaterally-assigned EEO counselors. 

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Federal Maritime Commission 

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The Office works closely with senior management and with the Commission’s Office of Human Resources (OHR) to: (1) monitor affirmative employment programs; (2) expand outreach and recruitment initiatives; (3) 

improve the representation, career development and retention of women, 

minorities and persons with disabilities; (4) provide adequate career counseling; (5) facilitate early resolution of employment-related problems; and 

(6) develop program plans and progress reports. 

Federal Maritime Commission
 

Fiscal Year 2011
 

E. OFFICE OF THE INSPECTOR GENERAL 

The Inspector General Act of 1978, as amended, establishes the 

responsibilities and duties of an Inspector General. The Inspector General Act was amended in the 1980’s to increase the number of agencies 

with statutory inspector generals (IG), culminating in 1988 with the establishment of Office of Inspectors General (OIG) in smaller, independent agencies, including the Federal Maritime Commission. Currently, 

there are 74 statutory IGs within executive and legislative departments 

and agencies. The mission of the OIGs, as identified in the IG Act, is to: 

•	 Conduct and supervise independent and objective audits and investigations relating to agency programs and operations. 

•	 Promote economy, effectiveness and efficiency within the agency. 

•	 Prevent and detect fraud and abuse in agency programs and operations. 

•	 Review and make recommendations regarding existing and proposed 

legislation and regulations relating to agency programs and operations. 

•	 Keep the agency head and Congress informed of problems in agency 

programs and operations. 

To ensure objectivity, the IG Act empowers independent IGs to determine what reviews to perform; to access all information deemed by the 

IG to be relevant to the reviews; and to publish findings and recommendations based on the reviews. 

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Federal Maritime Commission 

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During fiscal year 2011, the OIG issued the following audit reports 

and evaluations: 

Audit Report Number Subject of Audit 

A11-01 Evaluation of FMC Implementation 

of the Federal Information Security Management Act for FY 2010 

A11-01A Review of FMC’s Data Protection and Priva­

 cy Act Implementation for FY 2010 

A11-02 Audit of FMC’s FY 2010 Financial Statements 

A11-02A FY 2010 Management Letter to the Financial 

Statements 

OR11-01 Review of the Office of Consumer Affairs 

and Dispute Resolution Services, Informal 

Docket Processing 

OR11-02 Review of the Federal Maritime Commission’s Office of Transportation Intermediaries, Financial Responsibility Program 

In addition to these completed audits and reviews, the OIG performed fieldwork on the FY 2011 financial statement audit and the Federal 

Information Security Management Act evaluation, which includes privacy 

and data protection. The OIG also began a review of the Bureau of Enforcement’s Compliance Audit Program. 

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Federal Maritime Commission
 

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The OIG investigations unit received 59 complaints in fiscal year 

2011. The OIG responded to 31 of the complaints and forwarded 23 complaints to the appropriate FMC program area for disposition. Five complaints were forwarded to other agency OIGs or programs with jurisdiction 

over the subject matter. The OIG opened no new investigations and referred 

no matters to prosecutorial authorities during this period. 

In addition to these audit and investigative activities and outcomes, 

the OIG performed a peer review of the audit operations at another Federal 

OIG. The OIG also initiated meetings with House and Senate staff with 

jurisdiction over the FMC to establish new relationships and maintain existing ones; and continued to respond to consumers victimized by an internet 

scam operation using FMC indicia; assisted another Federal OIG in awarding contracts for financial statement audits and FISMA evaluations; worked 

with the agency’s OGC to develop coordination guidelines for the investigation of ethics matters and to amend two Commission Orders dealing with 

OIG activities; and consulted with the agency about its proposed actions 

in response to an employee who alleged a privacy breach. Also, during the 

reporting period, in accordance with the Inspector General Reform Act, the 

OIG provided legal services, on a reimbursable basis, to both the Architect 

of the Capitol OIG and the United States Capitol Police OIG, pursuant to a 

Memorandum of Understanding. 

The OIG responded to an OIG community-wide request for information from the Chairman of the House Committee on Oversight and Government Reform, regarding open (unimplemented) OIG recommendations, 

and a request from the Government Accountability Office pertaining to 

OIG independence and effectiveness. The OIG Counsel/Chief Investigator 

participated in an OIG-community working group to develop and present 

training on IG legal authorities, which was sponsored by the Council of Inspectors General on Integrity and Efficiency (CIGIE) Training Institute to 

provide training to OIG attorneys to address the unique legal needs of the 

OIG community. 

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Federal Maritime Commission 

Fiscal Year 2011 

OIG staff participated in several activities associated with the CIGIE, 

including actively serving on the (1) Legislation Committee where OIG staff 

reviewed and commented on several legislative initiatives affecting the OIG 

community; and (2) Integrity Committee, where staff reviewed allegations 

of administrative (non-criminal) misconduct against inspectors general and 

designated senior staff members of the OIG. 

During FY 2012, the OIG will continue to place a high priority on 

audits and reviews with the objective of improving agency programs and 

operations. The OIG will complete statutorily-required reviews to include 

separate audits of the FMC’s FY 2012 Financial Statements and an evaluation of the agency’s information security program and privacy assurance 

controls, as required by the FISMA, continue site visits to FMC area offices 

to better understand regulatory and program issues and concerns from a 

field office perspective and continue to focus on reviews of FMC missionbased programs. 

The OIG will continue to actively participate in IG community activities and maintain membership in the CIGIE, the Council of Counsels 

to Inspectors General (CCIG) and the Federal Audit Executive Council 

(FAEC). The OIG will continue to work with the OMB, CIGIE, CCIG and 

FAEC on joint projects which affect the IG community. The Office will also 

continue to keep the Chairman, Commissioners, OMB, and the Congress 

fully informed regarding its audit and investigative activities. 

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Federal Maritime Commission 

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F. OFFICE OF CONSUMER AFFAIRS
 

AND DISPUTE RESOLUTION SERVICES
 

The Office of Consumer Affairs and Dispute Resolution Services 

(CADRS) is responsible for developing and implementing the Commission’s 

Alternative Dispute Resolution (ADR) program. Through this program, the 

Commission provides services to assist parties in resolving shipping disputes. The Office provides a range of services designed to avoid the expense 

and delay inherent in litigation, and to facilitate the flow of U.S. ocean commerce. With respect to matters already in litigation, or moving toward litigation, parties to a dispute are encouraged to avail themselves of mediation 

or other ADR processes to resolve their disputes. The Commission makes 

trained neutrals available to facilitate resolution at all stages. Outside neutrals also may be employed as needed. During fiscal year 2011, Commission 

mediators provided services in a number of matters, especially assisting parties in overcoming obstacles that prevent delivery of transported goods. 

CADRS also provides ombuds services to participants in ocean 

shipping transactions. Typical complaints include situations in which an 

NVOCC or VOCC has placed a hold on cargo in its possession, often for 

sums owed under a different contract of carriage. Other cases occur when 

an NVOCC has received cargo from its customer and taken payment for 

the transportation of the cargo, but failed to deliver the cargo. Urgent resolution may facilitate delivery of shipments to avoid additional demurrage/ 

detention/storage charges. Household goods shippers often use unlicensed 

entities that demand additional payment and/or abandon the goods and refuse to communicate with the consumer. Tracking the location of a shipment can be difficult, and often additional charges have accrued, necessitating payment of additional funds to obtain release of the shipment. CADRS 

also receives a significant number of complaints involving issues with cruise 

lines. 

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Another function of CADRS includes the adjudication of small 

claims through informal proceedings under the Commission’s Rules of 

Practice and Procedure at 46 CFR Part 502, Subpart S. Office personnel 

serve as Settlement Officers in such cases, which involve complainants seeking reparations up to $50,000 for violations of the shipping statutes. Those 

claims generally involve alleged prohibited acts in connection with the international transportation of goods, or the failure to establish, observe, and 

enforce just and reasonable regulations and practices. 

During fiscal year 2011, 565 complaints were received that necessitated the opening of cases to provide dispute resolution services. These 

included 127 passenger complaints about cruise line issues, 250 complaints 

with respect to household goods shipments, and 188 complaints involving 

other cargo shipment matters. Cargo shipment complaints continued to 

be increasingly complex. Problems involving ocean transportation intermediaries with overextended finances and inability to complete the ocean 

transportation continued to be an issue. In addition, many household goods 

complaints pertained to initial charges quoted vis á vis the actual charges 

billed, often due to measurement discrepancies. 

One issue that arose during fiscal year 2011 involved Cruise West, a 

U.S.-based cruise line that ceased operations in September 2010. The Commission issued a press release and periodic updates to inform affected parties of possible reimbursement options for passenger fare deposits. CADRS 

assisted 37 individuals with inquiries and complaints related to the closure 

of this cruise line. In addition, CADRS participated in discussions with 

agency staff regarding possible revisions of the passenger vessel financial 

responsibility regulations. 

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Federal Maritime Commission
 

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The Commission concluded Fact Finding Investigation No. 26 into 

conditions and practices in the U.S. liner trades, and potential impediments 

to the flow of oceanborne import and export trades. This inquiry generated a number of complaints and concerns from both the import and export 

communities. CADRS continued its “Rapid Response Team” activities established under Fact Finding Investigation No. 26, including meeting with 

vessel operators to establish points of contact for each carrier to respond to 

CADRS’ inquiries on behalf of shippers. CADRS also supported implementation of the Fact Finding No. 26 recommendations through public outreach 

and promotion of service contract dispute resolution through CADRS. Public outreach efforts included developing brochures and other outreach materials, meetings with other agencies regarding joint outreach opportunities 

and the potential sharing of resources for ADR activities, participating in 

industry/shipper meetings and issue-solving activities, making ADR presentations to industry groups, and attending ADR conferences and meetings with government ADR groups. 

CADRS also continued its participation in the Commission’s Fact 

Finding Investigation No. 27, involving the review of potentially unlawful, 

unfair, or deceitful practices in the international shipment of household 

goods by water. Complaints to CADRS were the basis for initiating the fact 

finding and CADRS’ staff continued their efforts to resolve disputes involving household goods. A significant increase in household goods complaints 

occurred during fiscal year 2011. Numerous complaints were received regarding a formerly licensed NVO shipping household goods to the Phillippines. CADRS assisted affected consumers in locating cargo in the Phillippines and provided guidance regarding the filing of claims against the 

NVO’s surety bond. With the conclusion of Fact Finding Investigation No. 

27, CADRS is participating in implementing the fact finding’s recommendations, including targeted outreach, cooperative efforts with other government and industry entities, and the use of ADR to address household goods 

shipment issues. CADRS has been actively engaged in supporting these initiatives on an ongoing basis. 

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Federal Maritime Commission 

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G. OFFICE OF THE MANAGING DIRECTOR 

The Managing Director (MD) serves as the Commission’s senior 

executive responsible for the management and coordination of the Commission’s operating bureaus, exercising administrative direction or guidance 

over all units of the Commission. In addition to the major operating bureaus, the Managing Director oversees the Commission’s Area Representatives and all administrative offices. 

The MD is the Commission’s Chief Operating Officer and is responsible to the Chairman for the management and coordination of the following: 

■ Bureau of Certification and Licensing 

■ Bureau of Enforcement 

■ Bureau of Trade Analysis 

■ Area Representatives 

■ Office of Budget and Finance 

■ Office of Human Resources 

■ Office of Information Technology 

■ Office of Management Services 

The MD thus is responsible for implementing the regulatory policies 

of the Commission, as well as the administrative policies and directives of 

the Chairman. 

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In addition, the MD provides administrative guidance to the: 

■ Office of the Secretary 

■ Office of the General Counsel 

■ Office of Consumer Affairs and Dispute Resolution Services 

■ Office of Administrative Law Judges 

and administrative assistance to the: 

■ Offices of the Commissioners 

■ Office of the Inspector General 

■ Office of Equal Employment Opportunity 

The MD’s responsibilities include serving as the FMC’s Chief Acquisition Officer (CAO), and Chief Financial Officer, among myriad other 

administrative responsibilities. The Deputy Managing Director serves as 

the Managing Director’s Deputy with respect to all operational and administrative programs, as well as having primary responsibility for many efforts, 

including serving as the Commission’s Competition Advocate. 

The Director of Field Investigations (DFI) is located within the Office of Managing Director (OMD) and is responsible for managing and coordinating all investigative activities performed by Area Representatives 

(ARs) in the field. This includes extensive coordination among ARs and 

the Bureau of Enforcement, and coordinating the collective establishment 

of investigative priorities and goals. 

In managing the day-to-day operations of the Commission, the 

OMD provides direction and coordination among Commission administrative and program components to assure coordinated and cohesive efforts to 

achieve the Commission’s strategic goals. The OMD initiates recommendations for long-range plans, new or revised policies and standards, and rules 

and regulations, while issuing internal directives to Commission staff. 

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During fiscal year 2011, the OMD coordinated with CADRS to explain compliance with reduced tariff publication requirements and to assist in implementation of Rapid Response Teams to quickly resolve shipping 

problems. 

OMD staff participated in Fact Finding Investigation No. 27, Potentially Unlawful, Unfair or Deceptive Ocean Transportation Practices Related 

to the Movement of Household Goods or Personal Property in U.S.-Foreign 

Oceanborne Trades, and OMD developed plans for implementation of the 

report’s recommendations. The MD approved civil penalty compromises in 

a number of cases and established a system of internal directives (Managing 

Directives) to guide staff operations, particularly with respect to administrative programs. 

By directive, the MD established an Information Technology Advisory Board (ITAB) and initiated an assessment of the agency’s information 

technology (IT) program. The assessment was deemed necessary after reduced funding impeded the development of efforts to improve efficiency 

through the use of information technologies. The ITAB will ensure coordination among technology-operational staff managers to establish IT plans, 

priorities and initiatives. 

The OMD’s key objectives for fiscal years 2012 and 2013 include: 

(1) increasing the visibility of ARs to the shipping industry, importers and 

exporters to resolve issues affecting the flow of the nation’s oceanborne 

trade; (2) identifying ways to use modern technology within limited funds 

to achieve greater efficiencies in Commission operations; (3) implementing 

the agency’s Human Capital Management Plan, particularly with respect to 

succession planning for the departure of highly skilled personnel; (4) increasing, through ARs and CADRS, the use of enhanced dispute resolution 

mechanisms to quickly address industry disputes; (5) continuing to refine 

and enhance agency administrative programs and operations; and (6) overseeing the review and updating of Commission regulations, especially those 

governing OTIs and passenger vessel operators (PVOs). 

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Federal Maritime Commission
 

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1. Area Representatives 

The Commission’s Area Representatives (ARs) act as liaisons with 

the shipping industry at a local level and as a resource to all bureaus and 

offices of the Commission. Through its ARs, the Commission maintains a 

presence in Los Angeles, South Florida, New Orleans, New York, Houston, 

and Seattle. These ARs also serve other major port cities and transportation centers within a wider geographic range, representing the Commission, 

resolving complaints and issues involving international oceanborne shipping (often coordinating with CADRS), investigating alleged violations of 

the shipping statutes, and providing liaison to the shipping public. The ARs 

provide information to the maritime industry while acting as an intelligence 

resource to Commission headquarters. They provide advice and guidance 

to the shipping public, collect and analyze information of regulatory significance, and assess industry conditions. The ARs frequently cooperate and coordinate with other governmental agencies and departments, Federal, state 

and municipal, providing expertise and assistance as needed to law enforcement agencies, as well as relaying information about Commission statutes, 

rules and policies to the shipping industry and the public. 

In fiscal year 2011, hundreds of informal complaints were handled 

by the ARs. These complaints often involved unlawful activity. Where possible, compliance with statutory and regulatory requirements was achieved 

informally. In other instances, investigative cases were opened and the ARs 

conducted thorough investigations to determine the extent of unlawful activity. The ARs conducted a number of investigations in fiscal year 2011 

of unlawful shipping practices, including unlicensed OTI activities, misdescription of commodities by shippers, and illegal service contract activities 

by ocean carriers. The investigative actions by the ARs led to the development of several enforcement cases that were referred to the Bureau of Enforcement and resulted in civil penalties. Investigative activity by the ARs 

assists the FMC in ensuring fair competition access to shipping in the trades 

to and from the United States. 

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The ARs were instrumental in the publication of public service announcements (PSAs) for each major port area in fiscal year 2011, warning 

consumers against the use of unlicensed OTIs. The ARs identified appropriate local publications, including those that would reach various ethnic 

communities that have been particularly vulnerable to fraudulent activity by 

unlicensed entities. The PSAs resulted in numerous inquiries and reports to 

the ARs regarding improper activity by both licensed and unlicensed OTIs, 

and appear to have helped educate consumers to be more alert to unlawful 

operators, saving many from significant losses. 

During fiscal year 2011, the ARs made a number of presentations 

to interested industry audiences in their areas, explaining OTI licensing requirements and compliance with the new NRA Tariff Rate Exemption. ARs 

also worked closely with a number of law enforcement agencies, including 

local jurisdictions such as the New York City Police Department, New Jersey 

State Police, and Houston Police Department, as well as Federal agencies, 

including the Federal Bureau of Investigation (FBI) in South Florida. In 

addition, the South Florida ARs provided valuable expertise and assistance 

to the Export-Import Bank of the United States (Ex-Im Bank) to facilitate 

the investigation by Ex-Im Bank’s IG Office and subsequent prosecution of 

several cases of fraud against the U.S. government. 

The ARs participated in task forces and initiatives sponsored by local 

law enforcement agencies, the U.S. Department of Justice, the Department 

of Homeland Security including Customs and Border Patrol (CBP) and Immigration and Customs Enforcement (ICE), the Department of Commerce 

(DOC) and the FMCSA. This assistance and sharing of information contributed to the investigation of a wide range of unlawful activities. 

ARs also provided valuable assistance in Commission Fact Finding 

Investigation No. 27, Potentially Unlawful, Unfair or Deceptive Ocean Transportation Practices Related to the Movement of Household Goods or Personal 

Property in U.S.-Foreign Oceanborne Trades (FF No. 27). In the FF No. 27 

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Fiscal Year 2011 

proceedings, ARs assisted the Fact Finding Officer in arranging for the appearance of impacted witnesses, answered inquiries from shipping industry 

participants, and provided advice and suggestions through the Managing 

Director with respect to the conduct of the proceedings. The ARs have also 

been actively involved in carrying out the recommendations of FF No. 27 by 

reaching out to the public, consumer groups, trade associations, and other 

government agencies in efforts to achieve regulatory compliance and protection for the shippers of household goods and personal effects. 

In fiscal years 2012 and 2013, the ARs will continue to function in 

several key roles for the FMC by representing the agency, educating and assisting the shipping public, facilitating the resolution of informal complaints 

and disputes, and investigating unlawful practices in ocean shipping. All of 

these activities support the FMC’s mission of fostering a fair, efficient and 

reliable international ocean transportation system and protecting the public 

from unfair and deceptive practices. 

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2. Office of Budget and Finance 

(a) General Office Responsibilities 

The Office of Budget and Finance (OBF) administers the Commission’s financial management program and is responsible for offering guidance on optimal use of the Commission’s fiscal resources. OBF is charged 

with interpreting government budgetary and financial policies and programs, and developing annual budget justifications. The Office also administers internal control systems for agency funds, travel, work years, and cash 

management. Additionally, OBF manages the Commission’s Travel Charge 

Card Program and administers all budget execution functions. 

(b) Achievements 

During fiscal year 2011, OBF: 

•	 Collected and deposited $2,446,630 to the U.S. Treasury from fines and 

penalty collections, publications, reproductions, and user fees. 

•	 Worked with Bureau of Public Debt (BPD) staff and the Commission’s 

independent auditors regarding the audits of fiscal years’ 2010 and 2011 

financial statements. The Commission received unqualified opinions for 

both fiscal years. 

•	 Developed a new methodology for calculating user fee costs and revised 

procedures and calculations used to estimate the cost of annual performance goals. 

•	 Began migration from Paper Check Conversion system of depositing 

remittances received from FMC customers to Treasury’s new Over the 

Counter Channel Application (OTCnet). 

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•	 Began working with BPD regarding implementation of Treasury’s new 

Internet Payment Platform (IPP), which will create efficiencies in the 

Commission’s accounts payables. 

•	 Processed the Commission’s accounts payable documents in accordance 

with the Prompt Payment Act and prepared official travel documents in 

accordance with applicable Federal Travel Regulations. 

(c) Future Plans 

Goals in fiscal year 2012 include: implementation of Pay.gov to enable electronic collections processing using Internet technologies, thereby 

improving the agency’s Cash Management Program; continuing to pursue 

initiatives leading to economy and efficiency in budget and financial operations, including conversion to OTCnet and IPP; updating relevant Standard 

Operating Procedures, Commission Orders and procedural documents. 

3. Office of Human Resources 

(a) General Office Responsibilities 

The Office of Human Resources (OHR) administers a complete human resources management program, including recruitment and placement, position classification and pay administration, occupational safety 

and health, employee assistance, employee relations, workforce discipline, 

performance management and incentive awards, employee benefits, career 

transition, retirement, employee development and training, and personnel 

and information security. 

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(b) Achievements 

During fiscal year 2011, OHR: 

•	 Monitored activities of the agency’s payroll/personnel service provider, 

the National Finance Center (NFC), and worked with Administrative 

staff to ensure security, continuity and accuracy of payroll and personnel 

services. 

•	 Addressed talent/leadership management and succession planning by 

initiating individual development of those recruited and selected to participate in the Senior Executive Service Candidate Development Program and providing technical guidance regarding developmental activities, special projects, and training of candidates. 

•	 Conducted a comprehensive training program in accordance with the 

agency’s budget and strategic and performance plans, promoting elearning and on-line training opportunities, continuing the college 

tuition reimbursement program, ensuring training for new employees 

on the No Fear Act, participating in the SAC Training Program, and 

introducing more agency mission-critical training (e.g., Bills of Lading 

Workshop). 

•	 Planned, implemented, and promoted programs for Retirement-Readiness, Personal Financial Literacy Education, and Volunteer/Community 

Service Awareness and issued newsletters highlighting appropriate information and activities. 

•	 Conducted a comprehensive personnel and information security program, including initiating and adjudicating security investigations for 

new and reinvestigated employees and incorporating new security regulations into agency policy. 

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•	 Revised the agency Human Capital Plan to ensure consistency with revisions to the agency Strategic Plan’s goals and objectives. 

•	 Coordinated with OPM, OMB, and the Small Agency Human Resources 

Council on human capital and related initiatives including, e.g., Hiring 

Reform, potential government shut-down and related furlough activities, and Voluntary Early Retirement Authority. 

•	 Conducted a comprehensive performance management and incentive 

awards program, including working with the agency Performance Appraisal System Taskforce (PAST) to document policy changes, obtain 

OPM approval, coordinate training, and otherwise ensure successful 

implementation of a revised performance appraisal system for non-SES. 

•	 Participated in the online Federal Competency Assessment Tool for 

managers and HR staff to update FMC’s skill gap analysis, identify gaps 

in leadership competencies, support mission accomplishment, and 

guide planning for training and development. 

•	 Conducted comprehensive recruitment and classification and position 

management programs, including coordinating assignments and evaluating contractor performance. 

•	 Managed and conducted employee benefits and charitable contributions 

programs and Open Seasons, such as the Combined Federal Campaign, 

Long-Term Care Insurance Program, Flexible Spending Accounts, the 

annual Benefits Open Season and FMC Health Fair. 

•	 Conducted a proactive retirement program that included computing 

benefits, providing access to retirement seminars, related training and 

one-on-one counseling, and timely processing all retirements, as well as 

determining the need, requesting and receiving OPM approval, and informing the workforce regarding Voluntary Early Retirement Authority. 

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•	 Coordinated with other administrative units and the General Services Administration’s Managed Service Office on matters pertaining to 

Homeland Security Presidential Directive 12 (HSPD-12) and the issuance of Federal employee credentials, including activities to implement 

logical access provisions. 

•	 Coordinated with OPM in the administration of the Federal Employee 

Viewpoint Survey (FEVS), analyzed results, prepared interpretation and 

trend analysis, worked with senior management to identify and reinforce 

successful activities and develop strategies to address areas of improvement, and worked with the Partnership for Public Service in connection 

with metrics and utilizing results of the Best Places to Work rankings. 

•	 Continued to administer E-gov initiatives and implementation of the 

Enterprise Human Resources Integration Project and worked with the 

Small Agency Human Resources Consortium, OPM and Northrop 

Grumman Integic officials to complete program activities to implement 

the electronic Official Personnel Folder (eOPF). 

•	 Enhanced workplace flexibilities and provided recommendations to 

OPM regarding the agency’s work/life program and best practices. 

•	 Promoted the Preventive Health and Awareness Program and OPM’s 

Healthier Feds initiatives, publicized and hosted wellness seminars 

sponsored by the Employee Assistance and Federal Occupational Health 

Programs and coordinated with other administrative units on matters 

pertaining to the Automatic External Defibrillator (AED) program and 

Health Unit (clinical) services. 

•	 In concert with OPM’s hiring reform initiative, established agency Rapid 

Response (SWAT) team and undertook activities to simplify the Federal 

application process and enhance recruitment efforts, including developing streamlined vacancy announcement templates, mapping agency hiring processes to reduce the time-to-hire, and developing an action plan 

to identify and address required activities to implement and monitor 

hiring reform initiatives. 

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Federal Maritime Commission 

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•	 Maintained the partnership for acquisition of assistive devices through 

the Department of Defense’s Computer/Electronic Accommodations 

Program and continued work with information technology personnel to 

complete the design and agency-wide implementation of an automated 

training data management reporting system. 

(c) Future Plans 

In fiscal year 2012, OHR plans to continue to: advise agency management and staff on all human resources matters and maintain a sound and 

progressive human resources program; implement pertinent portions of the 

agency’s strategic, training and related performance plans, particularly performance goals related to the management of human resources; explore and 

implement simplification, flexibility, and accountability of human resources 

management programs, and explore high-tech solutions to address program 

requirements, including, e.g., a fully automated training evaluation system 

and automated staffing system; partner with agency officials in concert with 

the Administration’s goal to build a transparent, high-performance government specifically with respect to Federal hiring reform and improving 

employee satisfaction and wellness; continue with eOPF implementation 

and conversion of performance, payroll, benefits and other HR records to 

electronic format, and execute action plan for full production and employee 

roll-out; continue to monitor database modernization efforts of the NFC in 

conjunction with e-Governance and ensure timely and accurate payroll and 

personnel services; continue to review and update various policy statements 

to implement Executive Orders and related regulatory requirements; continue to administer and assess results from the FEVS to gauge employee satisfaction with work/life and benefits programs, agency leadership, developmental opportunities, etc., and use these metrics to strategically implement, 

monitor, measure, assess progress in achieving, ensure accountability, and 

report on human capital management goals pursuant to the agency’s Human Capital, Workforce, Succession and Accountability Plans; and evaluate 

the revised performance appraisal system for non-SES employees against 

OPM’s Performance Appraisal Assessment Tool (PAAT) and monitor employee perceptions regarding performance management through continued 

analysis of the FEVS. 

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4. Office of Information Technologies 

(a) General Office Responsibilities: 

The Office of Information Technology (OIT) provides management 

support to the program and administrative operations of the Commission 

with respect to information technology (IT), and thus is responsible for ensuring that the Commission’s IT program is administered in a manner consistent with applicable rules, regulations, and guidelines. 

The OIT Director serves as the Commission’s Chief Information Officer (CIO), IT Officer, Telecommunications Manager, Help Desk and Database Administration Manager, and oversees the IT security program. The 

OIT Director plans, coordinates, and facilitates the use of automated information systems. 

(b) Achievements 

During fiscal year 2011, OIT: 

•	 Contracted with a third party to conduct an assessment of the current 

state of the Commission’s IT systems, to be completed in the first quarter 

FY 2012, critical to the completion of the Enterprise Architecture Plan. 

•	 Established an Information Technology Advisory Board (ITAB) to provide direction and leadership in the acquisition, management and use of 

IT resources. 

•	 Expanded the agency’s critical servers into a virtual server system to reduce costs associated with procuring dedicated hardware for each system. 

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•	 Continued implementation of the HSPD-12 initiative; acquired and implemented a light activation kit to allow for in-house card activations, 

certificate updates, and PIN unlocks; finalized on-site login testing and 

network smart card group policy; developed an HSPD-12 agency directive and initiated the phased implementation approach. 

•	 Initiated the Pay.gov implementation process and is currently in the 

technical implementation phase of the project. 

•	 In efforts to comply with the government-wide marketplace for data 

center availability in the OMB 25 Point Implementation Plan to reform 

Federal IT, the agency has actively been working with other agencies 

that provide for sharing IT resources. OIT is in the process of evaluating 

the agreement process to acquire COOP and disaster recovery services 

from other Federal agencies. This initiative will decrease IT spending 

for COOP and ensure security compliance. 

(c) Future Plans 

Major OIT initiatives for fiscal year 2012 include: advance work on 

the agency Enterprise Architecture Plan; exploration of ways to leverage 

shared IT resources such as cloud computing and shared data centers to 

reduce costs and promote efficiency; and support the Pay.gov and HSPD-12 

initiatives. 

5. Office of Management Services 

(a) General Office Responsibilities 

The Office of Management Services (OMS) directs and administers 

a variety of management services functions that principally provide administrative support to the regulatory program operations of the Commission. 

The Director of the Office serves as the Commission’s Contracting Officer. 

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The Office’s support programs include procurement of administrative goods and services, property management, space management, printing 

and copying management, mail and record services, facilities and equipment 

maintenance, and transportation. The Office’s major functions are to secure 

and furnish all supplies, equipment and services required in support of the 

Commission’s mission, and to formulate regulations, policies, procedures, 

and methods governing the use and provision of these support services in 

compliance with the applicable Federal guidelines. 

(b) Achievements 

During fiscal year 2011, OMS: 

•	 Negotiated with GSA’s National Capital Region personnel to establish a 

new Occupancy Agreement for executing a lease for FMC’s Headquarters (HQ) office space. 

•	 Coordinated with FPS and GSA to assess and update the HQ building’s 

Occupant Emergency Plan (OEP) and arranged for a variety of emergency preparedness seminars/training for the building’s population. 

•	 Traveled to Los Angeles to facilitate the renovation of the field office, 

and negotiated with GSA’s real estate officials on establishing a new Occupancy Agreement for renewal of the office space lease. 

•	 Coordinated with OMD on the completion of the management evaluation and review of the BTA program. 

•	 Expanded the FMC’s recycling program to include the field locations 

and issued new guidelines and individual office receptacles for trash disposal and shredding of documents and materials. 

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Federal Maritime Commission 

Fiscal Year 2011 

(c) Future Plans 

In fiscal year 2012, the Office’s objectives include: continuing to work 

with GSA as required to execute new Occupancy Agreements for the agency’s leased office throughout the nation; continuing to work with GSA, FPS, 

and other tenant agencies at our HQ facilities and field locations to upgrade 

and/or improve the buildings’ security measures and emergency preparedness; in conjunction with the agency’s other administrative offices, for the 

enhancement and improvement in support services; continuing to work 

with BPD’s Administrative Resource Center on the transfer of procurement 

services and files back to FMC for streamlining our acquisition and contracting program for better efficiency; and continuing to provide advice and 

assistance regarding innovative support-service approaches to FMC activities. 

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Federal Maritime Commission 

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H. BUREAU OF CERTIFICATION AND LICENSING 

1. In General 

The Bureau of Certification and Licensing has responsibility 

for the Commission’s ocean transportation intermediary (OTI) licensing program and passenger vessel certification program. The Bureau: 

•	 Licenses and regulates OTIs, including ocean freight forwarders and non-vessel-operating common carriers (NVOCCs). 

•	 Issues certificates to owners and operators of passenger vessels that have 

evidenced financial responsibility to satisfy liability incurred for nonperformance of voyages or for death or injury to passengers and other persons. 

•	 Manages programs assuring financial responsibility of OTIs and 

passenger vessel operators, by developing policies and guidelines, and analyzing financial instruments and financial reports. 

•	 Develops and maintains information systems that support the 

Bureau’s programs and those of other Commission entities. 

The Bureau is organized into two offices: the Office of Transportation Intermediaries and the Office of Passenger Vessels and Information 

Processing. The former reviews and approves applications for OTI licenses, 

and maintains and updates records about licensees. The latter reviews applications for certificates of financial responsibility with respect to passenger 

vessels, manages all activities with respect to evidence of financial responsibility for OTIs and passenger vessel owner/operators, and develops and 

maintains all Bureau databases and records of OTI applicants and licensees. 

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Federal Maritime Commission 

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2. Licensing of Ocean Transportation Intermediaries 

OTIs are transportation middlemen for oceanborne cargo moving 

in the U.S.-foreign trades. There are two types: NVOCCs and ocean freight 

forwarders. NVOCCs are common carriers who do not operate the vessels 

by which transportation is provided. Ocean freight forwarders in the United 

States arrange for the transportation of cargo with a common carrier on 

behalf of shippers and process documents related to those shipments. Both 

NVOCCs and ocean freight forwarders must be licensed by the Commission 

if they are located in the U.S. NVOCCs doing business in the U.S. foreign 

trades but located outside the United States (foreign NVOCCs) may choose 

to become licensed, but are not required to do so. Whether licensed or not, 

foreign NVOCCs must establish financial responsibility. All NVOCCs must 

publish electronic tariffs which contain the NVOCC’s rates, charges, rules 

and practices. 

To become licensed by the Commission, an OTI must establish that 

it has the necessary character to render OTI services as well as establish 

its financial responsibility by means of a bond, insurance, or other instrument and through its Qualifying Individual (QI), has a minimum of three 

years of experience in ocean transportation intermediary activities in the 

United States. An investigation of the applicant’s qualifications address such 

issues as accuracy of information provided in the application; integrity and 

financial responsibility of the applicant; character of the applicant and its 

QI; and length and nature of the QI’s experience handling OTI duties. Licensed ocean freight forwarders must establish financial responsibility in the 

amount of $50,000, and licensed NVOCCs, $75,000. An additional $10,000 

of coverage is required for each unincorporated branch office in the United 

States other than the one used to establish a presence. 

If an OTI is a licensed NVOCC, it must file a Form FMC-1 and publish a tariff. Furthermore, non-U.S.-based NVOCCs that do not wish to be 

licensed must provide the Commission with proof of financial responsibility 

in the amount of $150,000, file a Form FMC-1, and ensure a tariff is published at the site listed on the Form FMC-1. A non-U.S.-based NVOCC 

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must list in its tariff an agent for service of process in the United States, and 

it must use a licensed OTI for any OTI services performed on its behalf in 

the United States. The financial instrument must be available to pay claims 

against the OTI arising from its transportation-related activities, any order 

of reparation assessed under the Shipping Act, and any judgments for damages against an OTI arising from its transportation-related activities under 

the Shipping Act. 

During FY 2011, the Commission received 496 new OTI applications and 277 amended applications, issued 459 OTI licenses, and revoked 

310 licenses. At the end of the fiscal year, 1,042 OFFs, 1,737 U.S. NVOCCs, 

1,670 joint NVOCC/OFFs, and 60 foreign NVOCCs held active OTI licenses. An additional 1,190 foreign NVOCCs maintained proof of financial responsibility on file with the Commission, but chose not to be licensed. Overall, there has been a gain of 187 licensed and/or bonded OTIs, representing 

approximately a 3.4 percent increase from 5,512 OTIs in fiscal year 2009 

to 5,699 in fiscal year 2011. U.S. NVOCCs may file riders to their existing 

NVOCC bonds to meet financial responsibility requirements imposed by 

the Chinese government. The Commission received 96 riders providing optional proof of financial responsibility for NVOCCs serving the U.S.-China 

trade. Figure 1 shows the number of freight forwarders and NVOCCs that 

held active OTI licenses over the past five fiscal years from 2006 through 

2011. 

The Bureau worked during the fiscal year to streamline the OTI licensing process and reduce the time needed to reach a licensing decision. 

The Commission’s goal was to complete 60 percent of all OTI license applications within 60 calendar days during fiscal year 2011. Despite reductions 

in staffing, the Bureau completed over 75 percent of all OTI applications 

within 60 business days, exceeding the goal set by almost 20 percent. Additionally, BCL made significant progress in reducing the number of applications processed with incomplete data submissions from applicants. The 

Bureau continues to review its procedures in order to improve the timeliness 

of licensing determinations. 

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Figure 1: Ocean Freight Forwarders, NVOCCs 

That Held Active OTI Licenses 

2006 - 2011 

2006 

Ocean Freight Forwarders 

2007 

2008 U.S. NVOCCs 

2009 Joint NVOCCs/Ocean 

2010 Freight Forwarders 

2011 

Foreign NVOCCs 

0 500 1000 1500 2000 

The automated Form FMC-18, Application for an Ocean Transportation Intermediary License, permits filers to complete an OTI application 

online, scan and attach required documents, and submit the application 

electronically. The filing system incorporates significant security features 

for the purpose of protecting applicant data, and detecting and preventing 

unauthorized system intrusion. The Bureau seeks additional efficiencies in 

its OTI licensing program through future improvements in the automated 

Form FMC-18 system. At the present time, approximately 93 percent of all 

incoming OTI applications received are from the electronic system. Figure 

2 shows the number of new applications processed by FMC over each of the 

last five fiscal years, 2006 through 2011. 

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Figure 2: New Ocean Transportation Intermediaries
 

Applications Received
 

2006 - 2011
 

600 

500 

400 

300 

New OTI Applications 

200 

100 

0
 

2006 2007 2008 2009 2010 2011
 

3. Passenger Vessel Certification 

The Commission administers 46 U.S.C. §§ 44102-44103, which requires evidence of financial responsibility for vessels which have berth or 

stateroom accommodations for 50 or more passengers and embark passengers at U.S. ports and territories. The program now encompasses 199 vessels 

and 41 operators, which have aggregate evidence of financial responsibility 

coverage in excess of $293 million for nonperformance and over $293 million for casualty. Certificates of performance cover financial responsibility 

for the indemnification of passengers for nonperformance of transportation. This requirement also helps prevent unscrupulous or financially weak 

operators from operating from U.S. ports. The required levels of coverage 

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Federal Maritime Commission 

Fiscal Year 2011 

for nonperformance are determined by Commission regulation, which do 

not currently require coverage exceeding $15 million per entity. Even after 

an operator has ceased operations and dissolved its corporate existence, the 

evidence of financial responsibility is still valid and available to claimants 

against the guarantor. Certificates of casualty are required to meet liability 

that may occur for death or injury to passengers or other persons on voyages to or from U.S. ports in the amounts established by the statute. The law 

provides for $20,000 coverage per person for the first 500 passengers, and 

the scale decreases to $5,000 per person for passengers in excess of 1,500. 

U.S. Customs and Border Protection is directed to refuse clearance to any 

vessel which does not comply with the FMC’s evidence of financial responsibility requirements for casualty and nonperformance. During fiscal year 

2011, the Commission approved and issued 22 casualty certificates and 24 

performance certificates. 

In conjunction with CADRS, the Bureau offers information and 

guidance to the cruising public throughout the year on passenger rights and 

obligations regarding monies paid to cruise lines that fail to perform voyages. Over the past few years, a number of cruise operators discontinued operations or filed for bankruptcy. When cruise lines fail to perform because 

of bankruptcies or other failures, the Commission works closely with the 

cruise line and the financial responsibility provider, if necessary, to facilitate 

the refund process. The public is kept informed through press releases posted on the Commission’s website and advice given to passengers who contact 

staff. During FY 2011, one operator, West Travel, Inc. doing business as 

Cruise West (Cruise West), ceased operations in September 2010 with unperformed cruises and filed for bankruptcy in December 2010. BCL and 

CADRS worked closely with Cruise West’s claims processor and the United 

States Tour Operators Association to oversee the disbursement of funds to 

Cruise West passengers and addressed concerns from the public regarding 

this situation. Staff also continued to assist passenger vessel operators and 

financial responsibility providers during the fiscal year to resolve passenger 

claims for several cancelled cruises of other cruise operators. 

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The Bureau reviewed PVO activities and operations by monitoring 

current industry events and examine cruise lines’ unearned passenger revenue (UPR) information. Oversight of cruise line operators’ operations and 

activities ensures compliance with applicable statutes and Commission regulations. No on-site review was conducted this fiscal year because staff was 

involved in analyzing comments and testimonies received in response to a 

Notice of Inquiry and a hearing on PVO matters which was held on March 

3, 2010. 

Based on the information received, the Commission voted on July 

14, 2011 to initiate a rulemaking to strengthen protections for cruise line 

customer deposits and prepayments and to reduce financial responsibility 

requirements for small cruise lines. The Notice of Proposed Rulemaking 

(NPRM) was issued on September 13, 2011 with a deadline of November 

21, 2011 to submit comments. The NPRM would double the maximum 

coverage requirement for larger cruise lines from $15 million to $30 million, 

with a two year phase-in period; adjust the maximum coverage requirement 

automatically to account for inflation; give relief to smaller vessel operators 

by reducing their coverage requirements to account for alternative forms 

of financial protections available to their customers; revise the application 

form; add an expiration date to the Certificate (Performance); and make 

some technical adjustments to the regulations. BCL will provide its analysis 

of the comments and present options for the Commission’s consideration in 

early fiscal year 2012. 

4. Automated Database Systems 

During FY 2011, BCL continued to modernize and expand the Regulated Persons Index (RPI), a database containing up-to-date records of licensed OTIs, ocean common carriers, and other entities. Among other data 

uses, the RPI is used to post on the Commission’s website a list of compliant 

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OTIs so that carriers and others can ascertain whether an OTI is properly 

licensed, bonded, and if required, has posted the location of its automated 

tariff. The OTI list also indicates whether an NVOCC has filed an optional 

rider for additional proof of NVOCC financial responsibility. Additional report capabilities were implemented during the fiscal year to facilitate management of the OTI licensing program. Also, in conjunction with the agency’s OIT, BCL continues to work towards automating the PVO Application 

Form FMC-131, Application for Certificate of Financial Responsibility, and to 

gather requirement analysis to facilitate the filing of PVO applications.

 5. Future Plans 

In fiscal year 2012, the Bureau will: 

•	 Continue to develop and present options to the Commission for consideration to ensure that passenger vessel financial responsibility requirements for nonperformance provide appropriate protection for the 

public. The Bureau will take necessary steps to implement a decision 

reached by the Commission, including initiation of rulemakings or adjustments in PVO monitoring procedures. 

•	 Generate for consideration suggested updates of rules and regulations 

regarding OTI licensing requirements to ensure continued protection of 

the shipping public in light of changed industry circumstances. 

•	 Produce guidance for OTI applicants to assist in preparing OTI Application Form FMC-18. 

•	 Improve the OTI list on the Commission’s website enabling users to perform geographic searches to locate licensed OTIs, which will be particularly useful for individuals who plan to move overseas. Finding a licensed OTI in their local area can result in more accurate quotations for 

transportation of their household goods and will allow those consumers 

to make better informed decisions, rather than resorting to using unlicensed OTIs. The Bureau plans to expand contact information provided 

for all OTIs on the website as well. 

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•	 Continue efforts to advance the efficiency and productivity of the OTI 

licensing program through additional improvements to the current automated Form FMC-18 system, or in conjunction with the agency’s Enterprise Content Management project. 

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Federal Maritime Commission 

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I. BUREAU OF ENFORCEMENT 

The Bureau of Enforcement is the primary prosecutorial arm of the 

Commission. Attorneys of the Bureau serve as trial attorneys in formal proceedings instituted under section 11 of the Shipping Act, and in investigations instituted under the FSPA. Bureau attorneys also may be designated 

investigative officers in nonadjudicatory fact-finding proceedings. The Bureau monitors all other formal proceedings, including relevant court proceedings, in order to identify major regulatory issues and advise the Managing Director and the other bureaus. The Bureau also participates in the 

development of Commission rules and regulations and serves on inter-bureau task forces and special committees. On occasion, under the direction 

of the General Counsel, attorneys from the Bureau may participate in matters of court or other agency litigation to which the Commission is a party. 

Through investigative personnel, and most often as the result of information provided by the industry and other government entities, the Bureau monitors and provides liaison and legal advice in investigations of the 

activities of ocean common carriers, OTIs, shippers, ports, and terminals, 

and other persons to ensure compliance with the statutes and regulations 

administered by the Commission. Monitoring activities include: (1) service contract and NVOCC service arrangement (NSA) reviews to determine 

compliance with applicable statutes and regulations; (2) reviews and audits of 

ocean common carrier, NVOCC and ocean freight forwarder operations, including compliance with licensing, tariff, and bonding requirements; (3) audits of passenger vessel operators to ensure the financial protection of cruise 

passengers; (4) monitoring of agreements among ocean carriers and MTOs; 

and (5) various studies and analyses to support Commission programs. 

Investigations involve alleged violations of the full range of statutes and 

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Fiscal Year 2011 

regulations administered by the Commission, including: illegal or unfiled 

agreements; abuses of antitrust immunity; unlicensed OTI activity, including servicing of noncompliant OTIs by VOCCs and licensed NVOCCs; illegal rebating; misdescriptions or misdeclarations of cargo; untariffed cargo 

carriage; unbonded OTI and passenger vessel operations; and various types 

of consumer abuses, including failure of carriers or intermediaries to carry 

out transportation obligations, resulting in cargo delays or financial losses 

for shippers. The Bureau adheres to the agency’s objectives of obtaining 

statutory compliance and ensuring equitable trading conditions. 

The Bureau prepares and serves notices of violations of the shipping 

statutes and Commission regulations and may compromise and settle civil 

penalty demands arising out of those violations. Other Bureau investigations may be resolved through compliance measures. If settlement is not 

reached, Bureau attorneys act as prosecutors in formal Commission proceedings that may result in settlement or in the assessment of civil penalties. 

The Bureau also participates, in conjunction with other Commission units, 

in special enforcement initiatives, fact-finding investigations and rulemaking efforts. 

During fiscal year 2011, the Bureau of Enforcement investigated 

and prosecuted possible illegal practices in many trade lanes, including the 

Transpacific, Oceania, North Atlantic, Mediterranean, West Africa, Central 

and South American, and Caribbean trades. These market-distorting activities included various forms of rebates and absorptions, misdescription of 

commodities and misdeclaration of measurements, illegal equipment substitution, and unlawful use of service contracts, as well as carriage of cargo 

by and for untariffed and unbonded NVOCCs. Most of these investigations 

were resolved informally, some with compromise settlements and civil penalties. The following Figure 3 shows civil penalties collected by the FMC 

over the last five fiscal years. 

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Figure 3: Civil Penalties Collected
 

FY 2006 - 2011
 

$2,500,000 

$2,000,000 

$1,500,000 

$1,000,000 

$500,000 

$0 

Two major investigations, completed during fiscal year 2011, addressed whether certain Shanghai-based NVOCCs utilized intentional misdescriptions of commodities as an unfair device or means to obtain ocean 

transportation at less than the rates that would otherwise apply, in violation 

of section 10(a) of the 1984 Act. Docket Nos. 10-09 (Sinicway International 

Logistics Ltd. – Possible Violations) and 11-04 (Worldwide Logistics Co. Ltd. 

– Possible Violations) were discontinued upon approval of a formal settlement agreement, payment of substantial civil penalties by the NVOCC, and 

termination of the violative practices at issue. BOE also completed a major 

investigation of an ocean common carrier in the inbound China-U.S. trades 

believed to be providing transportation services to intermediaries that did 

not have tariffs, licenses, or bonds as required by the statute; and allowing 

use of service contracts by persons who were not parties to those contracts. 

That investigation culminated in a $1.2 million penalty payment to the 

FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 

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Federal Maritime Commission 

Fiscal Year 2011 

Commission by Mitsui O.S.K. Lines Ltd., a Japanese-flag carrier, as well as 

that carrier’s agreement to provide ongoing cooperation with any further 

Commission investigations or enforcement actions with respect to these 

activities. The Bureau also continued ongoing investigations of household 

goods movers allegedly operating as unlicensed OTIs, including investigation of the VOCCs and licensed NVOCCs that provided service to unlicensed movers. BOE activities included formal proceedings instituted 

against an unlicensed freight forwarder in Docket No. 11-06 (Indigo Logistics LLC, et al – Possible Violations), undertaken in coordination with efforts 

by the Office of General Counsel requesting that the Federal courts enjoin 

the Indigo Logistics’ defendants from further illegal activities. Judge Timothy C. Batten, Sr. issued the preliminary injunction order in the U.S. District 

Court for the Northern District of Georgia on April 15, 2011. 

Interaction between the Bureau, the Commission’s Area Representatives, and the CBP with respect to the exchange of investigative information 

continues to be beneficial to all parties. Cooperation with CBP included 

staff interactions and joint field operations to investigate entities suspected 

of violating both agencies’ statutes or regulations. Such cooperation also has 

included local police and other government entities, including the U.S. Attorney’s Office and the Federal Bureau of Investigation, when necessary. 

In fiscal year 2011, the compliance audit program continued. This 

program, conducted from headquarters primarily by mail, reviews the operations of licensed OTIs to assist them in complying with the statutory 

requirements and the Commission’s rules and regulations. The audit program also includes review of entities holding themselves out as VOCCs with 

no indication of vessel operations. During the fiscal year, 100 audits were 

commenced, 106 audits were completed (including audits carried over from 

FY2010), and 9 remained pending in the Bureau on September 30, 2011. 

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Fiscal Year 2011 

At the beginning of fiscal year 2011, 12 enforcement cases were pending final resolution by the Bureau, the Bureau was party to 7 formal proceedings, and there were 11 matters pending which the Bureau was monitoring or for which it was providing legal advice. During the fiscal year, 17 

new cases were referred for enforcement action or informal compromise; 16 

were compromised and settled, administratively closed, or referred for formal proceedings; and 13 enforcement cases were pending resolution at fiscal 

year’s end. Also, 3 formal proceedings were initiated; 2 formal proceedings 

were completed, and 8 were pending at the end of the fiscal year. Additionally, the Bureau opened 5 matters involving monitoring or legal advice during the fiscal year, completed or closed 4 such matters, and 12 were pending 

in the Bureau on September 30, 2011. 

In fiscal year 2012, the Bureau will continue to investigate marketdistorting, fraudulent, and anticompetitive practices not in compliance with 

the statutes and regulations administered by the Commission, including the 

operations of licensed and unlicensed OTIs and possible non-compliance 

by the parties with the regulatory requirements for service contracts and 

NSAs. Cargo misdescription in the PRC trades and elsewhere will serve as 

an area of continuing focus for the Bureau’s enforcement efforts during fiscal 

year 2012. BOE will continue enforcement and monitoring activities that 

address the unlawful operations of international household goods carriers, 

both licensed and unlicensed, which have increasingly caused economic 

harm to individual consumers, as well as competitive injury to those carriers operating lawfully. 

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Federal Maritime Commission 

Fiscal Year 2011 

J. BUREAU OF TRADE ANALYSIS 

1. In General 

The primary function of the Bureau is the oversight of concerted 

activity by ocean common carriers and marine terminal operators under 

the standards of the Shipping Act. Further, the Bureau administers the 

Commission’s agreements, service contract, NSA, and Negotiated Rate 

Agreement (NRA) programs, and monitors the accessibility and accuracy of all published tariffs. The Bureau’s major program activities include: 

•	 Administering comprehensive trade monitoring programs to identify and track relevant competitive, commercial, and economic activity in the major U.S. foreign trades, and to advise the Commission and its staff on current trade conditions, trends and 

regulatory concerns affecting oceanborne liner transportation. 

•	 Conducting systematic surveillance of carrier activity in areas relevant to the Commission’s administration of statutory standards. 

•	 Developing economic studies and analyses in support of the Commission’s regulatory responsibilities. 

•	 Providing expert economic testimony and support in formal proceedings, particularly regarding unfair foreign shipping practices. 

•	 Processing and analyzing ocean common carrier and MTO agreements. 

•	 Reviewing and processing service contracts, NSAs and amendments filed by ocean common carriers, conferences of 

such carriers, and NVOCCs, including service contract and 

NSA statements of essential terms published by such entities. 

•	 Reviewing tariff publications in automated systems of carriers and 

conferences and ensuring that tariffs are accessible to the public and 

accurate, and overseeing application of the new NRA regulations. 

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Federal Maritime Commission 

Fiscal Year 2011 

2. Agreement Filings and Review 

Under sections 4 and 5 of the Shipping Act, all agreements by or 

among ocean common carriers to fix rates or conditions of service, pool 

cargo revenue, allot ports or regulate sailings, limit or regulate the volume 

or character of cargo (or passengers) to be carried, control or prevent competition, or engage in exclusive or preferential arrangements, are required 

to be filed with the Commission. Except for certain exempted categories, 

agreements among MTOs and among one or more MTOs and one or more 

ocean common carriers also are required to be filed with the Commission. 

Generally, an agreement becomes effective 45 days after filing, unless the 

Commission has requested additional information. These agreements are 

reviewed pursuant to the standard set forth in section 6(g) of the Shipping 

Act, 46 U.S.C. §41307(b)(1). Effective agreements are exempt from U.S. antitrust laws, and instead subject to Shipping Act restrictions and Commission oversight. 

In fiscal year 2011, the Bureau received 159 agreement filings, an increase of 25, or 19 percent, from the previous year. The Bureau analyzed and 

processed 158 agreement filings during the year. Statistics on agreement filings for fiscal year 2011 are contained in Appendix C. The following Figure 

4 graph illustrates the trend in agreement filings since FY 2006. Other than 

the increase in fiscal year 2011, the trend has been generally downward. 

While the annual number of filings changes year to year, the number 

of effective carrier agreements (Figure 5) on file with the Commission has 

remained relatively constant, averaging about 225 over the last six years. 

(a) Ocean Common Carrier Agreements 

There are two broad categories of ocean common carrier agreements 

filed with the Commission: (1) pricing agreements, where the main focus is 

on rates, and (2) operational agreements, where the focus can range from 

the sharing of vessel space to the management of an internet portal. Descriptions of the two categories of agreements follow: 

108
 

Federal Maritime Commission 

Fiscal Year 2011 

Figure 4: Agreement Filings 

FY 2006 - FY 2011 

300 

250 

200 

150 

100 

50
 

0
 

(1) Pricing Agreements 

There are two types of pricing agreements: conference agreements and rate 

discussion agreements (RDAs). Conference agreements provide for the collective discussion, agreement, and establishment of common ocean freight 

rates and practices by groups of ocean common carriers. Conferences publish a common rate tariff in which all the member lines participate. RDAs 

also focus on rate matters, but unlike conferences, any consensus on rates 

reached under RDAs is non-binding on the parties. RDA member lines each 

publish their own tariff. At the end of the fiscal year 2011, there were three 

effective conference agreements, and 22 RDAs on file. 

109
 
Federal Maritime Commission 

Fiscal Year 2011 

Figure 5: Effective Carrier Agreements 

FY 2006 - FY 2011 

250 

240 

230 

220 

210 

200 

Conference agreements have become largely irrelevant to U.S. liner shipping. No new carrier conference agreement has been filed with the 

Commission since fiscal year 2000. Last year, one conference, the South 

American Independent Lines Association, was terminated because the parties were no longer using the agreement. The remaining three conferences 

cover only government cargoes. 

Today, RDAs are the primary pricing forum in U.S. trade lanes. Since 

fiscal year 2000, the number of RDAs on file have declined from 36 to 22 

agreements. During fiscal year 2011, RDA filings for the most part involved 

adding or removing members. No new RDAs were filed last year, and two 

were terminated, the Eastern Mediterranean Discussion Agreement and the 

Japanese Flag Far East-United States Discussion Agreement. 

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Federal Maritime Commission
 

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(2) Operational Agreements 

Operational agreements include vessel-sharing agreements, joint 

service agreements, cooperative working agreements, and non-rate discussion agreements without rate authority. At the end of the fiscal year, operational agreements accounted for 89 percent of all carrier agreements on file. 

Vessel-sharing agreements (VSAs) typically authorize some level 

of service cooperation with the goal of reducing individual line’s operating 

costs. VSAs range from alliance agreements, which involve close operational 

cooperation across multiple trade lanes, to slot charter agreements, which 

require only minimal commitments. VSAs account for the vast majority 

of filed carrier agreements, 75 percent at the end of the fiscal year. They 

also accounted for 47 percent of carrier agreement filings received last year. 

Twenty-nine new VSAs were filed in fiscal year 2011, and 27 VSAs either 

were terminated or expired, bringing the total number of VSAs on file to 170 

agreements. 

Under joint service agreements (JSAs), two or more carriers operate 

a combined service under a single name in a specified trading area. The joint 

service issues its own bills of lading, sets its own rates, and acts as an individual ocean common carrier. At the end of the year, there were six JSAs on 

file, a decrease of one from last year. No new JSAs or amendments to existing 

JSAs were received last fiscal year. 

Cooperative working agreements (CWAs) are non-pricing agreements that tend to deal with unique operational considerations relating to 

acquisitions, sharing of administrative services, or internet portal management. Other CWAs filed with the Commission include agency, sailing, transshipment, and equipment interchange (including chassis pooling) agreements. At the end of the year, there were 17 CWAs and other agreements 

on file, a decrease of one from last year. No new CWAs or other agreements 

were filed last fiscal year. 

111
 
 

300 

Federal Maritime Commission 

Fiscal Year 2011 

Discussion agreements without rate authority provide ocean common carriers a vehicle for discussing matters of mutual interest other than 

rates. Typically, these agreements focus on macro-economic, regulatory, 

safety, or security issues. At the end of the fiscal year, there were nine such 

agreements on file, no net change from the previous year. One new agreement was filed last year, a liner data collection agreement that replaced a 

similar earlier agreement. 

(b) Marine Terminal Operator Agreements 

Marine terminals, operated by both public and private entities, provide facilities, services, and labor for the interchange of cargo and passengers between land and ocean carriers, and for the receipt and delivery of 

cargo from shippers and consignees. The Bureau is responsible for reviewing 

and processing agreements between and among MTOs. 

During fiscal year 2011, the Bureau received 25 MTO agreement filings, including 4 terminations. At the end of the fiscal year, there were 151 

marine terminal agreements on file, down from 155 the previous year. The 80 Figure 6 graph below shows the trend of MTO agreements on file over the 

70 last six years. 

60 

50 Figure 6: MTO Agreements on File 

FY 2006 - FY 2011 40 

30 

20 

10 

0 

0 

50 

100 

150 

200 

250 

Federal Maritime Commission
 

Fiscal Year 2011
 

Terminal leases accounted for most of the MTO agreements on file, 

followed by MTO discussion agreements, MTO joint ventures, and service 

agreements. Over the last five years, leases and services agreements experienced the deepest decline, falling 58 percent and 60 percent, respectively. 

These decreases are largely due to the filing exemption afforded under the 

Commission’s regulations and notifications of previously unreported terminations. MTO discussion agreements experienced the largest increase in 

numbers over the last five years, going from 11 agreements in 2007 to 21 

agreements at the end of 2011. This increase is due mainly to the MTOs’ 

need to discuss environmental, infrastructure, security, and congestion issues that the ports are facing today. 

The following Figure 7 graph, charts the types of MTO agreements 

on file at the end of fiscal year. 

Figure 7: MTO Agreements 

as of Sept 30, 2011 

112 113
 
Federal Maritime Commission
 

Fiscal Year 2011
 

3. Monitoring and Economic Analysis

 The systematic monitoring of common carrier activities and commercial conditions in the U.S. foreign trades is an integral part of the Commission’s responsibilities under the Shipping Act. The activities of certain 

types of MTO agreements are monitored in a similar fashion. Monitoring 

helps ensure that carriers and marine terminal operators comply with the 

statutory standards of the Shipping Act and the requirements of relevant 

Commission regulations. The Bureau administers monitoring programs, 

and conducts research into current trade conditions, emerging commercial 

trends, carrier pricing and service activities, and other issues that may affect 

U.S. liner shipping.

 The Commission’s monitoring program examines carrier competition 

in individual U.S. trade lanes, including market share, concentration, barriers to market entry, and coordination among carriers. The program also 

examines alternative service options and alternative supply sources, cargo 

volume trends, congestion bottlenecks, commercial pricing practices, operational cost pressures, service offerings, vessel capacity utilization, service 

contracting activity, and shipper complaints. 

Major projects begun or completed by the Bureau in fiscal year 2011 

included: (1) assisting in the preparation of Commission Orders for special 

reporting requirements from strategic discussion and alliance agreements 

in connection with Fact Finding Investigation No. 26, Vessel Capacity and 

Equipment Availability in the United States Export and Import Liner Trades; 

(2) reviewing and monitoring the compliance of special reports submitted 

by agreements subject to the Commission’s Orders; (3) providing presentations and reports to the Commission on the activities of the agreement parties subject to the Orders for special reports; (4) preparing a Commission 

Notice of Inquiry (NOI) to invite public comments on the impact of 

114
 

Federal Maritime Commission
 

Fiscal Year 2011
 

slow-steaming vessels by carriers in the U.S. liner trades and a memorandum 

to the Commission on the responses; (5) completing a NOI to invite public 

comments on the repeal by the European Union (EU) of its block exemption 

for liner conferences and a memorandum to the Commission on the responses; (6) completing a draft report on the Bureau’s study of the repeal of 

the EU block exemption. Study of the 2008 Repeal of the Liner Conference Exemption from European Union Competition Law; (7) providing presentations 

to the Commission on the proposed increase in the fees of the PierPASS program under the West Coast MTO Agreement and participating in a public 

forum on the issue; (8) preparing any necessary competitive impact analyses, 

along with requests for additional information, of new agreement filings and 

amendments to agreements, including the Port of NY/NJ - Port Authority/ 

Marine Terminal Operators Agreement to implement a RFID system at the 

marine terminal facilities and an amendment to the Consolidated Chassis 

Management Pool Agreement to restructure the chassis pool operations of 

the parties; (9) conducting research for, and providing a presentation to, the 

Commission on the formulation and use of certain container freight indices; 

(10) providing the Commission with data and information on the extent of 

U.S.-bound container cargo moving via Canadian ports; (11) assisting with 

the computer programming of the SERVCON operating system to index 

and search service contracts; (12) updating and expanding the BTA intranet 

website with trade and agreement profiles and other relevant information; 

(13) participating in the Automated Commercial Environment (ACE) under the U.S. Customs and Border Protection; and (14) providing data and 

information on liner trade conditions and agreement matters in response to 

requests from within and outside the Commission. 

115
 
 

 

 

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The Bureau also provides economic expertise for Commission initiatives, including rulemaking proceedings. Bureau economists may prepare 

testimony in investigations and cases of unfair shipping practices under section 19 of the 1920 Act and the FSPA. The Bureau also provides briefings 

and supporting materials for senior agency officials on agreements and trade 

conditions for the Commission’s hearings before Congress and the official 

speaking engagements of FMC Commissioners, and conducts outreach on 

behalf of the Commission to industry and the shipping public. 

4. Tariffs 

The Shipping Act requires common carriers and conferences to publish their tariffs electronically. These electronic tariffs contain rates, charges, 

rules, and practices of common carriers operating in the U.S. trades. The Bureau monitors the public accessibility of these private tariff systems and reviews published tariff material for compliance with the requirements of the 

Shipping Act. The Bureau also determines whether to grant applications for 

special permission to deviate from tariff publishing rules and regulations. 

During fiscal year 2011, the Bureau received and processed seven special 

permission applications. 

The Bureau is also responsible for processing the electronic Form 

FMC-1, Tariff Registration Form, required to be filed with the Commission by common carriers, conferences, and MTOs. The data on this form 

identifies the location of common carrier tariffs, including common carrier 

and conference service contract essential terms publications or any MTO 

schedules. At the end of fiscal year 2011, 5,043 tariff location addresses were 

posted on the Commission’s website. Of that number, 4,590 tariff addresses 

were for NVOCCs. The Bureau also collaborates with other Commission 

bureaus and offices to verify that VOCCs and NVOCCs comply with the 

Commission’s licensing, bonding, and tariff publication requirements. 

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Federal Maritime Commission 

Fiscal Year 2011 

The Commission implemented 46 C.F.R. Part 532, NRAs, on April 

18, 2011, which allows NVOCCs to “opt out” of having to file rate tariffs 

providing they use NRAs exclusively. NVOCCs are required to keep NRAs, 

which must be memorialized in writing, for a period of five years. Additionally, NVOCCs are required to maintain rules tariffs which must be made 

available free of charge. 

5. Service Contracts 

Service contracts are an alternative that has largely eclipsed transportation of cargo under tariff rates. Service contracts enable the parties to 

tailor transportation services and rates to their commercial and operational 

needs, and to keep such arrangements confidential. 

During fiscal year 2011, the Commission received 49,103 new service contracts, compared to 45,342 in fiscal year 2010, and 467,169 contract 

amendments, compared to 350,310 in fiscal year 2010. The number of original contracts in fiscal year 2011 increased by 8.3 percent whereas amendments increased by 33 percent. 

Original service contracts or NSA filings that contain clerical errors 

can be corrected within two business days by filing a “corrected transmission” copy into SERVCON. During the fiscal year, 5,346 records involving 

corrected transmission copies were filed into SERVCON. 

6. NVOCC Service Arrangements 

Commission rules allow NVOCCs to offer transportation services 

pursuant to individually negotiated, confidential service arrangements with 

customers known as NSAs rather than under a published tariff. The Commission’s rules implementing NSAs, 46 CFR Part 531, NVOCC Service Arrangements, became effective on January 19, 2005. 

117
 
 

 

 

Federal Maritime Commission 

Fiscal Year 2011 

Since January 2005, when NSA filing began, 6,461 NSAs and 12,296 

amendments have been filed with the Commission. In fiscal year 2011, 1,264 

NSAs and 3,460 amendments to NSAs were filed by a total of 83 NVOCCs. 

Of the 1,108 NVOCCs that are registered with the Commission to file NSAs, 

171 (about 15 percent) have done so. 

7. Controlled Carriers 

A controlled carrier is an ocean common carrier that is, or whose 

operating assets are, owned or controlled directly or indirectly by a foreign 

government. The Shipping Act provides that no controlled carrier may maintain rates or charges in its tariffs or service contracts that are below a level 

that is just and reasonable, nor may any such carrier establish, maintain, or 

enforce unjust or unreasonable classifications, rules or regulations in those 

tariffs or service contracts. In addition, tariff rates, charges, classifications, 

rules, or regulations of a controlled carrier may not, without special permission become effective sooner than the 30th day after the date of publication. 

The Commission’s staff monitors U.S. and foreign trade press and other information sources to identify controlled carriers. In fiscal year 2011, nine 

controlled carriers operated in U.S. trades. 

(1) American President Lines, Ltd. and APL Co., Pte. (RPI No. 000240) – 

Republic of Singapore; 

(2) Ceylon Shipping Corporation (RPI No. 016589) – Democratic-Socialist 

Republic of Sri Lanka; 

(3) COSCO Container Lines Company, Limited (RPI No. 015614) - People’s 

Republic of China; 

(4) China Shipping Container Lines Co., Ltd. (RPI No. 016435) - People’s 

Republic of China; 

(5) China Shipping Container Lines (Hong Kong) Company, Ltd. (RPI No. 

019269) - People’s Republic of China; 

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Federal Maritime Commission
 

Fiscal Year 2011
 

(6) Compagnie Nationale Algerienne de Navigation (RPI No. 000787) - People’s Democratic Republic of Algeria; 

(7) Sinotrans Container Lines Co., Ltd. (d/b/a Sinolines) (RPI No. 017703) 

– People’s Republic of China; 

(8) Shipping Corporation of India Ltd., The (RPI No. 001141) – Republic of 

India; and 

(9) Hainan P.O. Shipping Co., Ltd. (RPI No. 022860) – People’s Republic of 

China. 

8. Marine Terminal Schedules 

Pursuant to the Ocean Shipping Reform Act (OSRA), a marine terminal operator (MTO) may make available to the public a schedule of rates, 

regulations, and practices, including limitations of liability for cargo loss or 

damage, pertaining to receiving, delivering, handling, or storing property 

at its marine terminal. Any such schedule made available to the public shall 

be enforceable by an appropriate court as an implied contract without proof 

of actual knowledge of its provisions. MTOs must notify the Bureau of the 

electronic location of their terminal schedule by submitting Form FMC-1 

before commencing operations. A total of 267 MTOs have filed Form FMC1, of which 159 have elected to voluntarily publish their terminal schedules. Internet addresses for these MTO terminal schedules are posted on the 

Commission’s website. 

119
 
 

 

Federal Maritime Commission
 

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9. Automated Database Systems 

The Bureau maintains and uses the following automated databases 

and filing systems: (1) Form FMC-1 System; (2) SERVCON, the system for 

filing service contracts and NSAs (as well as internal database systems related to SERVCON registration forms); and (3) the Agreement Profile Database. 

At the end of fiscal year 2011, the Form FMC-1 System reflected the 

tariff location addresses of 289 VOCCs, 4,590 NVOCCs, 5 conferences, and 

159 MTOs. The FMC-1 System also allows the Commission to track the 

status of any Form FMC-1 submitted. 

SERVCON contains service contract and NSA data, most of which is 

available only to the Commission’s staff due to confidentiality requirements. 

Carriers must register to file service contracts by submitting Form FMC-83, 

and NVOCCs must submit Form FMC-78 to file NSAs. 

The Agreement Profile Database contains information about the status of carrier and terminal agreements, as well as related monitoring reports. 

These databases and filing systems provide support for many of the Commission’s programs and the Bureau’s monitoring efforts. Through specially 

tailored reports, the Commission makes certain database information available to the general public. The Bureau also maintains an electronic library of 

effective carrier and MTO agreements. This library is accessible through the 

Commission’s website. 

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Federal Maritime Commission
 

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10. Future Plans 

During fiscal year 2012, the Bureau will continue its regular review 

of new ocean carrier and marine terminal operator agreements and ongoing 

monitoring of existing agreements. The Consolidated Chassis Management 

Pool Agreement will be of special interest as it transitions to a new business 

model less dependent on chassis supplied by ocean carriers. In early 2012, 

the Bureau expects to publish its study of the 2008 repeal of the liner conference block exemption from European Union competition law. During fiscal 

year 2012, trends in rates, volatility, and concentration in the Far East/Europe and Far East/US trades may be further reviewed. 

In addition, the Bureau will help respond to requests the Commission has received from two U.S. Senators and several Members of Congress 

to study the factors, such as the U.S. Harbor Maintenance Tax, that may 

contribute to container cargo destined for U.S. inland points moving via 

Canadian or Mexican seaports. The Bureau will also continue its enhanced 

oversight of the three global alliances and its ongoing monitoring of vessel 

capacity and equipment availability in the U.S. liner trades. Subject to the 

availability of resources, the Bureau plans to work with OIT to revise the 

internal architecture of the SERVCON system to allow the search functionality to keep pace with the rapid accumulation of records. The Bureau also 

will continue to maintain an accurate record of tariff publication locations 

by conducting periodic compliance audits of NRAs and of the operating 

status of VOCCs engaged in the U.S. liner trades. 

The Bureau will continue to provide analytical support to other bureaus and offices, participate in Commission task force projects, oversee the 

filing of service contracts and the publication of tariffs, and conduct compliance studies and other research projects on liner shipping, marine terminal 

operations, and intermodal transportation in U.S. trades. 

121
 
APPENDICES
 
 

 

 

Bureau of Bureau of Bureau of Area Representatives 

Enforcement Certification Trade Houston, TX 

and Analysis Los Angeles, CA 

Licensing New Orleans, LA 

New York, NY 

Seattle, WA 

South Florida 

 

 

 

 

Federal Maritime Commission 

Fiscal Year 2011 

FEDERAL MARITIME COMMISSION 

ORGANIZATION CHART 

 Fiscal Year 2011 

COMMISSIONER 

DYE 

COMMISSIONER 

BRENNAN 

COMMISSIONER 

CORDERO 

CHAIRMAN 

LIDINSKY 

COMMISSIONER 

KHOURI 

FEDERAL MARITIME COMMISSION 

ORGANIZATION CHART 

as of 

SEPTEMBER 30, 2011 

Office of the 

Inspector 

General 

Office of Equal 

Employment 

Opportunity 

Office of the 

Managing 

Director 

Office of the 

General 

Counsel 

Office of the 

Secretary 

Office of 

Administrative 

Law Judges 

Office of Consumer 

Affairs and Dispute 

Resolution Services 

Office of 

Budget and 

Finance 

Office of 

Human 

Resources 

Office of 

Management 

Services 

Office of 

Information 

Technology 

Administrative Direction 

Technical Direction 

125
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Maritime Commission 

Fiscal Year 2011 

 APPENDIX B

 COMMISSION PROCEEDINGS 

 Fiscal Year 2011 

Formal Proceedings

 Orders of Investigation Initiated 2

 Formal Complaints Filed 11

 ALJ Initial Decisions Issued* 5

 Initial Decisions Reviewed 2

 Exceptions Filed to Initial Decisions 1 

Fact Finding Orders Issued (Final Report) 1 

Rulemakings

 Proposed Rules 3

 Final Rules 4 

Informal Dockets

 Informal Complaints Filed 3

 Settlement Officer Decisions Issued 2

 Settlement Officer Decisions Reviewed 4 

Notice of Inquiries Issued 3 

Hearings Held (Public Forum) 1 

*Initial Decisions includes four settlements approved and one dismissal. 

126
 

Federal Maritime Commission
 

Fiscal Year 2011
 

APPENDIX C 

AGREEMENT FILINGS AND STATUS 

Fiscal Year 2011 

Agreements Filed 

(including modifications and terminations) 

Carrier ....................................................................... 134 

Terminal...................................................................... 25 

Total............................................................................. 159 

Agreement Processing Categories 

Forty-Five Day Review..................................................... 32 

Expedited Review........................................................... 6 

Exempt-Effective Upon Filing............................................ 119 

Rejection of Filing.......................................................... 0 

Formal Extension of Review Period...................................... 1 

Withdrawals.................................................................. 0 

6(g) Injunction............................................................... 0 

Total............................................................................ 158 

Carrier Reports Submitted for Commission Review 

Minutes of Meetings........................................................ 797 

Voluntary Service Contract Guidelines.................................... 104 

Monitoring Reports......................................................... 365 

Total....................................................................... ..... 1,266 

Agreements on File as of September 30, 2011 

Conference.................................................................... 3 


Rate Discussion.............................................................. 22 


Non-Rate Discussion. ...................................................... 9 


Joint Service................................................................. 6 


Vessel-Sharing.............................................................. 170 


Cooperative Working & Other........................................... 17 


Terminal...................................................................... 151 


Total........................................................................... 378
 

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Federal Maritime Commission
 

Fiscal Year 2011
 

APPENDIX D
 

FORM FMC-1 


TARIFF LOCATION ADDRESSES - SERVICE CONTRACT AND 


NSA FILINGS AND SPECIAL PERMISSION APPLICATIONS 


Fiscal Year 2011
 

Form FMC-1 Filings 

VOCCs.......................................................... 289 

OTI/NVOCCs................................................. 4,590 

MTOs........................................................... 159 

Conferences..................................................... 5 

Electronic Service Contract Documents 

New Service Contracts........................................ 49,103 

Service Contract Amendments................................. 467,169 

NVOCC Service Arrangement (NSA) Documents 

New NSAs........................................................ 1,264 

NSA Amendments............................................. 3,460 

Special Permission Applications 

Granted........................................................... 7 

Denied............................................................. 0 

Pending........................................................... 0 

Withdrawn........................... ............................ 0 

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Federal Maritime Commission 

Fiscal Year 2011 

APPENDIX E
 

CIVIL PENALTIES COLLECTED 


Fiscal Year 2011
 

EuroUSA Shipping Inc................................................. $ 30,000.00
 

Prime Shipping International Inc. .................................... 45,000.00
 

Allied Transport Systems Inc. et al.................................... 150,000.00
 

Atlantic Express Corp. .................................................. 70,000.00
 

Mitsui O.S.K Lines Ltd..................................................... 1,200,000.00
 

Sinicway International Logistics Ltd.................................. 115,000.00
 

AE Eagle America Inc et al .............................................. 87,500.00
 

Sinotrans Express Inc..................................................... 50,000.00
 

MB Logistics International Inc......................................... 50,000.00
 

Ba-Shi Yuexin Logistics Development Co............................. 85,000.00
 

Oceane Marine Shipping Inc .......................................... 70,000.00
 

Orion Cargo Services Inc. ............................................ 32,500.00
 

S.E.S. International Express Inc ....................................... 62,500.00 

Cargo Alliance Inc. ..................................................... 40,000.00 

Worldwide Logistics Co. Ltd. .......................................... 100,000.00 

Total Civil Penalties Collected............................................ $2,187,500.00 

129 
 

 

 

 

 

 

 

 

 

 

 

 

Federal Maritime Commission 

Fiscal Year 2011 

APPENDIX F
 

STATEMENT OF APPROPRIATIONS, 


OBLIGATIONS AND RECEIPTS FOR 


THE FISCAL YEAR ENDED 


SEPTEMBER 30, 2011
 

APPROPRIATIONS: 

For necessary expenses of the Federal Maritime Commission as authorized 

by section 201(d) of the Merchant Marine Act, 1936, as amended (46 U.S.C. 

307), including services as authorized by 5 U.S.C. 3109; hire of passenger 

motor vehicles as authorized by 31 U.S.C. 1343(b); and uniforms or allowances therefore, as authorized by 5 U.S.C. 5901–5902, $24,135,000: Provided, That not to exceed $2,000 shall be available for official reception and 

representation expenses. 

Public Law 112-10 $24,135,000 

Government-wide Across-the-Board-Reduction - 48,270 

Reimbursable Authority 59,192 

Total Budgetary Resources Available $24,145,922 

OBLIGATIONS AND UNOBLIGATED BALANCE: 

Net obligations for salaries and expenses for the fiscal year ended September 

30, 2011. 

$24,061,355 

STATEMENT OF RECEIPTS: 

Deposited with the General Fund of the Treasury for the Fiscal Year Ended 

September 30, 2011: 

Publications and reproductions, 

fees and vessel certification, 

and freight forwarder applications 

Fines and penalties 

$ 259,130 

$ 2,187,500 

Total general fund receipts $ 2,446,630 

130