FEDERAL MARITIME 

COMMISSION

 

48th 

ANNUAL REPORT

for

 Fiscal Year

2009

TABLE OF CONTENTS

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

MEMBERS OF COMMISSION.................................................................... iii 

SENIOR COMMISSION OFFICIALS............................................................. v 

VISION ..................................................................................................... vi 

FMC MISSION................................................................................................. vi

I. THE COMMISSION 

A. History . ....................................................................................... 1 

B. Functions.................................................................................... 1 

C. Organization ................................................................................ 5

II. THE YEAR IN REVIEW........................................................................... 7 

A Outreach ..................................................................................... 9 

B. Trade Developments.................................................................. 11 

C. Restrictive Trade Practices.......................................................... 14 

D. Trade Oversight......................................................................... 15 

E. Alternative Dispute Resolution.................................................... 16 

F. Enforcement............................................................................... 18

III. DEVELOPMENTS IN MAJOR U.S. FOREIGN TRADES 

A. North Europe ............................................................................... 19 

B. Mediterranean .......................................................................... 21 

C. Indian Subcontinent and the Middle East ................................... 22 

D. Australia and Oceania............................................................... 24 

E. Central America and the Caribbean ............................................ 27 

F. Asia ............................................................................................ 28 

G. South America ............................................................................. 30 

H. Africa ......................................................................................... 32 

I. Worldwide .................................................................................. 33

IV. THE FOREIGN SHIPPING PRACTICES ACT OF 1988 

A. In General ................................................................................... 37 

B. Top Twenty U.S. Liner Cargo 

Trading Partners ....................................................................... 38
V. SIGNIFICANT ACTIVITIES BY ORGANIZATIONAL UNIT 

A. Office of the Secretary................................................................. 43 

B. Office of Administrative Law Judges....................................... 49 

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

D. Office of Equal Employment Opportunity .............................. 69 

E. Office of the Inspector General ................................................... 73 

F. Office of Administration .......................................................... 77 

G. Office of Operations ................................................................... 89 

H. Bureau of Certification and Licensing .................................... 93 

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

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

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

 
March 31, 2010

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, now codified, as amended, at 

46 U.S.C. §306(a), I am pleased to submit the 48th Annual Report of the 

activities of the Federal Maritime Commission for fiscal year 2009.

Sincerely,

Richard A. Lidinsky, Jr.

Chairman

FEDERAL MARITIME COMMISSION

WASHINGTON, D.C. 20573-0001

iii

 

MEMBERS OF THE COMMISSION

 

*One vacancy as of December 1, 2006

3

Harold J. Creel, Jr. 

Commissioner 

Appointed 1994 

Term Expired 2009

Rebecca F. Dye 

Commissioner 

Appointed 2002 

Term Expires 2010

Joseph E. Brennan 

Commissioner/Acting Chairman 

June-Sept. 2009 

Appointed 1999 

Term Expired 2008

Richard A. Lidinsky, Jr. 

Chairman 

Appointed 2009 

Term Expires 2012

*Vacant 

Commissioner 

v

SENIOR COMMISSION OFFICIALS

Counsel to Chairman Lidinsky........................Mark Dowd

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

Counsel to Commissioner Creel ................David R. Miles

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

General Counsel .......................................Peter J. King 

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

Administrative Law Judge..........................Clay Guthridge

Director, Office of 

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

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

Director of Administration.....................................Vacant

Director of Operations ...........................Austin L. Schmitt

Director, Bureau of Certification 

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

Director, Bureau of Enforcement ....................Vern W. Hill

Director, Bureau of 

Trade Analysis .....................................Florence A. Carr
vi

Vision

Fairness and Efficiency in U.S. Maritime Commerce

Mission

The FMC’s Mission is to:

Develop and administer policies and regulations that foster a fair, efficient 

and secure maritime transportation system;

Protect U.S. maritime commerce from unfair foreign trade practices and 

market-distorting activities;

Facilitate compliance with U.S. shipping statutes through outreach and 

oversight;

Assist in resolving disputes 
Federal Maritime Commission 

Fiscal Year 2009

I

THE COMMISSION

A. HISTORY

The Federal Maritime Commission (Commission or FMC) was established as an independent regulatory agency by Reorganization Plan No. 7, effective August 12, 1961. Prior to that time, the Federal Maritime Board was responsible for both the regulation of ocean commerce and the promotion of the 

United States Merchant Marine. Under the reorganization plan, the shipping 

laws of the U.S. were separated into two categories -- regulatory and promotional. The newly-created FMC was charged with the administration of the regulatory provisions of the shipping laws. The responsibilities associated with the 

promotion of an adequate and efficient U.S. Merchant Marine were assigned to 

the Maritime Administration, now located within the Department of Transportation. 

The Commission is responsible for the regulation of oceanborne transportation in the foreign commerce of the U.S. The passage of the Shipping Act 

of 1984 (Shipping Act) brought about major change in the regulatory regime applicable to shipping companies operating in the U.S. foreign commerce. The 

subsequent passage of the Ocean Shipping Reform Act of 1998 (OSRA), with its 

deregulatory amendments and modifications to the Shipping Act, further signaled a significant shift in shipping regulation.

B. FUNCTIONS

The principal statutes administered by the Commission are the Shipping 

Act, the Foreign Shipping Practices Act of 1988 (FSPA), section 19 of the Merchant Marine Act, 1920 (1920 Act), and Pub. L. No. 89-777. These statutes are 

now codified in Title 46 of the U.S. Code at sections 40101 through 44106.
Federal Maritime Commission 

Fiscal Year 2009

2

The Commission’s regulatory responsibilities include:

■ Reviewing 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.

■ Reviewing service contracts between ocean common carriers 

and shippers to guard against detrimental effects to shipping 

in the U.S. foreign trades.

■ Ensuring that common carriers’ tariff rates and charges are 

accessible to the shipping public in private, electronically accessible systems. 

■ Regulating 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 judgments 

for personal injury or death, or to refund passenger fares for 

the 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 sufficient financial responsibility to protect the shipping public from financial loss.
Federal Maritime Commission 

Fiscal Year 2009

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■ Ensuring against harm to the shipping public by investigating 

rates, charges, classifications, and practices of common carriers, MTOs, and OTIs operating in the foreign commerce of 

the U.S.

■ Taking action to address unfavorable conditions arising out of 

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

shipping trades. 

The Shipping Act is applicable to the operations of common carriers and 

other persons engaged in U.S. foreign commerce. It exempts agreements effective under the Shipping Act and the Commission’s jurisdiction from the U.S. antitrust laws, as contained in the Sherman and Clayton Acts. The Commission 

reviews and evaluates agreements to ensure that they do not result in an unreasonable increase in transportation cost or unreasonable reduction in service or 

otherwise violate the Shipping Act.

In addition to evaluating and monitoring agreements among carriers and 

marine terminal operators, the Commission is also responsible for ensuring that 

individual carriers and marine terminal operators, as well as those permitted by 

agreement to act in concert, treat shippers and other members of the shipping 

public fairly by not engaging in prohibited acts set out in the Shipping Act. The 

Shipping Act also requires all common carriers to make their rates, charges and 

practices available in automated tariff systems that must be available electronically to the public. Ocean common carriers are permitted to enter into service 

contracts with their shipper customers. Such contracts are confidentially filed 

with the FMC in its internet-based system. The Commission has, by regulation, 

also allowed non-vessel-operating common carriers (NVOCC) to offer service to 

customers under the terms of confidentially-filed contracts called NVOCC Service Arrangements (NSAs). The Commission does not approve or disapprove 
Federal Maritime Commission 

Fiscal Year 2009

4

general rate increases (GRIs) or individual commodity rate levels in the U.S. foreign commerce, except with regard to certain foreign government-owned or 

-controlled carriers.

The Commission is authorized to take action to ensure that the foreign 

commerce of the U.S. is not burdened by non-market barriers to ocean shipping. 

The Commission may take countervailing action to correct unfavorable shipping 

conditions in U.S. foreign commerce and may impose penalties. The Commission may address actions by carriers or foreign governments that either adversely 

affect shipping in the U.S. foreign oceanborne trades, including the intermodal 

operations of carriers or the operations of OTIs, or that impair access of U.S.-

flag vessels to ocean trade between foreign ports.

Pub. L. No. 89-777 requires the operators of passenger vessels with 50 or 

more berths, embarking passengers at U.S. ports, to establish financial coverage 

to indemnify passengers in cases of death, injury, or nonperformance of transportation. The Commission certifies such operators upon the submission of satisfactory evidence of financial responsibility.

The Commission also ensures that all OTIs have established sufficient 

financial responsibility to protect shippers from financial loss. Additionally, the 

Commission licenses all U.S. OTIs.

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 the regulated community, the 

shipping public, and other affected individuals or interest groups.
Federal Maritime Commission 

Fiscal Year 2009

5

C. ORGANIZATION

The Commission is composed of five commissioners appointed by the 

President with the advice and consent of the Senate. Commissioners serve fiveyear, 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 and the 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 Administration (including the Offices of Financial 

Management, Human Resources, Information Technology, and Management 

Services); and Office of Operations (including the Bureaus of Certification and 

Licensing, Enforcement, Trade Analysis and the Commission’s Area 

Representatives).

In fiscal year 2009, the Commission had a total appropriation of 

$22,800,000. That appropriation supported the actual employment of 120 fulltime equivalent positions during the fiscal year. While the majority of its 

personnel are located in Washington, D.C., the Commission has Area 

Representatives in Houston, Los Angeles, New Orleans, New York, Seattle and 

South Florida.

Federal Maritime Commission 

Fiscal Year 2009

7

II

THE YEAR IN REVIEW

In fiscal year 2009, the economic downturn delivered a sharp 14 percent 

decrease in the total volume of U.S. liner exports shipped worldwide. This was 

in stark contrast to the preceding fiscal year when exports grew by 16 percent. 

Liner imports to the U.S. also continued to weaken, declining by 16 percent over 

the fiscal year. While cargo volume decreased between the U.S. and Asia, 

China remained our leading trading partner in liner cargo. Consistent with the 

previous year’s pace over half of all the U.S. liner cargo (imports and exports) 

was concentrated in trade with nations in northeast Asia. At the end of the fiscal 

year, over 500 containerships were idle; 10 percent of total fleet capacity in 

TEUs. However, worldwide containership capacity expanded by 10 percent by 

mid 2009, as new ships with substantial capacity remain on order. In the largest 

of the U.S. liner trades, the volume of U.S. export cargo to Asia declined by 12 

percent in stark contrast to the growth rate of 18 percent in fiscal year 2008. The 

world’s container trade contracted about 11 percent in fiscal year 2009, compared to a growth of 8 percent in 2008. The U.S. share of the world’s container 

trades declined again this year to about 19 percent, compared to 20.5 percent in 

2008 (and 21 percent in 2007). 

The Commission continued to monitor the international liner trade, focusing in large part on competitive concerns reflected in ocean common carrier 

and marine terminal operator filed agreements. After review and careful consideration of the changed circumstances, the Commission dismissed FMC Docket 

No. 08-05, City of LA, CA, Harbor Department of the City of LA, Board of Harbor Commissioners of the City of Los Angeles, City of Long Beach, and the 

Board of Harbor Commissioner of the City of Long Beach. This concluded the 

Commission’s review of the Clean Truck Program (CTP) that was devised as 

part of the Clean Air Action Plan under the Los Angeles and Long Beach Port 

Infrastructure and Environmental Programs Cooperative Working Agreement 

and the Los Angeles/Long Beach Port/Terminal Operator Administration and 
Federal Maritime Commission 

Fiscal Year 2009

8

Implementation Agreement. On August 21, 2009, the Commission voted to terminate proceedings regarding certain practices of the Ports of Los Angeles and 

Long Beach (Ports) and possible violations of the Shipping Act of 1984 citing 

changes in circumstances concerning the initiative of the Ports. 

In 2009, the Commission monitored agreements that had potential for the 

greatest competitive impacts due to the parties’ ratemaking authority or high 

market share. In September of 2009, the Commission issued a Request for Additional Information (RFAI) regarding concerns over the competitive impact of 

an amendment to add CMA CGM to the Australia and New Zealand-United 

States Discussion Agreement (ANZUSDA). In addition, the Commission 

closely examined competitive conditions in the trade from information obtained 

from its previously-issued section 15 order which required specific pricing and 

operational data from carriers serving the trade. It was reported that rates declined significantly during the fiscal year. Over the fiscal year, coordinated service changes implemented by carriers through their vessel sharing agreements 

resulted in capacity reductions in both trade directions. By the end of the fiscal 

year, the reductions in vessel capacity were estimated at 12 percent in the outbound trade and 17 percent in the inbound trade. 

In the inbound trade, the combined market share of the rate discussion 

members of the Transpacific Stabilization Agreement (TSA) dropped from 86 

percent to 83 percent due to the membership withdrawal of Mitsui O.S.K. Lines. 

In the outbound trade direction, members of the rate discussion agreement, the 

Westbound Transpacific Stabilization Agreement (WTSA), had a combined market share of 63 percent. Attempts by WTSA and TSA carriers to implement rate 

increases in the trade were largely unsuccessful due to the declines in cargo volume and the weak economy. Transpacific carriers cut rates in an attempt to protect or gain market share. With reduced container volumes and unit revenues, 

most transpacific carriers reported significant financial losses for the first half of 

calendar year 2009.
Federal Maritime Commission 

Fiscal Year 2009

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Commission staff also closely monitored the market changes in the liner 

trade between the U.S. and North Europe following the October 2008 expiration 

of antitrust immunity in the European Union and the formation of the Container 

Trade Statistics Agreement. The latter established a system of exchange information between its members.

This Report highlights areas of particular interest and provides an officeby-office synopsis of activities and accomplishments during the past fiscal year. 

A. OUTREACH

During fiscal year 2009, the Commission continued its ongoing effort to 

enhance public awareness of agency resources, remedies and regulatory requirements through education and outreach. Several initiatives were undertaken to 

expand contact with all segments of the maritime community and public, including participating on industry discussion panels, coordinating and hosting industry briefings, and updating informational material. The Commission maintained 

its regular meeting schedule during fiscal year 2009 as well, thus providing a 

public forum for Commission discussion and action on industry and administrative matters before the Commission. 
Federal Maritime Commission 

Fiscal Year 2009

10

The Commission also promoted agency transparency and accountability 

by evaluating, developing and implementing improvements to the Commission’s 

website. During the fiscal year, the Office of the Secretary made adjustments to 

how information is presented, increased the amount of information available, 

and added functionality to the Commission’s website. For example, in May 

2009, the Commission introduced a publicly accessible, data-sharing tool for 

carrier service contract statistics through the Commission’s website. This enhancement provides greater public awareness and real-time access to the number 

and type of filings in the Commission’s confidential service contract database. 

Providing access to this information illustrates the Commission’s efforts to continually evaluate areas where it can balance security and legal requirements with 

the mandate for open government on its website.

The Commission continued to expand information and filed documents 

available electronically to the public and improve responsiveness to requests for 

public information. Through its Document Management Program, the Commission makes key documents filed in formal proceedings available on its website. 

The availability of these documents to the public in electronic form on the internet has proven to be a useful and cost effective resource, especially for attorneys 

practicing before the Commission. The Document Management Program encompasses an array of electronic Commission documents thus enabling agency staff 

to conduct more efficient research and improve response time to public inquiries 

as well. 
Federal Maritime Commission 

Fiscal Year 2009

11

B. TRADE DEVELOPMENTS 1

In fiscal year 2009, the total volume of U.S. liner exports shipped worldwide fell sharply by 14 percent in contrast to the preceding fiscal year when exports grew by 16 percent. Similarly, the total volume of liner imports to the U.S. 

declined by 16 percent compared to a decline of 6 percent in fiscal year 2008. 

For every loaded twenty-foot equivalent unit (TEU) container exported out of 

the U.S., 1.5 TEUs were imported. On a global scale, the container trade contracted by 11 percent due to the weak economy, which also negatively affected 

the demand for containerships. By fiscal year end, over 500 containerships were 

idle, or 10 percent of the total fleet capacity in TEUs, as compared to 2 percent 

in fiscal year 2008. Nevertheless, worldwide containership capacity had expanded by 10 percent as of July 2009, as new ships continued to be delivered 

and a substantial amount of capacity remains on order. While cargo volume was 

down between the U.S. and Asia, China remained the leading trading partner in 

liner cargo with the U.S., and trade with nations in northeast Asia continued to 

account for over half of the total cargo volume of the U.S., in imports and exports combined. Concentration among carriers remained relatively unchanged 

from the preceding fiscal year, with the top 10 carriers controlling about 60 percent of the containership capacity worldwide.

In the largest of the U.S. liner trades, the volume of U.S. export cargo to 

Asia declined by 12 percent in stark contrast to the growth rate of 18 percent in 

fiscal year 2008. Import cargo from Asia to the U.S. also declined. Compared 

to the preceding fiscal year, Asian imports fell sharply by 16 percent. Nonetheless, Asian import cargo continued to dominate the trade. For every TEU of 

U.S. exports moved outbound, 2.2 TEUs of imports from Asia were shipped 

—————————

 

1As to developments in particular trade lanes, please see section III, 

―Developments in Major U.S. Foreign Trades.‖
Federal Maritime Commission 

Fiscal Year 2009

12

inbound. In the outbound trade direction, members of the rate discussion agreement, the Westbound Transpacific Stabilization Agreement (WTSA), had a combined market share of 63 percent. In the inbound trade direction, the combined 

market share of the rate discussion members of the Transpacific Stabilization 

Agreement (TSA) dropped from 86 percent to 83 percent due to the membership 

withdrawal of Mitsui O.S.K. Lines. Attempts by WTSA and TSA carriers to 

implement rate increases in the trade were largely unsuccessful due to the declines in cargo volume and the weak economy.

In the liner trade between the U.S. and North Europe, cargo volume 

dropped significantly in both trade directions. U.S. exports fell by 28 percent 

compared to the preceding fiscal year. Shipments of containerized automobiles, 

the top export commodity to North Europe, sharply declined by 60 percent. Import cargo from North Europe decreased by 18 percent. To cope with the declines in cargo volume, major carriers in the trade cut back their services to remove excess vessel capacity and coordinated their operations through agreements with one another. By the end of the fiscal year, it was reported that annualized vessel capacity in the trade was reduced by 18 percent in the outbound 

direction and 11 percent in the inbound direction, but, on average, utilization was 

low at 68 percent in both directions. In October 2008, the European Union (EU) 

repealed its block exemption for liner shipping conferences. In place of a conference agreement, carriers in the U.S.-EU trades formed the Container Trade 

Statistics Agreement (CTSA), which established a system of information exchange between its members along with the formation of the European Liner 

Affairs Association, a trade association of CTSA members. In addition, the 

European Commission renewed a revised version of its block exemption regulations for consortia agreements between ocean carriers effective for the period 

from April 2010 through April 2015.
Federal Maritime Commission 

Fiscal Year 2009

13

Between the U.S. and the region of Australia, New Zealand, and the 

Pacific Islands, the volume of liner cargo fell by about 10 percent in both trade 

directions, and remained substantially imbalanced. U.S. export cargo exceeded 

import cargo by 70,000 TEUs, or about 40 percent. Over the fiscal year, 

coordinated service changes implemented by carriers through their vessel 

sharing agreements resulted in capacity reductions in both trade directions. By 

the end of the fiscal year, the reductions in vessel capacity were estimated at 12 

percent in the outbound trade direction and 17 percent in the inbound trade 

direction. In addition, a series of membership changes occurred in the rate 

discussion agreements among carriers in both trade directions. In the outbound 

direction, Wallenius Wilhelmsen Logistics, S.A. (WWL) withdrew from the 

United States/Australasia Discussion Agreement (USADA). However, WWL’s 

withdrawal had no real impact on the market share of the USADA, which 

remained high, at approximately 85 percent. In the inbound direction, Maersk 

Line withdrew from, and then later rejoined, the Australia and New ZealandUnited States Discussion Agreement (ANZUSDA). In July 2009, an amendment 

was filed to add CMA CGM to the ANZUSDA, which would have increased the 

market share of the agreement to upwards of 90 percent. Concerns over the 

competitive impact of the amendment led the Commission to issue a Request for 

Additional Information in September 2009. In addition, the Commission closely 

examined competitive conditions in the trade from information obtained from its 

previously-issued section 15 order.

Between the U.S. and South America, as a whole, liner exports in the 

outbound trade direction declined by 18 percent, and liner imports moving 

inbound decreased by 14 percent, in comparison to the preceding fiscal year. 

The volume of cargo shipped inbound and outbound was closely balanced. The 

region is generally divided into two liner trade sectors: the west coast of South 

America and the east coast of South America. In the western sector, most of the 

major carriers that provide direct service are members of the West Coast of South
Federal Maritime Commission 

Fiscal Year 2009

14

America Discussion Agreement (WCSADA), a discussion agreement with 

voluntary rate authority between the U.S. and nations along the west coast of 

South America. During the fiscal year, a number of membership changes 

occurred in WCSADA. Mediterranean Shipping Company (MSC) withdrew 

from and later rejoined the agreement, and Maersk Line also joined WCSADA. 

With these additional members, the market share of WCSADA increased to 85 

percent in the outbound direction and 63 percent in the inbound direction. 

Carriers operating between the U.S. and east coast of South America do not 

participate in a broad-based discussion agreement.

C. RESTRICTIVE TRADE PRACTICES

The Commission is responsible for identifying and addressing 

protectionist practices of other countries that unreasonably favor their domestic 

companies or discriminate against U.S. trade interests in ocean shipping. In this 

regard, the Commission may issue rules in response to foreign practices that 

create conditions unfavorable to U.S. shipping in general. It also may institute 

countermeasures in response to foreign laws or policies that adversely affect 

U.S. carriers. It also can initiate appropriate action in instances where a U.S.-

flag vessel faces unfair barriers in entering a foreign-to-foreign trade.

The Commission continued to monitor regulations and port practices of 

the Government of Japan. In fiscal year 2001, the Commission imposed its 

semiannual reporting requirement for U.S. and Japanese carriers. The 

Commission continued to require semiannual reports and to review them for any 

developments in Japanese practices.

The Commission’s Permanent Task Force on International Affairs, 

established in 2000, is chaired by an attorney in the Office of General Counsel 

and made up of personnel from that office and the Bureaus of Enforcement, 

Trade Analysis, and Certification and Licensing. The Task Force is responsible 

for identifying and evaluating foreign practices which might have adverse 

impacts on U.S. shipping interests.
Federal Maritime Commission 

Fiscal Year 2009

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D. TRADE OVERSIGHT

As part of its statutory responsibilities, the Commission maintains 

systematic oversight of the commercial activities of ocean liner carriers and 

other regulated entities in the U.S. oceanborne trades. On a regular basis, the 

Commission also monitors relevant economic and trade conditions that affect the 

ocean shipping industry. The Commission’s oversight helps to ensure regulatory 

compliance by uncovering unreasonable or unfair industry behavior. These 

efforts also help identify potentially unfavorable trade practices that could affect 

U.S. oceanborne commerce.

During the fiscal year, the Commission took action to address a number 

of competitive concerns relating to the activities of ocean common carriers and 

marine terminal operators (MTOs) in agreements on file at the FMC. In 

particular, the Commission reviewed and acted on an amendment to the Los 

Angeles and Long Beach Infrastructure and Environmental Programs 

Cooperative Working Agreement. The amendment, filed in August 2008, sought 

to expand the authority of the Ports of Los Angeles/Long Beach to discuss and 

agree on provisions of their Clean Truck Program (CTP). Upon review, the 

Commission determined that the amended agreement would likely violate the 

Shipping Act by unreasonably reducing competition. Consequently, in October 

and November 2008, the Commission filed a complaint and a motion against the 

parties to the amended agreement under sections 6(h) and (g) of the Shipping 

Act, 46 U.S.C. 41307(b), before the U.S. District Court for the District of 

Columbia to enjoin those authorities that it found to be most commercially 

harmful and unnecessary to the CTP. In June 2009, the Commission withdrew 

its complaint in the ATA case. Through its reporting requirements, the 

Commission monitors the impact of the agreement and other related agreements 

on file at the FMC.
Federal Maritime Commission 

Fiscal Year 2009

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On other agreement matters, in January 2009, the Commission issued a 

formal Request for Additional Information (RFAI), pursuant to section 6(d) of 

the Shipping Act, 46 U.S.C. 40304(d), to conduct a competitive impact 

assessment of an amendment to the Transpacific Stabilization Agreement (TSA). 

The amendment, filed in December 2008, proposed to allow TSA parties to 

discuss and agree on a program to coordinate and rationalize their supply of 

vessel capacity deployed in the inbound trade direction from Asia to the United 

States. The TSA parties withdrew their amendment in February 2009. 

In September 2009, the Commission issued a RFAI for information to 

assess an amendment to the Australia and New Zealand-United States 

Discussion Agreement. The amendment, filed in July 2009, proposed to add 

CMA CGM S.A. as a member to the agreement. At fiscal year end, a response 

from the parties to the RFAI remained pending. The Commission also 

conducted an extensive economic analysis of the state of competition in the trade 

between the U.S. and Australia/New Zealand from the specific pricing and 

operational data that was obtained under section 15 of the Shipping Act, 40 

U.S.C. 40104(a).

E. ALTERNATIVE DISPUTE RESOLUTION

During fiscal year 2009, the Commission continued to emphasize the role 

of alternative dispute resolution (ADR) in resolving shipping industry disputes, 

and encouraged parties to disputes to utilize the program in lieu of litigation. 

Through the Office of Consumer Affairs and Dispute Resolution Services 

(CADRS), the Commission provides services to assist parties in resolving 

disputes and problems in the U.S. maritime industry that affect international 

ocean shipping. These include a broad range of services designed to avoid the 

expense and delays inherent in litigation, and to facilitate the flow of U.S. ocean 

commerce. 
Federal Maritime Commission 

Fiscal Year 2009

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Another function of CADRS includes the adjudication of small claims 

through informal proceedings under 46 CFR Part 502, Subpart S. Office personnel serve as settlement officers in such cases, which involve complaints 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. Fourteen of these complaints were filed in 

fiscal year 2009. CADRS staff also evaluates and adjudicates applications for 

permission to apply non-tariff rates, and to waive or refund freight charges arising from various errors in tariff publications, an inadvertent failure to publish an 

intended rate, or a misquotation of a rate.

During fiscal year 2009, the Commission also utilized its ADR program 

to assist ocean transportation intermediaries and shippers that were experiencing 

financial difficulties due to the economic downturn. Many carriers depend on 

lines of credit for operating capital and the sudden tightening of credit caused 

delays in the release of cargo, often resulting in unanticipated charges for storage, demurrage and detention. Some carriers experiencing difficulties are new 

companies which are undercapitalized, and their underestimation of potential 

liabilities along with the scarcity of credit and small profit margins rendered 

them unable to meet their financial obligations. In addition, the increased use of 

internet marketing enabled other carriers to expand their operations nationwide 

thereby broadening their customer base. Unfortunately, in some cases such expansion led to growth in liabilities that many were unable to meet. CADRS staff 

facilitated communication among numerous parties during the economic downturn to ease tensions and mitigate damages. The Commission, through its ADR 

program, continues to promote discussions between and among carriers and 

shippers to address carrier and shipper concerns. 
Federal Maritime Commission 

Fiscal Year 2009

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F. ENFORCEMENT

The Commission maintains a presence in Houston, Los Angeles, South 

Florida, New Orleans, New York and Seattle through Area Representatives. 

These representatives serve as liaisons between the Commission and various 

maritime interests in their respective areas and investigate activity that may violate the Shipping Act. 

During fiscal year 2009, the Office of Operations, through the Area Representatives and the Bureau of Enforcement, investigated and prosecuted illegal 

practices in many trade lanes, including the Transpacific, North Atlantic, Central 

and South American, Mediterranean, West Africa, Oceana, and Caribbean 

trades. These included market-distorting activities such as various forms of rebates and absorptions, misdescription of commodities and misdeclaration of 

measurements, illegal equipment substitution, 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 of civil penalties. 

Several matters also arose with respect to activities pursuant to filed and 

unfiled agreements between and among ocean common carriers and marine terminal operators. A major investigative effort completed in fiscal year 2009, into 

the respective Clean Truck Programs of Los Angeles and Long Beach, CA, concerned the impact on the Ports’ users and the compatibility of the respective programs with the Ports’ responsibilities under the 1984 Act. Enforcement efforts 

also continued with respect to a number of unlicensed and unbonded NVOCCs 

specializing in the carriage of used household goods, including the VOCCs and 

licensed NVOCCs providing service to such unlicensed and unbonded operators. 

The Commission collected $843,000.00 in civil penalties this past fiscal 

year (see Appendix E). These collections represent a wide range of violations in 

our major trade lanes. 
Federal Maritime Commission 

Fiscal Year 2009

19

III

DEVELOPMENTS IN MAJOR 

U.S. FOREIGN TRADES

A. NORTH EUROPE

In fiscal year 2009, the weakness of the global economy adversely affected the volume of container cargo shipped in both directions of the liner trade 

between the U.S. and North Europe. In the outbound trade direction, the decline 

in cargo volume was particularly severe. Compared to fiscal year 2008, U.S. 

liner exports fell by 28 percent. Notably, containerized automobiles remained 

the top U.S. liner export in the trade, accounting for 7 percent of the total export 

cargo volume in TEUs (twenty-foot equivalent units). Compared to fiscal year 

2008, however, U.S. exports of containerized automobiles to North Europe 

dropped substantially by 60 percent. In the inbound trade direction, the volume 

of liner imports from North Europe decreased by 18 percent. Among the top imported commodities, declines in the shipments of beer/ale, auto parts, and furniture ranged from 10 to 30 percent. Together, these top commodities accounted 

for 20 percent of the total import cargo volume in TEUs.

With the sharp drop in demand, carriers serving the trade coordinated 

their operations through agreements to remove excess vessel capacity. Notably, 

Hamburg Süd discontinued its direct service and instead chartered space from 

members of the Grand Alliance and Zim Integrated Shipping Services, Ltd. 

(Zim) under the Grand Alliance/Zim/HSDG Atlantic Space Charter Agreement. 

CMA CGM S.A. opted to share vessel space with the Mediterranean Shipping 

Company (MSC) under the MSC/CMA CGM North Europe-U.S. Atlantic and 

Gulf Vessel Sharing Agreement and terminated its vessel sharing agreement with 

Evergreen Line (Evergreen) and China Shipping Container Lines Co., Ltd. 

(China Shipping). In turn, China Shipping removed its vessels and no longer 
Federal Maritime Commission 

Fiscal Year 2009

20

serves the trade directly. Evergreen discontinued its independent pendulum service in favor of sharing vessel space with members of the CKYH group (i.e., The 

Cosco/KL/YMUK/Hanjin Worldwide Slot Allocation and Sailing Agreement) under the ELJSA/CKYH Vessel Sharing Agreement. Further, Maersk Line announced plans to reduce capacity by terminating one of its service strings of vessels and reconfiguring its slot allocation with members of the New World Alliance under the New World Alliance/Maersk Line Slot Exchange Agreement. By 

the end of the fiscal year, it was reported that annualized vessel capacity in the 

trade was reduced by 18 percent in the outbound direction and 11 percent in the 

inbound direction. Nonetheless, over the course of the fiscal year, the average 

utilization of vessel capacity remained weak at around 68 percent in both trade 

directions.

In October 2008, the European Union (EU) repealed its block exemption 

regulations for liner shipping conferences (Council Regulation 4056/86). In 

place of a conference agreement, and in accordance with the guidelines for maritime transport services issued by the European Commission (EC), 20 carriers 

operating in the U.S./EU trades, around 90 percent in terms of market share, 

formed the Container Trade Statistics Agreement (CTSA), which became effective under the Shipping Act in October 2008. CTSA provides for a system of 

information exchange between its members and the formation of the European 

Liner Affairs Association (ELAA) as a trade association under which the members may conduct meetings. In addition, in September 2009, the EC renewed a 

revised version of its block exemption regulations for consortia agreements between ocean carriers (EC Regulation 906/2009). The regulations legally exempt 

types of cooperative operational agreements between carriers that, inter alia, do 

not involve price fixing or exceed a combined market share threshold of 30 percent. The new consortia regulations will be in effect for the period from April 

2010 through April 2015.
Federal Maritime Commission 

Fiscal Year 2009

21

Major carriers serving the trade, including Maersk Line, Hapag-Lloyd 

AG, CMA CGM, and Evergreen, independently implemented sizable general 

increases in their tariff rates on September 1, 2009, prior to the start of their service contract negotiations. Given the poor market conditions, however, it is 

doubtful that rate increases of any magnitude in the trade were achieved. According to the latest price index data published by ELAA, the monthly average 

revenue earned by CTSA carriers, as a whole, operating between Europe and 

North America in August 2009, compared to the base period in 2008 declined by 

20 percentage points in the outbound trade direction and 34 percentage points in 

the inbound trade direction, i.e., from 100 in 2008, the price index was at 80 outbound and 66 inbound as of August 2009.

B. MEDITERRANEAN

Liner trade between the U.S. and the Mediterranean region contracted 

due largely to declines in consumer spending. For fiscal year 2009, compared to 

the preceding fiscal year, U.S. exports to the Mediterranean decreased by 18 percent. Paper products, which remained the top U.S. export to the region accounting for 15 percent of the total export cargo volume in TEUs, were down by 14 

percent. Exports of containerized automobiles fell by 23 percent. Of note, however, U.S. exports of edible nuts rose by 37 percent. In the inbound trade direction, liner imports from the Mediterranean fell sharply by 20 percent in comparison to the preceding fiscal year. Among the top imports, the U.S. demand for 

wine and olive oil, which together accounted for 16 percent of the total import 

cargo volume in TEUs, remained relatively strong. However, imports of household furnishings from the region, including ceramic tiles and marble, were down 

by about 40 percent. Even with the slump in demand, the imbalance in cargo 

volume continued to favor imports. For every TEU moved outbound from the 

U.S., 1.3 TEUs of cargo moved inbound.
Federal Maritime Commission 

Fiscal Year 2009

22

With a significant amount of excess capacity in the trade, carriers acted 

collectively to rationalize their services and remove vessel space from the market. Most notably, in March 2009 CMA CGM and Maersk Line removed vessels from the trade by terminating their two separate services and jointly initiating one new weekly loop service under the CMA CGM/Maersk Line Space 

Charter, Sailing and Cooperative Agreement. The new service replaced Maersk 

Line’s WestMed loop service, and CMA CGM’s Amerigo Express/MUS loop 

service that it operated through a vessel sharing agreement with Evergreen. In 

turn, Evergreen removed its vessels from the trade. By the end of the fiscal year, 

it was reported that annual vessel capacity was reduced by about 10 percent in 

both trade directions. On average, the utilization of vessel space remained low at 

45 percent outbound and 60 percent inbound, which suppressed any rate restoration initiatives. Carriers serving EU member states in the South Europe region 

of the Mediterranean must also comply with the EU’s prohibition of conference 

and pricing agreements as well as the revised consortia regulations that become 

effective in April 2010. 

C. INDIAN SUBCONTINENT AND THE MIDDLE EAST

Despite the downturn in the global economy, U.S. container exports in 

fiscal year 2009 grew by 18 percent to the Indian Subcontinent, and by less than 

1 percent to the Middle East. The U.S. exported approximately 372,000 TEUs 

to the Indian Subcontinent and 475,000 TEUs to the Middle East. The Westbound Transpacific Stabilization Agreement (WTSA) is the only major rate 

agreement covering part of the U.S. outbound container trade. These were the 

only trade areas to achieve an increase in U.S. export container volumes for the 

fiscal year. 
Federal Maritime Commission 

Fiscal Year 2009

23

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).2 Throughout most of the fiscal year, the WTSA’s geographic 

scope also included India, the U.S.’s largest trading partner in the Indian 

Subcontinent. However, as the result of India implementing competition laws 

that do not exempt ocean liner agreements, WTSA informed Commission 

Bureau staff that it had suspended discussions regarding India. For the fiscal 

year, WTSA’s market share for U.S. exports to Bangladesh, Pakistan, and Sri 

Lanka was 42 percent.

Until June, the Middle East Indian Subcontinent Discussion Agreement

(MIDA) covered U.S. exports to the Indian Subcontinent and Middle East. 

Shortly after India’s competition laws became effective, however, MIDA 

suspended operations altogether. Because of that decision, no major rate 

discussion agreements now cover U.S. exports to the Middle East.

In fiscal year 2009, U.S. container imports from the Indian Subcontinent 

declined by 10 percent and by 4 percent from the Middle East. The U.S. 

imported approximately 563,000 TEUs from the Indian Subcontinent and 

129,000 TEUs from the Middle East.

_______________________________

2 WTSA’s geographic scope also includes northeast and southeast Asia.
Federal Maritime Commission 

Fiscal Year 2009

24

The Transpacific Stabilization Agreement (TSA) is the only major rate 

discussion agreement covering U.S. inbound container movements from the 

Indian Subcontinent countries of Bangladesh, Pakistan and Sri Lanka.3Similar 

to WTSA, TSA reported to the FMC it had suspended India from its geographic 

scope in May 2009 in response to India implementing its competition laws. For 

the fiscal year, TSA had a 58 percent market share for U.S. imports from the 

countries of Bangladesh, Pakistan and Sri Lanka. There were no major rate 

agreements covering Middle East imports to the U.S. 

D. AUSTRALIA AND OCEANIA

The Oceania region includes Australia, New Zealand, Papua New 

Guinea, Western Samoa, and other South Pacific Islands. Total trade in this 

region shrank to about 409,000 TEUs in fiscal year 2009, which is a decrease of 

11 percent from fiscal year 2008. The trade is imbalanced, with almost 240,000 

TEUs of exports from the U.S. to Oceania and over 170,000 TEUs of imports. 

Exports from the U.S. to Oceania were reduced over 11 percent in fiscal year 

2009, following over 17 percent growth in fiscal year 2008. The reduction in 

U.S. exports to the region was caused by the worldwide economic downturn; 

___________________

3 Like WTSA, the TSA’s geographic scope also includes southeast Asia and 

northeast Asia.
Federal Maritime Commission 

Fiscal Year 2009

25

however, due to the strength of the Australian economy and the weakness of the 

U.S. dollar, the drop in U.S. exports to this market was smaller than the drop in 

other developed markets (such as between the U.S. and Europe). Imports from 

Oceania fell about 10 percent in fiscal year 2009, following a 1 percent reduction 

in fiscal year 2008.

There were many notable agreement changes in the Oceania region in 

fiscal year 2009. Of particular interest are the Australia and New ZealandUnited States Discussion Agreement (ANZUSDA), the U.S./Australasia 

Discussion Agreement (USADA), the CMA CGM/Marfret Vessel Sharing 

Agreement, the Hamburg Sud/Maersk Line Vessel Sharing Agreement, and the 

U.S. Pacific Coast-Oceania Agreement (OVSA). Changes to the vessel sharing 

agreements, particularly the removal of one service string by the OVSA, resulted 

in capacity reductions estimated at 12 percent of southbound capacity and 17 

percent of northbound capacity by the end of the fiscal year.

ANZUSDA, the rate discussion agreement covering cargo moving 

northbound from Australasia to the United States, was amended four times in FY 

2009. In April 2009, the first amendment (amendment 26) reflected that Maersk 

Line was leaving the agreement; two months later, ANZUSDA was amended 

again (amendment 27) as Maersk Line was rejoining the agreement. In that 

same month, the Agreement was amended in order to reduce its guaranteed 

minimum service levels. The final amendment to ANZUSDA in FY 2009 was 

submitted in July 2009, and the purpose of that amendment was to add CMA 

CGM to the rate discussion agreement. In September 2009, the Commission 

responded to that amendment by issuing a formal Request for Additional 

Information in order to assess the impact of CMA CGM joining ANZUSDA.

USADA, the rate discussion agreement covering cargo moving 

southbound from the United States to Australasia, was amended twice in FY 

2009. The first amendment, in November 2008, reflected Wallenius 

Wilhelmsen’s departure from the agreement. In July 2009, USADA was 

amended to reflect a reduction in the Agreement members’ guaranteed minimum 

service levels.
Federal Maritime Commission 

Fiscal Year 2009

26

The U.S. Pacific Coast-Oceania Agreement is a space charter and sailing 

agreement between Maersk Line, Hamburg-Sud, Hapag-Lloyd, and ANL 

Singapore (wholly owned by CMA CGM) that operates between the U.S. West 

Coast and Australasia. Parties jointly deployed two services under this 

agreement; one fortnightly service to the Pacific Northwest and a weekly service 

to the Pacific Southwest. A third service, a fortnightly service called the Pacific 

Southwest 2 (PSW2), was deployed when ANL Singapore joined in June 2008, 

but the PSW2 sailings were suspended in December 2008. On June 4, 2009, the 

Agreement was amended to formalize the withdrawal of the PSW2 service. 

There are two vessel sharing agreements that carry containerized cargo 

between the U.S. East Coast and Australasia. The first is a fortnightly pendulum 

service operated by CMA CGM and Marfret. The second vessel sharing 

agreement is the Hamburg Sud/Maersk Line Vessel Sharing Agreement. This 

agreement provides a weekly service on which Hapag Lloyd takes space. It was 

amended in April 2009, as the carriers changed the service loop from a 

pendulum service calling in Europe, the U.S. East Coast and Australasia to a 

direct end-to-end service that operates sailings between the U.S. East Coast and 

Australasia.

During FY 2009, Commission staff closely examined conditions in the 

U.S.-Australasia trade. On August 26, 2008, the FMC issued a Section 15 Order 

on Competition, Rates and Service in the U.S.-Australia/New Zealand 

Northbound and Southbound Trade. The Order cited the FMC’s concern that 

the combined effect of activities of carriers acting under the two rate discussion 

agreements and the three vessel sharing agreements, highlighted above, may 

have the effect of reducing competition in a manner that may affect prices and 

service in the U.S.-Australia/New Zealand trade to an unreasonable extent, or 

may otherwise be violative of the Shipping Act. The Order required participants 

in the trade to furnish information and documents. Using those materials, staff 

prepared a report on the competitive conditions in that trade.
Federal Maritime Commission 

Fiscal Year 2009

27

E. CENTRAL AMERICA AND THE CARIBBEAN

In fiscal year 2009, significant changes occurred in liner cargo volume 

between the U.S. and Central America. U.S. export cargo fell 10.3 percent to 

487,070 TEUs and imports from Central America fell 6.5 percent to 609,727 

TEUs. Waste paper accounted for the largest share of U.S. containerized exports 

at 12 percent. The second largest export commodity was fabrics, yarns, and raw 

cotton accounting for 11 percent, and the third was used automobiles accounting 

for almost 9 percent. Fruits accounted for nearly half of all imports from the region, three-quarters of which consisted of bananas. The second largest import 

was apparel with nearly 20 percent of the total.

Most of the largest carriers in the U.S./Central America trade participate 

in the Central America Discussion Agreement (CADA). The only change to 

CADA provisions or membership was the departure of Trinity Shipping at the 

beginning of the fiscal year. With this departure, the combined market share of 

CADA members for exports and imports dropped modestly from 68 percent and 

76 percent in fiscal year 2008 to 65 percent and 72 percent in fiscal year 2009, 

respectively. 

In the liner trade between the U.S. and the Caribbean, the volume of 

cargo decreased sharply in both trade directions compared to the preceding fiscal 

year. U.S. exports, mainly of food, consumer, and manufactured products, 

dropped by 16 percent to 497,472 TEUs, while imports to the U.S. dropped by 

13 percent to 151,582 TEUs.
Federal Maritime Commission 

Fiscal Year 2009

28

Carriers in the U.S./Caribbean trade participate in four rate discussion 

agreements covering discrete trades: (1) the Hispaniola Discussion Agreement, 

(2) the Caribbean Shipowners Association, (3) the Florida-Bahamas Shipowners 

and Operators Association, and (4) the Aruba Bonaire and Curacao Discussion 

Agreement. Tropical Shipping left the Hispaniola Discussion Agreement and the 

Florida-Bahamas Shipowners and Operators Association in August 2009. They 

also left the Caribbean Shipowners Association along with Sea Star Line in 

September 2009. There were no membership changes for the Aruba Bonaire and 

Curacao Discussion Agreement this fiscal year.

F. ASIA

In terms of containerized cargo, Asia is by far our largest trading region. 

In fiscal year 2009, Asia accounted for 64 percent of all U.S. inbound and 

outbound containerized cargo. Seventy-one percent of all U.S. container imports 

originated from Asia, and the region took 52 percent of all U.S. container 

exports. 

The major agreement in the transpacific trade, the Transpacific 

Stabilization Agreement (TSA), is a fourteen-member discussion and policysetting agreement with voluntary pricing authority covering the inbound 

container trade from northeast and southeast Asia to all of the U.S.4 During 

fiscal year 2009, TSA’s market share of the U.S. inbound Asian trade was 

approximately 83 percent, compared to 86 percent the previous fiscal year. The 

decrease in market share was mainly due to the resignation of Mitsui O.S.K. 

Lines in November 2008.

____________________

4 TSA’s geographic scope also includes parts of the Indian Subcontinent that is 

discussed under a separate heading.
Federal Maritime Commission 

Fiscal Year 2009

29

During the fiscal year, Asian container imports decreased by 16 percent. 

Northeast Asia accounted for 87 percent of transpacific imports, with most originating in China. For the fiscal year, the U.S. imported 10.8 million TEUs of 

Asian goods compared to 12.9 million TEUs last year. The sharp decline in 

Asian imports was due to the severe global recession that was triggered by the 

financial crisis in September 2008.

For the annual service contract season that began on May 1, 2009, TSA 

tried to maintain rate levels but failed. It was reported that rates declined significantly during the fiscal year. Transpacific carriers cut rates in an attempt to protect or gain market share. With reduced container volumes and unit revenues, 

most transpacific carriers reported significant financial losses for the first half of 

calendar year 2009.

The major agreement in the outbound transpacific trade is the Westbound 

Transpacific Stabilization Agreement (WTSA). Like TSA, the ten-member 

WTSA operates as a forum for the exchange of information between its members that enables them to discuss and agree upon rate levels for cargo exported 

from the U.S. to Asia. WTSA’s geographic scope covers all U.S. outbound shipments to northeast and southeast Asia.5

U.S. exports to Asia declined by 12 percent. For the fiscal year, the U.S. 

exported 5.2 million TEUs of goods to the region. Eighty-four percent of all 

U.S. container exports to Asia are destined for northeast Asia, which includes 

China, Taiwan, South Korea and Japan. 

____________________________

5 Like TSA, WTSA’s geographic scope also includes parts of the Indian Subcontinent that is discussed under a separate heading. 
Federal Maritime Commission 

Fiscal Year 2009

30

WTSA does not have a distinct start to its annual service contract season 

like that of the TSA. Instead, WTSA members agree to voluntary service contract guidelines for different types or groups of commodities throughout the year. 

This practice is dictated by the seasonality of the major U.S. agricultural export 

commodities, which have different growing seasons and peak times when they 

are shipped. Like TSA, WTSA members experienced a significant drop in 

freight rates during the fiscal year.

G. SOUTH AMERICA

Between the U.S. and South America, U.S. export cargo dropped 18.2 

percent to 745,784 TEUs, eliminating all gains made in the previous fiscal year. 

Import cargo from South America to the U.S. fell by 14 percent to 769,371 

TEUs. 

The South America region is generally divided into two trade areas – one 

to the west coast and the other to its east coast. Just over 45 percent of the U.S./

South America cargo moved between the U.S. and the west coast of South 

America in fiscal year 2009, a two percent increase over the previous year. In 

fiscal year 2009, U.S. export cargo to the west coast of South America fell 11.9 

percent to 333,548 TEUs and imports from the region fell 6.5 percent. Waste 

paper accounted for the largest share of U.S. containerized exports at 13.4 percent. The second and third largest export commodities were synthetic resins and 

used automobiles at 8.6 percent and 3.8 percent, respectively. Fruits accounted 

for 29.8 percent of imports from the west coast of South America. The second 

largest import commodity was logs and lumber at 5.7 percent. Still wines were 

the third largest commodity from the region at 5.2 percent of the total.

By the end of fiscal year 2009, annualized vessel capacity had increased 

2.5 percent to 749,568 TEUs in the northbound trade, and remained virtually the 

same for the southbound trade at 784,567 TEUs.
Federal Maritime Commission 

Fiscal Year 2009

31

Most of the carriers that provide direct service to the west coast of South 

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

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

during this fiscal year. Mediterranean Shipping Company (MSC) left the agreement at the beginning of the fiscal year but rejoined 10 months later in August of 

2009, and Maersk Line joined the agreement in September 2009. During the 

second quarter of 2009, MSC had a 22.7 percent market share in the southbound 

trade and 15.5 percent in the northbound trade, while Maersk Line had market 

shares of 10 percent and 9.4 percent, respectively. Following these additions in 

membership, the WCSADA share of the trade increased to 85.4 percent for 

cargo moving southbound and 63.6 percent for cargo moving northbound. 

Carriers also served the trade indirectly via trans-shipment services based 

at ports in Mexico, Panama, and the Caribbean. In fiscal year 2009, nearly 20 

percent of all southbound cargo and 40 percent of all northbound cargo was 

transshipped to and from the west coast of South America through these ports. 

Liner cargo in the trade between the U.S. and the east coast of South 

America accounted for almost 55 percent of the U.S./South America liner cargo. 

U.S. exports to the east coast of South America fell 22.8 percent to 412,236 

TEUs during fiscal year 2009. Imports from the region fell 21.1 percent to 

364,053 TEUs during the same period. The top export commodity was auto 

parts at 7.1 percent. Synthetic resins were the second top export commodity at 

6.1 percent. Logs and lumber were the top import commodity at 6.3 percent. 

The second and third top commodities from the region were granite and coffee at 

5.4 percent and 4.9 percent, respectively.
Federal Maritime Commission 

Fiscal Year 2009

32

By the end of fiscal year 2009, annualized vessel capacity in this trade 

had dropped 5 percent to 907,755 TEUs for the northbound trade, and by only 1 

percent in the southbound trade. Unlike the west coast of South America trade, 

carriers serving the east coast of South America do not actively participate in a 

broad-based rate discussion agreement spanning the entire geographic scope of 

the trade. 

H. AFRICA

Cargo volumes between the United States and the Africa trade region 

dropped by 10 percent in fiscal year 2009, following two years with growth of 

about 15 percent. The decrease in cargo volumes was generated by an 8 percent 

decrease in U.S. exports to Africa from the previous fiscal year to 230,000 

TEUs. Imports from Africa shrank by 14 percent from the previous fiscal year 

to about 82,000 TEUs. The trade continues to be heavily imbalanced, with approximately 1 TEU inbound for every 2.7 TEUs that moved outbound. South 

Africa dominates the U.S. liner trade with Africa, accounting for about 27 percent of the overall container volume and 49 percent of the imported containers. 

Nigeria is the United States’ second largest trading partner in the region, with 14 

percent of container volumes, and Morocco and Ghana are the third and fourth 

largest partners with about 6 percent each.

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/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 also the top 

carriers in the Africa trade, carrying approximately 70 percent of the containers 

traveling between the United States and Africa. These three carriers provide one 

of only two direct weekly container services between the U.S. and Africa.
Federal Maritime Commission 

Fiscal Year 2009

33

The Southern Africa/Oceania Agreement is subject to special reporting 

requirements due to its unique features, including a revenue pool. The revenue 

pool, the distributions from which were capped in March 2005, is a rare method 

used by the three carriers to share the risks of operating this service. To ensure 

that the Agreement complies with the Shipping Act’s section 6(g) and does not 

violate its other prohibitions, the member carriers provide revenue and capacity 

information to the FMC for each northbound and southbound sailing. 

I. WORLDWIDE

The world’s container trade contracted about 11 percent in fiscal year 

2009, compared to a growth of 8 percent in 2008. As the fiscal year came to a 

close, 548 containerships lay idle, representing 11.6 percent of the total number 

of cellular ships or 10 percent of the total fleet capacity measured in TEUs. In 

contrast, only about 2 percent of the containership fleet capacity lay idle at the 

end of fiscal year 2008. 

Container volumes in the U.S. liner trades in fiscal year 2009 contracted 

almost 15 percent to 25.1 million TEUs, compared to 29.6 million last year. The 

U.S. share of the world’s container trades declined again this year to about 19 

percent, compared to 20.5 percent in 2008 (and 21 percent in 2007). U.S. container imports declined for the second consecutive year, falling by 15.6 percent 

to 15.3 million TEUs, compared to 18.1 million in 2008. U.S. container exports 

also contracted. The latter fell by 13.9 percent to 9.9 million TEUs. The U.S. 

container imbalance improved marginally. For every 100 loaded containers exported from the U.S. 154 were imported, compared to 157 last year.
Federal Maritime Commission 

Fiscal Year 2009

34

Container cargo through Pacific Northwest ports, such as Seattle, 

Tacoma and Portland, fell by about 17 percent. This coastal region’s share of 

U.S. container volume fell slightly to 10.6 percent from 10.9 percent. The 

Pacific Southwest region, which includes the ports of Los Angeles, Long Beach 

and Oakland, saw container cargo fall by about 15 percent. This coastal region’s 

share of U.S. container volume fell slightly to 38.9 percent from 39.2 percent. 

Ports along the U.S. Atlantic coast performed no better. Their container volumes 

also contracted by 15 percent, but volumes at Gulf coast ports fell only 8 

percent. The Atlantic coast ports managed to maintain their share of U.S. 

container cargo at 42.1 percent, while Gulf coast ports lifted their share from 6.7 

to 7.3 percent.

In fiscal year 2009, the U.S.’s top five liner cargo trading partners 

remained unchanged, namely, China, Japan, South Korea, Taiwan and Hong 

Kong. While U.S. liner trade with China and Hong Kong fell by about 15 

percent, trade with Taiwan fell by 43 percent, Japan by 29 percent, and South 

Korea by 23 percent. Collectively, these five trading partners accounted for 53 

percent of the total U.S. container trade, the same as last year. This year, trade 

with China accounted for 38.1 percent of the total U.S. container trade, 

compared to 35.7 percent in fiscal year 2008.

On a worldwide basis, containership capacity continued to grow despite 

this year’s severe contraction in container demand. By July 2009, the 

containership fleet’s nominal capacity had grown by almost 10 percent 

compared to the same month last year. As the end of the fiscal year approached, 

4,672 containerships, with a fleet capacity exceeding 12.5 million TEUs, were 

available to serve the world’s container trades. Only 129 containerships were 

added to the world fleet, net of vessels scrapped, compared to over 400 at the 

same time last year. As of July 2009, there were orders worldwide for over 

1,000 new containerships with an aggregate capacity of 5.3 million TEUs. This 

amount of ship capacity on order is equivalent to almost 43 percent of the 

existing fleet capacity, down from 60 percent at the same time last year.
Federal Maritime Commission 

Fiscal Year 2009

35

The world’s container shipping industry became marginally less 

concentrated during fiscal year 2009. Among the top one hundred container 

operators at the end of fiscal year 2009, the top five operators controlled 42 

percent of the world’s containership fleet capacity, the top ten controlled about 

59 percent, and the top twenty controlled 80 percent (compared to 43, 60 and 82 

percent, respectively, last year). In descending order of containership fleet 

capacity, the top four liner operators remained Maersk Line, MSC, CMA CGM 

and Evergreen Line. However, the Singapore-based operator, APL, overtook 

Hapag-Lloyd to occupy fifth position. The Chinese operator, COSCO Container 

Line, slipped one place to seventh, below Hapag-Lloyd in sixth. Another 

Chinese carrier, China Shipping Container Line, remained in eighth place. NYK 

Line remained in ninth position and Hanjin Shipping completed the top ten 

ranking.

Federal Maritime Commission 

Fiscal Year 2009

37

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

In fiscal year 2009, the Commission monitored potentially unfavorable or 

discriminatory shipping practices by a number of foreign governments. However, no direct FSPA action was necessary.
Federal Maritime Commission 

Fiscal Year 2009

38

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. PIERS obtains data on U.S. import and export shipments from tapes of 

manifests filed electronically with U.S. Customs and Border Protection via the 

Automated Manifest System (AMS). PIERS also stations personnel at individual 

ports to manually collect shipment data that is incomplete or not filed through 

AMS. The company edits the raw shipment data and distinguishes liner shipments from non-liner shipments, and also employs additional procedures to increase data accuracy.

The most recent complete calendar year for which data are available is 

2008. 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 U.S. in 

2008. The figures in the Table 1 represent each country’s total U.S. liner imports 

and exports in thousands of TEUs.
Federal Maritime Commission 

Fiscal Year 2009

39

 Table 1: Top Twenty U.S. Liner Cargo

Trading Partners (2008)

Rank Country TEUs

(000s)

1 China (PRC) 10,561

2 Japan 1,584

3 South Korea 1,284

4 Taiwan 1,225

5 Hong Kong4 980

6 Germany 783

7 Brazil 616

8 India 592

9 Vietnam 556

10 Italy 556

11 Indonesia 551

12 Belgium and Luxembourg 546

13 Thailand 544

14 Netherlands 475

15 United Kingdom (incl. N. Ireland) 438

16 Malaysia 387

17 Honduras 342

18 Chile 301

19 Guatemala 300

20 Australia 298

________________________

4 On July 1, 1997, Hong Kong reverted to Chinese control as a special administrative region. However, PIERS continues to report data separately for Hong 

Kong because of its status as a major transshipment center.

Source: All data are aggregated from the PIERS (Port Import Export Reporting 

Service) database maintained by the Journal of Commerce.
Federal Maritime Commission 

Fiscal Year 2009

40

Only nine of the top twenty trading partners saw gains in volume. Again, 

U.S. liner trade with Vietnam experienced the largest percentage growth over the 

previous year, this time at 16 percent, a slower pace than the 30 percent recorded 

in 2007. U.S. liner trade with China shrank by 6 percent in terms of volume but 

the country easily maintained its top ranking. This is the first decrease in 

volume for China since establishing itself in 1997 as the top ranked trading 

partner. South Korea swapped ranking positions with Taiwan with an increase 

of 6 percent over 2007; Taiwan saw a decrease of 5 percent. U.S. liner trades 

with India, Indonesia, Malaysia, Honduras, Chile and Guatemala all had 

increases of less than 5 percent. Hong Kong's liner trade with the U.S. continues 

to decline, this time by 9 percent. Australia gained a foothold in the top twenty 

ranking with a 7 percent increase from 2007, pushing Costa Rica off the list.
Federal Maritime Commission 

Fiscal Year 2009

41

V

SIGNIFICANT ACTIVITIES

BY

ORGANIZATIONAL UNIT

Federal Maritime Commission 

Fiscal Year 2009

43

A. OFFICE OF THE SECRETARY

1. In General

As the focal point for matters submitted to and emanating from the 

members of the Commission, the Office of the Secretary is the main public 

contact for 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 Act and other applicable laws; special docket 

applications and applications to correct clerical or administrative errors in 

service contracts or NVOCC service arrangements; 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 preparing and submitting regular and 

notation agenda matters for consideration by the Commission and preparing and 

maintaining the minutes of actions taken by the Commission on these matters; 

issuing orders and notices of actions of the Commission; maintaining official 

files and records of all formal proceedings and Commission regulations; issuing 

publications; and authenticating instruments and documents of the Commission. 

During fiscal year 2009, the Commission issued orders finalizing sixteen formal 

proceedings and three informal dockets. In addition, two rulemaking 

proceedings were finalized. 

The Office also responds to information requests from Commission staff, 

the maritime industry, press, and the public; administers the Freedom of 

Information, Government in the Sunshine, and Privacy Acts; compiles historical 

Commission decisions; maintains a public reference/law library and a Docket 

Activity Library; manages the content and organization of the Commission’s 

Internet website; and participates in the development and coordination of agency 

wide public relation/outreach strategies and initiatives. The Office of the 

Secretary also oversees the Office of Consumer Affairs and Dispute Resolution 

Services.
Federal Maritime Commission 

Fiscal Year 2009

44

As the Commission’s public information/press office, the Office of the 

Secretary 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 Commission staff. 

The Office is significantly involved with the Commission’s ongoing 

objective to enhance public awareness of agency resources, remedies and 

regulatory requirements through education and outreach. Several initiatives were 

undertaken during the fiscal year to expand contact with all segments of the 

maritime community and public, including participating on industry discussion 

panels, coordinating and hosting industry briefings, and updating informational 

material. During fiscal year 2009 the Office continued to facilitate the 

Commission’s regular meeting schedule, thus providing a public forum for 

Commission discussion and action on industry and administrative matters before 

the Commission. 

The Office promotes transparency and accountability on behalf of the 

Commission by evaluating, developing and implementing improvements to the 

Commission’s website. During the fiscal year, the Office made adjustments to 

how information is presented, increased the amount of information available, 

and added functionality. For example, in May 2009, the Office worked with 

other Commission components to provide a publicly accessible, data-sharing 

tool for carrier service contract statistics through the Commission’s website. 

This enhancement provides greater public awareness and real-time access to the 

number and type of filings in the Commission’s confidential service contract 

database. Providing access to this information illustrates the Commission’s 

efforts to continually evaluate areas where it can balance security and legal 

requirements with the mandates for open government on its website.
Federal Maritime Commission 

Fiscal Year 2009

45

During the fiscal year, the Office made substantial progress towards completion of a large-volume public information project. The contents of 28 bound 

volumes of historical Commission decisions issued between the years 1919 and 

1987 are in the process of being posted to the Commission’s website. These historical decisions are no longer available to the public in bound volume form, 

however, with the completion of this project, the entire body of historical Commission decisions issued in its adjudicatory proceedings will be available on the 

FMC 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. While significant data preparation 

was completed in FY 2009 to further this project, limited staff resources were 

reallocated to meet the demands of preparing for, conducting and follow-up of 

twice-monthly Commission meetings. Pending staff resources, the Office plans 

to complete this project in fiscal year 2010. 

In fiscal year 2009, the Office continued to take the lead in accomplishing the agency’s performance goals related to making more Commission information and filed documents available electronically and to improving responsiveness to requests for public information. For example, through its Document 

Management Program the Office continued to make key documents filed in formal proceedings available through its website. Not only does the Office electronically convert all official Commission files (both current and historical), it is 

responsible for planning, scheduling and systematically scanning documents for 

other agency components. The Document Management Program that the Office 

oversees also supports the agency’s initiatives for Continuity of Operations 

(COOP) 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. 
Federal Maritime Commission 

Fiscal Year 2009

46

2. 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 disputes and problems in the U.S. maritime industry that affect international ocean shipping. 

These include a broad range of services designed to avoid the expense and delays inherent in litigation, and to facilitate the flow of U.S. ocean commerce. 

With respect to matters already involved in litigation, or moving toward 

initiation of litigation, parties to a dispute are encouraged to avail themselves of 

mediation or other ADR processes such as conciliation, facilitation, fact finding, 

mini-trials, or arbitration, as a means to resolve disputes. The Commission 

makes trained neutrals available to facilitate the resolution of shipping disputes 

at all stages. 

During the fiscal year, Commission mediators provided mediation services in several matters, thus assisting parties in avoiding significant litigation 

costs and risks. The Office mediated a matter involving an ocean carrier, two 

NVOCCs, a shipper, and a U.S. port that concerned oil leakage from containers 

which posed an environmental hazard. These containers had been detained at the 

port and the parties were on the verge of filing at least three lawsuits. As a result 

of CADRS’ mediation, the parties reached an initial agreement to fund and effect 

environmentally safe cleaning and removal of the containers. CADRS also provides ombudsman services to participants in ocean shipping transactions. Typical complaints continue to include situations where an NVOCC or VOCC has 

placed a lien on cargo in its possession, often for sums owed under an unrelated 

contract of carriage. A number of cases involved an unlicensed NVOCC that 

had received cargo from its customer and taken payment for the transportation of 

the cargo, but failed to deliver the cargo. Tracking the whereabouts of a shipment can be difficult, and often additional charges have accrued, necessitating 

payment of additional funds to obtain release of the shipment. 
Federal Maritime Commission 

Fiscal Year 2009

47

During fiscal year 2009, 727 complaints were received that necessitated 

the opening of a case to provide dispute resolution services. These included 164 

complaints concerning cruise issues, 333 concerning household goods matters, 

and 230 concerning cargo shipment matters. During 2009, the number of cruise 

complaints declined 13 percent, while the number of household good complaints 

increased by 68 percent and the number of other cargo cases increased by approximately 27 percent. Cargo shipment complaints continued to be of increasing complexity. Problems involving co-loaded shipments and the transparency 

of such arrangements continued to be a significant issue. CADRS received a substantial increase in the number of complaints involving licensed NVOCCs that 

experienced difficulties with their co-loading arrangements and foreign agents 

that required a neutral party to facilitate communication. In addition to the above 

complaints, approximately 650 information requests were processed. 

As illustrated by the cases reported above, the worldwide economic 

downturn has affected all parties in the logistics chain. Particularly affected were 

NVOCCS focusing on household goods shipments, reflected in the 68 percent 

increase in this type of complaint. The tightening of credit contributed to cash 

flow problems for NVOCCs and some ceased operations, leaving customers 

with unpaid VOCC freight charges and little information to track the location of 

their shipments. Co-loading arrangements involving multiple NVOCCs added to 

the difficulty in locating cargo and securing its release. In many cases, Office 

staff arranged for the correction of shipping documentation with carriers and foreign agents to facilitate the release of shipments to their owners. CADRS staff 

also handled a number of complaints in which cargo delivered to the railhead for 

inland transport required devanning due to differing weight limitations between 

VOCCs and rail carriers. In such cases, disputes centered on responsibility for 

the unanticipated costs related to devanning. The economic downturn also led to 

a broader spectrum of shipping complaints that required coordination with multiple parties to resolve, including local warehouses, law enforcement officials, 

state agencies, foreign governments and companies, shippers, and carriers. During this time, CADRS staff worked diligently with all parties to resolve 

disputes and facilitate the delivery of cargo where possible.
Federal Maritime Commission 

Fiscal Year 2009

48

3. Library

The FMC public reference/law library is an information source for Commission staff, government agencies, private organizations and the public. The 

library contains a variety of books, directories, encyclopedias, journals, magazines, reports, microforms, and videos. Its holdings consist of specialized material, primarily covering the various segments of the international shipping industry, as well as historical and current regulatory materials covering all phases of 

shipping in the U.S. foreign trades. It 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, Comptroller General Decisions, and selected titles of 

the National Reporter system. The Library’s holdings consist of approximately 

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

In fiscal year 2009, the Office implemented an online catalogue for the 

Commission’s law/reference library collection that replaced an outdated card 

catalogue ahead of schedule and within the established project budget. The new 

automated system employs technology to improve workforce productivity by 

providing an in-house library access station, as well as individualized agencywide staff access to library holdings from their desktops. The new system minimizes data entry into multiple library management systems, thus reducing redundancy and increasing administrative efficiencies.
Federal Maritime Commission 

Fiscal Year 2009

49

B. OFFICE OF THE 

ADMINISTRATIVE LAW JUDGES

1. In General

Administrative law judges (ALJs) manage the development of an evidentiary record through rulings and conferences with counsel for the litigating parties, rule upon dispositive motions, and preside at hearings held after the receipt 

of a complaint or institution of a proceeding on the Commission’s own motion. 

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 the hearing; 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 2009, twenty formal proceedings were 

pending before the Office of ALJs. During the year, six formal proceedings 

were added. The Office dismissed one formal proceeding. The ALJs entered 

Initial Decisions in ten cases.

2. Final action by the Office of Administrative Law Judges and subsequent Commission action.

In fiscal year 2009, the Office of Administrative Law Judges issued initial decisions partially or completely resolving eleven proceedings and referred 

one motion to dismiss to the Commission, and the Commission issued final decisions in fifteen proceedings that had been decided by administrative law judges.
Federal Maritime Commission 

Fiscal Year 2009

50

Anchor Shipping Co. v. Alianca Navegacao e Logistica Ltda., Crowley 

American Transport Inc., Columbus Line, Inc., and Hamburg 

Südamerikanische Dampfschifffahrts. [Docket No. 02-04]

On December 16, 2008, the ALJ served an Order Dismissing Complaint 

for Failure to Comply with the Commission's Rules of Practice and Procedure 

and Orders Entered in this Proceeding. On January 22, 2009, the Commission 

served a Notice Not to Review. On April 1, 2009, the ALJ served an Initial 

Decision Granting Request to Dismiss Counter-Complaint. On May 1, 2009, the 

Commission served a Notice Not to Review. 

Odyssea Stevedoring of Puerto Rico, Inc. v. Puerto Rico Ports Authority 

[Docket 02-08], International Shipping Agency, Inc. v. Puerto Rico Ports 

Authority [Docket 04-01], San Antonio Maritime Corp. and Antilles 

Cement Corp. v. Puerto Rico Ports Authority [Docket 04-06]

On September 16, 2004 (02-08), September 17, 2004 (04-01), and 

September 27, 2004 (04-06), the Commission determined it would review ALJ 

rulings on the issue of sovereign immunity. On April 8, 2009, the Commission 

dismissed the proceedings.

Verucci Motorcycles, LLC v. Senator International Ocean, LLC. [Docket No. 

06-05]

On January 14, 2009, the ALJ issued an Initial Decision. On February 

18, 2009, the Commission served a Notice Not to Review.

R.O. White & Co. & Ceres Marine Terminals Inc. v. Port of Miami Terminal 

Operating Company, Continental Stevedoring & Terminals, Inc., et al.

[Docket No. 06-11]

On July 28, 2009, the ALJ served an Initial Decision. On October 6, 

2009, the Commission served a Notice Not to Review.
Federal Maritime Commission 

Fiscal Year 2009

51

APM Terminals North America, Inc. v. Port Authority of New York and New 

Jersey; Port Authority of New York and New Jersey v. Maher Terminals LLC

[Docket No. 07-01]

On October 24, 2008, the ALJ served an Initial Decision Granting Joint 

Motion for Approval of Settlement Agreement and Dismissal with Prejudice. 

On April 1, 2009, the Commission served an Order Denying Exceptions and 

Petition for Stay. On July 2, 2009, the Commission served a Notice 

consolidating Docket No. 07-01 with Docket No. 08-03.

Anderson International Transport and Owen Anderson - Possible Violations 

of Sections 8(a) and 19 of the Shipping Act of 1984 [Docket No. 07-02]

On August 28, 2009, the ALJ served an Initial Decision. On 

September 9, 2009, the Commission served a Notice of Extension of Time to 

File Exceptions and Replies.

Norland Industries, Inc., Linna Textiles Manufacturing Limited, Medcorp 

Distributors, Inc., Malan Garment Limited and Malan Garment Inc. v. 

Reliable Logistics, LLC [Docket No. 07-04]

On June 9, 2009, the ALJ served a Memorandum and Order on Joint 

Motion for Approval of Settlement Agreement and Dismissal with Prejudice of 

Claims against Washington International Insurance Company and Motion for 

Approval of Dismissal Without Prejudice against Reliable Logistics, LLC. On 

July 27, 2009, the Commission served a Notice Not to Review.

K.E.I. Enterprise d/b/a KEI Logix v. Greenwest Activewear, Inc. [Docket No. 

07-05]

On November 4, 2008, the ALJ served an Initial Decision Approving 

Settlement Agreement and Mutual Release and Granting Motions to Dismiss 

with Prejudice. On December 5, 2008, the Commission served a Notice Not to 

Review.
Federal Maritime Commission 

Fiscal Year 2009

52

Embarque Puerto Plata Corp. and Embarque Puerto Plata Inc. d/b/a Embarque Shipping and Embarque El Millon Corp., Estebaldo Garcia, Ocean 

Sea Line, Maritza Gil, Mateo Shipping Corp. and Julio Mateo – Possible Violations of Sections 8(a) and 19 of the Shipping Act of 1984 and the Commission’s Regulations at 46 C.F.R. Parts 515 and 520 [Docket No. 07-07]

On July 31, 2009, the ALJ served a Memorandum and Order Granting 

Motions to Dismiss Respondents Estebaldo Garcia, Embarque Puerto Plata, 

Corp., Embarque Puerto Plata Inc. d/b/a Embarque Shipping, Ocean Sea Line, 

and Maritza Gil. On September 24, 2009, the Commission served a Notice Not 

to Review. On August 28, 2009, the ALJ served an Initial Decision on the 

claims against Mateo Shipping Corp. and Julio Mateo. On September 29, 2009, 

the Commission served a Notice Not to Review.

Jamteck International Shipping Inc., and Angella Barnett-Walker – Possible 

Violations of the Commission’s Regulations at 46 C.F.R. Part 515 [Docket No. 

07-09]

On July 27, 2009, the ALJ served an Initial Decision. On August 31, 

2009, the Commission served a Notice Not to Review.

City of Los Angeles, California, Harbor Department of The City of Los Angeles, Board of Harbor Commissioners of The City of Los Angeles, City of Long 

Beach, California, Harbor Department of The City of Long Beach, and The 

Board of Harbor Commissioners of The City of Long Beach - Possible Violations of Sections (10(b)(10), (10)(d)(1) and 10(d)(4) of The Shipping Act of 

1984 [Docket No. 08-05]

On July 30, 2009, the ALJ referred the Motion of the Bureau of Enforcement for Dismissal of Proceeding to the Commission. On August 21, 2009, the 

Commission dismissed the proceeding.

Clutch Auto Ltd. v. International Touch Consolidator, Inc., MacAndrews and 

Company, Ltd., Rosmarine Shipping Private Limited, and Hitos Liner Agency 

Private Limited [1880(F)]
Federal Maritime Commission 

Fiscal Year 2009

53

D&W Clutch and Brake v. International Touch Consolidator, Inc., 

MacAndrews and Company, Ltd., and Rosmarine Shipping Private Limited

[1885(F)]

On November 13, 2008, the ALJ served an Initial Decision. On 

December 18, 2008, the Commission served a Notice Not to Review.

Frank J. Kuzela v. A.P. Moller-Maersk A/S [1883(F)]

On June 26, 2008 [FY08], the ALJ served an Initial Decision. On 

October 13, 2008, the Commission served an Order Denying Exceptions.

3. Pending Proceedings

At the close of fiscal year 2009, there were 11 formal proceedings 

pending before the Office of ALJs. During fiscal years 2010 and 2011, the 

Office will conduct hearings and render decisions on adjudicatory proceedings 

and any rulemaking proceedings referred to the Office. Figure 1 shows FMC 

Commission proceedings over the last five fiscal years, 2004 through 2009.

0

5

10

15

20

25

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09

Formal 

Proceedings

Informal Dockets

Special Dockets

Commission Proceedings

FY 2004 - 2009

Note: Formal proceedings include discontinuances, dismissals and settlements;

Rulemakings – final rules.

0

5

10

15

20

25

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09

Formal Proceedings

Informal Dockets

Special Dockets

Figure 1: Commission Proceedings Initiated

FY 2004 - 2009

Note: Formal proceedings include Notice Not to Review, Dismissals, Order 

Denying Petition, Order of Revocation, Informal Docket Order, and Settlements;

Rulemakings – Final Rules.

0

5

10

15

20

25

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09

Formal Proceedings

Informal Dockets

Special Dockets

Figure 1: Commission Proceedings Initiated

FY 2004 - 2009

Note: Formal proceedings include Notices Not to Review, Dismissals, Orders 

Denying Petitions, Orders of Revocation, Informal Docket Orders, and Settlements;

Rulemakings – Final Rules.

Federal Maritime Commission 

Fiscal Year 2009

55

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

Recodification of the Shipping Act as Positive Law; [Docket No. 09-06], ____ 

S.R.R. ____ (September 16, 2009)

The Commission issued a Final Rule revising 46 CFR Parts 501, 502, 

503, 504, 506, 508, 515, 520, 525, 530, 531, 535, 540, 545, 550, 551, 555, 560, 

and 565. The Shipping Act of 1984 and other statutes administered by the Commission were previously codified in the appendix to Title 46 of the United States 

Code. The House of Representatives introduced H.R. 1442 to complete the codification of the appendix as positive law. On October 6, 2006, H.R. 1442 was 

enacted as Public Law 109-304. This rule changes prior statutory references in 

the Commission’s regulations to reflect the codification and does not involves 

any substantive changes.
Federal Maritime Commission 

Fiscal Year 2009

56

Decisions by the Commission

Odyssea Stevedoring of Puerto Rico, Inc. v. Puerto Rico Ports Authority, 

[Docket No. 02-08]; International Shipping Agency, Inc. v. The Puerto Rico 

Ports Authority, [Docket No. 04-01]; and San Antonio Maritime Corp. and 

Antilles Cement Corp. v. Puerto Rico Ports Authority, [Docket No. 04-06], 30 

S.R.R. 1339 (March 5, 2007)

These cases came before the Commission for a determination whether 

the Puerto Rico Ports Authority (PRPA) is an arm of the Commonwealth of 

Puerto Rico and therefore entitled to sovereign immunity. Odyssea Stevedoring 

of Puerto Rico, Inc., International Shipping Agency, Inc. (Intership), San 

Antonio Maritime Corp. and Antilles Cement Corp. allege that PRPA’s marine 

terminal leasing practices violated sections 10(b)(10), 10(d)(1), 10(d)(3), and 10

(d)(4) of the Shipping Act. Further, Intership alleged PRPA violated section 10

(a) (3) of the Shipping Act by failing to act in accordance with the terms of an 

agreement filed with the Commission. PRPA filed motions for summary 

judgment or motions to dismiss in all three cases, arguing that the complaints 

were barred by PRPA’s sovereign immunity as an arm of the Commonwealth of 

Puerto Rico. In Odyssea and Intership, the ALJ ruled that PRPA was not entitled 

to sovereign immunity. The Commission, sua sponte, decided to review the 

ALJ’s decision. On November 30, 2006, the Commission issued an order, on a 3

-2 vote, finding that PRPA is not an arm of the Commonwealth of Puerto Rico 

and is therefore not entitled to sovereign immunity. 
Federal Maritime Commission 

Fiscal Year 2009

57

The Commission’s order was appealed to the U.S. Court of Appeals for 

the D.C. Circuit (Case No. 06-1407). The Court heard oral argument on October 

26, 2007. On July 8, 2008, the Court issued its opinion finding that PRPA is an 

arm of the Commonwealth of Puerto Rico and is therefore immune from suit 

absent its consent. Intership filed a motion on August 25, 2008, to stay the 

Court’s mandate pending filing of a petition for writ of certiorari. The Court 

granted Intership’s motion on September 16, 2008. A petition for a writ of 

certiorari at the United States Supreme Court was filed by Intership on 

October 8, 2008. The Supreme Court denied Intership’s writ on February 23, 

2009. The D.C. Circuit issued their mandate for the Commission to dismiss all 

three cases on March 6, 2009. The Commission dismissed all three PRPA cases 

on April 8, 2009.

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. 540 (December 18, 2008)

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 a bond as required by 

sections 8 and 19 of the Act. On October 1, 2007, Tober Group, Inc. (Tober) 

filed a Motion for Summary Judgment. The ALJ granted Tober’s Motion for 

Summary Judgment on June 12, 2008. The BOE filed an appeal on July 8, 2008, 

and Tober filed a reply on August 12, 2008. An Order on Appeal of the ALJ’s 

Grant of Summary Judgment, granting BOE’s appeal and remanding the case to 

the ALJ, was issued on December 18, 2008.
Federal Maritime Commission 

Fiscal Year 2009

58

APM Terminals North America, Inc. v. Port Authority of New York and New 

Jersey, [Docket No. 07-01], 31 S.R.R. 623 (April 1, 2009)

APM Terminals North America, Inc., commenced this proceeding by filing a complaint alleging that the Port Authority of New York and New Jersey 

violated section 10 of the Shipping Act of 1984 alleging it had been harmed by 

the Port Authority’s failure to tender an additional portion of marine terminal 

property provided for in a lease between APM and the Port Authority. APM 

also claimed that the Port Authority’s actions unlawfully preferred Maher Terminals, LLC, also a marine terminal operator. PANYNJ denied liability and filed a 

counter-complaint against APM. PANYNJ filed a third-party complaint against 

Maher Terminals claiming that Maher failed to timely surrender the premises 

sought by APM.

APM and PANYNJ entered into a settlement agreement and a supplemental agreement to the lease at issue between them resolving their claims and 

counter claims in this proceeding, which was approved by the presiding ALJ. 

On April 1, 2009, the Commission affirmed the ALJ’s decision. The Commission rejected assertions by Maher to block the settlement as the agreement met 

the Commission’s criteria for settlement and because Maher had not shown that 

the remaining claims between it and the Port Authority would be prejudiced. Maher’s separate claims have been consolidated within its separate complaint case, Docket No. 08-03.
Federal Maritime Commission 

Fiscal Year 2009

59

Global Link Logistics, Inc. – Emergency Petition for Declaratory Order, 

Rulemaking or other Appropriate Relief in Voluntary Disclosure 

Investigation, [Docket No. 08-07], 31 S.R.R. 718 (June 15, 2009)

Petitioners Olympus Growth Fund, III, L.P. and Olympus Executive 

Fund, L.P. petitioned the Commission to issue a Declaratory Order, initiate a 

rulemaking or grant other appropriate relief to confirm that an industry practice 

involving domestic inland movements was not a violation of section 10(a)(1) of 

the Shipping Act. Alternatively, Petitioners requested that the Commission 

initiate a docketed proceeding for the purpose of granting Petitioners leave to 

intervene in a formal investigation of the shipment practices of Global Link 

Logistics, Inc. (Global Link), a non-vessel-operating common carrier in which 

Petitioners formerly owned a stake. In the Commission’s Notice of filing of 

Petition, it was requested that Global Link and the Commission’s Bureau of 

Enforcement (BOE) reply to the petition. Subsequently, comments were invited 

from other interested parties with respect to the request in the petition to initiate 

a rulemaking proceeding. Global Link, BOE, and ABS Consulting filed 

comments generally opposing the relief sought in the Petition.

On June 15, 2009, the Commission issued an Order Denying the Petition. 

The Commission denied the request to issue a Declaratory Order, on the grounds 

that it did not meet the requirements of Commission Rule 68, as Petitioners are 

private equity funds not subject to the Commission’s jurisdiction, and they were 

not seeking a legal ruling on a proposed future course of action, as the activities 

in question had already occurred. The Commission also denied the request for a 

rulemaking, as Petitioners failed to set forth supporting facts and data showing 

convincing need for the broad regulatory relief envisioned in a rulemaking 

proceeding. Finally, the Commission denied the request to initiate a formal 

proceeding, on the grounds that the Commission encourages informal resolution 

of cases through compromise proceedings and has delegated to BOE authority to 

compromise civil penalties, and Petitioners did not include in their petition 

information or evidence justifying the institution of a formal investigation by the 

Commission.
Federal Maritime Commission 

Fiscal Year 2009

60

R.O. White & Company and Ceres Marine Terminals, Inc. v. Port of Miami 

Terminal Operating Company, Continental Stevedoring & Terminals, Inc., 

Florida Stevedoring, Inc., Ports America, Ports America Florida, Dante 

Fascell Port Of Miami Dade, Miami-Dade County Seaport Department and 

Miami-Dade County; [Docket No. 06-11], 31 S.R.R. 783 (July 28, 2009)

Complainants filed their complaint on November 22, 2006. Motions to 

dismiss were filed by Respondents. Complainants maintained that Respondents 

were marine terminal operators (MTOs) which are subject to the jurisdiction of 

the Commission. The Complainants also alleged that Respondents operate as 

MTOs in violation of the Shipping Act by failing to follow agreements that they 

filed with the Commission and by operating under agreements that should have 

been filed with the Commission. The Complainants, among other things, also 

allege that Respondents adopted practices and implemented unfiled agreements 

which deny them the opportunity to perform stevedoring services for vessels at 

Respondents’ terminal facilities, unlawfully preferred Respondents’ stevedoring 

operations and engaged in unreasonable and discriminatory practices in violation 

of the Shipping Act.

Though the presiding Administrative Law Judge ruled that the 

Commission has jurisdiction over Respondents as MTOs, he concluded that 

Complainants had not met their burden of proof to show that Respondents had 

sufficient economic power with regard to marine terminal services to force ocean 

carrier customers to accept the services of Respondents’ preferred stevedores. 

The ALJ also concluded that Complainants had failed to carry their burden to 

show that Respondents’ practices were unreasonable or amounted to unlawful 

discrimination. The ALJ dismissed the case. Complainants and Respondents 

separately informed the Commission in writing that they would not file 

exceptions. As the Commission did not decide to review the Initial Decision on 

its own motion, it became administratively final pursuant to 46 C.F.R. 502.227 

of the Commission’s regulations. 
Federal Maritime Commission 

Fiscal Year 2009

61

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 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:

Landstar Express America, Inc. and Landstar Global Logistics, Inc. v. Federal 

Maritime Commission, D. C. Circuit, Case No. 08-1152

This proceeding is an appeal of the Commission’s February 15, 2008 order in Commission Docket No. 06-08, In the Matter of the Lawfulness of Unlicensed Persons Acting as Agents for Licensed Ocean Transportation Intermediaries – Petition for Declaratory Order. The Commission denied the petition filed 

by Team Ocean Services, Inc., (Team Ocean) following review of the petition 

and three comments submitted thereon, including the comments of Landstar 

America, Inc. and Landstar Global Logistics, Inc. (Landstar). On April 14, 

2008, Landstar filed a Petition to Review the Commission’s Order, asserting in 

its Petition that it is a party aggrieved by the Commission’s denial of Team 

Ocean’s Petition. Petitioners submitted a single issue to be raised to the Court:

Whether the FMC Order’s determination that it is unlawful under 

The Shipping Act of 1984, as amended, for an unlicensed agent to 

provide Non-Vessel Operating Common Carrier (NVOCC) services in the name of and on behalf of a licensed NVOCC is arbitrary, capricious, contrary to the FMC’s statutory authority, jurisdiction and existing precedent, inconsistent with the plain language of the applicable statute, an abuse of discretion, unsupported by substantial evidence, or otherwise contrary to law.
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Pursuant to the schedule ordered by the Court, Landstar filed its opening 

brief December 4, 2008, and the Commission filed its brief on January 12, 2009, 

with Landstar filing its reply brief January 26.

Oral argument was held on April 21, 2009. On June 26, 2009, the Court 

issued its order and opinion granting Landstar’s Petition for Review, Vacating 

the Commission’s Declaratory Order and remanding the case to the 

Commission. The Court ruled that the plain language of section 19 of the 

Shipping Act does not provide authority to the Commission to require agents of 

ocean transportation intermediaries to obtain an OTI license in order to act as an 

agent. A declaratory order by the Commission responsive to the Court’s holding 

is pending.

Federal Maritime Commission v. City of Los Angeles, California, Harbor 

Department of the City of Los Angeles, Board of Harbor Commissioners of the 

City of Los Angeles, City of Long Beach, California, Harbor Department of 

the City of Long Beach, and the Board of Harbor Commissioners of the City 

of Long Beach, U. S. District Court for the District of Columbia, Case No. 08-

1895

On October 31, 2008, the Commission filed a complaint seeking a 

permanent injunction pursuant to section 6(g) of the Shipping Act against certain 

aspects of the Ports of Los Angeles and Long Beach (the Ports) Clean Truck 

Plan and harmonized concession agreements. The CTP and concession 

agreements are designed to require new, less-polluting trucks to serve the Ports 

but also add a requirement at Los Angeles that employee drivers be used 

although trucking at the Port is dominated by independent owner-operators. The 

Commission’s action seeks to enjoin the employee driver requirements on the 

basis that it results in an unreasonable increase in costs and unreasonable 

decrease in service. On November 17, 2008, the Commission filed a motion for 
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a preliminary injunction pending the Court’s decision on the merits of the 

Commission’s Complaint. On April 15, 2009, the Court denied the 

Commission’s motion for a preliminary injunction, finding that the Commission 

had not shown that it met the applicable equitable standards for injunction. On 

June 16, 2009, the Commission filed a motion to dismiss this proceeding, citing 

changed circumstances including a preliminary injunction issued against the 

employee driver requirement in unrelated litigation in the Ninth Circuit Court of 

Appeals and the U.S. District Court for the Central District of California. On 

July 24, 2009, the Commission and the Ports filed a joint stipulation dismissing 

the proceeding. The proceeding was terminated as of July 29, 2009.

National Resources Defense Council, Inc., Sierra Club, Inc. and Coalition for 

Clean Air, Inc. v. Federal Maritime Commission, U.S. District Court for the 

Central District of California, Case No. 08-07436

On November 10, 2008, the Complainants filed a complaint asserting 

that the Commission cannot take action that would impact the implementation of 

the Ports of Los Angeles and Long Beach Clean Trucks Program without first 

complying with the National Environmental Policy Act of 1969 (NEPA) and 

other environmental regulations. Attorneys from the Department of Justice 

Environment and Natural Resources Division and U.S. Attorney’s Office for the 

Central District of California defended the Commission and filed a Motion to 

Dismiss the Proceeding with the Court, which Natural Resources Defense 

Council, Inc. opposed. Complainants filed a Notice of Voluntary Dismissal on 

September 11, 2009, which terminated the proceeding on that date.
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National Resources Defense Council, Inc. v. Federal Maritime Commission, 

U.S. District Court for the District of Columbia, Case No. 1:09-cv-00935

On May 19, 2009, the National Resources Defense Council, Inc. (NRDC) 

filed a complaint for declaratory and injunctive relief against the Commission for 

denying NRDC a full waiver of fees under the Freedom of Information Act 

(FOIA). An Assistant US Attorney is assigned to defend the Commission. An 

answer to the complaint was filed on July 9, 2009.

On September 28, 2009, NRDC filed its Motion for Summary Judgment 

on the merits of the case related to whether plaintiff qualifies for fee waivers. Replies to the Motion for Summary Judgment due November 6, 2009.

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 (OMB) requests 

for views on proposed bills and testimony.

During FY 2009, 80 bills, proposals and Congressional inquiries were 

referred to the OGC for review or comment. The Office prepared and coordinated testimony for the agency’s FY 2010 budget authorization hearing before 

the U.S. House of Representatives Committee on Transportation and Infrastructure, Subcommittee on Coast Guard and Maritime Transportation. In addition, 

the Office assisted in the preparation for one confirmation hearing before the 

Senate Committee on Commerce, Science and Transportation. The Office also 

worked closely with Congressional staffs on proposed legislation that may affect 

the Commission.
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In fiscal years 2010 and 2011, the OGC will continue to take the 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 and 

to allow for the efficient and secure flow of ocean transportation. 

4. Other Significant Activity

The Port of Los Angeles and Port of Long Beach Proposed Clean Trucks 

Program, and FMC Agreement No. 201170, Los Angeles and Long Beach Port 

Infrastructure and Environmental Programs Cooperative Working Agreement 

and FMC Agreement No. 201178, Los Angeles/Long Beach Port/Terminal Operator Administration and Implementation Agreement, Docket No. 08-05.

On September 24, 2008, the Commission initiated FMC Docket No. 08-

05, an investigation to determine whether certain practices of the Ports violate 

the Shipping Act of 1984. The Ports are members of the Los Angeles and Long 

Beach Port Infrastructure and Environmental Programs Cooperative Working 

Agreement (FMC Agreement No. 201170), currently on file with the Commission, that permits them to discuss, consult, and agree on the establishment and 

implementation of programs and strategies to improve port-related transportation 

infrastructure and to decrease port-related air pollution. Practices under investigation included: the mandate, on a phased- in basis, that Licensed Motor Carriers 

(LMCs) that serve the Port of Los Angeles (Port) utilize only employee drivers 

and not independent owners and operators; the ban on independent owneroperators providing drayage service at the Port; Port payments to certain motor 

carriers as an incentive to provide drayage service at the Port, but not to other 

similarly situated motor carriers; exemption of some cargo owners from paying a 

Clean Truck Fee but not others despite the fact that their cargo is moved in compliant trucks; the requirement that motor carriers provide container drayage service at the Port to submit an application for a concession, but not publishing 

standards or criteria by which such applications will be granted or denied; and, 
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refusal to deal or negotiate with motor carriers otherwise authorized to provide 

drayage service at the Port who conduct their port operations using independent 

owner-operators. This proceeding was distinct from the Commission’s section 6

(g) injunction proceeding in the U.S. District Court for the District of Columbia 

discussed above (i.e., Case No. 08-1895). On July 28, 2009, the Commission’s 

Bureau of Enforcement filed a motion to dismiss this proceeding, to which the 

Ports replied in support. On August 21, 2009, the Commission issued an order 

granting the motion due to significant changes in the current circumstances, including the preliminary injunction issued against the employee driver requirement in unrelated litigation in the U.S. Court of Appeals for the Ninth Circuit 

and the U.S. District Court for the Central District of California.

5. 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.
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In FY 2009, 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. 

The Commission continued to receive and evaluate semi-annual reports from 

United States-flag and Japanese-flag vessels operating in the trades with Japan 

pursuant to its proceeding in Docket No. 96-20, Port Restrictions and 

Requirements in the United States/Japan Trade. OGC staff served as technical 

advisors to the U.S. delegation to the semi-annual U.S.-Japan Regulatory 

Reform talks held in Washington, D.C. in April 2009.

The OGC also pursued informally several matters that involved 

potentially restrictive foreign practices including new legislation, new 

interpretations of existing legislation, new regulations of non-domestic carriers’ 

terminal handling charges and 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 

based upon information received. OGC also provided expert assistance relating 

to non-ratemaking agreements among vessel-operating common carriers for the 

purpose of discussion by the United States’ delegation at the Asian-Pacific 

Economic Cooperation conference in Singapore in July 2009.

Another responsibility of the OGC is the identification and verification 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.
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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.

6. Designated Agency Ethics Official

The Ethics Official is administratively within the Office of the Chairman, 

but the position is performed as a collateral duty by an attorney in the OGC.

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 day-to-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 Office of Equal Employment Opportunity (OEEO) manages a comprehensive program of equal employment opportunity, consistent with federal 

equal employment opportunity (EEO) and personnel management laws, regulations and directives. This program promotes equal employment opportunity, 

processes complaints of discrimination and identifies and eliminates any discriminatory practices and policies.

The Chairman of the Federal Maritime Commission (FMC) is responsible for ensuring equal opportunity at the Commission. The Chairman has delegated this authority to the Director of Equal Employment Opportunity (DEEO). 

Operational responsibility for compliance with EEO policies and programs lies 

with the Commission’s managers and supervisors. 

The Director of EEO 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. In accordance with regulations and guidance issued by the Equal Employment Opportunity Commission, the DEEO arranges for EEO counseling or alternative dispute 

resolution 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. Additionally, 

the DEEO represents the Commission on intergovernmental committees, 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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The OEEO works with senior management and with the Commission’s 

Office of Human Resources (OHR) to: (1) promote equal employment opportunity; (2) monitor affirmative employment programs; (3) expand outreach and 

recruitment initiatives; (4) improve career development and retention of all employees without regard to race, color, sex, national origin, religion, disability, 

sexual orientation, political affiliation or familial status; (5) provide adequate 

career counseling; (6) facilitate early resolution of employment related problems; and (7) develop program plans and progress reports.

Significant Accomplishments for fiscal year 2009

During fiscal year 2009, women and minorities continue to represent a 

majority of the workforce at the Commission. Significant accomplishments include the following: (1) provided information to employees about Internet sites 

with diversity/EEO related information; (2) updated the Commission’s No 

FEAR Act statistics on the FMC website at http://www.fmc.gov/home/

NoFEARAct.asp and began planning for the FY 2010 No FEAR Act refresher 

training for all employees; (3) provided counseling assistance to Commissioners, managers, supervisors, and employees; (4) insured that all new FMC employees received the No FEAR training; (5) provided support and assistance to 

managers and supervisors in maintaining and effectively managing a diverse 

workforce; (6) reviewed and assessed human resource activities and actions; (7)

supported the Office of Human Resources effort to reform the Federal hiring 

process through participation on the agency SWAT Team; (8) maintained an 

effective discrimination complaint process that resolved issues informally, expeditiously, and at the lowest possible level through the use of alternative dispute 

resolution techniques; (9) held special commemorative programs for all FMC 

employees for National Hispanic Heritage, National Disability Employment 

Awareness, National American Indian Heritage, African American History, 

Women’s History, Asian Pacific American Month; (10) participated in EEO-
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related training/conferences; and (11) prepared all required affirmative employment program accomplishment reports and plans; (12) supported the 2009 Feds 

Feeds Families food drive which generated over one million pounds of food and 

other essentials for American families in need.

During fiscal years 2010 and 2011, the OEEO will continue all existing 

programs and initiate activities designed to increase an understanding of EEO 

concepts and principles, including initiating diversity training and monitoring 

workforce diversity, outreach, retention, and career-development initiatives.

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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 

IGs, culminating in 1988 with the establishment of Office of Inspectors General 

(OIG) in smaller, independent agencies, including the Federal Maritime 

Commission. Currently, there are 67 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; access to all information for the reviews; 

and authority to publish findings and recommendations based on the reviews.

During fiscal year 2009, the OIG issued the following audit reports and 

evaluations:
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Audit Report Number Subject of Audit

A09-01 Audit of the FMC’s FY 2008 Financial 

Statements 

A09-01A Management Letter to the FY 2008 Audited Financial Statements 

A09-02 Review of the Bureau of Enforcement’s 

Time and Attendance Practices 

OR09-01 Operational Review – Inspection of the 

Agency’s Checkout Process

A09-03 Review of the Office of the General 

Counsel Time & Attendance Practices

A09-04 Review of the Bureau of Certification 

and Licensing Time & Attendance Practices 

A09-05 Review of the Office of the Secretary 

Time and Attendance Practices 

A09-06 Review of the Bureau of Trade Analysis 

Time and Attendance Practices

A09-07 Review of the Office of Consumer Affairs and Dispute Resolution Services 

Time and Attendance Practices
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In addition to these completed audits and reviews, the OIG performed 

fieldwork on the FY 2009 financial statement audit and the Federal Information 

Security Management Act evaluation and began reviews of contract administration on two technology-related contracts. The OIG performed a desktop scan for 

prohibited (Internet surfing) activities and revisited agency fee-setting processes 

with the Office of Administration. We discussed best practices regarding webpage design with the FMC webmaster, and visited the New York Area Office, as 

the first of six visits to FMC field locations, and briefed the Commission on the 

results of the trip.

On the investigative side, the OIG processed 42 complaints received on 

the office’s hotline and anonymous e-mail link. We opened one preliminary investigation based on information provided to the OIG by a member of the maritime industry. 

During the year, the OIG implemented several provisions pertaining to 

the Inspector General Reform Act of 2008, including revising an internal Commission Order on OIG processes and procedures to reflect Reform Act requirements, developing a Memorandum of Understanding with a sister OIG for counsel support and working with the agency’s webmaster to provide a direct link to 

the OIG’s website from the FMC’s homepage. 

The OIG also coordinated with FMC program staff to provide assistance 

to other federal agencies. For example, the OIG arranged for a briefing by FMC 

staff from the Office of Operations (to include the Bureau of Enforcement and 

the Bureau of Certification and Licensing) to OIG agents from the Export/Import 

Bank. Also during the period, the OIG requested assistance from the Bureau of 

Trade Analysis on behalf of the U.S. Army Criminal Investigation Division pertaining to an ongoing investigation. 
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The OIG responded to the House Committee on Oversight and Government Reform, Ranking Minority Member’s request regarding open 

(unimplemented) OIG recommendations. On a separate matter, the Inspector 

General briefed Senate Commerce Committee staff, at staff’s request, on background information concerning agency and OIG program activities. 

In addition to these audit and investigative activities and outcomes, the 

Inspector General staff participated in several activities pertaining to the Council 

of Inspectors General on Integrity and Efficiency (CIGIE), including actively 

serving on the Legislation Committee where the IG reviewed and commented on 

several legislative initiatives affecting the OIG community. The OIG also performed a peer review of a sister OIG at the U.S. Election Assistance Commission. The objectives of a peer review are to determine whether an effective quality control system has been established in the office and if policies, procedures 

and applicable Government Auditing Standards are being followed. 

In fiscal year 2010, 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 fiscal year 2010 financial statements and an evaluation of 

the agency’s information security program and privacy assurance controls, as 

required by the Federal Information Security Management Act. Finally, the OIG 

will focus remaining resources on the agency’s mission critical programs and 

outreach activities with the objective of enhancing performance and improving 

outcomes.
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F. OFFICE OF ADMINISTRATION

The Office of Administration (OA) provides administrative support to 

the program operations of the Commission. OA interprets governmental policies 

and programs, and administers these in a manner consistent with Federal guidelines, including those involving procurement, information technology (IT), financial management, and human resources. OA initiates recommendations, collaborating with other elements of the Commission as warranted, for long-range 

plans, new or revised policies and standards, and rules and regulations, with respect to its program activities. The Director of OA is responsible for the direct 

administration and coordination of the:

■ Office of Financial Management 

■ Office of Human Resources

■ Office of Information Technology

■ Office of Management Services

The Director of OA provides administrative guidance to the:

■ Office of Operations 

■ Office of the Secretary

■ Office of the General Counsel

■ Office of Administrative Law Judges

and administrative assistance to the:

■ Offices of the Commissioners

■ Office of the Inspector General

■ Office of Equal Employment Opportunity
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The OA Director is the FMC’s Chief Financial Officer (CFO), Chief Acquisition Officer (CAO), Audit Follow-up and Management (Internal) Controls 

Official, Senior Agency Official for Privacy, and Forms Control Officer. The 

Director also represents the FMC as Principal Management Official to the Small 

Agency Council. As the CFO, the Director provides program oversight for the 

agency’s budget and financial management responsibilities, and ensures agency 

compliance with the Financial Integrity Act, the Antideficiency Act, and the 

Debt Collection Improvement Act of 1996. 

The Deputy Director of Administration is the FMC’s Chief Information 

Officer (CIO). The CIO oversees the Office of Information Technology operations and activities administered under the Clinger-Cohen Act of 1996, as well as 

other applicable laws which prescribe responsibility for operating the program. 

As the FMC’s Competition Advocate, the Deputy Director challenges barriers to 

competition, reviews procurement practices, and reports to the CAO as required. 

The Deputy Director also serves as Records Management Officer. 

The Office of the Director had significant program achievements in fiscal 

year 2009. The Office guided the agency’s continuing efforts to enhance its IT 

program, and received an ―unqualified‖ opinion in its fiscal year 2009 financial 

statement audit. The Office prepared the Federal Activities Inventory Reform 

Act report, and the Performance Accountability Report (PAR) (which included 

the Management’s Discussion & Analysis and the Federal Managers Financial 

Integrity Act report). The Office continued to direct the update of internal Commission issuances and standard operating procedures for a variety of programs 

and activities, guided Commission efforts to comply with the Government Paperwork Elimination Act and the Federal Information Security Management Act 

of 2002 (FISMA), and responded to Congressional inquiries. Additionally, the 

Office guided the development of the FY 2010 baseline documents to OMB and 

the FY 2010 President’s Budget submission, and directed the audit of the Commission’s FY 2009 financial statements. The Office also provided primary support for the OMB clearance and records management programs, and guided the 

further development of the Disaster Recovery Plan for the agency’s Continuity 

of Operations (COOP) Plan. 
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OA’s key objectives for fiscal year 2010 are to continue to refine and enhance agency administrative programs and operations by: reviewing, developing 

and/or updating internal Commission Orders and Standard Operating Procedures; assessing agency records disposition requirements in accordance with the 

National Archives and Records Administration guidelines; monitoring the accomplishment of the agency performance goals, including the full implementation of Pay.gov for acceptance of electronic payments from the industry; initiating further information technology improvements, including the implementation 

of document/workflow and records management technology, upgrading information system technology (servers, desktop operating systems, laptops, and software), and the implementation of Voice over Internet Protocol (VoIP) and video 

conferencing; and working with senior managers to ensure effective strategic 

succession planning. OA will take the lead in ensuring an effective agency-wide 

computer security program, that the agency’s financial management system receives an unqualified opinion in annual financial audits, and that the agency continues to comply fully with government-wide initiatives. 

1. Office of Financial Management

(a) General Office Responsibilities

The Office of Financial Management (OFM) administers the Commission’s financial management program and is responsible for offering guidance 

on optimal utilization of the Commission’s fiscal resources. OFM 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, OFM manages the Commission’s Travel Charge Card Program 

and administers all budget execution functions.
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(b) Achievements

During fiscal year 2009, OFM:

■ Collected and deposited in the General Fund $1,124,366 from 

fines and penalty collections, publications, reproductions, and 

user fees.

■ Coordinated and prepared budget justifications and estimates 

for the fiscal year 2010 Congressional budget and developed 

fiscal year 2011 budget documents for OMB. 

■ Prepared a variety of external financial reports.

■ Worked with the Commission’s independent auditors regarding the audits of fiscal years’ 2008 and 2009 financial statements. The Commission received unqualified opinions for 

both fiscal years.

■ Prepared financial materials as requested by the Congressional Subcommittees. 

■ Prepared the Commission’s 2008 PAR in concert with the Director’s Office, OA.
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(c) Future Plans

Goals in fiscal year 2010 include: assisting with implementation of 

Pay.gov to accept electronic payments from the industry and non-governmental 

customers; continuing to pursue initiatives leading to increased economy and 

efficiency in budget and financial operations; improving Cash Management Program and updating relevant standard operating procedures; and developing detailed training documents for the Commission’s Travel Charge Card Program to 

improve cardholders’ knowledge of appropriate use and responsibilities.

2. 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 security.

(b) Achievements

During fiscal year 2009, OHR: 

■ Coordinated with senior management to review and evaluate 

leadership development programs and activities to address 

succession planning.

■ Conducted a comprehensive training program in accordance 

with the agency’s budget and strategic and performance 

plans.
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■ Conducted a comprehensive personnel and information security program, including initiating and adjudicating security 

investigations for new and reinvestigated employees, and collaborating with the CBP to gain access to the ACE/ITDS. 

■ Coordinated with OPM regarding results from the Federal 

Human Capital Survey, worked with senior management to 

identify areas needing improvement, and worked with the 

Partnership for Public Service in connection with Best Place 

to Work Awards.

■ Implemented provisions of the Federal Workforce Flexibility 

Act and finalized the agency’s Human Capital, Workforce, 

Accountability, and Succession Management Plans in accordance with OPM’s Human Capital Assessment and Accountability Framework.

■ Continued to work with the Small Agency Human Resources 

Consortium, OPM and Northrop Grumman Integic officials 

to complete program activities to implement electronic Official Personnel Folder (eOPF). 

■ Promoted the Preventive Health and Awareness Program and 

OPM’s Healthier Feds initiatives, and publicized and hosted 

wellness seminars sponsored by the Employee Assistance and 

Federal Occupational Health Programs.

■ In concert with OPM’s hiring reform initiative, developed 

and revised vacancy announcement template to enhance our 

recruitment efforts.

■ Continued implementation of the Enterprise Human Resources Integration project, and administered other E-Gov 

initiatives such as Recruitment One-Stop, E-payroll, Eclearances, and E-learning. 
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■ Coordinated with other administrative units and the General 

Services Administration (GSA) to implement pertinent provisions of HSPD-12 and meet OMB requirements related to issuance of Federal employee credentials.

■ Worked with contractors to facilitate agency-wide implementation of the automated training data management reporting 

system required by OPM.

(c) Future Plans

In fiscal year 2010, 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, 

including investigating automated solutions to address program requirements; 

partner with agency officials in concert with the President’s goal to build a transparent high-performance government specifically with respect to Federal hiring 

reform and improving employee satisfaction and wellness; continue with e-OPF 

implementation and conversion of HR records to electronic format to address 

program requirements and meet agency business needs; explore automated solutions or pilot programs for evaluation of training; monitor the processes and database modernization activities of the National Finance Center in conjunction 

with the government-wide e-payroll initiative and ensure timely and accurate 

payroll and personnel services; and assess progress in achieving human capital 

goals as outlined in the agency’s Human Capital, Workforce, Accountability, 

and Succession Management Plans.
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3. Office of Information Technology

(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 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. OIT receives programmatic guidance from the agency’s CIO.

The OIT Director serves as the Commission’s 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 2009, OIT:

■ Completely renovated an outdated FMC Data Center and 

added redundancy to the Data Center cooling system.

■ Upgraded the FMC’s COOP environment in Germantown, 

MD. 

■ Selected a new contractor to implement the VoIP Project.

■ Upgraded the FMC Network Infrastructure to accommodate 

the upcoming VoIP system.

■ Successfully accredited two of the agency’s IT systems; 

FISMA documentation and the FISMA Documentation Process were established. 

■ Continued the development and enhancement of FMC systems to automate processes consistent with the E-Government 

Act.
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■ Continued to update the policies and procedures associated 

with the technical assistance provided to FMC staff and 

changes in the IT infrastructure.

(c) Future Plans

Major OIT initiatives for fiscal year 2010 include plans to: maintain 

compliance with FISMA requirements; complete implementation of VoIP; create 

an FMC Enterprise Architecture Plan; upgrade the FMC’s e-mail system; improve the VPN security infrastructure and ensure it is FIPS compliant; upgrade 

all agency desktops; and support the Pay.gov and HSPD-12 initiatives.

4. Office of Management Services

(a) General Office Responsibilities

The Office of Management Services (OMS) directs and administers a 

variety of management services 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.

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.
Federal Maritime Commission 

Fiscal Year 2009

86

 (b) Achievements

During fiscal year 2009, OMS:

■ The OMS Director continued to serve as the Agency’s Technical Representative for oversight of the Headquarters (HQ) 

building physical security contract, and served as Chairman 

of the tenants’ Building Security Committee and the Government’s Designated Official for the HQ site for emergency preparedness.

■ Arranged Contracting Officer’s Representative (COR) and/or 

Technical Representative (COTR) mandatory training for 

FMC personnel in accordance with the Office of Federal Procurement Policy’s government-wide requirement that appropriate agency officials in all activities be certified in these 

skills.

■ Coordinated with OA/OIT and arranged through GSA to 

have the necessary alterations performed to renovate and upgrade OIT’s Data Center, installed media upgrades in FMC’s 

Hearing Room and installed media devices in the agency’s 

executive work areas and select conference rooms.

■ Conducted site surveys with the agency’s Seattle/Tacoma 

Area Representative (AR) and GSA Realty Specialist, and arranged for relocating the AR to new office space.

■ Coordinated with the Department of Homeland Security’s 

Federal Protective Services (FPS) and participated in their 

“Operation Shield” event, conducted at the HQ building and 

in the DC metro area, to ensure proper procedures were being followed by security staff with respect to allowing building 

access. Collaborated with the FPS COTR and Operation 

Shield Team on lessons learned from the event. 
Federal Maritime Commission 

Fiscal Year 2009

87

■ Coordinated with OHR and arranged for the development of 

new, secure agency credentials, through the Government 

Printing Office, for issuance to agency executives and appropriate personnel. 

■ Continued to coordinate with OFM and the Bureau of Public 

Debt (BPD) to review the agency’s invoice processing program, and discuss ways to modify and improve the process.

(c) Future Plans

In fiscal year 2010, the Office’s objectives include continuing to: work 

with GSA, FPS, and other tenant agencies at HQ facility and field locations to 

upgrade and/or improve the building’s security measures and emergency preparedness; collaborate with the other OA Directors to improve communication and 

agency-wide administrative support through regular dialogue and/or information

-sharing sessions and by promoting a ―customer services and team building‖ environment throughout the OA; communicated with BPD on ways to improve and 

streamline the FMC’s acquisition and procurement processes; and provide advice and assistance to FMC activities regarding innovative office support and 

administrative services programs. 

Federal Maritime Commission 

Fiscal Year 2009

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G. OFFICE OF OPERATIONS

1. Oversight Responsibilities

The Director of Operations, as a senior staff official, is responsible to the 

Chairman for the management and coordination of the:

■ Bureau of Certification and Licensing 

■ Bureau of Enforcement 

■ Bureau of Trade Analysis 

■ Area Representatives (AR)

The Office of Operations (OPs) oversees the development and operation 

of various programs and recommends new programs and necessary changes in 

staff objectives.

In FY 2009, the Office led the operational Bureaus through oversight and 

guidance towards the accomplishment of many programmatic achievements. The 

Office continued work with staff to review and report to the Commission on 

emerging industry changes in all sectors. This fiscal year saw a continuing high 

volume in the number of OTI licenses sought and granted as well as an increase 

in the number of MTO discussion agreements filed. In FY 2009, the Commission considered agreements including the Los Angeles/Long Beach/Terminal 

Operator Administration and Implementation Agreement, and the Los Angeles 

and Long Beach Port Infrastructure and Environmental Programs Cooperative 

Working Agreement. OPs coordinated and assisted in the Bureaus’ recommendations and consideration of these high-profile agreements. The activities of the 

various Offices are described following this section.
Federal Maritime Commission 

Fiscal Year 2009

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During FY 2009, OPs continued to lead the Bureaus of Enforcement 

(BOE) and Certification and Licensing (BCL) in the review and coordination of 

compliance and enforcement policy. OPs worked with other Commission 

offices toward the integration and modernization of agency databases and the 

automation of key agency forms to facilitate ease of access and efficiency of 

agency processes.

2. Administrative Responsibilities

The Director of OPs has been designated as the agency’s Performance 

Improvement Officer (PIO). Subject to the direction of the Chairman, the PIO 

supervises the Commission’s performance management activities, including 

development of the agency’s goals, plans and performance reports.

In the PIO capacity, during FY 2009OPs finalized the agency’s strategic 

plan for 2010-2015, which revises the agency’s mission statement and strategic 

goals. The plan reflects a more streamlined and mission-focused description of 

the agency, its functions, and direction to achieve these goals. It highlights the 

Commission’s primary program activities and sets performance goals designed 

to measure the impact of those activities on the shipping public. The Office of 

Management and Budget reviewed the plan, and after opportunity for public 

comment in FY 2008, the final plan was adopted by the Commission on 

December 3, 2008 and submitted to Congress.

The Office of Operations also has responsibility for coordination of 

budget requests and spending by three bureaus, from the point of submitting 

budget requests to monitoring spending on travel and training. The Office is 

responsible for travel planning and final approval for the bureau staff and Area 

Representatives. As well, in fiscal year 2009, the Office drafted a new and more 

contemporary Annual Report for Fiscal Year 2009 to reflect the 

accomplishments of the agency during the fiscal year.
Federal Maritime Commission 

Fiscal Year 2009

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3. Area Representatives

The Commission’s ARs act as liaisons with the shipping industry at a 

local level and as a resource to all Bureaus and Offices of the Commission. The 

Commission maintains a presence in Los Angeles, South Florida, New Orleans, 

New York, Houston and Seattle through ARs based in each of those cities. 

These representatives also serve other major port cities and transportation centers within their respective areas. In addition to monitoring and investigative 

functions, ARs represent the Commission within their jurisdictions, provide liaison between the Commission and the maritime industry and the shipping public, 

collect and analyze information of regulatory significance, and assess industry 

conditions. Liaison activities involve cooperation and coordination with other 

governmental agencies and departments, providing regulatory information and 

relaying Commission policy to the shipping industry and the public, and handling informal complaints within each representative's area of responsibility. The 

ARs also work on Commission outreach through seminars, participation at various conferences and trade shows, presentations, and local community contacts.

In FY 2009, hundreds of informal complaints were handled by the ARs. 

These complaints often involved unlawful activity that could not be resolved and 

compliance achieved informally, and in other cases as required, investigations 

was opened by OPs. If a potential violation remained unresolved, a proceeding 

was referred to the Bureau of Enforcement for further action as described later in 

this report.

The ARs were instrumental in broadcasting public service announcements that were published by OPs for each major port area in FY 2009, warning 

against the use of unlicensed OTIs. The Area Representatives contributed to this 

effort through selection of appropriate local publications. These warnings facilitated numerous inquiries and reports to the ARs regarding licensed and unlicensed OTI activity and an apparent decrease in complaints about the activities 

of unlicensed entities in communities in which they were published.
Federal Maritime Commission 

Fiscal Year 2009

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In FY 2009, the ARs, with the assistance of BCL, made presentations on 

OTI licensing requirements and compliance for recently licensed companies, 

current applicants and persons interested in becoming licensed, to audiences in 

Florida, Oregon, and Texas. Area Representatives also briefed or addressed key 

officials of the New York City Police Department, New Jersey State Police, 

Houston Police Department, Association of Ship Brokers and Agents, Steering 

Committee of Sea Cargo Americas, University of Miami School of Law, International Cargo Committee of the Greater Miami Chamber of Commerce, Columbia 

River Customs House Brokers and Freight Forwarders, Export-Import Bank Office of Inspector General, National Defense Transportation Association, and U.S. 

Customs and Border Patrol.

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, through Customs and Border Patrol or Immigration and Customs 

Enforcement, and the Department of Commerce. This participation facilitates 

sharing of information on illegal activities.
Federal Maritime Commission 

Fiscal Year 2009

93

 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 

statements. 

■ 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. 
Federal Maritime Commission 

Fiscal Year 2009

94

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 U.S. 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 U.S. 

(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, 

through its Qualifying Individual (QI), has a minimum of three years of experience in ocean transportation intermediary activities in the U.S. and the necessary 

character to render OTI services as well as establish its financial responsibility 

by means of a bond, insurance, or other instrument. 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 U.S. 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 must list in its tariff an agent for 

service of process in the United States, and it must use a licensed OTI for any 
Federal Maritime Commission 

Fiscal Year 2009

95

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 transportationrelated activities under the Shipping Act.

During fiscal year 2009, the Commission received 482 new OTI applications and 277 amended applications, issued 401 OTI licenses, revoked 264 licenses, and reissued 2 licenses. At the end of the fiscal year, 1,123 ocean freight 

forwarders, 1,709 U.S. NVOCCs, 1,449 joint NVOCC/ocean freight forwarders, 

and 51 foreign NVOCCs held active OTI licenses. An additional 1,068 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 96 licensed 

and/or bonded OTIs, representing approximately a 2% increase from 5,304 OTIs 

in fiscal year 2008 to 5,400 in fiscal year 2009. U.S. NVOCCs may file riders to 

their existing NVOCC bonds to meet financial responsibility requirements imposed by the Chinese government. The Commission received 56 riders providing optional proof of financial responsibility for NVOCCs serving the U.S.-

China trade. Figure 2 shows the number of freight forwarders and NVOCCs that 

held active OTI licenses over the past five fiscal years from 2004 through 2009.

Ocean Freight Forwarders, NVOCCs 

That Held Active OTI Licenses

2003-2008

Ocean Freight Forwarders, NVOCCs 

That Held Active OTI Licenses

2004-2009

0 500 1000 1500 2000

2009

2008

2007

2006

2005

2004

Ocean Freight Forwarders

U.S. NVOCC

Joint NVOCC/Ocean Freight 

Forwarders

Foreign NVOCC

Figure 2: Ocean Freight Forwarders, NVOCCs 

That Held Active OTI Licenses

2004-2009

0 500 1000 1500 2000

2009

2008

2007

2006

2005

2004

Ocean Freight Forwarders

U.S. NVOCC

Joint NVOCC/Ocean Freight 

Forwarders

Foreign NVOCC

Figure 2: Ocean Freight Forwarders, NVOCCs 

That Held Active OTI Licenses

2004-2009

0 500 1,000 1,500 2,000

2009

2008

2007

2006

2005

2004

Ocean Freight Forwarders

U.S. NVOCC

Joint NVOCC/Ocean Freight 

Forwarders

Foreign NVOCC

Figure 2: Ocean Freight Forwarders, NVOCCs 

That Held Active OTI Licenses

2004-2009

0 500 1,000 1,500 2,000

2009

2008

2007

2006

2005

2004

Ocean Freight Forwarders

U.S. NVOCCs

Joint NVOCCs/Ocean Freight 

Forwarders

Foreign NVOCCs
Federal Maritime Commission 

Fiscal Year 2009

96

In fiscal year 2009, the Bureau reviewed updates to the electronic filing 

of an automated Form FMC-18, Application for an Ocean Transportation Intermediary license, permitting filers to complete an OTI application on-line, 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. 

At the present time, approximately 90 percent of all incoming OTI applications 

received are from the electronic system. Figure 3 shows the number of new applications processed by FMC over each of the last five fiscal years, 2004 through 

2009.

New Ocean Transportation Intermediaries 

Applications Received 

2003-2008

New Ocean Transportation Intermediaries 

Applications Received 

2004-2009

0

100

200

300

400

500

600

2004 2005 2006 2007 2008 2009

New OTI Applications

Figure 3: New Ocean Transportation Intermediaries 

Applications Received 

2004-2009

0

100

200

300

400

500

600

2004 2005 2006 2007 2008 2009

New OTI Applications
Federal Maritime Commission 

Fiscal Year 2009

97

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 202 vessels and 43 operators, 

which have aggregate evidence of financial responsibility coverage in excess of 

$319 million for nonperformance and over $637 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 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. 

The certificates issued pursuant to this program are necessary for U.S. 

Customs and Border Protection’s clearance of thousands of passenger vessel 

sailings annually. During fiscal year 2009, the Commission approved and issued 

14 casualty certificates and 18 performance certificates. 
Federal Maritime Commission 

Fiscal Year 2009

98

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 with the cruise line and the financial responsibility provider to facilitate the refund process. The public is kept informed through 

press releases posted on the Commission’s website, and advice is given to passengers who contact the FMC staff. During fiscal year 2009, three cruise operators under the Commission’s PVO program ceased operation and none filed for 

bankruptcy. Staff continued its efforts to assist passenger vessel operators and 

financial responsibility providers to resolve passenger claims for several cancelled cruises.

The Bureau continues to monitor PVO activities and operations by performing oversight of current industry events and reviews of cruise line’s financial records. PVO analysts perform oversight of cruise line operator’s operations 

and activities to ensure compliance with applicable statute and Commission 

regulations. One component of the Bureau’s PVO monitoring program is to perform on-site reviews to evaluate PVOs’ financial responsibility with respect to 

oversight of cruise lines participating in the Commission’s PVO program. The 

purpose of the on-site review is to confirm the passenger vessel operator’s compliance with the Commission’s reporting requirements relating to unearned passenger revenue and the appropriate amount of coverage required to ensure adequate financial responsibility. The Commission also wants to determine if a PVO 

is in compliance with the Commission’s reporting requirements relating to unearned passenger revenue and the appropriate amount of coverage required to 

ensure financial responsibility. During fiscal year 2009, BCL staff completed 

updates to the April 15, 2004 memorandum, Docket No. 02-15, Passenger Vessel Financial Responsibility. Staff completed two on-site reviews. One on-site 

review was of a PVO who established its financial responsibility with a guaranty 

and the second was one that established its financial responsibility with a surety 

bond. 
Federal Maritime Commission 

Fiscal Year 2009

99

4. Automated Database Systems

During fiscal year 2009, BCL continued to modernize and expand the 

Regulated Person Index (RPI), a Commission 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 

OTIs which are compliant with OTI requirements so that carriers and others can 

ascertain whether an OTI is properly licensed and bonded, and, if required, has 

posted the location of its automated tariff. 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 2010, the Bureau will:

Continue efforts to maintain additional developments to the current 

electronic Form FMC-18 System. In conjunction with the Agency’s 

Enterprise Content Management Project, the Bureau will focus its 

automation efforts to explore an automated business process for processing the OTI Applications that are submitted through the electronic 

FMC-18 System.

Continue to develop the OTI and PVO outreach programs and promote awareness of requirements envisioned to increase compliance by 

VOCCs, OTIs, and PVOs with the Shipping Act.

Review rules and regulations regarding OTI licensing requirements to 

ensure continued protection of the shipping public in light of changed 

industry circumstances. 
Federal Maritime Commission 

Fiscal Year 2009

100

Continue to re-examine issues that were raised in Docket No. 02-15 

and continue to present new options, if available, to the Commission 

for consideration to ensure that PVOs’ financial responsibility requirements for nonperformance are providing appropriate protection for the 

public. BCL will continue research into the various means of ensuring 

adequate coverage and prepare additional mechanisms to seek input 

from the general public on the adequacy of current regulations.

Perform an on-site review of a cruise line’s unearned passenger revenue each year; and conduct quarterly reviews of the PVO monitoring 

files to ensure cruise line operators provide timely and accurate information with respect to the submission of reports and records. 
Federal Maritime Commission 

Fiscal Year 2009

101

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 serve as legal advisors to the Office of 

Operations and other Commission bureaus, and 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 Director of Operations 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 investigates 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 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 
Federal Maritime Commission 

Fiscal Year 2009

102

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 2009, the Bureau of Enforcement investigated and 

prosecuted possible illegal practices in many trade lanes, including the Transpacific, Oceana, 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 4 shows 

civil penalties collected by FMC over the last five fiscal years.

In addition, several matters arose with respect to activities pursuant to 

filed and unfiled agreements between and among ocean common carriers and 

marine terminal operators. A major investigative effort, completed late in fiscal 

year 2009, into the respective Clean Truck Programs of Los Angeles and Long 
Federal Maritime Commission 

Fiscal Year 2009

103

Beach, CA, concerned the impact on the Ports’ users and the compatibility of the 

respective programs with the Ports’ responsibilities under the 1984 Act. Enforcement efforts also continued into the operations of unlicensed and unbonded 

NVOCCs specializing in the carriage of used household goods, including licensed OTIs providing service to the unlicensed. 

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.

Civil Penalties Collected

$ in thousands

FY 2004 - 2009

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09

Figure 4: Civil Penalties Collected

$ in thousands

FY 2004 - 2009

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09

Figure 4: Civil Penalties Collected

FY 2004 - 2009

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09
Federal Maritime Commission 

Fiscal Year 2009

104

In fiscal year 2009, 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. At the beginning of fiscal year 2009, six audits were pending. During the 

fiscal year, 98 audits were commenced, 99 audits were completed, and 5 were 

pending in the Bureau on September 30, 2009.

At the beginning of fiscal year 2009, 25 enforcement cases were pending 

final resolution by the Bureau, the Bureau was party to 9 formal proceedings, 

and there were 93 matters pending which the Bureau was monitoring or for 

which it was providing legal advice. During the fiscal year, 14 new enforcement 

actions were commenced; 19 were compromised and settled, administratively 

closed, or referred for formal proceedings; and 20 enforcement cases were pending resolution at fiscal year’s end. Also, 4 formal proceedings were initiated; 5 

formal proceedings were completed, and 8 were pending at the end of the fiscal 

year. Additionally, 47 matters involving monitoring or legal advice were received during the fiscal year, 67 such matters were completed, and 73 were 

pending in the Bureau on September 30, 2009.

In fiscal year 2010, 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. 
Federal Maritime Commission 

Fiscal Year 2009

105

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 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 each major U.S. foreign trade, 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. 
Federal Maritime Commission 

Fiscal Year 2009

106

■ Reviewing tariff publications in automated systems of carriers and conferences and ensuring that tariffs under OSRA 

are accessible to the public and accurate.

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 or 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 VOCCs 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. Effective agreements are exempt from the antitrust laws.

0

50

100

150

200

250

300

350

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09

45-Day Review

Expedited Review

Exempt-Effective

Rejection Filing

Formal Extension

Withdrawals

Not Subject

Agreement Filings and Status

Agreement Processing Categories

FY 2004 - 2009

0

50

100

150

200

250

300

350

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09

45-Day Review

Expedited Review

Exempt-Effective

Rejection Filing

Formal Extension

Withdrawals

Not Subject

Figure 5: Agreement Filings and Status

Agreement Processing Categories

FY 2004 - 2009

0

50

100

150

200

250

300

350

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09

45-Day Review

Expedited Review

Exempt-Effective

Formal Extension

Other

Figure 5: Agreement Filings and Status

Agreement Processing Categories

FY 2004 - 2009

Note: Other agreement processing includes rejection in filings, withdrawals, and not subject filings.

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Figure 5: Agreement Filings and Status

Agreement Processing Categories

FY 2004 - 2009

Note: Other agreement processing includes rejection of filings, withdrawals, and filings 

not subject to Shipping Act.
Federal Maritime Commission 

Fiscal Year 2009

107

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Agreement Filings and Status

FY 2004 - 2009

In fiscal year 2009, the Bureau received 158 agreement filings, a decrease of 25, or fourteen percent, from the previous year. The Bureau analyzed 

and processed 156 agreement filings during the year. Statistics on agreement filings for fiscal year 2009 are contained in Appendix C. Figure 5 shown previously and the following Figure 6 shows agreement filings and status at FMC 

from fiscal years 2004 through 2009.

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Figure 6: Agreement Filings and Status

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Figure 6: Agreement Filings and Status

FY 2004 - 2009
Federal Maritime Commission 

Fiscal Year 2009

108

(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 

follow of the two categories of agreements.

(1) Pricing Agreements

There are two types of pricing agreements: conference agreements and 

rate discussion agreements. Conference agreements provide for the collective 

discussion, agreement, and establishment of ocean freight rates and practices by 

groups of ocean common carriers. Conferences publish a common rate tariff in 

which all the member lines participate. Rate discussion agreements (RDAs) also 

focus on rate matters, but unlike conferences, any consensus reached under 

RDAs is non-binding on the parties. RDAs do not have common rate tariffs as 

each party publishes its own tariff. At the end of the year, conference agreements 

accounted for 2 percent of all carrier agreements on file, RDAs 12 percent.

While in years past conference agreements were the dominant pricing 

forum in many U.S. trades, their commercial significance has effectively 

disappeared in recent years. Since FY 2000 the number of conferences has 

declined by 78 percent from 23 to 5 agreements. No new carrier conference 

agreement has been filed with the Commission since FY 2000. Two inactive 

conferences in the Australia and New Zealand trades were officially terminated 

last year. Of the remaining five conferences, three cover only government 

cargoes, one focuses solely on joint service contracting between its two parties, 

and one deals exclusively with U.S. inland charges. Conference filing activities 

last year consisted of only three membership changes, representing about 2 

percent of all filings received. Given their historical trend and taking into 

account what is still in effect, the Bureau believes that the relevance of carrier 

conferences has almost evaporated.
Federal Maritime Commission 

Fiscal Year 2009

109

With the conferences’ demise, RDAs have become the primary pricing 

discussion forum in the major U.S. trade lanes. As with conferences, the trend 

since FY 2000 for RDAs also reflects a decline from 36 to 26 agreements, a 28 

percent reduction. During fiscal year 2009, pricing agreements represented 18 

percent of all agreement filings, for the most part adding or removing members. 

There was one new RDA filed last year, a joint operating agreement between 

two car carriers. Two RDAs were cancelled, notably the Middle East Indian 

Subcontinent Rate Discussion Agreement and an arrangement between two refrigerated cargo carriers.

(2) Operational Agreements

Operational agreements include vessel-sharing agreements, joint service 

agreements, cooperative working agreements, and non-rate discussion agreements. At the end of the fiscal year, operational agreements accounted for 86 

percent of all effective carrier agreements. 

Vessel-sharing agreements (VSAs) typically authorize some level of service cooperation with the goal of reducing individual operating costs. VSAs 

range from alliance agreements, which involve considerable operational cooperation among the parties, to slot charter agreements, which require only minimal commitments. VSAs account for the vast majority of effective carrier agreements, 71 percent at the end of the fiscal year. They also accounted for 37 percent of carrier agreement filings received last year. Twenty-six new VSAs were 

filed last year, representing 90 percent of all new carrier agreements filed. 

Twenty-six VSAs either were terminated or expired last year. Since FY 2000, 

the number of VSAs has increased by 7 percent from 148 to 159, although the 

total number has remained the same over the last three years.
Federal Maritime Commission 

Fiscal Year 2009

110

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 seven JSAs on file. This 

was three percent of the total number of effective carrier agreements. No new 

JSAs and only two amendments to existing agreements were received during this 

fiscal year. Since FY 2000, the number of effective JSAs has fallen by 50 percent, from 14 to 7. This reflects carriers’ growing preference[s] for more flexible 

arrangements such as VSAs. 

Cooperative working agreements (CWAs) are non-pricing agreements 

that tend to deal with unique operational considerations relating to acquisitions, 

joint service contracting, sharing of administrative services, or internet portal 

management. Other agreements filed with the Commission in very small numbers include agency, sailing, transshipment, and equipment interchange 

(including chassis pooling) agreements. At the end of the year, there were 18 

CWAs and other agreements on file, representing 8 percent of all carrier agreements. One new CWA regarding the joint procurement of terminal services, and 

nine amendments to existing CWAs were filed last year. This number represented 6 percent of the filings received. Since FY 2000, the number of CWAs 

and other agreements has decreased by 1, from 19 to 18.

Non-rate discussion agreements (NRDAs) provide ocean common carriers a vehicle for discussing matters of mutual interest other than rates. Typically, 

these agreements focus on macro-economic, regulatory, safety, and security issues. At the end of the year, there were nine such agreements on file, four percent of the total. The Bureau received one new NRDA during the year, an agreement among heavy-lift cargo operators, and ten amendments to existing agreements. These accounted for 7 percent of filings received last year. Since FY 

2000, the number of active NRDAs has declined slightly from 11 to 9.

 
Federal Maritime Commission 

Fiscal Year 2009

111

(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 2009, the Bureau received 25 MTO agreement filings, 

including two terminations and two withdrawals. This represents a 50 percent 

decrease from last year. MTO agreements accounted for 16 percent of all 

agreement filings during the fiscal year. At the end of the fiscal year, there were 

164 marine terminal agreements on file, down from 182 the previous year, a 

10 percent drop. This decline resulted from the identification of a number of 

terminal facilities (leases) and services agreements that had expired without 

notice to the Bureau. Terminal leases account for 48 percent of all MTO 

agreements on file, followed by discussion and service agreements at 12 percent 

each, and joint ventures at 11 percent. Like carrier conferences, MTO 

conferences are not a dominant force in the competitive landscape of terminal 

operations; they account for 6 percent of the effective agreements. Two 

significant trends are the increases in the number of terminal discussion and joint 

venture agreements. Since FY 2004, the number of discussion agreements has 

risen from 7 to 19, a 171 percent jump and joint ventures from 13 to 18, a 39 

percent increase. All other classes of MTO agreements saw their numbers 

decline over the last five years with leases and services agreements falling over 

60 percent. The decreases in leases and services agreements is explained by the 

filing exemption these agreements are afforded under the Commission’s 

regulations and unreported terminations.
Federal Maritime Commission 

Fiscal Year 2009

112

As identified last year, environmental issues remain a focal point for marine terminal operators. Port authorities and marine terminal operators continue 

to look closely at the environmental impact of their port operations, and are taking steps to try to minimize the environmental consequences resulting from these 

activities. These coordinated efforts can include the use of certain types of fuel 

in container handling equipment, incentives for the use of cleaner fuel in vessels 

while in port, and the banning of environmentally non-compliant drayage trucks 

serving a given port area.

In larger port areas, MTOs are finding it most effective to meet, discuss, 

and agree on measures to be taken to reduce negative environmental effects with 

other MTOs. As a result, we have seen an increasing number of these kinds of 

discussion agreements filed over the past two years, and we expect that trend to 

continue. In FY 2009 the Bureau received such discussion agreements covering 

terminal operations in Hampton Roads, Houston, Seattle, and Oakland. Figure 7 

below shows the types of agreement filings at the end of fiscal years 2004 

through 2009.

Figure 7: Agreements on File at End of Fiscal Year

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Figure 7: Agreements on File at End of Fiscal Year

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Figure 7: Agreements on File at End of Fiscal Year

(2004-2009)

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Federal Maritime Commission 

Fiscal Year 2009

113

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 agreements among marine terminal operators are monitored in a similar fashion. Such 

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. To that end, the Bureau administers monitoring 

programs and researches current trade conditions, contemporary issues adversely 

affecting the industry, emerging commercial trends, and carrier pricing and 

service. 

The Commission’s monitoring program examines carrier competition 

within individual U.S. trade lanes, including market share, concentration, 

barriers to market entry, and coordination between carriers or groups of carriers. 

The program also examines the availability of alternative services and alternative 

supply sources for imports, as well as cargo volume trends, congestion 

bottlenecks, commercial pricing practices, operational cost pressures, service 

offerings, vessel capacity utilization, capacity management programs, service 

contracting activity, and shipper complaints.

Major projects begun or completed by the Bureau in fiscal year 2009 

included: (1) preparing a competitive impact assessment (in conjunction with 

other Offices and Bureaus) of the Clean Trucks Program that was devised as part 

of the Clean Air Action Plan under the Los Angeles and Long Beach Port Infrastructure and Environmental Programs Cooperative Working Agreement; (2) 

preparing expert testimony in support of the Commission’s challenge in U.S. 

District Court of the Los Angeles and Long Beach Port Infrastructure and 

Environmental Programs Cooperative Working Agreement; (3) collecting and 

analyzing specific pricing, financial and operational data from carriers serving 
Federal Maritime Commission 

Fiscal Year 2009

114

the trade between the U.S. and Australia/New Zealand following the issuance of 

an order under section 15 of the Shipping Act to address concerns about competitive conditions in the trade that may affect prices and services to an unreasonable extent; (4) preparing formal requests for additional information for the 

Commission following the filing of an amendment by the Transpacific Stabilization Agreement that would have allowed the agreement parties to discuss the development of a plan to jointly rationalize capacity in the nation’s largest inbound 

liner trade, and the filing of an amendment by the Australia and New ZealandUnited States Discussion Agreement that would add CMA CGM to its membership, thereby raising the Agreement’s share of the trade to almost 90 percent; (5) 

defining the parameters of a study that will examine the impact of eliminating 

antitrust immunity in the U.S.-Europe trades as a result of the repeal by the 

European Union (EU) of the block exemption [Council Regulation (ECC) No. 

4056/86] for liner shipping conferences in the EU trades, with the study design 

allowing input from the shipping industry and others; (6) monitoring of controlled carriers to ensure that U.S. trades remain substantially free of unfair trading practices of foreign governments; (7) updating financial figures for the recommendation in FMC Docket No. 02-15, Passenger Vessel Financial Responsibility, in order to provide estimates of the weighted average cost of capital for 

two large cruise lines using the latest publicly available financial data for 2008; 

(8) meetings with industry representatives on agreement and trade matters, including with representatives of the Transpacific Stabilization Agreement to review semi-annually TSA activities and developments in connection with a settlement the Commission reached with the TSA and its members in September 

2003; and (9) expanding the use, on a voluntary basis, of a web-based system for 

filing meeting minutes, monitoring reports and voluntary service contract guidelines under a pilot program begun in fiscal year 2008.

The Bureau also provides economic expertise for Commission initiatives, 

including rulemaking proceedings. Bureau economists prepare testimony in fact

-finding investigations and cases of unfair shipping practices under section 19 of 
Federal Maritime Commission 

Fiscal Year 2009

115

the 1920 Act and 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 public.

4. Tariffs

The Shipping Act requires common carriers and conferences to publish 

their tariffs electronically, in private systems. These electronic tariffs contain 

rates, charges, rules, and practices of common carriers operating in the U.S. foreign commerce. 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 2009, the Bureau received and processed two special permission applications. 

Further, the Bureau is 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 2009, 4,709 tariff location addresses were posted on the Commission’s website. Of that number, 4,225 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. The following Figure 8 shows a comparison of FMC-1 filings in different categories in the last five fiscal years from 

2004 through 2009.
Federal Maritime Commission 

Fiscal Year 2009

116

5. Service Contracts

Service contracts are an alternative to transportation of cargo under tariff 

rates. Service contracts enable the parties to tailor transportation services to their 

commercial and operational needs and to keep these arrangements confidential.

During fiscal year 2009, the Commission received 45,328 new service 

contracts, compared to 44,438 in fiscal year 2008, and 412,570 contract amendments, compared to 294,880 in fiscal year 2008. During the fiscal year, the 

number of original contracts increased by 2 percent from the previous fiscal year 

whereas amendment filings increased by nearly 40 percent. The global recession 

played a large part in the increased number of amendment filings. As rates plummeted this necessitated frequent amendments by adjusting the rates downward. 

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FY 2004 - 2009

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FY 2004 - 2009

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Figure 8: Form FMC-1 Filings

FY 2004 - 2009
Federal Maritime Commission 

Fiscal Year 2009

117

As losses mounted, carriers sought rate recovery through various pricing adjustments in addition to rising bunker costs. This resulted in additional amendment 

filings for bunker adjustments and later on in the year for rate increases. Original service contract 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, 3,981 records involving corrected transmission copies were filed into SERVCON. The following Figure 9 show the number of electronic service contracts and NVOCC service arrangement documents 

received by the FMC over the last five fiscal years (2004 through 2009).

6. NVOCC Service Arrangements 

Commission rules allow NVOCCs to offer transportation services pursuant to individually negotiated, confidential service arrangements with customers 

(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.

Figure 8: Electronic Service Contract and NSA Filings

FY 2004 - 2009

Electronic Service Contract

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FY 2004 - 2009

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FY 2004 - 2009

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Federal Maritime Commission 

Fiscal Year 2009

118

At the end of fiscal year 2009, there were 796 NVOCCs registered with 

the Commission to file NSAs. During fiscal year 2009, approximately 1,289

NSAs and 2,389 amendments were filed by 62 NVOCCs. Since January 2005, 

when the practice was established, there have been 3,700 NSAs and 5,212

amendments filed by 128 NVOCCs.

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 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 of the Commission, 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 

data to identify controlled carriers and any unjust or unreasonable controlled carrier activity that might require Commission action. There are currently eight controlled carriers operating in the 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) – DemocraticSocialist Republic of Sri Lanka;

(3) COSCO Container Lines Company, Limited (RPI No. 015614) -

People's Republic of China;
Federal Maritime Commission 

Fiscal Year 2009

119

(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;

(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; and

(8) Shipping Corporation of India Ltd., The (RPI No. 001141) –

Republic of India.

8. Marine Terminal Activities

Pursuant to the Ocean Shipping Reform Act (OSRA) an 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. 

Pursuant to the Commission’s regulations governing MTO schedules, any 

terminal schedule that is made available to the public must be available during 

normal business hours and in electronic form. Each MTO must notify the Bureau 

of the electronic location of its terminal schedule by submitting Form FMC-1 

before commencing operations. A total of 261 MTOs have filed Form FMC-1. 

At the close of fiscal year 2009, 152 of these MTOs had published their terminal 

schedules. The internet addresses for these MTO terminal schedules are posted 

on the Commission’s website. 
Federal Maritime Commission 

Fiscal Year 2009

120

9. Automated Database Systems

The Bureau currently 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 2009, the Form FMC-1 System reflected the tariff location addresses of 326 VOCCs, 4,225 NVOCCs, 6 conferences, and 152 

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. During fiscal year 2010, the 

Bureau intends to implement an electronic registration procedure for carriers/

OTIs filing service contracts and 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, 

certain database information is 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.

10. Future Plans

During fiscal year 2010, in addition to its regular review of new ocean 

carrier and marine terminal operator agreements and on-going monitoring of existing agreements, the Bureau will conduct an in-depth study of the effects, if 

any, of the European Union’s decision to repeal its liner shipping competition
Federal Maritime Commission 

Fiscal Year 2009

121

law exemption. The study will include formal and informal opportunities for the 

agency’s various stakeholder communities to provide information, views, and 

suggestions useful to assessing any significant direct or indirect consequences of 

the EU repeal.

In addition, the Bureau will continue its on-going evaluation of competitive conditions in the US/Australia-New Zealand trade, and assess the current 

operations of the US/South Africa trade revenue pool. 

The Bureau will continue to assist other bureaus with analytical support, 

participate in the Commission’s strategic planning efforts, oversee the filing of 

service contracts and the publication of liner tariffs, and engage and conduct 

compliance studies on other research projects concerning liner shipping, maritime terminal operations, and inter-modal transportation in US trades.

APPENDICES

Federal Maritime Commission 

Fiscal Year 2009

125

APPENDIX A

 FEDERAL MARITIME COMMISSION 

ORGANIZATION CHART 

Fiscal Year 2009
Federal Maritime Commission 

Fiscal Year 2009

126

APPENDIX B

COMMISSION PROCEEDINGS 

 Fiscal Year 2009

Formal Proceedings

Initial Decisions Not Reviewed......................................................... 8

Dismissals......................................................................................... 3

Order Denying Petition..................................................................... 1

Order on License Revocation............................................................ 1

Informal Docket Order ..................................................................... 1

Settlement Approval.......................................................................... 2

Rulemakings - Final Rules................................................................ 2

 Total................................................................................ 18

Informal Dockets.............................................................................. 3
Federal Maritime Commission 

Fiscal Year 2009

127

APPENDIX C

AGREEMENT FILINGS AND STATUS 

Fiscal Year 2009

Agreements Filed in FY 2009 

(including modifications and terminations) 

Carrier ....................................................................... 133 

Terminal...................................................................... 25 

Total............................................................................. 158

Agreement Processing Categories in FY 2008 

Forty-Five Day Review..................................................... 58 

Expedited Review........................................................... 8 

Exempt-Effective Upon Filing............................................ 84 

Rejection of Filing.......................................................... 0 

Formal Extension of Review Period...................................... 4 

Withdrawals.................................................................. 1 

Not Subject................................................................... 0 

Total............................................................................ 156

Carrier Reports Submitted for Commission Review 

Minutes of Meetings....................................................... 1,050 

Ad Hoc Reports.............................................................. 191 

Monitoring Reports......................................................... 368 

Total.......................................................................... 1,609

Agreements on File as of September 30, 2008 

Conference.................................................................... 5 

Rate Discussion.............................................................. 26 

Non-Rate Discussion. ...................................................... 9 

Joint Service................................................................. 7 

Vessel-Sharing.............................................................. 159 

Cooperative Working & Other........................................... 18 

Terminal...................................................................... 164 

Total........................................................................... 388
Federal Maritime Commission 

Fiscal Year 2009

128

APPENDIX D

FORM FMC-1 

TARIFF LOCATION ADDRESSES - ELECTRONIC 

SERVICE CONTRACT AND NSA FILINGS AND 

SPECIAL PERMISSION APPLICATIONS 

Fiscal Year 2009

Form FMC-1 Filings

VOCCs.......................................................... 326

OTI/NVOCCs................................................. 4,225

MTOs........................................................... 152

Conferences..................................................... 6

Electronic Service Contract Documents

New Service Contracts........................................ 45,328

Service Contract Amendments................................. 412,570

NVOCC Service Arrangement (“NSA”) Documents

New NSAs...................................................... 1,289

NSA Amendments............................................. 2,389

Special Permission Applications

Granted........................................................... 2

Denied............................................................. 0

Pending........................................................... 0

Withdrawn........................... ............................ 0
Federal Maritime Commission 

Fiscal Year 2009

129

APPENDIX E

CIVIL PENALTIES COLLECTED 

Fiscal Year 2009

M Star Logistics Corporation........................................... $ 60,000.00

AME Logistics LLC ....................................................... 20,000.00

Abco International Freight USA Inc................................... 40,000.00

Cargo, Cargo Logistic, Inc................................................. 40,000.00

Pacific Transit Services Inc.............................................. 40,000.00

China United Transport, Inc................................................ 30,000.00

Grandwin Logistics, LLC................................................ 35,000.00

Hanjin Shipping Company, Ltd............................................ 440,000.00

U&S Shipping Inc........................................................... 103,000.00

Cosa Freight, Inc. ............................................................ 35,000.00

Total Civil Penalties Collected...........................................$843,000.00
Federal Maritime Commission 

Fiscal Year 2009

130

APPENDIX F

STATEMENT OF APPROPRIATIONS, 

OBLIGATIONS AND RECEIPTS FOR 

THE FISCAL YEAR ENDED 

SEPTEMBER 30, 2009

APPROPRIATIONS:

Public Law 111-8, 111th Congress: For necessary expenses of the Federal Maritime Commission as authorized by section 201(d) of the Merchant Marine Act of 

1936, as amended (46 App. U.S.C. 1111), including services as authorized by 5 

U.S.C. 3109; hire of passenger motor vehicles authorized by 31 U.S.C. 1343(b); 

and uniforms or allowances therefor, as authorized by 5 U.S.C. 5901-5902, 

$22,800,000: Provided, that not to exceed $2,000 shall be available for official 

reception and representation expenses.

$22,800,000

OBLIGATIONS AND UNOBLIGATED BALANCE:

Net obligations for salaries and expenses for the fiscal year ended September 30, 

2009. $22,733,716

STATEMENT OF RECEIPTS: Deposited with the General 

Fund of the Treasury for the Fiscal Year Ended September 30, 2009:

Publications and reproductions, 

Fees and Vessel Certification, 

and Freight Forwarder Applications $ 281,366

Fines and penalties $ 843,000 

Total general fund receipts $1,124,366