57th Annual Report 1

Federal Maritime

Commission

57th Annual

Report

for

Fiscal Year

2018
2 57th Annual Report
57th Annual Report 3

Table of Contents

Letter of Transmittal 1

Members of the Commission 3

FMC Mission, Strategic Goals, and Functions 5

Strategic Goal 1 5

Strategic Goal 2 6

Statutory Authority 6

Year in Review 7

Competition and Reliability 9

Agreement Filings and Review 11

Competitive Impact and Monitoring 14

Carrier Alliance Agreements 16

Tariffs, Service Contracts, NSAs, & MTO Schedules 17

International Cooperation 20

Protecting the Public 23

Investigation into Demurrage, Detention, and Per Diem Charges 23

Licensing 24

Passenger Vessel Program 26

Consumer Affairs and Education 27

Industry Outreach and Education/Awareness 28

Enforcement, Audits, and Penalties 29

Inter-Agency Cooperation 31

Developments in Major U.S. Foreign Trades 33

Worldwide 33

Asia 34

North Europe 35

Central America and the Caribbean 36

South America 36

Indian Subcontinent and Middle East 37

Mediterranean 38

Africa 38

Australia and Oceania 39
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Top Twenty U.S. Liner Cargo Trading Partners 40

Top Twenty U.S. Liner Cargo Trading Partners (CY2018) 41

Foreign Shipping Practices Act 42

Controlled Carriers 43

Formal Investigations, Private Complaints, and Litigation 44

Formal Investigations 44

Private Complaints 45

Litigation 49

Rulemakings 50

Leveraging Technology 52

APPENDICES 55

A – FMC Organization Chart 55

B – FMC Senior Officials – FY 2018 56

C – Statement of Appropriations, Obligations, and Receipts 57

D – Agreement Types 58

E – Civil Penalties Collected 60

F – Photo Credits 61
57th Annual Report 1

Letter of Transmittal

FEDERAL MARITIME COMMISSION

800 North Capitol Street, N.W.

Washington, DC 20573-0001

March 29, 2019

To the United States Senate and House of Representatives:

On behalf of my fellow Commissioners, and pursuant to section 103(e) of Reorganization 

Plan No. 7 of 1961, and section 208 of the Merchant Marine Act, 1936, as amended, at 46 U.S.C. 

306(a), I welcome the opportunity to share with you the 57th Annual Report of the Federal 

Maritime Commission, Fiscal Year 2018.

This report highlights the key accomplishments, initiatives, and relevant events that occurred 

between October 1, 2017 and September 30, 2018. Included in the following pages are reports 

about:

• Significant agreements filed at the Commission

• Status of formal investigations, private complaints, and litigation before the Commission

• Investigation of detention, demurrage, and per diem practices of ocean carriers and

marine terminal operators

• Trends in licensing of non-vessel operating common carriers and freight forwarders

• Developments in the key trade lanes serving the United States

Containerized ocean freight is an indispensable foundation of the Nation’s economy, providing American importers and exporters with a competitive advantage in the global marketplace. 

It is the mission of the Federal Maritime Commission to assure competition and integrity for 

America’s ocean supply chain and we are proud of the work we do toward that goal.

Sincerely,

Michael A. Khouri

Chairman
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Members of the Commission

Fiscal Year 2018

Michael A. Khouri

Chairman

Appointed 2009

Term Expires 2021

Rebecca F. Dye

Commissioner

Appointed 2002

Term Expires 2020

Daniel B. Maffei

Commissioner

Appointed 2016

Term Expired 2017

William P. Doyle

Commissioner

Appointed 2013

Term Expired 2018
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Ensuring Competition and Integrity 

for America’s Ocean Supply Chain 

for more than 100 years
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FMC Mission, Strategic 

Goals, and Functions

The Federal Maritime Commission (FMC or Commission) is an independent agency responsible for the regulation of oceanborne transportation in the foreign commerce of the United 

States for the benefit of U.S. exporters, importers, and the U.S. consumer.

The FMC's Mission is:

• Ensure a competitive and reliable international ocean transportation supply system that 

supports the U.S. economy and protects the public from unfair and deceptive practices.

The Commission achieves its Mission by ensuring that the fundamental dynamics of a 

free, open and competitive ocean transportation market 

drive economic outcomes. To that end, the Commission 

is committed to faithfully administer the Shipping Act, 

employing a minimum of government intervention and 

regulatory costs and by placing a greater reliance on the 

marketplace.

Strategic Goal 1

Maintain a competitive and reliable international ocean transportation 

system.

The FMC ensures competitive and reliable ocean transportation services for the shipping 

public by:

• Reviewing and monitoring agreements among ocean common carriers and marine 

terminal operators (MTOs) serving the U.S. foreign oceanborne trades to ensure that 

any joint or collective activities do not cause substantial increases in transportation 

costs or decreases in transportation services;

• Maintaining and reviewing confidentially filed service contracts and Non-Vessel-Operating Common Carrier (NVOCC) Service Arrangements to guard against detrimental 

effects to shipping;

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

to obtain relief from ocean shipping practices or disputes that impede the flow of 

commerce;

• Ensuring common carriers’ tariff rates and charges are published in private, automated 

tariff systems and electronically available;

• Monitoring rates, charges, and rules of government-owned or controlled carriers to 

ensure they are just and reasonable; and

Competition and Integrity 

for America’s Ocean Supply 

Chain
6 57th Annual Report

• Taking action to address unfavorable conditions caused by foreign government or 

business practices in U.S. foreign shipping trades.

Strategic Goal 2

Protect the public from unlawful, unfair and deceptive ocean transportation practices.

The FMC protects the public from financial harm, and contributes to the integrity and 

security of the U.S. supply chain and transportation system by:

• Investigating and ruling on complaints regarding rates, charges, classifications, and 

practices of common carriers, MTOs, and Ocean Transportation Intermediaries (OTIs), 

that violate the Shipping Act;

• Licensing OTIs with appropriate character and adequate financial responsibility;

• Helping resolve disputes involving shipments of cargo, personal or household goods, 

or disputes between cruise vessel operators and passengers;

• Identifying and holding regulated entities accountable for mislabeling cargo shipped 

to or from the United States; and

• Ensuring that cruise lines maintain financial responsibility to pay claims for personal 

injury or death, and to reimburse passengers when their cruise fails to sail.

Statutory Authority

The principal statutes administered by the Commission, now codified in Title 46 of the U.S. 

Code at sections 40101 through 44106, are:

• The Shipping Act of 1984, as amended by the Ocean Shipping Reform Act of 1998 

(Shipping Act)

• The Foreign Shipping Practices Act of 1988 (FSPA)

• Section 19 of the Merchant Marine Act, 1920 (1920 Act)

• Sections 2 and 3 of Pub. L. No. 89-777, 80 Stat. 1350
57th Annual Report 7

Year in Review

The container shipping industry returned 

in FY 2018 to a more settled and familiar state 

than it has experienced in recent years. As 

container volumes and carrier capacity grew, 

the Federal Maritime Commission adjusted 

its monitoring practices to continue to protect 

competition in the marketplace. Simultaneously, the Commission looked for ways to 

eliminate unnecessary or outdated regulatory 

burdens and to simplify regulatory compliance requirements to help trade move more 

efficiently.

Unlike the recent past, there were no bankruptcies of carriers and there were limited 

mergers and acquisition transactions in FY 

2018. The two most significant developments 

related to the make-up of the industry were 

COSCO Shipping completed its acquisition of 

Orient Overseas Container Line (OOCL) and 

the three formerly independent Japan-based 

container lines (Nippon Yusen Kaisha, Mitsui 

O.S.K. Lines, and K Line) merged into a single 

entity, the Ocean Network Express (ONE). 

For the first time in the past several years, the 

sector remained constant.

Both worldwide containerized trade volumes and container ship capacity grew last 

year. Container volumes grew by five percent 

both globally and in U.S. trade lanes. Asia as 

a region, and China as a nation, remain the 

leading trading partners of the United States. 

Not surprisingly, the majority of the Nation’s 

ocean cargo continues to flow through ports 

on the U.S. West Coast, and most of that 

volume transits the Ports of Los Angeles and 

Long Beach. Nevertheless, ports in the Southeast continue to see cargo volumes grow.

Vessel capacity to carry containerized cargo 

also grew last year, by six percent. There are 

now 5,293 vessels deployed globally providing 22.2 million twenty-foot equivalent units 

(TEUs) of carrying capacity. Critical to note, 

only two percent of the global fleet is idle.

Shippers continue to benefit from a marketplace that reflects sufficient capacity, managed 

efficiently, with service providers engaged 

in intense competition both inside and independent of joint operational agreements 

or alliances. Space aboard vessels is available and rates to move containerized ocean 

cargo remain at historically low rates. When 

adjusted for inflation, Fall 2018 container rates 

from China to the U.S. West Coast were 29 

percent lower than the same trade lane rates 

in 2008.

Much of the reason shippers benefit from 

low rates and reliable service is through the 

operational efficiencies ocean carriers achieve 

through alliance agreements filed at the Federal Maritime Commission. Oversight of those 

agreements, and the markets in which the alliance partners operate, remain a priority of 

the Commission. The Commission imposes 

alternative reporting requirements on the 

three major global carrier alliances (the 2M 

alliance, the OCEAN Alliance, and THE Alliance). This includes having standardized data 

requirements across all these alliances. Further, the Commission conducts statistical tests 

to ensure data integrity and identify trends 

in the data. In particular, the Commission 

focuses on any significant changes to rates 

by reviewing trade conditions and alliance 

meeting minutes for possible explanations.
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Last year saw the continuation of marine 

terminal operators and port authorities filing 

agreements at the Commission in response 

to changes in the industry, to increase their 

operational efficiencies, facilitate trade, and to 

better serve their customers. As trade volumes 

continue to grow and port operators need to 

find ways to make their facilities operate at 

higher levels of efficiency, it would not be 

surprising to see even more of these types of 

agreements filed at the Commission.

The Commission, as part of its monitoring 

of agreements and analysis of the marketplace, keeps close watch on what is happening 

day-to-day as containers move from origin 

to destination. Supply chain efficiency is a 

leading public policy issue of concern to the 

Commission and we are keenly interested 

in what operational circumstances might be 

influencing market performance. In recent 

years, our agency has repeatedly turned its 

attention to the ship-to-shore interchange, 

the point at which frictions in the network 

manifest themselves. In response to concerns 

raised by shippers, in January of 2018, the 

Commission held a two-day hearing exploring 

detention, demurrage, and per diem practices 

of ocean carriers and marine terminal operators. The hearing resulted in the initiation of 

an investigation led by Commissioner Rebecca 

F. Dye (Fact Finding 28). Commissioner Dye 

reported the findings of her investigation 

shortly after the end of the fiscal year.

Trade flows best when there are fewer barriers to impede its velocity. Such obstacles are 

not limited to physical impediments. Rules, 

regulations, and business practices can also 

make conducting business cumbersome 

and inefficient. Over the past year, the Commission has continued its efforts to identify 

outdated, burdensome, or unnecessary rules 

and regulations and either amend or eliminate 

them. Significantly, in August 2018 the Commission provided relief specifically requested 

by Ocean Transportation Intermediaries (OTI) 

by amending the rules governing Non-VesselOperating Common Carrier Rate Agreements 

and Non-Vessel-Operating Common Carrier 

Service Agreements, making regulatory compliance much easier to achieve and resulting 

in a more attractive way for parties to arrange 

to move ocean freight.

On a related note, the Commission initiated 

another important rule change by publishing 

a Notice of Proposed Rulemaking to restore 

what constitutes a “regular practice” to its traditional and proper definition. Respondents to 

the request for public comments were unanimously supportive of restoring the scope of 

46 USC 41102(c) to be consistent with statutory and legislative history, judicial precedent 

and Commission case law. The Final Rule will 

become effective in December 2018.

The ocean supply chain is the foundation 

of the American economy and provides companies with a competitive advantage. The 

Federal Maritime Commission is dedicated 

to protecting competition and the integrity 

of the marketplace.
57th Annual Report 9

Competition and Reliability

Maintaining a competitive and reliable 

international ocean transportation system 

and regularly scheduled liner trade by evaluating and monitoring the use of various 

types of agreement authority for anticompetitive effects is a primary function of the 

Commission. An efficient and competitive 

transportation system facilitates commerce, 

economic growth, and job creation. Competition among participants in U.S. liner trades 

fosters competitive rates and encourages a 

variety of service offerings for the benefit of 

U.S. exporters and importers, and ultimately 

consumers.

The Shipping Act allows ocean carrier and 

marine terminal competitors to meet and 

discuss (and in some cases cooperate on) 

certain business issues, but first they must 

file a written agreement with the Commission. The Commission reviews agreements 

using traditional antitrust law and economic 

models to evaluate the potential competitive 

Commissioner Dye, Chairman Khouri, and Commisioner Maffei at the bench
10 57th Annual Report

impact of a proposed agreement before it may 

go into effect. The initial review and analysis of a proposed agreement and subsequent 

monitoring of the members’ activities under 

the agreement, should it become effective, 

are designed to identify and guard against 

possible anticompetitive abuse of the filed 

authority, avoid unreasonable increases in 

transportation costs or decreases in transportation services, and address other activities 

prohibited by the Shipping Act.

The Shipping Act is a federal competition 

law applicable to the industry of international 

liner shipping. It contains provisions similar 

to those found in the Sherman Act of 1890, the 

1914 Clayton Act, and the Robinson-Patman 

Act of 1936 concerning various prohibitions 

of discriminatory or unfair business practices 

and standards regarding business combinations. The Shipping Act creates a regulatory 

regime separate from Department of Justice 

antitrust law under which collective carrier 

or marine terminal operators (MTO) activity 

is evaluated when an agreement is initially 

filed and closely monitored thereafter for any 

adverse impact on competition in the trade.

So long as the regulated entities comply 

with the statutory and regulatory proscriptions of the Act, then the other federal antitrust 

statutes generally do not apply. Conversely, 

if a regulated entity violates the Shipping 

Act, they would be subject to penalties set 

forth in the Act, and may under certain circumstances, be subject to investigation and 

prosecution under the full array of federal 

antitrust statutes.

Chairman Michael Khouri testifies before Congress on maritime issues
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Agreement Filings and Review

Under Sections 4 and 5 of the Shipping Act, 

46 U.S.C. §§ 40301–40303, all agreements by or 

among ocean common carriers to undertake 

any of the following are required to be filed 

with the Commission:

•  Fix rates or conditions of service,

•  Pool cargo revenue,

•  Allot ports or regulate sailings,

•  Limit or regulate the volume or character of cargo or passengers to be 

carried,

•  Control or prevent competition, or

•  Engage in exclusive or preferential 

arrangements.

Except for certain exempted categories, 

agreements among MTOs, and those among 

one or more MTOs and one or more ocean 

common carriers, also must be filed with the 

Commission.

The Commission reviews all agreements 

filed under the Shipping Act, as well as commercial conditions in the U.S. foreign trades, to 

determine whether cooperation contemplated 

between or among ports, ocean common carriers, and/or MTOs could reduce competition 

to the point of unreasonably impacting the 

market.

•  Generally, an agreement becomes 

effective 45 days after filing, unless 

the Commission has requested additional information to evaluate the 

competitive impact of the agreement. 

All agreements are reviewed pursuant to the standard set forth in section 

6(g) of the Shipping Act, 46 U.S.C. 

§41307(b)(1).

•  Based on its analysis, the Commission may seek to enjoin the operations 

of an agreement under 46 U.S.C. § 

41307(b), where it determines that 

the agreement is likely, by a reduction in competition, to produce an 

unreasonable reduction in service or 

unreasonable increase in transportation costs.

•  The Commission has the authority to 

reject a pending agreement filing if it 

determines the filing fails to meet the 

Shipping Act and Commission regulations requiring filed agreements to 

be clear and definite, or if the filing 

is outside the Commission’s jurisdiction. The Commission may reject an 

agreement if it would constitute or 

facilitate the violation of a prohibited 

act, as prescribed by the Shipping Act 

of 1984.

•  Effective agreements are subject to 

Shipping Act restrictions and Commission oversight, and are exempt 

from other US antitrust laws administered by the U.S. Department of 

Justice.

The Commission may enjoin 

operation of an agreement if it 

is likely to substantially reduce 

competition by creating an 

unreasonable reduction in transportation service or increase in 

transportation costs.
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•  When the Commission is unable to 

determine the likely competitive 

impact of a proposed agreement 

within the 45-day statutory review 

period, the Commission may issue 

a request for additional information 

(RFAI) to the agreement parties to 

obtain additional data and/or clarification on unclear or indefinite proposed 

agreement authority.

In FY 2018, the Commission received 193 

agreement filings, including new agreements 

and amendments to or terminations of existing agreements – an increase of 49 filings 

over FY 2017. A 

significant portion of this fiscal 

year’s increase 

in filings is 

attributed to the 

termination of 

outdated MTO 

agreements as a 

result of a comprehensive internal audit and 

review of all MTO agreements on file. Overall, 

440 agreements of all types are currently filed 

with the Commission and in effect.

As in previous years, the vast majority of 

vessel-operating common carrier (VOCC) 

agreements in effect at the end of FY 2018 

were either space charter or vessel sharing 

agreements, which collectively comprised 

approximately 65 percent of all agreements 

on file with the Commission. See Appendix D 

for description of all agreement types.

Space charter agreements authorize an 

ocean common carrier(s) to sell or exchange 

vessel space for use by another shipping line. 

Space charter agreements do not include the 

authority to discuss the provision of space in 

a trade, only the chartering of space already 

deployed.

Vessel sharing agreements authorize two 

or more shipping lines to discuss and agree on 

the supply of vessel capacity in a defined U.S. 

trade through the deployment of a specific 

service string or strings.

Of note, rate discussion agreements among 

VOCCs continued to decline in FY 2018. Ten 

of 15 rate discussion agreements on file with 

the Commission at the beginning of the fiscal 

year are still in effect. Among the agreements 

terminated was the Transpacific Stabilization 

Agreement, which became effective in 1989 

and included the top carriers as members in 

the transpacific trade. Half of the remaining 

rate discussion agreements lost members 

during FY 2018. These developments appear 

to support the presumption that rate discussion agreements have become a tool of limited 

use in maintaining stable freight rate levels 

among ocean carriers.

In FY 2018, the Commission completed an 

audit of all MTO agreements on file, finding 

over 90 percent of active MTO agreements 

can now be amended electronically and are 

available through 

the eAgreements 

system. All agreements on file with 

the Commission 

will be included in 

the eAgreements 

system by the end 

of FY 2019. The 

audit also allowed the Commission to secure 

the termination and removal of more than 

50 outdated and expired MTO Agreements. 

Vast majority of 

VOCC agreements 

were either slot charter or vessel sharing 

agreements.

No VOCC conference 

agreements are currently on file covering 

general commercial 

cargo.
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These efforts have resulted in a more accurate 

representation of active agreements on file 

with the Commission.

Rate discussion agreements 

continued to decline in FY 

2018
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Competitive Impact and Monitoring

The following are examples of different 

types of agreements filed with the Commission during the fiscal year, including specific 

Commission monitoring and actions taken 

to ensure compliance with the Shipping Act.

West Coast MTO Agreement 

(WCMTOA):

Under this Agreement, marine terminal 

operators at the Ports of Los Angeles and 

Long Beach created an off-peak gate program 

in 2005 to address cargo-related congestion 

and pollution in the port area. The PierPass 

program was developed to incentivize the utilization of night and weekend (off-peak) shifts 

as a way to alleviate traffic and air pollution 

caused by idling trucks awaiting access to the 

terminals. Since 2005, a traffic mitigation fee 

(TMF) has been charged only to users who 

enter the terminals during weekday daytime 

(peak) shifts. The program has succeeded in 

shifting roughly 50 percent of truck activity 

to off-peak shifts. However, in recent years, 

industry stakeholders have expressed dissatisfaction with aspects of PierPass, in particular 

the loss of terminal productivity near the peak/

off-peak shift changeover. The WCMTOA 

parties decided that an appointment system 

would be more effective in managing truck 

flow and terminal workload.

On March 13, 2018, the 12 container terminals in operation at the Ports of Los Angeles 

The Southern States Chassis Pool Agreement established in 2018 to supply chassis to 

shippers using Ports in Charleston and Savannah (pictured above)
57th Annual Report 15

and Long Beach filed an amendment to their 

agreement which would authorize significant 

changes to the PierPass program. Under the 

proposed amendment, a new flat fee TMF 

replacing the former TMF structure would 

be applied to all terminal gate users during 

both day and evening shifts, with the existing 

categories of cargo continuing to be exempt 

from the new flat fee. In addition, all terminals would require an appointment for the 

pickup of U.S. import cargo. In May 2018, the 

Commission issued a request for additional 

information from the parties to analyze the 

impact of the jointly-set flat fee and port-wide 

appointment requirement. The Commission 

assessed the likely effect of the amendment on 

the service provided by the WCMTOA parties 

during day and evening shifts, and the potential increase in transportation costs imposed 

on those terminal users not currently paying a 

fee. The amendment remained pending before 

the Commission at the end of the fiscal year. 

In November 2018, the Commission determined not to take further action to prevent 

the WCMTOA amendment from becoming 

effective and is reviewing appropriate monitoring requirements.

Southern States Chassis Pool 

Agreement:

This Agreement, which became effective 

August 2, 2018, authorized the Georgia Ports 

Authority (GPA) and the South Carolina Ports 

Authority (SCPA) to establish a common chassis pool in order to improve the supply and 

condition of truck chassis available to the 

ports. With input from industry stakeholders, the GPA and SCPA collaborated on the 

development of a new chassis pool model that 

would be owned and operated by a single 

provider on a not-for-profit basis. At the 

time the agreement was filed, the ports were 

served by a cooperative chassis pool owned 

and operated by the ocean carrier members 

of the Ocean Carrier Equipment Management 

Association Agreement (OCEMA). The new pool 

would replace the OCEMA pool. At the end 

of the fiscal year, the GPA and SCPA, together 

with their chosen operator for the pool, the 

North American Chassis Pool Cooperative 

(NACPC), were working with chassis lessors 

and ocean carriers on the implementation of 

the new chassis pool.

MED/USEC Vessel Sharing 

Agreement:

In August 2018, several members of THE 

Alliance and OCEAN Alliance, formed a 

vessel sharing agreement to coordinate their 

operations in the trade between ports in the 

western Mediterranean and the U.S. Atlantic 

Coast. The parties to this agreement planned 

to launch a weekly loop service with larger 

vessels that would replace their two separate 

weekly loop services in current operation. 

Under the agreement, the parties strive to 

reorganize their services to optimize cost 

savings and align the supply of vessel capacity with market demand. The Commission 

determined to take no action pursuant to 

the Shipping Act’s competition standard, to 

prevent or delay the Agreement from going 

into effect as scheduled, subject to appropriate special reporting requirements placed on 

the Alliances. The new service was launched 

in November 2018.
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Carrier Alliance Agreements

At the end of FY 2018, the three global ocean 

carrier alliances, namely, THE Alliance, the 

OCEAN Alliance and the 2M Alliance, controlled 80 percent of vessel capacity in the two 

largest U.S. trades, the transpacific and the 

transatlantic. The transpacific trade encompasses cargo moving between Asia and the 

U.S., while the transatlantic trade includes 

cargo moving between Europe and the U.S. 

The three alliances collectively hold market 

shares of 92 percent of cargo moving in the 

transpacific trade and 87 percent in the transatlantic at the end of the fiscal year. Given 

these considerable market shares, the FMC 

closely monitors alliance activities. As part 

of the Commission’s agreement monitoring 

program, alliances report individual members’ 

average revenue data and statistical tests are 

performed using that data for indications of 

collaborative price setting within alliances, 

among alliances, and among all alliance carriers. If tests indicate atypical market activity, 

the Commission will take appropriate action.

A number of factors have converged over 

the past decade that drove ocean carriers both 

to reconfigure their alliance arrangements 

under the Shipping Act and to consolidate 

their operations through mergers and acquisitions. While cargo volumes have increased 

in recent years, the rate of increase has not 

returned to the levels that existed prior to the 

2008-2009 global recession. The slower growth 

in demand for liner shipping services and 

the ongoing deployment of mega container 

ships have impacted the financial stability 

of liner carriers. Vessel capacity utilization 

continues to be higher in the headhaul trades 

(trade lanes generating the highest revenues, 

and generally those with the greater cargo 

volume) compared to the backhaul trades (the 

trade lane direction that carries both less cargo 

volume and generally cargo of lower value).

In the major east-west U.S. import and 

export trades (Asia-U.S. West Coast and 

Europe-U.S. East Coast), the higher value 

cargo headhaul is Asia east-bound to the U.S. 

and Europe west-bound to the U.S. From a 

volume perspective, the trades are also imbalanced, with more loaded containers coming 

into the U.S. from Asia than U.S. export loads 

going to Asia. A similar imbalance exists in the 

Trans-Atlantic trade with more loaded containers landing at U.S. East and Gulf ports 

than U.S. exports going to Europe.

In the last year, two mergers were completed 

during the fiscal year. The three Japanese carriers, K Line, MOL, and NYK, merged their 

liner shipping services in April 2018 under the 

new company Ocean Network Express (ONE). 

COSCO completed its purchase of a majority 

stake in OOCL in July 2018. The largest ocean 

carriers operate in the three global alliances 

covering the transpacific, transatlantic, and 

Asia-Europe trades, as discussed below.

Maersk/MSC Vessel Sharing Agreement (2M Alliance):

The 2M Alliance consists of Maersk Line 

and MSC, globally the largest and secondlargest ocean carriers by TEU capacity. The 

Commission monitors the activities of the 

parties in the alliance, the parties’ average revenues, and their vessel capacity and utilization 

levels. The parties also provide advance notice 
57th Annual Report 17

of any planned capacity reductions in the U.S. 

liner trades. At the end of the fiscal year, the 

2M Alliance accounted for approximately 32 

percent of global container capacity. During 

FY 2018, 2M entered into a slot exchange and 

purchasing agreement with Zim in the liner 

trade between the U.S. Atlantic Coast and Asia. 

The 2M carriers also have a slot exchange and 

purchasing agreement with Hyundai Merchant Marine covering the liner trade between 

Asia and the U.S Pacific and Atlantic Coasts.

OCEAN Alliance Agreement:

The OCEAN Alliance consists of COSCO, 

CMA CGM, Evergreen Line, and OOCL. The 

Commission monitors the activities of the 

parties in the OCEAN Alliance, the parties’ 

average revenues, and their vessel capacity 

and utilization levels. The parties also provide 

advance notice of any planned capacity reductions in the U.S. liner trade. At the end of the 

fiscal year, the OCEAN Alliance accounted for 

approximately 29 percent of global container 

capacity. COSCO completed its acquisition 

of a majority stake of OOCL in August 2018 

and plans to maintain the shipping line as a 

separate brand. As noted, the members of the 

OCEAN Alliance (with the exception of Evergreen Line) filed a vessel sharing agreement 

with the members of THE Alliance in August 

to combine their services and upgrade their 

vessels in their Mediterranean-U.S. Atlantic 

Coast services.

THE Alliance Agreement:

THE Alliance, formed in December 2016, 

authorizes member parties to share and 

charter vessel space among each other and 

to form and operate liner services in the 

U.S. liner trades. Initially, five ocean carriers 

were members to the Agreement. In April 

2018, three Japanese carriers, K Line, MOL, 

and NYK, merged to form ONE. THE Alliance now includes the original two members, 

Hapag-Lloyd and Yang Ming, and the newly 

consolidated ONE. THE Alliance accounted 

for approximately 17 percent of the global 

container capacity in FY 2018. As with the 

other major alliances, the Commission monitors THE Alliance parties’ activities under the 

Agreement, along with their vessel capacity 

and utilization, average revenue and planned 

capacity reductions in the U.S. liner trades.

Tariffs, Service Contracts, NSAs, & MTO 

Schedules

Tariffs

The Shipping Act requires common carriers and conferences to publish their tariffs 

containing rates, charges, rules, and practices, 

electronically in private systems. For ease of 

public access, the Commission publishes the 

web addresses of those tariffs on its website. 

At the close of the FY 2018, 5,695 tariff location 

addresses were posted. Of that number, 5,532 

tariff addresses were for NVOCCs.

The Commission provides regulatory relief, 

allowing licensed and foreign registered 

NVOCCs to “opt out” of the requirement to 

publish rate tariffs when using NVOCC Negotiated Rate Arrangements (NRAs). NVOCCs 

have indicated that NRAs, which are not 
18 57th Annual Report

required to be published or filed with the 

Commission, are a less burdensome commercial pricing option than rate tariffs, which must 

be published. Consequently, NVOCCs advise 

that NRAs save them both time and money. At 

the end of the fiscal year, nearly 1,805 active 

NVOCCs or approximately 33 percent of all 

5,532 NVOCCs, had filed a prominent notice 

or rule in their respective tariff indicating 

that they had invoked the NRA exemption 

as an alternative to rate tariff publication. 

The majority of NVOCCs which have implemented NRAs continue to use a combination 

of NRAs and tariff rate publications. In August 

2018, the Commission provided further regulatory relief by significantly expanding the 

commercial flexibilities available to NVOCCs 

and their shipper customers under NRAs (see 

Docket No. 17-10).

Service Contracts

Service contracts between carriers and shippers designed to meet the particular needs of 

the parties are an alternative to transportation 

of cargo under published tariff standard rates 

available for cargo transported by VOCCs. 

Approximately 90 percent of the total cargo 

transported in the major U.S. liner trades 

moves under service contracts, rather than 

tariffs. Service contracts enable the parties to 

tailor transportation services and rates to their 

commercial and operational needs and to keep 

these arrangements confidential. During the 

fiscal year, the Commission received 47,962 

new service contracts, compared to 47,110 in 

FY 2017; and 772,803 contract amendments, 

compared to 766,329 in FY 2017.

This was the first full fiscal year to gauge the 

impact of the Commission’s new regulatory 

flexibilities for service contracts through the 

Docket No. 16-05 rulemaking which addressed 

commercial issues raised by contracting parties to facilitate ocean commerce. As part of 

this regulatory relief, VOCCs were allowed up 

to 30 days to file service contract amendments 

after agreement by the VOCC and the shipper, 

along with expanded timelines for correcting 

service contracts. While it was anticipated that 

the number of amendments could be somewhat reduced by consolidation of service 

contract changes into periodic amendments 

as a result of this regulatory flexibility, few 

VOCCs have yet done so. Consequently, there 

was a slight increase in the number of service 

contract amendments during FY 2018 compared to the previous fiscal year. Discussions 

with various VOCCs indicated that they still 

must process amendments internally in their 

respective auto-rating systems by the effective 

date of the change in order for bills of lading 

to accurately reflect the rates and other terms 

agreed to with shippers. Therefore, the anticipated potential reduction in the number of 

service contract amendments for that reason 

has not occurred. Other factors leading to 

the increase in service contract amendments 

include a major carrier’s re-design of its IT 

system which automatically generates an 

amendment for each rate offering, rather than 

consolidating the rate changes into a single 

daily amendment. In addition, some carrier 

With nearly 48,000 new filings in 

FY2018, approximately 90 percent 

of cargo in major U.S. liner trades 

moves under service contracts.
57th Annual Report 19

consolidations during the fiscal year many 

times resulted in the filing of new service contracts by the acquiring carrier. But for these 

carrier consolidations, there may have been a 

decline in new service contract filing activity 

during FY 2018.

Near the end of FY 2018, a petition was 

filed by the World Shipping Council (WSC) 

requesting exemption from the service contract filing and essential terms publication 

requirements of the Shipping Act. The petition is pending before the Commission.

NVOCC Service Arrangements 

(NSAs)

Commission rules allow NVOCCs to offer 

transportation services pursuant to individually negotiated, confidential service 

arrangements with customers, rather than 

under a published tariff. During FY 2018, the 

Commission received 1,140 NSAs, compared 

to 969 in FY 2017, and 1,609 NSA amendments, 

compared to 1,778 in FY 2017. During the 

fiscal year, a total of 94 NVOCCs (2 percent) 

took advantage of the ability to use NSAs to 

conclude their transportation arrangements 

with shippers. While 1,903 NVOCCs are registered with the Commission to file NSAs, only 

295 NVOCCs have ever filed an NSA. The 

additional regulatory flexibilities introduced 

in the Commission’s rulemaking in Docket 

No. 16-05 appear to have had an impact, as 

new NSAs increased year-over-year and the 

number of NSA amendments were reduced. 

This regulatory relief allowed NVOCCs up to 

30 days to file NSA amendments after agreement by the NVOCC and the shipper, along 

with expanded timelines for correcting NSAs. 

The Commission continued its easing of regulatory burdens on NVOCCs through Docket 

No. 17-10 (effective August 22, 2018), in which 

the Commission eliminated the NSA filing 

and essential terms publication requirements 

to ease the regulatory burden associated with 

NSAs.

Marine Terminal Operator 

Schedules

An MTO may voluntarily 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. An MTO schedule 

made available to the public is enforceable 

by an appropriate court as an implied contract without proof of actual knowledge of 

its provisions. During FY 2018, 20 new MTOs 

registered with the Commission increasing 

the total to 274 MTOs that actively maintain 

a Form FMC-1. Through Form FMC-1, MTOs 

report the electronic location of their MTO 

terminal schedules, with 168 MTOs electing to 

voluntarily publish their terminal schedules. 

The internet address of these MTO terminal 

schedules are posted on the Commission’s 

website.
20 57th Annual Report

International Cooperation

Competition Law Challenges in 

the Shipping Sector in Brussels, 

Belgium

In March 2018, the General Counsel, Tyler 

Wood, traveled to Brussels, Belgium, and 

participated in the 2018 conference on Competition Law Challenges in the Shipping 

Sector. The conference covered a wide range 

of topics in the shipping industry, including 

consolidation, alliances, Brexit, and state aid. 

Mr. Wood spoke on a panel on global enforcement trends.

Japan-U.S. Maritime Bilateral 

Meeting

In March 2018, Chairman Khouri and General Counsel Tyler Wood represented the 

Federal Maritime Commission at the Fourth 

Japan-U.S. Maritime Bilateral Meeting, hosted 

by the Japanese Ministry of Land, Infrastructure, Transport, and Tourism in Tokyo, Japan. 

Discussions centered on consolidation in the 

ocean common carrier industry, matters relating to the U.S.-flag merchant fleet, vessel and 

mariner safety, security, and environmental 

concerns. Chairman Khouri and Mr. Wood 

also met with the American Chamber of Commerce in Japan and the Japanese Fair Trade 

Commission.

U.S.-China Transportation Forum 

& Maritime Consultations

In April 2018, Commissioner Dye and General Counsel Tyler Wood traveled to Beijing, 

China, to represent the Federal Maritime Commission at the U.S.-China Bilateral Maritime 

Consultations. Commissioner Dye discussed 

competition and efficiency within the shipping industry, as well as developments related 

to ocean carrier alliances and the Fact Finding 

28 investigation into detention and demurrage 

practices. Other topics discussed included 

safety, security, disaster response, research 

and development, and port infrastructure.

U.S.-Panama Maritime Bilateral 

Meeting

In May 2018, representatives from the 

Office of the General Counsel (OGC) attended 

the U.S.-Panama Maritime Bilateral Discussions, conducted at the U.S. Department of 

Transportation’s Maritime Administration in 

Washington, D.C. The discussions touched 

on the trade effects of the expanded Panama 
57th Annual Report 21

Canal, port infrastructure development, 

mariner training, autonomous vessels, 

and maritime security.

Global Shippers Forum Annual 

Conference in Melbourne, 

Australia

In May 2018, Commissioner Dye gave 

remarks before the Global Shippers 

Forum Annual Conference in Melbourne, Australia. Commissioner Dye’s 

discussed competition and cooperation 

in the ocean shipping industry, the Commission’s Fact Finding 28 investigation 

into demurrage and detention practices, 

and the Supply Chain Innovation Teams.

Global Liner Shipping Conference in Hamburg, Germany

In May 2018, Commissioner Maffei 

participated in the 2018 Global Liner 

Shipping Conference in Hamburg, Germany. The Conference covered a number 

of topics of relevance to the Commission’s work, including the operational 

impact of alliances, digital innovation, 

and sustainability. Commissioner Maffei 

then traveled to Copenhagen, Denmark, 

where he met with local maritime officials and industry representatives.

Chairman Khouri addresses the American Chamber 

of Commerce in Hong Kong, October 2018
22 57th Annual Report
57th Annual Report 23

Protecting the Public

The FMC engages in a variety of activities that protect the public from financial harm, 

including licensing and registering of ocean transportation intermediaries; helping resolve 

disputes about the shipment of goods or the carriage of passengers; investigating and prosecuting unreasonable or unjust practices, and ruling on private party complaints alleging 

Shipping Act violations. These activities contribute to competitiveness, integrity, fairness, and 

efficiency of the nation’s import and export supply chains and ocean transportation system. In 

addition, the FMC ensures that passenger vessel operators maintain proper financial coverage 

to reimburse cruise passengers in the event their cruise is cancelled or to cover liability in the 

event of death or injury at sea.

Investigation into Demurrage, Detention, 

and Per Diem Charges

On March 5, 2018, the Federal Maritime 

Commission initiated a non-adjudicatory 

investigation, Fact Finding Investigation 

No. 28, into the practices of vessel operating 

common carriers and marine terminal operators relating to U.S. demurrage, detention, and 

per diem charges. Demurrage is the charge 

per container for the use of ground space at 

the marine terminal. Detention is the charge 

by the ocean carrier for use of the container 

equipment. Per Diem relates to assessorial 

charges beyond demurrage and detention. All 

charges are subject to an agreed number of 

free days.

The Commission designated Commissioner 

Rebecca F. Dye the Fact-Finding Officer and 

directed her to develop a record through 

public or nonpublic sessions, and issue interim 

and final reports and recommendations.

The Fact Finding Officer conducted the 

investigation in two phases, and issued an 

Interim Report on September 4, 2018 suggesting consideration of the benefits of: (a) 

standardized language; (b) clear, simplified, 

and accessible billing and dispute resolution 

practices; (c) guidance on evidence relevant to 

dispute resolution; and (d) consistent notice 

to cargo interests of container availability. The 

Interim Report also considered organization 

of Innovation Teams of industry leaders to 

meet on a limited, short-term basis to refine 

commercially viable demurrage and detention 

approaches. On December 3, 2018, the Fact 

Finding Officer issued a Final Report.

Shipper Petition P4-16 led to January 2018 

hearings and Fact Finding No. 28 investigation conducted by Commissioner Dye 
24 57th Annual Report

Licensing

There are two types of ocean transportation 

intermediaries (OTIs) that serve as transportation middlemen for cargo moving in the 

U.S.-foreign oceanborne trades: NVOCCs and 

ocean freight forwarders (OFFs). An NVOCC 

is a common carrier that holds itself out to the 

public to provide ocean transportation and 

issues its own house bill of lading or equivalent document, but does not operate the vessel 

by which ocean transportation is provided. A 

U.S.-based ocean freight forwarder arranges 

for transportation of cargo with a common 

carrier (NVOCC or VOCC) on behalf of shippers and processes documents related to U.S. 

export shipments but does not hold itself out 

to the public to provide ocean transportation 

and does not issue a house bill of lading or 

equivalent document.

All NVOCCs and OFFs located in the U.S. 

must be licensed by the Commission and 

must establish financial responsibility. In 

FY 2018, licensed NVOCCs and OFFs had 

financial responsibility in the form of surety 

bonds on file with the FMC in excess of $443 

million. NVOCCs doing business in the U.S.-

foreign trades, but located outside the U.S. 

(foreign NVOCCs), may choose to become 

FMC-licensed, but are not required to do 

so. Foreign-based NVOCCs must register 

with the Commission and establish financial 

responsibility if not licensed under the FMC’s 

program. Foreign NVOCCs (registered and 

licensed) had approximately $245 million in 

surety bonds on file with the FMC in FY 2018.

The Commission’s triennial renewal program for FMC-licensed OTIs was instituted to 

ensure accurate and updated information. It 

completed its first full year in 2018. Approximately 2,200 of over 4,800 FMC-licensed OTIs 

completed the renewal process since the program began. The renewal process is an online 

user-friendly process that prepopulates the 

OTI’s renewal form with information from the 

FMC’s files providing a streamlined experience. In most cases the renewal process takes 

only five minutes. The online renewal process is already improving the accuracy of OTI 

records, and timeliness of reporting material 

changes in ownership and operations, for 

Licensing Activity in FY 2018

• New OTI applications accepted: 342

• Amended applications accepted: 

359

• New OTI licenses issued: 298

• Amended licenses issued: 111

• Licenses revoked: 327

• New registrations accepted: 176

• Licenses renewed: 1396

• Registrations renewed: 112

• 2,200 of over 4,800 FMC licenses 

renewed.

o 79% of OTIs recorded new 

ownership

o 8% updated contact information

o 12% reported a physical address 

change
57th Annual Report 25

the benefit of OTI sureties, carriers and the 

shipping public. During FY 2018, of the 2,200 

OTI license renewals processed, 79 percent 

reported an ownership change not previously 

filed with and recorded by the FMC; 18 percent reported a change to their telephone 

number; and 12 percent reported a change 

to their physical address. 

While many changes do not require prior 

approval by the Commission, about 13 percent 

of the licensees reported a change requiring 

submission of a Form FMC-18 Application. 

These changes to information on file with the 

Commission included changes to the Qualifying Individual (8.2 percent); the legal name 

of the company (2.4 percent); addition or 

deletion of a trade name (1.4 percent); or a 

business structure change (1.1 percent). Foreign-registered NVOCCs must also renew 

their registrations every three years. In FY 

2018, 112 foreign-registered NVOCCs successfully completed their renewals with the 

Commission. 

NVOCCs wishing to serve in the U.S. - 

China trade may file an Optional Rider for 

Additional NVOCC Financial Responsibility, 

to meet the Chinese government's financial 

responsibility requirements. This rider adds 

additional financial liability to meet the bond 

aggregate amount of $125,000 and is available 

to pay fines and penalties for activities in the 

U.S.-China trades that may be imposed by the 

Chinese government. This rider is accepted as 

a convenience to U.S. NVOCCs. At the close of 

the fiscal year, 425 U.S. NVOCCs held China 

Bond Riders, with aggregate evidence of 

financial responsibility totaling $21.2 million.
26 57th Annual Report

Passenger Vessel Program

The passenger vessel operator (PVO) program administered by the Commission (46 

U.S.C. §§ 44102-44103), 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. Certificates 

of performance cover financial responsibility 

used to reimburse passengers in the event 

their cruise is cancelled. Certificates of casualty are required to cover liability that may 

occur for death or injury to passengers or 

other persons on voyages to or from U.S. 

ports.

At the close of FY 2018, 231 vessels owned 

by 50 passenger vessel operators were certified under the PVO program. The combined 

evidence of financial responsibility for nonperformance of transportation for all cruise 

vessels in the program is $631.8 million. Under 

the Commission’s program, there is $721 million in aggregate financial responsibility for 

casualty coverage. During the fiscal year, 19 

new performance certificates and 13 casualty 

certificates were issued. In April 2018, the 

Commission implemented its initial 5 year 

Certificate of performance reissuance program. PVOs holding certificates must provide 

updated information every five years confirming, among other items, the names of vessels 

covered and continued effectiveness of the 

financial responsibility instrument. During 

FY 2018, 137 vessel certificates were reissued.

Additionally, during FY 2018 the Bureau of 

Certification and Licensing (BCL) coordinated 

refunds to passengers with cancelled domestic 

river cruises on French America Line. Effected 

passengers received refunds via credit card, 

travel insurance, or check from the French 

America Line escrow account. The escrow 

account was established by French America 

Line as required by the Commission under 

the FMC Passenger Vessel Program in order 

to protect passengers in the event of nonperformance of a scheduled cruise.

The maximum performance financial coverage requirement is currently $30 million per 

cruise line. The cap is adjusted every two 

years based on the Consumer Price Index for 

All Urban Consumers (CPI-U). The cap adjustment based on the CPI-U was completed in 

2017. Based on the adjustment formula, the 

adjusted cap figure of $30.4 million was 

rounded to the nearest $1 million, and the 

maximum coverage requirement remained 

$30 million per cruise line. The next adjustment will occur in 2019.

PVO Financial Coverage

• Aggregate evidence of financial 

responsibility for nonperformance: 

$631.8 million

• Aggregate evidence of financial 

responsibility for casualty: $721 million

• 137 Certificates of performance 

reissued during 5-year reissuance 

program
57th Annual Report 27

Consumer Affairs and Education

Dispute Resolution

Through its Office of Consumer Affairs 

and Dispute Resolution Services (CADRS), 

the Commission provides alternative dispute 

resolution (ADR) including ombuds (informal 

conflict resolution), mediation, and arbitration 

services, to assist parties in resolving international ocean shipping and cruise disputes. 

Such services are available to the shipping 

public at any stage of a dispute, regardless of 

whether litigation has been filed at the FMC 

or another jurisdictional forum. The Commission’s ADR services help parties avoid the 

expense and delay inherent in litigation, and 

facilitate the flow of U.S. foreign commerce.

In FY 2018, the Commission closed 489 

ombuds matters: 161 involved household 

goods; 168 relating to commercial cargo; and 

160 involved cruise matters. Seven mediation 

matters were concluded. Examples of matters 

handled by CADRS included:

•  Per diem, demurrage, detention and 

other shipping assessorial fee disputes, 

including facilitation of a negotiated 

settlement between a trucker, VOCC, 

and a container management company for a big box shipper where the 

trucker used non-approved chassis 

companies asserted during a period 

where the trucker contends that there 

was limited chassis availability.

•  CADRS assisted numerous consumers recover cargo from currently and 

formerly FMC-licensed NVOCCs. The 

Commission issued public notices 

with respect to formerly-licensed 

NVOCCs warning the public not to 

do business with them and to contact 

the FMC if assistance was needed.

•  An OTI alleged that detention charges 

were improperly assessed on an 

import of commercial goods during 

a U.S. Customs Exam. After Commission dispute-resolution assistance, the 

matter was resolved when the VOCC 

agreed to waive 50 percent of the 

assessed charges totaling $7,140.

•  An NVOCC alleged that a VOCC 

diverted cargo by skipping a port of 

call. The cargo was located at another 

port in another state and the VOCC 

assessed additional rail charges of 

$1150 per container for 31 containers. The parties ultimately agreed to 

a 30 percent reduction of rail charges 

or $10,695 reduction with CADRS 

assistance.

• A beneficial cargo owner (BCO) 

encountered a dispute with a VOCC 

regarding the existence of a prior 

credit agreement. The BCO indicated that it was unable to obtain a 

response from the VOCC and that it 

had $500,000 worth of cargo that was 

being held pending resolution of the 

matter. CADRS reached out to the 

VOCC who indicated that a mistake 

had been made and allowed for the 

release of the cargo.
28 57th Annual Report

Industry Outreach and Education/Awareness

Area Representatives

Area Representatives (ARs) represent the 

FMC at regional field offices located in Southern California, South Florida, New Orleans, 

New York/New Jersey, Houston and Seattle/

Tacoma. They investigate alleged violations 

of the shipping statutes, resolve complaints 

and disputes between parties involved in 

international oceanborne shipping (often 

coordinating with CADRS staff), and participate in local maritime industry groups. ARs 

provide advice and guidance to the shipping 

public, collect and analyze trade information, 

and assess industry conditions. The ARs conduct investigations of regulated entities, both 

VOCC and OTIs, coordinating with Bureau of 

Enforcement (BOE) staff to protect the shipping public from deceptive and unfair trade 

practices.

During the fiscal year, ARs conducted outreach to the public, consumer groups, trade 

associations, and worked with other Federal, 

state and local government agencies to achieve 

and enhance regulatory compliance and protect the public from financial harm. They also 

made presentations to industry groups in their 

regions, explaining OTI licensing, bonding 

requirements, and compliance with tariff filing 

requirements and provisions applicable to 

NRAs and NSAs.

Commissioner Dye in Baltimore christening ACL's M/V Atlantic Star
57th Annual Report 29

Enforcement, Audits, and Penalties

The Commission’s Bureau of Enforcement 

(BOE) staff and ARs in the field offices work 

to obtain industry compliance with the shipping statutes administered by the Commission 

to ensure competition and integrity in the 

foreign oceanborne commerce of the United 

States.

During the fiscal year, Commission staff 

investigated and prosecuted potential illegal 

practices in the Transpacific, North Atlantic, 

Middle East, South American and Caribbean 

trades. These included:

•  Misdescriptions of cargo commodities,

•  Misrepresentation of customer 

accounts,

•  Unlawful use of service contracts by 

non-contract parties, as well as carriage of cargo by and for untariffed 

and unbonded NVOCCs, and

•  Market-distorting unfiled agreement 

activities.

As of the beginning of FY 2018: 10 enforcement cases were pending final resolution, BOE 

was party to one formal proceeding, and there 

were 11 matters pending which BOE was 

monitoring or providing internal legal advice. 

Inclusive of cases opened at headquarters, the 

ARs referred 28 new investigative matters for 

enforcement action or informal compromise; 

14 matters were compromised and settled, 

administratively closed, or referred for formal 

proceedings; and 20 enforcement cases were 

pending resolution at fiscal year’s end. BOE 

added one case for monitoring, concluded 

its activities in one matter, and 11 matters 

remained pending at the end of the fiscal year.

Major investigations undertaken or completed during the fiscal year addressed:

•  VOCC operations pursuant to agreements that were not filed with the 

Commission;

•  Deceptive or fraudulent practices of 

certain OTIs operating primarily in 

the China-U.S. inbound trades; and

•  U.S.-based, licensed OTIs unlawfully facilitating the operations of 

unlicensed entities acting as OTIs by 

accepting cargo for ocean transportation from unlicensed companies.

In an Initial Decision issued June 29, 2017, 

an FMC Administrative Law Judge ordered 

the revocation of the OTI license of Washington Movers, Inc., an NVOCC, on the basis of 

the Federal felony conviction of its former 

owner President and Qualifying Individual 

(QI). The QI was convicted of attempting to 

smuggle weapons to a foreign country. The 

crime was facilitated through the use of the 

company’s NVOCC status. On March 16, 2018, 

the Commission affirmed the ALJ’s decision 

revoking Washington Movers’ OTI license.

The Formal Investigations section of this 

report includes more information on formal 

proceedings concluded during the fiscal year. 

Two formal cases were completed during the 

fiscal year. Cumulatively, the Commission 

collected over $1.1 million in penalties which 

were deposited directly into the U.S. Treasury 

General Fund during FY 2018. Most of these 

investigations were resolved informally, some 

with compromise settlements and civil penalties. A list of parties and penalties can be 

found in Appendix E.
30 57th Annual Report

The Commission’s compliance audit program reviews the operations of licensed OTIs 

to assist them in complying with the statutory requirements and the Commission’s rules 

and regulations. The program also reviews 

entities holding themselves out as VOCCs, 

where there is no indication of actual vessel 

operations. During the fiscal year, 146 audits 

were commenced, 137 audits were completed 

(including audits carried over from FY 2017), 

and 15 remained pending at the close of the 

fiscal year).
57th Annual Report 31

Inter-Agency Cooperation

The Commission regularly works with 

a number of other federal, state, and local 

transportation and law enforcement agencies, either through established memoranda 

of understanding (MOU), collaborations or 

partnerships to address specific transportation 

related policies, issues or incidents in both 

the U.S. domestic shipping arena and international liner shipping.

The ARs participated in a number of law 

enforcement initiatives sponsored by federal 

agencies: the U.S. Department of Homeland 

Security (Customs and Border Protection 

(CBP) and Immigration and Customs Enforcement); the U.S. Coast Guard; the Federal Motor 

Carrier Safety Administration (FMCSA); the 

Department of Commerce (Bureau of Industry 

and Security); the U.S. Department of Justice 

(including the Bureau of Alcohol, Tobacco, 

Commissioner Rebecca Dye and Commandant Paul F. Zukunft
32 57th Annual Report

Firearms and Explosives, and the Federal 

Bureau of Investigation); and interagency 

Joint Terrorism Task Forces operating regionally in the U.S. The law enforcement activities 

included criminal and civil investigations of 

entities licensed or regulated by the FMC, as 

well as violations of export and import statutes and regulations.

The ARs aided these investigations by providing expert knowledge on ocean carrier and 

OTI practices, procedures and documentation related to shipping transactions. Several 

ARs participated with CBP, the Coast Guard 

and other federal agencies in annual MultiAgency Strike Force Operations conducted 

at marine terminals at the ports of New York/

New Jersey, Oakland, CA, and Seattle, WA. 

They also worked closely with state and local 

law enforcement agencies, including police 

jurisdictions in New York, New Jersey, South 

Florida, and Houston, in matters relating to 

international shipping, such as the export of 

stolen motor vehicles.

The Office of CADRS, in its efforts to resolve 

issues and recover valuable cargo for owners, 

worked collaboratively with the FMCSA, the 

Federal Bureau of Investigation, the Italian 

Consulate, and the New Jersey Attorney General’s Office.

In 2018, the FMC also continued leadership 

roles in the Interagency Alternative Dispute 

Resolution (ADR) Working Group and the 

Coalition of Federal Ombudsmen. Through 

the Coalition of Federal Ombudsmen, federal 

ADR professionals enhance professionalism 

and effectiveness of Ombuds serving U.S. 

government agencies by sharing policies, 

standards, best practices, and innovative 

approaches.
57th Annual Report 33

Developments in Major 

U.S. Foreign Trades

Worldwide

The world’s container trade expanded by 

five percent in FY 2018, equal to growth in 

the preceding period. As the fiscal year ended, 

177 containerships lay idle, or 2 percent of the 

total TEU fleet capacity.

Due to mergers and acquisitions among 

ocean carriers, the container shipping industry 

worldwide continued to consolidate during 

the fiscal year. The top three container operators controlled 45 percent of the world’s 

containership capacity; the top five container 

operators controlled 64 percent; and the top 

ten controlled 82 percent. Maersk Line (18 

percent), MSC (14 percent) and COSCO (12 

percent) held the top three positions in terms 

of vessel capacity deployed.

Container volumes in U.S. liner trades 

during the fiscal year increased by 5 percent to 

35 million TEUs, compared to 33.3 million last 

year. The U.S. share of the world’s container 

trades was 16 percent, down slightly from FY 

2017. U.S. container imports expanded by 2 

percent to 23 million TEUs, compared to 21.8 

million in 2017. The volume of U.S. container 

exports during FY 2018 grew slightly from last 

fiscal year, to 11.8 million TEUs from 11.5 million. Primarily as a result of continued growth 

in U.S. imports, the U.S. container imbalance 

worsened; for every 100 loaded containers 

exported from the U.S., 195 were imported, 

compared to 190 imported in FY 2017.

The global containership fleet expanded with 

nominal capacity growing by approximately 

6 percent. At the end of the fiscal year, 5,293 

containerships, with a total fleet capacity of 

22.2 million TEUs, were available to serve the 

world’s container trades. There were orders 

worldwide for 295 new containerships with 

an aggregate capacity of 2.1 million TEUs, or 

10 percent of the existing fleet capacity. Vessels with nominal capacities exceeding 10,000 

TEUs comprised 32 percent of the existing containership fleet’s total capacity and 81 percent 

of the vessel orderbook at year-end, reflecting 

the increasing size of containerships on order.

Worldwide

For the ninth consecutive year, worldwide 

container trade grew – expanding by 5%

As the fiscal year ended, 177 containerships 

lay idle, or 2% of the total TEU fleet 

capacity, reflecting efficiencies being 

maintained in the industry

U.S. Liner Trades

Container volumes in the U.S. liner trades 

(imports and exports combined) grew by 

5%

Imported cargo continued to outpace 

exports, which increased the U.S. 

container imbalance
34 57th Annual Report

Asia

The liner trades between the U.S. and 

nations in Asia accounted for the largest container cargo volume of over 21 million TEUs 

in FY 2018 (exports and imports combined), 

or 62 percent of total U.S. container trade. The 

U.S. imported substantially more container 

cargo from the region than it exported. In FY 

2018, the U.S. imported 15.7 million TEUs 

of goods from Asia, a 6 percent increase 

over the previous fiscal year, while the U.S. 

exported 6 million TEUs, a very slight decline 

from the prior year. Northeast Asia (China, 

Japan, South Korea, Taiwan, and Hong Kong) 

accounted for 50 percent of total U.S. container 

cargo, and Southeast Asia (Brunei, Cambodia, 

Indonesia, Malaysia, the Philippines, Singapore, and Vietnam) accounted for 12 percent.

Just over half of the container imports from 

Asia moved through the ports of Los Angeles 

and Long Beach. U.S. Pacific ports handled 

62 percent of all Asian imports and exports, 

and U.S. Atlantic and Gulf ports handled 37 

percent.

The Transpacific Stabilization Agreement 

(TSA), active for several decades, was the 

major rate discussion agreement between 

ocean carriers covering the inbound and outbound transpacific trade. Its geographic scope 

included Asia and the Indian Subcontinent, 

except India (i.e., Bangladesh, Pakistan and 

Sri Lanka). In February 2018, the group disbanded. Leading up to its termination, TSA 

experienced declining membership and had 

discontinued general rate increases.

Trade conditions prompted each of the three 

global alliances to discontinue one service 

between Asia and the Pacific Coast of North 

America during the fiscal year. In addition, 

Zim phased out one of its services between 

Asia and U.S. Atlantic ports after it began sharing vessel space on the service strings of the 

2M alliance carriers under the Maersk/MSC/

Zim Cooperative Working Agreement in September. APL, however, introduced a new express 

transpacific service (Eagle Express X) in July 

2018 that calls in Los Angeles and Alaska and 

operates outside of the OCEAN Alliance, of 

which APL is a member. APL also increased 

the capacity of its transpacific US-flag service, 

which also operates outside of the OCEAN 

Alliance.

The independent South Korean carrier, 

SM Line, also launched a service connecting 

Asia with the Pacific Northwest during the 

fiscal year, adding to its existing service to the 

Pacific Southwest. New legislation would have 

required ocean carriers that were members of 

Asia accounts for 68% of containerized imports to the U.S.; and just 

over half of containerized exports 

from the United States

The Transpacific Stabilization 

Agreement, the major transpacific rate discussion agreement, 

disbanded in February 2018
57th Annual Report 35

TSA and also members of one of the new alliances in the transpacific trade to be subject to 

a new competition review.

North Europe

The liner trade with North Europe is the 

second largest U.S. trade by volume, accounting for 3.8 million TEUs, or 11 percent of total 

U.S. container cargo (exports and imports 

combined). Compared to the prior period, 

container cargo volume in FY 2018 grew by 

7 percent in each trade direction, resulting in 

an exchange of 1.5 million TEU exports and 

2.3 million TEU imports. The top imported 

commodities included auto parts, beer and 

furniture. The cargo volume carried by MSC, 

Hapag Lloyd, Maersk Line, and CMA CGM 

accounted for 60 percent of the total trade. In 

terms of service changes, in August 2018, MSC 

and Maersk Line added a fourth weekly loop 

service to the trade as part of their 2M alliance. 

The new TA4 service deploys five 5,000 TEU 

containerships between major U.S. Atlantic 

ports and North Europe. Throughout most of 

the fiscal year, the supply of vessel capacity 

Hong Kong continues to be a top twenty liner cargo trading partner of the U.S. 
36 57th Annual Report

remained constant, with an average vessel 

utilization rate of 57 percent in the outbound 

direction and 85 percent in the inbound direction. Reportedly, as of July 2018, spot market 

freight rates were higher in both trade directions compared to the preceding period at 

$1,942 per forty-foot equivalent unit (FEU) 

inbound and $577 per FEU outbound. New 

tariffs imposed by the U.S. and the EU on certain commodities are not expected to greatly 

impact container cargo in the trade.

Central America and the Caribbean

The Central America and Caribbean regions 

collectively accounted for 6 percent of total 

U.S. import and export container cargo in FY 

2018 at 2.1 million TEUs. Of the two regions, 

trade between the U.S. and Central America 

was considerably higher in volume at 1.4 

million TEUs (4 percent of total trade), while 

trade between the Caribbean and the U.S. was 

681,285 (2 percent of total U.S. trade), imports 

and exports combined.

In FY 2018, U.S. container exports to Central 

America fell by 10 percent to 561,229 TEUs, 

and container imports increased by 4 percent 

to 864,307 TEUs. Paper products accounted for 

the largest share of U.S. containerized exports. 

Other major exports included cotton, grocery 

products, used automobiles and fabrics. On 

the import side, fresh fruit made up a majority 

of container imports from the region. Roughly 

two-thirds of fresh fruit imports consisted 

of bananas. The second largest commodity 

imported from this region was apparel. The 

major carriers serving the trade participate 

in the Central America Discussion Agreement

(CADA); these are Seaboard Marine, Crowley 

Latin America Services, King Ocean Services, 

Dole Ocean Cargo Express, and Great White 

Fleet Liner Service Ltd.

In the liner trade between the U.S. and the 

Caribbean, U.S. container exports of mainly 

food, consumer goods, and manufactured 

products increased by less than 1 percent to 

503,138 TEUs. Container imports to the U.S. 

increased by 9 percent to more than 184,000 

TEUs. Container exports exceeded imports 

by a ratio of about 3 to 1. Carriers in the U.S./

Caribbean trade par-ticipate in two rate discussion agreements covering geographically 

discrete trades: (1) the Aruba Bonaire and Curacao Discussion Agreement, and (2) the Caribbean 

Shipowners Association.

South America

In FY 2018, the liner trades between the U.S. 

and South America represented 6 percent of 

total import and export container volume, 

at 1.9 million TEUs. The volume of containerized cargo between the U.S. and South 

American nations grew by about 3 percent 

in FY 2018. While container import growth 

to the U.S. from South America was flat, U.S. 

container exports grew by about 5 percent to 

883,116 TEUs. The top export commodities to 

South America included automobile parts and 

chemical products, while bananas, wood, and 

coffee were among the top import commodities. Brazil and Chile are the largest U.S. liner 
57th Annual Report 37

trading nations on the continent, accounting 

for about 55 percent of the container cargo 

moving in the trade.

The market share of the West Coast of South 

America Discussion Agreement (WCSADA) was 

40 percent outbound and 32 percent inbound. 

WCSADA members are CMA CGM, Hamburg 

Sud, Seaboard Marine and King Ocean Services. Carriers offering service independent of 

WCSADA included Dole Ocean Liner Express 

and Great White Fleet (a subsidiary of Chiquita Brands Intl. Inc.), which transport a high 

portion of proprietary cargo, such as fresh 

fruits and vegetables. Members of WCSADA 

also faced competition from other major carriers serving the trade through transshipment 

hubs in Mexico, Panama and the Caribbean. 

There are no active rate discussion agreements 

in the trade between the U.S. and the East 

Coast of South America.

Indian Subcontinent and Middle East

The Indian Subcontinent and Middle East 

regions combined accounted for 7 percent of 

total U.S. container trade volume in FY 2018, 

with the Indian Subcontinent being the larger 

of the two. The Indian Subcontinent alone 

(exports and imports combined) grew by 19 

percent, totaling over 1.6 million TEUs. The 

U.S. imported 958,000 TEUs from the Indian 

Subcontinent, an increase of 11 percent from 

the prior year. U.S. container export cargo 

to this region saw strong growth during the 

year, expanding by 30 percent to 707,000 TEUs, 

in large part due to Chinese restrictions on 

waste paper imports which shifted cargo to 

the region, along with increases in shipments 

of cotton and beryllium. U.S. imports from the 

Indian Subcontinent outpaced U.S. exports by 

a ratio of 1.4 to 1.

In the trade between the U.S. and Middle 

East, U.S. container export volumes grew 

by less than 1 percent (558,000 TEUs), while 

container imports to the U.S. from the region 

increased by 8 percent. The U.S. exports more 

goods to the Middle East than it imports, with 

U.S. container exports exceeding imports by 

a ratio of 2.2 to 1.

The Transpacific Stabilization Agreement 

was the rate discussion agreement covering 

U.S. inbound and outbound container trade 

with Bangladesh, Pakistan and Sri Lanka. 

After the group disbanded in February 2018, 

there were no longer any rate discussion 

agreements covering the liner trades between 

the U.S. and the Indian Subcontinent or the 

Middle East.

The U.S. saw strong growth in 

its trade with the Indian Subcontinent, as U.S. container exports 

increased by 30 percent and U.S. 

container imports increased by 11 

percent.
38 57th Annual Report

Mediterranean

Container volumes between the U.S. and 

the Mediterranean accounted for 5 percent of 

all U.S. import and export cargo in FY 2018, 

at 1.6 million TEUs. Compared to the prior 

period, there was positive growth in each 

trade direction. U.S. exports increased by 7 

percent to 465,914 TEUs, and imports from the 

region rose by 10 percent to 1.2 million TEUs. 

The trade imbalance continued to expand with 

import containers exceeding export containers 

by a ratio of 2.5 to 1. Major imported commodities included wine, ceramic tiles, and 

furniture, while wood pulp, paper, nuts and 

cotton were the top U.S. export commodities. A high concentration of the cargo was 

moved by the top carriers, as MSC, Hapag 

Lloyd, Maersk Line, CMA CGM, and Zim carried 86 percent of the total cargo in the trade. 

With respect to service changes, members of 

OCEAN and THE Alliances formed the MED/

USEC Vessel Sharing Agreement to combine 

their two separate weekly loop services into 

one weekly loop service. The new service was 

scheduled to commence in December 2018 

and will deploy six 8,500 TEU vessels between 

major U.S. Atlantic ports and ports in Spain, 

France and Italy. Zim will also take space on 

the new service under its slot exchange agreement with members of THE Alliance. Over the 

course of the fiscal year, the supply of vessel 

space in the trade contracted slightly by three 

percent.

Africa

FY 2018 imports and exports combined 

between the U.S. and Africa were 437,000 

TEUs, accounting for approximately 1 percent of all U.S. container cargo. Compared to 

the previous period, U.S. container exports 

to nations in Africa increased by about 16 

percent to 312,000 TEUs, and U.S. container 

imports from the region increased by about 14 

percent to 124,000 TEUs. Consequently, U.S. 

container exports exceeded imports by a ratio 

of 2.3 to 1.

The top container U.S. exports to Africa 

were automobiles and parts, poultry and 

wood pulp, while the top container imports 

from the region included cocoa beans, citrus 

fruits, aluminum, and rubber. The Republic 

of South Africa is the largest U.S. liner trading nation on the continent, accounting for 20 

percent of the containerized cargo. The two 

largest carriers in this trade are MSC and 

Maersk Line, including its subsidiary, Safmarine, which combined to carry approximately 

63 percent of the container cargo in the trade. 

Under the Southern Africa Agreement, MSC and 

Maersk continue to operate and share vessel 

space on their America Express (AMEX) service between the U.S. Atlantic Coast and the 

Republic of South Africa with calls at Cape 

Town, Port Elizabeth and Durban.
57th Annual Report 39

Australia and Oceania

Oceania consists of Australia, New Zealand, and the South Pacific Islands. The liner 

trades between the U.S. and Oceania comprised just over 1 percent of total U.S. import 

and export cargo volumes combined in FY 

2018, at 402,305 TEUs. The volume of U.S. container exports was 243,839 TEUs, and the top 

exported commodities included auto parts, 

general merchandise, and tires. U.S. container 

import cargo was 158,466 TEUs, and the top 

imported commodities included wine and 

fresh or frozen meat products. Compared 

to the preceding period, growth in U.S. container exports declined slightly, and container 

imports increased slightly. The major carriers 

serving the trade, Hapag Lloyd, Maersk Line, 

MSC, and CMA-CGM and its subsidiary ANL 

Singapore Pte Ltd., moved 92 percent of the 

total container cargo.

The three rate discussion agreements 

among ocean carriers in the trade were the 

United States/Australasia Discussion Agreement

(USADA), the Australia and New Zealand-United 

States Discussion Agreement (ANZUSDA), 

and the Pacific Islands Discussion Agreement. 

In early 2018, these agreements disbanded 

after a decline in membership and carrier 

consolidation. Among other changes in the 

trade, carriers sharing vessels under the U.S. 

Pacific-Oceania Agreement combined their two 

separate Pacific North- and Southwest services into one service string.
40 57th Annual Report

Top Twenty U.S. Liner Cargo 

Trading Partners

The Foreign Shipping Practices Act requires 

the FMC to 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 Commission derives its list of top 

twenty trading partners from the Port Import 

Export Reporting Service (PIERS) database. 

The most recent complete calendar year of 

available data is 2017. The table on the next 

page lists the twenty foreign countries that 

generated the largest volume of oceanborne 

liner cargo in the bilateral trade with the 

United States in calendar year 2017. The figures in the table represent each country’s U.S. 

liner imports and exports combined in thousands of loaded TEUs.

Bilateral trade with the United States’ top 

twenty liner trading partners represented 

approximately 80 percent of the Nation’s total 

liner trade in 2017. The total volume of trade 

with our top twenty liner trading partners 

increased by 4.3 percent year-to-year.

The top twenty list has been comprised of 

nearly the same trading partners since 2009. 

Several changes in ranking occurred among 

the top-twenty countries during 2017. Reflecting the greatest year-to-year liner volume 

increase of 15 percent, Costa Rica joined the 

top twenty from its previous rank at 22nd, 

eliminating Australia from the list. Following 

Costa Rica with the second largest year-toyear volume increase of 13 percent, Thailand 

maintained its rank at 8th place. Hong Kong, 

for the third year in a row slipped in the rankings, falling to 13th place, having experienced 

a 6 percent decrease in volume this year, the 

largest percentage decline of any top twenty 

trading partner.
57th Annual Report 41

Top Twenty U.S. Liner Cargo Trading Partners 

(CY2018)

Rank Country TEUs

(000)

1 China (PRC) 13,002

2 South Korea 1,388

3 Japan 1,369

4 Vietnam 1,343

5 Taiwan (ROC) 1,084

6 Germany 1,077

7 India 1,036

8 Thailand 737

9 Indonesia 681

10 Belgium & 

Luxembourg

675

11 Brazil 622

Rank Country TEUs

(000)

12 Italy 620

13 Hong Kong1 569

14 Netherlands 538

15 Guatemala 453

16 United Kingdom 431

17 Malaysia 421

18 Chile 408

19 Honduras 345

20 Costa Rica 341

1 Hong Kong reverted to Chinese control 

in July 1997. However, PIERS continues to 

report data separately for Hong Kong due 

to its status as a major transshipment center.
42 57th Annual Report

Foreign Shipping Practices Act

The Commission informally pursued several matters involving potentially restrictive 

foreign shipping practices. This included the 

examination of restrictive foreign port/harbor 

practices, foreign legislation, and regulations. 

No formal action by the Commission under 

the Foreign Shipping Practices Act of 1988 

(FSPA) was necessary.

The Commission has the authority to 

address restrictive foreign shipping practices 

under section 19 of the Merchant Marine Act 

of 1920 and the FSPA. 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 United States.
57th Annual Report 43

Controlled Carriers

A controlled carrier is an ocean common 

carrier that is, or whose operating assets are, 

owned or controlled directly or indirectly 

by a foreign government. The Shipping 

Act provides that no controlled carrier may 

maintain rates or charges in its tariffs or service contracts that are below a level that is 

just and reasonable, nor may any such carrier establish, maintain, or enforce unjust or 

unreasonable classifications, rules, or regulations in those tariffs or service contracts. In 

addition, tariff rates, charges, classifications, 

rules, or regulations of a controlled carrier 

may not, without special permission 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 information sources to 

identify controlled carriers and any unjust or 

unreasonable controlled carrier activity that 

might require Commission action. As of the 

end of fiscal year 2018, five controlled carriers 

operated in the U.S. trades:

1. COSCO SHIPPING Lines Co., Ltd. – 

People’s Republic of China

2. CNAN Nord SPA – People’s Democratic Republic of Algeria

3. Orient Overseas Container Line Limited – People’s Republic of China

4. Orient Overseas Container Line 

(Europe) Limited – People’s Republic of China

5. COSCO Shipping Lines (Europe) 

GmbH – People’s Republic of China
44 57th Annual Report

Formal Investigations, Private 

Complaints, and Litigation

Adjudicative proceedings before the Commission are commenced by the filing of a complaint, 

or by order of the Commission upon petition, or upon its own motion. Types of docketed 

proceedings include:

• Private complaints: Any person may file a formal complaint alleging violations of specific 

sections of the Shipping Act found at 46 U.S.C. Chapter 411. Formal complaints are 

generally assigned to an Administrative Law Judge (ALJ) who issues an initial decision 

which is reviewed by the Commission.

• Small claims complaints: For claims of $50,000 or less, an informal complaint may be 

filed. The complaint is handled by a settlement officer for resolution using informal 

procedures that do not tend to include discovery or motions practice.

• Investigative proceedings: The Commission may investigate the activities of ocean 

common carriers, OTIs, MTOs, and other persons to ensure effective compliance with 

the statutes and regulations administered by the Commission. Formal orders of investigation and hearing are assigned to an ALJ for an initial decision and may be reviewed 

by the Commission.

In FY 2018, five new formal private party complaints and two small claims complaints were 

filed with the Commission. The Office of Administrative Law Judges (OALJ) issued 11 initial 

decisions in formal proceedings and seven decisions in small claims proceedings. At the end 

of FY 2018, eight formal proceedings were pending before the OALJ and 10 were pending 

before the Commission.

The following summarizes the results of formal docketed proceedings concluded during 

FY 2018 by the ALJs and the Commission:

Formal Investigations

Revocation of Ocean Transportation 

Intermediary License No. 017843, 

Washington Movers, Inc. [Docket No. 

15-10]

On October 8, 2015, the Commission 

ordered Washington Movers, Inc., to show 

cause why the Commission should not revoke 

its ocean transportation intermediary license 

due to the felony weapons smuggling convictions of its qualifying individual and various 

alleged regulatory violations. After receiving 

briefing, on February 12, 2016, the Commission assigned this matter to the Office of 

Administrative Law Judges for further proceedings. The ALJ issued an Initial Decision 

revoking Washington Movers’ license on June 

29, 2017. Washington Movers filed exceptions 

to the ALJ’s decision, and the Commission’s 

Bureau of Enforcement filed a reply in support of revocation.
57th Annual Report 45

On March 16, 2018, the Commission 

affirmed the revocation of Washington 

Movers’ ocean transportation intermediary 

license and ordered it to cease and desist all 

ocean transportation intermediary activities. 

The Commission found that revocation was 

warranted because Washington Movers, 

through its president, violated federal weapons smuggling statutes as well as Commission 

regulations.

Private Complaints

Ngobros and Company Nigeria 

Limited v. Oceane Cargo Link, LLC 

[Docket No. 14-15]

On November 24, 2014, Complainant filed 

a complaint alleging that Respondents violated the Shipping Act with respect to the 

transportation of Complainant’s three vehicles from Georgia to Nigeria. Complainant 

moved for default judgment, and, after briefing, the ALJ construed the motion as one for 

summary decision. On November 10, 2015, 

the ALJ issued an Initial Decision finding that 

Respondents had violated 46 U.S.C. § 41102(c) 

and awarding Complainant reparations. The 

Commission determined to review the Initial Decision sua sponte, but while review 

was underway, one of the Respondents filed 

for bankruptcy. In light of the bankruptcy, 

the Commission stayed the proceedings. In 

October 2017, the Commission learned that 

one of the Respondent received a Chapter 7 

bankruptcy discharge and that the automatic 

bankruptcy stay was lifted. The matter is 

pending before the Commission.

Baltic Auto Shipping, Inc. v. Hitrinov 

[Docket No. 14-16]

On November 28, 2014, Complainant filed 

a complaint alleging that on several thousand shipments between November 2007 and 

January 2012, Respondent, an NVOCC, violated several sections of the Shipping Act, 46 

U.S.C. §§ 41102, 41104, 40501, and 46 C.F.R. 

Part 515, by charging rates not set forth in a 

tariff, charging Baltic rates greater than rates 

charged other shippers, and by failing to 

provide Baltic with shipping documents. All 

shipments began and almost all were delivered more than three years before Baltic filed 

its complaint. Empire moved for a summary 

decision that Baltic’s request for reparations 

was barred by the statute of limitations. On 

September 15, 2015, the ALJ held that based 

on material facts not in dispute, Baltic’s claims 

accrued more than three years before Baltic 

filed the complaint and were barred. The ALJ 

also determined that no other relief was warranted and dismissed the complaint.

Complainant filed exceptions and 

Respondents replied, but on March 3, 2016, 

Complainant filed a Motion to Withdraw 

Appeal and Discontinue Action. Respondents, 

however, declined to agree to a joint stipulation to withdraw the appeal.

On April 21, 2017, the Commission granted 

the request for withdrawal and dismissal of 

the action pursuant to 46 C.F.R. § 502.72(a)

(3). The Commission denied Complainant’s 

request to extinguish the ability of either party 

to seek attorney fees, and on July 19, 2017, 

Respondents petitioned for fees. Complainant opposed the petition. The Commission 

denied the petition for attorney fees on October 25, 2017.
46 57th Annual Report

Crocus Investments, LLC v. Marine 

Transport Logistics, Inc. [Docket No. 

15-04]

A complaint filed on May 27, 2015 alleged 

that Respondent, a licensed non-vesseloperating common carrier (NVOCC), and an 

individual, overcharged Complainant and 

transferred custody of cargo to a storage facility without their consent, in violation of 46 

U.S.C. § 41102(c). Complainant also alleged 

that the individual Respondent violated 46 

U.S.C. § 40901(a) by providing ocean freight 

forwarder (OFF) services without a license 

from the Commission. The ALJ dismissed 

Complainants’ claims for lack of jurisdiction 

and on substantive grounds on June 17, 2016. 

Complainants filed exceptions to that decision 

and the matter is currently pending before the 

Commission.

Ovchinnikov vs. Hitrinov [Docket No. 

15-11] consolidated with Nurgazinov 

v. Khitrinov [Docket No. 1953(I)]

Complainants filed a complaint on November 12, 2015, alleging that Respondents 

violated the Shipping Act and Commission 

regulations by not releasing or delivering three vehicles shipped from the United 

States to Finland. Respondents moved for 

judgment on the Pleadings on June 10, 2016. 

Subsequently, counsel for both sides moved 

that opposing counsel be sanctioned. The ALJ 

denied the sanctions motions, and on March 9, 

2017, the ALJ issued an Initial Decision granting Respondents’ motion for judgment on 

the pleadings. Respondents filed exceptions 

with respect to sanctions. Complainants filed 

exceptions with respect to the Initial Decision. 

These exceptions and several outstanding 

motions are pending before the Commission.

In Re: Vehicle Carrier Services [Docket 

Nos. 16-01, 16-07, 16-10, 16-11]

Complainants in these four consolidated 

cases filed in 2015 and 2016 allege that 

Respondents violated multiple provisions 

of the Shipping Act for nearly two decades 

by secretly agreeing and conspiring to fix, 

raise, and stabilize prices and allocate customers and market share in the roll on/roll 

off shipping trade. Complainants shipped or 

purchased new assembled cars and trucks 

transported on Respondents’ roll on/roll off 

(RoRo) ships and allege that Respondents 

illegally-inflated charges were passed along 

to them, either directly as freight charges or 

indirectly in the purchase prices of vehicles. 

Complainants sued on their own behalf and 

on behalf of similarly-situated members of a 

class.

On May 7, 2018, the ALJ dismissed Complainants’ claims as time-barred and for lack 

of standing and also provisionally ruled that 

the Commission does not have jurisdiction 

to adjudicate class actions. Complainants’ 

timely-filed exceptions are pending before the 

Commission. On August 30, 2018, the Commission granted leave for two law professors 

to file an amicus brief.

MAVL Capital Inc. v. Marine Transport Logistics, Inc. [Docket No. 16-16]

On July 31, 2016, Complainants alleged that 

Respondents violated 46 U.S.C. §§ 41102(c), 

41104(3), and 41104(10) in connection with 

the storage and shipment of five vehicles. 

In January 2017, the ALJ dismissed certain 

of the claims for lack of jurisdiction and 

failure to state a claim. The ALJ stayed the 

case as to the remaining claims. Complainants filed exceptions to the ALJ’s decision, 
57th Annual Report 47

which Respondents opposed. On March 7, 

2017, Complainants petitioned for leave to 

supplement the record. In December 2017, the 

Commission denied Complainants’ request 

for issuance of a subpoena, and in June 2018, 

the Commission granted leave for Respondent Marine Transport Logistics’ counsel to 

withdraw their representation. Complainants’ 

exceptions and petition are pending before 

the Commission.

Hangzhou Qianwang Dress Co., Ltd. 

v. RDD Freight International Inc. 

[Docket No. 17-02]

On February 17, 2017, Complainant filed a 

complaint alleging that Respondent violated 

the Shipping Act by releasing goods to a consignee before it had received the original bills 

of lading and permission to release from Complainant. On August 29, 2018 the ALJ issued 

an Initial Decision finding that Respondent 

released cargo without a bill of lading in violation of 46 U.S.C. § 41102(c) and awarding 

Complainant reparations. After the Commission determined to review the Initial Decision 

sua sponte, Respondent filed exceptions to the 

decision. The exceptions are pending before 

the Commission.

Lima v. Fastway Moving and Storage, 

Inc. [Docket No. 17-03]

Complainant alleges that in the course of 

shipping its household goods from the United 

States to Brazil, Respondent allowed illegal 

items to be combined with Complainant’s 

shipment, failed to comply with tariff or service contract rates, and knowingly accepted 

cargo without a tariff, bond, insurance or 

surety, in violation of 46 U.S.C. §§ 41102(c) 

and 41104. According to Complainant, as a 

result, Brazilian authorities seized and held 

Complainant’s goods until he eventually 

secured their release. On January 16, 2018, 

the ALJ entered a default judgment in Complainant’s favor and awarded Complainant 

reparations. The Commission determined to 

review the ALJ’s decision sua sponte on January 23, 2018.

Port Elizabeth Terminal & Warehouse 

Corp. v. Port Authority of New York & 

New Jersey [Docket No. 17-07]

Complainant alleges that Respondent violated numerous sections of the Shipping Act 

in connection with certain leasing decisions 

and negotiations at Port Newark. Specifically, Complainant alleges that Respondent 

decided to lease property occupied by Complainant to another tenant, while at the same 

time declining to lease additional property 

to Complainant. Complainant claims that in 

so doing, Respondent violated 46 U.S.C. §§ 

41102(c), 41106(2), and 41106(3). On January 12, 2018, Respondent moved to partially 

dismiss the complaint. The ALJ granted the 

motion and dismissed two of Complainants 

claims on the merits. The ALJ also found that 

Complainant was barred from seeking reparations for the surviving claims. Complainants 

filed exceptions to the ALJ’s decision, which 

are pending before the Commission.
48 57th Annual Report

Carlstar Group, LLC v. UTi, United 

States, LLC [Docket No. 17-08]

Complainant filed a Shipping Act complaint on August 31, 2017, alleging that 

Respondents violated 46 U.S.C. §§ 41102(c), 

41104(2), and 41104(4) by overcharging Carlstar at least $5,155,170.06 for transportation 

services between 2011 and 2016. Respondents 

moved to dismiss the complaint for lack of 

subject matter jurisdiction and failure to state 

a claim. On May 18, 2018, the ALJ issued an 

Initial Decision denying in part and granting 

in part the motion to dismiss. The Commission determined sua sponte to review the 

Initial Decision. While the matter was under 

review, the parties petitioned for approval 

of a settlement agreement. At the end of the 

fiscal year, the petition was pending before 

the Commission.

Taylors Resources, Inc. (USA) v. Mitsui 

O.S.K. Lines Ltd. [Docket No. 1954(F)]

Complainant alleges that after its consignee 

in China failed to accept delivery of a shipment 

of plastic scrap, Respondent, the ocean carrier, unreasonably delayed in disposing of the 

unclaimed cargo, which caused Complainant 

to incur significant detention and demurrage 

charges. According to Complainant, by unreasonably delaying, and by suing Complainant 

to recover excessive charges, Respondent 

violated the Shipping Act and state law. On 

August 11, 2017, the ALJ dismissed the complaint. On August 21, 2017, Complainant filed 

a request to vacate the ALJ’s decision. At the 

end of the fiscal year, that request was pending before the Commission.

Fiat Chrysler Automobiles NV, FCA US 

LLC, and FCA Italy S.P.A. v. Wallenius 

Wilhelmsen Logistics AS, Wallenius 

Wilhelmsen Logistics Americas LLC, 

Eukor Car Carriers Inc., Nippon Yusen 

Kabushiki Kaisha, NYK Line (North 

America) Inc., Mitsui O.S.K. Lines, 

Ltd., MOL (America) Inc., Kawasaki 

Kisen Kaisha, Ltd., “K” Line America, 

Inc., Compañía Sud Americana De 

Vapores, And Hoëgh Autoliners AS 

[Docket No. 17-09]

On October 6, 2017, Complainants, three 

Fiat entities, filed a complaint alleging that 

Respondents, ocean common carriers that 

provide ocean transport of new, assembled 

motor vehicles using specialized roll-on/rolloff cargo ships, violated the Shipping Act from 

as early as 1997 and alleges that the violations 

are continuing. Respondents filed a motion 

to dismiss in this and four related cases. On 

May 7, 2018, an order was issued finding that 

the statute of limitations bars reparations, 

except for violations that Fiat can establish 

that occurred within the statute of limitations period. The order was not appealed to 

the Commission. The remaining claims for 

a cease and desist order and for reparations 

for violations within three years of filing the 

complaint are continuing before the OALJ.

Tarik Afif Chaouch v. Demetrios Air 

Freight Co., Demetrios International 

Shipping Co., Inc., and Troy Container 

Line Ltd. [Docket No. 18-02]

On January 18, 2018, a Notice of Filing of 

Complaint and Assignment was issued indicating that Mr. Chaouch filed a complaint 

against Demetrios. Mr. Chaouch alleged that 

Demetrios violated the Shipping Act of 1984 
57th Annual Report 49

in connection with two vehicles shipped from 

the United States to Algiers, Algeria, allegedly 

shipped without requested separate bills of 

lading. On March 23, 2018, an initial decision 

approving settlement agreement and dismissing with prejudice was issued. On April 24, 

2018, the Commission issued a Notice Not 

to Review.

JC Horizon Ltd. v. China Shipping 

Container Lines Co. Ltd. [Docket No. 

18-03]

On May 15, 2018, a complaint was filed 

alleging numerous violations of the Shipping Act of 1984 (“Shipping Act”). On June 25, 

2018, China Shipping Container Lines Co. Ltd. 

filed its answer denying the allegations. On 

August 3, 2018, Complainant JC Horizon Ltd. 

and Respondent China Shipping Container 

Lines Co. Ltd. filed a joint motion for approval 

of settlement and voluntary dismissal. On 

August 8, 2018, an Initial Decision Approving Settlement Agreement and Dismissing 

Proceeding with Prejudice was issued. On 

September 10, 2018, the Commission issued 

a Notice Not to Review.

Litigation

The following docket matters were litigated 

during the fiscal year in the United States 

Courts of Appeals by the OGC on behalf of 

the Commission or were before the Commission on remand from the Courts.

Santa Fe Discount Cruise Parking, 

Inc. v. The Board of Trustees of the 

Galveston Wharves [Docket No. 14-06], 

United States Court of Appeals for the 

District of Columbia Circuit

Respondents operate the cruise terminal 

at the Port of Galveston. Complainants operate parking facilities near the Port where 

they provide parking for passengers who 

embark on cruises from the cruise terminal. 

As part of their service, Complainants provide transportation to the Port. On June 16, 

2014, Complainants filed a complaint alleging 

that Respondents’ tariff imposing charges on 

Complainants’ shuttles transporting passengers to and from the terminal violated three 

sections of the Shipping Act.

On November 21, 2014, the ALJ granted 

Respondents’ motion to dismiss claims under 

two sections of the Act, but denied dismissal of 

claims under 46 U.S.C. § 41106(2), finding that 

the Complaint stated a claim that Respondents 

gave an undue or unreasonable preference or 

advantage or imposed an undue or unreasonable prejudice or disadvantage with respect 

to Complainants. On December 23, 2014, the 

Commission issued a Notice Not to Review 

the partial dismissals and the decision became 

administratively final.

On December 4, 2015, the ALJ issued 

an Initial Decision dismissing Complainants’ remaining claim regarding § 41106(2). 

Complainants filed exceptions to the Initial Decision, and on January 13, 2017, the 

Commission affirmed the dismissal of the 

complaint.
50 57th Annual Report

The Complainants petitioned for review in 

the D.C. Circuit on March 14, 2017, and the 

parties filed their briefs. Oral argument was 

held on March 12, 2018, and on May 11, 2018, 

the Court vacated the Commission’s January 

13, 2017 decision and remanded the case to 

the Commission for further proceedings. The 

Commission in turn remanded the case to the 

ALJ to address all remaining issues in light of 

the Court’s decision. The matter is pending 

before the ALJ.

Rulemakings

The Commission has initiated a number of 

rulemakings this year to update its regulations 

and reduce regulatory burdens.

Amendments to Regulations Governing NVOCC Negotiated Rate 

Arrangements and NVOCC Service 

Arrangements [Docket 17-10]

On April 16, 2015, the National Customs Brokers and Forwarders Association of America, 

Inc., (NCBFAA) petitioned the Commission 

to revise the Commission’s regulations in 46 

CFR Part 532 governing non-vessel-operating 

common carrier (NVOCC) Negotiated Rate 

Arrangements (NRAs) to: (1) allow inclusion 

of economic terms beyond rates in NRAs, and 

(2) permit NRAs to be modified at any time 

upon mutual agreement between the NVOCC 

and shipper. The Petition further requested 

that the Commission either revise 46 CFR Part 

531 governing NVOCC Service Arrangements 

(NSAs) to eliminate the filing and essential 

terms publication requirements for NSAs or 

eliminate Part 531 in its entirety. The Commission subsequently published a request for 

comments on April 28, 2015. (80 FR 23549) 

On August 2, 2016, the Commission issued an 

order granting NCBFAA’s petition.

On November 30, 2017, the Commission 

published a Notice of Proposed Rulemaking. 

(82 FR 56781) Thirty-nine sets of comments 

were received in response to the NPRM. The 

vast majority of commenters supported the 

proposed revisions to the NRA and NSA 

regulations.

The Commission published a final rule on 

July 23, 2018, which went into effect on August 

22, 2018. (83 FR 34780) The final rule removed 

the NSA filing and publication requirements 

and made a number of changes to the regulations governing NRAs. Specifically, NRAs 

may now be amended at any time and may 

include non-rate economic terms. In addition, 

NVOCCs may now provide for shipper acceptance of an NRA through booking a shipment 

thereunder if certain requirements are met. 

The final rule also clarified the requirements 

for NRAs related to surcharges and assessorial charges.

Interpretive Rule; Shipping Act of 

1984 [Docket No. 18-06]

On September 7, 2018 the Commission 

issued a Notice of Proposed Rulemaking 

(NPRM) seeking to clarify the Commission’s interpretation of the scope of 46 U.S.C. 

§ 41102(c) (section 10(d)(1) of the Shipping 

Act of 1984). (83 FR 45367) Section 41102(c) 

prohibits common carriers, terminal operators, and ocean transportation intermediaries 

from failing to establish, observe, and enforce 

just and reasonable regulations and practices 
57th Annual Report 51

relating to or connected with receiving, handling, storing, or delivering property. The 

Commission sought to clarify that, in order 

to violate this provision, a regulated entity 

must be engaged in a practice or regulation 

on a normal, customary, and continuous basis 

and that such practice or regulation is unjust 

or unreasonable. As of the end of fiscal year 

2018, the comment period for the NPRM was 

open.

Inflation Adjustment of Civil Monetary Penalties [Docket No. 17-01]

The Commission published its annual civil 

penalty adjustments for inflation on January 

11, 2018 (applicable January 15, 2018), pursuant to the Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 2015. 

(82 FR 10719)

Commissioner Maffei at the bench, January 2018
52 57th Annual Report

Leveraging Technology

A continuous investment priority is the 

ongoing development, deployment and 

security of the agency’s information systems 

infrastructure. Digital transformation, the 

migration away from paper-based systems 

to automated computer systems, is ongoing 

at the Commission. The FMC’s automated 

information technology (IT) systems are used 

by the shipping public to file license applications, carrier and MTO agreements, and 

commercially sensitive operational data used 

by the Commission’s economists to conduct 

mission critical competition analysis. Planned 

IT investments will further streamline and 

improve the Commission’s internal business 

processes; expand research and analysis capabilities; and provide better public access to 

FMC information.

The FMC’s Information Technology Strategic Plan for FY 2018-2022 (IT Strategic Plan), 

finalized in December 2018, guides the FMC’s 

efforts to manage its IT resources. This new 

5-year Plan reflects the FMC’s progress with 

prior year initiatives; next steps for improving IT services and solutions; and guides 

the FMC’s IT mission, setting performance 

goals, objectives and, and timelines. The FMC 

IT Strategic Plan continues the work of the 

Information Resources Management (IRM) 

Strategic Plan for FY 2014-2017 and is aligned 

with the Commission’s agency-wide Strategic 

Plan for FY 2018-2022 to ensure information 

management is consistent with and supports 

the agency’s mission goals and objectives.

The FMC has identified four strategic goals 

in its IT Strategic Plan that target quality, 

efficiency, cybersecurity, and compliance, 

with action-oriented objectives supported by 

key initiatives. The four IT strategic goals are:

IT Strategic Goal 1 – Manage and deliver 

quality IT systems and services critical for the 

FMC to fulfill its mission and support related 

administrative, business, and operational 

functions.

IT Strategic Goal 2 – Maintain IT policies, procedures, and practices that support 

efficient and effective FMC business, administrative, and mission processes.

IT Strategic Goal 3 – Expand on current 

progress to strengthen cybersecurity of FMC’s 

networks and systems.

IT Strategic Goal 4 – Ensure reliability and 

accuracy of federal information technology 

as required by statutes, government-wide 

requirements, directives, or guidance.

The Commission completed or actively 

continued several key initiatives in 2018. 

At the enterprise level, IT capital planning 

and investment control (CPIC) is informed 

through engagement with the FMC’s Information Technology Advisory Board (ITAB). 

The ITAB is responsible for reviewing IT planning and the budget appropriate to support IT 

application development, business continuity 

and disaster recovery, information assurance 

and cybersecurity, data management and user 

support, as well as network and telecommunications systems maintenance.

During FY 2018, the FMC continued significant progress to upgrade its information 

systems infrastructure and architecture and 

fortified its security posture by implementing 
57th Annual Report 53

government-wide email and web security 

requirements mandated by the U.S. Department of Homeland Security (DHS).

In 2018, the Commission completed an initiative to upgrade the Service Contract Filing 

System (SERVCON) application and database 

environment. SERVCON is a web-facing filing 

system for ocean common carrier confidential service contracts and NVOCC service 

arrangements. The FMC uses SERVCON to 

review service contracts and arrangements 

which provides a critical source of data and 

information on trends in carrier pricing and 

information.

FY 2018 was the second full year since the 

eAgreements electronic filing system was 

launched, with over 95 percent of all agreements and amendments filed electronically. 

The use of eAgreements has streamlined FMC 

business processes by reducing initial agreement intake time, thereby resulting in faster 

public access to pending filed agreements and 

significantly reducing administrative costs for 

both the industry and the Commission. The 

migration of MTO agreements to the eAgreements system in FY 2018 also substantially 

increased the information available to the 

public, as many historical amendments to 

these agreements became available online.

The Commission is also continuing its 

efforts to develop a plan that will improve 

the design, usability and platform of its online 

docket library and historical document repository. When completed, the new design and 

functionality will expand the availability of 

public documents on the Commission’s website, including Sunshine Act meeting materials. 

Increasing information available to the public 

will enhance the public’s awareness and ability to participate in agency proceedings.

In January 2018, the Commission completed 

an upgrade of severely outdated audio/visual 

equipment in its Main Hearing Room. The 

upgrade included replacing equipment to 

allow for live streaming and closed captioning 

of public Commission meetings and events to 

promote higher quality public access to information on Commission activities and actions.
54 57th Annual Report
57th Annual Report 55

APPENDICES

A – FMC Organization Chart
56 57th Annual Report

B – FMC Senior Officials – FY 2018

Chief of Staff Mary T. Hoang

Counsel to Chairman Khouri John A. Moran

Counsel to Commissioner Dye Robert M. Blair

Counsel to Commissioner Doyle David J. Tubman, Jr*

Counsel to Commissioner Maffei Carrol Hand*

General Counsel Tyler J. Wood

Secretary Rachel E. Dickon

Chief Administrative Law Judge Clay G. Guthridge

Director, Office of CADRS Rebecca A. Fenneman

Director, Office of EEO Ebony Jarrett

Inspector General Jon Hatfield

Managing Director Karen V. Gregory

Deputy Managing Director Peter King

Director, Bureau of Certification and Licensing Sandra L. Kusumoto

Director (Deputy), Bureau of Enforcement Brian L. Troiano*; Benjamin K. Trogdon**

Director, Bureau of Trade Analysis Florence A. Carr

*Departed position in FY 2018: Tubman, February 2018; Hand, May 2018; Troiano, August 

2018

**Assumed position in August, 2018
57th Annual Report 57

C – Statement of Appropriations, Obligations, 

and Receipts

Appropriations

For necessary expenses of the Federal Maritime Commission, as authorized by §201(d) of 

the Merchant Marine Act, 1936, as amended (46 U.S.C. §307), including services as authorized 

by 5 U.S.C. §3109; hire of passenger motor vehicles as authorized by 31 U.S.C. §1343(b); and 

uniforms or allowances therefore, as authorized by 5 U.S.C. §§5901-5902, $27,490,000. Provided, 

that not to exceed $2,000 shall be available for official reception and representation expenses.

Public Law 115-141 $27,490,000

Total Budgetary Resources $27,490,000

Obligations and Unobligated Balance:

Net obligations for salaries and expenses 

for the fiscal year ended September 30, 2018

$27,138,443

Statement of Receipts:

Deposited with the General Fund of the Treasury for the Fiscal 

Year Ended with September 30, 2018

Publications and reproductions, fees and 

vessel certification, and freight forwarder 

applications

$245,822

Fines and penalties $1,108,194

Total general fund receipts $1,354,016
58 57th Annual Report

D – Agreement Types

Types of Agreements

First introduced with the current eAgreements system in FY 2016, the Commission categorizes ocean common carrier agreements by the types of agreements currently utilized by 

the ocean transportation industry, recognizing trends among types of agreement filings, and 

provided more refined information to users. The current categories are summarized below.

Space charter agreements authorize an ocean common carrier(s) to sell or exchange vessel 

space for use by another shipping line. Space charter agreements do not include the authority 

to discuss the provision of space in a trade, only the chartering of space already deployed.

Vessel sharing agreements authorize two or more shipping lines to discuss and agree on 

the supply of vessel capacity in a defined U.S. trade through the deployment of a specific 

service string or strings.

Global vessel sharing agreements/alliances authorize two or more shipping lines to discuss and agree on the supply of vessel capacity across multiple trades. Alliance agreements 

may contain other authorities such as, information exchange, joint procurement of goods or 

services necessary to operate their services, etc. While there are currently seven global alliance agreements on file with the Commission, only three are jointly/collectively operating 

container services in the U.S. trades.

Vessel-operating common carrier (VOCC) conference agreements are distinguished from 

all other types of agreements because they authorize two or more shipping lines to collectively 

discuss, agree, and fix uniform freight rates, charges, practices, and conditions of service 

relating to the receipt, carriage, handling and/or delivery of passengers or cargo. There are 

currently no conference agreements on file that cover the movement of general commercial 

cargo. The conference agreements currently on file with the Commission only involve the 

transport of government impelled cargo.

Joint service agreements authorize two or more shipping lines to establish and operate a 

combined vessel service or joint venture that uses a distinct operating name and generally 

acts as a single shipping line independent of the shipping lines that are parties to the joint 

service agreement.

Equipment discussion agreements are agreements between shipping lines that primarily 

focus on the discussion, exchange, and transportation of containers, chassis, LASH/ SEABEE 

barges, and related equipment.

VOCC rate discussion agreements focus on any type of rate matter or charges, but unlike 

conferences, any consensus on rates among the shipping line members is non-binding on the 

members.
57th Annual Report 59

VOCC cooperative working agreements (CWAs) authorize shipping lines to establish 

exclusive, preferential, or cooperative working relationships that are subject to the Shipping 

Act, but that do not fall precisely within the parameters of any other specifically defined 

agreement category.

Assessment agreements, whether part of a collective bargaining agreement or negotiated 

separately, authorize the parties to collectively bargain for fringe benefit obligations on other 

than a uniform man-hour basis regardless of the cargo handled or type of vessel or equipment utilized. These agreements can be between common carriers and labor organizations, 

or marine terminal operators and labor organizations, and are effective upon filing with the 

Commission.

Marine terminal rate discussion agreements authorize marine terminal operators to discuss 

rates and/or charges related to marine terminal operations.

Marine terminal facilities agreements generally refer to lease agreements between a marine 

terminal operator and the owner of the land or warehouse/facility at a port.

Marine terminal services agreements are agreements between a marine terminal operator 

and a shipping line concerning marine terminal services provided to and paid for by a shipping 

line. These services include: dockage, free time, handling, heavy lift, loading and unloading, 

terminal storage, usage, wharfage, wharf demurrage, and checking (the service of counting 

and checking cargo against the shipping documentation), and including any marine terminal 

facilities that may be provided incidentally to such marine terminal services.

Marine terminal joint venture agreements are agreements between or among two or more 

marine terminal operators, or between one or more marine terminal operators and one or 

more shipping lines, operating as a joint venture whereby a separate marine terminal operator is established.

MTO cooperative working agreements authorize marine terminal operators to establish 

exclusive, preferential, or cooperative working relationships subject to the Shipping Act, but 

do not fall precisely within the parameters of any of the above specifically defined agreement 

categories.
60 57th Annual Report

E – Civil Penalties Collected

Bondex Logistics Co. Ltd. $73,000

DSV Air & Sea Inc. and DSV Ocean Transport A/S $175,000

Golden Padlock, LLC $50,000

Jiangsu Feiliks Logistics Inc. $85,000

Prime Shipping International Inc. dba Prime Agency $120,000

North-Star World Trade Services $35,000

NZS Worldwide, Inc. $50,000

Swat International Inc. $85,000

Translink Shipping Inc. $115,000

Trans Orient Express, Inc. $70,000

Walmay Logistics, Inc. $75,000

Young-Ko Trans. Co., Ltd. $75,000

Blue Cargo Group LLC $75,000

Bayani Commercial, Inc. $25,000

Total: $1,108,000
57th Annual Report 61

F – Photo Credits

• Page 13 - The Container Ship 'MSC Chicago' Entering Savannh Harbor (GA) July 2012 

by Ron Cogswell is licensed under CC by 2.0

• Page 14 - Savannah River Defender by Rob Shenk is licensed under CC BY-SA 2.0

• Page 28 - Courtesy of Atlantic Container Lines

• Page 30 - Courtesy of South Carolina Ports Authority 

• Page 42 - Courtesy of South Carolina Ports Authority