ANN

Jfierra

Com

FISCAL YEAR EN

Office of nye ttfiainnnn

il

W 

TO THE SENATE AND HOU

Pursuant to sec

Plan No 7 of 1961 a

Marine Act 1936 as 

the Sixteenth Annual 

Commission This rep

reporting period that 

ended September 30 1

Mr Richard J Daschbach 

President Carter to the Federa

and confirmed by the Senate on 

nated Mr Daschbach to succeed 

Commission on August 5 1977 

August 24 1977 for a fiveye

Mr Ashton C Barrett of 

on August 23 1977 after seve

Mr Bob Casey of Texas re

October 31 1977 Mr Thomas 

to the Commission by President 

remainder of Mr Casey sterm 

appointed by the President to 

Mr Clarence Morse of Ca

April 20 1978 and was succee

1978 who was appointed by the 

Mr Morse sterm

The current members of th

Richard J Daschbach Chairman

D New Hampshire

Thomas F Moakley Vice Chairm

D Massachusetts

James V Day Commissioner

R Maine

Karl E Bakke Commissioner

R Virginia

Leslie L Kanuk Commissioner

D New Jersey

TAB

SCOPE OF AUTHORITY AND BASIC FU

OCEANBORNE COMMERCE IN REVIEW 

Trends in Trade by Geograp

Intermodalism 

Development of Containeriz

Freight Rates and Charges 

Domestic Commerce 

LEGISLATIVE DEVELOPMENT 

Proposed Legislation 

Other Legislative Activitie

FORMAL PROCEEDINGS 

RULEMAKING 

ACTION IN THE COURTS 

COMPLIANCE SURVEILLANCE AND E

Agreements Review 

Foreign Tariff Review 

Domestic Tariff Review 

Dual Rate Contract Systems 

Terminals 

Ocean Freight Forwarders 

Water Pollution Financial 

Passenger Vessel Respons

Informal Complaints 

Enforcement Activities 

SPECIAL STUDIES AND PROJECTS 

APPENDIX A

Statistical Abstract of F

APPENDIX B

Penalties for Shipping Act 

APPENDIX C

Bureau of Enforcement Fiel

APPENDIX D

Table of Organization

APPENDIX E

Statement of Appropriation 

Year Ended Scp ember 30 1

APPENDIX F

Field Offices

I SCOPE OF AUTH

The Federal Maritime Comm

by Reorganization Plan No 7 ef

authorities are derived from the S

Intercoastai Shipping Act 1933 Me

November 6 1966 Section 3ll of 

Subsection 204 cof the Trans Alas

The Commission is compo

President with the advice and co

appointed for fiveyear terms w

being appointed from the same poli

Commissioners to be the Chairman 

of the agency

The statutory authorities a

following principal areas I 

agreements of common carriers by 

foreign commerce of the United S

classifications tariffs regulations 

the domestic offshore trades of th

disapproval of tariff filings of com

of the United States 4 in

classifications and practices of co

forwarders in the waterborne fore

licensing of independent ocean freig
The Commission also issues 

of vessel owners or charterers of hi

to pay juiments for casualties or 

scheduled voyages or cruises

Other certification respones

certain vessels using US ports or 

discharges of oil and hazardous subs

for spills of oil that is transported th

The Commission is a quajudic

and makes rules and regulations gov

of its efforts are directed toward t

Commission does not have the au

commerce or to disapprove tariffs a

hearing

II OCEANBORN

TRENDS IN TRA

Far East

On February 1 1977 the Pac

their intermodal authority publishin

of the Far East Conference EEC 

Atlantic and Gulf Coast ports U

member lines soon filed over 400 

cutting was prompted by the imbalan

cargo to fill otherwise empty return 
Effective April 1 1977 FEC 

but due to mini bridge competitio

level or were reduced Many FEC 

bridge operators themselves felt 

their best interest and began tend

the 14 member lines had tendere

existence of the Far East Confere

resignations were withdrawn

At present a competitiv

intermodal rates however many 

are now lower than PWC slocal al

Central South America and Caribb

Government decrees appea

Latin American countries to guar

major portion of their import and 

In response to these dec

agreements usually bilateral ag

carriers in the Latin American 

usually granted to the bilateral tra

access to reserved cargo

Equal access agreements 

parties involved making them 

agreements One potential be

rationalization of services provi
required to service a trade and prod

efficiencies to be passed along to the 

During the past year numero

have begun efforts to institute a m

conferences have pending before the 

to provide for the appointrnent of a 

system to conduct selfpolicing

Europe

The last year has seen a m

conferences serving the US Europ

service was sufficiently developed 

time limits originally imposed by 

Development has been in the directio

loading and movement of containers 

through rates and through liability a

latter remains handicapped by statuto

The trend toward more restri

filing of a new GulfEuropean Freigh

and with more restricted independent 

Middle East

The nations of the Middle Ea

and on the Persian Gulf continue to 

When these countries began their v

influx of ocean carriers created se

surcharges of up to 200 percent being 
By midsummer of 1976 

declined somewhat due in part to 

arrivals Another factor in relie

ports has been increased utilizatio

offloaded at ports in Europe a

destination Similar service is als

ports

By the summer of this yea

surcharges at most ports had been 

However the potential for conge

foreseeable future and needs to be 

Africa

The first requests for inte

trades were received during the p

AfricaUSA Conference Agree

East Africa Conference Agreeme

inbound and outbound trades betw

States Atlantic and Gulf ports f

authority to engage in intermoda

American West African Freight C

between US Atlantic and Gulf po

Australia

Frozen meat continues to 

the United States with ocean 
AMB The AMB is a governmen

negotiation can also purchase ex

actions necessary to meet export quo

A formal withdrawal of all 

liaEastern USAShipping Conferen

in rate negotiations and the booking 

subsequently approved Agreements 

northbound ocean carriers in the A

with the AMB Ultimately a new C

into by Farrell Lines Incorpora

Transportation Australia Ltd A

Express Line AAsia Pty Ltd 

November 23 1976 This agreemen

action with respect to carriage of f

parties and a reduced share of the 

agreement has stablilized movement 

Southbound to Australia from 

ocean carriers have been members 

New Zealand Conference or the 

Recently ACE Line Limited and 

Company FESCO have entered the 

Bermuda

Approximately six years ago 

longtime buying habits by transferr
British and European sources to A

the beginning has been accelera

Bermudan importers to turn to A

European currencies the inflation 

of European exporters to supply 

transportation from the US

The growth in the USB

container facilities available in 

Atlantic Shipping Ltd and Bermu

this pressure was approved by the 

I

The introduction of conta

technological revolution that ha

One of the attributes of a contai

to various modes of transportat

concept of intermodalism whic

through transportation from shi

transportation modes

Containerization and inte

tation innovations including lan

a transportation service which is 

ocean movement and it gene

maxibridge
taei s

Containerization t cargo s 

of sophisticated intermodal vessels 

the impetus for the establishment o

The Federal Maritime Com

responsibile for the regulation of t

systems ocean transportation In 

promulgate adequate regulations w

cargo These rules and regulati

Commission sGeneral Order 13

There are now approximatel

the Commission representing servic

extensive use of container and lig

motor carriers and inland water 

offering single document bills of la

combination of these factors sho

American exporter and importer

While the Commission srec

modal tariffs are mini bridge tariff

filed by ocean carriers such as mic

Mini bridge is a joint servic

provides the shipper with an altern

bridge service involves the receip

continental movement to the oppos

an ocean carrier for delivery to a 

point
Micro bridge service is also 

cases US motor carriers which pro

route usually over the shortest rout

and the receiver Microbridge ser

resulted in the mini bridge service 

service Several carriers now hav

carrier with multimodal services 

tariffs many carriers are serving the 

tariffs which provide for through rat

Agreements

During Fiscal Year 1977 con

authority increased from 32 to 43 

actually filed intortnodal tariffs inc

United Kingdom Continent Medit

Hong Kong Far East and Straits tra

Interagency Committee on Intermod

The staff of the Federa

Interagency Committee on Intermo

The ICIC functions as an informat

provides a forum where these e

responsive to the shipping industry 

intermodalism
Inland Rules and Practices

During the fiscal year nume

and consortia serving Continenta

ports were granted authority to e

in Europe

Conferences and rate agre

intermodal services to meet cus

beyond the historical sales or mar

tion services such as pickup an

drayage establishing offpier d

establishing rules governing shippe

from interior points

Intermodal arrangements w

activities developed to the poin

inland segment of the cargo movem

be authorized and they would serv

legitimate Conferences and rate 

practices but also had to regulate t

Consortia and joint services 

they could operate coextensively w

they belonged They were not 

authority without prior Commission 

Competitive pressure led to 

and regulate inland rules and pract

respective applicants to resolve in
trade stability and to extend se

movements so the regulations could 

LashSeabee and Ro Services

Rollonrolloff roro servic

is growing in popularity on trade 

extensively at ports particularly i

wharfage and loading facilities

The vessels employed in ror

cargoes such as automobiles and a

ship on massive ramps and driven 

wheeled cargoes rolro vessels car 

including container palletized u

generally do not lend themselves to 

Lighter AboardShip LASIi 

between US South Atlantic and 

Pacific Coast and the Far East

LASH encompasses the us

envisions a complement of barges o

on board a mother ship The barge

the mother ship and either adjace

and abroad Whereas all other typ

vessels can operate at anchorages 

loaded irrespective of whether 

operations
DEVELOPMEN

Many carriers have fond it 

g cerr ents to limit the number o

greu ents have been appro ed 

interchange containers container c

these interchange agreements there 

whereby one carrier leases contain

for its own use for a per diem charg

The Japanese carriers co

maximum utilization in the Japa

agreements

The four Japanese space c

Year 1977 Agreement No 9835 is 

while Agreements Nos 9718 9731 

Three of the agreements 9718 973

the US West Coast while Agreem

and the Atlantic Coast

Under these agreements no 

carriers in order to charter space 

arrangements reduce the overall c

each participant and benefit the sh

cargoes

Agreement No 10186 is a spac

Corporation KSC and Orient Overs

is authorized to charter a certain 

1
vessels operated by OOCL This 

offer a containership service bet

countries

Agreement No 10051 amon

iterranean trades provides autho

other svessels in times of emergen

Agreement No 10254 be

Navigation Co allows AEL to cha

USports and Israel

Containerization has enable

means of more than one mode o

have become common Ocean c

geographical scope than the tradit

Cargo Diversion

The development of con

containerized US exports and im

nations particularly Canada 

diversion and the problems it cr

Maritime industry Containeriza

ports on each coast which they w

all of the costs of moving the go

to serve The loss of cargoes 

adversely affects US foreign c

networks and our ports of reve

diverted traffic
The Shipping Act clearly e

ences serving a US port regardle

order in Docket 7366 in which th

ACE to be a common carrier by w

the meaning of the Shipping Act 

the order has been appealed

FREIGHT RATES AND C

While the Commission saut

ensure that general increases do n

keeping with our efforts to ensure 

goods and services at a fair and e

been recorded during the pact yea

pressures that prevail throughout the 

General Rate Increases

The Commission has devoted 

rate increases to ensure that ra

conferences do not become an undu

otherwise contrary to the Shipping A

of surveillance over general freigh

United States foreign trade When a 

a detailed justification is required 

the method used by the carriers and 

increase 2 the carrier expenses 

action the carriersconferences conte

1
not impede American exporters in 

of the data submitted then determin

Surcharges

Carriers and conferences es

nary expenses resulting from tem

problems and currency fluctuation

cost situations and the Commissio

charges are necessary and that th

maintaining an effective surveillan

expertise of agencies such as the 

foreign commerce and port in

justification for the surcharge

Program for Rate Disparities

The Commission has been 

regulation as it pertains to the pr

tion by common carriers in the US 

carriers The Commission has tr

from charging US exporters of 

charged to foreign shippers of es

inbound trade

Due to the limitations 

Commission intends to meet its r

some of the following methods
Utilization of its compu

data

Considerat nnof modifyi

greater awareness of poss

Promotion of a Uniform T

Use of its authority und

necessary to secure data 

complaints over alleged d

Exemptions

During the reporting period 

water carriers participating in a thr

Sound ports and ports in British Co

Columbia Canada and ports and 

Commission stariff filing require

Canada with those in Alaska and the 

by railroad tariffs listing the water 

with the ICC and the Canadian Tr

traffic by the FMC was unnecessary

Incheon Outport Arbitrary Rate Asse

On September 20 1976 the 

member lines of the Far East 

JapanKorea Atlantic and Gulf Freig

ence of JapanKorea and eight i

published arbitrary rate assessments 

1
A total of 31 carriers were se

supporting a conferencewide ar

transpor cation conditions

After a review of the data 

mentioned Section 21 Order the C

requiring that they show cause 

conferences authoriity to be con

under Section 15 of the Shipping 

should not be relinquished If re

respective conferences could esta

based upon valid economic trans

service to or from the port of Inch

Far East Conference

On September 27 1977 sh

Conference and its member lines 

accessorial charges at US Atla

amendment filed by the conferenc

that wharfage charges which are 

vessel will be rebilled by the carri

Wharfage charges are curr

of Atlantic coast ports where ca

except at New York where wharf

US Gulf coast ports wharfage is 

The proposed tariff mod

Atlantic coast ports end in effe
ports in the US Atlantic and G

freight collections within the c

Merchant Marine Act 1936 and 

Shipping Act 1916

Dangerous and Hazardous Cargo Ru

During Fiscal Year 1977 nu

concerning the filing of new rules 

cargo published by the US Atlantic 

Conference The rule required tha

carrier for hazardous cargo burd

Commission made an in depth analy

the rules postponed As part of 

meeting between interested carrier

to discuss the impact of the rules 

discussions were used to modify the 

OCPFact Finding

On August 23 1977 the Com

10 concerning the proposed phasing 

cargo in the trade between the F

States

This investigation was promp

Freight Conference of JapanKorea 

The purpose of the Commisss

Conference saction on the shippin
report to the Commission every th

recommendations due in August 19

DOME

The Intercoastal Shipping A

Act 1916 mandate the Commiss

commercial maritime community 

that common carriers shippers f

abide by the terms of the statutes 

exercise of its authority the Com

practices involved in the moveme

are just and reasonable

Puerto Rico

In late May and early J

Authority PRMSA Gulf Caribbea

Transport Corporation TMT filed 

protestants objected to PRMSA si

which is currently the subject of D

In light of the pending 

investigation in Docket No 7730 

of TMT and GCML caused the 

increases in Dockets No 7727 an

TMT and GCML requeste

investigations discontinued Bo
Commission determined that no us

suspensions Since other issues re

were continued

SeaLand Service Inc Sea

Rico trade with a containerload s

after SeaLand took steps to chan

from shipperload to carrierload sou

southbound movements was initial

provisions became effective

Following strong opposition 

decided that the provisions could be 

unreasonable Both the original sou

under investigation in Docket N

amendments which never went into 

indicated its desire not to defen

provisions and the proceeding was d

Seatrain Gitmo Inc Seatra

applicable to the carriage of governm

The provisions of each were identica

June 1975 and which are still under 

carriers proposals were placed unde

28 and Sea Land in Docket No 7738

PRMSA also dominated other 

Governor of Puerto Rico campaig

Commonwealth ssale of PRMSA Th

2
and bids were received At the en

bids and negotiating with the bidde

The West CoastPuerto Ric

the trade put a 10 percent genera

May and June 1977 SeaLand ag

trailer and to raise certain other 

the face of several protests Effec

percent general increase Numero

suspended in Docket No 7748 

understatement by SeaLand of 

statistics as opposed to the require

Alaska

Foss Alaska Line Inc F

increase in the Seattle Western 

SeattleSouthern Alaska trade in 

general increase and new tariff 

protested the filings The Commis

tariff to become effective and la

the State of Alaska

Northland Marine Lines In

Coast and Alaska Hawaii filed a 

October 1976 Northland self insu

capsized in the Gulf of Alaska i

insurance claims Northland sub
indicated its intentions to continue 

Northland has entered into final ba

Alaska Cargo Lines Inc AC

Alaska in May 1977 and appears to 

Pacific Alaska Line Inc P

tiled a joint protest alleging that 

Kotzebue were noncompensatory 

tations submitted were not sufficien

During the spring of 1977 b

ACL continued to reduce rat

ACL

incentives for volume shipments an

ACL both entered into connecting 

which resulted

carriers

Black Navigation Company 

in its tariff applicable at St Michae

in through

rates t

Hawaii

Matson Navigation Company 

the trade with United States Lines 

Sause and Hawaiian Marine Lines 

a Crowleyowned tug and barge op

rates and rules effective February 

service to additional ports

In March HML proposed new 

application to the Oregon counties 

2
lumber cargoes to move out of th

Douglas County area with a servic

indications that the Souse service 

its Portland to Hawaii lumber rate

the same commodities moving th

The diversion of lumber from Sauss

was considered to be potentially p

proportional rates on April 14 1

rates and the proceeding was disco

In June 1977 Matson pro

United States Lines following soon 

increases and after consideratio

increases to become effective

Guam

After remaining dormant 

mainland ports and Guam came 

essentially served by only tw

Navigation Company Matson an

part of the fiscal year these 

provisions governing shipments o

however the Commission allowed 

Triggered by a substantial 

Port of Guam the carriers filed 

and charges The increase of US
acted to initiate an investigation 

carriers Subsequent to the suspen

increase while USL cancelled its inc

American Samoa

Late in the last quarter of F

between the US Mainland and Pag

increase in rates proposed to be 

increase was not protested Howev

postponement of the increases

BI LEGISLA

PROPOS

Regulatory Reform

S 263 The Interim Regulat

consideration by the Congress in the 

version was subsequently passed by th

legislation would have required seve

Maritime Commission to undertake 

administer and propose statutory cha

rules and regulations

Although the Commission suppo

with many of its provisions were h

Bakke on April 4 1977 before the Se

2
Committee After receiving testim

decided to delete the recodification 

bills were thereafter introduced 

individual agencies Thus S 1532 w

Commission to review and systema

it has promulgated and which are s

S 1532 also includes provisi

Congressional access to inform

avoidance of conflict of inter

President by and with the advice a

oversight through the process of 

four years S 1532 passed the Se

Merchant Marine and Fisheries C

June 10 1977 and was referred to t

Comprehensive Oil Spill Liability 

HR 37ll the original sup

comprehensive system of liabili

removal costs Because of cer

anticipated difficulties adhering 

objections to the bill in a letter 

Fisheries HR 3711 was subsequ

was passed by the House Septemb

During the first session o

number of bills dealing with 
compensation for oil spill damage 

The Commission commented upon 

Senate Commerce Science and T

Commission stated it would sup

modifications were made but oppo

September 12 1977 S 2083 was rep

and was referred to the Senate Co

further consideration

Rates in Domestic Offshore Trades

HR 6503 a bill designed to 

order to revise the Commission s

domestic offshore commerce is an a

by the House on September 20 1976 

1976 by the Senate with Senate ame

1976 and included additional amend

prevented any further action on the le

Thus HR 6503 was introduced 

Congress If enacted the bill would 

offshore trades to file without s

decreases of seven percent or less 2 

Commission to order refunds to over

given rate increase to be unjustified 

reasons for instituting a hearing on 

Commission decision making by pres

hearings initial decisions and fina

26
testified before the House Mercha

Marine Subcommittee on May 23 

bill After the hearing the Coms

staff on several occasions As a re

during Committee markup and the 

reduced The bill was reported 

Fisheries June 301977

Regulation of US Cargo Diverted 

Legislation to provide for r

cargo being transported via Canada 

the House and Senate in the form 

The bills required carriers who s

through Canadian ports to file tarif

Merchant Marine and Fisheries Co

Transportation Committee the Co

of this legislation for several reaso

The Commission maintaine

United States would be viewed by 

of their sovereignty and would 

believed that the bill would und

shippers the right to avail themse

parity requirement imposed in the 

disadvantage with Canadian or Me

of US commerce Finally the C

jurisdiction over carriers who offe
the United States via Canadian or 

the Legislation be amended to cl

intermodal services

OTHER LEG

Energy Policy and Conservation Act 

Pursuant to section 382 ao

Conservation Act a report was su

Committee on Interstate and Foreig

Interior and Insular Affairs

To assist its preparation of the 

from all vessel operating common c

commerce of the United States re

programs by carriers to reduce f

statutes that inhibit efficient use of f

The Commission finally reporte

efforts by carriers to minimize fu

consumption to ten percent below 

extremely remote given existing eco

programs now in effect by carriers to 

fuel consumption reduction in ve

technological advances and educatio

consumption

The Commission and responding 

statutes administered by the Comm

28
inefficient use of energy Finally 

energy conservation programs und

the private sector

Financial Reporting

On September 23 1977 t

proposed legislation drafted by th

legislation would amend the Inte

financial reports of common carrie

this legislation would permit the 

of rate base and income which 

public Similar authority is prese

Interstate Commerce Commission

Illegal Rebating in the Foreign Co

The Senate Committee on 

charged with Commission oversig

shipping practices in United Stat

before the Commerce Committes

discuss the problem of rebating 

commerce on March 18 1977 

overtonnaging which often leads 

recommendations made in an 

policing and discussed the Coms

was undertaken to investigate w

expected to lead to the introd

rebating activities
IV FOR

BEFORE 

During Fiscal Year 1977 the 

proceedings and issued decisions te

were discontinued or dismissed wit

review Administrative Law Judge o

referred or remanded to the Office o

The Commission also issued 

tions and 35 decisions in informal do

than 55000

Among the more noteworthy C

Docket No 73 44 Kraft 

proceedings on remand from the DC 

carrier tariff rule requiring a claim 

with the carrier before shipment leav

claim with the Commission within the 

Docket No 7366 Austas

operating carrier transporting United 

area to Australia via the west coast 

the Shipping Act and was ordered to f

It was held that Shipping Act jurisdic

a United States port by an ocean goi

the Court of Appeals for District of C

Docket No 73 79 Household 

Inc v American Export Lines Inc 

3
Lines Inc The practice of certa

available to shippers of used ho

personnel under International Th

generally lower than the rates av

constitute unjust discrimination 

despite the 1974 repeal of Section 

reconsideration is pending before 

Docket No 74 18 Dow C

Lines Limited et al The Comm

ambiguous with regard to the app

containers tendered to the carrie

shipper entitling the shipper to re

Docket Nos 75 4 and 75 5 

Command v Matson Navigation 

burden of proving that Matson sfa

rates is an unjust and unreasonab

the Shipping Act 1916 and Sectio

Docket 75 13 Petition 

Conference and North Atlantic B

In this proceeding the Commis

Act 1916 requires only that a c

notice of any increase in the con

Docket No 75 15 The 

Steamship Company and Docket 

The Commission determined th
NOS when the bill of lading de

preclude Commission consideration o

with the FMC

Docket No 7530 Agreemen

the Commission found that an agreem

the sharing of space on their respe

sailing and itineraries of those ves

Shipping Act because the agreem

condition of the transPacific trade

keeping a high number of common ca

Docket No 76 2 Borden Inc 

tariff provision requiring statement o

to deny shippers opportunity to e

Commission

Docket No 7637 American 

Order The Commission has juris

responsibility under Section 3 of PL 

which are otherwise regulated by the 

Other Commission decisions is

billing practices of certain freight 

agreements approvability of prefere

active tariffs and a wide range of oce

The Commission also adopted i

Chemical Company v Mitsui OSKL

Waterman Steamship Corp i7544 

Lines 76 1 CSC International Inc v 

32
Trane Company v South Africa

Health Organization v Prudential 

v South African Marine Corporatio

ocean freight The Commission 

Administrative Law Judge in D

General Rate Increase in the V

respondent srate increase not unju

At the beginning of Fiscal 

Administrative Law Judges Durin

four cases reopened and remand

proceedings The judges held 28 p

cases issued 19 initial decisions 

special docket applications Ca

proceedings The Commission ad

decisions

In proceedings not yet de

decisions of the Commission sALs

Docket No 7176 Bethleh

A harbor service charge contained 

unjust and unreasonable charge in 

where a port dedicated to the p

benefit to vessels using either pu

Docket No 72 35 Pa

Woodpulp from United States W

respondent conference had engag
of Section 15 of the Shipping Act 

ordered modified and member lines 

and fair wastepaper rates

Docket No 73 22 Matson 

Between the US Pacific Coast and 

Navigation Co General Rate Incre

36 Sub No 1 Matson Navigation 

investigation of rates under Section 

the Intercoastal Shipping Act 1933 

cannot support an award of reparatio

effect at the time of the investigati

Docket No 7338 Council o

American Mail Lines Ltd et al 

violative of Section 16 First 17 or 

reevaluation of past criteria and 

intermodal or minibridge service in 

particularly in containerization and t

Docket No 74 45 Agreeme

York Terminal Conference NYTC 

and demurrage rules for particular 

Section 15 of the Shipping Act 19

conference tariff rather than by mul

Docket No 7610 Joy Manuf

It was found that the party which i

proper party to recover overcharges 

The proceeding was held open for sub

3
Docket No 76 41 Berthin

was found that 1 the Commis

Authority and the Puerto Rico M

Section 1 of the Shipping Act 1916 

of the Act by failure to preve

property thereon from becoming 

Ports Authority also violated S

enforce just and reasonable reg

utilization of public areas at Isla 

the Act by its exclusive utilizati

itself an unreasonable preferen

unreasonable disadvantage and 5 

failure to establish just and reaso

of its container cranes and rails lo

Judges also issued initial d

7624 7625 76 42 772 and th

close of Fiscal Year 1977 nin

Commission sAdministrative Law 

The following rules were p

rulemaking proceedings Seve

Government in the Sunshine Ac
Docket Nos 7649 7661 7

Amendments to the Rules of Pract

conduct of administrative proceeding

Amendments 16 18 and 20

Docket No 7665 Rules Impl

Implementation of Government in t

of agency business in open sessions 

General Order 22 Amendment 8

Docket No 7666 Extraneous 

tion of Section 4 of the Sunshine A

amended the Administrative Procedu

parte communications The rule pro

interested person from communicat

Commission member Administrative 

or may reasonably be expected to be 

that proceeding General Order 16 A

Docket No 7714 Appearanc

Former Employees Amendments 

prohibit any former Commission me

appearing or representing anyone be

termination of his or her service with 

particular matter under consideration 

responsibility of such person at any t

or her service with the Commission G

36
Docket No 7724 Oil P

operators of vessels carrying Alask

General Order 37

The following rulemaking p

were still in progress as of Septem

Docket No 7658 Report 

Trades

Docket No 7663 Genera

Other Persons Supporting Stateme

Docket No 77 22 Action

Shipping in the Forei nTrade of t

Four rulemaking proceedin

rules

VI AC

At the beginning of the 197

was a party in fifteen proceeding

Of these cases ten involved petit

were appeals from actions in Unit

ending September 30 1977 eigh

appeals were taken from Distric

participating in six actions in Uni

During the 1977 Fiscal Ye

Appeal were either completed o

briefs argument or decision
The Commission referred n

Justice during the Fiscal Year

Significant Cases

The more important cases in

sion included the following

FMC USA v Pacific Mar

14o 76938 This case is on certiora

the DC Circuit Pacific Maritime 

1976 which held that the FMC la

approval of agreements negotiated d

longshore labor The Commission 

members of the Pacific Maritime 

collective bargaining association 

Warehousemen sUnion 1LWU which 

and nonmember employers was 

requirement of Section 15 Shipping 

agreement in attempting to impose 

PMA member employers controlled 

and that the mere existence of 

agreements did not necessarily exem

The briefs have been filed but argum

United States v Sea Land S

represents a civil penalty action 

Department of Justice against SeaLa
of the Shipping Act 1916 Section 

Commission order of suspension

Sea Land in conformity 

Longshoremen sAssociation and 

provision which would deny conta

the New York Harbor Sea L

Commission SeaLand neverthele

refused containers to consolidato

for 151 days of continuing viola

sections 18 and 32 of the Shipping 

New Jersey District Court how

awarded only5000 in civil penal

The case is on appeal to the Third 

United States Lines v FM

Case No 76 2004 is a review of 

No 99023 without a hearing A

Euro Pacific Joint Service Agree

Generale Transatlantique which 

and allowed the joint service t

combination breakibulk and conta

the agreement and requested a he

Case No 771470 is a re

pendente lite to a continuation 

amended through Agreement No 

Docket No 77 4 an investigation 
the joint service and Euro Pacific s

containerized vessels and to use sepa

Service Inc filed protests to the 

review of the Commission sapprov

without a hearing Briefs have been 

scheduled

Austasia Container Express v 

to as the ACE case this court act

decision finding a through containe

Australia via Windsor and Vancouv

requirements of the Shipping Act 

containers overland by Canadian ra

United States is involved The ca

construction of Sections 1 and 18 of 

oral argument is expected to be sched

New York Foreign Freight F

USA DC Cir No 751867 Th

Commission rulemaking proceeding 

that non vessel operating common 

jurisdiction should be excluded on p

tional joint rates with ICC regulated 

vessel operating carriers are allowed 

one of five petitioners challenging the 

case is awaiting argument

Delta Steamship Lines v FMC 

case was brought under the Freedom 

40
denial of access to the documents 

Inc in connection with settlem

violations under Sections 16 and 1b

argument on a summary judgment 

Ryoichi Takazato and Kan

Civil No 771575 WHO This is a 

and two of its officials for alledg

an investigational subpoena to pla

of a court order directing the Co

was issued in the course of Fact 

that the Commission ssubpoena 

proceedings brought pursuant to 

Commission has filed an answer an

US v Deutsche Dampfsc

2737 Civil penalty action filed 

receipt by this joint service Germs

Fassio Service of rebates on ov

Section 16 violations would tota

violations 1628 This case has no

US Lines v Boyce Lucke

private civil action brought by U

tecum of an Administrative La

custody of HapagLloyd s busin

intervened both to have the subp

court order in the event that the C

difficulties in obtaining complianc

the subpoenas were ordercd on forc
Other significant proceedings 

FMC and USA a review of the Coms

certain adjustments in assessments 

maritime laborers Ceres Terminals 

a proceeding brought by lessees of 

round to be operating under an unapp

several civil penalty and enforcemen

of Fact Finding Investigation No 9 in

Non Adjudicatory Matters

The Commission initiated 19 

1977 During the period several cla

of civil penalties totalling 1899 600 

first installment of a 4000 pen

SeaLand Service Inc for violations 

1916 The claims asserted and c

violations of Sections 15 16 18 a

importance during the fiscal year we

anti rebating provisions of the Ship

result in a significant increase in enfo

4
Vll COMPLIANCE SU

AGR

Section 15 of the Shipping 

continued approval of ocean carr

consideration of these agreemen

anticompetitive effect of any ag

weighed against its potential publi

Section 15 also provides t

approval permitted to any confer

terms and conditions for admissio

withdrawal from membership w

Commission shall disapprove any 

finding of inadequate policing of th

maintain reasonable procedures f

and complaints

During Fiscal Year 1977 

Section 15 A statistical table of 

appears in Appendix A

The surveillance of approve

agreement and its modifications in 

requirements of Section 15 and th

ie 6 7 9 14 17 18 23 and 24 

the latest Commission and court 

one of these criteria correspon
agreement in an attempt to have i

Occasionally the parties comply 

proceeding

The Commission receives re

analyzed to determine that no malp

the parties are not engaged in activ

impact of their activities upon 

measured

Minutes of Meetings

It is the responsibility of t

Section 15 conference and ratemakin

all times and within the terms of th

this responsibility the Commission 

conference operations are carried 

timely reports including minutes

In Fiscal Year 1977 2166 m

and discussion agreements were fi

staff

Shippers Requests and Complaints

The phrase shippers reques

requesting a change in tariff rates 

or other tariff changes protesting 

commodity classification incorrect 

concernings sny other aspect of the 
In Fiscal Year 1977 300 re

were filed with the Commission an

received and reviewed covering ter

SelfPolicing Reports

These reports are intended 

conferences and rate agreements a

with respect to malpractices and b

1977 186 semiannual self policing 

reviewed by the staff

Conferences are turning in 

mechanisms in order to effectivel

In evaluating the continued viab

ocean transportation strategy the 

respective conferences ability to 

1977 the Commission was develop

self policing requirements for conf

Pooling Statements

Pooling statements are filed 

activities of the parties to poolin

financial settlements made betwe

formula in the basic agreement 

semiannual basis The majority 

trades They usually require the 

served in addition to Commission 
policy of the foreign government 

particpating Latin American flag line 

due consideration in the processing o

Fortyseven pooling statemen

the staff during Fiscal Year 1977

Operating Reports

Reports submitted by partie

agreements primarily in the Japane

consortia and sailing agreements a

reports require a detailed analysis o

their operations do not exceed the s

technological changes in the industry 

to increase in the future

Ninetyone operating reports 

by the staff in Fiscal Year 1977

Nonexclusive Transshipment Agreem

General Order 23 exempts no

requirements of section 15 These 

carrier from entering into similar a

parties involved must file these agree

General Order and the tariff sinv

order The Commission does not nee

they be processed at staff level Ss

nonexclusive transshipment agreem

through September 30 1977 As of th
Agreements in the Domestic Trades

During Fiscal Year 1977 

filed for Commission approval th

close of the fiscal year

FOREI

The tariffs that are subm

changes in their rates rules an

continuing program to ensure th

operating in the foreign commerce 

Shipping Act 1916 and other rela

general orders Such examination 

of

Section 18b and Gene

rules and regulations

Section 15

Section 14b and the va

systems as approved by 

Sections 14 16 and 17

General Orders of the 

compensation import an

During Fiscal Year 1977 th

were cancelled resulting in a ne

reflects the beginning of the Cos

from its files Active tariffs on fi
Special Permission Applications

Under section 18b of the Sh

in its discretion and for good ca

provision applicable to new or initia

the shipper During Fiscal Year 

permission applications requesting w

98 special permission applications p

granted 20 denied and 12 withdrawn

Programs and Surveillance Activity

The Shipping Act and the Cos

he filed with the Commission and 

Although these filings are carefully 

requirements they are also examin

regulations Tariff filings constitut

which enables the Commission to car

Tariff material filed with the 

various provisions of bills of lading d

to determine whether conference ta

under approved agreements 3 m

consolidator compensation 4 ident

respect to shippers consignees po

identify discriminatory freight rate

commerce 6 watch for trends in 

areas 7 observe development of int

4
an impact on traditional trade p

surcharges to ensure that they a

carefully analyze all tariff rule

applicable Commission regulations

Cancellation of Inactive Tariffs

The Commission issued a S

which were believed to be no lon

should not be cancelled The S

Register and resulted in the cance

Phase II of the cancellat

independent tariffs on file with the 

filing of changes in rates within a 

carrier services were not being p

were identified and an Order was 

tariffs should not be cancelled 

resulted in the voluntary cancellat

DOMES

The Commission sregulat

commerce derive mainly from the 

Act 1933

The Domestic Tariff Circu

April 1948 During the past 29 ye
times in an effort to provide for 

continued develpment of containe

through movement the neeed for 

appeared prudent to revise rather t

saw the completion of this revised 

new rules designated as Commis

January 1 1978 with full compliance 

DUAL RATE 

Section 14b of the Shipping A

dual rate contract systems by any co

our foreign commerce which would 

The Pacific Coast European 

rate system modification pending 

because it results from intermodalis

contract system

The modification provides fo

to intermodal rates applying from 

destination ports of call Protests 

The primary objection is the denial 

across the United States In ad

Commerce Act does not authorize 

agency for that portion of the movem
Two dual rate contract mod

Coast European Conference were fil

JapanKorea and the Japan Korea 

modifications are the subject of Doc

7 and 3103 DR7 on which hearings 

Seven other dual rate contra

Commission and one application f

denied

The terminal industry provi

cargo between land and sea carrie

shippers and consignees may directl

In order to keep pace with e

and to facilitate the interchange o

sums of money to modernize their 

leases preferential berthing assig

agreements which permit operator

are common to the industry as a w

The Commission closely mo

is required appropriate action und

in certain instances the dem

in litigation involving the approv

involved parties that preferenti

detrimental to their individual inte
Competition het veen earn

competition between ports for avai

on the part of the Commission and 

of the shipping public terrnir alopici

Section 16 of the Act forbi

making or giving any undue or u

particular person locality or descrip

Tariff Filings

During the reporting period 

examined on behalf of terminal ope

had an alltime high of 609 active te

Agreements Review

During Fiscal Year 1977 

Commission consideration As of 

terminal agreements on file

Rulemaking

The trend toward more int

operator also acts as s stevedore co

developments Agreements with c

nalstevedoring services These 

jurisdictional problems since the C

authority over the activities of par

provide some guidance to the 
requirements for these types of agr

prepare a new proposed rule which 

dore agreements 2 propose an ex

certain types of agreements and 

jurisdiction over the use of inlan

operators

Tariff Matters

A total of 520 terminal op

appear in the Commission s ma

Communication with the operato

facilitated through the use of this s

As a result of continuing ec

noticeably during the past 12 month

1977 Most terminal operators cite 

ILA labor as the primary reason fo

OCEAN F

The Commission under the 

program of licensing and regulating 

44 of the Shipping Act 1916 ma

business of forwarding provided th

properly perform forwarding servic

licensing of any person related 

beneficial interest in export carg

who do not perform services on b
forwarders maintain a bond to 

services in accordance with con

forwarding activities

The Commission sGeneral 

met by freight forwarder applica

conduct and activities of regulated 

Since 1962 approximately 

having been found fit willing and 

forwarding and 1310 of those 

forwarders in addition to their 

offices for which similar prior app

During the reporting period 

for licenses 136 of which were app

also were approved during the yea

The time between the fil

reduced from an average of nearly 

years

Denials and Revocations

During Fiscal Year 1977 the 

various reasons and 23 applicatio

Commission requirements

Significant Proceedings

During the reporting per

initiated by the Commission involv
Docket No 7726 Independ

Mobley Inc involves allegations th

falsely certified by the licensee in v

which could jeopardize the licenses

ocean freight forwarder This proce

had failed to pay freight monies adv

to payment within the time period s

Docket No 7737 Independe

Vasquez involves allegations that 

export shipments in the foreign com

the licensee does not appear to mee

forwarder as defined in Section 1 Sh

Automatic Data Processing

The Commission has contin

system for maintaining accurate 

forwarders This system is updat

information relative to independen

current status

Rulemaking Proceedings

The Commission has institu

No 7753 which proposes to incre

from 10000 to 50000 Experien

forwarder default the present amo

measure of protection that Congre
rendered the bond figure of 10000 

is illustrated by the fact that fre

original bond for 10000 was estab

The proposed rulernaking als

procedures with respect tc applican

The Commission also is re

which apply to the licensing and re

ing revisions which would address 

ocean freight forwarding industry

WATER POLLUTIO

The Federal Maritime Com

the financial responsibility provisio

Pollution Control Act FWPCA an

TransAlaska Pipeline Authorizatio

between the two statutes the FWP

TAPAA program

Federal Water Pollution Control Ac

Section 3ll p1of the FWP

and foreign vessels over 300 gross 

size using any port or place in th

United States including the Panama 

to establish and maintain with the 
to meet their potential liability to 

removing oil or hazardous substa

waters

Ihe financial responsibility 

effect since April 3 1971 The finan

hazardous substances however ca

Protection Agency establishes neces

TransAlaska Pipeline Authorization 

Subsection 204 eof the TAP

and foreign vessels including barge

through the TransAlaska pipeline 

the size of such vessels are r

Commission evidence of financial 

which would result from a discha

TAPAA is a more broad and strict l

Level of Responsibility

The amount of evidence of f

100 per gross ton of a subject vess

evidence is arranged by vessel own

bonds self insurance or guaranties 

on file with the Commission to as

reimbursed for costs incurred in t

FWPCA
The Commission simpleme

the certification of vessels which 

responsibility requirements No s

without carrying a valid certificat

enforcement officials upon reques

The amount of evidence o

204 eof the TAPAA is 14 mil

without regard to any evidence re

submitted to the Commission purs

form of insurance designed by t

international Protection and inde

subject to the TAPAA requirem

companies have agreed to insure th

The Commission sregulation

requirements are contained in the 

vessel may load carry transship L

pipeline without a valid certificate 

oil already has been brought ashore 

at a US port it becomes subject t

any non Alaskan oil would be

Enforcement Program

During the year the Comm

port locations in an area ranging fro

to the US Virgin islands Of that 

vessels because they were not in c

5
Without the Commission coordinate

of the 1386 vessels would have been 

failure to carry certificates In 135

Commission sconfirmation to the 

involved vessels were in complianc

the Acts

Hazardous Substances

Section 311 of the FWPCA p

substances as a class of pollutant

evidence financial responsibility 

able to issue necessary regulations 

and the quantity of each substance 

all vessels previously certified by 

responsibility for removal of oil m

the financial responsibility requirem

Certificates Issued

During the year application

under the FWPCA and TAPAA prog

certificates covering 2371 vessels 

of the vessels to new owners and a

At the close of the year 

certificates under the FWPCA an

certification of 925 additional ves

covered by special certificates te
program The latter are blanket 

shipyards and scrappers which err 

gcti adne vessels they will be 

certificates are not operated ec r

Automatic Data Processing

An automated record rete

programs The existing ADP syst

ie type flag tonnage certifica

operators and the underwriter cov

indispensable source of initial refer

enforcement inquiries from the C

Company

PASSENGER VESSE

The Commission administers 

requires vessel owners charte

passenger vessels having 50 or mor

United States ports to establish 

incurred for death or injury and 

performance of a voyage or cruise

Certificates Issued

During Fiscal Year 1977 

certificates of financial responsib
approved including ten new applicat

new applications for Casualty Ce

were approved amending existing ce

fleets changed their evidence of fi

from United States ports Five appli

Certificates Revoked

During the reporting period 

withdrawal of vessels from service 

programs transfer to foreigntofo

vessel operations

Enforcement

On December 14 1976 the C

Order filed by American Cruise Li

declare that the requirements of Se

its operations as a carrier operating 

with the requirements of the Inters

denied because the Commission foun

no doubt that its provisions apply t

ports and which have stateroom acc

operations of such vessels otherwise 

On January 18 1977 the Com

good cause exists for the continue

capital requiremernt and whether its 

6
the passenger vessels MARIPOSA 

comply with the financial respon

89777 and the Commission sim

Hearings were held end at the clo

filing of briefs

INFOR

Through its informal compla

complaints or protests against the 

carriers by water in the foreign 

States or conferences of such 

operators and other persons subje

Maritime Commission The Com

dispute either by resolution th

recommendation that the complai

shipping statutes rules or orders 

of Enforcement for investigation

There were 236 informal co

1977 and during the year 267 new 

were carried forward into Fiscal Y

350 complaints

During Fiscal Year 1977 the 

assistance program by appointing 

Affairs to expedite processing of in

tariff rates and interpretation T
consuming public as well as the regu

to air grievances and secure pro

problems on an amicable and coopera

The Commission sDistrict Off

received in their District Offices and 

ENFORCE

The Commission senforcemen

its Bureau of Enforcement which is 

District offices in New York New 

California and San Juan Puerto 

Georgia and Los Angeles California 

next year in Chicago Illinois to serv

The basic mission of these off

the coastal US as well as to in

administered by the agency The

common carriers by water ocean 

shippers and consignees The type

investigation during Fiscal Year 1977 

a part of the ocean freight charg

consignees obtaining illegal rebates 

misdeclaring or misdescribing cargo

charges

During the past eighteen m

placed on investigation and exposure 

charges that have been paid by carri
in progress or have been compl

carriers by water believed to have 

Hundreds of shippers and consigne

rebates

Two of the largest enfor

history were made in the past yea

Inc for 40000 and one 

subsidiary Sony Corporation of A

were assessed against others and a

in Appendix B

For the protection of Unit

District offices conducted periodic 

had been granted certificates of fin

Field Investigations

At the beginning of the y

completed numbered 662 During 

into a wide variety of possible st

were scheduled for investigatio

malpractices rebates of freight 

misdeclaration of shipments unla

domestic offshore trades unlawful 

activities and other matters

Completed investigations to

end of the year as shown by the tab
Vlll SPECIAL 

Soviet Maritime Activities

Several studies relating to S

the fiscal year The Commission st

Activities in Liner Trades of the 

Committee which constituted the as

published as Soviet Oceans De

documented the growing presence 

explored alternative proposals to de

A second study of the exten

liner trades was prepared for sub

Fisheries Committee This report d

the Soviets control and documente

were then compared to those of th

the extent of Soviet rate cutting

Currency Exchange Rates

The acceptance of the flexi

western nations has had a unusually 

The fluctuation in the value of th

surcharges so that they can n

realignments The Commission ca

using the extensive data base whic

each surcharge request
Domestic Commerce

A special report on the 

USPuerto Rico Trade was prep

Puerto Rican Economy which was 

of Transportation to produce the t

the Puerto Rican economy Th

direction of the Department of Co

of the United States The Presid

evaluate the requirements of the 

relationship with the United States

The Commission staff c

land Hawaiian Trade documentin

important trade Topics covered 

fleet serving the trade the c

transportation costs on the cost o

increases in the trade

Environmental and Energy Efforts

The Commission continued 

Policy Act of 1969 and initiated a

Conservation Act of 1975

Section 382 bof the Energ

163 EPACA requires that the 

federal agencies write energy im

energy efficiency and conservatio

Each of these agencies must defin
for conducting energy studies thro

proceedings are now being reviewe

determine whether EPACA applies 

As in the case of EPACA 

reviewed to determine whether th

Policy Act of 1969 NEPA apply to 

Guidelines provide the framework 

agreements and other important Co

applicability of NEPA Those action

designated for environmental asses

The assessment ensures that 

on how the Commission sdecision w

environmental significance of the C

Metric System

A continued effort was mad

the metric system of measurement 

of the shipping industry to recon

measurement system in view of th

adoption of the metric system 

metrication developments in the s

and programs can be planned accor

Marine Information System

The computerized Marine In

its developmental stages to an 
improvement and catchup activ

ments during FY 1977 include

An extensive manual a

ensure accurate cover

geographic scope of eac

Collection of approxim

reports developed fro

Bureau vesselcargo mo

Development of the 

reflecting selected act

Two new reports for t

tariff geographic covera

worldwide tariff geogra

The continuing file ma

timely and accurate m

Commission personnel in 
REPORTS REVIEW

A

Statistical 

SECTION 15 AGREEMENTS includi

Foreign Commerce 

Domestic Offshore Commerce 

Terminals 

SECTION 14b DUAL RATE CONTRAC

Shippers Requests and Com

Minutes of Meetings 

Self policing of Conferenc

Pooling Statements 

Operating Reports 

APPROVED AGREEMENTS ON FILE A

Conference 

Rate 

Joint Conference 

Pooling 

Joint Service 

Sailing 

Transshipment 

Cooperative Working Agenc

Dual Rate Contract Systems 

Domestic Offshore 

Terminals 

Non exclusive Transshipmen

TARIFFS

Tariff Pages Filed

Foreign 

Domestic Offshore 

Terminal 

Tariffs on File as of Septe

Foreign 

Domestic Offshore 

Terminal 
Penalties iur Shippin

Superscope 

Pat Fashions Industries 

Starlight Trading Inc

Starlight Purchasing Cor

Sony Corp

Sony Corp of America

Sea Land Services Inc

International Warehouse In

Total FY 1977

Farrell Lines 

Western Navigation Corp 

Harper Robinson S Co
AP

Bureau of Enforcement Field 

Investigations Total M

Pending 93076 662 

Opened FY 1977 608 

Completed FY 1977 470 

Pending 93077 800 
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Atlantic District 

AP

The Commission sheadquart

Washington D C 20573 The 

follows

Pacific District 

Puerto Rico Area Office

Gulf District 

Great Lakes District