Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 

T A B L E O F C O N T E N T S

 Page

Summary and Highlight Statement ..........................................................................1 

Justification Materials: 

Organizational Chart ................................................................................................10 

Appropriation History (Graph)................................................................................11 

Full-Time Equivalent History (Graph)....................................................................12 

Summary of Requirements .......................................................................................13 

Program by Activities................................................................................................14 

Summary of Employment .........................................................................................15 

Summary of Salaries and Benefits Expenses...........................................................16 

Summary of Travel and Administrative Expenses.................................................17 

Budget Justifications:

Formal Proceedings Program...................................................................................18 

Equal Employment Opportunity Program .............................................................35 

Inspector General Program......................................................................................37 

Operations Program..................................................................................................39 

Administration Program...........................................................................................54 

Alphabetical Listing of Abbreviations (Appendix A).............................................62 

Attachment: 2008 Final Annual Performance Plan
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 1 

Federal Maritime Commission 

Summary and Highlight Statement 

Budget Estimates, 2008 

The Federal Maritime Commission (“FMC” or “Commission”) is an independent regulatory 

agency which administers the Shipping Act of 1984 (“1984 Act” or “Shipping Act”) as 

amended by the Ocean Shipping Reform Act of 1998 (“OSRA”); section 19 of the Merchant 

Marine Act, 1920 (“1920 Act”); the Foreign Shipping Practices Act of 1988 (“FSPA”); and 

Public Law (“P. L.”) 89-777 (passenger vessel certification). The Commission: monitors the 

activities of ocean common carriers, marine terminal operators (“MTOs”), conferences, ports 

and ocean transportation intermediaries (non-vessel operating common carriers and ocean 

freight forwarders) who operate in the U.S. foreign commerce to ensure they maintain just and 

reasonable practices; maintains a trade monitoring and enforcement program designed to assist 

regulated entities in achieving compliance and to detect and appropriately remedy malpractices 

and violations of the prohibited acts set forth in section 10 of the 1984 Act; monitors the laws 

and practices of foreign governments which could have a discriminatory or otherwise adverse 

impact on shipping conditions in U.S. trades, and imposes remedial action as appropriate 

pursuant to section 19 of the 1920 Act or the FSPA; enforces special regulatory requirements 

applicable to carriers owned or controlled by foreign governments; processes and reviews 

agreements, service contracts, and service arrangements pursuant to the 1984 Act for 

compliance with statutory requirements; and reviews common carriers’ privately published 

tariff systems for accessibility and accuracy as required by OSRA. The Commission also 

issues licenses to qualified ocean transportation intermediaries (“OTIs”) in the U.S., ensures 

that all OTIs are bonded or maintain other evidence of financial responsibility, and ensures that 

passenger vessel operators demonstrate adequate financial responsibility in case of 

nonperformance or injury to passengers. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 2 

Federal Maritime Commission 

The Commission’s activities during the past fiscal year include the following:

— Issued a Notice of Inquiry in Docket No. 05-06, Non-Vessel-Operating Common 

Carrier Service Arrangements. Effective January 19, 2005, an earlier Final Rule in Docket No. 

04-12, Non-Vessel-Operating Common Carrier Service Arrangements, permitted NVOCCs to 

offer NVOCC Service Arrangements (“NSAs”) with their shipper customers. After an opinion 

by the U.S. Court of Appeals for the Fourth Circuit clarified that NVOCCs are not entitled to 

antitrust immunity under the Shipping Act, the Commission issued a final rule extending the 

above exemption to allow NVOCCs to offer NSAs to other NVOCCs as well as shippers’ 

associations with NVOCC members. This Final Rule became effective on October 28, 2005. 

The Notice of Inquiry seeks comment on expansion of the exemption to enable two or more 

unaffiliated NVOCCs to jointly offer NSAs. Responses to the inquiry currently are under 

review by the Commission. 

— Obtained an injunction against international household goods movers All-In-One 

Shipping, Inc., Around the World Shipping, Inc., Boston Logistics Corp., Global Direct 

Shipping, Daniel Cuadrado, Elizabeth F. Hudson, and Joshua Morales in the U.S. District Court 

for the Southern District of Florida. The complaint and motion are based on Docket No. 06-01, 

Worldwide Relocations, Inc., et al. More than 250 consumer complaints were received 

alleging, among other things, failure to deliver cargo and refusing to return pre-paid ocean 

freight; lost cargo; charging the shipper for marine insurance which was never obtained; 

misleading the shipper as to the whereabouts of cargo; charging the shipper an inflated rate and 

withholding cargo until the rate was paid; and failure to pay the common carrier. 

— Issued an order affirming the initial decision in part and assessing penalties for 

violations of section 10(b)(4) of the Shipping Act in Docket No. 98-06, Sea-Land Service Inc. - 

Possible Violations of Sections 10(b)(1), 10(b)(4) and 19(d) of The Shipping Act of 1984. On 

February 8, 2006, the Commission affirmed the Administrative Law Judge’s (“ALJ’s”) rulings 

that Sea-Land failed to collect the rates contained in its applicable tariff, and failed to collect 

the applicable rate through an unjust device or means. The Commission vacated the $4,082,500 

penalty assessed by the ALJ and imposed instead a penalty of $820,000 for the violations. 

— Issued an Order vacating the ALJ’s dismissal and remanding the proceeding for further 

adjudication in Docket No. 02-04, Anchor Shipping Co. v. Alianca Navegacao E Logistica 

Ltda. By an order dismissing Anchor’s complaint against Alianca, the ALJ determined that it 

would be unfair and unjust to allow Anchor to litigate a claim that had been previously settled 

in arbitration. Anchor appealed, and the Commission vacated the ALJ’s dismissal order and 

remanded the proceeding to an ALJ for further adjudication. In determining that the ALJ 

improperly dismissed Anchor’s complaint, the Commission held that precluding Anchor from 

filing its complaint because it had previously participated in private arbitration of contract 

issues would be inconsistent with the agency’s statutory mandate. 

— Continued to monitor potentially restrictive shipping practices of the Government of 

Japan, including the receipt and review of reports on prevailing conditions filed by Japanese 

and U.S. carriers as part of the Commission’s ongoing proceeding in Docket No. 96-20, Port 

Restrictions and Requirements in the United States/Japan Trade.
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 3 

Federal Maritime Commission 

— Continued to host a series of briefings by shipping industry representatives to develop a 

greater awareness and understanding of the current issues and concerns affecting the U.S. 

international liner shipping industry. 

— Continued informational outreach conducted by the agency’s Area Representatives at 

locations around the country. Activities included manning a booth at the National Customs 

Brokers and Freight Forwarders Association annual convention in Hollywood, Florida to 

distribute informational materials and meet with attendees; giving an interview to a local 

television station in the New York area regarding shipping and unlicensed operators, an 

interview which was also placed on the station’s website; addressing the Dominican American 

Chamber of Commerce to discuss OTI licensing requirements as they relate to consumer 

protection issues; and visiting port facilities such as in the Baltimore area to meet with port 

authorities, carrier representatives and others to discuss relevant issues and to view operations 

firsthand. 

— Continued a series of functions/operations briefings to educate agency staff on the full 

range of activities and inter-relationships of the units of the agency. 

— Contracted with an independent auditing firm to audit the Commission’s financial 

statements for fiscal year 2006. The Commission received an unqualified opinion for its fiscal 

year 2006 financial statement. 

— Reviewed and analyzed the justification for a establishment of the Traffic Mitigation 

Fee (“TMF”) established by PierPASS, an organization created pursuant to the West Coast 

MTO Agreement as a means of funding extended gate hours at marine terminals at the ports of 

Los Angeles and Long Beach. The TMF provides an incentive for shippers to move cargo 

traffic to off-peak evening hours as a means of reducing traffic congestion and air pollution 

levels attributable to truck idling time at port facilities. 

— Commenced an On-Site Monitoring Program that evaluates passenger vessel operator 

(“PVO”) financial responsibility under section 3, P.L. 89-777. The program is responsive to 

Congressional concern for the practices of PVOs generally with respect to protecting 

passengers’ advance deposits for transportation. 

In addition to the above, the Commission, as part of its ongoing activities: 

— Completed its Program Performance Report for fiscal year 2005, finalized its Annual 

Performance Plan for fiscal year 2007, and developed its Initial Annual Performance Plan for 

fiscal year 2008, in accordance with the Government Performance and Results Act of 1993. 

— Participated in interagency groups and international maritime discussions, including the 

Committee on the Marine Transportation System, a cabinet-level inter-agency organization 

whose goal is to ensure the development and implementation of national MTS policies 

consistent with national needs. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 4 

Federal Maritime Commission 

— Continued an exchange of enforcement information with the U.S. Bureau of Customs 

and Border Protection (“CBP”) in accordance with a Memorandum of Understanding. 

Cooperation with Customs has expanded into several joint field operations to investigate 

entities suspected of violating both agencies’ statutes or regulations. Such cooperation has also 

included local police and the Bureau of U.S. Citizenship and Immigration Services (formerly 

INS). 

— Continued to meet with officials of various trading partners, including the European 

Commission, to discuss issues of mutual interest and to coordinate activities where possible. 

— Continued to accumulate information on the laws and practices of foreign governments 

and monitor activities in the U.S. foreign trades to address appropriately any condition which 

appears unfavorable to U.S. shipping interests. 

— Facilitated access to information involved in formal Commission proceedings by 

electronically serving various issuances and making public filings available on our homepage, 

and improved responsiveness to requests for public information. 

— Commented on 120 bills, proposals and Congressional inquiries, and consulted with 

Congressional staff on the continuing efforts to revise, codify and enact certain maritime laws 

as part of Title 46, U.S. Code, Shipping. 

— Continued to work with the industry to obtain statutory compliance in all major trades 

and with all segments of the transportation industry, i.e., carriers, carrier agreements, MTOs, 

PVOs, and OTIs. 

— Continued a controlled carrier program designed to identify controlled carriers 

effectively and quickly, and to ensure appropriate monitoring of controlled carrier activities. 

This included reviewing documents and information relating to the controlled carrier status of a 

number of carriers. As part of the program, produced a detailed study of service contract rate 

levels for major commodities moving between key port-pairs in the U.S. Transpacific trade. 

— Responded to 3,000 shipment transaction inquiries and provided ombuds dispute 

resolution services for 632 complaints. 

— Provided consumer assistance consistent with the policies of Executive Order 12,160, 

“Providing for Enhancement and Coordination of Federal Consumer Programs,” while also 

assisting regulated entities in achieving compliance with statutory requirements. 

— Worked with Commission staff and agency stakeholders to make modifications to the 

new website and to increase the amount of electronically available information. 

— Issued 15 orders and notices in docketed proceedings.

— Reviewed, evaluated and processed 265 carrier agreement filings and 27 marine 

terminal agreement filings. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 5 

Federal Maritime Commission 

— Received 886 sets of minutes and 164 monitoring reports containing market share, 

cargo, revenue, and service data for agreement parties. Additionally, 16 applications for waiver 

requests were processed. 

— Received and processed approximately 46,682 new service contracts and 252,566 

contract amendments. Received and processed 557 original NSAs and 448 subsequent 

amendments that were filed by NVOCCs, and completed an initial audit of filed NSAs and a 

related research project on the marketing and use of NSAs. A new upgraded Service Contract 

Filing System (“SERVCON”) system was implemented to streamline the filing process for all 

filers of service contracts and NSAs, and other major performance enhancements were made to 

the system. 

— Posted 3,942 active/current tariff location addresses for carriers, conferences, and 

MTOs on the agency’s website. A total of 1,902 inactive/cancelled tariff location addresses 

were posted as well. 

— Issued 343 new and 169 amended OTI licenses, and revoked 278 licenses; bonds for 63 

non-U.S.-based unlicensed NVOCCs were cancelled. 

— Received 50 applications for passenger vessel certificates (casualty and performance). 

Currently, 197 vessels and 47 operators have evidence of financial responsibility coverage on 

file with the Commission in excess of $339 million for nonperformance and over $666 million 

for casualty. 

• Collected $1,042,000 in fines and penalties. The Commission also collected $553,530 from 

user fees. 

— Commenced an investigation into the operations of unlicensed, unbonded OTIs that 

provide transportation of household goods and personal effects, including enforcement of the 

prohibition on vessel operating common carriers (“VOCCs”) and licensed NVOCCs providing 

service to such unlawful operators. 

— Converted the agency’s database of historical Port Import Export Reporting Service 

(“PIERS”) data into a Structured Query Language (“SQL”) server database, and implemented 

an intuitive point-and-click web-based PIERS data analysis system. Over 30 million records 

were converted and an additional 450,000 records are newly appended each month. 

— Continued to monitor accessibility to tariffs published in carriers’ automated tariff 

systems (“CATS”). Completed an audit of 98 unique CATS. 

— Continued information technology efforts to ensure compliance with statutory and 

regulatory requirements, and to ensure effective coordination of the Commission’s automation 

program, including conducting a requirements analysis and inventory to meet the government’s 

new Internet upgrade initiative. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 6 

Federal Maritime Commission 

— Reviewed and updated internal Commission orders, as necessary, to ensure that they 

reflect current policies and procedures, to revoke orders which no longer are necessary, and to 

draft new orders as appropriate. 

— Refined the Commission's Continuity of Operations Plan dealing with recovery of 

operations in the event of displacement or disaster. 

— Maintained an agreement database and library containing up-to-date information 

pertaining to effective agreements. Began adding copies of marine terminal agreements to the 

agency’s electronic agreement library. Public access to the marine terminal agreements library 

will be established through links on the agency website. 

— Prepared budget justifications and estimates for the fiscal year 2007 Congressional 

budget and fiscal year 2008 Office of Management and Budget (“OMB”) budget, and produced 

the agency’s fiscal year 2006 Management’s Discussion and Analysis, and its Performance and 

Accountability Report. 

— Upgraded the agency’s network security infrastructure. 

— Analyzed the Commission’s Freedom of Information Act program and developed and 

submitted a plan for improvements pursuant to Executive Order 13392. 

— Implemented employee development programs and activities to address executive 

succession, such as a Senior Executive Service (“SES”) Candidate Development Program and 

an Emerging Leaders Program. 

— Developed renovation plans for the Commission's headquarters space in order to more 

appropriately accommodate and add efficiency to current agency programs. 

— Continued development of a project to modernize the Regulated Person Index. The 

agency posts on its website a list of OTIs which are licensed, bonded and have provided their 

tariff location, if required, so that carriers and others can ascertain whether an OTI has met 

FMC requirements. The list is also of use to the CBP, and other Federal agencies, in 

conjunction with homeland security initiatives.

• Selected a vendor to address the Commission’s current and future scanning needs. New 

hardware and software are being put to use both to update the current scanning process and 

expand scanning services to other agency components. The agency has also begun training 

initiatives to ensure maximum use of the new scanning technology. 

• Reviewed all agency and government-wide forms used by the agency to identify and 

eliminate unnecessary requests for employee-sensitive (i.e., Social Security numbers) data on 

the forms. 

— Continued implementation of an Equal Employment Opportunity (“EEO”) early 

intervention program to resolve potential problems. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 7 

Federal Maritime Commission 

— Continued to conduct, through the Office of the Inspector General, various audits and 

operational reviews. 

As part of its program objectives for fiscal years 2007 and 2008, the Commission is 

planning to: 

— Continue to meet with officials of various trading partners to discuss issues of mutual 

interest and to coordinate activities where possible. 

— Continue to accumulate information on the laws and practices of foreign governments 

and monitor activities in the U.S. foreign trades to address appropriately any condition which 

appears unfavorable to U.S. shipping interests. 

— Continue to expand public outreach seminars to educate maritime transportation users 

and providers about Commission statutes and regulations, and to encourage voluntary 

compliance with applicable laws and regulations. 

— Continue the Commission’s monitoring, surveillance and enforcement programs to 

ensure compliance with the shipping statutes. 

— Continue to emphasize maritime homeland security by enhancing involvement with 

inter-agency working groups and adjusting ongoing operations to focus on this area of concern. 

— Provide consumer assistance consistent with the policies of Executive Order 12160, 

“Providing for Enhancement and Coordination of Federal Consumer Programs,” while also 

assisting regulated entities in achieving compliance with statutory requirements. 

— Continue to monitor agreement activities and trade conditions, and prepare reports and 

economic analyses covering a wide variety of developments and issues in key U.S. trades. 

• Continue to process and review agreements, service contracts and NSAs. 

• Continue to participate in activities to help identify any service contract provisions that may 

bear on maritime security concerns. 

— Implement measures to provide for the option of electronic submission of most agency 

forms and to provide for the option of electronic payment of funds to the Commission, 

implement the new Internet upgrade as part of a government-wide initiative, perform database 

design integration to maximize the usefulness of collected data and eliminate duplication of 

effort, in line with the requirements of the Government Paperwork Elimination Act (“GPEA”), 

and continue Commission efforts to comply with and implement other Congressional and 

Presidential information technology (“IT”) initiatives such as the Federal Information Security 

Management Act (“FISMA”). 

— Complete evaluation of the impact of the new agreement rules on the industry and the 

internal processes of the agency. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 8 

Federal Maritime Commission 

— Further enhance public access to filed agreements, develop and implement procedures 

for the electronic filing of agreements, agreement monitoring reports and minutes, and develop 

a database for these filings to maximize usefulness of the data collected for monitoring 

competitive conditions in U.S. trades. 

— Link the new PIERS data analysis system to the enhanced Agreements database to 

facilitate the review of new agreements or modification of existing agreements. 

— Conduct detailed research into the effectiveness of the PierPASS system and the 

impacts of its pricing procedures and cost allocation methods. 

— Automate forms for service contract and NSA registration to encourage the use of 

electronic filing and increase the accuracy of data and the ease of retrieval of information. 

— Enhance the usefulness of service contract and NSA data through upgrades to the 

SERVCON system so that trends and relevant developments may be determined more easily. 

— Initiate a rulemaking to update regulations regarding the Commission’s statutory 

obligation regarding passenger vessel financial responsibility including automation of PVO 

application Form 131 to facilitate the filing of PVO applications. 

— Redesign the functionality of the OTI list on the homepage to include more information 

and make it more interactive. 

 

— Enable the electronic filing of OTI bonds. 

— Focus on unlicensed OTI activity in the transportation of household goods, and expand 

the OTI monitoring program. 

— Redesign and update the agency’s intranet to provide better access to internal 

information. 

— Develop an online catalogue for the Commission’s law/reference library collection, 

allowing staff access to the catalogue from their desktops, increasing efficiency in searching 

library resources. 

— Facilitate access to information involved in formal Commission proceedings by 

electronically serving various issuances and making public filings available on our homepage, 

and improve responsiveness to requests for public information.

— Review and revise Commission rules as necessary to ensure consistency with port and 

maritime security initiatives undertaken by Congress and other Federal agencies. 

— Ensure that information disseminated to the public continues to comply with all 

requirements of section 515 of the Treasury and General Government Appropriations Act for 

Fiscal Year 2001, in accordance with the procedures and standards set forth in the 

Commission’s published Information Quality Guidelines. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 9 

Federal Maritime Commission 

— Continue to refine internal audit and controls programs, and financial management 

systems, to prevent fraud, waste, mismanagement, and misuse of Government funds within the 

Commission. 

— Further develop emergency preparedness and continuity of operations planning/

activities. 

— Implement Homeland Security Presidential Directive 12 (“HSPD 12”), the new 

government-wide identification card system. 

 

— Continue succession planning and further development of an Emerging Leaders 

Program for staff, and implement the agency’s new performance appraisal system. 

— Assess telework program to encourage usage and advance efficiency of operations. 

— Implement the use of electronic employee records. 

— Migrate to an updated platform for paperless check conversion. 

— Continue to monitor the representation of minorities and women in the workplace and 

update procedures for affirmative action, complaints processing, and special emphasis and 

handicap programs. Initiate additional activities designed to increase an understanding of EEO 

concepts and principles. 

The budget estimates for fiscal year 2008 in the amount of $22,322,000 provide funding for 

127 work years of employment. Funding at this level enables the Commission to maintain and 

continue its existing statutory programs effectively and efficiently. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 10 

Federal Maritime Commission 

Federal Maritime Commission

Organization Chart

(as of 5 February, 2007)

Office of Equal

Employment

Opportunity

Office of the

Inspector General

Office of the

Secretary

Office of

Operations

Office of

Administration

Office of the

General Counsel

Commissioner

(DYE)

Commissioner

(BRENNAN)

Chairman

(Vacant)

Commissioner

(CREEL)

Commissioner

(ANDERSON)

Bureau of

Certification

 and Licensing

Bureau of

Enforcement

Bureau of Trade

Analysis

Office of

Administrative

Law Judges

Office of

Consumer Affairs

and Dispute

Resolution

Services

Area

Representatives

New York

Los Angeles

New Orleans

Seattle

South Florida

Office of Financial

Management

Office of Human

Resources

Office of

Information

Technology

Office of

Management

Services
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 11 

Federal Maritime Commission 

Appropriation History Graph (000s)

1998-2008

22,322

21,474

20,294

19,340

18,362

16,447 16,591

15,466

14,097 14,000 14,133

0

5,000

10,000

15,000

20,000

25,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Fiscal Year

Appropriation
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 12 

Federal Maritime Commission 

Full-Time Equivalent Graph 

1998-2008

127

131

121 124

129 129 127

131 128

139 139

180 180 180 180 180 180 180 180 180 180 180

0

50

100

150

200

250

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Fiscal Year

Full-Time Equivalent
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 13 

Federal Maritime Commission 

ID Code: 

65-0100-0-1-403

2007 

Estimate

2008 

Estimate Difference Difference %

Direct obligations:

11.1 Full-Tim e Perm anent 12,530,000 12,777,000 247,000 1.97%

11.3 Other than full-tim e perm anent 56,000 58,000 2,000 3.57%

11.5 Other personnel com pensation 0 0 0 0.00%

11.9 Total personnel com pensation $12,586,000 $12,835,000 $249,000 1.98%

12.0 Civillian personnel benefits 2,947,000 3,041,000 94,000 3.19%

21.0 Travel and transportation of persons 237,000 260,000 23,000 9.70%

22.0 Transportation of things 10,000 12,000 2,000 20.00%

23.1 Rental paym ents 2,867,000 3,104,000 237,000 8.27%

23.2 Com m unications, utilities, and 

miscellaneous charges 284,000 297,000 13,000 4.58%

24.0 Printing and reproduction 172,000 157,000 -15,000 -8.72%

25.0 Other services 2,152,000 2,383,000 231,000 10.73%

26.0 Supplies and m aterials 189,000 233,000 44,000 23.28%

31.0 Equipm ent 30,000 0 -30,000 -100.00%

Totals $21,474,000 $22,322,000 $848,000 3.95%

FEDERAL MARITIME COMMISSION

Appropriation: Salaries and Expenses

Budget Year: 2008

Summary of Requirements
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 14 

Federal Maritime Commission 

2006 2007 2008

Actual Estimate Estimate

Formal Proceedings 6,403 7,160 7,196

Equal Employment Opportunity 199 182 189

Inspector General 466 513 546

Operations 9,094 9,973 10,446

Administration 4,127 3,646 3,945

Total Obligations 20,289 21,474 22,322

Program by Activities

FEDERAL MARITIME COMMISSION

($000)
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 15 

Federal Maritime Commission 

2006 Actua l 2007 Estim a te 2008 Estim a te

W orkyears W orkyears W orkyears

Form al Proceedings 36 40 39

 O ffice of Com m issione rs 8 11 10

 Office of the Se cre ta ry 14 15 15

 O ffice of the G e ne ra l Counse l 12 12 12

 O ffice of Adm inistra tive La w Judge s 22 2

Office of Equa l Em ploym e nt Opportunity 11 1

Inspe ctor G e ne ra l 23 3

Office of Ope ra tions 59 63 61

 Office of the Dire ctor 46 6

 Ne w York Are a Re pre se nta tive 12 2

 Ne w O rle a ns Are a Re pre se nta tive 11 1

 Los Ange le s Are a Re pre se nta tive 11 1

 S outh Florida Are a Re pre se nta tive 22 2

 S e a ttle Are a Re pre se nta tive 11 1

 Bure a u of Tra de Ana lysis 22 22 20

 Bure a u of Ce rtifica tion a nd Lice nsing 17 18 18

 Bure a u of Enforce m e nt 10 10 10

O ffice of Adm inistra tion 23 24 23

 Office of the Dire ctor 44 3

 Office of Inform a tion Te chnology 66 6

 O ffice of Hum a n Re source s 34 4

 Office of Fina ncia l M a na ge m e nt 55 5

 Office of M a na ge m e nt Se rvice s 55 5

Tota l W ork Ye a rs (FTE) 121 131 127

Offices

FEDERAL MARITIME COMMISSION

Sum m ary of Em ploym ent
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 16 

Federal Maritime Commission 

The salaries estimates for fiscal year 2008 are increased by $249,000 over fiscal year 2007. The 

funding provides for annualization costs of 2007 salary increases; general schedule pay step 

increases (within grades); for the anticipated 2008 pay increase @ 2.5%, and career-ladder 

promotions. This request funds the staffing anticipated to be on board when fiscal year 2008 

begins. 

Personnel benefits amount to $3,041,000 in fiscal year 2008 for current programs, which 

includes the FMC’s contribution to CSRS, FERS, Social Security, group life insurance and 

FEHB, and worker’s compensation and medical benefits. This is an increase of $94,000. 

WY Amount WY Amount WY Amount WY Ammount

Full Time Permanent 

Employment 120 11,192 130 12,530 126 12,777 -4 247

Temporary and PartTime Employment 1 50 1 56 1 58 0 2

Overtime 0 0 0 0

Awards 435 0 0 0

Total Salaries 121 11,677 131 12,586 127 12,835 -4 249

Personnel Benefits 2,567 2,947 3,041 94

Total Salaries and 

Benefits 121 14,244 131 15,533 127 15,876 -4 343

FEDERAL MARITIME COMMISSION

Summary of Salaries and Benefits

($000)

2006 Actual 2007 Estimate 2008 Estimate Difference
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 17 

Federal Maritime Commission 

Travel funding is necessary to allow Commission staff to meet with representatives of the 

shipping industry to resolve problems through direct negotiations, conduct on-site audits of 

carriers, consult with foreign trading partners to ensure comity in international regulatory 

affairs, and expand compliance oversight into interior U.S. points not otherwise readily 

accessible to FMC Area Representatives from their base port locations. Travel estimates are 

increased for fiscal year 2008 for anticipated per diem and airfare increases, as well as to 

accommodate planned, significant increases in outreach, Alternative Dispute Resolution and 

compliance activities for the agency’s five Presidential appointees and agency staff, and to 

accommodate an increase in staff travel in furtherance of training opportunities and casework.

In fiscal year 2008, administrative expense estimates reflect a net increase of $482,000. 

Included in the request is a $237,000 increase in rent to accommodate rent rate increases. 

Additionally, transportation of things (FEDEX) is increased by $2,000, communications are 

increased by $13,000, supplies are increased by $44,000, and other services are increased by 

$231,000 for increases to commercial and government contracts. These increases are partially 

offset by reductions of $30,000 for furniture and equipment and $15,000 for printing and 

reproduction. 

2006 Actual 2007 Estimate 2008 Estimate Difference

Travel 227 237 260 23

Adminstrative Expenses 5,818 5,704 6,186 482

 Transportation of Things 6 10 12 2

 Rental Payments 2,850 2,867 3,104 237

 Communications, Utilities & Misc Charges 245 284 297 13

 Printing and Reproduction 108 172 157 -15

 Other Services 2,132 2,152 2,383 231

 Supplies and Materials 239 189 233 44

 Equipment 238 30 0 -30

Total Travel and Administrative Expenses 6,045 5,941 6,446 505

FEDERAL MARITIME COMMISSION

Travel and Administrative Expenses

($000)
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 18 

Federal Maritime Commission 

Formal Proceedings Program

The Offices of Commissioners, Secretary, General Counsel and Administrative Law Judges 

comprise the Formal Proceedings Program. Within this program, the Commission conducts 

hearings, renders formal decisions in the disposition of docketed cases, compiles and maintains 

all official documents arising from proceedings, and conducts external representation activities 

before the Congress, courts of law, and other agencies. The duties, responsibilities, and 

accomplishments of the offices within the program are provided in the following summary. 

Linking Program Funding to Strategic/Performance Goals

For fiscal year 2008, we have developed a performance goal for the Formal Proceedings 

program to support specific agency strategic goals in Technological Efficiencies. To improve 

our services to stakeholders and the public, we intend to continue to improve, integrate, and 

increase the amount of information available internally through electronic means. To 

accomplish this objective, a specific performance goal has been established to explore options 

and begin the development of an online catalogue for the Commission’s law/reference library 

catalogue. This goal will provide an efficient tool for Commission staff to access the library 

catalogue from their desktops, allowing for increased efficiency in searching library 

resources. In addition, it is anticipated that online catalogue entries could be directly linked 

to other electronic library resources, which will reduce the redundancy of data entry across 

library databases.
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 19 

Federal Maritime Commission 

Office of the Commissioners

The Chairman of the Commission is designated by the President of the United States and serves 

as the agency's chief executive and administrative officer. As such, the Chairman has exclusive 

authority over agency personnel matters, organization and supervision, distribution of business 

and use of funds for administrative purposes. 

The Chairman and the other four Commissioners are responsible for making decisions and 

determinations in the disposition of docketed cases, and ensuring the efficient, equitable and 

expeditious resolution of all matters arising under statutes administered by the Commission. 

The Commission promulgates rules and regulations and issues decisions which interpret, 

enforce and assure compliance with the 1984 Act, as amended by OSRA, the 1920 Act, FSPA, 

and P. L. 89-777. During the fiscal year ending September 30, 2006, the Commission issued 15 

orders and notices in docketed proceedings.
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 20 

Federal Maritime Commission 

Office of the Secretary

The Office of the Secretary serves as the focal point for matters submitted to and emanating 

from the members of the Commission. It is the public=s main contact point with the FMC. The 

Office receives and processes a variety of documents filed by the public, including: complaints 

initiating adjudicatory proceedings for alleged violations of the shipping statutes and other 

applicable laws; special docket applications and applications to correct clerical or 

administrative errors in service contracts or NVOCC service arrangements; all communications, 

petitions, notices, pleadings, briefs, or other legal instruments in administrative proceedings; 

and subpoenas served on the FMC, its members or employees. The Office is responsible for 

preparing and submitting regular and notation agenda matters for consideration by the 

Commission and preparing and maintaining the minutes of actions taken by the Commission on 

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

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

and authenticating instruments and documents of the Commission. The Office also responds to 

information requests from Commission staff, the maritime industry, press, and the public; 

administers the Freedom of Information, Government in the Sunshine, and Privacy Acts; 

compiles historical Commission decisions; maintains a public reference/law Library and a 

Docket Activity Library; manages the Commission=s Internet website; and participates in the 

development and coordination of agency-wide public relation/outreach strategies and 

initiatives. The Office of the Secretary also oversees the Office of Consumer Affairs and 

Dispute Resolution Services. The Secretary's Office also participates in the implementation of 

legislative changes to the shipping statutes. 

During fiscal year 2006, the Office of the Secretary continued to administratively process and 

direct all major filings addressed to the Commission and its component offices, including 

agreements filed under section 5 of the 1984 Act, which must be reviewed and processed within 

45 days. The Office continued to make improvements to the Commission’s website by 

adjusting how information is presented and increasing the amount of information available. A 

number of programming enhancements were made to the administrative tool used to manage 

website organization and content. A new feature was added to the tool that allows uploading of 

large documents to the site -- giving users fast electronic access to reports formerly only 

available in hard copy and by visiting the Commission. The Frequently Asked Questions 

section of the tool was updated so that links can be directly added within this section, thereby 

making it easier to access additional information and resources. The Office continues to 

evaluate the overall usefulness of the site and works closely with other offices and bureaus to 

improve its content and user-friendliness. 

The Office remained involved in the Commission=s ongoing effort to expand contact with all 

segments of the maritime community and the public during the fiscal year. Several initiatives 

were undertaken by Commission staff to improve industry outreach, including compiling new 

lists of government and media contacts, updating educational and informational material, and 

continuing to host briefings given by various segments of the industry to facilitate dialogue and 

understanding. Finally, Commission public relations policies were gathered and analyzed to 

determine the best policies to foster open communication with all segments of the 

Commission’s constituency. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 21 

Federal Maritime Commission 

The process of electronically scanning/imaging Commission records also continued during 

fiscal year 2006. During the fiscal year, the Office assessed agency-wide document scanning 

requirements, and selected a new, more robust and flexible document scanning system to 

replace its current system. New scanning software and equipment were installed, and data 

migration from the old system to the new one was started during the fiscal year. Data migration 

will be completed during fiscal year 2007, and the new system will become fully functional. 

This new system will help support the agency’s continuity of operations initiatives by 

improving preservation and Commission staff access to Commission documents, as well as 

improving Commission staff response time to public inquires and public access to electronic 

files. 

 

During the fiscal year, the Office continued, and in large part completed, its initiative to fill a 

publication gap for Commission decisions and to make more information available 

electronically. Commission decisions from 1987-1997 were compiled and converted to 

electronic form. Commission Decisions from 1987-1995 were posted on the Commission’s 

website during the fiscal year, with the balance posted by the end of October 2006. In addition, 

the Office made opening/reply briefs, exceptions, and replies in selected docketed proceedings 

available through its website. Throughout fiscal years 2007 and 2008, the Commission will 

continue to increase the number of documents available through its website. 

During fiscal years 2007 and 2008, the Office will continue to take the lead in accomplishing 

the agency’s performance goals related to making more Commission information and filed 

documents available electronically and to improving responsiveness to requests for public 

information. Specifically, the Office of the Secretary will integrate the Commission’s internal 

complaints database with other internal databases, expand the amount of internal information 

electronically available to Commission staff and improve staff access to internal FMC 

information by completing the redesign of the agency’s Intranet, and begin to develop an online 

catalogue for the Commission’s law/reference library collection. 

Office of Consumer Affairs and Dispute Resolution Services (“CADRS”)

The Office of Consumer Affairs and Dispute Resolution Services is responsible for, among 

other things, developing and implementing the Commission's Alternative Dispute Resolution 

("ADR") program. Through this program, the Commission provides services to assist parties in 

resolving disputes and shipping problems in the U.S. ocean shipping commerce. These include 

a broad range of services designed to avoid the expense and delays inherent in litigation, and to 

facilitate the flow of U.S. ocean commerce. 

The Office encourages parties to avail themselves of mediation or other ADR processes such as 

conciliation, facilitation, fact finding, mini-trials, or arbitration as means to resolve disputes. 

The Commission makes trained neutrals available to facilitate the resolution of shipping 

disputes, whether prior to or after commencement of the litigation process. If parties prefer 

outside neutrals, the Office will assist parties in locating acceptable neutrals with appropriate 

expertise. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 22 

Federal Maritime Commission 

During fiscal year 2006, Commission mediators provided mediation services in six dispute 

resolution proceedings, attempting to assist parties in avoiding significant litigation costs and 

risks. An example of such proceedings is the dispute among a major port authority and two 

terminal operators about rights to certain facilities and concerns by one operator that port 

actions would make it impossible for it to continue to stay in business. Through the mediation 

process, the parties reached agreement on all issues, enabling all parties’ needs to be met. The 

resolution avoided protracted litigation. Another example involved a significant dispute as to 

the amount of detention charges. In this matter, an NVOCC had collected substantial charges 

from a consignee in anticipation of potential equipment detention charges which, in fact, had 

not been charged by the ocean common carrier. Office staff mediated a resolution among the 

consignee, NVOCC and ocean carrier. 

The Office also provides ombuds services to participants in ocean shipping transactions. 

Typical complaints include situations where an NVOCC or steamship line has placed a lien on 

cargo in its possession, often for sums owed under a different contract of carriage, and cases in 

which an NVOCC has received cargo from its customer and taken payment for the 

transportation of the cargo, but failed to deliver the cargo. Tracking the whereabouts of a 

shipment can be difficult, and often additional charges have accrued, necessitating payment of 

additional funds to obtain release of the shipment. 

During fiscal year 2006, approximately 3,632 complaints and information requests were 

processed. Of those, 632 complaints required ombuds dispute resolution services. These 

included 221 complaints about cruise issues, 178 household goods matters, and 233 other 

matters affecting cargo shipments. 

Complaints involving the transportation or handling of cargo continued to increase, partly due 

to the Commission=s revitalized focus on informal and non-adjudicatory means of complaint 

resolution, and the increased awareness of Commission assistance available through electronic 

and other means of communication. 

Conversely, fewer complaints were received from individuals concerning household goods 

shipments. The decrease is primarily attributable to improved outreach and the Commission’s 

institution of a formal investigation of several problem movers. In addition to opening the 

proceeding, injunctions were obtained against several companies and individuals to prohibit 

their continued operation. As a result, several entities ceased operations, thereby substantially 

reducing the number of complaints against those entities. 

Information about the Commission's services has been disseminated by consumers through 

other websites, such as certain blog sites for those experiencing moving problems. In addition, 

the Commission's website has been expanded to provide consumer advice and to caution 

consumers to deal only with properly licensed OTIs. As a result, we receive more inquiries 

from consumers searching for a valid OTI, and correspondingly fewer post-shipment 

complaints. 

Consumers increasingly are using the Internet in order to find a means of shipping their 

personal effects internationally. While there are many efficiencies with Internet usage, many so-
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 23 

Federal Maritime Commission 

called “rogue movers" find it particularly effective to prey on unsuspecting consumers by 

offering services through very sophisticated websites. These entities usually are unlicensed and 

often operate only through a website that does not identify a correct address or name of the 

entity. Such entities tend to offer very low prices to entice customers. Once payments have 

been received, and goods have been picked up from the consumer's household, significant 

delays often are encountered, and additional payments demanded to continue with the shipment. 

Some customers have experienced lost cargo, delivery delays of up to one year, and have had to 

pay twice for the same ocean transportation services. A great deal of staff time was devoted to 

simply assisting consumers in locating their household goods, and once located, working with 

respondents, licensed OTIs, and others to enable customers to retrieve their goods. 

One example of household goods issues that involved intervention by Office staff resulted in 

the release of household goods being held at a German warehouse for nonpayment by a rogue 

mover. The consumer had been able to locate his personal effects, but the warehouse had 

refused to release them, as the rogue mover owed the warehouse for other shipments. As a 

result of staff intervention, the consumer was able to eventually obtain his goods. In another 

matter, a container loaded with seven shippers' household goods was on the verge of being 

returned to the United States. Office staff worked with the ocean carrier, a foreign, unlicensed 

NVOCC, a United Kingdom destination agent, and the British government to effect British 

Customs clearance, the unloading of the container, and the onward delivery of the household 

goods to the shippers' various European destinations. 

With respect to passenger matters, the failure of a small cruise operator generated a number of 

complaints, and assistance was provided to a number of passengers in obtaining refunds for 

cruises that were canceled. In addition, a number of passengers were affected by certain vessels 

being taken out of service in order to provide berthing accommodations in the wake of 

Hurricane Katrina. 

Another function of the Office includes the adjudication of small claims through informal 

proceedings under 46 CFR Part 502, Subpart S. Office personnel serve as Settlement Officers in 

such cases, which involve complaints seeking reparations up to $50,000 for violations of the 

shipping statutes. Those claims generally involve alleged prohibited acts in connection with the 

international transportation of goods, or the failure to establish, observe, and enforce just and 

reasonable regulations and practices. CADRS staff also evaluates and adjudicates applications 

for permission to apply other than tariff rates, and to waive or refund freight charges arising 

from various errors in tariff publications, an inadvertent failure to publish an intended rate, or a 

misquotation of a rate. 

In fiscal years 2007 and 2008, the Office intends to expand awareness of the ADR program 

through education and training and other outreach efforts. A brochure/pamphlet will be 

developed to provide advice to consumers in avoiding difficulty with moving internationally. 

Further efforts will be made to increase shipping industry awareness of less adversarial, more 

cost-effective means of resolving disputes in a manner that enables the parties to control the 

outcome. Use of mediation, in particular, will be promoted to assist in resolving formal 

proceedings and other significant disputes. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 24 

Federal Maritime Commission 

The Office also will continue to make consumer protection information available and will 

expand its outreach through various websites and media sources. While these efforts may be 

expected to generate additional complaints, their real value will be the number of consumers 

that are forewarned and thereby avoid problems. Through this means, assistance may be 

provided to many more consumers than could be possible through post-shipment problem 

resolution. 

Library

The Office of the Secretary also administers the Commission’s Library. The Library serves the 

Commission's research and information needs, and is a specialized repository of current and 

basic materials primarily covering the shipping industry, the history of shipping, and 

regulations covering all phases of shipping in U.S. foreign trade. It also contains material on 

several related fields such as engineering, economics, political science and an extensive 

collection of admiralty law. The Library includes such sources of information as law 

encyclopedias, engineering textbooks, law textbooks, Comptroller General Decisions, and 

editions of the various National Reporter systems. The Library's holdings consist of 

approximately 4,500 volumes and numerous microfiches, CD-ROMs and on-line services. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 25 

Federal Maritime Commission 

Office of the Secretary

On Hand 

09/30/05 Receipts Output

On Hand 

09/30/06 Receipts Outputs

On Hand 

09/30/07 Receipts Outputs

On Hand 

09/30/08

Commission Docketed 

Proceedings (Formal, 

Special & Informal) 9 20 15 14 30 30 14 30 30 14

Commission Non-Docketed 

Proceedings 0 0 0 0 5 5 0 5 5 0

Service Contract 

Correction Applications 0 3 3 0 2 2 0 2 2 0

Non-Docketed Informal 

Complaints 68 632 500 200 675 600 275 750 700 325

Responses to Shipment 

Transaction Inquiries or 

Information Requests 0 3,000 3,000 0 3,000 3,000 0 3,000 3,000 0

Docketed Informal 

Complaints 8 13 5 16 15 15 16 15 15 16

Special Dockets 0 2 2 0 2 2 0 3 3 0

Agenda Items 0 73 73 0 100 100 0 110 110 0

Pages of Minutes 0 85 85 0 110 110 0 130 130 0

Federal Register Notices 0 323 323 0 300 300 0 300 300 0

FOIA Requests 5 24 28 1 50 50 1 60 60 1

Certifications 0 44 0 4 4 0 4 4 0

Formal Proceedings Program

Statistical Workload Summary

Workload Units Fiscal 2006 Actual Fiscal 2007 Estimate Fiscal 2008 Estimate
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 26 

Federal Maritime Commission 

Office of the General Counsel

The General Counsel provides legal counsel to the Commission. This includes reviewing staff 

recommendations for Commission action for legal sufficiency, drafting proposed rules to 

implement Commission policies, and preparing final decisions, orders, and regulations for 

Commission review. In addition, the Office of the General Counsel (“OGC”) provides written 

and oral legal opinions to the Commission, its staff, and the general public in appropriate cases. 

As described in more detail below, the General Counsel also represents the Commission before 

the courts and Congress and administers the Commission’s international affairs program. 

Rulemaking and Decisions 

The following are rulemakings and adjudications representative of matters prepared by the 

OGC: 

(a) Rulemakings 

Non-Vessel-Operating Common Carrier Service Arrangements, [Docket No. 04-12], 30 

S.R.R. 592 (February 8, 2005); Non-Vessel-Operating Common Carrier Service 

Arrangements, [Docket No. 05-05], 30 S.R.R. 763 (September 23, 2005); Non-VesselOperating Common Carrier Service Arrangements (Notice of Inquiry), [Docket No. 05-06], 

____ S.R.R. ____ (August 30, 2005) 

Unlike VOCCs, NVOCCs are limited by the Shipping Act to offering common carrier services 

for the carriage of international oceanborne cargo to the shipping public under the terms of a 

published tariff. The Commission initiated this proceeding with the issuance of a notice of 

proposed rulemaking (“NPR”) on October 28, 2004. The NPR was issued to solicit public 

comment on specific proposed language for an exemption to the tariff publication requirements 

of section 8(a) of the Shipping Act, 46 U.S.C. § 40501, for cargo moved by NVOCCs for their 

shipper customers on a contractual basis. Commenters initially were given until November 19, 

2004, to submit comments on the NPR; this period was later extended to November 30, 2004. 

The Commission voted to issue a Final Rule on December 15, 2004, at a public meeting. The 

Final Rule became effective on January 19, 2005. 

The Final Rule exempts NVOCCs offering NSAs from the publication requirements of the 

Shipping Act, subject to certain conditions. The Final Rule defines an NSA as “a written 

contract, other than a bill of lading or receipt, between one or more NSA shippers and an 

individual NVOCC or two or more affiliated NVOCCs, in which the NSA shipper makes a 

commitment to provide a certain minimum quantity or portion of its cargo or freight revenue 

over a fixed time period, and the NVOCC commits to a certain rate or rate schedule and a 

defined service level. The NSA may also specify provisions in the event of non-performance on 

the part of any party.” 

The Final Rule’s exemption is conditioned on the electronic filing by the NVOCC of the NSA 

with the Commission, through its web-based electronic filing system SERVCON, in the same 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 27 

Federal Maritime Commission 

manner as VOCCs file service contracts provided for in section 8(c) of the Shipping Act, 46 

U.S.C. § 40502. Analogous to the Shipping Act’s requirements for service contracts offered by 

VOCCs, the exemption also requires that the essential terms of all NSAs be published in the 

NVOCC’s tariff publication. 

Due to prior judicial interpretations of the extent of the antitrust immunity granted by the 

Shipping Act, the Commission declined several Commenters’ requests to extend the exemption 

to encompass arrangements between two or more NVOCCs, including shippers’ associations 

whose members include NVOCCs. The Commission found that such an exemption could 

confer antitrust immunity on arrangements between and among NVOCCs, and that this could 

result in substantial reduction in competition, contrary to the Shipping Act’s exemption 

standards. 

Subsequently, after issuance of an opinion by the U.S. Court of Appeals for the Fourth Circuit 

which clarified that NVOCCs are not entitled to antitrust immunity under the Shipping Act, on 

September 23, 2005, the Commission issued a final rule extending the exemption to allow 

NVOCCs to offer NSAs to other NVOCCs as well as shippers’ associations with NVOCC 

members. This Final Rule became effective on October 28, 2005. The Commission also 

determined that it would further consider the expansion of the exemption to enable two or more 

unaffiliated NVOCCs to jointly offer NSAs. On August 30, 2005, the Commission issued a 

Notice of Inquiry, seeking comments on such joint NSA authority. 70 Fed. Reg. 52345 

(September 2, 2005). The responses to that inquiry are currently under review by the General 

Counsel’s Office. 

(b) Decisions 

Anchor Shipping Co. v. Alianca Navegacao E Logistica Ltda., [Docket No. 02-04], 30 S.R.R. 

991 (May 10, 2006)

This proceeding was initiated by a complaint filed by Anchor Shipping Co. (“Anchor”) against 

Alianca Navegacao E Logistica Ltda. (“Alianca”). Anchor, an NVOCC, alleged that Alianca, 

an ocean common carrier, violated numerous sections of the Shipping Act during the course of 

its service contract with Anchor. Anchor sought $1,000,000 in reparations. 

Prior to filing its complaint with the Commission, Anchor and Alianca participated in binding 

arbitration. After reviewing the evidence, the arbitrator issued a decision in which Anchor was 

awarded over $381,000, which Alianca paid. Following the issuance of the arbitrator’s 

decision, Anchor filed its complaint with the Commission. In response, Alianca filed a motion 

to dismiss. 

The ALJ issued an Order dismissing Anchor’s complaint. The ALJ determined that it would be 

unfair and unjust to allow Anchor to litigate a claim that had been previously settled in 

arbitration. Anchor appealed the ALJ’s ruling to the Commission. 

The Commission issued an Order vacating the ALJ’s dismissal order and remanded the 

proceeding to an ALJ for further adjudication. The Commission found that the ALJ improperly 

dismissed Anchor’s complaint. The Commission held that precluding Anchor from filing its 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 28 

Federal Maritime Commission 

complaint merely because it had previously participated in private arbitration would be 

inconsistent with the agency’s statutory mandate. The Commission further explained that 

arbitration would be appropriate to resolve breach of contract claims, but cannot prohibit the 

Commission from exercising its statutory obligations. Specifically, when a complaint contains 

allegations specific to the Shipping Act such as unfair or unjustly discriminatory practices, 

undue or unreasonable preferences, and undue or unreasonable prejudice or disadvantage, such 

complaints are appropriately before the Commission. 

Sea-Land Service Inc. - Possible Violations of Sections 10(b)(1), 10(b)(4) and 19(d) of The 

Shipping Act of 1984 [Docket No. 98-06], 30 S.R.R. 872 (February 8, 2006) 

The Commission issued an Order of Investigation and Hearing on April 24, 1998, to determine 

whether Sea-Land Service, Inc., a VOCC, violated the Shipping Act by substituting larger 

containers for smaller ones for certain NVOCCs and charging those NVOCCs rates lower than 

it lawfully should have charged based on the amount of cargo actually loaded into the larger 

containers. The Order also alleged that Sea-Land paid forwarder compensation to certain 

freight forwarders who did not perform forwarding services. 

By Order dated February 8, 2006, the Commission affirmed the ALJ’s rulings that Sea-Land 

violated sections 10(b)(1) by failing to collect the rates contained in its applicable tariff and 10

(b)(4) by failing to collect the applicable rate through an unjust device or means. The 

Commission vacated the $4,082,500 penalty assessed by the ALJ and imposed instead a penalty 

of $820,000 for the violations. 

Litigation

The General Counsel represents the Commission in litigation before courts and other 

administrative agencies. Although the litigation work largely consists of representing the 

Commission upon petitions for review of its orders filed with the U.S. Courts of Appeals, the 

General Counsel also participates in actions for injunctions, enforcement of Commission 

orders, actions to collect civil penalties, and other cases where the Commission’s interest may 

be affected by litigation. 

The following is representative of matters litigated by the Office: 

American Institute of Shipper’s Associations v. Federal Maritime Commission, D.C. 

Circuit, Case No. 05-1036; International Shippers’ Association v. Federal Maritime 

Commission, D.C. Circuit, Case No. 05-1037 

This proceeding is an appeal of the FMC’s final rule, and its order denying rehearing, in Docket 

No. 04-12, Non-Vessel-Operating Common Carrier Service Arrangements. In order to ensure 

that competition would not be harmed, that rule forbade NVOCCs and shippers’ associations 

with NVOCC members from acting as shippers in NSAs. The petitioners sought to convince the 

Court of Appeals either that the Commission’s rule is discriminatory against shippers’ 

associations with NVOCC members, or that the rule is entirely beyond the scope of the 

agency’s authority. The Court, on its own motion, consolidated Case Nos. 05-1036 and 05-

1037. On May 11, 2005, the following entities were granted leave to intervene in support of the 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 29 

Federal Maritime Commission 

FMC’s rule: BAX Global Inc., FEDEX Trade Networks Transport & Brokerage, Inc., National 

Industrial Transportation League, Transportation Intermediaries Association, and United Parcel 

Service, Inc. The Court also granted permission to the Fashion Accessories Shippers 

Association (“FASA”) to participate as an amicus curiae. Following amendments made by the 

Commission to the NSA rule, petitioners moved for voluntary dismissal of the petitions. Amicus 

curiae FASA moved to convert its status to intervenor, in order to continue the case. On 

January 12, 2006, the court issued a per curiam Order granting petitioners’ motions for 

voluntary dismissal of these consolidated proceedings. The Court also denied FASA’s motion 

to intervene.

American President Lines v. Federal Maritime Commission, D.C. Circuit, Case No. 05-

1288; Horizon Lines, LLC v. Federal Maritime Commission, D.C. Circuit, Case No. 05-

1289; Government of the Territory of Guam v. Federal Maritime Commission, D.C. Circuit, 

Case No. 05-1360

These proceedings involved appeals of the Commission’s orders in Docket No. 89-26, The 

Government of Guam, et. al. v. Sea-Land Service, Inc. and American President Lines, Ltd., 

served June 1, 1998, and The Government of the Territory of Guam v. Sea-Land Service, Inc. 

and American President Lines, Ltd., served July 11, 2005. Horizon Lines, LLC (“Horizon”) 

(the successor company to Sea-Land Service, Inc.) and American President Lines, Ltd. 

(“APL”), appealed the Commission’s June 1, 1998, Order which found them to have collected 

excess revenues in violation of the Shipping Act, 1916. The Government of Guam appealed 

both Orders. The Commission, in the July 11, 2005, order, found that the Government of Guam 

did not prove damages and denied reparations and dismissed the proceeding. The appeals of 

the June 1, 1998, order were made at this time because that order did not become final for 

purposes of court appeal until the Commission completed the final phase of the proceeding with 

the issuance of its July 11, 2005 order. The Court consolidated the three proceedings. On April 

5, 2006, the Court granted a motion by the Government of Guam to withdraw its appeal, 

thereby terminating its role in the appeal of the Commission’s Orders. Shortly after the Court’s 

dismissal of the Government of Guam’s appeal, APL and Horizon filed motions to withdraw 

their separate appeals. The Court granted APL’s and Horizon’s motions and dismissed the 

remaining consolidated proceedings by order dated June 12, 2006. As a result of the dismissals 

of all appeals, the litigation which began seventeen years ago with the filing of the Government 

of Guam’s complaint with the Commission has concluded. 

Federal Maritime Commission v. All-In-One Shipping, Inc., et al. U.S. District Court for the 

Southern District of Florida, Case No. 06-60054 – Civ 

On January 11, 2006, the Commission commenced Docket No. 06-01 by issuing an Order of 

Investigation and Hearing to determine whether nine household goods moving companies and 

their owners and/or primary corporate officers (14 individuals) were operating in violation of 

sections 8, 10, and 19 of the Shipping Act by operating as NVOCCs without obtaining a 

license, without providing proof of financial responsibility, without publishing an electronic 

tariff and by failing to establish, observe, and enforce just and reasonable regulations and 

practices related to receiving, handling, storing, or delivering property. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 30 

Federal Maritime Commission 

The U.S. District Court for the Southern District of Florida issued a preliminary injunction by 

order dated January 17, 2006, at the request of the Commission. The injunction enjoins four of 

the household goods moving companies and three of the individuals named in the 

Commission’s Order from operating as NVOCCs in violation of the Shipping Act by accepting 

cargo for transportation, and for advertising for or soliciting cargo while operating as an OTI 

without a valid license, bond or other security on file with the Commission. In addition to each 

of the companies and individuals named in the injunction, the named companies’ and 

individuals’ agents, servants, employees, and attorneys, and those in active concert or 

participation, are also enjoined. 

The Court found that the Commission met the requirements for issuance of the injunction by 

showing a substantial likelihood of success on the merits, that irreparable injury would be 

suffered unless the injunction were issued, the threatened injury to the moving party (the 

Commission) outweighed whatever damage the injunction might cause those enjoined, and that 

the injunction would not be adverse to the public interest. 

The Court injunction and the Commission’s formal investigation are based on more than 250 

consumer complaints. Those complaints included: (1) failure to deliver cargo and refusal to 

return the pre-paid ocean freight; (2) losing the shipper’s cargo; (3) charging the shipper for 

marine insurance which was never obtained; (4) misleading the shipper as to the whereabouts of 

the cargo; (5) after initially quoting a rate to the shipper, withholding the cargo until a 

subsequent higher rate is paid by the shipper; and, (6) the shipper having to pay another carrier 

or warehouse to obtain release of cargo after having already paid a respondent for that 

transportation or warehousing. The injunction will remain in effect until 10 days after the 

Commission issues an order disposing of the issues under investigation in the related 

proceeding, Docket No. 06-01. 

Legislative Activities 

The OGC represents the Commission’s interests in all matters before Congress. This includes 

preparing testimony for Commission officials, responding to Congressional requests for 

assistance and information, commenting on proposed legislation, proposing legislation, and 

responding to OMB requests regarding proposed bills and testimony. 

During fiscal year 2006, 120 bills, proposals and Congressional inquiries were referred to the 

OGC for comment. The Office prepared and coordinated testimony for the agency’s fiscal year 

2007 budget authorization hearing before the U.S. House of Representatives Committee on 

Transportation and Infrastructure, Subcommittee on Coast Guard and Maritime Transportation. 

In addition, the Office assisted in the written testimony for the agency’s fiscal year 2007 budget 

requests submitted to the U.S. Senate Committee on Appropriations, Subcommittee on 

Transportation, Treasury, the Judiciary, HUD and Related Agencies. The Office also consulted 

with Congressional staff on the continuing efforts to revise, codify and enact certain maritime 

laws as part of Title 46, U.S. Code, Shipping. 

In fiscal years 2007 and 2008, the OGC will continue to take the lead in providing assistance 

and technical advice to Congress regarding issues for possible legislative consideration, with 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 31 

Federal Maritime Commission 

particular emphasis on port and maritime security initiatives. The Office will recommend 

legislative and regulatory amendments as necessary to ensure uniformity with other federal 

initiatives to allow for the efficient and secure flow of ocean transportation. Additionally, the 

Office will continue to serve as liaison with other federal agencies with respect to port and 

maritime security. 

Foreign Shipping Restrictions and International Affairs

The OGC is responsible for the administration of the Commission's international affairs 

program. The OGC monitors potentially restrictive foreign shipping laws and practices, and 

makes recommendations to the Commission for investigating and addressing such practices. 

The Commission has the authority to address restrictive foreign shipping practices under 

section 19 of the 1920 Act and the FSPA. Section 19 empowers the Commission to make rules 

and regulations governing shipping in the foreign trade to adjust or meet conditions 

unfavourable to shipping. The FSPA directs the Commission to address adverse conditions that 

affect U.S. carriers in foreign trade and do not exist for foreign carriers in the U.S. 

In fiscal year 2006, the Commission continued to monitor potentially restrictive shipping 

practices of the Government of Japan. 

The OGC represented the Commission at the 27th meeting of the Asia-Pacific Economic 

Cooperation (“APEC”) Transportation Working Group, a group composed of staff-level experts 

in various modes of transportation from the relevant government agencies of each member 

economy. The Deputy General Counsel made a formal presentation on perspectives on the 

United States’ experience with shipping deregulation under OSRA and provided information on 

U.S. legislation and regulation to the APEC Transportation Working Group. The OGC also 

represented the Commission at the 28th APEC Transportation Working Group meeting. 

The OGC also pursued informally several matters that involved potentially restrictive foreign 

practices including new legislation, new interpretations of existing legislation and new 

regulations of non-domestic carriers’ terminal handling charges. 

The Commission continued to monitor developments relating to restrictive practices in 

Japanese ports, including the effects of amendments to the Port Transportation Business Law 

enacted in 2000 and 2005. The Commission continued to receive and evaluate semi-annual 

reports from its proceeding in Docket No. 96-20, Port Restrictions and Requirements in the 

United States/Japan Trade. 

The Commission’s Permanent Task Force on International Affairs, chaired by the Deputy 

General Counsel, is a network of representatives from a number of Commission bureaus and 

offices. The Task Force meets to exchange information regarding new or continuing areas of 

concern relating to restrictive foreign shipping practices possibly necessitating action under one 

of the Commission’s statutory authorities in this area. The agency’s Task Force on International 

Affairs was internally evaluated in 2006 and a draft set of recommendations to improve its 

performance and effectiveness were outlined. These recommendations are presently under 

review. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 32 

Federal Maritime Commission 

Another responsibility of the OGC is the identification and verification of controlled carriers 

under section 9 of the Shipping Act. Common carriers that are owned or controlled by foreign 

governments are required to adhere to certain requirements under the Act, and their rates are 

subject to Commission review. The Office investigates and makes appropriate 

recommendations to the Commission regarding the status of potential controlled carriers. The 

Office, in conjunction with other Commission components, also monitors the activities of 

controlled carriers. 

In fiscal years 2007 and 2008, the OGC will continue to take the lead in accomplishing the 

agency's performance goals relating to eliminating restrictions that unjustly disadvantage U.S. 

interests. Through the Permanent Task Force on International Affairs, OGC will monitor 

foreign laws and practices to determine whether there are any unjust non-market barriers to 

trade. The Office will recommend appropriate action to the Commission as warranted. 

Designated Agency Ethics Official

The Ethics Official is administratively within the Office of the Chairman, but the position is 

performed as a collateral duty by the Deputy General Counsel. 

The Commission's Ethics Official is responsible for administering public and confidential 

financial disclosure systems in order to prevent conflicts of interest from arising in the 

execution of the agency's regulatory functions. The Ethics Official also conducts annual 

training and the day-to-day advice and guidance to ensure compliance with the standards of 

ethical conduct that apply to Executive Branch officials. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 33 

Federal Maritime Commission 

On Hand 

09/30/05 Receipts Output

On Hand 

09/30/06 Receipts Outputs

On Hand 

09/30/07 Receipts Outputs

On Hand 

09/30/08

Litigation 4 5 7 2 4 3 3 3 3 3

Legislation 0 120 120 0 125 125 0 130 130 0

Legal Opinions, case 

summaries, decisions and 

final orders 0 125 125 0 130 130 0 135 135 0

Sec. 19/sec. 13 (b)(5) FSPA 

Proceedings 1 0 0 1 2 1 2 1 1 2

International affairs reports, 

policy papers, briefings, 

controlled carrier 

recommendations 0 35 35 0 35 35 0 35 35 0

Speeches, articles, 

presentations 0 15 15 0 20 20 0 25 25 0

Interagency & international 

group participation 0 30 30 0 35 35 0 40 40 0

Response to requests for 

information, oral & written 0 275 275 0 280 280 0 285 285 0

Formal Proceedings Program

Office of the General Counsel

Statistical Workload Summary

Workload Units Fiscal 2006 Actual Fiscal 2007 Estimate Fiscal 2008 Estimate
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 34 

Federal Maritime Commission 

Office of Administrative Law Judges

Administrative Law Judges regulate the course of proceedings, conduct hearings, approve 

settlements, and render decisions in adjudicatory proceedings held after receipt of a complaint, 

or when instituted by the Commission. ALJs have authority to administer oaths and 

affirmations; issue subpoenas; rule upon motions and offers of proof; receive evidence; 

authorize depositions; regulate the course of hearings; hold pre-hearing conferences for the 

settlement or simplification of the issues involved; refer matters to mediation when appropriate; 

dispose of procedural requests; act as settlement judges in particular cases; and take any other 

action authorized by agency rule or the Administrative Procedure Act. 

The case load of the Office is governed by the number of complaints and applications filed, the 

number of formal proceedings instituted by the Commission on its own motion, and other 

matters assigned in furtherance of the Commission's regulatory functions. Proceedings which 

come before the ALJs include, but are not limited to, the adjudication of discriminatory or 

unfair and unreasonable practices between various parties subject to the shipping acts, and 

adjudication of shipper complaints. ALJs also can be called upon to process special docket 

applications on an as-needed basis. 

At the beginning of fiscal year 2006, there were 10 formal and 2 informal proceedings pending 

before the Office of ALJs. During the year, 8 formal cases and 1 informal case were added. 

The Office of ALJs issued initial decisions in 3 formal proceedings and 3 informal proceedings. 

Six formal proceedings were dismissed. At the end of the fiscal year, there were 9 formal 

proceedings pending before the Office of ALJs. 

Work load 

Units

On Hand 

09/30/05 Receipts Output

On Hand 

9/30/06 Receipts Outputs

On Hand 

19/30/07 Receipts Outputs

On Hand 

09/30/08

Form al 

Proceedings 10 8 9 9 11 11 9 13 22 0

Spe cial 

Proceedings 0 00 0 0 0 0 0 0 0

Inform al 

Proceedings 2 13 0 4 4 0 4 4 0

Fis cal 2006 Actual Fis cal 2007 Es tim ate Fis cal 2008 Es tim ate

Form al Proce e dings Program

Office of Adm inis trative Law Judge s

Statis tical Work load Sum m ary
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 35 

Federal Maritime Commission 

Equal Employment Opportunity Program

The Office of Equal Employment Opportunity follows Federal EEO and personnel management 

laws, concepts, procedures and regulations to develop, implement and manage a comprehensive 

program of equal employment opportunity. The EEO program is statutorily mandated with 

required activities in complaints processing, adjudication, affirmative employment program 

planning, workforce diversity management, special emphasis programs, community outreach, 

monitoring and evaluation. 

The Director of EEO (“DEEO”) works independently under the direction of the Chairman to 

provide advice to the Commission's senior staff and management in improving and carrying out 

its policies and program of non-discrimination, workforce diversity and affirmative 

employment program planning. The DEEO arranges for EEO counseling or ADR for 

employees who raise allegations of discrimination; provides for the investigation, hearing, factfinding, adjustment, or early resolution of such complaints of discrimination; accepts or rejects 

formal complaints of discrimination; prepares and issues decisions for resolution of formal 

complaints; and monitors and evaluates the program’s impact and effectiveness. In addition, the 

DEEO represents the agency on several intergovernmental committees, coordinates all 

affirmative program planning efforts and directs programs of special emphasis. The DEEO also 

supervises two collaterally-assigned EEO counselors. 

The Office works closely with senior management and with the Commission's Office of Human 

Resources (“OHR”) to: (1) expand outreach and recruitment initiatives; (2) improve the 

representation, career development and retention of women, minorities and persons with 

disabilities; (3) provide adequate career counseling; (4) facilitate early resolution of 

employment-related problems; and (5) develop program plans and progress reports. 

Significant Accomplishments for Fiscal Year 2006: 

Women and minorities continue to represent a majority of the FMC workforce in fiscal year 

2006. Significant accomplishments include the following: (1) provided EEO briefings to senior 

staff and new employees; (2) gave EEO/Affirmative Employment Programs presentation to all 

FMC employees; (3) provided information to employees about internet sites with Diversity/

EEO related information; (4) updated No FEAR Act statistics on FMC website {http://

www.fmc.gov/home/NoFearAct.asp}; (5) provided counseling assistance to managers, 

supervisors and employees; (6) provided support and assistance to managers and supervisors in 

maintaining and effectively managing a diverse workforce; (7) updated Commission Order 52 

on Equal Employment Opportunity and policies on non-discrimination and diversity, sexual 

harassment, and EEO alternative dispute resolution; (8) reviewed and assessed management and 

personnel human resource activity and actions; (9) maintained an effective discrimination 

complaint process that resolved issues informally and expeditiously; and (10) held special 

commemorative programs for all FMC employees, including Hispanic Heritage month, 

National Disability Employment Awareness month, National American Indian Heritage month, 

Black History month, Women’s History month, and Asian Pacific American month; (11) 

provided information to employees about Veterans Day; World AIDS Day; Holocaust 

Remembrance Day; Lesbian, Gay, Transgender and Bisexual Pride Month; and Women’s 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 36 

Federal Maritime Commission 

Equality Day; (12) participated in meetings of several inter-agency councils in special emphasis 

areas; (13) coordinated activities of the FMC’s Advisory Council on Women’s Issues; (14) 

created, administered and analyzed a survey on agency issues; (15) EEO Director and 

counselors attended EEO refresher training/conferences; (16) prepared all required affirmative 

employment program accomplishment reports and plans; (17) coordinated the Commission’s 

“Take Our Daughters and Sons to Work” program; and (18) managed the Commission’s 

Emerging Leaders Program. 

During fiscal years 2007 and 2008, the Office of EEO will continue all existing programs and 

initiate additional activities designed to increase an understanding of EEO concepts and 

principles, including workforce diversity, outreach, retention initiatives, and career 

development. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 37 

Federal Maritime Commission 

Inspector General Program

The Office of Inspector General (“OIG”) operates pursuant to The Inspector General Act of 

1978 (1978 Act) (5 U.S.C. App. 3) as amended in 1988. The 1988 amendments created 

additional statutory offices of inspector general at various designated Federal entities, including 

the FMC. 

The purpose of the 1978 Act, as amended, and as applicable to the FMC, is to create an 

independent and objective unit to conduct audits; review operations and programs; investigate 

possible fraud, waste, and mismanagement of Commission resources; and promote economy, 

efficiency and effectiveness in programs and operations administered by the FMC. 

The OIG is staffed by an Inspector General (“IG”), an Assistant Inspector General and an 

administrative assistant who performs administrative and support functions. 

The IG works independently under the general supervision of the Chairman. The IG does not 

report to, and is not subject to supervision by, any other officer or employee of the FMC. The 

OIG has memorandums of understanding (“MOUs”) with the FMC’s Office of the General 

Counsel and with the Social Security Administration’s Office of Inspector General to provide 

legal counsel and criminal investigative assistance respectively on an as-needed basis. In 

addition, the Office utilizes the expertise of outside contractors to assist in performing 

specialized audits and reviews. 

During fiscal year 2006, the Office issued an audit of the agency’s fiscal year 2005 financial 

statements and a companion report to management containing financial-related findings and 

recommendations resulting from the audit. The OIG also issued reports to management on 

agency compliance with FISMA, management challenges facing FMC in fiscal year 2005, data 

accuracy in the Bureau of Enforcement’s tracking systems, management controls over 

employee privacy information and the effectiveness of controls over select aspects of payroll 

processing. Finally, the OIG issued two semiannual reports to Congress discussing the Office’s 

audit and investigative activity for the fiscal year.

Also during the period, the Inspector General spoke at a joint Inspector General/Chief 

Information Officer symposium on information security. 

The OIG received various Hotline complaints during the year, and a number of preliminary 

investigations were opened. The Office had no formal investigations during the reporting 

period. The OIG also received and responded to citizen inquiries regarding the FMC or other 

federal programs. 

During fiscal years 2007 and 2008, the OIG will continue to place high priority on audits and 

reviews with the objective of improving agency programs and operations. The OIG will 

complete statutorily-required reviews to include an audit of the agency’s fiscal year 2006 

financial statements and an evaluation of the agency’s information security program and 

privacy assurance controls as required by FISMA. The OIG will also undergo a review of its 

audit quality program performed by a sister OIG as part of a triennial peer review program and 

conduct a similar review of a third federal OIG. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 38 

Federal Maritime Commission 

The OIG will continue to actively participate in OIG community activities and maintain 

membership in the Executive Council on Integrity and Efficiency (“ECIE”) and the Federal 

Audit Executive Council (“FAEC”). The OIG will continue to work with the OMB, ECIE and 

FAEC on joint projects which affect the IG community. The Office will also continue to keep 

the FMC Chairman, OMB and the Congress fully informed regarding our audit and 

investigative activities. 

Workload Units

Audits:

On Hand 

09/30/05 Receipts Output

On Hand 

9/30/06 Receipts Output

On Hand 

09/30/07 Receipts Outputs

On Hand 

09/30/08 

Economy/Efficiency 1 1 2 0 2 2 0 1 1 0

 Program 0 0 0 0 1 1 0 2 2 0

 Financial 1 1 2 0 1 1 0 1 1 0

Security 1 0 1 0 0 0 0 1 1 0

Surveys 1 01 0 0 0 0 1 1 0

Investigations:

 Preliminary 0 2 2 0 3 3 0 3 3 0

 Formal 0 00 0 1 1 0 1 1 0

Fiscal 2006 Actual Fiscal 2007 Estimate Fiscal 2008 Estimate

Inspector General Program

Statistical Workload Summary
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 39 

Federal Maritime Commission 

Operations Program

Linking Program Funding to Strategic/Performance Goals

The Office of Operations is responsible primarily for the management and coordination of 

the agency=s program areas. As such, the Office of Operations supports the following 

strategic goals: Compliance; Balanced Enforcement; and Technological Efficiencies. The 

agency has established seven performance goals in line with the strategic goals that will be 

supported by the Office of Operations. In support of Technological Efficiencies, three 

performance goals focus on automation of agency forms and integration of data. We intend 

to develop a plan to automate the FMC Form 131, the PVO Application form, and conduct a 

corresponding requirements analysis to make the Form 131 more user friendly and allow for 

more timely and effective review by staff. We will initiate a redesign of the OTI list 

maintained on the Commission’s website to increase accessibility to information and 

facilitate public search capability. These initiatives will increase ease of compliance, 

efficiency, accuracy and consistency in the Commission’s regulatory activities. Internally, we 

will integrate major agency databases. This will not only increase efficiency but will enhance 

analytical capabilities and improve data accessibility within the Commission. In support of 

Efficient Regulatory Process, we will assess the impact of recently implemented rules 

concerning carrier agreements. In support of Balanced Enforcement, we will undertake a 

review of the “best practices” program and its impact on compliance. These inquiries will 

allow us to gage our success in increasing compliance with Commission rules. As well, we 

will develop a rulemaking providing for enforcement against cruise lines that fail to file 

reports required by law. 

Office of Operations

Office of the Director 

The Director of Operations, as a senior staff official, is responsible to the Chairman for the 

management and coordination of Commission Bureaus: 

Bureau of Trade Analysis 

Bureau of Certification and Licensing 

Bureau of Enforcement 

The Office of Operations oversees the development and operations of various Commission 

programs and recommends new programs and necessary changes in staff objectives. 

In addition, the Office of Operations oversees the Area Representatives (“ARs”). The 

Commission maintains a presence in Los Angeles, South Florida, New Orleans, New York and 

Seattle through ARs based in each of those cities. These representatives serve other major port 

cities and transportation centers within their respective areas. In addition to monitoring and 

investigative functions, ARs represent the Commission within their jurisdictions, provide liaison 

between the Commission and the maritime industry and the shipping public, collect and analyze 

information of regulatory significance, and assess industry conditions. Liaison activities 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 40 

Federal Maritime Commission 

involve cooperation and coordination with other government agencies and departments, 

providing regulatory information and relaying Commission policy to the shipping industry and 

the public, and handling informal complaints within each representative's area of responsibility. 

ARs also work on Commission outreach, through seminars, booths at various conferences and 

trade shows, presentations, and local community contacts. ARs visit headquarters for an AR 

conference once a year, and Operations staff travel to various AR offices throughout the year. 

The Office of Operations supported the operational bureaus through oversight and guidance 

towards the accomplishment of many programmatic achievements during fiscal year 2006. In 

particular, the Office worked extensively with the bureaus and other agency offices to review 

Commission rules and regulations with regard to business practices in the OTI sector. The 

Office worked with the Bureau of Certification and Licensing to report to the Commission with 

regard to emerging industry changes in the OTI sector and to propose certain initiatives in that 

area. The Office continues to lead the Bureau of Enforcement, the Bureau of Certification and 

Licensing, and CADRS in review and coordination of compliance and enforcement policy. 

Significantly, the Office worked with the bureaus and other agency offices to take action 

against illegal conduct of household goods movers. Investigation by the ARs, in concert with 

information gathered by CADRS, led directly to the issuance by the Commission of an Order of 

Investigation against a number of entities, as well as injunctive action against some. The 

Office worked with staff members from all bureaus to make technological advances, including 

work on the automated form FMC-18. 

Office staff participated in the formation of plans of actions and milestones on several areas of 

importance to agency strategic planning. In particular, the Office was heavily involved in the 

development of an agency outreach strategy which will improve communications with 

regulated entities, raise awareness of the FMC, and build relationships with other government 

agencies. As well, the Office contributed significantly to the development and implementation 

of a plan to address human resources issues, including the need for succession planning and 

enhanced performance management. The Office participated in review of business processes 

and statutory authorities in light of possible future strategic needs.

The Office of Operation’s key objectives for fiscal years 2007 and 2008 include instituting the 

Chairman’s policy directions aimed at refining and enhancing agency programs and operations, 

as well as monitoring the accomplishment of agency performance goals. In particular, the 

Office will continue to concentrate on increasing agency outreach and raising public awareness 

of agency regulations and services. The Office also will focus on reviewing agency policies 

and regulations to ensure alignment between the FMC and the industry and on automating 

certain processes. Finally, the Office will continue to refine cooperation and integration of the 

three agency bureaus. 

Bureau of Trade Analysis

The Bureau of Trade Analysis plans, develops, and administers Commission programs for the 

following activities: (1) monitoring general trade conditions and economic developments in 

liner shipping; (2) overseeing individual and concerted carrier and MTO activity; 

(3) developing economic studies and analyses in support of the Commission's regulatory 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 41 

Federal Maritime Commission 

responsibilities; (4) processing and analyzing carrier and marine terminal agreements; 

(5) providing expert economic testimony and support in formal proceedings, particularly 

regarding unfair foreign shipping practices; (6) processing, reviewing, and monitoring 

confidential service contracts and amendments filed by ocean common carriers, conferences,

and agreements; (7) reviewing requests to correct clerical or administrative errors in service 

contracts; (8) ensuring that statements of certain essential terms associated with service 

contracts are published in tariffs and made available to the public; (9) auditing tariff publishing 

systems to ensure that tariffs are accessible and accurate; (10) processing FMC-1 registration 

forms submitted by carriers and conferences and posting and updating the location of carrier 

tariffs on the Commission’s website; (11) acting on special permission applications to deviate 

from tariff publishing rules; (12) monitoring the activities of state-controlled carriers; and (13) 

supporting other Commission components with regard to the Commission’s regulatory 

requirements. 

The Bureau’s three operating offices under the supervision of the Bureau Director are: the 

Office of Agreements, the Office of Economics and Competition Analysis, and the Office of 

Service Contracts and Tariffs. The Office of Agreements is responsible for processing and 

analyzing carrier and marine terminal agreements filed with the Commission and maintaining 

various agreement databases. The Office of Economics and Competition Analysis develops and 

administers programs overseeing individual and concerted carrier activities, carriers' dealings 

with shippers and intermediaries, activities of state-controlled carriers in U.S. foreign 

commerce, foreign shipping practices, and overall U.S. liner trade conditions. The Office of 

Service Contracts and Tariffs is responsible for processing, reviewing, and monitoring 

confidential service contracts, NSAs and ensuring that the statements of certain essential terms 

associated with service contracts and NSAs are published and made available to the public.

Further the Office ensures that carrier tariffs are accessible and accurate; the location of carrier 

tariffs as submitted in FMC-1 registration forms is correct; and those locations are published on 

the Commission’s website and updated on a periodic basis. 

Agreement Program Activities

The focus of the Bureau's agreement program is to analyze what impact a carrier or terminal 

agreement will have on competition, in particular whether it is likely that the agreement will 

result in an unreasonable increase in transportation cost or decrease in service. 

During fiscal year 2006, the Bureau received 256 carrier agreement filings and 28 terminal 

agreement filings. The Bureau reviewed, evaluated and processed 265 carrier agreement filings, 

which include 10 pending from fiscal year 2005, and 27 terminal agreement filings. 

Operational agreements, those involving the sharing of vessel space, continued to be the 

predominant type of agreement filed. These agreements accounted for over 45 percent of the 

filings. Price-fixing agreements, i.e., freight conferences, continued to decline last year to 

about 7.5 percent of filings. Most of the conference filings involved membership changes, that 

is, carriers joining or dropping out of those agreements. Some years ago, when conferences 

were the dominant pricing forum, their filings accounted for as much as 27 percent of yearly 

filings. Additionally, the number of marine terminal agreements filed continued to fall with 18 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 42 

Federal Maritime Commission 

filings. The reason for this is that terminal operators are taking advantage of the filing 

exemption for terminal leases. 

The Bureau also receives and reviews minutes of meetings and reports filed by various 

agreement parties. 

Certain revised agreement regulations that were enacted last fiscal year allow for expedited 

implementation of specific types of agreements and lessen the burden on the industry. An 

exemption from the 45-day waiting period was established to allow low market share 

agreements without pricing or capacity rationalization to become effective upon filing. In fiscal 

year 2005, about ten percent of agreements filed qualified for the low market share exemption. 

In fiscal year 2006, the percentage of qualifying filings more than doubled. 

During the year, the Bureau analyzed a number of significant agreement filings. Brief synopses 

of some of those follow: 

Hamburg Süd and FESCO Ocean Management filed a cooperative working agreement 

containing non-compete provisions relating to Hamburg-Süd’s acquisition of FESCO’s services 

and vessels in the Australia/New Zealand market. The Commission required parties to provide 

further information concerning their agreement and, after reviewing the parties’ responses, 

allowed the agreement to become effective. 

The member lines of the Caribbean Shipowners Association and the Florida Bahamas 

Shipowners and Operators Association filed a cooperative working agreement (the Florida 

Shipowners Group Agreement) under which the members of the two associations agree to form 

a separate entity that would handle the administrative matters of their respective agreements. In 

connection with the joint agreement, both underlying agreements were amended authorizing 

them to hire and use the services of the entity established under the Florida Shipowners Group 

Agreement. 

The member lines of the New World Alliance filed a new agreement that consolidated services 

that were covered under three separate agreements. After determining that the new 

arrangement did not alter the parties’ operational relationships and would not likely result in a 

significant reduction in competition or in an unreasonable increase in transportation costs to 

shippers, the Commission allowed the consolidated agreement to become effective. 

Ocean common carriers participating in the Ocean Carrier Equipment Management Association 

filed an agreement to give them authority to establish chassis pools at ports, marine terminals, 

and inland locations in cases where ports, marine terminals, railroads, and/or other entities are 

unable or unwilling to do so. The agreement authorizes the parties to meet, discuss, exchange 

information and data, negotiate, and agree upon matters related to the establishment, operation, 

and use of chassis pools. 

The ports of Los Angeles and Long Beach filed a marine terminal discussion agreement to 

facilitate implementation of their Clean Air Action Plan, which they developed in cooperation 

with U.S., state, and local government agencies and other stakeholders. The agreement gives 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 43 

Federal Maritime Commission 

the two ports authority to discuss and agree on rates, charges, operating costs, practices, 

legislation, regulations, and terminal operations regarding matters for the funding, 

establishment, and construction of port-related infrastructure projects and environmental 

programs. 

The Bureau maintains an Agreements database and library containing up-to-date information 

pertaining to, and copies of, effective agreements. In fiscal year 2006, the Bureau, in 

conjunction with the Office of the Secretary and the Office of Information Technology, 

completed the programming and established links to provide the public with direct access to the 

Bureau’s agreement library through the agency’s website. In fiscal years 2007 and 2008, the 

Bureau expects to further enhance public access to agreements as well as develop and 

implement the technology and procedures for the electronic filing of agreements. 

Economic Analysis Program Activities

To keep the Commission apprised of current trade conditions, emerging commercial and 

economic trends, and the impact of regulations affecting waterborne liner transportation, the 

Bureau prepares studies and profiles of major trades, monitoring reports, economic analyses, 

and agreement/carrier profiles, and undertakes special projects to identify and track relevant 

competitive and economic activity in major U.S. trade lanes. The Bureau’s monitoring activities 

include surveillance programs to identify: (1) concerted activity without an effective agreement 

on file with the Commission, or concerted activity exceeding the scope or authority of an 

effective agreement; (2) activity contravening the mandatory conference agreement provisions 

required by sections 5(b) and 5(c) of the 1984 Act; (3) the potential for, or emergence of, 

unreasonable service reductions/cost increases that contravene the section 6(g) general 

standard; (4) controlled carrier activity in areas relevant to the Commission’s administration of 

section 9 of the 1984 Act; (5) the occurrence of prohibited acts proscribed under section 10; 

(6) economic harm associated with unfair trade practices of foreign governments; and 

(7) whether the continued operation of an effective agreement in its present form is consistent 

with the statutes and current Commission decisions, rules, and policies. The Bureau develops 

profiles of major trade areas to assess carrier behavior under agreements, to determine 

compliance with regulatory requirements, and to ascertain the competitive posture of carriers, 

shippers, and shippers’ associations within each trade. 

In fiscal year 2006, the Bureau produced a variety of reports and analyses. These included (1) a 

Trade Profile on the U.S.-Oceania trade evaluating liner cargo growth, top trading partners, top 

commodities and major shippers of imported goods, liner services and vessel capacity, and the 

market structure and revenues of carriers in rate agreements; (2) two Trade Outlook reports 

providing a comprehensive economic analysis of selected U.S. liner trades, which focused on 

the market structure, conduct, and performance of carriers and carrier agreements operating in 

the trades; (3) two competitive impact studies of selected carrier agreements presently in effect, 

assessing the reasonableness of the parties’ collective activities pursuant to the statutes 

governing agreements under the Shipping Act; (4) a detailed study of service contract rate 

levels assessing the pricing policies of state-owned (controlled) carriers operating in the U.S. 

liner trades pursuant to the standards in section 9 of the Shipping Act; (5) an analysis of 

possible new forms of carrier agreements developing in the U.S. liner trades and proposals for 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 44 

Federal Maritime Commission 

Commission oversight of such agreements; and (6) a study of methods for using data from the 

Automated Commercial Environment/International Trade Data System (“ACE/ITDS”) and the 

SERVCON system to enhance the monitoring of carriers in rate agreements, and assess the 

impact of their service contracting and pricing practices in the U.S. liner trades. 

Other Bureau projects and initiatives completed or begun in fiscal year 2006 included: (1) 

economic analyses of filed agreements and agreement modifications pursuant to the standards 

of the Shipping Act; (2) monitoring the operations and impact of the PierPASS program at the 

Ports of Los Angeles/Long Beach implemented under the West Coast MTO Discussion 

Agreement; (3) a study of service contract terms and conditions based on a statistical random 

sample taken from the FMC’s SERVCON database; (4) quarterly controlled carrier reports; (5) 

continued efforts to correct compliance issues and problems with the monitoring reports and 

minutes of agreement meetings filed by parties to agreements subject to the Commission’s 

reporting regulations; (6) responses to applications for waiver from the Commission’s reporting 

regulations for agreements; (7) a carrier profile program to maintain current information on the 

top carriers operating in the U.S. liner trades; (8) creating and maintaining an interactive 

website on the Commission’s intranet with Bureau information and data on carrier agreements 

and conditions in the U.S. liner trades; (9) assisting in the development of a module within the 

SERVCON system that profiles selected service contracts for analysis; (10) developing and 

implementing a database and intranet interface to contain and access commercial trade data 

purchased by the Commission (PIERS); (11) preparing data and information for, and 

participation in, meetings with foreign government officials on maritime-related matters; (12) 

providing information from the Commission’s Regulated Persons Index to respond to a survey 

request from the Program Support Group of the ACE/ITDS project; (13) assisting with 

speeches and preparing trade and agreement information for official speaking engagements of 

Commission staff members; and (14) responses to requests, inquiries, and informal complaints 

on carrier agreements and related agreement trade matters. 

During the fiscal year, the Bureau received 886 sets of minutes and 164 monitoring reports 

containing market share, cargo volumes, revenue, and service data for agreement parties, 

including capacity and capacity utilization data for certain types of agreements. Monitoring 

reports are filed quarterly by the potentially more anticompetitive agreements, such as 

conference agreements and agreements with rate and/or capacity rationalization authority. The 

Bureau reviews these reports for filing compliance and uses the data to support its monitoring 

activities. In addition, in fiscal year 2006, 16 applications for waivers to the minutes and/or 

monitoring report filing requirements were reviewed and processed. 

In fiscal years 2007 and 2008, the Bureau will continue to monitor agreement activities and 

trade conditions, to prepare reports and economic analyses on developments and issues in key 

U.S. trades, to report on the activities of controlled carriers, and to respond to inquiries and 

informal complaints. The Bureau also will focus on: (1) conducting research in support of the 

statutory standards and the requirements of relevant Commission regulations overseen by this 

Bureau, as well as other Bureaus and Offices in the agency; (2) assessing the impact and 

effectiveness of the regulations governing agreements in 46 CFR part 535, implemented by the 

Commission in FMC Docket No. 03-15, Ocean Common Carrier and Marine Terminal 

Operator Agreements Subject to the Shipping Act of 1984; (3) linking the new PIERS data 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 45 

Federal Maritime Commission 

system to the enhanced Agreements database to facilitate production of the Bureau’s regular 

trade monitoring publications and other trade analysis reports; and (4) further enhancing the 

Agreements database to accept and store electronic versions of agreements’ minutes and 

monitoring reports and to make those documents accessible and searchable via the Bureau’s 

intranet. In addition, the Bureau will continue to assist the Commission’s investigative and 

enforcement initiatives, and oversee international trade issues, such as unfair foreign shipping 

practices. As a Commission representative, the Bureau will continue to participate in 

development of ACE/ITDS. As a Participating Government Agency (“PGA”), the Commission 

is working with the “e-Customs Partnership” and a host of other Federal agencies on 

developing the ACE/ITDS. The Bureau also will participate in the Maritime Data Working 

Group and the Interagency Action Team for the National Committee on the Marine 

Transportation System dealing with data collection and information management issues. 

Service Contracts Program Activities

The Shipping Act allows ocean common carriers, either individually or through agreements, to 

negotiate and execute service contracts with one or more shippers or shippers’ associations. 

Under service contracts, shippers make a commitment to provide a certain volume or portion of 

cargo over a fixed period of time and carriers commit to a specified rate and a defined service 

level. These contracts are filed confidentially with the Commission. 

Contract flexibility enables carriers to tailor their transportation services to the specific 

commercial and operational needs of shippers. Overall, service contracts continue to be the 

predominant pricing mechanism due primarily to their efficiency, flexibility, and 

confidentiality. 

The Bureau continues to improve its Internet-based system for the filing of service contracts 

(SERVCON) to meet the needs of the agency as well as the shipping industry. In fiscal year 

2006, the Bureau upgraded SERVCON to streamline the filing of service contracts and NSAs. 

In addition, the Bureau implemented major performance enhancements to provide faster 

retrieval and better screen displays, and updated the underlying architecture. 

During fiscal year 2006, the Bureau received approximately 46,682 service contracts and 

252,566 contract amendments. There were three requests to correct clerical errors in service 

contracts. In fiscal years 2007 and 2008, the Bureau will assess and evaluate the efficiency of 

the SERVCON system. Also, the Bureau intends to implement an electronic registration 

procedure for carriers/OTIs filing service contracts and NSAs. 

NVOCC Service Arrangement Program Activities

In January 2005, the Commission permitted NVOCCs to enter into NSAs with their shipper 

customers. During fiscal year 2006, 557 original NSAs and 448 amendments were filed by 59 

NVOCCs. Since NSAs were first allowed, more than 424 NVOCCs have registered to file 

NSAs. Of those registered, 71 have filed NSAs. The Bureau initiated an audit to examine the 

general characteristics of NSA filings and to identify distinctions between NSAs and carrier 

service contracts. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 46 

Federal Maritime Commission 

Tariff Program Activities

The Shipping Act requires carriers and conferences to publish their tariffs electronically. Tariffs 

are to be made available, typically through Internet access, to any person, without time, 

quantity, or other limitation. Carriers are permitted under law to charge a reasonable fee for 

providing public access to their tariffs. The Bureau reviews and monitors the accessibility and 

accuracy of these private systems, and reviews published tariff material for compliance with the 

Shipping Act’s requirements. 

The Bureau evaluates applications for special permission to deviate from tariff publishing rules 

and regulations. During fiscal year 2006, the Bureau received and processed 13 special 

permission applications. The majority of the applications sought to advance the effective date of 

various tariff provisions that require a 30-day notice period. 

Unlike carriers, MTOs have the option of publishing or not publishing schedules of their rates, 

regulations, and practices, including limitations of liability for cargo loss or damage. Last year, 

171 MTOs made their schedules available to the public. 

 

The Bureau also monitors the tariff activity and the service contracts of controlled carriers. 

Under the Shipping Act, no controlled carrier (that is, a carrier whose majority ownership is 

held by a foreign government) maintain rates or charges in its tariffs or service contracts that 

are below a level that is just and reasonable, or establish or maintain unjust or unreasonable 

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

monitoring the activities of known controlled carriers, the Bureau reviews trade publications to 

identify carriers that might be controlled by a foreign government. During fiscal year 2006, the 

Bureau produced a detailed study of service contract rate levels assessing the pricing policies of 

state-owned (controlled) carriers operating in the U.S. liner trades pursuant to the standards in 

section 9 of the Shipping Act. 

The Bureau also collects and processes information provided by carriers, MTOs, and OTIs 

concerning, among other things, the Internet location of their tariffs and schedules. These 

Internet locations are made available to the shipping public via the Commission’s website. Last 

year, the Bureau posted on the agency’s website 3,942 active/current tariff/schedule Internet 

addresses. Also, the Bureau listed 1,902 inactive/cancelled addresses. 

Formal Proceedings

The Bureau furnishes support in formal Commission proceedings arising in the areas of its 

expertise. The Bureau provides analyses and recommendations on petitions, information 

demand orders, and Commission-initiated rulemakings, and provides expert witness testimony 

in investigations of unfair foreign shipping practices. Further, the Bureau prepares economic 

testimony in Commission investigations. 

In fiscal year 2006, the Bureau participated in the following matters: (1) drafting a report with 

recommendations on revising regulations governing the financial responsibility of passenger 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 47 

Federal Maritime Commission 

vessel operators in Docket No. 02-15, Passenger Vessel Financial Responsibility; (2) 

developing recommendations for a rulemaking that sets forth specific criteria for determining 

the status of ocean common carriers; (3) conducting semi-annual meetings with agreement 

representatives pursuant to the settlement terms of Fact Finding Investigation No. 25, Practices 

of Transpacific Stabilization Agreement Members Covering the 2002-2003 Service Contract 

Season; and (4) providing economic assistance in Docket No. 04-10, Agreement No. 201158, 

Docking and Lease Agreement by and Between City of Portland, Maine and Scotia Prince 

Cruises Limited. 

 

The Bureau's support of formal proceedings during fiscal years 2007 and 2008 will depend on 

the number and subject matter of the proceedings initiated over the period. The Bureau will 

assist the Commission’s continuing efforts to address unfair foreign shipping practices under 

the FSPA and the 1920 Act. 

Bureau of Certification and Licensing

The Bureau of Certification and Licensing (“BCL”) licenses U.S.-based OTIs, including ocean 

freight forwarders and NVOCCs; issues certificates to owners and operators of passenger 

vessels that have evidenced financial responsibility to satisfy liability incurred for 

nonperformance of voyages or for death or injury to passengers and other persons; and manages 

programs assuring financial responsibility of OTIs and PVOs by developing policies and 

guidelines and analyzing financial documents. 

The Bureau is composed of two offices. The Office of Transportation Intermediaries has 

responsibility for reviewing and approving applications for OTI licenses, and maintaining and 

updating records about licensees. The Office of Passenger Vessels and Information Processing 

has responsibility for reviewing applications for certificates of financial responsibility with 

respect to passenger vessels, managing all activities with respect to evidence of financial 

responsibility for OTIs and PVOs, and for developing and maintaining all Bureau databases. 

Licensing of Ocean Transportation Intermediaries

During fiscal year 2006, the Commission received 420 new and 227 amended OTI applications. 

During this period, BCL issued 343 new and 169 amended OTI licenses and permanently 

revoked 278 licenses. BCL also approved 39 other actions such as replacement qualifying 

individuals. An additional 63 non-U.S. based unlicensed NVOCCs’ bonds were cancelled. 

During fiscal year 2006, the Commission received 11 riders providing optional proof of 

financial responsibility for carriers serving in the U.S. - China trade for a total of 49 riders. 

Docket No. 04-02, Optional Rider for Proof of Financial Responsibility, implemented rules that 

permit U.S. NVOCCs to file riders to their existing NVOCC bonds to meet financial 

responsibility requirements of the Chinese government. 

During fiscal year 2006, BCL staff continued to work with other Commission components to 

examine the Commission’s rules, policies and procedures regarding OTIs. Areas of focus 

included review of the requirements for OTI license applicants, streamlining the application 

process, posting timely and easier-to-locate information about OTIs on the Commission’s 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 48 

Federal Maritime Commission 

website, and initiating a review of requirements to support electronic filing of OTI bond 

information. 

BCL continues to experience a backlog of cases in excess of the target 30 days for processing 

from receipt of application to licensing determination. Much of the delay occurs because data 

provided with the initial submission is incomplete. This requires BCL to contact the applicant 

and request the necessary information before making a determination to issue a license or 

recommend approval of the requested modifications. BCL continues to assist OTI applicants, 

seeking to promote accurate and complete submissions and to process such applications within 

30-45 days of receipt. 

In fiscal year 2006, BCL made significant progress in the development of an automated Form 

FMC-18, Application for an Ocean Transportation Intermediary License. Testing of an 

automated FMC-18 filing system is being conducted internally by BCL prior to release. In 

fiscal year 2007, BCL will propose the implementation of a system to allow for the electronic 

submission of Form FMC-18. Electronic submission will facilitate completeness of the 

application and will contribute to a speedier licensing review process. The next phase of the 

system will permit paperless OTI license processing and a later phase will integrate the OTI 

license database with other Commission databases. Database integration will reduce 

redundancies for those who interact with the Commission through various means such as the 

FMC-1 and FMC-18 application. 

Also, in fiscal year 2007, BCL will continue its outreach programs and promote awareness of 

OTI requirements. This program is envisioned to improve compliance by VOCCs and OTIs 

with the Shipping Act and to reduce the number of transportation users harmed by unlawful 

operators. 

Certification of Passenger Vessel Operators 

The Commission administers 46 U.S.C. § 44102 and 46 U.S.C. § 44103, which require 

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. During fiscal 

year 2006, the Commission received applications for 50 certificates (casualty and performance), 

while 24 casualty certificates and 29 performance certificates were approved and issued. 

Currently 197 vessels and 47 operators have evidence of financial responsibility coverage in 

excess of $339 million for nonperformance and over $666 million for casualty on file with the 

Commission. The certificates issued pursuant to this program are necessary for the U.S. 

Customs clearance of thousands of passenger vessel sailings annually. In addition to reviewing 

applications and issuing certificates, the Office of Passenger Vessels and Information 

Processing offers information and guidance to the cruising public throughout the year on their 

rights and obligations regarding monies they paid to cruise lines which are experiencing 

financial difficulties and nonperformance problems. 

The cruise industry continues to grow as we enter a new era characterized by innovative, 

feature-full ships, international ports-of-call and convenient embarkation cities. The volume of 

passengers reached an all-time high of nearly 11 million passengers during fiscal year 2006. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 49 

Federal Maritime Commission 

New cruise operators continue to enter the industry, and existing cruise lines continue to build 

or purchase additional vessels. The annual delivery of vessels has decreased due to their 

dramatically increased size and the acquisition of niche market cruise lines, which constantly 

changes the industry’s environment. Further, cruise lines are continuously developing new and 

creative ways of establishing their required financial responsibility. 

During fiscal year 2006, Glacier Bay Cruise Lines, CQ Rivers Cruises LLC d/b/a Great 

American Journeys, and Delphin Cruises ceased operation or left the trade. The Ambassadors 

Cruise Group acquired the vessels of American West Steamboat Co. and Delta Queen 

Steamboat Company and subsequently formed the Majestic American River Line. 

During fiscal year 2006, BCL commenced an On-Site Monitoring Program that evaluates PVO 

financial responsibility under 46 U.S.C. § 44103. The on-site review program is responsive to 

Congressional concern for the practices of passenger vessel operators generally with respect to 

protecting passengers’ advance deposits for transportation. The Bureau’s PVO monitoring 

program ensures that operators provide accurate and timely information required to be 

submitted and that evidence of adequate financial coverage has been provided. 

In fiscal years 2007 and 2008, BCL will continue to evaluate the agency’s PVO program to 

address the current needs of the cruising public. During fiscal year 2007, BCL will review the 

effectiveness of PVO monitoring procedures previously implemented; make appropriate 

corrections in staff procedures and monitoring schedules; and follow up to ensure that new 

procedures are timely implemented. In fiscal year 2008, BCL will initiate a rulemaking with 

respect to the Commission’s statutory obligation to the passenger vessel financial responsibility 

program administered under 46 U.S.C. § 44102 and 46 U.S.C. § 44103. 

Automated Database Systems

In conjunction with the Office of Information Technology (“OIT”), BCL has initiated a new 

project to modernize the Regulated Persons Index. A primary function of BCL is the 

maintenance of up-to-date records of licensed OTIs. BCL posts on the Commission’s website a 

list of OTIs which are licensed, bonded and have provided their tariff location, if required, so 

that carriers and others can ascertain whether an OTI has met FMC requirements. The OTI list 

also indicates whether an NVOCC has filed an optional rider for additional proof of NVOCC 

financial responsibility. 

During fiscal years 2007 and 2008, BCL will continue its implementation of an electronic Form 

FMC-18 and systems integration among Commission databases, and will lead the effort to 

achieve the agency’s performance goals related to improving the program for updating OTI 

data. In conjunction with the OIT, BCL intends to develop a plan to automate the FMC Form 

131, the PVO Application form, and to conduct corresponding requirements analysis to 

facilitate the filing and review of PVO applications. During fiscal year 2007, BCL also 

proposes to commence development work to support electronic filing of OTI bonds. In fiscal 

year 2008, BCL will work with OIT to initiate a redesign of the OTI list maintained on the 

Commission’s website to increase accessibility to information, to facilitate public search 

capability, and to make it more interactive for users. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 50 

Federal Maritime Commission 

*On Hand 

09/30/05 Receipts Output

*On Hand 

09/30/06 Receipts Outputs

*On Hand 

09/30/07 Receipts Outputs

*On Hand 

09/30/08

OTI Applications New 234 420 343 311 500 550 261 500 550 211

OTI Applications 

Amended 103 227 169 161 300 325 136 300 325 111

OTI License 

Terminations (1) 0 278 278 0 250 250 0 250 250 0

Passenger Vessel 

Applications 

(Performance) 5 26 29 2 30 30 2 30 30 2

Passenger Vessel 

Applications 

(Casualty) 11 24 24 11 30 30 11 30 30 11

(1) Revoked or surrendered licenses not subsequently re-issued.

* This number primarily includes incomplete applications aw aiting further information from applicants

and completed applications pending applicants' procurement of a bond. The number w ill grow 

as more applications are approved. Under current regulations, applicants are

permitted up to tw o years after approval to provide a bond prior to licensing.

Operations Program

Bureau of Certification and Licensing 

Statistical Workload Summary

Workload Units Fiscal 2006 Actual Fiscal 2007 Estimate Fiscal 2008 Estimate
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 51 

Federal Maritime Commission 

Enforcement Program

The Bureau of Enforcement has primary responsibility for ensuring compliance with the 

shipping statutes administered by the Commission, principally the Shipping Act of 1984. The 

Bureau is actively involved in the Commission=s outreach activities and liaisons regularly with 

all segments of the ocean transportation industry. The Bureau is also active in maritime 

security and works closely with the agency=s BCL to promote prompt licensing of all qualified 

OTIs, and with the Department of Homeland Security=s CBP to ensure submission of complete 

and accurate shipping data. Bureau attorneys also serve as legal advisors to the Director of the 

Office of Operations and to other bureaus and offices, and may be designated as Investigative 

Officers in nonadjudicatory fact finding proceedings. Additionally, Bureau attorneys work 

closely with the Commission=s investigatory personnel and participate as trial counsel in formal 

adjudicatory proceedings. The Bureau monitors all other formal proceedings, including 

relevant court proceedings, in order to identify major regulatory issues and to advise the 

Director of Operations and the other bureaus and offices. The Bureau also participates with 

other bureaus and offices in committees and task forces in the development of Commission 

policies, rules, and regulations. The Bureau also participates in formal complaint proceedings 

where appropriate. 

In liaison with investigative personnel, the Bureau monitors and conducts investigations into 

the activities of ocean common carriers, OTIs (NVOCCs and freight forwarders), shippers, 

ports and terminals, and other persons to ensure compliance with the statutes and regulations 

administered by the Commission, thereby providing maximum protection to all participants in 

the ocean transportation shipping industry. Monitoring activities include: (1) service contract 

and NSA reviews to determine compliance with applicable statutes and regulations; (2) reviews 

and audits of ocean common carrier and OTI operations, including compliance with bonding 

requirements and post-licensing and routine compliance checks of licensees to determine 

whether operations conform with regulatory requirements; (3) audits of PVOs to ensure the 

financial protection of cruise passengers; and (4) various studies and surveys to support 

Commission programs. Investigations are conducted into alleged violations of the full range of 

statutes and regulations administered by the Commission, including: illegal rebating, 

misdescriptions or misdeclarations of cargo, illegal or unfiled agreements, abuses of antitrust 

immunity, unlicenced OTI activity, including service to noncompliant OTIs by ocean common 

carriers and licensed OTIs, untariffed cargo carriage, unbonded passenger vessel operations, 

unlawful MTO activity and various types of consumer abuses, such as failure of carriers or 

intermediaries to carry out transportation obligations, resulting in cargo delays and financial 

losses for shippers. Through these activities, the Bureau=s efforts support the agency=s 

objectives of obtaining statutory compliance, ensuring equitable trading conditions, and 

focusing enforcement efforts on activities having market-distorting effects affecting the 

shipping public. 

The Bureau of Enforcement prepares and serves notices of violations of the shipping statutes 

and Commission regulations and may compromise and settle civil penalty demands arising out 

of those violations. Bureau attorneys represent the Commission in formal Commission 

proceedings that may result in the assessment of civil penalties. The Bureau also participates, 

in conjunction with other bureaus, in special enforcement initiatives, fact finding investigations, 

ADR processes, rulemaking efforts and in homeland security issues. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 52 

Federal Maritime Commission 

During fiscal year 2006, the Bureau worked to obtain statutory compliance in all major trades 

and with all segments of the transportation industry, i.e., carriers, carrier agreements, MTOs, 

PVOs, and OTIs. The Bureau also initiated actions to address market-distorting activities such 

as rebates and absorptions, misdescriptions of commodities and misdeclarations of 

measurements, illegal equipment substitution, unlawful use of service contracts, as well as 

carriage of cargo by and for untariffed and unbonded NVOCCs and joint carrier activities 

outside the authority of agreements or pursuant to unfiled agreements. Emphasis was placed on 

industry service contracting activities to ensure fair trading conditions and protection of the 

public. Most of these investigations resulted in compromise settlements of civil penalties or 

were treated as compliance matters and closed without action. However, certain investigations 

of NVOCCs and ocean common carriers have required the institution of formal adjudicatory 

proceedings in order to pursue remedies under the 1984 Act. 

In fiscal year 2006, the compliance audit program continued. This program, conducted from 

headquarters primarily by mail, reviews the operations of licensed OTIs to assist them in 

complying with the statutory requirements and the Commission=s rules and regulations. The 

audit program also includes review of entities holding themselves out as VOCCs with no 

indication of vessel operations. At the beginning of fiscal year 2006, 9 audits were pending. 

During the fiscal year, 53 audits were commenced, 60 audits were completed and 2 were 

pending in the Bureau on September 30, 2006. 

At the beginning of fiscal year 2006, 27 enforcement cases were pending final resolution by the 

Bureau, the Bureau was party to 4 formal proceedings, and there were 71 matters pending 

which the Bureau was monitoring or for which it was providing legal advice. During the fiscal 

year, 21 new enforcement actions were commenced; 14 were compromised and settled, 

administratively closed, or referred for formal proceedings; and 34 enforcement cases were 

pending resolution at fiscal year's end. Also, 3 formal proceedings were completed, and 5 were 

pending at the end of the fiscal year. Additionally, 53 matters involving monitoring or legal 

advice were received during the fiscal year, 57 such matters were completed, and 67 were 

pending in the Bureau on September 30, 2006. 

In fiscal years 2007 and 2008, the Bureau will continue to pursue market-distorting, fraudulent 

and anticompetitive practices harmful to the industry and the public and will continue to 

monitor the U.S. trades and the implementation of the changes and regulations resulting from 

OSRA, to the extent that resources permit. The Bureau will continue to pursue initiatives aimed 

at VOCCs engaged in unfair service contracting practices, particularly those which permit 

improper entities to compete unlawfully with carriers and OTIs operating in compliance with 

U.S. laws, and will expand the OTI monitoring and audit programs. An ongoing initiative is 

focusing on the unlawful operations of household goods carriers -- both licensed and unlicensed 

-- which have increasingly resulted in economic harm to individual consumers, as well as 

competitive injury to carriers operating lawfully. Public outreach efforts will continue to 

educate the shipping public with regard to FMC statutes and regulations. The program will seek 

to improve participation in maritime security issues, specifically efforts to coordinate the use of 

available database systems with other agencies or government groups engaged in homeland 

security in order to improve identification of entities providing and utilizing maritime 

transportation services. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 53 

Federal Maritime Commission 

*On Hand 

09/30/05 Receipts Output

*On Hand 

09/30/06 Receipts Outputs

*On Hand 

09/30/07 Receipts Outputs

*On Hand 

09/30/08

Audits and Monitoring 

Activities* 9 53 60 2 55 55 2 55 55 2

OTI Applicant and 

License Checks 0 556 556 0 584 584 0 612 612 0

Formal Proceedings 4 43 5 6 6 5 7 7 5

Civil Penalty Cases 27 21 14 34 25 25 34 30 30 34

Staff Legal Advice 71 53 57 67 60 65 62 60 65 57

* Category of Investigations changed to Audits and Monitoring Activities. Audits and monitoring activity

seperated from investigations. Investigations are included in other categories in the Statistical

Workload Summary.

Operations Program

Enforcement Program

Statistical Workload Summary

Workload Units Fiscal 2006 Actual Fiscal 2007 Estimate Fiscal 2008 Estimate
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 54 

Federal Maritime Commission 

Administration Program

Linking Program Funding to Strategic/Performance Goals

The Office of Administration primarily supports our strategic goals of Technological 

Efficiencies and Management Capabilities. Three performance goals in fiscal year 2008 are 

particularly important to the Administration program. In the Information Technology area, 

the Commission intends to upgrade its network and desktop operating systems. Appropriate 

funding will enable us to accomplish this objective so that we enhance the security of our 

network, reduce network administration costs and burdens, and keep in step with industry 

best practices. Also, we are requesting funding to fast track implementation of electronic 

record keeping of employee records, in keeping with Federal government e-initiatives, which 

will address paperwork and storage issues while improving accuracy and enhancing data 

collection and retention. Additionally, we plan to implement Pay.gov. Providing for the 

option to receive electronic payments from the industry will reduce paperwork, expand 

alternatives for industry compliance, and also achieve greater conformance with Federal 

government e-initiatives. 

Office of Administration

Office of the Director

The Office of Administration (AOA@) provides administrative support to the program operations 

of the Commission. The OA interprets governmental policies and programs and administers 

these in a manner consistent with Federal guidelines, including those involving procurement, 

information technology, financial management and human resources. The OA initiates 

recommendations, collaborating with other elements of the Commission as warranted, for longrange plans, new or revised policies and standards, and rules and regulations, with respect to its 

program activities. The Director, OA, is responsible for the direct administration and 

coordination of the: 

Office of Financial Management 

Office of Human Resources 

Office of Information Technology 

Office of Management Services 

Many of the functions and achievements of the OA are reflected below in the narratives for 

these offices. 

The Director, OA, provides administrative guidance to the Offices of the Chairman, 

Commissioners, Secretary, General Counsel, Administrative Law Judges and Operations, and 

administrative assistance to the Offices of the Inspector General and Equal Employment 

Opportunity. The Director is the FMC=s Chief Acquisition Officer, Audit Follow-up and 

Management (Internal) Controls Official, and Forms Control Officer. The Director also 

represents the FMC as Principal Management Official on the Small Agency Council. As the 

Chief Financial Officer, the Director provides program oversight for the agency=s budget and 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 55 

Federal Maritime Commission 

financial management responsibilities, and ensures agency compliance with the Financial 

Integrity Act, the Antideficiency Act, and the Debt Collection Improvement Act of 1996. The 

Director also serves as the agency=s lead executive for strategic planning and implementation of 

the Government Performance and Results Act of 1993 (AGPRA@). OA staff act as the point of 

contact for the Small Business Administration=s E-forms initiative. 

The Deputy Director of Administration is the FMC’s Chief Information Officer (“CIO”). The 

CIO oversees the Office of Information Technology operations and activities administered 

under the Clinger-Cohen Act of 1996, as well as other applicable laws which prescribe 

responsibility for operating the program. As the FMC’s Competition Advocate, the Deputy 

Director challenges barriers to competition, reviews procurement practices, and reports to the 

Chairman as required. The Deputy Director also serves as Records Management Officer. 

The Office of the Director had significant programmatic achievements during fiscal year 2006. 

The Office guided the agency=s continuing efforts to enhance its information technology 

program; during the fiscal year the agency mitigated two material weaknesses and addressed 

the final outstanding recommendations made by the Inspector General through a contractor 

assessment of agency IT operations. The agency received an unqualified opinion in its fiscal 

year 2006 financial statement audit. The Office again directed preparation of the Annual 

Performance Plan and the Annual Program Performance Report, as required by GPRA. The 

Office also prepared the Federal Activities Inventory Reform Act report, the Performance and 

Accountability Report (which included the Management=s Discussion and Analysis) the Federal 

Managers Financial Integrity Act report, and transmittal letters for the Inspector General=s semiannual reports to Congress. Also, the Office prepared the Agency Regulatory Plan and Semiannual Unified Agendas, the SBPRA Implementation Plan, and the Final Regulatory 

Enforcement Act Report for FY 2005 to Congress. The Office also coordinated completion of 

the agency=s 44th Annual Report. Also during the fiscal year, the Office directed the update of 

the internal Commission issuances that specify procedures for a variety of programs and 

activities, and guided Commission efforts to comply with GPEA and FISMA. Additionally, the 

Office guided the development of the fiscal year 2008 budget request to OMB and the fiscal 

year 2007 President=s Budget submission, and directed all efforts involving the audit of the 

Commission=s fiscal year 2006 financial statements. Also during the year, the Office provided 

primary support for the OMB clearance and record management programs. Further, the Office 

guided the further development of the agency=s Continuity of Operations Plan. Also, the Office 

directed the effort to update and refine the agency=s performance evaluation system, 

coordinated the agency=s development of a pilot Individual Development Plan program, and 

coordinated a series of in-house functional briefings. 

The OA=s key objectives for fiscal years 2007 and 2008 are continuing to implement the 

Chairman=s policy directions aimed at refining and enhancing agency administrative programs 

and operations; monitoring the accomplishment of agency performance goals, particularly those 

related to the agency=s refinement of its performance management system and implementation 

of Pay.gov; initiating further information technology improvements, including the replacement, 

integration or update of agency database systems and the upgrading of network and desktop 

operating systems; and working with senior managers to ensure effective strategic succession 

planning, including providing key support for the agency=s new Emerging Leaders Program. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 56 

Federal Maritime Commission 

The Office also will take the lead in assuring that the agency-wide computer security program 

is effective, that the agency=s financial management system receives an unqualified opinion in 

annual financial audits, and that the agency complies fully with the HSPD-12 initiative. 

Office of Financial Management (AOFM@)

OFM administers the Commission's financial management program and is responsible for 

offering guidance on optimal utilization of the Commission's fiscal resources. The OFM is 

charged with interpreting government budgetary and financial policies and programs, and 

developing annual budget justifications for submission to the Congress and OMB. The Office 

also administers internal control systems for agency funds, travel, and cash management. 

OFM's main responsibilities are to: (1) produce and submit annual budget justifications and 

estimates to OMB and the Congress; (2) execute the budget to ensure that appropriated funds 

are properly expended; (3) prepare audited financial reports to aid management decisions; (4) 

administer the control system over workyears of employment; (5) collect all fees and forfeitures 

due the Commission; (6) process payments to appropriate vendors in the correct amount 

efficiently and in accordance with the Prompt Payment Act and Debt Collection Improvement 

Act; (7) verify all financial, accounting and payroll reports generated by the agency’s fiscal 

services agents; (8) process travel orders and vouchers within established time limits and in 

accordance with Federal Travel Regulations; (9) administer and manage the Commission’s 

Travel Charge Card program; and (10) manage the Commission's Cash Management program. 

The Commission has an interagency agreement (“IAG”) with the Bureau of Public Debt 

(“BPD”) to provide such services as general ledger accounting; travel; procurement; and 

financial reporting, e.g., preparing the Commission’s annual financial statements. OFM serves 

as the Commission’s primary contact with BPD and verifies all accounting transactions. OFM 

works with BPD to ensure the timely submission of quarterly financial statements to OMB. 

Additionally, OFM works with BPD to ensure that an unqualified opinion is received on the 

annual financial statement audit. The National Finance Center (“NFC”) provides the 

Commission with payroll services via an IAG. OFM serves as the primary contact with NFC 

regarding time card transmission and verifies all payroll disbursement costs. NFC transmits 

documentation of payroll costs directly to BPD for inclusion in the agency’s accounting 

records. 

During fiscal year 2006, the OFM: (1) collected and deposited to the U.S. Treasury $1,595,530 

from user fees, fines and penalty collections, and OTI application and PVO certification fees; 

(2) coordinated and prepared budget justifications and estimates for the fiscal year 2007 

Congressional budget and fiscal year 2008 OMB budget; (3) prepared a variety of external 

reports such as: the Annual Leave Year Report for 2005 (Office of Personnel Management 

“OPM”), the Report on Workyears and Personnel Costs for 2005 (OPM), the Report on 

International Travel for fiscal year 2005 (OMB), the Report on First Class Airline 

Accommodations for fiscal year 2005 (GSA), and monthly reports of Full-time Equivalent/

Workyear Civilian Employment (OPM); (4) prepared monthly status reports on workyears, 

funding, travel, and receivables; (5) managed the Commission's cash management programs; 

(6) updated Commission orders and internal office procedures which deal with financial 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 57 

Federal Maritime Commission 

management issues; (7) developed a process for the individual offices/bureaus to forecast the 

cost of annual goals in accordance with the Commission’s strategic goals; (8) prepared monthly 

allocation reports to provide management with meaningful, timely expense data by program; 

(9) worked with BPD staff and auditors regarding the Audit of the Fiscal Year 2005 Financial 

Statements (resulting in an unqualified opinion); (10) pursued delinquent receivables and 

referred debts to the Department of Treasury for collection; (11) worked with the Director of 

Administration to finalize and produce the Commission=s 2005 Management=s Discussion and 

Analysis and the Commission’s 2005 Performance and Accountability Report and to initiate 

work on the 2006 versions of each; (12) conducted research on the implementation of electronic 

commerce to automate the processing of purchase orders, obligations, receipts and payments 

through Pay.gov; and (13) migrated to an updated platform for Paperless Check Conversion 

through Federal Reserve Bank in Cleveland. 

Goals in fiscal years 2007 and 2008 include: (1) continuing development of a fully integrated 

financial management system; (2) facilitating the implementation of Pay.gov for agencywide 

and industry acceptance of electronic payments; (3) reviewing and updating procedures and 

controls for current business processes, as necessary; (4) migration to an updated version of 

StarWeb for processing of time and attendance through the NFC; and (5) pursuing initiatives 

leading to economy and efficiency in budget and financial operations. 

Office of Human Resources (“OHR”)

The OHR plans and administers a complete human resources management program including: 

recruitment and placement, position classification and pay administration, occupational safety 

and health, employee assistance, employee relations, workforce discipline, performance 

management and incentive awards, employee benefits, career transition, retirement, employee 

development and training, and personnel security. 

Major accomplishments during fiscal year 2006 include the following: (1) monitored activities 

of the agency’s payroll/personnel service provider, NFC, and worked with OFM on security 

issues for conversion to a web-based time-and-attendance reporting system; (2) worked with 

senior management to recruit and staff certain employee development programs and activities 

to address executive succession, for example, the SES Candidate Development Program and the 

Emerging Leaders Program; (3) conducted a comprehensive performance management and 

incentive awards program and continued working with senior management to assess the 

performance appraisal system and recommend changes to simplify and streamline the program; 

(4) conducted a comprehensive training program in accordance with the agency’s budget and 

strategic and performance plans, including drafting agency policy on training and employee 

development, providing executive training for SES candidates, promoting e-learning and online training opportunities, continuing the college tuition reimbursement program, ensuring 

training for new employees on the No FEAR Act, and participating in the Small Agency 

Council “(SAC”) Training Program; (5) conducted a comprehensive recruitment program, 

utilizing flexibilities and recruitment alternatives to staff critical positions, and reinitiated 

student/leadership programs (e.g., the Student Temporary Employment and Presidential 

Management Fellows Programs); (6) coordinated with OPM, OMB and pertinent partners on a 

variety of human capital initiatives related to accomplishment of action items pursuant to the 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 58 

Federal Maritime Commission 

President’s Management Agenda; (7) promoted the Preventive Health and Awareness Program, 

hosted bi-monthly wellness workshops, and issued email notices focusing on preventive health 

themes and related health issues, e.g., Employee Assistance and Federal Occupational Health 

programs; (8) conducted a proactive retirement program including counseling, computing 

benefits, providing retirement seminars and related training, and processing all retirements; (9) 

managed and conducted numerous employee benefit and charitable contributions programs and 

Open Seasons, such as the Combined Federal Campaign, Long-Term Care Insurance Program, 

Flexible Spending Accounts, etc.; (10) conducted a cyclical position management program 

review to maintain balanced organizational structures and ensure positions remained current 

and accurately classified; (11) conducted a comprehensive personnel and information security 

program, including initiating and adjudicating security investigations for new and 

reinvestigated employees, completing work necessary for reporting and updating data in the 

Clearance Verification System pursuant to the e-clearance initiative, and collaborating with the 

CBP to gain access to the ACE/ITDS; (12) oversaw preparation for implementation of the 

Enterprise Human Resources Integration project, and administered other e-Gov initiatives such 

as Recruitment One-Stop, e-payroll, e-clearances, and e-learning; joined small agency 

consortium for discounted funding and collaborated with OPM and Integic officials involved in 

the Fast-Track implementation of e-OPF (Official Personnel Folder); (13) coordinated with 

OPM in administering a number of agency-wide surveys, including the 2006 Federal Human 

Capital Survey, and worked with senior management to identify areas needing improvement; 

and (14) implemented provisions of the Federal Workforce Flexibility Act and related 

legislation. 

In fiscal years 2007 and 2008, the Office plans to: (1) advise agency management and staff on 

all human resources matters and ensure the maintenance of a sound and progressive human 

resources program; (2) implement pertinent portions of the agency’s strategic, training, and 

related performance plans, particularly performance goals related to the management of human 

resources; (3) explore and implement simplification, flexibility, and accountability of human 

resources management programs; (4) continue to investigate appropriate automated solutions 

and other flexibilities to address program requirements and meet agency business needs; (5) in 

conjunction with administrative components and the GSA, continue to implement pertinent 

provisions of HSPD-12 related to common identification standards for Federal employees; and 

(6) monitor processes and database modernization activities of the NFC in conjunction with the 

government-wide e-payroll initiative and to ensure timely and accurate payroll and personnel 

services. 

Office of Information Technology (AOIT@)

The OIT provides management support with respect to IT to the program and administrative 

operations of the Commission, and thus is responsible for ensuring that the Commission=s IT 

program is administered in a manner consistent with applicable rules, regulations and 

guidelines. The OIT receives programmatic guidance from the CIO. 

The OIT Director serves as the Commission=s Information Technology Officer, 

Telecommunications Manager, Help Desk and Database Administration Manager, and oversees 

the IT security program. The OIT plans, coordinates, and facilitates the use of automated 

information systems agencywide. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 59 

Federal Maritime Commission 

During fiscal year 2006, significant OIT activities included the following: (1) completed the 

implementation of the upgraded CADRS database; (2) merged a legacy system with the new 

Bureau of Enforcement (“BOE”) indexing system; (3) updated the policies and procedures 

associated with the technical assistance provided to FMC staff and changes in the IT 

infrastructure; (4) provided advice and technical support to all bureaus and offices in 

developing Internet and database applications; (5) administered the agency=s IT technical 

support and assistance contracts; (6) continued enhancements to the IT Test Lab and User 

Support Center; (7) continued to lead and coordinate the Asset Management Committee, IT 

Change Control Process, and Technical Users Group; (8) furnished agency-wide advice and 

coordination on electronic records; (9) updated the FMC=s Enterprise Architecture Plan; (10) 

reviewed the FMC=s systems and completed security assessments for each; (11) upgraded the 

network security infrastructure to include Secure Socket Layer (“SSL”) virtual private network 

(“VPN”); (12) completed the implementation of the enhanced Internet-based SERVCON 

system; (13) conducted requirements analysis and inventory to meet the Internet Protocol 

version 6 (“IPv6”) government-wide initiative; (14) improved IT compliance with FISMA and 

other Federal IT initiatives; (15) improved data and wireless telecommunications services and 

support; (16) conducted an analysis of the agency=s telecommunications services, then 

consolidated and assumed management of those services; (17) updated the FMC=s System 

Development Lifecycle plan; (18) further developed the disaster recovery/continuity of 

operations plans for the agency; (19) submitted IT Federal reports pursuant to FISMA and EGovernment; (20) implemented wireless network access; and (21) began development of an 

automated filing system for FMC Form 18. 

For fiscal years 2007 and 2008, OIT will continue to emphasize improved customer service for 

Commission staff and externally mandated government-wide programs. Major initiatives 

include plans to: (1) ensure compliance with government programs such as FISMA; (2) 

implement the new automated FMC Form 18; (3) update the FMC Enterprise Architecture Plan; 

(4) continue to develop plans to stabilize all critical systems and recommend enhancements to 

the existing IT infrastructure; (5) complete the IPv6 upgrade and upgrade existing applications 

for interoperability with IPv6; (6) facilitate the Commission=s ability to take advantage of ecommerce; (7) continue to investigate options to partner with other agencies= initiatives to better 

serve the public in the dissemination and collection of information; (8) begin the analysis for 

upgrading the existing desktop operating system, software applications, and equipment; (9) 

improve the VPN security infrastructure; (10) continue to improve data and wireless 

telecommunications services and support; (11) continue to improve the capital planning and 

investment control process; (12) continue to research new technology through the IT Test Lab 

and User Support Center; (13) implement Pay.gov initiative; (14) continue development of a 

new Regulated Persons Index and automated FMC Form 1; (15) implement the new PIERS 

system; (16) begin development of an Online Agreements system; (17) finalize the 

consolidation of all telecommunications; and (18) continue to provide assistance, as needed, in 

the updating of the Commission’s website to provide information to the public. 

Office of Management Services (“OMS”)

The OMS is responsible for procuring and furnishing all supplies, office equipment and 

services necessary and required to support the day-to-day operations and overall mission 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 60 

Federal Maritime Commission 

objectives of the Commission. To accomplish this responsibility, the OMS directs and 

administers a variety of management service functions, including: (1) administering 

Commission procurement and contracting; (2) controlling and administering the Commission's 

property utilization, maintenance, inventory and disposition programs; (3) planning and 

administering programs for improvement of the workplace environment and other space 

utilization operations for all Commission locations, including office space and provision of 

office furnishings; (4) managing the receipt, storage, distribution and inventory of all supplies, 

forms and accessories; (5) coordinating and fulfilling all printing, copying, and graphic service 

requirements; (6) regulating the receipt, distribution and dispatching of mail; (7) coordinating 

the use of the building's physical facilities with respect to maintenance, security and parking; 

(8) arranging transportation services for all Commission locations; (9) conducting safety 

inspections and coordinating the Commission's emergency planning and evacuation plan; (10) 

administering the agency’s transit benefit program; (11) directing the Commission's 

participation, development and goal-setting efforts under the Small Business Act; and (12) 

formulating and implementing policies, procedures, and methods to accomplish support 

services that are in compliance with governing regulations, as set forth in Titles 41 and 48 of 

the Code of Federal Regulations. 

During fiscal year 2006, OMS: (1) developed a revised office layout to accommodate 

Operations and OA activities in appropriate office space, and arranged through GSA to have the 

required physical alterations at FMC’s HQ accomplished through the use of the FMC’s 

remaining Tenant Improvement Allowance from our most recent lease renewal; (2) upgraded 

the procurement services provided through BPD from platform services to full service support; 

(3) revised and reissued the agency’s policy on Personal Use of FMC Office Equipment; (4) 

through the Office Director, continued to serve as the Agency’s Technical Representative for 

monitoring and oversight of the HQ building security contract and continued to serve in the 

collateral post as Chairman of the tenants’ Building Security Committee (“BSC”) for the HQ 

site; (5) provided support for industry briefings, agency functional briefings, and “all-hands” 

programs and events sponsored by the agency; (6) completed the annual property inventory of 

accountable property; (7) coordinated the HQ building-wide biannual evacuation drill through 

the BSC, and prepared and issued a “lessons learned” document to all tenant representatives to 

assist in improving the process; (8) coordinated through the BSC and established dialog with 

Department of Homeland Security/Federal Protective Service (“DHS/FPS”) to resolve 

outstanding concerns surrounding the regular payment of invoices to the security force 

contractor, and to have a special security assessment conducted to address HQ building security 

vulnerabilities due to changes in building tenants and population; (9) coordinated and 

implemented the new Government Printing Office Express program for printing/copying 

services through FedEx Kinko shops nation-wide; (10) coordinated with Operations and OIT to 

arrange for the acquisition of products and services to reestablish and temporarily relocate the 

New Orleans ARs office after Hurricane Katrina; (11) and acquired and coordinated lease 

renewals or office space expansion for a number of ARs. 

In fiscal years 2007 and 2008, the Office’s objectives include: (1) full implementation and more 

effective use of procurement services through BPD; (2) working with GSA, DHS, and other 

tenant agencies at our HQ facilities and field locations to upgrade and/or improve the buildings’ 

security measures and emergency preparedness for better control of office space access and 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 61 

Federal Maritime Commission 

safety of agency personnel; (3) in conjunction with the agency’s other administrative 

offices, implementing HSPD-12 (new government-wide ID requirements); and (4) continuing 

to provide advice and assistance to FMC activities regarding innovative support service 

approaches. 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 62 

Federal Maritime Commission 

Appendix A 

Alphabetical Listing of Abbreviations

 -#- 

1920 Act Section 19 of the Merchant Marine Act, 1920 

1984 Act Shipping Act of 1984 

 -AADR Alternative Dispute Resolution 

ACE/ITDS Automated Commercial Environment/International Trade Data 

System 

ALJ Administrative Law Judge 

APEC Asia-Pacific Economic Cooperation [Transportation Working 

Group] 

APL American President Lines, Ltd. 

AR Area Representative 

 -BBCL Bureau of Certification and Licensing 

BOE Bureau of Enforcement 

BPD Bureau of Public Debt 

BSC Building Security Committee 

BTA Bureau of Trade Analysis 

 -CCIO Chief Information Officer 

CADRS Office of Consumer Affairs and Dispute Resolution Services 

CATS Carriers' Automated Tariff Systems 

CBP U.S. Bureau of Customs and Border Protection 

CFR Code of Federal Regulations 

Commission Federal Maritime Commission 

CSRS Civil Service Retirement System 

 -DDEEO Director of Equal Employment Opportunity 

DHS Department of Homeland Security 

 -EECIE Executive Council on Integrity and Efficiency 

EEO Equal Employment Opportunity 

 -FFAEC Federal Audit Executive Council 

FASA Fashion Accessories Shippers Association 

FEHB Federal Employee's Health Benefits 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 63 

Federal Maritime Commission 

FERS Federal Employee Retirement System 

FISMA Federal Information Security Management Act of 2002 

FMC Federal Maritime Commission 

FOIA Freedom of Information Act 

FPS Federal Protective Service 

FSPA Foreign Shipping Practices Act 

FY Fiscal Year 

 -GGAO Government Accountability Office 

GC General Counsel 

GPEA Government Paperwork Elimination Act 

GPRA Government Performance and Results Act 

GSA Government Services Administration 

 -HHR Human Resources 

 

HSPD12 Homeland Security Presidential Directive 12 

Horizon Horizon Lines, LLC 

HQ Headquarters (FMC) 

 -IIAG Interagency Agreement 

IG Inspector General 

IPv6 Internet Protocol Version 6 

IT Information Technology 

 

 -MMOU Memorandum of Understanding 

MTO Marine Terminal Operator 

MTS Marine Transportation System 

 -NNPR Notice of Proposed Rulemaking 

NFC National Finance Center 

NVOCC Non-Vessel-Operating Common Carrier 

NSA NVOCC Service Arrangement 

 -OOA Office of Administration 

OFM Office of Financial Management 

OGC Office of General Council 

OHR Office of Human Resources 

OIG Office of the Inspector General 

OIT Office of Information Technology 
Fiscal Year 2008 Budget Estimates submitted to the Appropriations Committee 64 

Federal Maritime Commission 

OMB Office of Management and Budget 

OMS Office of Management Services 

OPF Official Personnel Folder 

OPM Office of Personnel Management 

OSRA Ocean Shipping Reform Act of 1998 

OTI Ocean Transportation Intermediary 

 -PPGA Participating Government Agency 

PIERS Port Import Export Reporting Service 

P.L. Public Law 

PVO Passenger Vessel Operator 

 -RRPI Regulated Persons Index 

 -SSAC Small Agency Council 

SBPRA Small Business Paperwork Relief Act 

SERVCON Service Contract Filing System 

SES Senior Executive Service 

Shipping Act Shipping Act of 1984 

SQL Structured Query Language 

SSL Secure Socket Layer 

 -TTMF Tariff Mitigation Fee 

 -UU.S. United States 

U.S.C. United States Code 

 -VVOCC Vessel Operating Common Carrier 

VPN Virtual Private Network 

 -WWY Work Year 
FEDERAL MARITIME COMMISSION 

FINAL ANNUAL PERFORMANCE PLAN FOR FY 2008

February 2007 
1 

LIST OF ACRONYMS 

1984 Act Shipping Act of 1984 

AR Area Representative 

BCL Bureau of Certification and Licensing 

BOE Bureau of Enforcement 

BTA Bureau of Trade Analysis 

CADRS Office of Consumer Affairs and Dispute Resolution Services 

COOP Continuity of Operations Plan 

EHR1 Enterprise Human Resources Integration 

e-OPF Electronic Official Personnel Folder 

FMC/Commission Federal Maritime Commission 

FR Final Rule 

FRB Federal Reserve Bank 

FTE Full Time Equivalent Employee 

FY Fiscal Year 

GPEA Government Paperwork Elimination Act 

GPRA Government Performance and Results Act 

IAA Inter-agency Agreement 

IT Information Technology 

NARA National Archives and Records Administration 

NPR Notice of Proposed Rulemaking 

NVOCC Non-Vessel-Operating Common Carrier 

OIT Office of Information Technology 
2 

OMB Office of Management and Budget 

OPF Official Personnel Folder 

OPM Office of Personnel Management 

OPS Office of Operations 

OSRA Ocean Shipping Reform Act of 1998 OTI Ocean Transportation 

Intermediary 

PVO Passenger Vessel Operator 

SAHRC Small Agency Human Resources Consortium 

SC Service Contract 

SOW Statement of Work 

U.S. United States 

VOCC Vessel-Operating Common Carrier 
3 

INTRODUCTION 

This document comprises the FMC’s Final Annual Performance Plan for FY 2008. This plan is 

closely linked to the agency’s Strategic Plan, and it sets forth objective performance goals and 

narrow, measurable performance indicators so as to facilitate implementation and assessment of 

performance. 

For FY 2008, we have continued the modified approach for our annual planning first 

implemented with our Revised Final Plan for FY 2005. Agency performance goals now are tied 

directly to our Strategic Goals instead of our budget program activities. This has resulted in the 

development of broader performance goals better suited to the achievement of agency-wide 

objectives, as opposed to more narrowly focused goals tailored to the responsibilities of 

individual units. It also facilitates our aim of utilizing a more inclusive, collaborative approach 

in conducting our ongoing activities, which we believe both enhances decision-making and 

improves ultimate results. Addressing our performance goals in this fashion also has enabled us 

to link planning, budgeting and performance more effectively. 

Our Plan for FY 2008 focuses on continuing our efforts to implement the President’s 

Management Agenda initiative to expand electronic government. Several performance goals 

focus on utilizing technology to streamline and simplify the delivery of services and 

information to regulated entities and the public, and to improving our databases so the staff can 

more effectively identify regulated entities, relevant data/information, and potential abuses. 

Performance goals also were developed to enhance our management capabilities, with 

particular focus on the more effective use of teleworking and the implementation of EHRI, and 

to improve our technological efficiency through upgrading agency network and desktop 

operating systems and improving access to library information. 

The Commission’s Annual Performance Plan comports with the overall objectives of GPRA 

while maintaining flexibility in its presentation and application. This modified approach has 

been authorized by OMB since the majority of Commission activities are statute-driven and our 

goals essentially are based upon legislative mandates which are clear and direct. Significant 

alteration of our existing programs is not possible, given that many measures and goals are 

required by statute. 

Our Plan sets forth the mission statement and general goals from our Strategic Plan, as a point 

of reference for the reader. As aforementioned, we have prepared performance goals for the 

agency in line with each of the agency’s Strategic Goals. Each performance goal has been 

stated as a narrow, measurable objective. For each performance goal, we have identified the 

related “means to achieve” from the Strategic Plan, the intended outcomes, appropriate 

performance indicators, the processes and resources required to accomplish it, and the means 

for measuring/evaluating performance. To ensure a clear understanding of the Plan’s contents, 

set forth below are definitions of basic terms used. We relied on OMB’s published guidance 

for these definitions, and have included parenthetically our interpretation of their practical 

application. 
4 

Performance Goal - A target level of performance; a measurable objective (a specific, 

proposed performance action). 

Related Strategic Goals/Outcomes/Means - A specific action identified in the agency’s 

Strategic Plan as one means of achieving a particular Strategic Goal (actions to accomplish 

Strategic Goals). 

Outcome - Intended result or consequence of carrying out the activity (the projected effect or 

what is hoped to be achieved). 

Performance Indicator - A value or characteristic for measuring results (the quantifier or 

qualifier of performance). 

Process/Activity - The processes, skills, or resources that are required to effectively accomplish 

a performance goal (what is needed to achieve the goal). 

Performance Measure/Evaluation - The means used to verify and validate measured values 

(methods used for assessing if programs achieved objectives or, the specific means to measure 

if outcomes were realized). 

The Commission used its existing consultation process in developing this Plan. We have kept 

key Congressional Committees apprised of our efforts, and have responded to any inquiries. We 

continued our ad hoc meetings and visits with industry officials to discuss the state of U.S. 

ocean shipping and the FMC’s oversight responsibilities. In coordination with the various 

sectors of the maritime industry, we are holding periodic briefings by industry experts designed 

to provide Commission staff with valuable information on industry services, operations, 

business practices, and regulatory concerns. And we have initiated a broader outreach program 

to expand our extant seminar series, where agency staff travels to various locations to exchange 

information and discuss relevant issues with the industry and the shipping public. The 

information and opinions we received via these various efforts have assisted us in developing 

our performance goals and implementing approaches. It is clear that those involved in the 

various sectors of U.S. ocean shipping understand the Commission’s major program activities 

and, at the same time, the Commission is cognizant of the views of all parties with whom it 

interacts. 

In line with OMB guidance, the Commission has reflected the resources needed to accomplish 

its various functions. We have provided FTE and funding figures for each Strategic Goal, which 

reflect what we believe will be required to accomplish the performance goals and “steady state” 

functions under each respective Strategic Goal. Accordingly, all Commission resources are 

accounted for in this Plan, i.e., the figures under each Strategic Goal, when summed, reflect the 

full FTE and funding levels of our FY 2008 budget. 

The Commission will post this Performance Plan on its Internet website to ensure that it is 

readily accessible to interested parties, and will advise all employees to take the time to review 
5 

it. Additionally, all employee performance plans are required to comport with the agency’s 

Strategic and Annual Performance Plans, and contain specific elements and standards with a 

clear explanation of what is expected of the employee in support of the agency achieving its 

goals. This process in turn has the effect of directly furthering the Administration’s initiative on 

strategic human capital management. Performance of managers and staff is evaluated in part on 

how they achieve the objectives in this plan. 
6 

FMC STRATEGIC GOALS 

1. Efficient Regulatory Process: Provide a timely, efficient and decisive regulatory process, 

including alternative dispute resolution, to enable all segments of the industry to operate more 

effectively, with a minimum of regulatory costs. 

2. Compliance: Promote efficiency and fairness in U.S. foreign waterborne commerce through 

various means, including outreach and monitoring, to protect the public and assist stakeholders 

in achieving compliance with ocean transportation statutes administered by the FMC. 

3. Balanced Enforcement: Foster economic efficiencies, reliance on marketplace factors and 

maritime security by administering U.S. shipping statutes in a balanced and equitable manner to 

redress excessive anticompetitive actions and other unlawful activities. 

4. Technological Efficiencies: Employ technological enhancements to improve efficiency and 

to facilitate the exchange of information. 

5. Management Capabilities: Ensure the FMC has the appropriate organizational framework 

and management systems to carry out its statutory mandates. 

 

 
7 

FMC VISION AND MISSION

The FMC’s vision is: 

Fairness and Efficiency in U.S. Maritime Commerce. 

To achieve its vision, the FMC’s mission is to: 

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

secure maritime transportation system; 

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

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

• Assist in resolving disputes.

OSRA and the events of September 11, 2001, have significantly changed the manner in which 

the business of ocean shipping is being conducted. The industry continues to restructure its 

operations to adapt to dynamic economic conditions, emerging trends, and maritime security 

efforts. International trade remains dependent upon an efficient ocean transportation system. 

Therefore, it is imperative for the FMC to ensure that its oversight activities produce a 

competitive trading environment in U.S. ocean commerce that is in harmony with and 

responsive to international shipping practices, and permits fair and open commerce. We must 

focus our energies and efforts on this mission, and assure that the agency is organized and 

managed in a manner best suited to accomplish it with a minimum of government intervention 

and regulatory cost. Effective use of emerging information technologies will facilitate our 

efforts. Our actions also must encourage the development of a sound U.S.-flag liner fleet. 

Accordingly, the FMC has established the following five strategic goals to carry out its 

statutory mandates. 
8 

LINKAGE BETWEEN MISSION STATEMENT AND STRATEGIC GOALS 

Our strategic goals address essential FMC statutory, programmatic, and management 

responsibilities. They were developed with a specific focus on accomplishing the basic 

purposes of our mission and attaining the competitive, nondiscriminatory shipping environment 

envisioned by the 1984 Act, as amended by OSRA. 

The primary intention of Strategic Goal 1 is to minimize regulatory costs by maintaining timely 

and decisive regulatory processes, and providing various dispute resolution services. This will 

render the FMC more effective in addressing matters that perpetuate discrimination or preclude 

industry efficiency, while reducing the costs of pursuing matters before the Commission. 

Decisive action and effective assistance in resolving informal complaints or disputes will help 

to remove uncertainties as to statutory interpretations or the application of FMC rules. Such 

uncertainties may impede operational efficiencies or technological changes, each of which can 

foster a more economical ocean shipping system. 

Our second strategic goal centers on achieving compliance with the substantive provisions of 

the shipping statutes the FMC administers, and protecting those involved in U.S. ocean 

commerce from unfair practices. We will address this goal particularly by interacting with all 

sectors of the industry, and by vigilant monitoring of ongoing commercial activities. 

Accomplishing this goal should minimize the unjust discrimination and undue preference or 

prejudice that precludes certain shipping interests from obtaining rates or service levels that can 

render their businesses more economic and efficient. Increasing industry compliance should 

enable stakeholders to concentrate on fair and legal means of enhancing operational efficiency, 

secure in the knowledge that competitors are not engaging in widespread illegal actions aimed 

at improving short-term profits. The agency’s focus on the qualifications of intermediaries 

operating in the 

U.S. trades will afford greater protection to our stakeholders and contribute to national maritime 

security. And cruise passengers also will be protected through the demonstration of financial 

responsibility by passenger vessel operators. 

Strategic Goal 3 is designed to foster economic efficiencies, assist maritime security initiatives, 

promote reliance on marketplace factors, and redress excessive anticompetitive practices 

harmful to international commerce. This is a direct link to our mission statement’s call for an 

efficient, secure, market-driven ocean transportation system. Our continuing efforts to address 

the actions of foreign governments that adversely affect U.S. interests and our foreign trade 

comport with that aspect of our mission aimed at creating an environment free of unfair foreign 

maritime trade practices. Our focus on commercial malpractices enhances our objective of 

limiting unlawful activities. 

We also have a specific strategic goal that focuses on making effective use of advancements in 

IT to improve the efficiency of our operations and enhance our exchange of information with 

external parties. Carrying out the agency’s mission in times of budgetary limitations dictates 

that we appropriately utilize all available resources. Dynamic changes continue to be made in 

this area, and the Commission intends to take advantage of any improvement that can enable it 
9 

to perform its functions more effectively. We hope to improve our business operations so as to 

add efficiency to the Commission’s dissemination and receipt of information. We intend to 

perform the research and analysis necessary to identify the best options for implementing 

technical enhancements to facilitate our efforts to achieve our mission. 

Finally, our fifth strategic goal addresses Commission management and operations. In order to 

achieve the objectives of our mission, we must maintain effective processes that enhance 

efficiency, without serving as ends in themselves. It is essential that we manage for results, and 

that we effectively tie our budget needs to our performance. This strategic goal serves as the 

internal underpinning that enables us to accomplish the policy objectives set forth in our 

mission statement. This goal also ensures continuation of a comprehensive approach to the 

strategic management of our human capital. 

Achieving these mission-driven goals will enable us to address the external factors we face, 

while assuring an equitable and efficient administration of the shipping statutes under our 

jurisdiction. Our processes and procedures will be refined or updated as necessary. We are 

committed to accomplishing our strategic goals and the outcome goals related to them. 

Therefore, specific means have been identified to enable the FMC to achieve these goals in the 

most cost-efficient and least disruptive manner possible. 
10 

I. STRATEGIC GOAL: Efficient Regulatory Process 

36 FTEs and $6,731,000 will be required to accomplish this goal. 

2008 Steady State Activities: 

— Adjudication and resolution of complaints 

— Adjudication and resolution of investigatory proceedings, including fact-findings and 

show cause proceedings 

— Issuance of rules through the rulemaking process 

— Commission decision-making activities through meetings (formal and notation) that 

comply with the Government in the Sunshine Act 

— Public information and assistance processes such as press relations, responses to 

legislative and regulatory inquiries, and compliance with Freedom of Information Act 

and Privacy Act requirements 

— Other regulatory processes, including activities such as appeals of delegated authority 

actions, policy issuances, and formal petition processes 

— Providing timely legal counsel to the Commission in order to facilitate regulatory 

action that is consistent with statutory mandates, representing the Commission’s interest 

in matters before Congress and OMB 

— Reviewing and refining Commission rules to determine their economic impact and 

ensure that they reflect the current industry environment, as well as meet the needs of 

the Commission’s regulatory mandate 

— Compiling, organizing, and maintaining Commission records 

— Monitor, review and modify, as necessary, Commission regulations to address 

changing trade conditions, industry practices or statutory modifications 
11 

Performance 

Goal 

Related 

Strategic 

Goals/ 

Outcomes/ 

Means 

Outcome Performance 

Indicator 

Process/Activity Performance Measure/ 

Evaluation 

1. Develop 

plan for 

automating 

PVO 

Application 

Form 131 and 

perform 

requirements 

analysis. 

 

- Automate 

agency 

systems. 

- More user friendly 

and convenient 

process for industry 

to apply for 

certificates of 

nonperformance and 

casualty. 

- Reduction in 

burden and cost for 

industry. 

- More timely and 

effective staff review 

and process. 

- More efficient 

database 

management. 

- Facilitate 

filing of PVO 

applications. 

- Improve 

BCL’s ability 

to receive and 

process PVO 

certificates. 

- Contributes to 

streamlined 

PVO process. 

- Reduce staff 

database 

management 

efforts. 

- Discuss with 

PVOs benefits 

of electronic 

filings. 

 - Identify 

system 

functionality. 

- Initiate 

development of 

SOW. 

- Begin 

development of 

system & 

implementation 

plans. 

- Requirements analysis 

conducted. 

- Initial SOW drafted. 

- Feedback from staff. 

- Identify and resolve any 

impediments, then continue 

next steps identified in 

overall plan. 

2. By 

9/30/08, 

assess the 

impact and 

effectiveness 

of the new 

rules for 

agreements. 

-Update and/or 

refine FMC 

rules relating to 

the content of 

filed 

agreements, 

minutes, 

information 

form & 

monitoring 

reports. 

-Written report to 

Director, OPS re: 

- Extent relevant 

filings are timely, 

useful, complete, & 

accurate. 

- Level of industry 

compliance/ 

concerns 

- Filings’ impact on 

regulatory costs/

burdens; 

- Impact on 

processing times for 

agreement filing/

effective -ness 

of ongoing 

monitoring of 

agreements of 

concern to BTA; 

- Impact on 

“follow-up” 

contacts w/filers 

related to routine 

monitoring; 

- Extent to which 

filed information 

effectively used; 

-Recommendations 

for further changes 

to rules postassessment. 

-Drawing on 

relevant BTA 

databases, data 

and 

information to 

address the 

performance 

goal are 

collected. 

-Relevant 

agreement files 

reviewed, and 

information 

relevant to the 

performance 

goal collected. 

- BTA staff 

surveyed to 

collect 

information 

relevant to the 

performance 

goal. 

- Relevant data 

from samples 

of industry 

filers 

collected. 

-Research team 

is established -- 

composed of a 

team leader and 

approximately 

four BTA staff 

members. 

-Team agrees 

on the 

necessary tasks 

& workload 

distribution to 

address fully 

the 

performance 

goal. 

-Team meets 

bi-weekly to 

share findings, 

concerns or 

problems. 

- Team 

members meet 

with industry 

representatives 

for relevant 

input. 

- Team drafts 

final report and 

any proposals 

for revising 

existing rules. 

-Bureau director manages 

ongoing staff efforts. 

-Team leader for project 

tracks progress of team 

through periodic meetings 

and deadlines established 

to maintain schedule. 

- Feedback from industry 

sectors on costs/burdens 

related to current rules, 

and on alternative data 

sources. 
12 

II. STRATEGIC GOAL: Compliance 

47 FTEs and $7,970,000 will be required to accomplish this goal. 

2008 Steady State Activities: 

— Reviewing and maintaining a database of SCs between ocean common carriers and 

shippers, and using this database to guard against anticompetitive practices and other 

unfair prohibited activities under the 1984 Act. 

— Ensuring that common carriers’ rates and charges are accessible to the shipping 

public in private, electronically accessible systems. 

— Ensuring that OTIs maintain bonds that protect the shipping public from financial 

losses. 

— Providing formal and informal legal opinions and guidance to the Commission’s staff 

and the general public to ensure clarity and understanding of Commission rules and 

regulations. 

— Administering the Commission’s international affairs program. 

— Working with other agencies to enhance maritime security. 

— Reviewing operational and pricing agreements among ocean common carriers and 

marine terminals to ensure that they do not unduly restrict competition. 

— Issuing passenger vessel certificates evidencing financial responsibility of vessel 

owners or charterers to pay judgments for personal injury or death or to repay fares for 

the nonperformance of voyage or cruise. 

— Licensing OTIs to protect the public from unqualified, insolvent, or dishonest 

companies. 

— Responding to informal complaints and informal inquiries from Congress and the 

public relating to Commission responsibilities. 

— Acting as a liaison between the FMC and the public by responding and/or 

coordinating agency responses to public inquiries. 

— Maintaining a specialized maritime law library for agency and public use. 

— Conduct audit activity of regulated entities, including OTIs and VOCCs, to promote 

and ensure compliance with applicable statutes and Commission regulations. 
13 

— Respond to inquiries and complaints from the regulated industry and shipping public. 

Provide information, assistance and forms necessary to comply with applicable statutes 

and Commission regulations including educational seminars. 
14 

Performance 

Goal Related 

Strategic 

Goals/ 

Outcomes/ 

Means 

Outcome Performance 

Indicator 

Process/Activity Performance 

Measure/ 

Evaluation 

1. Enhance OTI 

audit/

monitoring 

program as to 

unlicensed 

operators. 

-Ensure higher 

compliance 

with licensing 

& bonding 

requirements. 

-Enhance 

monitoring 

programs to 

improve 

industry 

compliance. 

-Ensure those OTIs 

whose applications 

have been rejected 

or terminated for 

inaction receive 

compliance followup. 

- Pursue, monitor 

or audit those OTIs 

who fail to get 

licensed or relicensed. 

- Number of 

entities relicensed. 

- Number of 

compliance or 

enforcement 

actions against 

entities who refuse 

to be licensed or 

re-licensed. 

- Develop 

procedures to 

assist review of 

monitoring. 

- Identify 

procedures and 

requirements to 

coordinate 

possible 

compliance or 

enforcement 

actions. 

-Quarterly reviews 

by BCL. -

Quarterly reports 

by BOE & ARs as 

to efforts with 

regards to noncompliant entities. 

2. Begin 

redesign of the 

functionality 

of OTI list on 

the homepage 

to include 

more 

information 

and make it 

more 

interactive. 

-Increase 

outreach via 

FMC’s 

homepage. 

- Enhance query/ 

search capability. 

- Provide more 

timely 

information. 

-Protect the public 

& users of ocean 

transportation 

services by 

providing more 

information re: 

choosing an OTI 

or ensuring an 

OTI is licensed/

bonded. 

- Facilitate 

industry and 

public 

accessibility to 

list of compliant 

OTIs. 

- Improve 

compliance with 

statute and 

regulations by 

OTIs and 

VOCCs. 

- Enhance 

protection of 

shipping public. 

- Identify data to 

be displayed & 

queried. 

 - Conduct 

requirements 

analysis. 

- Develop overall 

plan for system 

and its 

implementation. 

- Requirements 

analysis 

successfully 

completed. 

- Identify and 

resolve any 

impediments, 

then continue 

next steps 

identified in 

overall plan. 
15 

III. STRATEGIC GOAL: Balanced Enforcement 

19 FTEs and $3,497,000 will be required to accomplish this goal. 

2008 Steady State Activities: 

— Investigating discriminatory rates, charges, classifications, and practices of common 

carriers, terminal operators, and OTIs operating in the foreign commerce of the U.S. 

— Representing the FMC before U.S. courts and other administrative agencies. 

— Reviewing staff recommendations and initial decisions for legal sufficiency and 

preparing final decisions and orders. 

— Regulating rates, charges, and rules of government-owned or -controlled carriers to 

ensure that they are just and reasonable and are not unfairly undercutting private 

competitors. 

— Protecting shippers and carriers engaged in the foreign commerce of the U.S. from 

restrictive or unfair foreign laws, regulations or business practices that harm U.S. 

shipping interests or ocean trade. 

— Prosecute formal proceedings initiated by the Commission. 

— Monitor activities and conduct investigations of regulated entities and of SC activity 

to ensure compliance with statutes and regulations administered by the Commission. 

— Conduct non-adjudicatory fact-finding proceedings as directed by the Commission. 

— Provide liaison between the Commission and the shipping industry, the public and 

other governmental entities. 

— Coordinate and cooperate with other government entities to improve homeland 

security by effective exchange of information and assistance regarding foreign ocean 

transportation. 
16 

Performance 

Goal Related Strategic 

Goals/Outcomes/ 

Means 

Outcome Performance 

Indicator 

Process/Activity 

Performance 

Measure/ 

Evaluation 

1. Review “best 

practices” re: 

VOCCs & 

NVOCCs 

offering service 

to non-compliant 

entities 

- Encourage 

voluntary 

compliance by 

increasing 

outreach to 

industry. 

-Improved 

compliance by 

VOCCs and 

NVOCCs w/their 

statutory 

responsibility not 

to provide service 

to non-compliant 

OTIs. 

-Improved 

maritime security 

by limiting service 

to non-compliant 

OTIs. -Increased 

protection of the 

shipping public by 

limiting the 

operations of 

unbonded and 

unqualified OTIs. 

-More equitable 

competition among 

VOCCs and among 

entities operating 

as compliant OTIs. 

-Increased 

recognition by 

VOCCs & 

NVOCCs of the 

benefits of 

implementing a 

“best practices” 

program. 

-Reduction in the 

number of 

noncompliant OTIs 

receiving service 

from VOCCs & 

NVOCCs. 

-Reduction in the 

number of 

complaints 

received by 

CADRS relating to 

unbonded & 

untariffed 

NVOCCs. 

-Utilize outreach 

resources, 

including the 

FMC’s website, 

electronic 

databases & 

activities of the 

ARs, to promote 

the ‘best 

practices” 

program among 

the VOCC & 

NVOCC 

communities. 

-Provide 

appropriate 

“mitigation” 

recognition in 

enforcement 

actions to entities 

w/ “best 

practices” 

programs. 

-Review of 

outreach & 

promotional efforts 

& materials 

developed to advise 

VOCCs & 

NVOCCs of the 

availability of the 

“best practices” 

program. 

-Number of VOCCs 

& NVOCCs 

implementing “best 

practices” 

programs. 

-Usage of “best 

practices” in 

mitigation of 

enforcement 

actions. 

-Level of 

recidivism among 

those VOCCs & 

NVOCCs adopting 

“best practices” 

programs. 

2. Develop 

rulemaking 

containing new 

enforcement 

options against 

cruise lines that 

fail to file PVO 

reports. 

- Enhance 

monitoring 

programs to 

improve 

compliance. 

- Timely filed and 

accurate PVO 

reports. 

- More efficient 

and effective 

monitoring of 

PVO activities. 

- Reduction of 

staff resources 

spent contacting 

PVOs to submit 

reports. 

- Prepare NPR. 

- Solicit 

comments. 

- Issue FR. 

- Reduction in 

number of PVOs 

identified as 

noncompliant. 

- Actions taken 

against 

noncompliant 

PVOs. 
17 

IV. STRATEGIC GOAL: Technological Efficiencies 

15 FTEs and $2,518,000 will be required to accomplish this goal. 

2008 Steady State Activities: 

— Implementing a wide range of IT programs and services, including operating the 

agency’s local area network, strategic planning for short- and long-term IT initiatives, 

IT security, data telecommunications, database development and management, and 

Internet page development and maintenance to enhance productivity and efficiency. 

— Maintaining and updating internal databases to enhance the ability of the public and 

Commission to obtain relevant program-related information and enhance staff 

productivity. 

— Converting Commission records into electronic format to enable easier public access 

to information 
18 

 

Performance Goal 

Related 

Strategic 

Goals/ 

Outcomes/ 

Means 

Outcome Performance 

Indicator 

Process/Activity Performance 

Measure/ 

Evaluation 

1. Implementation of 

Pay.gov. 

-Increase use 

of modern 

technologies 

& systems to 

improve 

results. 

-Employ 

OMB’s 

procedures to 

meet GPEA 

mandates. 

-Agencywide 

acceptance of 

electronic 

payments. 

-Industry use 

of electronic 

payments. 

-Relative 

reporting 

output from 

Pay.gov. 

-Volume of 

electronic 

payments 

received. 

-Feedback from 

the industry/users 

of electronic 

payments. 

-Feedback from 

involved FMC 

employees. 

-Conduct internal 

assessment to determine 

ways agency units might 

require Pay.gov support. 

-Meet w/ Treasury 

regarding implementation 

procedures and 

requirements. 

-Discuss and refine 

requirements. 

-Consult w/ senior 

management & Chairman 

with proposed 

implementation plans. 

- Conduct meeting(s) with 

Treasury to develop an 

Agency Configuration 

Template. 

-Begin conversion process. 

-Sign agreement w/ FRB 

Cleveland to set up, create 

and deploy application for 

FMC to receive electronic 

payments. 

-Conduct application 

testing prior to going 

“live”. 

-Deploy electronic 

payment option 

agencywide. 

-Industry usage of 

electronic 

payments. 

-Feedback from 

customer base. 

-Feedback from 

involved FMC 

employees. 

2. Upgrade network 

and desktop operating 

systems. 

- Identify and 

provide 

information 

technology to 

improve 

workforce 

productivity. 

- Agency-wide 

standard 

desktop and 

laptop 

foundation. 

- Agency-wide 

standard server 

configuration. 

- Successful 

upgrade from 

current operating 

system to new 

operating system. 

- Positive feedback 

from FMC users. 

- Complete inventory of 

existing equipment. 

- Select software, test, 

acquire & configure. 

- Update all procedures w/ 

new desktop and server 

configurations. 

- Deploy software. 

- Agency 

operating systems 

are selected, 

tested, and 

deployed. 

- Feedback from 

FMC staff. 
19 

Performance Goal Related 

Strategic 

Goals/ 

Outcomes/ 

Means 

Outcome Performance 

Indicator 

Process/Activity Performance 

Measure/ 

Evaluation 

3. Initiate 

integration of major 

databases. 

- Increase 

use of 

modern 

technologies 

to improve 

results by 

enhancing 

work 

processes. 

- Building on 

analysis of 

information 

collections 

completed in 

FY06, design 

centralized, 

unified & 

secure database 

system of 

regulated 

entities for use 

by Commission 

staff. 

- Design to 

meet needs of 

all Commission 

offices & 

bureaus with 

regard to 

regulated entity 

data collection.

- Facilitate 

retrieval of data. 

- Enhance 

analytical 

capability. 

- Reduce 

duplication of data 

input. 

- Work with other 

Commission 

components, OIT & 

contractor, if 

applicable, to develop 

system. 

- Assure periodic 

meetings held to 

evaluate progress. 

- Develop SOW or inhouse proposal to 

develop system. 

- Successful 

completion of 

implementation 

plan of action 

steps. 

- Feedback from 

staff. 

4. Explore options 

for and begin the 

development of an 

online catalogue for 

the FMC’s law/

reference library 

collection. 

-Employ 

technology to 

improve 

workforce 

productivity. 

- Paper 

catalogue in 

library replaced 

by online access 

station. 

- Staff has 

access to library 

catalogue from 

desktops. 

- Increased 

efficiency in 

searching library 

resources. 

- Directly link 

online catalogue 

entries to other 

electronic 

resources. 

- Reduce 

redundancy of 

data entry across 

library modules. 

- Options for 

automating the card 

catalogue evaluated 

against specific 

needs and 

recommendations 

made. 

- Online catalogue 

created based on 

recommended 

approach. 

- Paper catalogue 

replaced with 

online work station 

in the library. 

- Staff access to 

catalogue from 

desktops. 

- Research online 

catalogue options, make 

recommendations. 

- Design screens and 

other aspects of system. 

- Populate catalogue 

through either scanning 

of catalogue cards or use 

of outside source 

documents. 

- Work with OIT to 

provide desktop access 

to staff, including ARs, 

through central server. 

 - Train staff on how to 

use system. 

- Assess 

recommendations 

for timeliness and 

appropriateness. 

- Assess feedback 

from FMC staff 

and the public. 

- Assess overall 

effectiveness of 

new system. 
20 

V. STRATEGIC GOAL: Management Capabilities 

10 FTEs and $1,606,000 will be required to accomplish this goal. 

2008 Steady State Activities: 

— Executing financial management policies and programs, including developing annual 

budget justifications for submission to the Congress and OMB, managing agency 

appropriations, administering internal control systems for agency funds, travel and cash 

management, and coordinating with contractors who provide accounting and payroll 

services. 

— Fostering human resources management principles, including recruitment and 

placement, position classification and pay administration, occupational safety and 

health, employee assistance, employee relations, workforce discipline, performance 

management and incentive awards, employee benefits, career transition, retirement, 

employee development and training, personnel security, and an equal employment 

opportunity. 

— Ensuring the program operations of the agency are administratively supported via 

telecommunications, procurement of administrative goods and services, property 

management, space, printing and copying, mail and records services, facilities and 

equipment maintenance, and transportation. 

— Promoting economy and efficiency in the administration of, and protecting and 

detecting waste, fraud and abuse in, the agency’s programs via auditing agency 

operations. 

— Providing guidance to staff regarding administrative matters, including procurement, 

personnel and contracting issues. 

— Ensuring program compliance with various rules and regulations regarding such areas 

as forms clearance, Paperwork Reduction, Small Business Paperwork Reduction Act, 

and other federally required reports and submissions 
21 

Performance 

Goal 

Related Strategic 

Goals/Outcomes/ 

Means 

Outcome 

Performance 

Indicator 

Process/Activity Performance 

Measure/ 

Evaluation 

1. Fast track 

implementation 

of EHRI (e-OPF) 

-Evaluate 

approaches for 

increasing the use 

of modern 

technology to 

improve results. 

- Eliminate the 

need for a paper 

OPF. 

- Establish 

database to enable 

electronic transfer 

of e-OPF data 

among Federal 

agencies (future). 

- Achieve 

economy/ annual 

savings by 

eliminating the 

paper folder. 

-In sync w/ OPM 

strategic plan & 

operational goal to 

convert 50% of 

hard copy OPFs to 

electronic format 

by 10/1/2008. 

-Volume of OPF 

documents 

processed & filed. 

-Feedback from eGovernment 

officials, users of 

e-OPF. 

-Feedback from 

involved FMC 

employees. 

-Meet w/ OPM/ & 

SAHRC on funding, 

implementation, and 

requirements. 

-Begin Fast-track 

implementation. 

-Update IAA w/ 

OPM & SAHRC 

EHRI reps to lay 

framework for other 

products. 

-Activate e-OPF 

accounts for 

employees, 

managers, “friends 

and family” 

accounts. 

-Feedback from 

SAHRC user 

group, EHRI 

program officials, 

customers. 

-Feedback from 

involved FMC 

employees. 

- NARA 

requirements. 
22 

Performance 

Goal Related Strategic 

Goals/Outcomes/ 

Means 

Outcome Performance 

Indicator 

Process/Activity 

Performance 

Measure/ 

Evaluation 

2. Assess 

telework 

program to 

encourage usage 

& advance 

efficiency of 

operations. 

- Emphasizes 

workforce planning 

issues such as 

recruitment and 

retention. 

-Encourage 

activities that help 

employees 

demonstrate 

abilities and 

achieve full 

potential. 

-Encourages the 

better 

understanding of 

the benefits of 

teleworking for 

both employees, 

agency and the 

environment (e.g., 

more flexibilities 

for employees, a 

more powerful tool 

for recruitment & 

retention of 

employees, less 

fuel consumption) 

-Agency increases 

the total number of 

participating 

employees & 

teleworked days 

without 

deterioration of 

effectiveness and 

efficiency. 

-Supervisors can 

assess employees’ 

performance using 

simple 

measurement tools. 

-Agency has clear 

benchmarks to 

assess success of 

program. 

-Significant 

increase in total 

number of 

participating 

employees& total 

number of 

teleworked days 

per year over prior 

year’s experience. 

-Development of 

new supervisory 

tools. 

- Development of 

an annual survey 

of supervisors’ and 

employees’ 

opinions of 

program. 

-Development of 

benchmarks by 

which Agency may 

measure success of 

program. 

-Identify total 

number of employees 

& days teleworked 

under current 

program in the past 

year. 

-Review positions/ 

types of work which 

can, or cannot, be 

performed via 

telework. 

- Identify the 

optimum number of 

days per week/ 

month/year which 

can be teleworked 

consistent with 

Agency’s duties. 

-Identify benchmarks 

for satisfactory use of 

program. 

-Assess supervisors’ 

and employees’ 

opinions on the 

program. 

-Registration of 

eligible employees 

for use of program. 

- Administration of 

opinion survey of 

supervisors and 

employees on their 

views regarding the 

program. 

- Implementation of 

new supervisory 

tools. 

-Senior 

management 

evaluates the 

adequacy of the 

number of 

participating 

employees, the 

results of annual 

survey of 

supervisors and 

employees. 

-Chairman 

evaluates the 

operation of the 

program relative to 

the effective and 

efficient conduct of 

Agency business. 

-Chairman reviews 

the results of 

supervisor & 

employee survey & 

target benchmarks 

established for the 

program.