Federal Maritime 

Commission

Fiscal Year 2013

52nd

Annual Report


Federal Maritime 

Commission

52nd Annual Report 

for

Fiscal Year 2013

Table of Contents

Letter of Transmittal �������������������������������������������i

Members of The Commission ���������������������������������ii

Senior Commission Officials ��������������������������������� iii

FMC Mission ����������������������������������������������������� v

I. The Commission ��������������������������������������������� 

A. Functions������������������������������������������������ 

B. Organization �������������������������������������������� 

II. Year in Review����������������������������������������������� 

Strategic Goal 1: Maintain an Efficient and 

Competitive International Ocean Transportation 

System ������������������������������������������������������ 5

Strategic Goal 2: Protect the Public from Unlawful, 

Unfair and Deceptive Practices and Resolve Shipping 

Disputes ���������������������������������������������������� 8

III. Developments In Major U.S. Foreign Trades ���������

A. Worldwide ��������������������������������������������� 1

B. Asia �����������������������������������������������������1

C. Australia and Oceania �������������������������������� 1

D. Indian Subcontinent and The Middle East ���������1

E. North Europe ������������������������������������������ 1

F. Mediterranean �����������������������������������������1

G. Africa��������������������������������������������������� 1

H. Central America and The Caribbean ���������������2

I. South America �����������������������������������������2

IV. The Foreign Shipping Practices Act Of 1988�����������2

A. In General ���������������������������������������������2

B. Top Twenty U.S. Liner Cargo Trading Partners ���
V. Significant Activities By Organizational Unit�����������25

A. Office of the Secretary ������������������������������25

B. Office of the Administrative Law Judges ����������27

C. Office of the General Counsel ����������������������36

D. Office of Equal Employment Opportunity����������41

E. Office of the Inspector General���������������������42

F. Office of Consumer Affairs and Dispute Resolution 

Services ���������������������������������������������������44

G. Office of the Managing Director �������������������47

H. Bureau of Certification and Licensing ��������������53

I. Bureau of Enforcement �������������������������������6

J. Bureau of Trade Analysis �����������������������������65

VI. Appendices�������������������������������������������������7

APPENDIX A - Federal Maritime Commission 

Organization Chart ��������������������������������������79

APPENDIX B - Commission Proceedings����������������80

APPENDIX C - Agreement Filings And Status ����������81

APPENDIX D - Form FMC-1 Tariff Location Addresses 

- Service Contract and NSA Filings and Special 

Permission Applications ���������������������������������83

APPENDIX E - Civil Penalties Collected ����������������84

APPENDIX F - Statement of Appropriations, 

Obligations and Receipts ��������������������������������85


i

LETTER OF TRANSMITTAL

March 31, 2014

To the United States Senate and House of 

Representatives:

Pursuant to Section 103(e) of Reorganization Plan 

No. 7 of 1961, and Section 208 of the Merchant Marine Act,

1936, now codified, as amended, at 46 U.S.C. §306(a), I am 

pleased to submit the 52nd Annual Report of the activities 

of the Federal Maritime Commission for fiscal year 2013.

 Sincerely, 

 Mario Cordero

 Chairman

FEDERAL MARITIME COMMISSION

WASHINGTON, D.C. 20573-00
ii

MEMBERS OF THE COMMISSION

 William P. Doyl

Commissioner

Appointed 2013

Term Expired 2013

Mario Cordero

Chairman

Appointed 2011

Term Expires 2014

 Michael A. Khour

Commissioner

Appointed 2009

Term Expires 2016

 Richard A. Lidinsky, Jr.

Commissioner

Appointed 2009

Term Expired 2012

 Rebecca F. Dy

Commissioner

Appointed 2002

Term Expires 2015
iii

SENIOR COMMISSION OFFICIALS

Chief Of Staff.............

Counsel to Commissioner Dye...................

Counsel to Commissioner Lidinsky.................

Counsel to Commissioner Khouri.............

Counsel to Commissioner Doyle.................. Da

General Counsel...................

Secretary................

Chief Administrative Law Judge..................

Director, Office of Consumer Affairs & 

Dispute Resolution Services......

Director, Office of 

Equal Employment Opportunity.................

Inspector General..............

Managing Director...............

Deputy Managing Director.................

Director, Strategic Planning 

and Regulatory Review.................

Director, Bureau of 

Certification and Licensing.......
iv

Director, Bureau of Enforcement..............

Director, Bureau of Trade Analysis................Sa

* Interim

** Assumed position in June 2013.
v

FMC MISSION

To foster a fair, efficient and reliable international 

ocean transportation system and to protect the public 

from unfair and deceptive practices.

The Commission

1

I. THE COMMISSION

A. Functions

The Federal Maritime Commission (FMC) is an independent 

agency responsible for the regulation of oceanborne 

transportation in the foreign commerce of the United 

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

U.S. consumer. The principal statutes administered by t

Commission are the Shipping Act of 1984 (Shipping Act), the 

Foreign Shipping Practices Act of 1988 (FSPA), Section 19 of the 

Merchant Marine Act, 1920 (1920 Act), and Sections 2 and 3 of 

Pub. L. No. 89-777, 80 Stat. 1350, 46 U.S.C. 40101

The Commission’s regulatory responsibilities include:

• Reviewing and monitoring operational and discussion 

agreements among ocean common carriers and marine 

terminal operators (MTOs) to ensure that they do not cause 

substantial increases in transportation costs or decreases 

in transportation services; 

• Maintaining and reviewing confidentially filed service 

contracts and non-vessel-operating common carrier 

(NVOCC) Service Arrangements between ocean common 

carriers and shippers to guard against detrimental effects 

to shipping in the U.S. foreign trade

• Providing a forum for exporters, importers, and other 

members of the shipping public to obtain relief from ocean 

shipping practices or disputes that impede the flow of 

commerce and otherwise cause economic harm;

• Ensuring that common carriers’ tariff rates and charges 

are published in private, automated tariff systems and 

electronically available to the shipping public;
2

The Commission

• Monitoring rates, charges, and rules of governmentowned or -controlled carriers to ensure that they are 

just and reasonable and not unfairly undercutting private 

competitors;

• Issuing passenger vessel certificates evidencing financial 

responsibility of vessel owners or charterers to pay claims 

for personal injury or death, and to reimburse passengers 

in the event of nonperformance of a voyage or cruise;

• Licensing ocean transportation intermediaries (OTIs) in the 

U.S. to protect the public from unqualified, insolvent, or 

dishonest companies;

• Ensuring that OTIs maintain financial responsibility to 

protect the shipping public from financial loss;

• Protecting the shipping public from economic harm by 

investigating rates, charges, classifications, and practices 

of common carriers, MTOs, and OTIs and acting to stop 

unjust or unlawful practices that violate the Shipping Act; 

and

• Taking action to address unfavorable conditions arising out 

of foreign government or business practices in the U.S.foreign shipping trad

The Shipping Act applies to the operations of common 

carriers and other persons engaged in the U.S. foreig

commerce. Under the Shipping Act, the general U.S. antitru

laws – the Sherman and Clayton Acts - do not apply to certain 

agreements between or among ocean common carriers and 

MTOs. The Commission conducts preliminary reviews and

performs ongoing oversight of such agreements and can take 

action to address agreement activity that does not meet the 

requirements of the Shipping Act, or that violates the Shipping 

Act
3

The Commission

The Commission carries out its regulatory responsibilities 

by conducting informal and formal investigations. It holds

hearings, considers evidence, renders decisions, and issues 

appropriate orders and regulations. The Commission also

adjudicates and mediates disputes involving regulated entities, 

the shipping public, and other affected individuals or interest 

groups

B. Organization

(Also See Appendix A: FMC Organizational Chart)

The Commission is composed of five Commissioners 

appointed by the President with the advice and consent of the 

Senate. Commissioners serve five-year, staggered terms, and 

no more than three members of the Commission may belong to 

the same political party. The President designates one of the

Commissioners to serve as Chairman. The Chairman is the chief

executive and administrative officer of the Commission.

The Commission’s organizational units consist of: the 

Office of the General Counsel (OGC); the Office of the 

Secretary (OS); the Office of Consumer Affairs and Dispute 

Resolution Services (CADRS); the Office of Administrative Law 

Judges (OALJ); the Office of Equal Employment Opportunity 

(OEEO); the Office of the Inspector General (OIG); the Office of 

the Managing Director (OMD); the Offices of Human Resources 

(OHR), Budget and Finance (OBF), Management Services (OMS), 

and Information Technology (OIT); the Bureaus of Certification 

and Licensing (BCL), Enforcement (BOE), and Trade Analysis 

(BTA); and the Commission’s Area Representatives (ARs). In

fiscal year 2013, the Commission had a post-sequestration 

appropriation of $22,839,425. That appropriation supported

the employment of 119 full-time equivalent positions during 
4

The Commission

the fiscal year. The majority of the Commission’s personnel are 

located in Washington, D.C., with ARs in Houston, Los Angeles

New Orleans, New York, Seattle, and South Florida
5

The Commission
Year in Review

6

II. YEAR IN REVIEW

In fiscal year 2013, the Commission kept a watchful 

eye on a fragile economic recovery in Europe, slow growth 

in U.S. GDP, and a reduction in China’s GDP growth rat

and the impact on the international container trade. The

combination of weak freight rates and disappointing cargo 

volumes translated into lower average operating margins, 

with many liner operators expected to once again end the 

calendar year with sharply reduced earnings. Given current

and expected supply and demand dynamics, carriers likely will 

have to continue to rely on cost cutting measures to address 

their on-going financial challenges. By the final quarter of the 

fiscal year, reports were emerging that several major carriers 

and carrier alliances likely would be expanding operational 

cooperation on an unprecedented scale

The Federal Maritime Commission’s mission is to foster a 

fair, efficient and reliable international ocean transportation 

system, and to protect the public from unfair and deceptive 

practices. The highlighted actions under the Commission’s

Strategic Goals provide an overview of agency activities in 

pursuit of its mission.

Strategic Goal 1: Maintain an Efficient 

and Competitive International Ocean 

Transportation System

Under Strategic Goal 1, the Commission is committed to 

maintaining an efficient and competitive international ocean 

transportation system and enhancing trade efficiency through 

the use of various types of agreement authority. Competitive

ocean transportation facilitates commerce, economic growth, 

and job creation. Competition among participants in U

liner trades fosters competitive rates and encourages a 

variety of service offerings for the benefit of U.S. exporters 
Year in Review

7

and importers, and ultimately consumers. The Shipping Act

grants ocean carriers and MTOs limited antitrust immunity 

for activities pursuant to agreements they file with the 

Commission. The Commission performs competition analysis

of carrier and MTO agreements and subsequent monitoring of 

their activities to guard against possible abuse of that limited 

immunity, to avoid unreasonable increases in transportation 

costs or decreases in transportation services, and to guard 

against other activities prohibited by the Shipping Act

Trade Oversight: During the fiscal year, the Commission 

continued to closely monitor the shipping activities of carriers 

and produced a number of reports and analyses concerning, 

for example, the Consolidated Chassis Management Pool 

Agreement (CCM); the Port of Lake Charles, Louisiana’s 

changes to local stevedoring services; and the G-6 Alliance 

Agreement involving operational cooperation between two 

major global alliances serving U.S. trade.  Other maj

monitoring activities included reviewing data and meeting 

minutes provided by three global alliances, and conducting 

bi-annual information meetings with representatives of the 

Transpacific Stabilization Agreement (TSA)

The CCM filed an amendment to change its model for 

governance of its regional chassis pools which elicited 

comments from maritime labor, motor carrier associations, and 

others. Given potential concerns regarding the impact of the

CCM amendment, the Commission issued a formal Request for 

Additional Information. The Commission continues to monitor

the availability of chassis by third parties as carriers move 

away from providing chassis to their shippers

Following up on its fiscal year 2012 Study of the 2008 

Repeal of the Liner Conference Exemption from European 

Union Competition Law, the FMC continued to update data 
Year in Review

8

useful for evaluating the impact, if any, of the European 

Union’s repeal of its block competition law exemption for liner 

conferences

Monitoring Foreign Practices: The Commission monitors 

potentially restrictive activities of foreign governments 

that may create conditions unfavorable to U.S. oceanborn

trade, and determines whether any action is necessary to 

remedy such activities. During the fiscal year, the Commission 

informally pursued 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

FMC continued to monitor and participate, both formally and 

informally, in international agreement negotiations that could 

affect foreign-borne cargo shipments to the United States.

For example, the Commission began a close look at changes 

to Chinese tax law that may unfairly impact U.S. shippers an

non-Chinese carriers. Implemenation of China’s value-addedtax system is being closely reviewed and the Commission will

continue to pursue clarity of its implementation. In addition,

the Commission tracked consumer inquiries regarding possible 

foreign restrictive shipping practices

The FMC continued its international outreach efforts by 

attending and coordinating events with foreign embassies and 

counterparts, and monitoring foreign laws and practices to 

determine whether there are any unjust non-market barriers 

to trade

Maritime Environmental Committee: The Commission’s 

Maritime Environmental Committee hosted several public 

forums and events, including presentations on: MARAD’s 

Alternative Fuel Sources and Environmental Projects, a 

discussion on alternative fuel source viability; Emerging 

Environmental Transportation Technologies, a discussion on 
Year in Review

9

present and future environmental programs and technologies 

in the industry; and Environmental Best Practices in Cruise 

Line and Passenger Vessel Industries, a presentation and 

discussion on environmental best practices employed by the 

cruise line and passenger vessel industries. The Commission

also hosted the 2nd Annual Port Environmental Initiatives

where representatives from the Maryland Ports Administration, 

Port of Seattle, and Georgia Ports Authority gave presentations 

and engaged in discussions on water quality issues and 

sustainability initiatives at ports

Strategic Goal 2: Protect the Public from 

Unlawful, Unfair and Deceptive Practices and 

Resolve Shipping Disputes

Consistent with the Commission’s Strategic Goal 2, the 

FMC engages in a variety of activities that protect the public 

from financial harm, including assisting in the resolution of 

disputes related to the shipment of goods or the carriage 

of passengers, investigating and prosecuting unreasonable 

or unjust practices, and ruling on private party complaints 

alleging violation of the Shipping Act. These activities

contribute to the integrity and security of the nation’s 

import and export supply chains and ocean transportation 

system. In addition, the FMC ensures financial coverage of 

passenger vessels to indemnify passengers in the event of 

nonperformance. Pursuant to these regulatory responsibilities,

the Commission undertook a number of significant actions 

during the fiscal year to address issues affecting American 

consumers who ship their personal goods overseas or take 

cruises

Investigations and Enforcement Proceedings: The 

Commission’s Area Representatives handled hundreds of 

informal complaints typically alleging unlawful activity.
Year in Review

10

When possible, compliance with statutory and regulatory 

requirements was achieved informally. In other instances, 

investigations were conducted to determine the extent of any 

unlawful activity. The Commission’s Bureau of Enforcement

investigated and prosecuted possible illegal practices in many 

trade lanes, including the Transpacific, North Atlantic, West 

Africa, Central and South American, and Caribbean trades

Cumulatively, BOE collected more than $3 million in civil 

penalties. (See Appendix E

In cooperation with other agencies, the ARs participated 

in various enforcement initiatives sponsored by local law 

enforcement, the U.S. Department of Justice, the Department 

of Homeland Security (including U.S. Customs and Borde

Protection (CBP) and Immigration and Customs Enforcement), 

the Department of Commerce, and the Federal Motor Carrier 

Safety Administration (FMCSA). This participation and sharing

of information contributed positively to the investigation 

of a wide range of unlawful activity. The Commission also

signed an updated Memorandum of Understanding (MOU) 

with the CBP to share data from the Automated Commercial 

Environment-International Trade Data System in order to 

enhance facilitation and enforcement of ocean carriers and 

other entities involved in ocean trade between the U.S. an

foreign countries

Ombuds Services and Educational Outreach: The 

Commission received 1,211 complaints that resulted in the 

opening of ombuds cases. These included 229 commercial

cargo matters, 857 household goods matters, and 116 cruise 

passenger matters. The Commission also issued 9 consumer

alerts with respect to household goods and cruise passenger 

matters. The large increase in household goods complaints

(200 percent over fiscal year 2012) was related to the failure 

of a single, large OTI during the fiscal year. Commercial cargorelated complaints continued to be increasingly complex and 
Year in Review

11

problems from OTIs with overextended finances and inability 

to complete the ocean transportation continued to be an 

issue. The Commission’s Office of Consumer Affairs and Dispute 

Resolution Services also served as mediators in 13 mediation 

matters. It is anticipated that the number of mediation

matters handled by CADRS will increase in the coming years 

due to a revised Commission procedural rule that requires an 

initial mediation conference at the outset of formal private 

complaint proceedings.

Ocean Transportation Intermediaries: In accordance 

with the Commission’s Plan for Retrospective Review of 

Existing Rules, the Commission issued an Advance Notice of 

Proposed Rulemaking (ANPRM) that proposes modifications to 

the Commission’s OTI rules governing the licensing, financial 

responsibility requirements, and duties of OTIs. The ANPRM is 

intended to adapt regulations to changing industry conditions, 

improve regulatory effectiveness, improve transparency, 

streamline processes, and reduce regulatory burdens

Suggested rule modifications include increasing minimum 

bonding amounts originally set in 1999, implementing a new 

license renewal process, and establishing a new hearing 

process for license denial or revocation actions. The ANPRM

also sought comment on filing and payment of claims, 

priorities for claims, and methods of improving reporting 

provisions by surety companies to promote faster and more 

equitable allocation to claimants. At the close of the fiscal 

year, the Commission had received 90 comments on this 

proposal

The Commission also revised its rules to extend an 

exemption from the tariff publication requirements of the 

Shipping Act and certain Commission regulatory requirements 

to foreign-based, unlicensed NVOCCs that agree to negotiated 

rate arrangements (NRAs) and also comply with a new 

registration and renewal process
Year in Review

12

Passenger Vessel Operators: As part of its efforts to 

protect the public and ensure financial coverage for cruise 

passengers, the Commission issued a final rule on February 13, 

2013, to increase the maximum coverage requirement from 

$15 million to $30 million per cruise line, and required that 

this cap be adjusted every two years based on the Consumer 

Price Index for All Urban Consumers (CPI-U). This increase

reflects the effects of inflation and the growth of the cruise 

industry since the current $15 million cap was set in 1990. The

Commission’s final rule also implemented a 5-year expiration 

date on PVO performance certificates. 

Information Technology: The Commission prepared 

a 2014-2018 Information Resources Management (IRM) 

Strategic Plan in support of the agency’s Strategic Plan 

covering the same time period. The IRM plan describes how

IRM activities help accomplish agency missions, and ensures 

IRM decisions are integrated with organizational planning, 

budget, procurement, financial management, human resources 

management, and program decisions. The Commission also

enhanced its information technology capabilities in a number 

of areas including implementing the first phase of a multiyear transition to use Enterprise Content Management (ECM) 

technology to manage its business activities and information 

needs
Year in Review

13
Developments 

in Major Trades

14

III. DEVELOPMENTS IN MAJOR U.S. FOREIGN 

TRADES

A. Worldwide

The world’s container trade expanded by nearly 2 percent 

during the fiscal year compared to an expansion of almost 

3 percent in 2012. As the fiscal year came to a close, 181 

containerships lay idle, representing 2.4 percent of the total

fleet capacity measured in TEUs (twenty-foot equivalent 

container units). In contrast, 255 ships, representing 3.

percent of the containership fleet capacity, lay idle at the end 

of fiscal year 2012.

The world’s container shipping industry remained as 

concentrated during fiscal year 2013 as it had been in prior 

years. At the close of the year, the top five container operators 

controlled 46 percent of the world’s containership capacity; 

the top three controlled nearly 37 percent; and the top ten 

controlled almost 64 percent. The world’s top three operators

are: APM-Maersk (14.9 percent), Mediterranean Shipping

Company (MSC) (13.5 percent), and CMA CGM (8.5 percen

Container volumes in the U.S. liner trades expanded 1

percent to roughly 30 million TEUs, compared to 29.4 million

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

percent. U.S. container imports continued to grow, expandi

2.7 percent to 17.9 million TEUs, compared to 17.5 milli

in 2012. This was still well below the record of 18.6 millio

reached in fiscal year 2007. U.S. container exports also rose, 

albeit by less than 1 percent to 12 million TEUs. As a result,

the U.S. container imbalance worsened; for every 100 loade

containers exported from the U.S., 150 were imported

compared to 147 imported in fiscal year 2012.
Developments 

in Major Trades

15

The world containership fleet continued to expand. The 

fleet’s nominal capacity grew by approximately 6 percent. At 

the end of the fiscal year, 4,990 containerships, with a total 

fleet capacity of 17.2 million TEUs, were available to serve 

the world’s container trades. In addition, there were orders

worldwide for 480 new containerships with an aggregate 

capacity of 3.7 million TEUs, which is equivalent to 21.3 

percent of the existing fleet capacity. 

B. Asia

In terms of container cargo volumes, Asia is our primary 

trading region. Asia was responsible for 61 percent of U

container trade volumes (exports and imports combined). Of

these volumes, Northeast Asia accounted for 52.5 percent

of all U.S. container cargo and Southeast Asia accounted fo

8.5 percent. The Ports of Los Angeles and Long Beach handl

approximately 44 percent of all containers originating from or 

destined to Northeast and Southeast Asia. Sixty-six percent of

all U.S. container imports originated from Asia, and the regio

received slightly more than 50 percent of all U.S. containe

exports

The Transpacific Stabilization Agreement is the major 

agreement in the transpacific trade. It is a fifteen-member 

discussion agreement with voluntary pricing authority. TSA

covers both the inbound container trade from Northeast and 

Southeast Asia to the U.S., and outbound exports from th

U.S. to Asia. TSA’s geographic scope also includes parts of t

Indian Subcontinent (i.e., Bangladesh, Pakistan and Sri Lanka

but not India). TSA’s share of the U.S. inbound Asia trade w

approximately 94 percent
Developments 

in Major Trades

16

Northeast Asia accounted for 87 percent of transpacific 

imports, with most originating in the People’s Republic of 

China (PRC). The U.S. imported 11.9 million TEUs of As

goods, compared to 12 million TEUs last year, representing a 

decline of 1.3 percent over the previous fiscal year.

TSA announced a series of General Rate Increases (GRIs) 

for short-term (spot) markets in the eastbound (U.S. import

trade during the summer and early fall of 2013. After making

some initial gains, none of the GRIs proved successful. TSA

closed the fiscal year without instituting the sort of revenue 

recovery that the member lines reported was needed to 

support the levels of service they provided

C. Australia and Oceania

The Oceania trade includes the nations and territories of 

Australia, New Zealand, Papua New Guinea, Western Samoa, 

and other South Pacific islands. In the outbound direction of 

the trade, container volume is greater. However, during the

fiscal year, U.S. container exports declined by 2.7 percent 

compared to fiscal year 2012. U.S. imports from the region 

grew 3.3 percent  By volume, the ratio of exports to import

in the trade was 1.67 to 1. The leading export commoditie

were auto parts, general merchandise, grocery products, 

paper, and tires. The top two container import commodities

were meat and wine. Other leading imports included paper,

beverages, and lumber

Carriers providing direct service in the trade are linked 

through a patchwork of agreements. Two main rate discussion

agreements cover the trade. Six carriers participate in

the United States/Australia Discussion Agreement (USADA) 

in the outbound direction, and six carriers participate in 

the Australia and New Zealand-United States Discussion 

Agreement (ANZUSDA) in the inbound direction. In addition,
Developments 

in Major Trades

17

five carriers serving the Pacific Islands participate in the Pacific 

Island Discussion Agreement. Further, a number of major

carriers serve the trade through transshipment arrangements.

With the exception of one carrier, all of the carriers that serve 

the trade directly operate their services through several vessel 

sharing agreements.

Pacific International Line (PIL) does not participate in 

agreements in the trade and operates a direct service in the 

outbound direction from Long Beach to ports in Australia, 

New Zealand, and China. Since entering the trade in 2011,

PIL’s market share has grown to over 10 percent of the total 

container exports from the U.S. Pacific Coast. Given the extent 

of cooperation among a limited number of carriers through a 

network of agreements, the Commission closely monitors the 

carriers’ activities in this trade. As competitive conditions

in the trade have improved, the Commission terminated a 

previously issued Section 15 Order in June 2013. The Order 

was issued in 2009 to require additional reporting information 

from the agreement carriers to help the Commission assess the 

impact of carrier activities on competition in the trade

D. Indian Subcontinent and The Middle East

The growth rate of U.S. container trade with the India

Subcontinent (exports and imports combined) was flat 

at 1 percent. Exports from the U.S. to the Subcontine

increased by 1.2 percent. U.S. imports from the Subcontin

increased by 0.9 percent. U.S. container trade with 

Middle East similarly grew by 1 percent. U.S. imports we

up 2.6 percent over 2012 levels and U.S. exports increas

by only 0.5 percent. In this region, TSA is the rate discussio

agreement covering part of the U.S. outbound containe

trade. Its geographic scope covers U.S. exports to the Indi

Subcontinent countries of Bangladesh, Pakistan, and Sri Lanka, 

but not to India or to the Middle East. TSA’s market share for
Developments 

in Major Trades

18

exports to Bangladesh, Pakistan, and Sri Lanka was 16 percent

No major rate discussion agreement covers U.S. exports to o

imports from the Middle East

U.S. container imports from the region essentiall

remained flat at 678,000 TEUs from the Indian Subcontinent 

and 170,500 TEUs from the Middle East. The U.S. total tra

(imports and exports) was approximately 1.1 million TEUs with

the Indian Subcontinent and 786,000 TEUs with the Middle 

East

The TSA is the only rate discussion agreement covering 

U.S. inbound container movements from the India

Subcontinent countries of Bangladesh, Pakistan and Sri Lanka.

TSA had roughly 87 percent market share of U.S. imports fro

the countries of Bangladesh, Pakistan, and Sri Lanka

E. North Europe

During the fiscal year, U.S. container trade with North 

Europe (imports and exports together) increased by 2 percent 

compared to the preceding fiscal year. Vessel capacity in 

the trade increased by nearly 3 percent in each direction 

in comparison to the preceding fiscal year, and the average 

vessel utilization was reported to have been 78 percent in the 

outbound direction and 92 percent in the inbound direction

There were a number of service changes in the 

transatlantic trade. Most notably, Zim Integrated Shipping

Services, Ltd. (Zim) exited the trade  Zim discontinue

participating in the Atlantic Express (ATX) service by removing 

its vessel and withdrawing from the Grand Alliance/ZIM/HSDG 

Atlantic Space Charter Agreement. Orient Overseas Container

Line (OOCL), as a member of the Grand Alliance, replaced the 

vessel that Zim removed and continued to operate the ATX 

service with Hamburg Sud. In addition, a new service was
Developments 

in Major Trades

19

introduced into the U.S. market by MSC in conjunction wit

Compania Sud Americana De Vapores, S.A. (CSAV) under th

MSC/CSAV Ecuador-North Europe Vessel Sharing Agreement.

In this agreement, MSC and CSAV expanded their weekly 

loop service between ports in Ecuador, Panama, and North 

Europe by adding U.S. port calls in the South Atlantic regio

CMA CGM and Compagnie Maritime Marfret S.A. (Marfret

added vessel capacity to the trade by increasing the service 

frequency of their pendulum service from fortnightly to weekly 

calls at ports between Australia/Oceania, Columbia, Panama, 

the U.S., and North Europ.  The carriers operated t

pendulum service under the CMA CGM/Marfret Vessel Sharing 

Agreement. In other agreement activity, Maersk Line and

CMA CGM entered into separate agreements to charter vessel 

space from APL Co. Pte Ltd., on the Americas Europe Expres

(AEE) service operated by members of the New World Alliance.

Under its agreement, CMA CGM also supplies APL with vessel 

space on its Amerigo service in the Mediterranean trade

F. Mediterranean

There were several major service changes in the 

Mediterranean trade during the fiscal year. In March, members 

of the Grand Alliance and the New World Alliance combined 

and reconfigured their services between the U.S. Atlantic 

Coast and Asia under the G6 Alliance Agreement (G6). Two

of the G6 services that transit the Suez Canal, the Asia Suez 

Express (AZX) and the South China Vietnam Express (SVS), 

now also call at South Europe ports on the Mediterranean.

Evergreen Line participates in the SVS service under the G6/

ELJSA Slot Exchange Agreement, and Zim charters space on 

the AZX service under the G6/Zim Transpacific Vessel Sharing 

Agreement. Zim also entered into a new reciprocal space

charter agreement with COSCO Container Lines Co. Lt

(COSCO), the COSCO/Zim Slot Charter Agreement. Under this
Developments 

in Major Trades

20

agreement, Zim charters vessel space from COSCO between 

the U.S. and China, and COSCO charters space between th

U.S. and Mediterranean on the Zim Container Atlantic (ZCA

service. Maersk Line discontinued its dedicated West-Med

service that it operated with CMA CGM under the CMA CGM/

Maersk Line Space Charter, Sailing Cooperative Working 

Agreement. To service the trade, Maersk Line upgraded and

added port calls in South Europe to its Middle East Container 

Line, MECL 1 and 2. CMA CGM entered into a vessel sharing

arrangement with Hapag Lloyd to continue its Amerigo service 

in the trade under the CMA CGM/HLAG U.S.-West Med Vessel 

Sharing and Slot Exchange Agreement. By the end of the

fiscal year, vessel capacity in trade had increased by about 10 

percent in each trade direction

G. Africa

Cargo volumes between the U.S. and Africa increased 

percent during the fiscal year. The increase in cargo volumes 

included a 0.5 percent increase in U.S. exports to Africa 

321,193 TEUs. Imports from Africa increased about 7 percent

from the previous fiscal year to nearly 101,500 TEUs. The top 

commodities exported to Africa included automobiles, grocery 

products, fresh and frozen poultry, and auto parts. The top

container commodities imported from Africa included cocoa 

beans, apparel, and aluminum (wire, bars, and sheets)

The Republic of South Africa dominates the U.S. line

trade with Africa, accounting for approximately 24 percent 

of the overall container volume and 43 percent of imported 

containers from the continent. Nigeria is the United States’

second largest trading partner in the region, with 13 percent 

of container volumes, and Ghana is third with almost 10 

percent
Developments 

in Major Trades

21

H. Central America and The Caribbean

U.S. export cargo to Central America increased 2 percen

to 597,300 TEUs and U.S. import cargo increased 8 percent t

781,400 TEUs during the fiscal year. Waste paper accounted 

for the largest share of U.S. containerized exports at 13

percent. The second largest export commodity category was

fabrics, yarns, and raw cotton accounting for 8.9 percent

Grocery products accounted for about 6 percent and used 

automobiles and apparel accounted for about 5 percent 

each. On the import side, fresh fruit made up 56 percent

of all imports from the region. Almost three quarters of 

the fresh fruit imported consisted of bananas. The second

largest commodity imported from this region was clothing and 

apparel, with nearly 15 percent of the total

Five of the largest regional carriers in the U.S./Centra

America trade participated in the Central America Discussion 

Agreement (CADA): Seaboard Marine, Crowley Liner Services, 

King Ocean, Dole Ocean Cargo Express, and Great White Fleet.

The combined market share of CADA members was 62 percent 

for exports and 70 percent for imports.

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

U.S. exports, mainly of food, consumer goods, an

manufactured products, decreased 5 percent to 462,000 TEUs

Imports to the U.S. increased by 5 percent to 169,700 TE

 Carriers in the U.S./Caribbean trade participated in fou

rate discussion agreements covering discrete trades: (1) the 

Caribbean Shipowners Association; (2) the Florida-Bahamas 

Shipowners and Operators Association; (3) the Aruba Bonaire 

and Curacao Discussion Agreement; and (4) the Bermuda 

Discussion Agreement
Developments 

in Major Trades

22

I. South America

Containerized trade with South America (exports and 

imports combined) was nearly 1.9 million TEUs during the

fiscal year, a 2 percent increase over the previous fiscal year. 

The South America region is generally divided between 

the west coast and east coast of the continent. Just over 50 

percent of the region’s cargo moved between the U.S. and th

west coast of South America. U.S. export cargo to that coa

grew 2 percent to 476,800 TEUs, and imports from the region 

grew just over 2 percent to 465,900 TEUs. The three largest

U.S. exports to this region included waste paper, syntheti

resins, and general merchandise cargo. On the U.S. impo

side, fresh fruit, still wines, and fresh vegetables were the top 

commodities moving in the trade

Most of the carriers providing direct service to the 

west coast of South America are members of the West 

Coast of South America Discussion Agreement (WCSADA)

Membership during the fiscal year remained unchanged and 

consists of seven regional carriers (Seaboard Marine, Trinity 

Shipping, Ecuadorian Line, Frontier Liner Services, King 

Ocean, Compania Chileana de Navegacion Interoceanica, and 

Interocean Lines) and three global carriers (Hamburg Sud, 

CSAV, and CMA CGM). Peru was dropped from the geographic

scope due to expectations of a change in Peru’s competition 

law.

The combined market share for WCSADA members was 

46 percent for the outbound direction and 31 percent for 

the inbound direction. The U.S. inbound trade includes fo

carriers that are not members of WCSADA (i.e., Dole Ocea

Cargo Express, Great White Fleet, Network Shipping, and 

Banacol Colombia) that mainly transport proprietary cargo, 

consisting of fresh fruits and vegetables. The agreement also
Developments 

in Major Trades

23

faces competition from global carriers, such as NYK, Maersk 

Line, Evergreen, MOL, Hapag-Lloyd, and Zim. Only NYK

provides a direct service to the U.S. Pacific Coast. The latter 

five carriers serve the trade via transshipment hubs in Panama, 

Mexico, and countries in the Caribbean. Several other regional

carriers compete with WCSADA carriers, including Tropical 

Shipping, Antillean Lines, Isabella Shipping, Industrial Maritime 

Carriers, and West Coast Industrial Express

The trade between the U.S. and the east coast of Sout

America accounted for slightly less than 50 percent of the 

liner cargo in this region. As in past years, no active rate

discussion agreement operated in this trade. U.S. exports 

the east coast of South America remained about the same – 

at about 551,500 TEUs during the fiscal year. The top export 

commodities included auto parts and waste paper. Imports

from the region increased 4 percent to 378,700 TEUs during 

the same period. Top commodities included logs and lumber,

granite, and coffee
24

Foreign Shipping 

Practices

IV. THE FOREIGN SHIPPING PRACTICES ACT OF 

1988

A. In General

The Foreign Shipping Practices Act of 1988, effective 

August 23, 1988, directs the Commission to investigate and 

address adverse conditions affecting U.S. carriers in 

oceanborne trades, when such conditions do not exist for 

foreign carriers in the United States under U.S. law or as 

result of actions by U.S. carriers or others providing maritim

or maritime-related services in the United States

During the fiscal year, the Commission monitored 

potentially unfavorable or discriminatory shipping practices 

by a number of foreign governments. However, no direct FSPA

action was necessary

B. Top Twenty U.S. Liner Cargo Trading 

Partners

Pursuant to the FSPA, the FMC must include in its annual 

report to Congress “a list of the twenty foreign countries 

which generated the largest volume of oceanborne liner cargo 

for the most recent calendar year in bilateral trade with the 

United States,” 46 U.S.C. § 306 (b)(1).

The Journal of Commerce’s Port Import Export Reporting 

Service (PIERS) database was used to derive the Commission’s 

list of top twenty trading partners. The most recent complete

calendar year for which data are available is 2012. Table 1

lists the twenty foreign countries that generated the largest 

volume of oceanborne liner cargo in bilateral trade with the 

United States in 2012. The figures in Table 1 represent each 

country’s total U.S. liner imports and exports combined i

thousands of loaded TEUs
25

Foreign Shipping 

Practices

There was a 2 percent year-to-year increase in liner 

volumes in the United States’ bilateral trade with its top 

twenty trade partners. The membership of the top twenty

list has remained the same, and the top eight countries have 

remained identical, since 2009. Seven trading partners in the

top twenty had a negative growth rate – South Korea, Taiwan, 

Hong Kong, Brazil, Indonesia, Belgium and Luxembourg, and 

Thailand

Table 1: Top Twenty U.S. Liner Cargo Trading Partners 

(2012)

Rank Country TEUs (000)

1 China (PRC) 10,974

2 Japan 1,484

3 South Korea 1,329

4 Taiwan (ROC) 1,107

5 Hong Kong 1 841

6 Germany 830

7 India 789

8 Vietnam 734

9 Brazil 579

10 Belgium & Luxembourg 562

11 Indonesia 515

12 Italy 503

13 Thailand 477

14 Netherlands 450

15 United Kingdom 409

16 Guatemala 368

17 Malaysia 348

18 Honduras 345

19 Chile 324

20 Australia 323

1

 Although Hong Kong reverted to Chinese control in July 1997, PIERS 

continues to report data separately for Hong Kong because of its status as a 

major transshipment center
26

Significant 

Activities

V. SIGNIFICANT ACTIVITIES BY ORGANIZATIONAL 

UNIT

A. Office of the Secretary

The Office of the Secretary serves as the focal point for 

matters submitted to and emanating from the Commission. It

is the public’s main contact point with the FMC. The Office 

receives and processes a variety of documents filed by the 

public, including all filings in adjudicative and administrative 

proceedings

The OS is responsible for conducting business under 

and ensuring compliance with the Freedom of Information, 

Government in the Sunshine, and Privacy Acts. Among a

myriad of public information functions, the office maintains a 

public reference/law library, a docket activity library, and the 

Commission’s historical decisions; oversees the maintenance, 

organization, and content of the Commission’s website; and 

serves as the Commission’s public information/press office. 

During the fiscal year, the OS continued to administratively 

process and direct all filings addressed to the Commission 

and its component offices, including agreements filed under 

Section 5 of the Shipping Act. The office also issued 44 

orders and notices in docketed proceedings on behalf of the 

Commission

The OS enhanced the Commission’s website with new 

communication features that engage the public on the most 

recent Commission and industry developments. Website

content organization was significantly improved to render a 

more citizen-centered platform. Some of the improvements

made included: the launch of USASearch as our primary 

search engine; adding our Twitter feed to the homepage 

and increased twitter interactions; reorganization and 

consolidation of navigation to reflect the public’s usage of 
27

Activities

Significant 

the website; and new pages to highlight important content 

relating to our mission including posting public comments 

on agreements and a new page consolidating upcoming 

events. The website also supports the goals of the agency’s

Plain Writing Act of 2010 Plan and the President’s directive 

that government should be transparent, participatory, and 

collaborative. The office worked with other Commission 

components to publish alerts warning consumers of complaints 

received about certain household goods movers, and providing 

updates on the operational status of international cruises.

The process of electronically scanning/imaging Commission 

records is an integral function of the office which supports 

preservation of and staff access to Commission documents, 

and supports the agency’s Continuity of Operations (COOP) 

and disaster recovery. The OS continued to digitize and post

to the FMC’s website, current and historical Commission 

records which facilitates public access to and transparency 

of Commission activities. The OS also implemented new

agency-wide procedures and provided additional training to 

staff designed to improve FOIA processing time; continued to 

lead an agency-wide team to review the Commission’s Rules 

of Practice and Procedure and revised its rules concerning 

appearance and practice before the Commission, and parties 

to proceedings and rulemaking. The OS also conducted an

agency-wide System of Record (SOR) review of existing FMC 

data systems and any proposed systems for compliance with 

the Privacy Act. Twenty-seven systems were reviewed and

updated, with new notices prepared for 5 new data systems. In

addition, the OS modernized the Commission’s procedures for 

publication of documents in the Federal Register
28

Significant 

Activities

B. Office of the Administrative Law Judges

Under the direction and management of the Chief 

Administrative Law Judge, the Office of Administrative Law 

Judges holds hearings and renders initial or recommended 

decisions in formal rulemaking and adjudicatory proceedings 

as provided by the Shipping Act, and other applicable laws and 

other matters assigned by the Commission, in accordance with 

the Administrative Procedure Act and the Commission’s Rules 

of Practice and Procedure

The OALJ has the authority to administer oaths and 

affirmations; issue subpoenas; rule upon offers of proof and 

receive relevant evidence; take or cause depositions to be 

taken; regulate the course of the hearing; hold conferences 

for the settlement or simplification of the issues by consent 

of the parties; dispose of procedural requests or similar 

matters; make decisions or recommend decisions; and take 

any other action authorized by agency rule consistent with the 

Administrative Procedure Act

At the beginning of the fiscal year, 14 formal proceedings 

were pending before the OALJ. Seven new formal proceedings 

were added and two formal proceedings were remanded by 

the Commission. OALJ issued 14 initial decisions or orders 

subject to review by the Commission in 12 proceedings; initial 

decisions resolving 8 contested proceedings; initial decisions 

on default in 2 proceedings; 2 orders granting dismissal against 

individual respondents in 1 proceeding; and initial decisions 

approving settlements in 2 proceedings. The Secretary issued

a notice of voluntary dismissal in 1 proceeding
29

Activities

Significant 

1. Final Action by the Office of Administrative Law 

Judges and subsequent Commission action.

EuroUSA Shipping, Inc., Tober Group, Inc., and Container 

Innovations Inc. – Possible Violations of Section 10 of the 

Shipping Act of 1984 and the Commission’s Regulations at 46 

C.F.R. § 515.27 [Docket No. 06-06]

On May 11, 2006, the Commission issued an Order of 

Investigation and Hearing to determine whether respondents, 

three NVOCCs licensed by the Commission, violated Section 

10(b)(11) of the Shipping Act in their dealings with OTIs that 

did not have bonds and/or tariffs pursuant to requirements of 

the Shipping Act and to determine whether Tober Group, Inc.,

violated Section 10(b)(2)(a) by providing service in the liner 

trade that was not in accordance with the rates and charges 

contained in a published tariff. On December 31, 2012, the

administrative law judge issued an initial decision on remand 

on the investigation against Tober finding that it did not violate 

Section 10(b)(11) and did violate Section 10(b)(2)(a) on 279 

shipments. The decision imposed a civil penalty of $433,00

On March 20, 2013, BOE filed exceptions to the initial decision.

On September 10, 2013, a majority of the Commission 

issued an Order Affirming in Part, Reversing in Part, and 

Vacating in Part Initial Decision on Remand, in which it 

concluded that Tober violated Sections 10(b)(11) and 

10(b)(2)(a) of the Shipping Act, and the Commission’s 

regulations at 46 C.F.R 515.27, by knowingly and willful

accepting cargo from, or transporting cargo for, the account 

of an entity acting as an OTI without a tariff or bond, and by 

providing service in the liner trade that was not in accordance 

with rates and charges in a published tariff. The Commission

ordered Tober to remit $1.5 million as a civil penalty for 255

violations of Section 10(b)(11), and 279 knowing and willful 

violations of Section 10(b)(2)(a) of the Shipping Act. The

Commission also ordered that the proceeding be discontinued
30

Significant 

Activities

Parks International Shipping, Inc., Cargo Express International 

Shipping, Inc., Bronx Barrels & Shipping Supplies Shipping 

Center, Inc., and Ainsley Lewis a.k.a. Jim Parks – Possible 

Violations of Sections 8(a) and 19 of the Shipping Act of 

1984, as well as the Commission’s Regulations at 46 C.F.R. 

Parts 515 and 520 [Docket No. 06-09]

On September 19, 2006, the Commission issued an 

Order of Investigation and Hearing to determine whether 

respondents violated Section 8 of the Shipping Act by 

operating as NVOCCs without publishing tariffs showing rates 

and charges, and Sections 19(a) and (b) by operating as OTIs 

without obtaining a license from the Commission and without 

providing proof of financial responsibility in the form of surety 

bonds. An initial decision dated February 5, 2010, dismissed

claims against respondents Bronx Barrels and Ainsley Lewis.

BOE did not pursue claims against them on remand. On

December 31, 2012, the Administrative Law Judge (ALJ) issued 

an initial decision on remand finding that respondents Parks 

International and Cargo Express violated Sections 8 and 19 

and imposed civil penalties of $18,000 on Parks International 

and $388,000 on Cargo Express. On February 26, 2013, BOE

filed exceptions to the initial decision. The Commission 

issued a final decision September 16, 2013, affirming the 

Initial Decision in part, and reversing in part. The Commission

imposed civil penalties in the amount of $484,000 against the 

two remaining respondents

Anderson International Transport and Owen Anderson – 

Possible Violations of Sections 8(a) and 19 of the Shipping 

Act of 1984 [Docket No. 07-02]

On March 22, 2007, the Commission issued an Order of 

Investigation and Hearing to determine whether respondents 

violated Section 8 of the Shipping Act by operating as an 

NVOCC without publishing tariffs showing rates and charges, 
31

Activities

Significant 

and Sections 19(a) and (b) by operating as an OTI without 

obtaining a license from the Commission and without providing 

proof of financial responsibility in the form of surety bonds. 

On December 31, 2012, the ALJ issued an initial decision on 

remand finding that respondents operated as an OTI without 

a license and bond, but had not operated as an NVOCC. The

decision imposed a civil penalty of $40,500 and entered a 

cease and desist order.

On June 25, 2013, the Commission issued an Order 

Affirming in Part, Reversing in Part, and Vacating in Part 

Initial Decision on Remand. In its Order, the Commission

concluded that respondents violated Sections 8 and 19 of the 

Shipping Act, and the Commission’s regulations at 46 C.F.

515.3, 515.21, and 520.3, by operating as an OTI in the

trades without obtaining a license from the Commission, 

without providing proof of financial responsibility, and without 

publishing tariffs. The Commission ordered respondents to pay

a civil penalty of $132,000 for 22 knowing and willful violations 

of the Shipping Act; cease and desist from holding out or 

operating as an OTI in the U.S. foreign trades until and unles

a license is issued by the Commission and respondents publish 

a tariff and obtain a bond; that respondent Owen Anderson 

cease and desist from working in any capacity for any entity 

providing OTI services in the foreign commerce of the U.

for a period of one year; and that Owen Anderson cease and 

desist from serving as investor, owner, shareholder, officer, 

manager or administrator in any entity engaged in providing 

OTI services for five years. The Commission also ordered that 

this proceeding be discontinued
32

Significant 

Activities

Mitsui O.S.K. Lines Ltd. v. Global Link Logistics, Inc., Olympus 

Partners, L.P., Olympus Growth Fund III, L.P., Olympus 

Executive Fund, L.P., Louis J. Mischianti, David Cardenas, 

Keith Heffernan, CJR World Enterprises, Inc. and Chad J. 

Rosenberg [Docket No. 09-01]

On May 5, 2009, Mitsui filed a complaint alleging that 

Global Link, a licensed NVOCC, violated Sections 10(a)(1) and 

10(d)(1) by engaging in a practice it called “split routing” 

on multimodal shipments by issuing a bill of lading to a land 

carrier in the U.S. directing shipments to a destination othe

than the destination on the Mitsui through bill of lading.

Mitsui alleged that as a result, Global Link used an unjust or 

unfair device or means to obtain ocean transportation for 

property at less than the rates or charges that would otherwise 

apply. Mitsui alleged that the other parties, owners of Global

Link at the time it engaged in the practice, were also liable.

Global Link filed cross claims against the other respondents. 

On July 9, 2013, the ALJ issued an initial decision finding 

that Mitsui knew about the split routing practice. Therefore,

Global Link had not used an unfair device or means to obtain 

the lower rates. The cross claims were dismissed. On July 

31, 2013, Mitsui filed exceptions to the initial decision and the 

proceeding is currently pending before the Commission

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

City of Oakland, Acting by and Through its Board of Port 

Commissioners [Docket No. 09-08]

On December 16, 2009, Complainants SSA Terminals, 

LLC and SSA Terminals (Oakland), LLC filed a complaint 

alleging that they suffered actual injury when Respondent, 

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

Commissioners (hereinafter “the Port”), violated the Shipping 

Act (46 U.S.C. §§ 41106(2) and (3) and 41102(c)) by: (1) 

imposing an undue or unreasonable prejudice or disadvantage 
33

Activities

Significant 

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

unreasonable preference or advantage to an unrelated nonparty; (3) refusing to deal or negotiate with the complainants; 

and (4) failing to establish, observe, and enforce just and 

reasonable regulations and practices relating to or connected 

with receiving, handling, and storing or delivering property.

On November 8, 2010, the ALJ issued an Order denying a 

motion to dismiss on Eleventh Amendment sovereign immunity 

grounds. On December 13, 2011, the Commission affirmed this 

ruling and on July 26, 2013, the District of Columbia Circuit 

denied respondents’ petition for review. On August 20, 2013,

the Secretary issued a notice that the parties jointly filed a 

voluntary dismissal pursuant to Commission Rule 72. On the

same date, the Commission issued a notice to review the 

dismissal. On September 3, 2013, the Commission ordered

the parties to file their settlement agreement and ordered 

the ALJ to issue an initial decision reviewing the settlement. 

On September 23, 2013, the ALJ issued an initial decision 

approving the settlement. The proceeding is currently pending

before the Commission

Marine Repair Services of Maryland, Inc. v. Ports America 

Chesapeake, LLC [Docket No. 11-11]

On July 11, 2011, Marine Repair Services of Maryland, 

Inc., filed a complaint alleging that Ports America Chesapeake, 

L.L.C. violated Section 10(d)(4) of the Shipping Act 

giving undue and unreasonable preference to itself and to 

Multimarine Services, Inc., with regard to the performance

of maintenance and repair work on containers and chassis 

and on refrigerated containers at Seagirt Marine Terminal and 

Dundalk Marine Terminal in the Port of Baltimore. Marine

Repair Services further alleged that Ports America Chesapeake 

acted in violation of Section 10(d)(3) by unreasonably refusing 

to deal and negotiate with regard to the performance of 

maintenance and repair work at Seagirt and Dundalk. On
34

Significant 

Activities

January 10, 2013, the administrative law judge issued an 

initial decision dismissing the complaint. On March 20, 2013,

the Commission served a notice not to review

OC International Freight, Inc.; OMJ International Freight, 

Inc.; and Omar Collado [Docket No. 12-01]

On April 2, 2012, the Commission issued an Order of 

Investigation and Hearing to determine whether respondents 

knowingly and willfully obtained ocean transportation at less 

than the rates and charges that would otherwise be applicable 

by permitting unrelated entities to unlawfully access OMJ’s 

service contracts; operated as an ocean transportation 

intermediary without a license and bond; and whether to 

affirm the denial of the application of OC for an OTI license. 

On March 26, 2013, the ALJ issued an initial decision finding 

violations of Section 19 but finding no violation of Section 

10(a)(1). On July 22, 2013, the Commission issued an Order 

Remanding for Further Proceedings. The Commission affirmed 

the Section 19 violations, the issuance of a cease and desist 

order, and denial of OC’s license application. The Commission

vacated the determination that respondents did not violate 

Section 10(a)(1) and the civil penalty.

The Auction Block Company, an Alaska Corporation, and 

Harbor Leasing, LLC, an Alaska Limited Liability Company v. 

the City of Homer, a Municipal Corporation, and its Port of 

Homer [Docket No. 12-03]

On April 2, 2012, The Auction Block Company and Harbor 

Leasing, LLC, filed a complaint against The City of Homer 

and its Port of Homer alleging that the City and Port are 

marine terminal operators that violated the Shipping Act 

by unreasonable prejudice or preference, refusal to deal, 

and unfair practices. On May 20, 2013, the administrative

law judge issued an initial decision dismissing the complaint 

and finding that the complaint exceeds the jurisdiction 
35

Activities

Significant 

of the Commission. Complainants filed exceptions to the 

decision and the proceeding is currently pending before the 

Commission

Shipco Transport Inc. v. Jem Logistics, Inc., and Andi 

Georgescu, an Individual and d/b/a Jem Logistics, Inc. 

[Docket No. 12-06)

On April 18, 2012, Shipco filed a complaint alleging that 

respondents violated Sections 8 and 19 of the Shipping Act by 

operating as an ocean transportation intermediary without 

a license, bond, or tariff and violated Section 10(a)(1) by 

knowingly obtaining ocean transportation at less than the rates 

and charges that would otherwise be applicable. Respondents

did not answer or otherwise respond to the complaint and 

did not respond to an order to show cause why a decision on 

default should not be entered. On March 26, 2013, the ALJ 

issued an initial decision on default finding that respondents 

violated Sections 8, 19, and 10(a)(1). Respondents were

ordered to cease and desist operating as an OTI without a 

license, bond, and tariff and to pay a reparation award of 

$8,050 for actual injuries caused by the violation of Section 

10(a)(1). On April 4, 2013, respondents filed an answer to the 

complaint that the Secretary construed as a motion to vacate 

the initial decision addressed to the Commission. On August

21, 2013, the Commission affirmed the initial decision.

Century Metal Recycling Pvt. Ltd. v. Dacon Logistics, LLC 

d/b/a Coda Forwarding; Great American Alliance Insurance 

Company; Avalon Risk Management; Hapag-Lloyd America, 

Inc.; and Mitsui OSK Lines [Docket No. 12-09]

On October 19, 2012, Century Metal filed a complaint 

alleging that respondents violated Section 10(d)(1) of the 

Shipping Act, 46 U.S.C. § 41102(c). All respondents but Dacon 

settled or were dismissed from the case. Dacon failed to

answer or otherwise respond to the complaint and did not 
36

Significant 

Activities

respond to an order to show cause why an initial decision 

on default should not be entered. On June 20, 2013, the 

ALJ entered an initial decision on default finding that Dacon 

violated Section 10(d)(1) when it failed to pay ocean freight 

to the vessel-operating common carriers that transported 

30 contains of scrap metal to India. The decision ordered

a reparation award in the amount of $323,663.71. On July 

16, 2013, the Commission issued a notice of Commission 

determination to review and the proceeding is currently 

pending before the Commission

Lisa Anne Cornell and G. Ware Cornell, Jr. v. Princess Cruise 

Lines, Ltd. (Corp), Carnival plc, and Carnival Corporation 

[Docket No. 13-02]

On January 30, 2013, complainants filed a complaint 

alleging that respondent cruise ship lines refused to permit 

them to sail on their cruise ships in violation of Section 

10(b)(10) of the Shipping Act, 46 U.S.C. § 41104(10). The 

controversy stemmed from a dispute over a refund of money 

paid to a fine arts auction company that operates on the 

cruise ships after Lisa Cornell cancelled a purchase of works of 

art. Complainants had been involved in litigation for several

years in Florida courts with the auction company, an affiliate 

of the cruise lines. Respondents filed a motion to dismiss or 

alternatively for summary judgment. On July 23, 2013, the 

administrative law judge issued a summary initial decision 

dismissing most claims, but found that respondent Princess 

violated Section 10(b)(10) and entered a cease and desist 

order. The judge found that complainants did not meet their

burden of offering evidence that they had suffered actual 

injury as a result of the violation. On August 14, 2013, both

parties filed exceptions to the decision and the proceeding is 

currently pending before the Commission
37

Activities

Significant 

Seagull Maritime Agencies Private Ltd. v. Gren Automotive, 

Inc.; Centrus Automotive Distributers Inc.; and Liu Shao, 

Individually [Docket No. 13-03]

On February 22, 2013, Seagull Maritime, an NVOCC, filed 

a complaint alleging that respondent shippers violated Section 

10(a)(1) of the Shipping Act, 46 U.S.C. § 41102(a), by not 

paying freight and other charges due Seagull Maritime. On

July 8, 2013, the Secretary served a notice that the parties 

jointly filed a voluntary dismissal pursuant to Commission 

Rule 72. On August 7, 2013, the Commission issued a notice

that it intended to review the dismissal, and on August 16, 

2013, ordered the parties to file any settlement papers 

memorializing the settlement and remanded the proceeding 

to the ALJ. On September 4, 2013, the administrative law 

judge issued an initial decision approving the settlement.

On October 22, 2013, the Commission served a notice not to 

review.

2. Pending Proceedings

At the end of the fiscal year, 11 formal proceedings were 

pending before the OALJ. 

C. Office of the General Counsel 

The Office of 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, OGC provides written and oral

legal opinions to the Commission, its staff, and the general 

public in appropriate cases. As described in more detail

below, the General Counsel also represents the Commission 

before courts and Congress, and administers the Commission’s 

international affairs program. The OGC has delegated
38

Significant 

Activities

authority to make determination of controlled carrier status.

Also, the FMC’s ethics official is designated by the Chairman as 

a collateral duty and located in the OGC

1. Rulemakings and Decisions 

The following are rulemakings and adjudications 

representative of matters prepared by the OGC: 

NVOCC Negotiated Rate Arrangements [Docket 11-22], 32 

S.R.R. 350 

On March 2, 2011, the Commission issued a final rule, 

promulgating 46 C.F.R part 532, regulations which gover

the exemption of licensed NVOCCs from their tariff rate 

publication obligations when entering into a “negotiated rate 

arrangement” (NRA). Commission Docket No. 10-03, 76 F

Reg. 11351, effective April 18, 2011

On February 26, 2013, the Commission published a 

Notice of Proposed Rulemaking to extend the NRA exemption 

to foreign-based unlicensed NVOCCs. 78 Fed. Reg. 13

The Commission received six comments. A Final Rule was

issued on July 12, 2013 revising Commission rules imposing 

registration requirements on foreign-based unlicensed NVOCCs 

and extending an exemption from certain provisions and 

requirements of the Shipping Act and Commission regulations 

to foreign-based unlicensed NVOCCs that utilize negotiated 

rate arrangements

EuroUSA Shipping, Inc., Tober Group, Inc., and Container 

Innovations, Inc. – Possible Violations of Section 10 of the 

Shipping Act of 1984 and the Commission’s Regulations at 

46 C.F.R § 515.27 [Docket No. 06-06], 32 S.R.R. 578; Parks 

International Shipping Inc., Cargo Express International 

Shipping Inc., et al. – Possible Violations of Sections 8(a) 

of the Shipping Act and the Commission’s Regulations at 

46 C.F.R., parts 515 and 520 [Docket No. 06-09], 31 S.R.R. 
39

Activities

Significant 

1166 ; Anderson International Transport and Owen Anderson 

– Possible Violations of Sections 8(a) and 19 of the Shipping 

Act [Docket No. 07-02], 32 S.R.R. 568, 32 S.R.R. 1678.

As described in the previous OALJ section, the Commission 

decided a series of cases alleging violations by various 

household goods movers, imposing civil penalties and cease 

and desist orders

Smart Garments v. Worldlink Logistics Services, Inc., 33 S.R.R. 

65 (FMC 2013); Bimsha International v. Chief Cargo Services, 

Inc. and Kaiser Apparel. Inc., 32 S.R.R. 1861 (FMC 2013); 

Yakov Kobel and Victor Berkov v. Hapag-Lloyd A.G., HapagLloyd America, Inc., Limco Logistics, Inc., International TLC, 

Inc., 32 S.R.R. 1720 (FMC 2013).

This year the Commission decided a series of cases that 

clarified the scope of Section 10(d)(1) of the Shipping Act 

to include violations of the Shipping Act where a regulated 

entity fails in a single instance to observe and enforce just and 

reasonable practices

2. Litigation

The General Counsel represents the Commission in 

litigation before courts and other administrative agencies.

Although the litigation work largely consists of representing 

the Commission upon petitions for review of its orders filed 

with the U.S. Courts of Appeals, the OGC also participates i

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:
40

Significant 

Activities

City of Oakland v. Federal Maritime Commission, United 

States Court of Appeals for the District of Columbia Circuit, 

Case No. 12-1080

On February 9, 2012, the City of Oakland filed a petition 

for review of the Commission’s Order in FMC Docket 09-08, SSA 

Terminals, LLC, et al. v. The City of Oakland, upholding th

ALJ’s denial of its motion to dismiss on the ground of Eleventh 

Amendment sovereign immunity. On March 26, 2012, the FMC

filed the certified index to the record. The court granted 

SSA Terminals’ Motion to Intervene on March 29, 2012. The

Commission filed its brief July 5, 2012, and on July 18, 2012 

the Intervenor filed its brief. The Commission filed its Final 

Brief on August 24, 2012. Oral argument was held on April 9,

2013. On July 26, 2013, the Court entered an Opinion and 

Judgment in favor of the Commission, and denying the petition 

for review

3. Legislative Activities

The OGC represents the Commission’s interests in all 

matters before Congress. The OGC reviewed and commented

on 117 bills, proposals, and congressional inquiries. On 

January 1, 2013, the Senate Committee on Commerce, 

Science and Transportation confirmed a Presidential nominee 

that OGC prepared for such confirmation. OGC prepared 

and coordinated testimony for the agency’s fiscal year 

2014 budget authorization hearing held before the U.

House of Representatives’ Committee on Transportation 

and Infrastructure’s Subcommittee on Coast Guard and 

Maritime Transportation. In addition, OGC helped prepare

the Commission’s Chairman for the House Subcommittee on 

Coast Guard and Maritime Transportation hearing regarding 

regulatory review, on September 10, 2013.
41

Activities

Significant 

4. Foreign Shipping Restrictions and International Affairs

The OGC is responsible for the administration of the 

Commission’s international affairs program. The OGC monitors

potentially restrictive foreign shipping laws and practices, and 

makes recommendations to the Commission for investigating 

and addressing such practices. The Commission has the

authority to address restrictive foreign shipping practices 

under Section 19 of the Merchant Marine Act of 1920 and the 

Foreign Shipping Practices Act of 1988. Section 19 empowers

the Commission to make rules and regulations governing 

shipping in the foreign trade to adjust or meet conditions 

unfavorable to shipping. The FSPA directs the Commission to

address adverse conditions that affect U.S. carriers in foreig

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

The OGC pursued informally several matters involving 

potentially restrictive foreign practices. This included

legislation, interpretations of existing legislation, and 

regulations of non-domestic carriers’ terminal handling 

charges. OGC also finalized a requested change by the Ministry 

of Transport of the People’s Republic of China to revise the 

FMC’s rules implementing a US-PRC bilateral understanding 

addressing the ability of U.S. NVOCCs to do business in Chin

The OGC advised the Commission on developments relating 

to the application of the People’s Republic of China’s new 

regulations implementating a nationwide value-added-tax 

on international transportation services. The OGC served as

a technical adviser to the U.S. delegation regarding Chines

requirements for rate-filing and related issues at the 6th 

U.S.-People’s Republic of China Consultations on the Maritim

Bilateral Agreement held in Hangzhou, People’s Republic of 

China in November 2012. At the end of the fiscal year, the 

OGC prepared background information for Commissioner 
42

Significant 

Activities

Doyle’s participation in the 7th U.S.-People’s Republic of Chin

Consultations on the Maritime Bilateral Agreement held in 

Chicago, Illinois in November 2013

 Another responsibility of the OGC is the classification of 

controlled carriers subject to Section 9 of the Shipping Act.

Common carriers that are owned or controlled by foreign 

governments are required to adhere to certain requirements 

under the Shipping Act, and their rates are subject to 

Commission review. The OGC investigates and makes

appropriate recommendations to the Commission regarding 

the status of potential controlled carriers. The OGC, in

conjunction with other Commission components, also monitors 

the shipping activities of controlled carriers. The OGC last

republished this list of Controlled Carriers on August 22, 2012, 

77 Fed. Reg. 51801 (August 22, 2012). A current list is fou

below in this report

The OGC continued to take the lead in accomplishing the 

agency’s performance goals relating to eliminating restrictions 

that unjustly disadvantage U.S. interest.  OGC monito

foreign laws and practices to determine whether there are any 

unjust non-market barriers to trade. Where appropriate, the

OGC recommends Commission action

D. Office of Equal Employment Opportunity

The FMC Office of Equal Employment Opportunity (EEO) 

Program follows federal EEO and personnel management laws, 

concepts, procedures and regulations to develop, implement, 

and manage a comprehensive program of equal employment 

opportunity. The program is statutorily mandated with

required activities in complaints processing, adjudication, 

affirmative employment program planning, workforce 

diversity management, special emphasis programs, community 

outreach, monitoring and evaluation.
43

Activities

Significant 

Operational responsibility for compliance with federal 

EEO policies and programs lies with the Commission’s front 

line managers. The Director of EEO works independently

under the direction of the Chairman to provide advice to the 

Commission’s senior staff and management on improving and 

carrying out its policies and program of non-discrimination, 

workforce diversity, and affirmative employment program 

planning

The office works closely with senior management and with 

the Commission’s Office of Human Resources to: (1) monitor 

affirmative employment programs; (2) expand outreach and 

recruitment initiatives; (3) improve the representation, career 

development and retention of women, minorities and persons 

with disabilities; (4) provide adequate career counseling; (5) 

facilitate early resolution of employment-related problems; 

and (6) develop program plans and progress reports

E. Office of the Inspector General

The Inspector General Act of 1978 (IG Act), as amended, 

establishes the responsibilities and duties of an Inspector 

General. The IG Act was amended in the 1980s to increase

the number of agencies with statutory Inspectors General, 

culminating in 1988 with the establishment of numerous 

Inspectors General (IGs) in smaller, independent agencies, 

including the Federal Maritime Commission. Currently,

there are 73 statutory IGs within executive and legislative 

departments and agencies. The mission of the OIG, as

identified in the IG Act, is to:

• Conduct and supervise independent and objective audits 

and investigations relating to agency programs and 

operations
44

Significant 

Activities

• Promote economy, effectiveness and efficiency within the 

agency

• Prevent and detect fraud and abuse in agency programs 

and operations

• Review and make recommendations regarding existing and 

proposed legislation and regulations relating to agency 

programs and operations

• Keep the agency head and Congress informed of problems 

in agency programs and operations

To ensure objectivity, the IG Act empowers independent 

IGs to determine what reviews to perform; to access all 

information deemed by the IG to be relevant to the reviews; 

and to publish findings and recommendations based on the 

reviews. During the fiscal year, the OIG issued the following 

audit reports and evaluations:

Audit Report 

Number

Subject of Audit

A13-01 Audit of FMC’s Transit Benefit Program

A13-02 Evaluation of the FMC’s FY 2012 Privacy and 

Data Protection

A13-03 Evaluation of the FMC’s Compliance with the 

Federal Information Security Management 

Act FY 2012

A13-04 Independent Auditor’s Report of FMC’s FY 

2012 Financial Statements

A13-04A FY 2012 Financial Statement Management 

Letter

In addition to these completed audits and reviews, the OIG 

performed fieldwork on the following: fiscal year 2013 financial 

statement audit; Federal Information Security Management 
45

Activities

Significant 

Act evaluation; an audit of expenditures for furnishing or 

re-decorating Commissioners’ offices; and an audit of FMC’s 

physical security program. The OIG’s audit program was peer

reviewed by another OIG and received a “pass” rating.

The OIG investigations unit received and responded to 

several complaints during the fiscal year. The IG Act provides 

that the IG may receive and investigate complaints or 

information concerning possible allegations of fraud, waste 

and abuse occurring within FMC programs and operations by 

employees or contractors. Matters of possible wrongdoing are

referred to the OIG in the form of allegations or complaints 

from a variety of sources, including FMC employees, other 

government agencies, and the general public

OIG staff also participated in several activities and 

meetings associated with the Council of the Inspectors General 

on Integrity and Efficiency (CIGIE); the Federal Audit Executive 

Council (FAEC); Council of Counsels to the Inspector General 

(CCIG); and the Assistant Inspector General for Investigations 

Committee

F. Office of Consumer Affairs and Dispute 

Resolution Services

The Office of Consumer Affairs and Dispute Resolution 

Services is responsible for developing and implementing the 

Commission’s Alternative Dispute Resolution (ADR) programs.

CADRS provides ombuds and mediation services to assist 

parties in resolving international ocean shipping disputes.

Exporters experiencing cargo shipping problems can contact 

the Commission’s Rapid Response Team, created to quickly 

address cargo export problems. Such services are available

to the shipping public at any stage of a dispute regardless 

of whether litigation has been filed at the Commission (or 
46

Significant 

Activities

another jurisdictional forum) for the purpose of avoiding the 

expense and delay inherent in litigation, and to facilitate the 

flow of U.S. foreign commerce.

CADRS ombuds and Rapid Response Team services 

are available to assist parties involved in ocean shipping 

transactions including: commercial shipments, shipments of 

household goods and personal effects, as well as problems that 

arise between cruise lines and passengers. Typical examples of

complaints handled by CADRS staff in the commercial context 

include situations in which an NVOCC or VOCC has placed a 

hold on cargo in its possession, often for sums owed under 

a different contract of carriage. In such instances, CADRS

works with parties to facilitate timely release of cargo and to 

address the underlying pre-existing dispute. Another example

involves situations where an NVOCC has received cargo from 

its customer and taken payment for the transportation of the 

cargo, but has failed to deliver the cargo. In such matters,

CADRS staff coordinates with the parties to facilitate delivery 

and to avoid additional demurrage/detention/storage 

charges. CADRS often assists household goods shippers

who have unwittingly used unlicensed entities that demand 

additional payment and/or abandon the goods and refuse to 

communicate with the consumer. In these matters, CADRS staff

works with parties to locate and to arrange for delivery of such 

shipments

CADRS also receives a significant number of complaints 

from consumers involving problems with cruise lines. The

most common examples of these complaints are cruise 

cancellations, changes of itinerary, difficulties encountered 

with connecting transportation (i.e., flight cancellations), 

reports of discrepancies in cruise advertising, and problems 

with passenger documentation (i.e., refused boarding due t
47

Activities

Significant 

failure to have appropriate personal identification). CADRS 

facilitates between consumers and the cruise lines to assist in 

resolving disputes arising from such difficulties.

The Commission received 1,211 complaints during the 

fiscal year that resulted in the opening of ombuds cases

These included 229 commercial cargo matters, 857 household 

goods matters, and 116 cruise passenger matters. Commercial

cargo-related complaints continued to become increasingly 

complex and problems resulting from ocean transportation 

intermediaries with overextended finances and inability to 

complete the ocean transportation continued to be an issue.

In addition, passenger complaints about cruise lines, such 

as cancellations due to vessel propulsion system difficulties, 

unannounced cruise changes of itinerary, and difficulties 

involved with missed flights continued to be problematic. 

CADRS mediators provided services in 13 matters, especially 

assisting parties in overcoming obstacles to delivery of 

transported goods

In addition to its ADR services, CADRS Settlement Officers 

adjudicate small claims. involving complaints seeking

reparations up to $50,000 for violations of the statutes within 

the Commission’s jurisdiction. CADRS staff also adjudicate

special docket proceedings in which filers seek to waive or 

refund a portion of ocean freight under the Commission’s 

special docket rules. During fiscal year 2013, CADRS issued 

10 informal docket decisions; and issued 1 special docket 

decision

CADRS continued to reach out to the shipping public 

through educational sessions with shippers, ocean 

transportation intermediaries, vessel operators, port 

authorities, trade associations, and an educational institution

In addition to public outreach, CADRS continued to coordinate 
48

Significant 

Activities

with other federal, local, and state governmental entities to 

combat domestic and international moving fraud through the 

auspices of the FMC-FMCSA MOU

G. Office of the Managing Director 

The Managing Director (MD) serves as the Commission’s 

senior executive responsible for the management and 

coordination of the Commission’s operating bureaus, exercising 

administrative direction or guidance over all units of the 

Commission. In addition to the major operating bureaus, the

MD oversees the Commission’s Area Representatives and all 

administrative offices.

The MD is the Commission’s Chief Operating Officer and 

is responsible to the Chairman for the management and 

coordination of the following:

• Bureau of Certification and Licensing 

• Bureau of Enforcement 

• Bureau of Trade Analysis

• Area Representatives 

• Office of Budget and Finance 

• Office of Human Resources 

• Office of Information Technology

• Office of Management Services 

The MD is responsible for implementing the regulatory 

policies of the Commission, as well as the administrative 

policies and directives of the Chairman

In addition, the MD provides administrative guidance to 

the: 
49

Activities

Significant 

• Office of the Secretary

• Office of General Counsel 

• Office of Consumer Affairs and Dispute Resolution Services

• Office of Administrative Law Judges

and administrative assistance to the:

• Offices of the Commissioners

• Office of the Inspector General 

• Office of Equal Employment Opportunity

The OMD coordinated the development and issuance of 

an Advanced Notice of Proposed Rulemaking for OTIs, the 

issuance of a Final Rule to require registration of all foreignbased NVOCCs involved in U.S. trades and to extend th

NRA tariff exemption to registered foreign OTIs, and a Final 

Rule on Passenger Vessel Operations. Pursuant to an MOU

with the FMCSA, the office continued cooperation to provide 

enhanced protection and assistance for consumers. Th

OMD coordinated activities with other agencies to leverage 

existing government assets. Pursuant to signed MOUs with the

Surface Transportation Board and the Census Bureau, trade 

data was shared. In addition, the OMD oversaw coordination

with Department of Defense agencies and U.S. Agency fo

International Development regarding issues affecting ocean 

transportation

The MD coordinated the development of a long-range 

plan for information technology (IT). The focus of the plan is

to improve internal IT efficiencies through development and 

implementation of an enterprise platform solution that will 

improve data collection, storage and retrieval to support all 

Commission programs, and enhance both internal and external 

interface of Commission electronic systems and databases. An
50

Significant 

Activities

assessment of the agency’s IT program demonstrated the need 

for significant upgrades of existing systems and for disaster 

recovery options. Plans have been developed to make these

needed upgrades as funding is available

1. Area Representatives

The Commission maintains a presence in Southern 

California, South Florida, New Orleans, New York, Houston 

and Seattle through Area Representatives based in each of 

these locales. These representatives serve major ports and

transportation centers within their respective areas and 

beyond. In representing the Commission, ARs act as a conduit

for information to and from the maritime industry and the 

shipping public, resolve complaints and disputes between 

parties involved in international oceanborne shipping (often 

coordinating with CADRS), investigate alleged violations of the 

shipping statutes, and function as an intelligence resource.

They provide advice and guidance to the shipping public, 

collect and analyze information of regulatory significance, and 

assess industry conditions. The ARs frequently cooperate and 

coordinate with other federal, state and local governmental 

agencies and departments, providing shipping expertise and 

information and relaying Commission policy. The ARs inform

the public regarding Commission requirements and services 

through activities such as seminars, participating in various 

conferences and industry events, making presentations, and 

through various local community contacts

During the fiscal year, hundreds of informal complaints 

were handled by the ARs, many of which involved unlawful 

activity. When possible, compliance with statutory and

regulatory requirements was achieved informally. In other 

instances, the ARs conducted investigations to determine 

the extent of unlawful activity, such as unlicensed OTI 

activities, misdescription of commodities by shippers, and 

improper service contract rate application by ocean carriers.
51

Activities

Significant 

Investigative actions by the ARs led to several enforcement 

matters referred to the Bureau of Enforcement for pursuit of 

civil penalties. Investigative activity by the ARs assists the

FMC in ensuring fair competition by all participants in the 

trades to and from the United States

The ARs also made a number of presentations to interested 

industry audiences in their areas, explaining OTI licensing 

requirements and compliance with the new NRA Tariff 

Rate Exemption. ARs worked closely with a number of law

enforcement agencies, including local jurisdictions such as the 

New York City Police Department, New Jersey State Police, and 

Houston Police Department; and federal agencies, including 

the Federal Bureau of Investigation, the U.S. Departmen

of Justice, the Department of Homeland Security including 

CBP and Immigration and Customs Enforcement (ICE), the 

Department of Commerce (DOC) and the FMCSA

ARs continued to provide valuable assistance in 

implementing recommendations of Commission Fact Finding 

Investigation No. 27, Potentially Unlawful, Unfair or Deceptive

Ocean Transportation Practices Related to the Movement 

of Household Goods or Personal Property in U.S.-Foreign 

Oceanborne Trades. The ARs have been actively involved

in reaching out to the public, consumer groups, trade 

associations, and other government agencies in efforts to 

achieve regulatory compliance and protection for the shippers 

of household goods and personal effects

2. Office of Budget and Finance

The Office of Budget and Finance administers the 

Commission’s financial management program and is responsible 

for offering guidance on optimal use of the Commission’s 

fiscal resources. OBF is charged with interpreting government 

budgetary and financial policies and programs, and developing 

annual budget justifications. The office also administers 
52

Significant 

Activities

internal control systems for agency funds, travel, work 

years, and cash management. Additionally, OBF manages the

Commission’s Travel Charge Card Program and administers all 

budget execution functions

In addition to preparing and process a myriad of reports 

and accounts payable documents, OBF collected and deposited 

$3,319,566 to the U.S. Treasury from fines and penalty 

collections, publications, reproductions, and user fees; 

worked with Bureau of Public Debt staff and the Commission’s 

independent auditors regarding the audits of fiscal years’ 2012 

and 2013 financial statements. The Commission received an 

unqualified opinion for 2012 and 2013.

3. Office of Human Resources

The Office of Human Resources administers a 

comprehensive human resources program that is true to merit 

system principles, mission driven, and promotes a diverse 

workforce. Program areas include position management and

classification, policy, recruitment and staffing, workforce 

and training development, workforce planning and analysis, 

performance and awards management, compensation and 

benefits, work/life and employee relations, personnel and 

information security, executive resources, and the Federal 

Employee Viewpoint Survey

In addition to managing various hiring, benefits and 

educational programs, the OHR streamlined human resources 

functions through various human resources information 

systems, including the new electronic employee official 

personnel file, Paycheck 8 time and attendance, electronic 

questionnaires for investigations and enhanced self-service 

personnel actions available online. In addition, OHR

coordinated with other administrative units and the General 

Services Administration’s Managed Service Office on matters 

pertaining to Homeland Security Presidential Directive 12 
53

Activities

Significant 

and the issuance of federal employee credentials, including 

activities to implement physical and logical access provision.

The OHR also administered the Federal Employee Viewpoint 

Survey, analyzed results, prepared interpretation and 

trend analysis, worked with senior leadership to identify 

and reinforce successful activities and develop strategies 

to address areas of improvement, and worked with the 

Partnership for Public Service in connection with metrics and 

utilizing results of the Best Places to Work rankings

4. Office of Information Technology

The Office of Information Technology provides 

management support to the program and administrative 

operations of the Commission with respect to information 

technology (IT), and thus is responsible for ensuring that 

the Commission’s IT program is administered in a manner 

consistent with applicable rules, regulations, and guidelines

During the fiscal year, among the number of reporting 

requirements that are directly related to OIT, it completed 

the technical implementation of the foundation for the FMC 

Enterprise Platform Solution, a data and content management 

platform. This platform is the basis for the modernization

of all FMC applications. The OIT also completed technical

implementation of Pay.gov, which when instituted by the FMC

Bureaus and Offices, will offer the public a new payment 

method through the U.S. Department of the Treasury’

collection service

5. Office of Management Services

The Office of Management Services directs and administers 

a variety of management services functions that principally 

provide administrative support to the regulatory program 

operations of the Commission. The Director of the Office 

serves as the Commission’s Principal Contracting Officer.
54

Significant 

Activities

In conjunction with other administrative offices and 

operational bureaus, OMS negotiated with the agency’s 

physical security contractor to acquire, install and implement 

security enhancements, to include updating and installation of 

additional card readers to access offices and security cameras 

at the agency’s entrances, to monitor staff and guests within 

agency facilities, in accordance with HSPD-12 initiatives.

Due to budgetary constraints, OMS played an active role 

to negotiate the reduction of the agency’s key contracts in 

accordance with sequestration reduction requirements to 

include contracts for legal publications, IT services and/

or database maintenance, IT database updates/expansion, 

headquarter’s office space, and other related services. 

OMS provided guidance and led the agency’s response to 

OMB’s Freeze the Footprint initiative implemented throughout 

the federal government. It also provided guidance, assistance,

and collaborated with the OIT to re-compete the agency’s 

requirement for Wireless Telecommunication Services and 

expand the program for smart-phone use. In addition, OMS

expanded and revised the agency’s procurement program 

policy statement to include recent changes in federal 

regulations and updated acquisition procedures. 

H. Bureau of Certification and Licensing

The Bureau of Certification and Licensing is responsible for 

the Commission’s ocean transportation intermediary licensing 

and registration program and passenger vessel certification 

program. The Bureau

• Licenses, registers and regulates OTIs, including ocean 

freight forwarders and non-vessel-operating common 

carriers;
55

Activities

Significant 

• Issues certificates to owners and operators of passenger 

vessels that have evidenced financial responsibility to 

satisfy liability incurred for nonperformance of voyages or 

for death or injury to passengers and other persons;

• Manages programs assuring financial responsibility of OTIs 

and PVOs, by developing policies and guidelines, and 

analyzing financial instruments and financial reports; and 

• Develops and maintains information systems that support 

the Bureau’s programs and those of other Commission 

entities

1. Licensing of Ocean Transportation Intermediaries

OTIs are transportation middlemen for oceanborne 

cargo moving in the U.S.-foreign trade.  There are t

types: NVOCCs and ocean freight forwarders. NVOCCs are

common carriers that do not operate the vessels by which 

transportation is provided. Ocean freight forwarders in the

U.S. arrange for the transportation of cargo with a commo

carrier on behalf of shippers and process documents related to 

those shipments. Both NVOCCs and OFFs must be licensed by

the Commission if they are located in the U.S  NVOCCs doin

business in the U.S.-foreign trades but located outside th

U.S. (foreign NVOCCs) may choose to become licensed, but ar

not required to do so. If not licensed, foreign-based NVOCCs 

must register with the Commission and establish financial 

responsibility. All NVOCCs, whether licensed or registered,

must publish electronic tariffs that contain the NVOCC’s rates, 

charges, rules, and practices

If an OTI is a licensed NVOCC, it must file a Form FMC-1 

and publish a tariff. Prior to July 19, 2013, non-U.S. based 

NVOCCs that did not wish to be licensed had to provide the 

Commission with proof of financial responsibility in the amount 

of $150,000, file a Form FMC-1, and publish a tariff. A foreign-
56

Significant 

Activities

based NVOCC must list in its tariff an agent for service of 

process in the United States, and it must use a licensed OTI for 

OTI services performed on its behalf in the United States

On July 12, 2013, the Commission issued a final rule that 

requires foreign-based, unlicensed NVOCCs to register with 

the Commission. In order to register, non-U.S. based NVOC

must submit Form FMC-65, containing their name, address, 

and contact information, including an email address, as well 

as the identity of its legal agent for service of process with 

contact information for the agent. The rule required all 

existing foreign-based, unlicensed NVOCCs to register no later 

than October 19, 2013. The Commission received 336 new

OTI applications and 259 amended applications, issued 267 

new OTI licenses and 129 amended licenses, and revoked 263 

licenses. At the end of the fiscal year, 994 OFFs, 1,746 U.S. 

NVOCCs, 1,918 joint NVOCC/OFFs, and 75 foreign NVOCCs 

held active OTI licenses. An additional 1,259 foreign-based

NVOCCs maintain proof of financial responsibility on file with 

the Commission, but choose not to be licensed; these entities 

are required to file the new Form-65 to become registered. 

Overall, there were 93 more licensed and/or bonded OTIs, 

representing approximately a two percent increase, to 

5,992, during the fiscal year. U.S. NVOCCs may file riders to 

their existing NVOCC bonds to meet financial responsibility 

requirements imposed by the Chinese government. The 

Commission received 326 new and amended riders providing 

optional proof of financial responsibility for NVOCCs serving 

the U.S.-China trade last year; 35 riders were terminated. 

the end of the fiscal year, 419 U.S. NVOCCs had riders on file. 

As part of its continuing outreach effort, BCL handled over 

6,000 inquiries regarding licensing and related OTI issues. 

Figure 1 shows the number of ocean freight forwarders and 

NVOCCs that held active OTI licenses over the past five fiscal 

years from 2009 through 2013
57

Activities

Significant 

Figure 1

Figure 2
58

Significant 

Activities

The Commission’s goal is to complete 75 percent of all OTI 

license applications within 60 calendar days. During the fiscal 

year, BCL exceeded this goal completing over 87 percent of all 

OTI applications within 60 calendar days. Figure 2 shows the

number of OTI applications received by the FMC over each of 

the last five fiscal years, 2009 through 2013.

3. Passenger Vessel Certification

The Commission administers the passenger vessel 

operator program as described under 46 U.S.C. §§ 44102-

44103, which requires evidence of financial responsibility 

for vessels which have berth or stateroom accommodations 

for 50 or more passengers and embark passengers at U.

ports and territories. At the end of the fiscal year, the 

program encompassed 204 vessels and 40 operators, which 

had aggregate evidence of financial responsibility coverage 

in excess of $326 million for nonperformance and over $712 

million for casualty.

Certificates of performance cover financial responsibility 

for the indemnification of passengers for nonperformance 

of transportation. This requirement also helps prevent 

unscrupulous or financially weak operators from operating 

from U.S. ports. The required levels of coverage for 

nonperformance are determined by Commission regulation

Even after an operator has ceased operations and dissolved its 

corporate existence, the evidence of financial responsibility is 

still valid and available to claimants

Certificates of casualty are required to cover liability that 

may occur for death or injury to passengers or other persons 

on voyages to or from U.S. port.  The law provides for $20,0

coverage per person for the first 500 passengers, and the 

scale decreases to $5,000 per person for passengers in excess 

of 1,500. U.S. Customs and Border Protection are directed 

refuse clearance to any vessel which does not comply with 
59

Activities

Significant 

the FMC’s evidence of financial responsibility requirements 

for casualty and performance. During the fiscal year, the 

Commission approved and issued 8 casualty certificates and 11 

performance certificates.

In conjunction with CADRS, BCL offers information and 

guidance to the cruising public on passenger rights and 

obligations regarding monies paid to cruise lines that fail to 

perform voyages. When cruise lines fail to perform because of

bankruptcies or other reasons, the Commission works closely 

with the cruise line and the financial responsibility provider 

to facilitate the refund process. The public is kept informed

through FMC press releases posted on the Commission’s 

website and advice given to passengers who contact staff. No

cruise operator ceased operation with unperformed cruises 

during the fiscal year.

The Bureau reviewed PVO activities and operations by 

monitoring current industry events and examining cruise lines’ 

unearned passenger revenue (UPR) information. Oversight

of cruise line operations and activities ensures compliance 

with applicable statutes and Commission regulations. A

remote review program was implemented that provides 

BCL an additional mechanism of safeguards for cruise lines 

participating in the Commission’s PVO program. Remote

reviews include an examination of accompanying summaries 

and schedules, comparison of monthly UPR calculations to UPR 

as reported on the general ledger, verification of UPR semiannual reporting calculations, and other auditing procedures 

to accomplish the program review objectives. The review

also seeks to determine the adequacy of cruise lines’ systems 

of controls over monies received from passengers for water 

transportation and other services
60

Significant 

Activities

On February 21, 2013, the Commission amended its rules 

regarding the establishment of passenger vessel financial 

responsibility for nonperformance of transportation, which 

became effective April 2, 2013. Some of the significant changes 

include, increasing the maximum coverage requirement from 

$15 million to $30 million per cruise line over a two-year 

period with an adjustment to the cap every two years based 

on the Consumer Price Index for All Urban Consumers (CPI-U); 

providing relief from coverage requirements by means of 

substituting alternative forms of protection for PVOs with 

unearned passenger revenue that is no more than 150% of the 

cap (i.e., UPR of $45,000,000 or less); and initiating a 5-yea

expiration cycle for each certificate from the date of issuance. 

All Certificates issued as of April 2, 2013, will have a 5-year 

expiration date. Certificates for all remaining vessels in a 

PVO’s fleet will be issued on an interval basis and will contain 

a 5-year expiration date

4. Database Systems

The Bureau hosts two active databases, the Regulated 

Persons Index (RPI) and the FMC-18 for OTI applications

1. The RPI is a database containing records of licensed OTIs

ocean common carriers, and other entities doing business 

with the Commission. A key function of the RPI is to

display on the Commission’s website, a list of compliant 

OTIs so that carriers and others can ascertain whether 

an OTI is properly licensed, bonded, and if required, has 

posted the location of its automated tariff. The OTI list

also indicates whether an NVOCC has filed an optional 

rider for additional proof of NVOCC financial responsibility 

for China activity.

2. The automated Form FMC-18, Application for an Ocea

Transportation Intermediary License, permits filers to 

complete an OTI application online, attach electronic 
61

Activities

Significant 

documents, and submit the application electronically. The

filing system incorporates security features to protect 

applicant data, by detecting and preventing unauthorized 

system intrusions. During the fiscal year, 92 percent of 

all incoming OTI applications received were through the 

electronic system

The Bureau is currently working with the agency’s Office 

of Information Technology to create a more robust and 

efficient electronic OTI licensing system. Both of the Bureau’s 

databases will be assimilated into the new system, which will 

not only be more efficient, but also will remove the stovepipes 

between all the existing systems, thus eliminating the need 

for duplicate data entry. This fiscal year saw the completion 

of the enterprise solution’s foundation, the enterprise store, 

which will be the repository for the Commission’s critical data.

I. Bureau of Enforcement

The Bureau of Enforcement is the primary prosecutorial 

arm of the Commission. BOE attorneys serve as trial attorneys

in formal proceedings instituted under Section 11 of the 

Shipping Act, and in investigations instituted under the 

FSPA. BOE attorneys also may be designated investigative

officers in nonadjudicatory fact-finding proceedings. BOE 

monitors all other formal proceedings, including relevant 

court proceedings, in order to identify major regulatory issues 

and advise the MD and the other bureaus. The Bureau also

participates in the development of Commission rules and 

regulations and serves on inter-bureau task forces and special 

committees. On occasion, under the direction of the General

Counsel, BOE attorneys may participate in matters of court or 

other agency litigation to which the Commission is a party
62

Significant 

Activities

Through the agency’s investigative personnel, and 

information provided by the industry and other government 

entities, the Bureau provides liaison and legal advice in 

investigations of the shipping activities of ocean common 

carriers, OTIs, shippers, ports and terminals, and other persons 

to ensure compliance with the statutes and regulations 

administered by the Commission. Monitoring activities include:

(1) service contract and NVOCC service arrangement and 

negotiated rate arrangement reviews to determine compliance 

with applicable statutes and regulations; (2) reviews and 

audits of ocean common carrier, NVOCC and ocean freight 

forwarder operations, including compliance with licensing, 

tariff, and bonding requirements; (3) audits of PVOs to 

ensure the financial protection of cruise passengers; (4) 

monitoring of agreements among ocean carriers and MTOs; 

and (5) various studies and analyses to support Commission 

programs. Investigations involve alleged violations of the

full range of statutes and regulations administered by the 

Commission, including: illegal or unfiled agreements; abuses 

of antitrust immunity; unlicensed OTI activity, including 

servicing of noncompliant OTIs by VOCCs and licensed NVOCCs; 

illegal rebating; misdescriptions or misdeclarations of cargo; 

untariffed cargo carriage; unbonded OTI and passenger vessel 

operations; and various types of consumer abuses, including 

failure of carriers or intermediaries to carry out transportation 

obligations, resulting in cargo delays or financial losses for 

shippers. The Bureau adheres to the agency’s objectives of

obtaining statutory compliance and ensuring equitable trading 

conditions

BOE prepares and serves notices of violations of the 

shipping statutes and Commission regulations and may 

compromise and settle civil penalty demands arising out of 

those violations. Other BOE investigations may be resolved

through compliance measures. If settlement is not reached,
63

Activities

Significant 

Bureau attorneys act as prosecutors in formal Commission 

proceedings that may result in settlement or in the assessment 

of civil penalties. BOE also participates, in conjunction with

other Commission units, in special enforcement initiatives, 

fact-finding investigations and rulemaking efforts.

During the fiscal year, BOE investigated and prosecuted 

possible illegal practices in many trade lanes, including the 

Transpacific, North Atlantic, West Africa, Central and South 

American and Caribbean trades. These market-distorting

activities included various forms of unfiled agreements, 

rebates and absorptions, misdescription of commodities and 

misdeclaration of measurements, and unlawful use of service 

contracts, as well as carriage of cargo by and for untariffed 

and unbonded NVOCCs. Of note, the Bureau’s efforts in

pursuing inquiries regarding the major car carriers in the 

Japan-U.S. trades (and in other U.S. trades inbound as well as 

outbound), culminated in two separate settlements relating 

to unfiled carrier agreements, netting $2,325,000 in penalty 

payments. Cumulatively, the Bureau collected more than $3

million in penalties, during the fiscal year. Figure 3, below, 

shows civil penalties collected by the FMC over the last five 

fiscal years.

Major investigations completed during fiscal year 2013 

addressed investigations of household goods movers allegedly 

operating as unlicensed OTIs, including those VOCCs and 

licensed NVOCCs that provided service to unlicensed movers

Three longstanding docketed proceedings were completed 

by the Commission upon review of the Bureau’s exception 

to decisions by the ALJ below, resulting in the assessment 

of substantial civil penalties on the unlicensed, unbonded 

operator and its principals, as well as against the NVOCC 

offering services to such unlicensed operators. Each case also

culminated in issuance of a cease and desist order barring 

the company and individual respondents from operating as 
64

Significant 

Activities

an OTI or OTI agent for a period of 5 years. Upon filing of 

exceptions by the Bureau, the Commission also remanded the 

Initial Decision in Docket No. 12-01, a formal investigation of

OMJ International, OC International, and Mr. Omar Collado 

to determine whether respondents violated Section 10(a)

(1) of the Shipping Act by providing service to an unlicensed, 

unbonded NVOCC, and whether respondents should still qualify 

to be licensed as an OTI. Additional briefs were ordered by

the ALJ in August 2013, with a further decision expected 

therein by October 2013. In Docket No. 13-01, the Burea

submitted a motion for summary judgment and supporting 

affidavits seeking findings of violation of Sections 10(a)(1) and 

10(b)(2) of the Shipping Act, assessment of civil penalties, 

and revocation of the OTI license of respondent United 

Logistics (LAX) Inc. for unlawfully accessing service contracts

to which United Logistics was neither the shipper signatory 

nor an affiliate. The matter remained pending before the 

administrative law judge for decision at the end of the fiscal 

year

Figure 3
65

Activities

Significant 

At the beginning of the fiscal year, 9 enforcement cases 

were pending final resolution by the Bureau, the Bureau was 

party to 5 formal proceedings, and there were 12 matters 

pending which the Bureau was monitoring or for which it was 

providing legal advice. During the fiscal year, 17 new cases 

were referred for enforcement action or informal compromise; 

13 were compromised and settled, administratively closed, 

or referred for formal proceedings; and 13 enforcement 

cases were pending resolution at fiscal year’s end. Also, 1 

formal proceeding was initiated; 3 formal proceedings were 

completed, and 3 were pending at the end of the fiscal year. 

Additionally, BOE opened 6 matters involving monitoring or 

legal advice, completed or closed 2 such matters, and 16 were 

pending at the end of the fiscal year.

The compliance audit program continued during the 

fiscal year. This program, conducted by BOE staff 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 

where there is no indication of current vessel operations.

During the fiscal year, 82 audits were commenced, 74 audits 

were completed (including audits carried over from fiscal year 

2012), and 12 remained pending in BOE on September 30, 

2013. During 2013, BOE continued to report to the Commission

regarding the most prevalent compliance issues encountered 

in the audit program and to identify those same issues on the 

Commission’s website, in accordance with recommendations of 

the agency’s Inspector General (Report OR12-01, issued March 

2012)

BOE completed its first full year under a formal MOU with 

the Census Bureau, U.S. Department of Commerce, providin

FMC with access to the Census’ Automated Export System 

(AES) database. The completed MOU accommodates and
66

Significant 

Activities

respects Census’ ongoing concerns for data security in any 

subsequent handling and use of otherwise confidential U.S. 

export shipment data. Such data may be used only for FMC

law enforcement purposes

Interaction between BOE the Commission’s ARs, and the 

CBP with respect to the exchange of investigative information 

continues to be beneficial to all parties. Cooperation with 

CBP included staff interactions and joint field operations to 

investigate entities suspected of violating both agencies’ 

statutes or regulations. Such cooperation also has included

local police and other government entities, including the U.

Attorney’s Office and the Federal Bureau of Investigation, 

when necessary

J. Bureau of Trade Analysis

The primary function of the Bureau of Trade Analysis is the 

oversight of concerted activity by ocean common carriers and 

marine terminal operators under the standards of the Shipping 

Act. Further, BTA administers the Commission’s agreements,

service contract, NVOCC Service Arrangements and NVOCC 

Negotiated Rate Arrangements programs, and monitors the 

accessibility and accuracy of published tariffs. The Bureau’s

major program activities include:

• Administering comprehensive trade monitoring programs 

to identify and track relevant competitive, commercial, 

and economic activity in the major U.S. foreign trades

and to advise the Commission and its staff on current 

trade conditions, trends and regulatory concerns affecting 

oceanborne liner transportation;

• Conducting systematic surveillance of carrier activity 

in areas relevant to the Commission’s administration of 

statutory standards;
67

Activities

Significant 

• Developing economic studies and analyses in support of 

the Commission’s regulatory responsibilities;

• Providing expert economic testimony and support in formal 

proceedings; 

• Processing and analyzing ocean common carrier and MTO 

agreements;

• Reviewing and processing service contracts, NSAs and 

amendments filed by ocean common carriers, conferences 

of such carriers, and NVOCCs; and 

• Reviewing tariff publications in automated systems of 

carriers and conferences and ensuring that tariffs are 

accessible to the public and accurate, and overseeing 

application of the NRA regulations

1. Agreement Filings and Review

Under Sections 4 and 5 of the Shipping Act, all agreements 

by or among ocean common carriers to fix rates or conditions 

of service, pool cargo revenue, allot ports or regulate 

sailings, limit or regulate the volume or character of cargo 

(or passengers) to be carried, control or prevent competition, 

or engage in exclusive or preferential arrangements, are 

required to be filed with the Commission. Except for certain 

exempted categories, agreements among MTO’s and among 

one or more MTOs and one or more ocean common carriers 

also are required to be filed with the Commission. Generally, 

an agreement becomes effective 45 days after filing, unless 

the Commission has requested additional information. These 

agreements are reviewed pursuant to the standard set forth 

in Section 6(g) of the Shipping Act, 46 U.S.C. §41307(b)(1). 

Effective agreements are exempt from U.S. antitrust laws, an

instead subject to Shipping Act restrictions and Commission 

oversight
68

Significant 

Activities

BTA received 127 agreement filings, and analyzed and 

processed 131 agreement filings during the fiscal year. 

Statistics on agreement filings are contained in Appendix C. 

Figures 4 and 5, illustrate the trend in agreement filings since 

fiscal year 2009. 

(a) Ocean Common Carrier Agreements

There are two broad categories of ocean common carrier 

agreements filed with the Commission: (1) pricing agreements, 

where the main focus is on rates, and (2) operational 

agreements, where the focus can range from the sharing 

of vessel space to the management of an internet portal

Descriptions of the two categories of agreements follow:

 (1) Pricing Agreements

There are two types of pricing agreements: conference 

agreements and rate discussion agreements (RDAs)

Conference agreements provide for the collective discussion, 

agreement, and establishment of common ocean freight 

rates and practices by groups of ocean common carriers

Conferences publish a common rate tariff in which all the 

member lines participate. RDAs also focus on rate matters,

but unlike conferences, any consensus on rates reached under 

RDAs is non-binding on the parties. RDA member lines each

publish their own tariff. At the end of the fiscal year, there 

were three effective conference agreements, and 24 RDAs on 

file. 

Conference agreements have become largely irrelevant 

to U.S. liner shipping. No new carrier conference agreeme

has been filed with the Commission since fiscal year 2000. The 

remaining three conferences cover only government cargoes
69

Activities

Significant 

200

210

220

230

240

250

260

270

280

290

2009 2010 2011 2012 2013

Effective Carrier Agreements

FY 2009 - FY 2013

0

20

40

60

80

100

120

140

160

180

2009 2010 2011 2012 2013

Agreement Filings

FY 2009 - FY 2013

Figure 4

Figure 5
70

Significant 

Activities

Today, RDAs are the primary pricing forum in U.S. trad

lanes. Since fiscal year 2000, the number of RDAs on file has 

declined from 36 to 24 agreements. During the fiscal year, 

RDA filings involved, for the most part, adding or removing 

members. Two new RDAs were filed last year.

(2) Operational Agreements

Operational agreements include vessel-sharing 

agreements, joint service agreements, cooperative working 

agreements, and discussion agreements without rate authority

At the end of the fiscal year, operational agreements 

accounted for 87 percent of all carrier agreements on file. 

Vessel-sharing agreements (VSAs) typically authorize 

some level of service cooperation with the goal of reducing 

an individual line’s operating costs. VSAs range from alliance

agreements, which involve close operational cooperation 

across multiple trade lanes, to slot charter agreements, which 

require only minimal commitments. VSAs account for the vast 

majority of filed carrier agreements, 80 percent at the end of 

the fiscal year. They also accounted for 65 percent of carrier 

agreement filings received last year.

Under joint service agreements (JSAs), two or more 

carriers operate a combined service under a single name in 

a specified trading area. The joint service issues its own bills 

of lading, sets its own rates, and acts as an individual ocean 

common carrier. No new JSAs or amendments to existing JSAs 

were received last fiscal year. At the end of the year, there 

remain six JSAs on file with the Commission.

Many cooperative working agreements (CWAs) are 

non-pricing agreements that tend to deal with unique 

operational considerations relating to acquisitions, sharing 

of administrative services, or internet portal management

Other CWAs filed with the Commission include agency, sailing, 
71

Activities

Significant 

trans-shipment, and equipment interchange (including chassis 

pooling) agreements. At the end of the year, there were 16

CWAs on file; a net decrease of one CWA during the last fiscal 

year

Discussion agreements without rate authority provide 

ocean common carriers a vehicle for discussing matters of 

mutual interest other than rates. Typically, these agreements

focus on macro-economic, regulatory, safety or security issues

At the end of the fiscal year, there were eight such agreements 

on file.

(b) Marine Terminal Operator Agreements

Marine terminals, operated by both public and private 

entities, provide facilities, services, and labor for the 

interchange of cargo and passengers between land and ocean 

carriers, and for the receipt and delivery of cargo from 

shippers and consignees. BTA is responsible for reviewing and

processing agreements between and among MTOs.

BTA received 13 MTO agreement filings during the fiscal 

year for a year-end total of 151 MTO agreements on file - up 

from 149 the previous year. Figure 6 below shows the trend of

MTO agreements on file over the last five years.

Terminal leases accounted for about 40 percent of the MTO 

agreements on file, followed by MTO discussion agreements, 

MTO joint ventures, and service agreements. Over the last

five years, leases and services agreements experienced deep 

declines, due largely to the filing exemption afforded under 

the Commission’s regulations and notifications of previously 

unreported terminations. MTO discussion agreements

experienced the largest increase in numbers over the last five 

years, due mainly to the MTOs’ need to discuss environmental, 
72

Significant 

Activities

infrastructure, security, and congestion issues that the ports 

are facing today. During the fiscal year, MTO discussion 

agreements declined from 21 to 19

Figure 7 provides the types of MTO agreements on file at 

the end of the fiscal year.

3. Monitoring and Economic Analysis

The systematic monitoring of common carrier activities 

and commercial conditions in the U.S. foreign trades is a

integral part of the Commission’s responsibilities under the 

Shipping Act. The shipping activities of certain types of MTO

agreements are monitored in a similar fashion. Monitoring

helps ensure that carriers and marine terminal operators 

comply with the statutory standards of the Shipping Act and 

the requirements of relevant Commission regulations. BTA 

administers monitoring programs, and conducts research into 

current trade conditions, emerging commercial trends, carrier 

pricing and service activities, and other issues that may affect 

U.S. liner shippi

140

145

150

155

160

165

170

2009 2010 2011 2012 2013

MTO Agreements on File

FY 2009 - FY 2013 

Figure 6
73

Activities

Significant 

The Commission’s monitoring program examines 

carrier competition in individual U.S. trade lanes, includin

market share, concentration, barriers to market entry, and 

coordination among carriers. The program also examines

alternative service options and alternative supply sources, 

cargo volume trends, congestion bottlenecks, commercial 

pricing practices, operational cost pressures, service offerings, 

vessel capacity utilization, service contracting activity and 

shipper complaints

BTA produced various reports and analyses concerning, 

for example, the Consolidated Chassis Management Pool 

Agreement; the Port of Lake Charles, Louisiana’s changes to 

local stevedoring services; and the G-6 Alliance Agreement 

involving operational cooperation between two major global 

alliances serving U.S. trade.  Other major monitori

activities included preparing a report on the TSA and 

Westbound Transpacific Stabilization Agreement rate increase 

and surcharge proposals and their impact; reviewing data 

Figure 7

0

10

20

30

40

50

60

70

Lease Conf CWA Disc Assess Serv JV

MTO Agreements

as of Sept. 30, 2013
74

Significant 

Activities

and meeting minutes provided by three global alliances; 

and conducting bi-annual information meetings with 

representatives of the TSA

4. Tariffs

The Shipping Act requires common carriers and 

conferences to publish their tariffs electronically, in private 

systems. These electronic tariff systems contain rates,

charges, rules, and practices of common carriers operating 

in the U.S. foreign commerce. BTA monitors the publ

accessibility of these private tariff systems and reviews 

published tariff material for compliance with the requirements 

of the Shipping Act. The Bureau also determines whether to

grant applications for special permission to deviate from tariff 

publishing rules and regulations. During the fiscal year, BTA 

received and processed four special permission applications 

and no service contract correction applications

The Bureau is responsible for processing the electronic 

Form FMC-1, Tariff Registration Form, required to be filed 

with the Commission by common carriers, conferences, and 

MTOs. The data identifies the location of common carrier 

tariffs, including common carrier and conference service 

contract essential terms publications or any MTO schedules.

At the end of fiscal year 2013, 5,252 tariff location addresses 

were posted on the Commission’s website. Of that number,

4,913 tariff addresses were for NVOCCs. The Bureau also

collaborates with other Commission bureaus and offices to 

verify that VOCCs and NVOCCs comply with the Commission’s 

licensing, bonding and tariff publication requirements.

The Commission provides regulatory relief, allowing 

licensed NVOCCs to “opt out” of the requirement to file 

rate tariffs providing they use NRAs exclusively. In fiscal 

year 2013, the Commission extended this relief to foreign 

registered NVOCCs. All NVOCCs are required to keep records 
75

Activities

Significant 

of their NRAs, which must be memorialized in writing, for a 

period of five years. Additionally, NVOCCs are required to 

maintain rules tariffs which must be made available free of 

charge. It is anticipated that NVOCCs will continue to take

advantage of this opportunity, thereby significantly reducing 

the number of rate tariffs that BTA must review to ensure 

compliance with applicable regulations. By the end of the

fiscal year, 525 NVOCCs had filed prominent notices or a rule 

in their respective tariff indicating that they have invoked the 

exemption – up 14 percent from 465 in fiscal year 2012.

5. Service Contracts 

Service contracts are an alternative to transportation of 

cargo under tariff rates. Service contracts enable the parties

to tailor transportation services and rates to their commercial 

and operational needs and to keep these arrangements 

confidential. During the fiscal year, the Commission received 

48,802 new service contracts, compared to 47,664 in fiscal 

year 2012, and 556,285 contract amendments, compared to 

498,727 in fiscal year 2012. 

Original service contract or NSA filings that contain 

clerical errors can be corrected within two business days by 

filing a “corrected transmission” copy into SERVCON (FMC’s 

service contract filing system). During the fiscal year, 5,515 

records involving corrected transmission copies were filed into 

SERVCON

6. Service Arrangements 

Commission rules allow NVOCCs to offer transportation 

services pursuant to individually negotiated, confidential 

service arrangements with customers, known as NSAs, rather 

than under a published tariff
76

Significant 

Activities

During the fiscal year, 1,635 NSAs and 2,019 amendments 

to NSAs were filed by a total of 95 NVOCCs. Of the 1,273 

NVOCCs that are registered with the Commission to file NSAs, 

only 204 (about 16 percent) have done so. Those 204 NSA

users represent approximately 4 percent of all registered 

NVOCCs

7. Controlled Carriers

A controlled carrier is an ocean common carrier that is, 

or whose operating assets are, owned or controlled directly or 

indirectly by a foreign government. The Shipping Act provides

that no controlled carrier may maintain rates or charges in its 

tariffs or service contracts that are below a level that is just 

and reasonable, nor may any such carrier establish, maintain, 

or enforce unjust or unreasonable classifications, rules or 

regulations in those tariffs or service contracts. In addition,

tariff rates, charges, classifications, rules, or regulations of a 

controlled carrier may not, without special permission of the 

Commission, become effective sooner than the 30th day after 

the date of publication

The Commission’s staff monitors U.S. and foreign trad

press and other information sources to identify controlled 

carriers and any unjust or unreasonable controlled carrier 

activity that might require Commission action. During the 

fiscal year, four controlled carriers operated in the U.S. trades:

1. American President Lines, Ltd. and APL Co., Pte. (R

000240) – Republic of Singapore;

2. COSCO Container Lines Company, Limited (RPI No. 01561

- People’s Republic of China; 

3. China Shipping Container Lines Co., Ltd. and Ch

Shipping Container Lines (Hong Kong) Company, Ltd. (RPI

No. 019270) - People’s Republic of China; an
77

Activities

Significant 

4. Hainan P.O. Shipping Co., Ltd. (RPI No. 022860) – Pe

Republic of China

8. Marine Terminal Schedules

Pursuant to the Ocean Shipping Reform Act (OSRA), 

MTOs may make available to the public a schedule of rates, 

regulations, and practices, including limitations of liability 

for cargo loss or damage, pertaining to receiving, delivering, 

handling, or storing property at its marine terminal. Any such

schedule made available to the public shall be enforceable 

by an appropriate court as an implied contract without 

proof of actual knowledge of its provisions. Pursuant to

the Commission’s regulations governing MTO schedules, any 

terminal schedule that is made available to the public must 

be available during normal business hours and in electronic 

form. Each MTO must notify the Bureau of the electronic

location of its terminal schedule by submitting Form FMC-1 

before commencing operations. A total of 245 MTOs have filed 

Form FMC-1, with 141 electing to voluntarily publish their 

terminal schedules by the end of the fiscal year. The internet 

addresses of these MTO terminal schedules are posted on the 

Commission’s website

9. Automated Database Systems

The Bureau currently maintains and uses the following 

automated databases and filing systems: (1) Form FMC-1 

System; (2) SERVCON, the system for filing service contracts 

and NSAs (as well as internal database systems related to 

SERVCON registration forms); and (3) the Agreement Profile 

Database.

At the end of the fiscal year, the Form FMC-1 System 

reflected the tariff location addresses of 193 VOCCs, 4,913 

NVOCCs, 5 conferences, and 141 MTOs. An additional 104

MTOs have registered by filing a Form FMC-1 and, as permitted 

under Commission rules, do not publicly post a MTO schedule.
78

Significant 

Activities

The Commission’s Office of Service Contracts staff validated 

that VOCCs were providing common carriage service in the 

waterborne commerce of the U.S

SERVCON contains service contract and NSA data, most 

of which is available only to the Commission’s staff due to 

confidentiality requirements. Carriers must register to file 

service contracts by submitting Form FMC-83, and NVOCCs 

must submit Form FMC-78 to file NSAs. 

The Agreement Profile Database contains information 

about the status of carrier and terminal agreements, as well as 

related monitoring reports. These databases and filing systems 

provide support for many of the Commission’s programs and 

the Bureau’s monitoring efforts. Through specially tailored

reports, the Commission makes certain database information 

available to the general public. BTA also maintains an

electronic library of effective carrier and MTO agreements

This library is accessible through the Commission’s website

 
79

Activities

Significant 
Appendices

80

VI. APPENDICES

APPENDIX A - Federal Maritime Commission 

Organization Chart 
Appendices

81

APPENDIX B - Commission Proceedings

Formal Proceedings

 Orders of Investigation Initiated..

 Formal Complaints Filed..

 ALJ Initial Decisions Issued*...

 Initial Decisions Reviewed..

 Exceptions Filed to Initial Decisions..

Fact Finding Orders Issued..

Rulemakings 

 Advanced Notice of Proposed Rule..

 Proposed Rules..

 Final Rules..

Informal Dockets

 Informal Complaints Filed..

 Settlement Officer Decisions Issued...

 Settlement Officer Decisions Reviewed..

Notice of Inquiries Issued..

Hearings Held..
Appendices

82

APPENDIX C - Agreement Filings And Status

Agreements Filed in FY 2013 (including modifications and 

terminations)

Carrier....

Terminal...

Total....

Agreement Processing Categories in FY 2013

Forty-Five Day Review...

Expedited Review..

Exempt-Effective Upon Filing...

Rejection of Filing..

Formal Extension of Review Period.

Withdrawals..

6(g) Injunction.

Total....

Carrier Reports Submitted for Commission Review

Minutes of Meetings ...

Voluntary Service Contract Guidelines...

Monitoring Reports....

Total......

Agreements on File as of September 30, 2013

Conference.
Appendices

83

Rate Discussion...

Non-Rate Discussion.

Joint Service.

Vessel-Sharing....

Cooperative Working & Other...

Terminal....

Total....
Appendices

84

APPENDIX D - Form FMC-1 Tariff Location 

Addresses - Service Contract and NSA Filings 

and Special Permission Applications 

Form FMC-1 Filings

VOCCs....

OTI/NVOCCs......

MTOs....

Conferences..

Electronic Service Contract Documents

New Service Contracts.......

Service Contract Amendments.......

NVOCC Service Arrangement (“NSA”) Documents

New NSAs......

NSA Amendments......

Special Permission Applications

Granted.

Denied.

Pending.

Withdrawn.

 
Appendices

85

APPENDIX E - Civil Penalties Collected

American Freight Line – Southeast Inc.........

China International Freight Co. Ltd......

East-West Logistics Inc.......

Versatile International Corp.......

Top Shipping Logistics Co. Ltd. et al.....

Whale Logistics (Shanghai) Co. Ltd......

Koil, Inc. dba VShip Co......

UTi, United States, Inc.......

Kawasaki Kisen Kaisha..........

Nippon Yusen Kaisha..........

Total Civil Penalties Collected............
Appendices

86

APPENDIX F - Statement of Appropriations, 

Obligations and Receipts

Appropriations:

For necessary expenses of the Federal Maritime 

Commission as authorized by Section 201(d) of the Merchant 

Marine Act, 1936, as amended (46 U.S.C. 307), includi

services as authorized by 5 U.S.C. 3109; hire of passeng

motor vehicles as authorized by 31 U.S.C. 1343(b); a

uniforms or allowances therefore, as authorized by 5 U.S

5901–5902, $22,839,425: Provided, That not to exceed $2,000 

shall be available for official reception and representation 

expenses

Public Law 113-6............

Rescission.......

Presidential Sequestration..........

Total Budgetary Resources............

Obligations and Unobligated Balance:

Net obligations for salaries and expenses for the fiscal year 

ended September 30, 2013............

Statement of Receipts: 

Deposited with the General Fund of the Treasury for the 

Fiscal Year Ended September 30, 2013:

Publications and reproductions, fees and vessel certification 

and freight forwarder applications..........

Fines and Penalties............

Total General Fund Receipts............