MR DAY

DR KANUK
TABL

LETTER OF TRANSMITTAL

II THE COMMISSION 

Membership

History and Func

Administration

III FISCAL YEAR 1979 IN RE

IV FOREIGN COMMERCE 

Agreements

Tariffs

Significant Comm

Major Commission 

V DOMESTIC COMMERCE 

Agreements

Tariffs

Significant Comm

Major Commission 

VI CERTIFICATION ACTIVITI

Water Pollution

Passenger Vessels

Freight Forwardin

VII LEGISLATION 

VIII COURT PROCEEDINGS 

IX TRADE STUDIES 

X APPENDIX
Wnre at me ct airnn

3fvber

I

TO THE SENATE AND THE HOUSE O

I am pleased to submit t

Maritime Commission for Fisca

of Reorganization Plan No 7 

Marine Act 1936

Fiscal Year 1979 has bee

FMC The Commission settled 

million in civil penalties d

annual budget Sixteen of th

flag carriers for fines of o

produced well over one settle

In addition to the numb

Commission issued more final 

previous year in the FMC s h

special and informal dockets 

before

I look forward to even 

toward our goal of making th

efficient and responsive re
II 

His

The Federal Maritime Commiss

regulatory agency on August 12 19

Shipping Act 1916 and subsequent 

US domestic offshore and foreign 

under the jurisdiction of the FMC

Major responsibilities of the 

1 The regulation of ocean c

domestic offshore trades

2 Investigation of discrimi

shippers carriers term

3 Licensing of independent 

4 Passenger vessel certific

5 Certification of vessels 

pollution by oil and haza

The Commission smost visible 

ment of section 15 of the Shipping 

carrier conferences from the Sherm

order to prevent abuses of concert

evaluates all agreements between o

Shipping Act
The functions and authority 

those of the Interstate Commerce 

The FMC unlike the ICC has ve

disapprove tariffs already lawf

The FMC also does not have auth

commerce

The Maritime Administratio

is a promotional agency which d

USflag merchant marine The 

responsibility for promoting the 

building industry The FMC can 

the extent that the maintenance 

serves the general public inter

In spite of these restrict

ensuring stability and equity in 

percent of US foreign trade is 

in protecting the shipping pub

efficiency and economy in our f

Ad

There are five Commissione

President with the consent of t

more than three of the members 
The President designates one Com

and administrative officer of the 

The FMC has a total authoriz

of its personnel located in the C

The Commission also has five dis

Chicago San Francisco New Orlea

offices in Los Angeles Savannah 

The Commissioners oversee a

bureaus and offices The respon

and operations is divided among t

o The Office of the Managing D

administration of Commission 

Managing Director coordinate

ensure the timely accomplish

o The Office of the General Co

legal issues and provides it 

consideration The General 

approves the legality of pro

and informal written opinion

prepares draft decisions and 

Commission action The Gen

settlements of Shipping Act 

in most matters before the c
The Administrative Law Judg

decisions in formal rulemak

The Commission has seven ad

drection of a Chief Judge 

administrative law judges i

section 15 agreements adju

practices between various p

Act adjudication of shippe

of the Act and domestic ra

During Fiscal Year 197

initial decisions 75 of wh

the Commission Fiftyfour 

were pending Commission con

period

c The Office of the Secretary 

of court Its responsibil

agenda for weekly meetings 

complaints involving allege

issuing orders and notices 

all official files and reco

administering the Freedom o

Sunshine Acts 6 respondi

Commission staff the ocean 

and 7 providing copies of 

judges Commission reports 

documents to interested pa
During Fiscal Year 197

in the conclusion of 70 spe

117 informal dockets which 

less than 5000 They also 

issuance of 65 other final d

including eight final rules

o The Bureau of Hearing Counse

in the Commission sdocketed 

counsel in formal adjudicato

proceedings which are initia

hearing counsel where inter

complaint proceedings instit

Act The Bureau of Hearing 

on special Commission proje

of court litigation by or a

o The Bureau of Ocean Commerc

regulatory programs which a

activities It is the larg

88 personnel The Bureau s 

analysis and review of all 

the Shipping Act the evalu

and the analysis of foreign 

bility for the ongoing ana

activities self policing c

operating reports represent 

duties
During the past fiscal 

Regulation processed 373 s

o The Bureau of Industry Econ

economic environmental an

effective performance of th

The Bureau is functionally 

the Offices of Economic F

and the Office of Data Syst

During the past fiscal 

Economic Analysis completed 

shipping on the USVirgin 

Commission studies examinin

conditions and shipping rel

North Pacific and South Am

The Office of Financia

revision of Commission Gen

rules on reporting requirem

vessel operating common ca

The Office of Environm

docketed proceedings to det

environmental assessment 

and 101 informal dockets
o The Bureau of Enforcement s

commerce in an effort to cu

malpractices by carriers s

subject to the Shipping Act 

the investigative functions 

are strategically located to 

surrounding our major port 

Commission settled 56 rebat

civil monetary penalties fo

o The Bureau of Certification 

under various Federal anti 

for spills of oil and hazard

jurisdiction over 26000 ve

311 of the Federal Water Po

Trans Alaska Pipeline Autho

Continental Shelf Lands Act 

The Bureau also has respon

regulation of independent o

certification of passenger 

casualties or non performanc

During Fiscal Year 197

outstanding freight forward

denied At the end of the 

licenses issued by the Com
o The Office of Budget and Prog

optimal utilization of physic

That office formulates recomm

policies and programs prepare

Congress and the Office of Ma

systems of internal control fo

Budget and Program Analysis is 

financial management policies 

performs ongoing evaluation o

and the effectiveness and effi

c The Division of Office Service

for the Commission and its fie

performed include printing d

building services safety pro

retrieval

o The Office of Personnel plans 

programs including recruitmen

development employee relation

In 1979 the Equal Emplo

the Federal Maritime Commissio

in employment of handicapped 

The Office of Personnel has in

of recruiting and evaluating 

attorney vacancies The Offic

for administration of most pr
Service SES program and other 

improving the quality diversit

of government managers and supe

of Personnel has begun convertin

Evaluation System FES of posit
III F

Changing attitudes and valu

the world shipping community exe

Maritime Commission spolicies a

year

The cost and effectiveness 

focus of increasing scrutiny thr

growing demand for regulatory re

developments in world liner ship

different type of reform aimed 

meet changing policies and pract

two powerful forces played a ma

of ocean shipping during Fiscal 

Clamor for reform of govern

widespread allegations of burea

reporting requirements and exce

The Federal Maritime Commi

of regulatory inaction and unres

the Commission issued a record 1

1979 the Commission exceeded th

In the past two years the FMC h

previous years combined
In August 1977 the Commission 

proceedings that were over five yea

The Commission has taken steps 

regulation in other ways not reflect

decisions

During Fiscal Year 1979 the FM

paperwork burden that has now prepa

Chairman and the Comptroller Genera

reduce unnecessary reporting require

memoranda and paper flow

Throughout the year draft Com

screened for clarity and plain Eng

regulations were exemplified by the 

operating common carrier reporting 

trades published shortly after the 

The FMC also played an active 

analyzing the costeffectiveness of 

inclusion in the Council sbiennial 

The Commission has increased u

ings in which freight overcharge ca

lengthy and expensive formal hearin

1979 the FMC decided over 200 spec

resulting in 1990 00 in refunds 

consumers of ocean transportation s
The agency continues to ame

to provide stricter internal dea

needless interventions that serve 

reduce frivolous petitions for r

orders and eliminate unnecessary 

by parties to Commission proceed

regulatory delay

The Commission adopted othe

during the past year The imple

rate law signed by President Ca

limit on Commission consideratio

offshore trades and provides shi

if rates are found to be unjust 

The FMC made widespread use 

FY 79 a rulemakingtype proceed

public comments on major maritim

embarked on formal action This 

possible impact of ratification 

Conduct UNCTAD on the US oce

that should be exempted from the 

feasibility of extending neutra

operators
Finally the transition to g

rated by Senator Lawton Chiles G

has nearly been completed During 

out of 360 agenda items or 70 

to slightly over 80 during Fisca

1979 the Commission was consider

open session and the FMC should 

principles of the new law decidin

behind closed doors

The elimination of the Comms

with its efforts to reduce unnece

ocean shipping industry and increa

the myth that all government agen

secrecy and inaction All govern

public they serve and the FMC is 

that public with prompt and respo

The Commission has an equal 

commercial political and techno

commerce in order to maintain effe

industry The FMC has consequent

the Congress in the development o

current problems in our foreign oc

preparation of maritime regulatory 

sweeping revisions in the Shipping 

provisions to address current com
Working with the Congress th

during the past fiscal year to pro

in our ocean commerce During Fis

amendments to the Intercoastal Sh

signed them into law as PL 95 47

noted these amendments have grea

domestic rate cases and provided 

US domestic commerce who have p

unjust and unreasonable

Recent events have shown tha

playing by different rules than o

in liner shipping where foreign 

been exerted over an historically 

The Ocean Shipping Act of 19

and signed by President Carter on 

Commission new power to protect t

rate practices by state controlle

Before the socalled Contro

controlled carriers posed a serio

such as the USflag merchant m

commercial steamship lines to com

are backed by the resources of th

political and even military objec

foreign commerce and are not co

motive that is an integral part o
Since PL 95 483 became law 

classified over twenty steamship lin

subject to the provisions of the ne

cation for the rates of five stateo

proceeding under the new statute t

individual rates of a state contro

Most of these rates were ultimately 

by the Commission Privately owned 

commerce have indicated that preda

since the enactment of the controll

Many new carriers have entered 

no entry restrictions in recent ye

increased pressure on steamship lin

practices particularly secret kick

compete for cargo

During the past two years Co

rebating legislation and the Comms

in our foreign trades have begun to 

The Shipping Act of 1979 Amen

passed by both Houses of Congress 

by President Carter They increase 

rebating fivefold and authorize the 

these penalties The Commission h

authority but has never been empow
This new law also dramatically e

rebating by authorizing suspens

or failing to cooperate with FMC 

Tariff suspension effectively p

trading in the US ocean comme

The Commission achieved 56 

in civil monetary penalties duri

equalled nearly half its FY 79 b

over to the US Treasury Six

achieved with foreignflag carri

35 million despite the diffic

foreign blocking statutes and ob

disclosure of illegal rebating f

flags

The FMC s 56 settlements du

favorably to the 34 anti rebatin

and the three settlements achiev

campaign against illegal rebatin

This trend reflects an incr

ment program which promises to a

due to tougher anti rebating sa

taken a hard line on illegal reb

effect of increasing numbers of 

Commission sgoal of eventually 

practices from the US foreign 
Despite substantial progress 

US foreign trade the Commissio

comprehensive reform of US marit

the Shipping Act 1916 in order 

world marketplace and reflect cha

of government in commercial activ

In January 1978 Chairman D

Committee comprised of senior age

review and analysis of the Comms

On July 19 1979 the Commis

Act to the House Merchant Marine a

broadest proposed revision of the 

agency shistory

The Commission sdraft statut

government must tailor regulation 

necessary effective and producti

burdens imposed upon industry and 

The FMC s draft Revised Shipp

authority to exempt from its juris

has determined no longer requires 

would create categories of presum

eliminating the need for many of t

by the Commission
The FMC also believes tha

with predictability in its de

Act would establish the clear 

agrer ents that are essential 

The draft statute would g

nrer ed activities within th

oric functions 1 elimi

imposition of antitrust regula

regulatory environment conduci

tation services which should 

vation and reduce transportat

De mitting the formation of sh

Lrpetitiveness of US import

encouraging the development of 

growth of more efficient econ

services

rinally the Commission s

in responding to the trend tow

the allocation of cargo shares 

rerketclace encouraging comit

presumptive approvability to c

coo ernment togovernment bilat
The FMC is also taking steps 

to enable the agency to effective

bilities and continue to expedite 

Special Task Force on Commission 

Moakley is completing recommend

agency functions to ensure that n

with the greatest possible efficie

is expected that these recommend

In addition to its regulation 

Commission has also been vested w

passenger vessels to ensure that 

resources to cover claims for cas

cruises and more recently to pr

ensure financial responsibility f

substances

During the past fiscal year 

its recertification of over 24000 

provisions of new water pollution 

its perfect record for its passen

Since the FMC was vested with aut

no passenger has lost a single ce

to meet the financial obligations 

Considerable activity also to

of the independent ocean freight 

imposing tougher sanctions on forw
licenses who violated Commi

who must entrust large sums 

trade practices and irrespon

More importantly the C

which would provide the firs

forwarding industry in e

Despite fluctuations in 

of government in commercial 

carrier industry remains a n

and equity in the US liner 

However current pressu

focus the Commission seffor

maximum public and commercia

can be realized by meeting t

1 Creating a regulato

national economic o

2 Mandating continued 

industry and the pu

responsive actions 

3 Limiting regulation 

necessary effectiv

4 Establishing clear 

the maritime indust

freedom flexibilit
The Commission is proud of i

fiscal year because they have bee

degree of cost consciousness and 

Commission expects even greater p

coming year and it remains comm

ensure the continued exercise of 

responsive regulation

changes or trends Data regarding 

reports during Fiscal Year 1979 c

in Appendix D

T

All carriers and conferences 

the Commission were required to up

meet the standards imposed by the 

CFR 536 effective January 1 197

influx of new and revised tariffs 

Many other tariffs were no longer 

carriers failed to respond to the 

An order to show cause why tariffs 

inactive or the carrier had failed 

was issued It is estimated that 

removed from the Commission sfiles 

Terminals

Marine terminals operated by 

governments are currently subject 

they provide services in connection 

Agreements entered into between te

subject to the Shipping Act eg 

berthing space or for services to 

require the approval of the Commis

The advent and subsequent rap

intermodalism have generated numer

operators and carriers In an effo

the industry the Commission decide
areements to determine whethe

regulation u0Pr section 35 of 

upon nondiscriminatory nonexc

terminal property where all use

prevailino tariff charges and 

parties otherwise subject to th

involving facilities located in 

agreements were included in the 

Exemption From Provisions of th

Shipping Act 1933 which was i

solicit comments on various ma

fry the Commission sjurisdict

Significant 

Affecting The 

hiker Surcharges

Oil prices skyrocketed to 

faced with extraordinary fuel p

in the worldwide supply of bunk

As a result carriers in a

permission to advance the effec

filed on 30and 90 day notices 

14b respectively of the Sh

to accept dual rate bunker surc

notice period while unanimousl

proceedings in Docket No 79 46 
Carriers Increased Fuel Costs in 

States and Docket No 79 58 Dual 

Commerce of the United States

In Docket No 79 46 the Com

ratemaking conferences there are 

systems were within the law in ap

than a 90day notice It was deci

beyond the carriers control Co

making which would modify Article 

to specify the circumstances and J

surcharge imposed on shortened no

Currency Surcharges

Carriers and conferences con

when they feel that they are warr

published by carriers in the US

of the Commission sregulatory re

surcharges which allegedly result 

are proportionally related to the 

or conference so that transportat

where international trade is impe

The Commission is considering 

establish procedures and tariff f

and conferences in the US foreig

adjustment factors in their ocean 

specific provisions describing the 

process involved in self policing 

On September 30 1979 there 

groups subject to the requirements 

agreements were in full compliance 

rules while 30 agreements filed a

conditionally approved or are pend

year 16 agreements were found to 

Commission srules and were served 

agreement should not be disapprove

under the requirements of section 

agreements have challenged the va

self policing rules in the US Co

Columbia Circuit

The Commission sstaff has im

with the reporting requirements of 

have submitted the required report

The self policing rules perm

policing authority requirement to 

ratemaking agreement to act as hea

the policing authority if a conv

person or persons are not otherwis

member that an independent polici

financial burden and that the tra

for five years

The audit of one specific confe

absorption practices began by id

involve conference regulation or pr

carriers in the US foreign comme

to conference rate agreement repres

the absorption practices conducted u

Correspondence has also been in

forwarder conferences for purposes o

approval of the agreements is warra

Monitoring of Controlled Carriers

When the Ocean Shipping Act of 

signed into law on October 18 1978 

to eliminate the predatory pricing p

in the US foreign commerce

The staff implementation of th

and classification of all state cont

foreign commerce of the United State

under the authority of section 21 of 

regarding the registry ownership an

operating in our foreign commerce O

received and other information indepe

over 20 steamship lines had been clas

P9

justification in order to determine 

Most of FESCO sthree hundred and fiv

have subsequently been disapproved

One of the most significant re

controlled carriers contained in PL 

rates and charges shall not withou

become effective within less than 30 

with the Commission As a consequen

special permission applications from 

and processed by the Commission ss

three of those were granted five w

processing and one was withdrawn

As an adjunct to the administr

proposed rules incorporating the st

new law were drafted for inclusion 

Publishing and Filing Tariffs By Co

Of The United States 46 CFR 536 T

on this rulemaking prior to final a

Finally the Commission issued 

state controlled carrier Baltic Sh

requesting documents as part of the 

rates and practices Docket No 78 

and Practices in the US Gulf Coa

Baltic furnished the FMC with some 

Commission deemed their submission 
the carrier with final Order 

1979 finding Bv c to be in v

Act

As a result of Baltic sco

January 29 1979 to adopt a rul

Act 1920 to suspend the carrs

the FMC with some additional do

26 1979 implementation of the 

consider this submission suffic

action

Prior to actual implementa

tariffs Baltic smotion for sta

by the DC Court of Appeals 

had been joined by the US Dep

of the Soviet carrier the Coms

Baltic Shipping Company executed 

Under the terms of that se

submit to the FMC information re

demands of the section 21 order

On October 10 1979 the F

Baltic ssubmissions as constitu

requirements of its section 21 

and its notice of default of the 
The Commission sstaff was sub

submissions to determine the type a

violations they may reveal It is 

its findings to the Commission earl

will determine whatever penalties m

means of assessing them

Collective Bargaining Agreements

Fiscal Year 1979 marked the fi

of selected maritime collective ba

Supreme Court s March 1 1978 deci

v Pacific Maritime Association 43

Court determined that collective b

not categorically exempt from the 

the Shipping Act 1916 stating th

arbiter of competition in the ship

In view of this decision the 

Notice of Proposed Rulemaking in D

Collective Bargaining Agreements 

public comment on the nature scop

certain collective bargaining agre

approval requirements of section 1

interim or conditional approval o

However because renegotiation of 
bargaining agreements was im

became necessary to clearly 

procedures to enable industry 

rule in the proceeding

On June 12 1978 the C

Collective Bargaining Agre

procedures for interim approv

bargaining agreements in the 

June 9 1978

The Commission sprogram 

consists of the following ac

agreements filed after June 9 

of a proposed rule in Docket 

Under the first set of p

bargaining agreements amend

filed during Fiscal Year 1979 

bargaining matters by Septemb

79 percent over completions f

A proposed rule in Docke

conclusion of the fiscal yea

priate regulatory or legislati

Fiscal Year 1980 to clearly d

bargaining agreements and min

in the negotiating process
Container Leasing and Container Su

On June 12 1979 the Commiss

No 11 to examine carrier practice

containers to the shipping commun

Since the advent of container

the United States almost 20 years 

to shippers have resulted in the e

Container pools of carrier equipm

of containers owned by leasing co

near the facilities of large ship

agreements with inland carriers to 

equipment to and from ports

While this arrangement appea

Commission needs additional inform

container leasing and supply syst

that container equipment has been 

allegations of preferential treatm

been received Container leasing 

three occasions when conferences 

containers by their membership

The fact finding investigati

parties who are affected by conta

of shippers and consignees who u
Intermodal ism

Intermodal transportation 

route involving two or more mod

reflecting rates and charges fo

filed with both the Federal Ma

Commerce Commission Some juris

inconsistencies and conflicts b

agencies The Shipping Act 19

1887 never contemplated the nee

recent transportation innovatio

The Interagency Committee 

of representatives from the FMC 

the Department of Transportation 

committee sPolicy Review Board 

the development of a model inter

determine the feasibility of un

The uniform interagency rules p

the rules of the ICC with those 

can be resolved

At the end of Fiscal Year 

had intermodal authority Of th

intermodal authority with the f

statistics show continued drama

intermodal movements particula

carriage by all water service
Pooling and Equal Access Agreeme

There were 19 active pooling 

Fiscal Year 1979 Bilateral poo

agreements generally reflect com

dations designed to reduce the i

laws import fees and quotas an

imposed by some of our trading p

lance to monitor the effect on s

participants is required

Such agreements are common 

pooling and equal access agreem

between the United States and A

Twelve provide for cargo allocat

and 50 percent to the reciprocal 

partner The remaining three p

USflag carriers 40 percent 

20 percent to thirdflag steams

Pools designed primarily to 

being established in several tra

has been in effect since Decemb

Japan Pool No 10116 has been 

the past year the ItalyUSA

approved on April 2 1979 and 

10274 was approved October 1 
Pool No 10333 1 was ending 

end has subsequently been app

utilization of the fuel equip

leading to increased fuel con

transportation costs

Nonexclusive Transshipment Agr

Nonexclusive transshipmen

23 from the requirements of se

either carrier involved from e

carriers The parties involve

outlined in the General Order 

language required by the orde

Commission staff and do not re

ANALYSIS BY TRADES

US North Atlantic Europe Tra

During Fiscal Year 1979 t

dominated by the big seven c

Lines Dart Containerline Fa

and US Lines All seven are 

Westbound Freight Conference C

announced changes in their ves

in the trade In addition to 
smaller nonconference carriers in t

their capacity through larger vesse

sailings One of the principal non 

expansion has been Trans Freight Lin

The impact of the substantial c

planned by the big seven and TFL w

trade although the actual effect is 

the demand for this capacity A stu

Administration projected a capacity 

AtlanticNorthern Europe trade of 30

42 percent increase in actual capac

unlikely that cargo growth will be a

supply

Since the end of Fiscal Year 1

capacity in the North Atlantic trade 

supply and demand In early 1980 S

has recently been alleged that the 

percent excess capacity and this co

had on the market has resulted in 

war in the North Atlantic since 197

US North PacificFar East Trade

The North Pacific trade consis

between the US West Coast and Jap

which accounted for 82 percent of a

3

New entrants in this trade du

Container Line Korean KMTC NYK 

Brothers Steamship Line US Ro

and CSC Line US These carrie

the estimated 100 0 TEU s alre

In addition established car

USSea Land Service Inc US

Israel Barber Blue Sea Scandi

increased the capacity offered du

The past fiscal year proved d

the North Pacific trade and there 

major steamship lines will exit th

further financial and rate instab

USSouth American Trade

South American economic deve

growth rate and relatively high le

fiscal year Increased trade libe

most South American nations and 

increase

Government involvement plays 

industries of most South American 

assistance and cargo sharing are 
Involvement There s subst

in the South American races 

develop and most of thr avai

breakbulk vessels

In its South American Tr

rate increases in the trade i

between the rate at which oce

prevalence of bilateralism 

South American trades were ge

experienced in other trades

Major Commissi

The Commission issued ov

foreign commerce during FY 79 

decisions included the follow

Docket Nos 78 51 and 78 

Revenue Pooling and Sailing A

Trade and Agreement No 10346 

Agreement ArgentinaUnited 

approved pooling agreements i

US Gulf trades on the cond

flag carriers in the trade be 
Docket No 76 14 JapanUS 

Agreement No 101163 The Co

cost sharing agreement among six 

for an additional 18 months The 

that the agreement would contribu

help curtail excess tonnage and w

fashion against competing carrie

would separately market their se

found to be an important pro com

Docket No 74 12 Agreeme

of a Pooling Sailing and Equal 

Cargo The Commission approved 

between Delta Steamship Lines I

providing for equal access to gov

between Peru and US West Coast 

Docket Ilo 74 5 Agreemen

Arrangement The FMC found that 

Lines Inc and Flota Mercante G

access to government controlled c

trade was in the public interest 

in order to maintain internationa

international commercial conflict 

action
Docket No 7743 Agre

Atlantic Pool Agreement This 

all cargo carried westbounfrom 

north ofCape Hatteras was a

stveral minor modifications 

would alleviate excessive ov

trade

Docket No 7750 North 

Containerline Limited The 

offering intermodal transporta

from Wilmington North Carolin

Virginia The Commission foun

rate to absorb the full cost 

adjacent container ports of W

Virginia was an unjust and u

16 and 17 of the Shipping Act 

because the diverting carrier 

containerized cargo in questio

inland locations at shipper e

can adequately accommodate the 

efficiencies were found to be 
Docket No 777 Combi Line 

9929 2 et al The Commission app

two joint service arrangements in 

condition that the three Europeanf

combined containerized cargo carry

direction averaged quarterly A

the Commission majority that the a

competition in comparison with exi

continue useful LASH and container 

efficiency and avoid overtonnagin

breakbulk service between two of 

and a second such service was limit

Docket No 77 4 EuroPacif

99023 et al The agreement in

European flag common carriers seek

in the US Pacific CoastEurope t

1982 was approved by the Commissi

the three carriers seeking approva

proposed joint service and that the 

twentyfoot container equivalents 

averaged quarterly The Commiss

to demonstrate the necessity for th

the joint service and that the sam

benefits would flow from the use in 

of the other two carriers which h

4
Docket No 7634 Tar

North Atlantic Westbound Freig

Tariff Rules Concertedly Publ

and Rate Agreement Members Re

for ShipperOwned or Shipper 

held that tariff rules which 

containers and established a 

trailerscontainers were with

approved section 15 agreemen

Docket No 7441 Agre

Pacific Westbound Conference 

agreement would have extended 

applicable to porttoport tra

The agreement was found to pr

trade to justify its anticomp

Commission

Docket No 72 35 Pac

of Rates Rules and Practices 

and Woodpulp from United State

the Philippines Taiwan Kore

determined that the Pacific W

concerning woodpulp and waste

First 17 or 18b5of the 
Docket No 71 29 Baton Rouge 

Incorporated The Commission found 

the use of Cargill sservices and fa

Port Allen Louisiana to be just an

section 17 of the Act and in relatio

Docket No 7828 Internation

Robert H Wall Inc v Sentinel Lin

It was determined that a simple bre

not establish a violation of section

Docket No 74 53 Agreement 

Far East Conference for Intermodal 

an agreement which would extend the 

Conference to include inland points 

East The Commission found the rec

conditions or other need for the a

its anticompetitive features In 

held that the extension of existing 

authority is not presumptively app

Docket No 76 Rulemakin

Agreements Filing of Agreements 

Subject to the Shipping Act 1916 

Commission earlier gave notice tha
procedures governing the fili

to the Commission for approv

Act 1916 On June 18 1979 

and invited further comment 

the procedures employed in th

expedite the disposition of a

improve the quality of inform

of such agreements without cr

upon the industry The Comm

comments submitted on the rev

Docket No 79 46 Expe

Increased Fuel Costs in the F

After a fivemonth investigat

dramatic rise in fuel oil pric

and the OPEC pricing decisions 

reasonably foreseeable and not 

US foreign commerce After 

ability of carriers to carry o

Merchant sContract the Comm

surcharges applicable to cargo 

than ninety days notice was la

Act 1916 This decision was 

the end of the reporting perio
Docket No 79 50 Notice of 

Convention on Code of Conduct for L

solicited comments from the maritim

transportation and economic consequ

Liner Code would have on the US f

most major maritime nations with t

will have ratified or acceded to th

be put into effect The inquiry fo

relating to cargo allocation ship

carrier disputes through voluntary 

intervals between general rate incr

summarized and transmitted to the 

Docket No 79 65 Certificat

to Combat Rebating in the Foreian 

Commission issued proposed rules in

the Shipping Act Amendments of 197

FMC require the Chief Executive O

common carrier by water in the fore

file periodic certification attest

combat rebating Discretionary au

require similar certification from 

forwarder broker other carrier o

Act 1916 Fifteen comments were 

V DO

Public Law 95 475 enacted on O

January 16 1979 amended the Interco

carriers in the domestic offshore tra

increases of up to five percent witho

The notice period for general rate in

changed to provide for 60 days notic

increases of less than three percent 

days notice

For those rates which the Commi

suspension period has been increased 

The new law provides for reparations 

general rate increase that is found t

Commission proceeding The Commissio

limits within which to conclude actio

The primary purpose of the new l

which the Commission reviews and take

increases or decreases in the domest

States and to provide a vehicle enab

rates found to be unreasonably high

Agreeme

One of the primary functions of 

to discharge its obligations under se

to evaluate concerted rate making and 

5
an commerce Most of These 

rating in the US foreign T

uo estic trades generally involv

ments and similar activiti

In Fiscal Year 1979 the C

the US domestic offshore trad

The Commission sprogram fo

filing rules during the past fis

38 proved to be successful It

including audio visual presentat

which were conducted in various 

major changes and requirements o

domestic trades increased approx

year as carriers submitted new o

the new rules The increased w

Commission sFiling Requirements

Effective January 1 1979 

tariffs on file with the Commis

their current tariffs to meet th

new General Order 13 46 CFR 53
53


56













3 requires controlled carrie

increases on 30 days notice 

rate justifications to the FMC 

requests 5 permits the FMC 

carrier rates on the basis of 

rates necessity of rates to a

ether factors deemed appropria

suspend controlled carrier rate

Act of 1978 also provides the 

stay of an FMC suspension orde

order if the President declares 

national defense or foreign po

An

The Shipping Act 1916 p

foreign commerce of the United 

those in their published tariff

trades many carriers have been 

called rebates to attract more 

HR 3055 was introduced o

the House Merchant Marine and F

that practice through tougher a

companion measure 5 199 was 

Inouye A substantially simila

House and Senate during the 95th 

the President After hearings 
and Fisheries Committee the anti 

both the House and Senate in early 

measure on June 19 1979 and it wa

The enactment of this law wh

1 increases penalties for rebati

shipment 2 provides as an add

suspension of up to 12 months 3 

for failure to comply with FMC sub

rebating investigations 4 requ

shippers forwarders and NVOCC s 

that they are enforcing a policy a

FMC rebating investigations 5 

negotiate a regime of cooperatio

whom do not formally prohibit reb

assess all civil penalties under 

prosecution for a criminal conspi

empowered to override prospective 

after receipt of the Commission s

In addition to previous testi

before the House Merchant Marine 

regarding the enforcement efforts 

the US foreign trades and testif

The Commission also submitted a d

to the Senate Commerce Committee
The Federal Mariti

In July 1979 the Comm

its governing statutes and ad

o the House Merchant Marine 

The model Shipping Act repre

month analysis by senior Comm

review Committee headed by Ch

7e7ared by the Statutory Revi

erg omical and equitable adm

is more responsive to current 

reflects the FMC s efforts to 

shipping operations and minimi

wherever appropriate The Of

work of the Committee

The Revised Shipping Act 

objectives 2 provides neces

te agency sstatutory obligat

the enactment of the original 

rplete irunity from the an

Wooing Act 4 delineates p

ajieements including criteria 

and 5 modernizes regulations 

tariff filing the Commissios

exemption from regulation lice

frwaroers and related proced

presented the Revised Shipping 

Marine Subcommittees as an adj

in the maritime industry
HR 4769 

On July 12 1979 Chairman Mu

McCloskey of California introduced 

Regulatory Reform Revitalization 

sponsors of the Omnibus Bill main

maritime industry by reducing gover

segments of the industry to organiz

efficient and profitable operation

immunity for authorized conference 

and allow conferences to limit mem

for ships to be sold to US citize

3 permit ships built or operated 

trade between foreign countries in 

States and other nations 4 gran

built ships if owned by US citize

at present operating subsidies m

ships 5 revise tax laws that c

to register under foreign flags a

carriage of US trade on USflag 

Enactment of HR 4769 in its 

the transfer of many FMC regulator

Trade Representative for Maritime 

authority to issue regulations su

agreements The Omnibus Bill woul
MC decision by the executive 

rarty The bill has been sub

on Undersecretary of Commerce 

Special Trade Representative 

the independent regulatory fu

derarbient and providing that 

FMC decisionmaking has been 

portions of the bill are expe

Chairman Daschbach testif

Subcommittee on July 19 1979 

portion of the Omnibus Bill 

basic policy objectives he e

Commission sown Revised Ship

Commission the FMC s draft s

necessary changes in maritime 

larly clarification of standa

he authority to exempt any c

jurisdiction and a grant of 

shipping industry The exten

formation of shippers counc

efficient intermodal transpo

created by application of both 

to the US ocean commerce
On October 16 1979 Chairman Da

House Merchant Marine Subcommittee 

mandated by Title V of HR 4769 whi

authority in a Deputy Special Trade R

the Chairman voiced the Commission s

that the Commission instead concurred 

President in a July 20 1979 letter t

In his letter incorporating the 

Task Force the President designated 

Department of Commerce as the Admins

maritime affairs and reaffirmed the 

authority in regulatory matters The 

that the President srecommendations 

in both the promotional MARAD and r

maritime policy preserving a clear a

the two The Commission urged subcom

recommendation in the final report on 

S 1460 

In July 1979 Senator Inouye C

Marine and Tourism Subcommittee intro

1462 and S 1463 dealing with regu

S 1460 and S 1463 are amendments to 

upon section 15 agreements and their 

the Commission sRevised Shipping Ac

separate proposals is the method of C

7
agreeTents The third bi

ing a policy of bilateralism 

Chairman Daschbach testif

September 18 1979 expressing 

substantive provisions of the 

points of similarity with the 

where he believed the Commiss

worthy of consideration Sen

cuently introduced a more com

1980 which provides for broa

ana proposes necessary changes 

Othe

Convention for a 

The proposed Convention f

commonly referred to as UNCTAD 

a suggested 402 ratio wh

trading while allocating spec

lines The Code also provides 

tying devices deferred rebate

involving rates and conditions 

European approach to conferen

commercial concepts with a mini

The Chairman testified be

on April 26 1979 with respect 

provisions be carefully examine

differs from US law and emp

US shippers and carriers if 

partners
In order to more fully examine p

adoption the Commission instituted D

Regarding the United Nations Convent

Conferences soliciting public comme

consequences of the implemented Code 

Commission specifically invited comm

conflict with existing US law and p

closed conferences and cargo allocat

association and two carrier associat

US ratification of the Code They 

the Code would exacerbate existing c

policies and those of our trading pa

to commerce and would harm the intere

Jurisdiction Over C

On October 30 1979 Vice Chairm

House Merchant Marine Subcommittee in 

would amend the Shipping Act 1916 to 

complaints against shippers clarify 

investigate violations of the Act by 

from paying less than applicable tar

that certain complaints against shipp

rather than courts of varying jurisdi

consistency to the decisions rendere

has both the expertise and responsib

Act matters Mr Moakley offered an 

that a shipper would not be found in 

mistake or inadvertent action

7
year

V

The Commission continued t

cnfcemrt claim schedule duri

the fiscal year there were 21 

ng Pefo e various United S

ceinc US District Court d

e elsc pending During the 

were file The Commission app

appeared in an ICC proceeding o

three proceedings before the IC

art cipated in eleven actions 

At the close of the fiscal 

briefs argument or decision a

in the district courts The fo

section of cases involving stat

are pending as of September 30 

US Court of Appeals

US FMC v Atlantic Co

79 1931 and 79 2162 US and F

Cir Ins 79 1930 and 79 2171 

and thirteen individuals were i
violations of section 1 of the She

inter alia that the defendants ha

raise stabilize and maintain pr

freight in the US foreign comme

of Commission approved agreements 

de novo The defendants pleaded 

June 8 1979 The Commission the

proceedings for use preliminarily 

proceeding in accordance with Ru

Procedure On August 14 1979 th

proceeding to determine inter a

the indictments violated section 

No 79 83 Investigation of Unf

Trade Both prior to and subseq

proceeding the District Court de

by orders dated July 17 and Augu

and the Commission appealed these 

briefing stage

Council of North Atlantic S

Association v FMC Si USA DC C

challenges FMC orders in its Doc

and Gulf Puerto Rico Lines Inc 

Docket No 74 40 Puerto Rico M

Rules on Containers declaring u
carriers in the United State

and stripping of containers 

Association

within 50 miles

labor

of mainland

These ta

sections 14 Fourth 16 First 

and section 4 of the Intercoa

been held in abeyance pending 

pending before the DC Circ

National Labor Relations Act 

provisions which the tariff 

now in the briefing stage

New York Shipping Assoc

ZimAmerican Israeli Shipping 

These consolidated proceeding

Commission sorders regarding 

benefits for maritime laborer

Agreement No T 2336 New Y

Working Arrangement The New 

those orders to the extent th

assessment adjustments in ad

upheld by the Court of Appea

see 571 F2d 1231 while Zi

to deny its claim for assessm

such claim was both asserted 

proceedings have been briefed 
In Reefer Express Lines v FMC 

AS Ivarans Rederi v FMC USA UC 

sought of the Commission sapproval 

No 10349 A Cargo Revenue Pooling 

States Atlantic Trade and Docket 

Revenue Pooling and Sailing Agreem

of revenue pooling agreements in th

Gulf trades The consolidated pro

Dart Container Line Co v FM

a challenge to the Commission sde

Carolina State Ports Authority In

AFL CIO Local 1426 and 1426A W

holding that Dart s practice of a

of tobacco between Wilmington No

by water and the NorfolkHampton 

sections 16 and 17 of the Shipping 

before the Court

State of Alaska v FMC 9th 

appealed a Commission decision no

increase filed by Foss Alaska Lin

not to investigate or suspend rat

Shipping Act 1933 are not subje
Ryoichi Takazato and K

Cir No 782193 The plai

the form of a court order d

gative subpoena that had be

that the Commission ssubpoe

proceedings brought pursuan

US District Judge William 

a Commission motion for sum

of the contested subpoena 

with US v Paper Fibre Int

which appealed a Los Angeles 

Commission sinvestigative s

have been briefed and are sc

USA v FMC DC Cir N

trust Division of the Depart

authority to approve section 

permit the ocean carriers to 

carriers regulated by the In

through intermodal service 

awaiting argument

Trans Pacific Freight C

DC Cir No 782172 and Se

79 1062 These consolidated 
policing rules under General Orde

rate making bodies to police the

through a neutral body and requ

they have collected available to 

has been briefed and will be argu

In New York Foreign Freight 

589 F2d 696 1978 the Court o

Circuit upheld an ICC rule exclu

common carriers by water NVOCs

joint rates with ICC regulated c

petitioners opposing the ICC rul

In Trailer Marine Transport 

DC Cir 1979 a proceeding b

No 77 55 Trailer Marine Trans

Puerto Rico the Court of Appeal

reversed the FMC s decision requ

rates in the USPuerto Rico tra

the FMC had no jurisdiction to r

of joint rail water rates in the 

remanded to the Commission the q

nevertheless require reporting o

carrier sdivision of those rate

of their impact on FMC regulated 

The Court adopting the Commissio

s

all questions relating to the alleg

provisions of section 18b Shippi

conducting an investigation to be c

investigation is currently underway 

Bulk Carriers Ltd Investigation 

the Trade Between the United States 

This

US v Deutsche Dampfschiffa

civil penalty action was broug

service consisting of Germany s Ha

Italy s Fassio Service for paying 

in the Mediterranean US trade 

Court assessed penalties of13400

ever imposed by a US court for il

commerce

US v Open Bulk Carriers L

193 is a civil penalty action filed 

five defendants for allegedly comb

obtain a lower freight rate than t

the Commission in violation of sec

Act 1916 and Commission General O

defendant and two of the shipper d

Commission has pending a motion fo

remaining defendants a shipper an

8
US v Paper Fibres 

is a civil penalty case bro

rebates from ocean carriers 

Act Settlement negotiation

awaiting trial

Other Adjudication

Ex Parte No MC 105 S

Proposed Rulemakinq This i

proceeding in which the ICC 

carriers engaged in operatio

proceeding involved operation

shipments in interstate or f

movement by ocean carrier an

commercial zone of a port ci

extending beyond the boundar

located The Commission file

In lieu of the proposed exem

expedited certification proce

In ICC Ex Parte 359 W

legislation the FMC submitte

respect to deregulation of w

its comments to those areas t

Action by the ICC with respec
IX 

As part of its continuing eff

other interested parties apprised 

commerce the Commission sstaff p

and Virgin Islands trade studies 

has previously published similar e

Hawaiian and Alaskan trades

The North Atlantic Trade Stud

pated ocean shipping developments 

Europe

The survey included economic 

nations as well as detailed analy

Atlantic trade routes tonnage st

fluctuations and rate disparitie

The report also detailed US

foreignflag participation and E

European trades All section 15 

discussion agreements involving t

in the study which also discusse

ments affecting the trade

The Virgin Islands Trade S

tive maritime developments in the 

and the US mainland Puerto Ri

and other trading partners
The study included a des

fleet configuration in the Vir

ports and harbors and an exte

ocean transportation on the is

The report also provided 

the flow of various commoditie

riiestic trade as well as a d

Islands shippers toward the qu

they uillize

The most recent report wa

shortl after the end of the r

shipping developments in the li

the South American nations of 

Peru and Venezuela

That study included a des

South America individual prof

partners an economic review an

and the South American contine

import and export trade with o

region

The report also provided 

carriers serving various South 

USflag participation in the 

and studies relevant to our oce

Commission approved section 15 

trade were also described

Similar studies of other 

1980 and existing analyses wi
6

6

N

1

w

0

N

1

W

0

N

O

W

J cc

40
AS O

CLAIMS COMPROMISED 

ebate Claims 

No Settled Shippers 

Civil Penalties Shippers 

No Settled American Carriers 

Civil Penalties American Carr

No Settled Foreign Carriers 

Civil Penalties Foreign Carrie

REBATING PENALTIES 

Non Reoatinq Claims

No Settled 

Civil Penalties 

COMPROMISED CIVIL PENALTIE

COURT SETT

Nc of Defendants

Civil Eenalties

TOTAL CIVIL PENALTIES

GENE

FEDERA

E
NEVITT IMP CORP

JAPAN LINE

SHOWA LINE LTD

MITSUI 0SK

YAMASHITA SHINNIHON

NIPPON YUSEN KAISHA

KAWASAKI KISEN KAISHA

ACTION INDUSTRIES

LUDLOW CORPORATION

RIO DEL MAR INC

EUROPAM CORP AND

EUROPAM PAPER AND FIBRE CORP

ARKAY IMPORT

HR ARDINGER SON

ZALE CORP BUTLER SHOE CORP

BUTLER SHOE CORP

ZADOCORP

JASONEMPIRE

ORIENTAL TRADING CORP

TALLEY INDUSTRIES

ADORENCE

LARIMI

CIVIL P

REBATING VIOLAT

F
US INDUSTRIES 

WR GRACE 

BRENTWOOD 

COTTON IMPORT 

TANDY 

NEDLLOYD HOEGH LINES 

DIVERSIFIED INDUSTRIES 

ANGEL ETTS 

CUNARD BROCKLEBANK 

BERG OCEANIC CORP AND

BERG MILL SUPPLY 

DAMICO LINES 

ARA SERVICES INC 

VIDA SHOES 

SAM BRILLIANT COMPANY 

CURTIS MATHES CORPORATION 

MODMAID IMPORTS 

MORSE ELECTRO PRODUCTS 

ITALIAN LINES 

HEIDELBERG 

PREMIER BRANDS 

ATLANTIC CONTAINER LINES 

SIRCO 

NISHIMOTO TRADING CO 

COMPANHIA DE NAVAGACAO

LLOYD BRASILEIRO 
APPE

C

LELY CORPORATION 

IMPERIAL INTERNATIONAL 

MONSIEUR HENRI 

SOUNDESIGN CORP 

KAUFMANN TRADING 

TENNA CORPORATION 

MR CHRISTMAS 

MELVILLE CORPORATION 

ORIENT OVERSEAS CONTAINER LINE 

LIGGETT GROUP INC 

HITACHI 

BURLINGTON INDUSTRIES 

KNUTSEN LINE 

TOTAL ANTI REBATING PENALTIES 
BUREA

FIELD 

INVESTIGATIONS TOTAL 

Pending

September 30 1978 667 

Opened FY 1979 923 

Completed FY 1979 853 

Pending

September 30 1979 737 
AP

STATISTICAL 

SECTION 15 AGREEMENTS including m

Foreign Commerce 

Domestic Offshore Commerce 

Terminals 

Labor Management 

SECTION 14b DUAL RATE CONTRACTS inc

REPORTS REVIEW

Shippers Requests and Co

Minutes of Meetings 

Self policing of Conferenc

Pooling Statements 

Operating Reports 

APPROVED AGREEMENTS ON FILE AS OF S

Conference 

Rate 

Joint Conference 

Pooling 

Joint Service 

Sailing 

Transshipment 

Cooperative

Dual Rate Contract

Working

Systems

Agen

Non exclusive Transshipme

Domestic Offshore 

Terminals 

Labor Management Approvals 

Includes 23 agreements determined 

subject to section 15 of the Ship
Granted 328

Denied 74

Withdrawn 13

Fiscal Year 1979

October 1 1978 thru September 

Total Number of Tariff Filings 

Total Number of Tariff Filings 

Total Number of Tariffs On Hand 

Total Number of Tariffs On Hand 

Special Permission Applications

received during Fiscal Year 197
APPE

STATEMENT OF APPROPRIAT

FISCAL YEAR ENDED 

APPROPRIATION

Public Law 95431 95th Congres

For necessary expenses of the 

including services as authori

passenger motor vehicles and 

as authorized by 5 USC 59

exceed 1500 shall be availa

representation expenses

Public Law 9638 96th Congress 

Supplemental Appropriation A

increased pay cost

Appropriation availability 

OBLIGATIONS AND UNOBLIGATED BALANCE

Net obligations for salaries an

year ended September 30 197

Unobligated balance withdraw

STATEMENT OF RECEIPTS DEPOSITED WIT

TREASURY FOR THE FISCAL YEAR EN

Publications and reproductions 

Water

Fines

Pollution

and penalties

application and 

Miscellaneous

Total general fund receip