letter of Transmittal 

Administration 

THE FUNCTIONS OF THE 

HISTORICAL DEVELOPMEN

THE ORGANIZATION 

FISCAL YEAR 1978 

FOREIGN COMMERCE 

DOMESTIC COMMERCE 

PROCEEDINGS BEFORE TH

COMMISSION 

CURRENT TRENDS 

APPENDIX 

eMflrc at the Liininnnn

3Fcbrtni Sia

to nshiu 

TO THE SENATE AND HOUSE OF 

Pursuant to section 1e2

No 7 of 1961 and section 

1936 as amended I respe

Annual Report of the Feder

report covers Fiscal Year 

began October 1 1977 and 

Yiebe

in

The e

0 channe 

Ysr 1 The rre

Ririe rd 3achbacf Cl

rma

M inw Hampshire 

Romas F Moakley Jic 4air

0i Massachusetts 

James l DTiY Coflaniissi nev

R Maine 

Karl E Bakke Commissioner

R Virginia 

Leslie L Kanuk Commis sion

0 New Jersey 
10

8

FMC
SCOPE OF A

The Federal Maritime Com

pendent regulatory agency by 

12 1961 Its basic regulato

Act 1916 and subsequent law

the regulation and protection 

The Commission is compos

President with the advice and 

are appointed for fiveyear t

the Commission belonging to t

designates one of the Commis

tive and administrative office

The FMC s establishment 

which found the dual promotio

Federal Maritime Board to be 

divided the Maritime Board in

Administration of the Departm

development subsidization a

and the Federal Maritime Com

the domestic offshore and fore

States
riimaission smain 

1 The regulat cn

our foreign a1

2 nrestigati e

anteing Si ppr r 

freight forwa l

3 Licensing of d

4 Passenger vess

5 Certification 

responsibility 

The Conrr ission regula

US foreign commerce to rea

efficiency in the ocean comm

is achieved the FMC satisfie

that shippers transport and c

at a fair and equitable pric

the shippinci laws of the Unit

Perhaps the Commission s

carrying out its obligations 

Act 1916 Since this legisl

from the Sherman and Clayton 

Charged with carefully evalua

entits subject to the Shipp
their antitrust immunity T

Considered by the Commission 

public benefits During the 

were processed under section 

of roughly six hundred separa

The Commission srespon

with those of other maritime 

Commerce Coianission for exa

authority to set rates or to 

and has no authority to limit 

Unlike the Maritime Adm

often confused the FMC is a 

Commission not only has no re

merchant marine or shipbuildin

fleet only to the extent that 

merchant marine serves the ge

Despite these restrictio

responsibility for ensuring s

commerce Since over 95 per c

the Commission simportance in 

consumer as well as promoting 

commerce cannot be overempna
icleral Maritime orA

t positions allw 

E apropriatfon of

s to hcated Th 1

cr ices in New a1 k 

tcrto Rico with so

current Chairman N1r 

n into office en AtiguA 
HISTORIC

raifegCcraaraglair2 3xe1

DEVEL
OCEAN

is widespread cote ec

ihe atiorial ocean tra

ti

vaeisid 021N the incepthi

ihe file tander Report a 

Het shie enactment of the Shi

antewer comprehensive Congress f

The Industrial Revolution 

had livtn rise to the need for 

cation than the sailing vessels 

those performance was relatively 

previded the essential ingredt e

reguty of sail ips

t ireekthrough create 

dcalieD the middle and late 19th 

r411 ti01 soon le to seri 15 

rates viers cn mc ajar trade 2

thel decide I 

the offects of destrie

the first steamship conlerences 

that the first confrenee origin

the 1870 s
13

The concept rapidly gained 

decades and zs the new transp

foreign commerce conflict with 

In 1911 the Department of just

charging them with violation o

practices in restraint of trad

Although the intervention 

conferences in question the Ju

British review of shipping ring

Representative Joshua Alexands

Committee to undertake a compr

their practices

The Alexander Report found 

inherent advantages to the ship

1 Greater regularit

2 Stability and un

3 Economy in the co

4 Better distrihttin

5 Maintcr ance or US 

foreigo rar ets 

6 E tai tieatneo tc

rr 
The Committee Report expres

conference agreements would res

through common ownership Neith

than the existing system

In addition to the advantag

the Card Congress found many abu

as has every subsequent Congress 

it created the US Shipping Bo

US ocean commerce and curb the 

making

Chairman Alexander sComm

imposition of antitrust policies 

prove counterproductive finding 

worth retaining under the scruti

The Shipping Act 1916 evo

as amended the guiding legislat

Few changes were made in e

ocean shipping regulation for ne

ocean freight regulation during 

indirect byproducts of an incre

strong and healthy USflag me

Merchant Marine Acts of 1920 and 
Between 1958 and 1962 the 

Judiciary Committees each condu

ocean commerce and monopoly prob

Bonner and Celler Committees re

The findings of the two gro

those of their predecessor the 

existed within the conference s

and discriminatory treatment of 

At the same time it was d

virtues still outweighed its fa

further increase Federal regula

gressions The inapplicability 

emphasized

Representative Celler sJu

for preserving antitrust immun

1 Existing instituti

historical standin

as a last resort

2 The conference sy

that could not be 

improved merely b

as well as US 

commerce of the U
1

3 Outright eliminatio

in the US foreign 

in inflicting sever

marine and in crea

presently undesired 

The final congressional rep

and regulatory functions of the o

patible leading to President Kes

was put into effect on August 12 

The reorganization vested re

subsidization of the US mercha

of the Department of Commerce 

offshore waterborne commerce was 

Maritime Commission

After 1961 no substantive 

rgulation outside the area of 

liability occurred until the 95

through passage of the domestic 

again increased the FMC s regula

exclusive jurisdiction over some 

existing in our foreign ocean co
The pattern that was tir

the present day and was rca

when President Carter signed 

Although many of the cha

to the inception of OS regu

new challenges continually ar

incorporate political conarc

world marketplace into its re

With the growth of the s

maritime nationalism among m

become increasingly cognizant 

industry it regulates

Finally in adapting to 

commerce the Commission must 

it develops are as efficient a

minimize the burden of regula

it has been entrusted

The Chairman of the Feder

executive and administrative o

with the other four Commission

policies of the Commission

The Commission makes rules 

and ensure compliance with the 

statutes The five Cormissicne

consider matters under adjudic

investigations and establish 

other Commissioners testify be

regulation of the US ocean co

internal agency committees or t

aspect of the Commission sreg

in administering the polic

prescribes the Comilission spro

the Chairman sOffice serves as 

information on the activities a

Congress other government actn

and the general public

Office 
and objectives. 

Office of t

The General Counsel's Offic

Commission. providing it with le

ation. The staff reviews and a

rules and regulations; renders 

pending adjudicatory matters; a

for ratification pursuant to Co

The Office of the General 

certain Shipping Act violations

Commission in most matters befo

The General Counsel's Offi

Division of Reports, Opinions. 

legislation. Orders and legal R

Deputy General Counsel. 
The Admin

The FMC has seven adminis

a Chief Judge The administra

render decisions in formal rule

Initial decisions of the As 

action by the Commission or in 

Judges have the authority to ad

upon motions and offers of pro

regulate the course of hearings 

agency rules or the Administrat

The majority of proceeding

involve the approvability of se

discriminatory practices betwee

Act adjudication of shipper co

Act and domestic rate cases
Office 

The Secretary sOffice per

those carried out by a clerk of 

Office of the Secretary include 

meetings 2 receiving and proc

tions of the shipping statutes 

orders and notices of Commissio

and records of all formal proce

subpoenas directed to Commissio

ing the Freedom of Information 

responding to information reque

lated industry and the public 

the ALJ s Commission reports 

to interested parties

In addition the Secretars

participant in the development 

and complexity of formal procee

mandate and evaluation of the 
Bureau 

The Bureau of Hearing Cou

of the public interest in the 

public interest considerations 

activities Hearing Counsel p

adjudicatory dockets some rule

show cause cases petitions fo

investigations all of which a

Commission Attorneys from the 

discovery examine and cross e

motions exceptions and other 

arguments before the Administr

They act as hearing counsel w

complaint proceedings initiated 

Hearing Counsel attorneys furni

special Commission projects s

litigation by or against the C

the Commission sdecisionmakin

and Procedure
8uread of Oa

the Bureau of r

Rryulrsi iof OCR is the larges

whc ale rei ponsible for both th

programs which address nearly a

Fe among the Bureau 

and analysis of all agreements 

Act evaluation of dual rate c

and domestic tariff filings wh

which shape the flow of US w

Although the Bureau of Oce

segrh nts of the ocean shipping 

arc reflected in their recomme

conference agreements filed for 

Regular analysis of trade 

pol cing contracts pooling lJt

to the successful perlor aonrc o
Bureau of 

The Bureau of Industry Ec

economic environmental and e

performance of the Commissios

expertise may be utilized in d

rules and regulations analysis 

or development of longrange re

The Bureau is functionally 

the Offices of Economic Finan

Office of Data Systems It is 

environmental analysis in deter

apace with the increasing need 

minimize the economic burden of 

dwindling energy resources

As an example of the funct

staff participated in the follow

year

1 Assisted in the prepar

submission to the Inter

outlining future regul

2 Completed a study of th

addressing the configu

the major moving comm

portation costs on the 

recent history of rate 
3 Continued research i

carriers to set up a

construction an ac

4 Initiated a Virgin I

5 Participated in a Co

preparation of studi

Atlantic liner trade

Continued assessment 

shipping industry

Prepared a proposed 

and

6 Prepared a rule to a

criteria

rate base

used in the 

The importance of Commiss

general and fuel consumption in 

worldwide depletion of oil and 

year the Commission sOffice o

activities under the National 

and the Energy Policy and Cons

40 proceedings were reviewed to 

assessments were needed Work 

Impact Statement concerning rec

dealing with minibridge operat

The Commission expects to 

area of energy utilization in o

which encourage the most effici

possible
Bureau 

The Commission senforceme

to eliminate cash rebates and m

from our foreign trade

In the literal sense it i

common carrier rates and agreem

checks of ocean freight forward

passenger vessel audits of ship

financial responsibility

But the FMC s enforcement 

policing initiatives also repr

carriers of all flags that trade 

compliance with US maritime la

The Commission firmly belie

trades must do so according to o

against illegal rebating is jus

adherence to the laws of the Un

commerce and to ensure the acce

powers among those who seek to p

trade

Although the enactment of a

welcomed as an invaluable additi
28

rebating campaign continues to 

sion is currently focusing effo

for malpractices revision of e

conducting investigations as we

of more sophisticated forms of 

cash rebating Efforts are also 

of trades in which major settlem

extent to which malpractices ha

In activities conducted du

Commission increased the invest

in an intensive effort to curta

by carriers shippers consigne

commerce District offices are 

in areas surrounding principal U

The District offices repres

geographical areas In addition 

the District Offices and their 

Commission activities in these a

advice and access to the Comms

parties
Be3ofCertific

The Cureau sprimary resp

vessels under various Federal a

for spills of oil and hazardoi s

within the Commission sjurisdi

311 of the Federal Water Pollut

Pipeline Authorization Act TA

Continental Shelf Lands Act Ame

The Bureau of Certificatio

for the licensing and regulatio

and the certification of passen

casualties or non performance o

The Federal Maritime Conrn

tration of the financial respo

contained in section 311 of the 

Ft Pct and section 2C4 cct t

Act lbPAA Due is nai ifen

fnrL cram is adu intte C

Cn Sceteaacer ic Sc Ike 

Continental Shelf Lands Act nha

that k i contain financial repn

provisions and inditatior t 

the respcnsihiiit fe aGltr

Third cater poiic rn rlogran 
existing patchwork of water polluti

law is expected early in 1979. 

The ocean freight forwarding in

who. on behalf of shippers, arrange 

cargo by common carriers by \�ater. 

Act: 1916.-enacted in 1961. the Comm

and regulation of independent ocean 

Commission General Order 4 sets fort

appJiA:ants· for freight forwarder 1 ic

acth-ities�{)f 1 icensed forwarders. 

During -fiscal. year J.9J8.· the Co

licenses and 25 ap'pl ications were de

The Commission also administers 

777 which require vessel owners. cha

foreign-flag passenger vessels havin

acccim

odalions 'and embarking passeng

establish financial responsibility t

or injury !lnd to indemnify passenger

a voyage or cruise. 
Office of Bu

The Office of Budget and 

direction of the Managing Dire

of physical fiscal and manpo

tions and interprets budgetary 

justifications develops and a

internal control for agency fu

policies procedures and plan

agency workload productivity 

agency programs

Division 

The Division of Office S

for the Commission and its fie

printing duplicating and ma

and equipment space manageme

records storage and retrieval
Offic

The Office of Personnel pla

programs for the Commission in 

tions These include recruitme

training position classificati

opportunity and other employee 

the Commissio non all personnel 

progressive personnel program w
FI

Y

1
1) Complete statutory re

legislative recommend

will make the Commiss

needs of the future; 

2) Analysis and evaluat

determine how best to 

the greatest possible 

econoll1Y; 

3) Development of strate

Commission's decision

the quality of its r

4) Full utilization of a

5) Development of a Gre

address the maritime 

seacoast. 

These objectives were establi

longer-range goals which are essen

1) Developing a balance 

shippers and carrier
making the Commissi

and protective of t

It quickly became apparent t

these goals within the constraint

and with the backlog of docketed 

of the reporting period During 

was taken on both fronts

The political technologica

have altered the character of the 

never contemplated by the Congres

Consequently a Statutory R

early in Fiscal Year 1978 to exam

develop and prioritize goals and 

implementation will address the m

maritime affairs

Many of the changes advocate

headed by the Chairman were pas

period and several were signed 

Daschbach and Vice Chairman Thom

during the 95th Congress on beha

improve the effectiveness of FMC 

closely with the Congress in are

maritime laws
The Congress passed HR 

overwhelming margin It was 

1978 The Ocean Shipping Ac

Conmission to contain the thre

which penetrate the US line

market considerations with wh

HR 6503 which amends 

also easily passed by the Con

This statute enlarges the Coms

in the US domestic commerce 

disputed domestic rate cases

Antirebating legislation 

HR 9518 passed the House by 

vote in the Senate This leg

Commission saggressive campa

ocean commerce The bill was 

A similar bill was introd

the end of the reporting peri

will continue to actively par

designed to enhance the effect

Statutory Review Committee w

reform of the Shipping Act an
Regulatory reform has also bee

successful efforts to reduce its re

unnecessary procedural delay Duri

issued 193 decisions and nine rules 

FY 74 39 in FY 75 40 in FY 76 

period 197377 the FMC issued an a

During June 1978 alone the C

agenda items heard four oral argum

issued 25 initial decisions and 17 

COMMISSION DECISIONS

1 I

FY FY F

74 75 
More importantly there w

activity compromised the qual

contrary the time effort an

the Conmission and its staff a

process could be expedited wit

provide the public with fair 

Although the regulatory p

reporting period there is no 

Between January 1 and Septembe

seven docketed proceedings tha

agency had decided in the past 

The impact of this increa

industry should soon become ev

landmark minibridge case th

shippers and carriers alike an

one of the most important tran

In a companion proceeding 

examined the concept of natura

that should further encourage 

services that redound to the u

domestic consumers
In Docket 73 22 the Matso

several other domestic rate pro

established guidelines that sho

domestic offshore commerce

The Commission also issued 

with an aggressive enforcement 

strict standards of conduct for 

commerce

Expedited Commission decis

recent handling of informal doc

taking less than onethird as l

five years ago Under new rule

informal docket proceedings ado

resolution of reparations cases 

The FMC also adopted new 

severely restrict the circumsta

be granted to parties to Comm

regulatory delay

The Commission will conti

streamlining its decision mak

is currently identifying areas 

the Commission sOrganization 

to improve the agency s work f

Hearing Process is focusing up

reform
In an effort to become more 

FMC has assigned a higher priori

delay and backlog than it has ev

of the public interest as a who

the maritime industry in particu

timeliness with which the Comm

issues

The public interest require

action that is based upon the b

important step that the FMC has 

its communication lines with the 

During calendar year 1977 

agenda items or 72 in open s

period well over 80 of all ag

and the FMC should soon complet

GovernmentintheSunshine Act 

cases behind closed doors

The Commission has also br

the maritime community whose v

in Commission matters The int

always been evenly balanced in 

additional shipper input into 

was vigorously solicited during 
Shippers have subsequen

numbers During Fact Finding 

Point OCP Rates over 400 s

tions reflecting an unusual

The opening of the Coms

Chicago on February 24 1978 

the Midwestern exporter in Om

commerce as the ocean carrier 

The Great Lakes office g

a better opportunity to make 

FMC regulatory policy and un

balance of shipper and carrie

The functions of the new 

role of the FMC s five distric

as field representatives of th

traditional investigative dut

necessary to address the diver

their respective regions

It should be emphasized 

rather than supplants their im

The Commission sinvestigative 

FMC s credibility as an effect

upon our ability to eliminate 

to restore legitimate competi

goods
Although rebating has a leg

inception of the steamship indu

has significantly eroded its pre

past two years

During Fiscal Year 1978 th

Shipping Act violations with 39 

Most of the settlements evolved 

were reached under the provisions 

anti rebating settlements in inc

Especially prominent among 

were those achieved with Seatrain 

Israel1000 Barber Blue 

United States Lines Inc 9000

reporting period the Commission 

Japanese government resulting in 

Japanese lines for malpractices 

trades In the past two years 

4000 Seatrain Zim and 

more money into the US treasury 

total annual budget

The FMC is far more than a 

settlements with Zim and the Jap

representing the Commission sfir

anti rebating laws against foreig
significant progress in the FMs 

carriers of all flags that trad

compliance with US law

The Commission firmly beli

trades must do so according to 

against illegal rebating is ju

adherence to the laws of the U

commerce and to ensure the ac

powers among those who seek to 

trade

Shippers and carriers wer

shipping industry that were th

the past year

The agency sstatutory re

Congress which would provide o

sectors of the shipping indus

guidelines and legislative cla

industry

The Commission has alread

lation of freight forwarders 

the required freight forwarde

and the increasing value of c

original bond requirement ina

who use freight forwarders to 
In addition to its regu

Commission has also been vest

passenger vessels for casualt

recently to provide certifica

bility for pollution by oil a

These new duties were th

reporting period The increa

ensuring that vessel operator

broad range of clean up opera

challenging task of recertify

Clean Water Act of 1977

Throughout the reporting 

and the maritime industry exp

for interagency cooperation o

a first step the FMC and the 

guidelines for the exchange o

proposed actions by the respe

opinions on subjects of mutua

The agreement is intende

to work toward informal reso

which both agencies have an i
In May 1978 the Presid

develop national maritime po

become increasingly aware of 

ocean shipping industry and t

economical transportation str

The Commission therefore 

Force in which it advocated 

economic efficiency and prog

The draft called for legaliza

councils and full rationaliza

commercial desires of the pa

precedence The FMC would r

most efficient possible flow 

Through a policy of fu

the FMC seeks to encourage s

eliminate wasteful overtonna

the way for the formation of 

efficient and therefore more 

consumer By allowing steam

best adapted to the unique m

sion also seeks to minimize 

and the shipping public wh

to prevent exploitation of 

The Task Force is expe

President early in 1979
The Commission realizes 

of its regulatory policies it 

Special Organization Task For

coordinated by the Special As

established early in 1978 to e

structure Its mandate includ

functions activities and sta

of the resulting work flow O

and current division of respo

the Task Force

The Organization Task Fo

the Commission changes in org

achieve our statutory objectiv

ness and economy

In reviewing achievements 

noted that the Federal Maritim

which reflect in microcosm the 

maritime affairs as a whole

Foremost among these is 

widely divergent but equally 

The Commission should ma

It must balance the impo

providing goods and services 

that were also designed to se
It is necessary to pro

taining fair and equitable 

foreign commerce

It is imperative that 

according to the laws of th

international characteristi

practices of its participa

The Commission must b

public interest requires t

which due process decrees 

As the Commission em

reforms during the coming 

of maintaining this delica
7

CLfAA ETPC

THE WORLD

4

IC

COM
SURVE

ENFOR

Fo

Agreements Review

Section 15 of the Shi

for initial or continued a

Commission sconsideration 

visible activity The ant

by the Commission must be 

Section 15 also provid

continued for any conferenc

terms and conditions for a

ship or withdrawal from m

that the Commission shall d

hearing on a finding of in

reasonable procedures for p

and complaints

During fiscal year 19

under section 15 A statis

active agreements appears i

The Commission receive

agreements in order to dete

and to ensure that the part
scope of their agreement The 

competitors the shipping pub

Commission also receives and re

and ratemaking agreements to e

Shipper requests and comp

cargo misclassification of co

or tariff changes are also revi

Commission staff Nearly four 

were filed during FY 78 and 

the attention of the FMC s Ass

Affairs and other staff The 

enhancing its responsiveness to 

Foreign Tariff Filings

Section 18a and b of 

rates and charges must be filed 

was promulgated to implement t

technical tariff filing require

in order for the Commission to 

These filings are reviewed for 

particularly the requirements 

revised General Order 13 will 

the Commission sstaff is activ

compliance with these new requ
Tariffs filed with this 

any practices involving unjus

subject to the Act 2 revie

ensure that they do not devia

the Commission 3 determine 

with statutory requirements 

identify discriminatory freig

to US foreign commerce and 

applicable Commission regula

During Fiscal Year 1978 

filings were received involv

anticipated that the number o

in 1979 but decrease in 1980 

pursuant to General Order 13 

Self Policinq

On September 14 1978 t

Docket No 73 64 Additional 

Applicable to Self Policinq S

effective January 1 1979 T

provide for more effective se

fixing agreements

The rule amends the Commis

in General Order 7 Part 52
All conference agreements 

under section 15 of the Shippin

agreements are exempted from th

to conform to the requirements 

be filed with the Commission on 

The new rule requires that 

shall contain provisions estab

policing authority shall be com

by or having any financial inte

or ratefixing agreement or any 

shall make selfinitiated inves

fixing agreements shall not pro

to the Commission nor preclude 

and extent of their own involvem

xnd 5 a more precise descript

included in the semiannual repo

Such detailed reports will enab

whether a particular agreement 

not adequately self policed mus

Shipping Act
Freight Rates and Charges in 

General Rate Increases

During the past year th

police general rate increases 

implemented do not become an 

shipping public The Commis

carriers publish general fre

includes 1 the method u

lishing the level of rate in

computation and 3 what ac

to ensure that the proposed 

of the United States Upon 

analysis to determine if the 

Surcharges

Carriers and conference 

increases in costs related t

labor difficulties port con

in bunker costs While it is 

are necessary to offset add

the Commission has the resp

not imposed longer than is r
impediment to US importers o

area has succeeded in reducing 

are not continued after the co

passed

In December 1977 confere

filed emergency surcharges with 

incurred during the earlier str

Association The staff advised 

regarding the statutory proprie

complaints were received from 

of these surcharges

Formal Commission action w

of the surcharges However th

surcharges prior to their beco

unnecessary Since the Commis

ratemaking or lawfully filed t

jawboning used in this instan

ensuring that ocean freight ra

levels

OCP Fact Finding

On August 23 1977 the C

gation No 10 concerning the P

Conference of Carriers in the 

Point OCP Cargo
The OverlandOCP service 

to importers and exporters for 

to give carriers operating thro

attract ocean cargo from and de

United States by establishing d

the Pacific Coast gateway would 

Gulf gateways

The investigation of the O

proposed action of the Trans P

to eliminate its OCP rate syste

investigation is to assess the 

community Interested parties 

effects on their individual op

throughout the country to give 

and the volume of the resulting 

participation

final report of

rarely

findings

seen

and

in Co

re

fiscal year
Time Limit For Filing Overcharg

On August 24 1978 the C

Federal Register a proposed ru

the filing of overcharge claims 

years The proposed rule wou

rule which requires overcharge 

period other than two years 2 

which clearly advises shippers 

claim within two years 3 re

applicable and pertinent tarif

claim
INTE

Intermodalism denotes the 

consignee over a route involving 

Through the recent development 

of the Interstate Commerce Com

filed with both the FMC and the 

occasionally arisen however a

ie TMI v United States and 

Circuit pending

It has been recognized tha

identify potential problem area

where possible In August of 1

and the ICC entered into an agr

procedures to be followed by th

matters in which each agency ha

In a continuing effort to 

Policy Review Board was formed 

of the interagency Committee on 

Board is composed of the Manag

agencies and an official of the 
program has been established a

undertaken including developm

and determination of the feas

rules The impetus for the p

of lading was an ICIC report o

lading practices completed in 

By the end of fiscal year 

had intermodal authority an i

44 agreements 27 have impleme

of tariffs
III OlY

COMM

iYlRi 1M

j

n 1 it

1 i

ic1 

1
Dom

During the past fiscal yea

became Public Law 95495 This 

of the Intercoastal Shipping Ac

carriers to file annual general 

being subject to suspension A

general rate increase over 3 pe

the suspension period for filing 

percent was changed from four m

also authorized under the new la

time limits within which it mus

Various amendments to the Comms

Practice and Procedure have been 

changes

Domestic Tariff Review

Revised tariff filing rules 

completed during Fiscal Year 197

was involved in an intense train
of the General Order This t

to carriers along with a cop

tariff filing requirements 

the staff of the Domestic Ta

tion highlighting the major c

Numerous seminars were sponso

audiovisual presentation a 

rules and a sample tariff pr

carrier srepresentatives sh

community attended seminars a

atives in Miami New Orleans 

Angeles and Seattle The su

program regarding Domestic C

decline in domestic tariffs 

Terminals

Marine terminals both 

and labor for the interchange 

and for the receipt and deliv

The lease and operation 

of agreements subject to the 

15 Shipping Act 1916
The scope of agreements file

significantly broadened by the de

United States in Federal Maritime 

No 76 938 decided March 1 19

collective bargaining agreements 

from the filing requirements of s

Commission is the public arbiter 

Consequently as a result of this 

labor matters heretofore conside

must be processed for appropriate 

The Commission therefore has 

that both standard terminal leasi

arrangements adequately protect 

the standards of the Shipping Ac

The Commission published an 

Docket No 7811 on April 19 

comments and information from the 

operation of a rule to exempt and 

maritime collective bargaining ag

renegotiation of various major m

it was apparent that there was an 

of Commission policy and the esta

industry compliance pending adop
15

On June 12 1978 the Com

Statement Collective Barlainin

established procedures for inte

of agreements becoming effective 

agreements which became effectiv

statement provides that such ag

Federal Register for comment and 

possible

The present program to han

ing three activities 1 proce

bargaining agreements under 46 

1978 collective bargaining agree

and 3 preparation of a propose

In fiscal year 1978 100 po

supplements were filed for cons

exempted or determined by the Co

During fiscal year 1978 ni

current operational intermodal m

Puerto Rico were filed for Com

agreements between the Puerto R

Transport Corporation covering 

have been approved by the Comm
Authority, cover berths and adjace

were conditionally approved. Howe

implemented by the parties. 
hXO C IS 

18 IE 

TI

coIm lm 
FINAL DEC

COM

During Fiscal Year 1978 

formal proceedings and issued 

proceedings were discontinued 

determinations not to review 

proceedings and nine were r

trative Law Judges

The Commission also deci

issued 56 decisions in inform

for less than 5000

In addition to making tr

Commission issued several fin

to have a profound impact upo

among the decisions made dur

following
6

Docket No 7238 Council o

et al v American Mail Lines et 

tially upheld the lawfulness of m

innovation in the ocean shipping 

Commission held that the Far Gast 

carriers by water did not violate 

the Shipping Act 1916 or sectio

In so doing the Commission also 

the reasonableness of a practice 

Docket Nos 73 42 73 61 7

the Port of New Orleans et al 

companion docket to 73 38 the 

tariffs providing for the transp

US points to foreign ports via 

referred to as a minibridge se

reintel reted the impact of seci

making the concept of naturally 

and fluid in its deterninations 

through US ports
and to employ shipping documents 

each shipment in terms readily co

fications. 

Docket No. 76-41 - Berthing �

Rico. The Commission found that t

section 17 of the Act by failing t

lations regarding berthing assignm

the Ports Authority violated secti

Rico Maritime Shipping Authority. 

able advantage by allowing it the 

located on a public terminal. 

_ • ..:.

_� ________ �� ..

 o __ 
Docket No 77 5 In Re Agre

Service Voting Provisions The C

allowing a joint service member t

conference voting to reflect the 

joint service The Commission di

ScanStar Service and held that it 

Docket No 7755 Trailer M

Single Factor Rates Puerto Rican 

profound impact on the Commissis

common carrier by water in the do

have violated section 2 of the In

file a tariff fully describing it

Rico

Docket No 7317 Sea Lan

Lines Inc Rules on Containe

Shipping Authority Proposed I

tariff rules which place restri

over waterfront facilities when 

points within 50 miles of inlan

of the Shipping Act and ordered 
Docket No 73 22 et al 

Changes in the US Pacific C

Matson Navigation Company fou

otherwise violate the Shippin

rate base was calculated as o

to reflect the existence of d

capital structure

Docket No 76 35 Can

Rule Published in the Freigh

Agreement Operating From Uni

the United Kingdom Ireland 

Europe Concerted establishm

of consolidation allowances 

agreements Maintenance of s

interest within the meaning o

concerted elimination of such 

Commission under that sectio
The Commission also adopted 

7545 Madeplac SA Industria 

SA aka Frota Amazonica 77 3

Inc v Barber Blue Sea Line 77

Matson Navigation Company all 

freight

Decisions were rendered in 

Dockets Nos 7050 733 73 70 

7623 76 38 76 51 771 7732 

the assertion of jurisdiction ov

activities the lawfulness of sp

used household goods belonging t

dictional dispute between carrie

to set free time and demurrage r

for prepaid freight Commission 

Isla Grande Puerto Rico and ca

in the US foreign and domestic 
Rulemakiug

The most significant ru

included

Docket No 7364 Sel

its rules governing the stand

participating in rate fixing 

Act 1916 necessitating neu

conferences tightening crite

preventing the release of se

Commission The effective da

Docket No 7640 Revisi

Publishing Filing and Posting 

The Commission revised and upd

offshore commerce Special re

transportation were included fo

filed at the Commission must no

to a carrier stariff These r

during calendar year 1978 and w

1979
Docket No 7714 Appearanc

by Former Employees The Rules o

appearance of former Commission m

proceedings were substantially tig

of interest

Docket No 77 53 Independ

Requirements Increase in Amo

of bond required for licensed in

increased from 10000 to 30000 

an application for license where 

Docket No 78 9 Financial 

This rule amended existinv regul

evidence of financial ability to 

Pollution Control Art csc aeA

of the Clean Water Act cf 917 

Corterl Ant The ameneact s bid

cost esicbli h minisma 1r6 t

yetselhi acid requi e nt finaci 
ADS

rs
75

CURRENT STATUS O

TRENDS IN TRA

Fore

US North AtlanticEurope Trade

The US North Atlantic ports 

to Northern Europe Consequently 

available capacity than any other 

Europe from the United States

In 1966 the North Atlantic t

route on which containers were ut

ization has become increasingly p

trade is now almost totally conta

trade underscores its important t

Virtually all of the major c

members of conferences both inbo

independent carriers had been una

market The inability of indepen

Express Lines TransOmega Line M

stable and continuous service has 

characterized as a graveyard for 

currently a modest number of inde

to capture a small market share
Eastbound North Atlantic 

carriers two of these operat

bulk vessels and the remaind

the total long ton capacity i

along the eighteen carrie

Container Lines Dart Contain

Land Seatrain and US Line

members both inbound and outb

America Line is a conferenc

in the trade the big seven ca

81 of the containers carried 

Over the past year the c

increasing dramatically althou

rates have kept pace

The North Atlantic trade 

increase in vessel capacity ov

changes have been undertaken by 

not such carriers can maintain 

to be seen The trade is still 

of the inroads which independen

continue
The principal response to h

has been a concurrent increase in 

point last year proposed general 

and an abortive strike induced 

shortterm increases ranging up t

During fiscal year 1978 inc

trades has been evidenced by w 

diversion rho heightened degree 

strated by the corLinui gdirer 

cargoes through East Coast Ca rae ao 

Kt is also beneficial to ex

the trade The level of capacity 

the profitability of carriers 

place a carrier below its break e

maritime policy on the load facto

be underestimated

Because of the relatively 

existing in the trade and it ih

the North Atlantic increased ra

only logical measure to avert se

currently embarked upon such a r
The Commission staff is curr

the' North Atlantic trade and the 

its future development. 

North Pacific Trade 

The liner trade between the 

the North Pacific.;. Japan. Korea

most lucrative and important of a

largest trading partner of the U

�orea. and Taiwan are growing rap

�vemrults have grown at much hig

tonnage bas is. 1 iner imports from 

during the period. while imports 

J9.9%. 10.7%. and 14.3% respecti

This expansion I'll cargo dema

volume of additional vessel tonna

_ .. --- -t 
In October 1977 the availa

trade amounted to roughly1400 

cally available to shippers on th

be filled with cargoes from other 

destinations because some of the 

all water service which originate

as Sea Land offer minibridge se

This tonnage is contributed 

which are extremely large such a

President Lines and Sea Land if 

Japan Line K Line Mitsui 0SK 

and Yamashita Shinnihon is consi

trade is served by at least 27 sc

major operators other carriers 

offer a liner service with limited 

Pacific trade

From the beginning of 1977 t

increases in vessel capacity in t

to the growth of existing fleets 

as possible entrants into this tr

Steam Company will enter the Pac

vessels and industry reports ao 

Company will place two new vessel
1979. 

Based on the actual and for

concluded that the tonnage avail

.grown enonnously since the begin

will. in all likelihood. amount 

period. 1977-78. 

Whether this rapid increase 

in 1979 cannot be determined at 

have the authority to require co

utilization rates. During 1977

appear to have been adequate •. E

than westbound rates because the 

Intense competition from in

in the wide fluctuations in the 

market. ranging from 81.2% of t

Coast/ Korea trade to only 33.9

market. Despite some conferenc

posed by independent competitio

ference system on North Pacific 

'" . :" 
8

During the reporting period ra

on trans Pacific trade routes were 

other trades Increases on major m

lower than on lesser moving commo

currency in most tariffs In the J

expenses have drastically increased 

permitted rates to be fully adjuste

the profit margins of some carrier

Pacific Far East Line was forced i

Mediterranean Trade

Mediterranean trade routes are 

services offered breakbulk conta

of participants many of whom are 

The trade has traditionally b

leading to the repeated filings of 

practices Capacity appears to ha

of the trade

Many of the carriers offering 

a portion of an overall service co

and the Persian Gulf IndiaPakist

this multi faceted service a majo

of cargo westbound through the Me
in ballast from Middle East ca

ports to load whatever cargo i

to ascertain precisely what th

are

The major carriers in the 

1 Black Sea Shippin

2 Prudential Lines

3 Hellenic Lines

4 Costa Lines

5 Turkish Lines

These five carriers provid

in the trade At the end of 1

included American Export Lines 

Both the WINAC data and a 

point to extreme capacity imba

however is not the only proble

stateowned enterprises as in 

trades permeates the Mediterra

carriers such as BLASCO Jugo

others is a factor of at least 

problem to be considered in dev

to the Near Eastern market

On a more positive note p

and the Persian Gulf continue t

encing minor delays congestion 
83

lengthy The rate agreement and m

area generally are no longer impos

this region

Latin American Trades

US trade with Latin America 

the dominance of US carriers W

ation has changed Most Latin Am

national flag lines to compete for 

policy in most Latin American coun

market aspirations of their nation

in the form of cargo preference or 

The general pattern of trade 

traditionally consisted of the US 

equipment while importing raw mat

pattern continues today but is ch

chemical and industrial sectors of 

A significant trend in the L

spread of commercial bilateral po

of them initiated in response to c

government bilaterals have been d

and Argentina These agreements 

transport a mutually agreed upon a

moving in their reciprocal trade o
sponsorship. this pool of cargo i

Two such agreements have bee

and at the end of FY '78. two wer

Argentina/U.S. trades. 

Equal access agreements norm

the parties involved, making them 

pooling agreements. One potentia

they often provide for rationaliz

zation and reduces the amount of 

thereby producing cost savings wh

public. The incentive for malpY'a

equal access and pooling arrangem

In the latin American trades 

reluctant to allow conferences to 

there h�s been a trend for the co

congestion surcharges as a inean5 

Cormn1ssion's staff has maintained 

during the reporting period and \'1

conferences to reduce theh' conge

improved. 
DOMESTIC COMMERCE

Alaska

Black Navigation Company In

percent general rate increases on 

tively

Totem Ocean Trailer Express 

Interstate Commerce Commission and 

12 general increase was proposed 

effective July 1 1978 After su

lieu of the 12 increase at the IC

changed to 8 for Totem s FMC regu

August 1 1978

Hawaii

Matson Navigation Company f

tariffs in the Pacific CoasHawa

1978 In each instance the prop

became effective on March 4 and 

cemwnissi0n consideration Hawa

increases which became effective 

and United States Lines Inc lik

roughly the sane tints n its Pn

filed a 214 ecrease that became 
tismitaconsidered a prote

r suspension or inve

riig FY 7 Matson plac

MAUI LOA service between Los 

Puerto 45co

Me 0 S Puerto Rico trad

cohp itton within both price 

fiscal year Sea Land Service 

10 for those routes it was se

the US CulfPuerto Rico trad

lower than carriers serving th

protest filed by the Puerto Ri

rates became effective on Nove

trade Sea Land decided to ret

level

Proportional rates which 

have application only if there 

movement became prevalent as 

specific cargo movements Sinc

unjust port equalization can e

scrutiny of all proportional ra

permitted to become effective 
Intermodal tariff filings in

during the current reporting per

sion has generally encouraged int

have met with question and much c

rejection of previous filings T

filed its internrodal tariff sole

Obvious questions of agency juris

the subject of a docketed procee

subsequent hearings the Federal 

finding TMT in violation of Comm

order was subsequently stayed by 

the District of Columbia Circuit 

TMT has increasingly expande

numerous points in the mainland s

all decided to publish tariffs of

cations similar to that offered b

have filed their publications wit

various permission authoritics u

decision and clearly set net tii 

holding out this inter modal serv

Included in thew intenoodai 

land for its West Coast Puertc Pr

ering tha disco rtinuance of its a

Coast ports and Puerto Rice and t
Sea-land filed the provisions 'in 

rules. tariff included in its reg

late in the fiscal year. Se

Atlantic/Puerto Rico trade to in

other.competitors in this trade

offering a percentage discount 

The provisions were the subject 

by the Commission. Representat

\\farrant either suspension or fu

consideration is being given to 

insurance provisions included i

In f4ay of 1978. TMT added 

between Jacksonville. Florida a

has a cargo capacity of 374 for

world's largest barge, measurin
Virgin Islands

While the year saw very li

area it again found the Virgin 

rates SeaLand Service Inc 

Intermodal Lines Inc proposed 

was expressed no formal protes

ing to warrant either suspensio

to become effective as schedule
AP
APPENDIX 

Statistical Ab

SECTION 15 AGREEMENTS including m

Foreign Commerce 

Domestic Offshore Commerce 

Terminals 

Labor Management 

SECTION 14b DUAL RATE CONTRACTS inc

REPORTS REVIEW

Shippers Requests and Complaint

Minutes of Meetings 

Selfpolicing of Conference and 

Pooling Statements 

Operating Rcports 

APPROVED AGREEMENTS ON FILE AS OF S

Conference 

Rate 

Joint Conference 

Pooling 

Joint Service 

Sailing 

Transshipment 

Cooperative Working Agency and 

Dual Rate Contract Systems 

Nonexclusive Transshipment 

Domestic Offshore 

Terminals 

TARIFlS

Tariff Pages Filed

Foreign 

Domestic Offshore 

Terminal 

Tariffs on File as of September 

Foreign 

Domestic Offshore 

Terminal 

Includes43 agreements determined 

Shipping Act 1916
New and Initial Filings 

Replacement Filings 

Other Filings (pages) 

Total Number of Filings Reject

Total Number of Filings Accept

l\hmlber of new or initial rate

an average of l new or initia

Number of rate changes (based 

changes per page) 

Total Number of Tariffs on Hand 

New Tariffs Accepted during F

Total 

Total number of tariffs cance

Fiscal Year 1978 

Special Permission Aplicatio

received during Fiscal Year 1

Granted 94 

Denied 14 

Withdrawn 27 

Pending 1 

Infonnal Complaints·: 

Pending as of 10-1-77 

Pending as of 10-1-78 

Net increase in Infonnal'Comp
APPENDIX 

Monthly Pilings Fiscal Year 1978

October 77

November 77

December 77

January 78

February 78

March 78

April 78

May 78

June 78

July 78

August 78

September 78

Total

Civil Penalt

For Violations of 

fiscal Y

Albis Corp

Banfi Products Corp

Barber Blue Sea

Brother Int lCorp

CBS Import

Carfel Inc

Cedarwood Young Co Inc dba

Allan Paper Co

Clinton Electronics Corp

Continental Can

R Dakin Co

ES Novelty

Gambles Import Corp

Hasbro Industries

Ideal Toy Corp

Johnson LineNOSAC

Perry Koplik Sons

Kraco Enterprises

Mamiye Bros Inc

Mega Lines joint service

Merit Int lCorp

National Recreation Products

Mead Corp

Pacific Coast Commercial Inc

APP
Pier 1 Imports

The Playhouse Co Inc

RSM Co

VJ Rhodes 8 Co Inc

Scope Imports Inc

Seatrain Lines Inc

Stanley Home Products

Tras Mex Line et al

Troll Carriers open bulk

United States Lines Inc

Valley Distributing Co Inc

Van Wyck Int lCorp

Sam Ward Co Inc

Willem Winkel

M

Zim Israel Navigation Co Ltd 

Zim American Israeli Shipping 
AP

BUREAU 

FIELD 

F

INVESTIGATIONS TOTAL MALPRACTIC

Pending 93077 800 383 

Opened FY 1978 768 174 

Completed

FY 1978 901 289 

Pending 93078 667 268