51st 

Annual Report

Federal Maritime Commission

Fiscal Year 2012
 FEDERAL MARITIME 

 COMMISSION

 

 51st

 ANNUAL REPORT

 

 

 for

 

 Fiscal Year

 2012 

 
TABLE OF CONTENTS

LETTER OF TRANSMITTAL................................................ ..... i 

MEMBERS OF THE COMMISSION....................................... ..... iii 

SENIOR COMMISSION OFFICIALS....................................... ..... v 

FMC MISSION.................................................................. ..... vii 

I. THE COMMISSION 

A. Functions .................................................... ..... 1 

B. Organization................................................ ..... 3 

II. THE YEAR IN REVIEW.......................................... ...... 5 

A Efficiency and Competition............................... ...... 6 

B. Protecting the Shipping Public......................... ...... 11 

 

III. DEVELOPMENTS IN MAJOR U.S. FOREIGN TRADES 

A. North Europe...................................................... 17 

B. Mediterranean............................................. ...... 18 

C. Indian Subcontinent and the Middle East............... ...... 19 

D. Australia and Oceania...................................... ...... 20 

E. Central America and the Caribbean...................... ...... 21 

F. Asia........................................................... ...... 22 

G. South America.............................................. ...... 24 

H. Africa........................................................ ....... 27 

I. Worldwide............................................ ...... ....... 27

IV. THE FOREIGN SHIPPING PRACTICES ACT OF 1988 

A. In General................................................... ........ 29 

B. Top Twenty U.S. Liner Cargo 

Trading Partners.................................................. 30

TABLE OF CONTENTS

LETTER OF TRANSMITTAL................................................ ..... i 

MEMBERS OF THE COMMISSION....................................... ..... iii 

SENIOR COMMISSION OFFICIALS....................................... ..... v 

FMC MISSION.................................................................. ..... vii 

I. THE COMMISSION 

A. Functions .................................................... ..... 1 

B. Organization................................................ ..... 3 

II. THE YEAR IN REVIEW.......................................... ...... 5 

A Efficiency and Competition............................... ...... 6 

B. Protecting the Shipping Public......................... ...... 11 

 

III. DEVELOPMENTS IN MAJOR U.S. FOREIGN TRADES 

A. Worldwide......................................................... 17 

B. Asia................................................................. 18 

C. Australia and Oceania .......................................... 20 

D. Indian Subcontinent and the Middle East..................... 21 

E. North Europe...................................................... 23 

F. Mediterranean................................................... 24 

G. Africa .............................................................. 25 

H. Central America................................................. 26 

I. South America...................................... ............... 27

IV. THE FOREIGN SHIPPING PRACTICES ACT OF 1988 

A. In General................................................... ........ 31 

B. Top Twenty U.S. Liner Cargo 

Trading Partners.................................................. 32

TABLE OF CONTENTS

LETTER OF TRANSMITTAL................................................ ..... i 

MEMBERS OF THE COMMISSION....................................... ..... iii 

SENIOR COMMISSION OFFICIALS....................................... ..... v 

FMC MISSION.................................................................. ..... vii 

I. THE COMMISSION 

A. Functions .................................................... ..... 1 

B. Organization................................................ ..... 3 

II. THE YEAR IN REVIEW.......................................... ...... 5 

A Efficiency and Competition............................... ...... 6 

B. Protecting the Shipping Public......................... ...... 11 

 

III. DEVELOPMENTS IN MAJOR U.S. FOREIGN TRADES 

A. Worldwide......................................................... 17 

B. Asia................................................................. 18 

C. Australia and Oceania .......................................... 20 

D. Indian Subcontinent and the Middle East..................... 21 

E. North Europe...................................................... 23 

F. Mediterranean................................................... 24 

G. Africa .............................................................. 25 

H. Central America................................................. 26 

I. South America...................................... ............... 27

IV. THE FOREIGN SHIPPING PRACTICES ACT OF 1988 

A. In General................................................... ........ 31 

B. Top Twenty U.S. Liner Cargo 

Trading Partners.................................................. 32

TABLE OF CONTENTS

LETTER OF TRANSMITTAL................................................ ..... i 

MEMBERS OF THE COMMISSION....................................... ..... iii 

SENIOR COMMISSION OFFICIALS....................................... ..... v 

FMC MISSION.................................................................. ..... vii 

I. THE COMMISSION 

A. Functions .................................................... ..... 1 

B. Organization................................................ ..... 3 

II. THE YEAR IN REVIEW.......................................... ...... 5 

A Efficiency and Competition............................... ...... 6 

B. Protecting the Shipping Public......................... ...... 11 

 

III. DEVELOPMENTS IN MAJOR U.S. FOREIGN TRADES 

A. Worldwide......................................................... 17 

B. Asia................................................................. 18 

C. Australia and Oceania .......................................... 20 

D. Indian Subcontinent and the Middle East..................... 21 

E. North Europe...................................................... 23 

F. Mediterranean................................................... 24 

G. Africa .............................................................. 25 

H. Central America................................................. 26 

I. South America...................................... ............... 27

IV. THE FOREIGN SHIPPING PRACTICES ACT OF 1988 

A. In General................................................... ........ 31 

B. Top Twenty U.S. Liner Cargo 

Trading Partners.................................................. 32

TABLE OF CONTENTS

LETTER OF TRANSMITTAL................................................ ..... i 

MEMBERS OF THE COMMISSION....................................... ..... iii 

SENIOR COMMISSION OFFICIALS....................................... ..... v 

FMC MISSION.................................................................. ..... vii 

I. THE COMMISSION 

A. Functions .................................................... ..... 1 

B. Organization................................................ ..... 3 

II. THE YEAR IN REVIEW.......................................... ...... 5 

A Efficiency and Competition............................... ...... 5 

B. Protecting the Shipping Public......................... ...... 9 

 

III. DEVELOPMENTS IN MAJOR U.S. FOREIGN TRADES 

A. Worldwide......................................................... 12 

B. Asia................................................................. 13 

C. Australia and Oceania .......................................... 15 

D. Indian Subcontinent and the Middle East..................... 16 

E. North Europe...................................................... 18 

F. Mediterranean................................................... 19 

G. Africa .............................................................. 20 

H. Central America................................................. 21 

I. South America...................................... ............... 22

IV. THE FOREIGN SHIPPING PRACTICES ACT OF 1988 

A. In General................................................... ........ 26 

B. Top Twenty U.S. Liner Cargo 

Trading Partners.................................................. 27

TABLE OF CONTENTS

LETTER OF TRANSMITTAL................................................ ..... i 

MEMBERS OF THE COMMISSION....................................... ..... iii 

SENIOR COMMISSION OFFICIALS....................................... ..... v 

FMC MISSION.................................................................. ..... vii 

I. THE COMMISSION 

A. Functions .................................................... ..... 1 

B. Organization................................................ ..... 3 

II. THE YEAR IN REVIEW.......................................... ...... 5 

A Efficiency and Competition............................... ...... 5 

B. Protecting the Shipping Public......................... ...... 9 

 

III. DEVELOPMENTS IN MAJOR U.S. FOREIGN TRADES 

A. Worldwide......................................................... 12 

B. Asia................................................................. 13 

C. Australia and Oceania .......................................... 15 

D. Indian Subcontinent and the Middle East..................... 16 

E. North Europe...................................................... 18 

F. Mediterranean................................................... 19 

G. Africa .............................................................. 20 

H. Central America and the Caribbean........................ 21 

I. South America...................................... ............... 22

IV. THE FOREIGN SHIPPING PRACTICES ACT OF 1988 

A. In General................................................... ........ 26 

B. Top Twenty U.S. Liner Cargo 

Trading Partners.................................................. 27
 

 March 31, 2013

To the United States Senate and House of Representatives:

Pursuant to section 103(e) of Reorganization Plan No. 7 of 

1961, and section 208 of the Merchant Marine Act, 1936, as amended, 

at 46 U.S.C. §306(a), I am pleased to submit the 51st Annual Report of 

the activities of the Federal Maritime Commission for fiscal year 2012.

 

 Sincerely, 

 

 Richard A. Lidinsky, Jr.

 Chairman

FEDERAL MARITIME COMMISSION

WASHINGTON, D.C. 20573-0001

V. SIGNIFICANT ACTIVITIES BY ORGANIZATIONAL UNIT 

A. Office of the Secretary........................................ ... 35 

B. Office of Administrative Law Judges..................... 41 

C. Office of the General Counsel................................ 53 

D. Office of Equal Employment Opportunity.............. 63 

E. Office of the Inspector General.............................. 65 

F. Office of Consumer Affairs and Dispute Resolution 

Services......................................................... 69 

G. Office of the Managing Director............................. 73 

H. Bureau of Certification and Licensing................... 89 

I. Bureau of Enforcement....................................... 99 

J. Bureau of Trade Analysis.................................. 105

APPENDICES

A. Organization Chart............................................ 123 

B. Commission Proceedings................................... 124 

C. Agreement Filings and Status............................... 125 

D. Form FMC-1 Tariff Location Addresses - 

Electronic Service Contract Filings 

and Special Permission Applications..................... 126 

E. Civil Penalties Collected..................................... 127 

F. Statement of Appropriations, Obligations 

and Receipts.................................................. 128

V. SIGNIFICANT ACTIVITIES BY ORGANIZATIONAL UNIT 

A. Office of the Secretary........................................ ... 37 

B. Office of Administrative Law Judges..................... 43 

C. Office of the General Counsel................................ 55 

D. Office of Equal Employment Opportunity.............. 65 

E. Office of the Inspector General.............................. 67 

F. Office of Consumer Affairs and Dispute Resolution 

Services......................................................... 71 

G. Office of the Managing Director............................. 75 

H. Bureau of Certification and Licensing................... 91 

I. Bureau of Enforcement....................................... 101 

J. Bureau of Trade Analysis.................................. 107

APPENDICES

A. Organization Chart............................................ 125 

B. Commission Proceedings................................... 126 

C. Agreement Filings and Status............................... 127 

D. Form FMC-1 Tariff Location Addresses - 

Electronic Service Contract Filings 

and Special Permission Applications..................... 128 

E. Civil Penalties Collected..................................... 129 

F. Statement of Appropriations, Obligations 

and Receipts.................................................. 130

V. SIGNIFICANT ACTIVITIES BY ORGANIZATIONAL UNIT 

A. Office of the Secretary........................................ ... 37 

B. Office of Administrative Law Judges..................... 42 

C. Office of the General Counsel................................ 50 

D. Office of Equal Employment Opportunity.............. 60 

E. Office of the Inspector General.............................. 62 

F. Office of Consumer Affairs and Dispute Resolution 

Services......................................................... 66 

G. Office of the Managing Director............................. 70 

H. Bureau of Certification and Licensing................... 86 

I. Bureau of Enforcement....................................... 94 

J. Bureau of Trade Analysis.................................. 100

APPENDICES

A. Organization Chart............................................ 117 

B. Commission Proceedings................................... 118 

C. Agreement Filings and Status............................... 119 

D. Form FMC-1 Tariff Location Addresses - 

Electronic Service Contract Filings 

and Special Permission Applications..................... 120 

E. Civil Penalties Collected..................................... 121 

F. Statement of Appropriations, Obligations 

and Receipts.................................................. 122

V. SIGNIFICANT ACTIVITIES BY ORGANIZATIONAL UNIT 

A. Office of the Secretary........................................ ... 37 

B. Office of Administrative Law Judges..................... 42 

C. Office of the General Counsel................................ 50 

D. Office of Equal Employment Opportunity.............. 60 

E. Office of the Inspector General.............................. 62 

F. Office of Consumer Affairs and Dispute Resolution 

Services......................................................... 66 

G. Office of the Managing Director............................. 71 

H. Bureau of Certification and Licensing................... 87 

I. Bureau of Enforcement....................................... 95 

J. Bureau of Trade Analysis.................................. 101

APPENDICES

A. Organization Chart............................................ 118 

B. Commission Proceedings................................... 119 

C. Agreement Filings and Status............................... 120 

D. Form FMC-1 Tariff Location Addresses - 

Electronic Service Contract Filings 

and Special Permission Applications..................... 121 

E. Civil Penalties Collected..................................... 122 

F. Statement of Appropriations, Obligations 

and Receipts.................................................. 123

V. SIGNIFICANT ACTIVITIES BY ORGANIZATIONAL UNIT 

A. Office of the Secretary........................................ ... 32 

B. Office of Administrative Law Judges..................... 37 

C. Office of the General Counsel................................ 45 

D. Office of Equal Employment Opportunity.............. 55 

E. Office of the Inspector General.............................. 57 

F. Office of Consumer Affairs and Dispute Resolution 

Services......................................................... 61 

G. Office of the Managing Director............................. 66 

H. Bureau of Certification and Licensing................... 82 

I. Bureau of Enforcement....................................... 90 

J. Bureau of Trade Analysis.................................. 96

APPENDICES

A. Organization Chart............................................ 113 

B. Commission Proceedings................................... 114 

C. Agreement Filings and Status............................... 115 

D. Form FMC-1 Tariff Location Addresses - 

Electronic Service Contract Filings 

and Special Permission Applications..................... 116 

E. Civil Penalties Collected..................................... 117 

F. Statement of Appropriations, Obligations 

and Receipts.................................................. 118

V. SIGNIFICANT ACTIVITIES BY ORGANIZATIONAL UNIT 

A. Office of the Secretary........................................ ... 32 

B. Office of Administrative Law Judges..................... 37 

C. Office of the General Counsel................................ 45 

D. Office of Equal Employment Opportunity.............. 55 

E. Office of the Inspector General.............................. 57 

F. Office of Consumer Affairs and Dispute Resolution 

Services......................................................... 60 

G. Office of the Managing Director............................. 65 

H. Bureau of Certification and Licensing................... 79 

I. Bureau of Enforcement....................................... 86 

J. Bureau of Trade Analysis.................................. 92

APPENDICES

A. Organization Chart............................................ 108 

B. Commission Proceedings................................... 109 

C. Agreement Filings and Status............................... 110 

D. Form FMC-1 Tariff Location Addresses - 

Electronic Service Contract Filings 

and Special Permission Applications..................... 111 

E. Civil Penalties Collected..................................... 112 

F. Statement of Appropriations, Obligations 

and Receipts.................................................. 113

V. SIGNIFICANT ACTIVITIES BY ORGANIZATIONAL UNIT 

A. Office of the Secretary........................................ ... 32 

B. Office of Administrative Law Judges..................... 37 

C. Office of the General Counsel................................ 45 

D. Office of Equal Employment Opportunity.............. 55 

E. Office of the Inspector General.............................. 57 

F. Office of Consumer Affairs and Dispute Resolution 

Services......................................................... 60 

G. Office of the Managing Director............................. 65 

H. Bureau of Certification and Licensing................... 79 

I. Bureau of Enforcement....................................... 86 

J. Bureau of Trade Analysis.................................. 92

APPENDICES

A. Organization Chart............................................ 108 

B. Commission Proceedings................................... 109 

C. Agreement Filings and Status............................... 110 

D. Form FMC-1 Tariff Location Addresses - 

Service Contract Filings, NSA Filings 

and Special Permission Applications..................... 111 

E. Civil Penalties Collected..................................... 112 

F. Statement of Appropriations, Obligations 

and Receipts.................................................. 113
MEMBERS OF THE COMMISSION

Richard A. Lidinsky, Jr.

Chairman

Appointed 2009

Term Expired 2012

 Joseph E. Brennan Rebecca F. Dye

 Commissioner Commissioner

 Appointed 1999 Appointed 2002 

 Term Expired 2008 Term Expires 2015

 

 Michael A. Khouri Mario Cordero

 Commissioner Commissioner

 Appointed 2009 Appointed 2011

 Term Expires 2016 Term Expires 2014

iii
v

SENIOR COMMISSION OFFICIALS

Counsel to Chairman Lidinsky...................Lowry A. Crook

Counsel to Commissioner Brennan .......Steven D. Najarian

Counsel to Commissioner Dye ..............Edward L. Lee, Jr.

Counsel to Commissioner Khouri................John A. Moran

Counsel to Commissioner Cordero.............Mary T. Hoang

General Counsel .........................Rebecca A. Fenneman 

Secretary............................................Karen V. Gregory

Chief Administrative Law Judge..............Clay G. Guthridge

Director, Office of Consumer 

Affairs and Dispute Resolution Services..........Vern W. Hill

Director, Office of 

Equal Employment Opportunity .................Keith I. Gilmore

Inspector General ...............................Adam R. Trzeciak

Managing Director...............................Ronald D. Murphy

Deputy Managing Director......................Florence A. Carr

Director, Bureau of Certification 

and Licensing .................................Sandra L. Kusumoto

Director, Bureau of Enforcement ..................Peter J. King

Director, Bureau of 

Trade Analysis ...................................Austin L. Schmitt

SENIOR COMMISSION OFFICIALS

Chief of Staff.........................................Lowry A. Crook

Counsel to Commissioner Brennan .......Steven D. Najarian

Counsel to Commissioner Dye ..............Edward L. Lee, Jr.

Counsel to Commissioner Khouri................John A. Moran

Counsel to Commissioner Cordero.............Mary T. Hoang

General Counsel .........................Rebecca A. Fenneman 

Secretary............................................Karen V. Gregory

Chief Administrative Law Judge..............Clay G. Guthridge

Director, Office of Consumer 

Affairs and Dispute Resolution Services..........Vern W. Hill

Director, Office of 

Equal Employment Opportunity .................Keith I. Gilmore

Inspector General ...............................Adam R. Trzeciak

Managing Director...............................Ronald D. Murphy

Deputy Managing Director......................Florence A. Carr

Director, Bureau of Certification 

and Licensing .................................Sandra L. Kusumoto

Director, Bureau of Enforcement ..................Peter J. King

Director, Bureau of Trade Analysis..........Austin L. Schmitt

SENIOR COMMISSION OFFICIALS

Chief of Staff.........................................Lowry A. Crook

Counsel to Commissioner Brennan .......Steven D. Najarian

Counsel to Commissioner Dye ..............Edward L. Lee, Jr.

Counsel to Commissioner Khouri................John A. Moran

Counsel to Commissioner Cordero.............Mary T. Hoang

General Counsel .........................Rebecca A. Fenneman 

Secretary............................................Karen V. Gregory

Chief Administrative Law Judge..............Clay G. Guthridge

Director, Office of Consumer 

Affairs and Dispute Resolution Services.................Vacant

Director, Office of 

Equal Employment Opportunity .................Keith I. Gilmore

Inspector General ...............................Adam R. Trzeciak

Managing Director...............................Ronald D. Murphy

Deputy Managing Director......................Florence A. Carr

Director, Strategic Planning 

and Regulatory Review .........................Austin L. Schmitt

Director, Bureau of Certification 

and Licensing ............................................Vern W. Hill

Director, Bureau of Enforcement ..................Peter J. King

Director, Bureau of Trade Analysis......Sandra L. Kusumoto
 

Mission

To foster a fair, efficient and reliable international ocean transportation system 

and to protect the public from unfair and deceptive practices.

vii
I

THE COMMISSION

A. FUNCTIONS

The Federal Maritime Commission (FMC) is an independent 

agency responsible for the regulation of oceanborne transportation in the 

foreign commerce of the United States for the benefit of U.S. exporters, importers, and the U.S. consumer. The principal statutes administered by the 

Commission are the Shipping Act of 1984 (1984 Act), the Foreign Shipping Practices Act of 1988 (FSPA), section 19 of the Merchant Marine Act, 

1920 (1920 Act), and sections 2 and 3 of Pub. L. No. 89-777, 80 Stat. 1350, 

46 U.S.C. 40101-44106. 

The Commission’s regulatory responsibilities include:

•	 Reviewing and monitoring agreements among ocean common carriers and marine terminal operators (MTOs) relating to service in the 

U.S. foreign oceanborne trades, to ensure that they do not cause substantial increases in transportation costs or decreases in transportation 

services. Under the 1984 Act, the general antitrust laws do not apply 

to certain agreements between or among ocean common carriers and 

marine terminal operators. The Commission conducts preliminary 

reviews and performs ongoing oversight of such agreements and can 

take action to address agreement activity that does not meet the requirements of the 1984 Act, or that cause effects prohibited by the 1984 

Act.

•	 Maintaining and reviewing confidentially filed service contracts and 

NVOCC Service Arrangements between ocean common carriers and 

shippers to guard against detrimental effects to shipping in the U.S. 

foreign trades.

Federal Maritime Commission

Fiscal Year 2012
•	 Providing a forum for exporters, importers, and other members of the 

shipping public to obtain relief from ocean shipping practices or disputes that impede the flow of commerce and otherwise cause economic 

harm.

•	 Ensuring common carriers’ tariff rates and charges are published in private, automated tariff systems and electronically available to the shipping public.

•	 Monitoring rates, charges, and rules of government-owned or -controlled carriers to ensure that they are just and reasonable.

•	 Issuing passenger vessel certificates evidencing financial responsibility 

of vessel owners or charterers to pay claims for personal injury or death, 

and to reimburse passengers in the event of nonperformance of a voyage 

or cruise.

•	 Licensing ocean transportation intermediaries (OTIs) in the U.S. to 

protect the public from unqualified, insolvent, or dishonest companies.

•	 Ensuring that OTIs maintain financial responsibility to protect the shipping public from financial loss.

•	 Protecting the shipping public from economic harm by investigating 

rates, charges, classifications, and practices of common carriers, MTOs, 

and OTIs operating in the foreign commerce of the United States, and 

acting to stop unjust or unlawful practices that violate the 1984 Act.

•	 Taking action to address unfavorable conditions arising out of foreign 

government or business practices in the U.S. foreign shipping trades.

The Commission carries out its regulatory responsibilities by conducting informal and formal investigations. It holds hearings, considers evidence, renders decisions, and issues appropriate orders and regulations. The 

Commission also adjudicates and mediates disputes involving regulated entities, the shipping public, and other affected individuals or interest groups.

B. ORGANIZATION

The Commission is composed of five Commissioners appointed by 

the President with the advice and consent of the Senate. Commissioners 

serve five-year, staggered terms, and no more than three members of the 

Commission may belong to the same political party. The President designates one of the Commissioners to serve as Chairman. The chairman is the 

chief executive and administrative officer of the agency.

The Commission’s organizational units consist of: Office of the 

General Counsel; Office of the Secretary (including the Library); Office of 

Consumer Affairs and Dispute Resolution Services; Office of Administrative Law Judges; Office of Equal Employment Opportunity; Office of the 

Inspector General; Office of the Managing Director; the Offices of Human 

Resources, Budget and Finance, Management Services, and Information 

Technology; the Bureaus of Certification and Licensing, Enforcement, and 

Trade Analysis; and the Commission’s Area Representatives. In fiscal year 

2012, the Commission had a total appropriation of $24,100,000. That appropriation supported the actual employment of 123 full-time equivalent 

positions during the fiscal year. The majority of the Commission’s personnel 

are located in Washington, D.C., with Area Representatives in Houston, Los 

Angeles, New Orleans, New York, Seattle, and South Florida.

2 3

Federal Maritime Commission

Fiscal Year 2012

Federal Maritime Commission

Fiscal Year 2012
II

THE YEAR IN REVIEW

As U.S. economic growth slowed during the first three quarters of 

fiscal year 2012, so too did the demand for ocean transportation. However, 

capacity adjustments implemented by carriers did not cause the vessel capacity shortages experienced in fiscal year 2010. For much of fiscal year 

2012, shippers were able to ship their goods at much lower cost than in 2011. 

Meanwhile, liner vessel operators reported sharply lower earnings, resulting from lower rates across the board. In the latter part of fiscal year 2012, 

however, carriers began implementing a series of general rate increases that 

were able to generate increased revenue. Looming over the industry during 

the last quarter of fiscal year 2012 was the possibility of a strike by U.S. east 

coast dockworkers. That possibility led most carriers to publish significant 

congestion surcharges. As the fiscal year closed, dockworkers and ship owners were engaged in renewed talks to avoid a strike. 

The Federal Maritime Commission’s mission is to foster a fair, efficient and reliable international ocean transportation system, and to protect 

the public from unfair and deceptive practices. The highlighted actions under the Commission’s Strategic Goals provide an overview of agency activities in pursuit of its mission. 

Strategic Goal 1: Maintain an Efficient and Competitive International 

Ocean Transportation System

The FMC is charged with ensuring competitive and efficient ocean 

transportation services for the shipping public. Competition in U.S. trades 

helps to foster competitive rates and encourage diverse service offerings for 

the benefit of U.S. exporters and importers, and ultimately consumers. The 

1984 Act grants ocean carriers and MTOs limited antitrust immunity for 

activities pursuant to agreements they file with the Commission. The carriers and terminal operators are subject to the FMC’s monitoring of their

5

Federal Maritime Commission

Fiscal Year 2012
Supporting U.S. exports and the economic recovery: During fiscal year 2012, 

exported goods continued to grow, on pace to exceed the National Export 

Initiative’s goal of doubling U.S. exports by 2015. While vessel capacity and 

container availability met demand, the Commission continued to use recently established Rapid Response Teams to provide prompt solutions for 

commercial disputes between carriers and their customers.

The Commission also assisted the U.S. Department of Agriculture’s 

Agricultural Marketing Service (AMS) with its exporters’ project to give 

more transparency and visibility to the chronic problem of locating empty 

containers for exports. AMS’ Ocean Shipping Container Availability Report (OSCAR) is published weekly and shows container availability at 18 

U.S. port and inland locations, using data provided by nine leading ocean 

carriers. The report helps U.S. exporters determine weekly container availability, and provides projections two weeks in the future. 

Economic Assistance to Small Businesses: In fiscal year 2011, the Commission approved a rule change to conditionally exempt more than 3,300 licensed non-vessel-operating common carriers (NVOCCs) from the costs 

and burdens of publishing in tariffs the rates they charge for cargo shipments. In fiscal year 2012 more than 3,500 NVOCCs could take advantage of this exemption. Most NVOCCs are small businesses who could see 

significant savings from the exemption. The Commission followed up in 

fiscal year 2012 with an inquiry to solicit public comments on suggestions 

for further improvement to its rules including extending the conditional 

exemption to foreign-based NVOCCs.

Marine Environmental Committee and Clearinghouse: The FMC has seen 

environmental issues become increasingly central to the agreements and 

shipping practices it monitors. The Commission’s Marine Environmental 

Committee reviews filings at the agency for best environmental practices 

which can be put forward as models for adoption by other ports and companies. The Commission also has created a webpage to serve as an environmental issues clearinghouse for information on maritime environmental issues, news, resources, laws and regulations, and best practices. The

7

Federal Maritime Commission

Fiscal Year 2012

 

activities to guard against possible abuse of that limited immunity, to avoid 

unreasonable increases in transportation costs or decreases in transportation services, and to guard against other activities prohibited by the 1984 

Act. 

During fiscal year 2012, the Commission concentrated on facilitating U.S. exporters’ access to foreign markets via ocean transportation, supporting the economic recovery, protecting American consumers, encouraging a sustainable ocean transportation industry, enhancing safety and 

security, and monitoring foreign practices to protect American jobs. The 

Commission continued to closely monitor concerted activities of carriers, 

particularly in the transpacific trades, to ensure that agreement members 

did not cause unreasonable increases in rates or unreasonable reductions in 

service. In addition, the Commission monitored the availability of ocean 

container chassis as carriers decided to shift the responsibility and cost for 

securing chassis to shippers. 

The Commission’s Bureau of Trade Analysis issued its Study of the 

2008 Repeal of the Liner Conference Exemption from European Union Competition Law. The study collected and analyzed data on the impact of the 

October 2008 European Union repeal of its block competition law exemption for liner conferences. Data analyzed included information regarding 

changes in carrier market structures, competition, services, vessel capacity, 

rates, and surcharges. The study concluded that:

•	 The repeal of the block exemption did not appear to have caused any 

negative impact on U.S. liner trades. 

•	 The activities of carrier rate discussion agreements in the U.S. trades do 

not appear to have increased average rates relative to rates in EU trades, 

but may have contributed to modestly reduced rate volatility.

•	 The repeal may have resulted in a modest increase in market concentration, but not such that would present problems.

6

Federal Maritime Commission

Fiscal Year 2012
Commission held a public Forum on Port Environmental Initiatives in April 

2012 where representatives from the ports of Houston, Long Beach, Los Angeles, New York/New Jersey, Oakland, and Virginia gave presentations on 

their environmental and sustainability initiatives and engaged in general 

discussion with Commissioners about the future of port environmental issues.

Container Freight Index-Based Service Contracts: The Commission amended its service contract regulations to give shippers and carriers more flexibility and certainty in their use of long-term service contracts. The new 

rule permits periodic adjustment to freight rates contained in multi-year 

contracts using an index reflecting changes in market conditions, so long as 

the index is readily available to the parties and the Commission. 

Cargo Diversion: As a result of requests from two U.S. senators and several members of the House of Representatives, the Commission conducted 

a study of the impacts and the extent to which the Harbor Maintenance Tax 

(HMT), other U.S. policies, and other factors may incentivize inbound container cargo to shift from U.S. seaports to competing ports located in Canada 

and Mexico. Accordingly, the Commission published an inquiry soliciting 

public views and information concerning the factors that may cause or contribute to such a shift in cargo. The Commission’s report was issued in the 

fourth quarter of fiscal year 2012 with the following conclusions:

•	 Carriers shipping cargo through Canadian and Mexican ports violate no 

U.S. law, treaty, agreement, or FMC regulation.

•	 Numerous factors account for why shippers elect to use ports in Canada or Mexico. They include overall shipment savings, risk mitigation 

through port diversification, perceived transit time benefits, avoidance 

of the HMT and rail rate disparities.

•	 Congress has many options to consider should it decide to revise or replace the current HMT structure.

8

Federal Maritime Commission

Fiscal Year 2012

Strategic Goal 2: Protect the Public from Unlawful, Unfair, and Deceptive 

 Practices and Resolve Shipping Disputes

The FMC has a wide variety of responsibilities to protect the public 

from financial harm, including assisting in the resolution of disputes related 

to the shipment of goods or the carriage of passengers, investigating and 

prosecuting unreasonable or unjust practices, and ruling on formal complaints alleging violation of the 1984 Act. The FMC contributes to the integrity and security of the nation’s supply chain and transportation system by 

identifying unlicensed operations and licensing only those ocean transportation intermediaries with appropriate character and financial responsibility. 

The FMC also ensures financial coverage of passenger vessels to indemnify 

passengers in the event of nonperformance. Pursuant to these regulatory 

responsibilities the Commission undertook a number of significant actions 

during fiscal year 2012 to address issues affecting American consumers who 

ship their personal goods overseas or take cruises.

Household Goods Shipments: The Commission undertook several actions as 

a result of the fiscal year 2011 Fact Finding Officer’s report in Fact Finding 

Investigation No. 27, Potentially Unlawful, Unfair or Deceptive Ocean Transportation Practices Related to the Movement of Household Goods or Personal 

Property in U.S.-Foreign Oceanborne Trades. Each year, the FMC receives 

several hundred complaints from individuals who have experienced problems with their international household goods shipments. To address this 

continuing issue, in fiscal year 2012 the Commission took the following actions:

•	 Consumer Education: The Commission launched a redesigned and restructured website that improved both content and delivery of information, including better information and tools to help the public shopping 

for international shipping options; entered into a formal Memorandum 

of Understanding with the Federal Motor Carrier Safety Administration 

(FMCSA) to conduct joint investigative operations against international

9

Federal Maritime Commission

Fiscal Year 2012
and interstate movers with a history of chronic complaints and violations 

and to engage Commission ombuds support in resolving problems for consumers; developed relationships for enhanced cooperation with trade associations representing household goods movers; developed information for 

OTIs to distribute to consumers moving household goods; targeted outreach 

to local communities, particularly certain ethnic communities that regularly 

ship household goods overseas; and encouraged household goods movers to 

link their websites to the FMC’s website for consumer information.

•	 Licensing Issues: As the Commission reviews its licensing regulations, it 

will pursue recommendations for adjustments that specifically address 

issues affecting household goods shipments. 

Preventing Fraud and Enhancing Safety and Security: The Commission’s Bureau of Enforcement and Area Representatives continued efforts to investigate and prevent practices that are unfair and deceptive. Targeted violations 

included misdescription of cargo, which also poses a serious safety and security risk because it could prevent vessel operators and port officials from 

knowing whether dangerous goods are being transported on vessels into the 

United States. During 2012, the Commission completed 12 cases by collecting $838,000 in penalties for such violations.

Monitoring Foreign Practices to Protect American Jobs: The Commission 

also was vigorous in carrying out its charge to monitor and prevent practices by foreign governments or entities that adversely affect American commerce. The Chairman hosted a visit from the Shanghai Shipping Exchange 

(SSE) to jointly discuss regulatory issues of China and the U.S. and create a 

climate of cooperation to overcome any barriers to international trade with 

China. The Commission continues to closely follow developments in China 

to ensure that no unreasonable conditions exist that would impair U.S. commerce.

Dispute Resolution: During fiscal year 2012, 670 complaints were received 

that necessitated the opening of cases to provide dispute resolution services. 

This was a 19 percent increase over the volume of cases in fiscal year 2011 

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Federal Maritime Commission

Fiscal Year 2012

and included 132 passenger complaints about cruise line issues, 274 complaints with respect to household goods shipments, and 264 complaints involving other cargo shipment matters. 

Participation of the parties in confidential ADR services can provide a means for immediate, cost-effective resolution through cooperation 

between parties. Confidentiality is essential to the success of such efforts, 

especially considering the confidential nature of service contracts. Cargo 

shipment complaints continued to be of increasing complexity. Problems 

involving ocean transportation intermediaries with overextended finances 

and inability to complete the ocean transportation continued to be an issue. 

In addition, many household goods complaints pertained to initial charges 

quoted vis á vis the actual charges billed, often due to measurement discrepancies. 

Technology and Stewardship of Resources: Strategic management of the 

FMC’s human resources, property management, financial and procurement 

practices and other vital support activities is essential to meet the agency’s 

regulatory and programmatic goals. The FMC realizes the need to use new 

information technology (IT) as a means of improving agency business processes and augmenting the accessibility of the public conducting licensing or 

legal business with the agency. In fiscal year 2012, the Commission explored 

various means to update and revise its existing IT infrastructure to meet 

agency needs and government-wide standards, and to improve efficiency of 

operations. System improvements are critical to the Commission’s ability to 

carry out its mission, especially in an era of increasing demands but declining human resources. 

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Federal Maritime Commission

Fiscal Year 2012
III

DEVELOPMENTS IN MAJOR

U.S. FOREIGN TRADES1

A. WORLDWIDE

The world’s container trade expanded by almost 3 percent in fiscal 

year 2012 compared to an expansion of approximately 7 percent in 2011. As 

the fiscal year came to a close, 255 containerships lay idle, representing 3.4 

percent of the total fleet capacity measured in TEUs (twenty-foot equivalent 

container units). In contrast, 156 ships representing 2.2 percent of the containership fleet capacity lay idle at the end of fiscal year 2011. 

Container volumes in the U.S. liner trades in fiscal year 2012 expanded 2.4 percent to 29.6 million TEUs, compared to 28.9 million last year. 

The U.S. share of the world’s container trades was 18 percent. U.S. container 

imports continued to increase, expanding by 3 percent to 17.6 million TEUs, 

compared to 17.0 million in 2011. This was still well below the record of 19.4 

million TEUs reached in fiscal year 2007. U.S. container exports also expanded slightly, increasing by less than 1 percent to 12.0 million TEUs. As a 

result, the U.S. container imbalance worsened; for every 100 loaded containers exported from the U.S. 147 were imported, compared to 143 imported in 

fiscal year 2011.

On a worldwide basis, the containership fleet continued to expand, 

but that expansion was tempered by an increase in the number of vessels 

being idled or scrapped. This fiscal year, the containership fleet’s nominal capacity grew at a rate similar to its growth rate in fiscal year 2011, just under 

7 percent. At the end of September 2012, 4,950 containerships, with a fleet 

capacity of 16.2 million TEUs, were available to serve the world’s container 

1

 The FY 2011 import data cited in this report may differ slightly from those 

reported in last year’s annual report due to vendor adjustments in previous 

years’ data. 

Federal Maritime Commission

Fiscal Year 2012

12 13

trades. Net of vessels scrapped, only 38 containerships were added to the 

world fleet, a notable drop from last year’s 81. As of September 30, 2012, 

there were orders worldwide for 514 new containerships with an aggregate 

capacity of 3.6 million TEUs, which is equivalent to 22 percent of the existing fleet capacity.

The world’s container shipping industry remained almost as concentrated during fiscal year 2012 as it was in prior years. At the end of fiscal year 

2012, the top five container operators controlled 45 percent of the world’s 

containership fleet capacity, the top ten controlled nearly 63 percent, and the 

top twenty controlled almost 84 percent compared to 46 percent, 66 percent, 

and 88 percent, respectively, during the prior year. The carriers comprising 

the top five operators changed only slightly with Hapag-Lloyd (ranked fifth 

in fiscal year 2011) being surpassed by Evergreen (ranked sixth in fiscal year 

2011).

B. ASIA

In terms of container cargo volume, Asia is our primary trading region. In fiscal year 2012, Asia accounted for 62 percent of all U.S. container 

cargo. The Ports of Los Angeles and Long Beach handle approximately half 

of all containers originating from or destined to Asia. Sixty-nine percent of 

all U.S. container imports originated from Asia, and the region received 52 

percent of all U.S. container exports.

The Transpacific Stabilization Agreement (TSA) is the major agreement in the transpacific trade. It has fifteen members and is a discussion 

and policy-setting agreement with voluntary pricing authority covering the 

inbound container trade from northeast and southeast Asia to all of the 

United States. TSA’s geographic scope also includes parts of the Indian Subcontinent (i.e., Bangladesh, Pakistan and Sri Lanka, but not India). During 

fiscal year 2012, TSA’s share of the U.S. inbound Asia trade was approximately 92 percent, compared to 89 percent the previous fiscal year. This 

market share increase was due primarily to several non-TSA carriers leaving 

the trade.

Federal Maritime Commission

Fiscal Year 2012
For fiscal year 2012, container imports from Asia grew by just under 

2 percent, compared to a 3 percent growth in the prior fiscal year. Northeast 

Asia accounted for 87 percent of transpacific imports, with most originating 

in China (PRC). For the fiscal year, the U.S. imported 12.1 million TEUs of 

Asian goods, compared to 11.9 million TEUs last year.

Prior to renewing their annual service contracts for effect on May 1, 

2012, TSA announced a general rate increase (GRI) of $500 per FEU (fortyfoot equivalent container units) to the U.S. West Coast and $700 per FEU to 

the U.S. East Coast. TSA also announced a peak season surcharge of $600 

per FEU, effective from June 10, 2012. However, prior to and after the start 

of the new service contract term, TSA announced a number of rate increases 

to apply on service contracts for which the minimum quantity commitment 

had been met or on service contracts that permitted such increases. Press 

reports indicate that these attempts to increase freight rates were only marginally successful.

The Westbound Transpacific Stabilization Agreement (WTSA) is 

the carrier rate discussion agreement operating in the outbound transpacific trade. WTSA’s geographic scope covers all U.S. ports to northeast and 

southeast Asia and parts of the Indian Subcontinent (i.e., Bangladesh, Pakistan and Sri Lanka, but not India). Like TSA, WTSA is a forum for the 

exchange of information among its member lines. That exchange enables 

the lines to propose common rate actions for U.S. exports to Asia. WTSA’s 

market share of that trade was about 62 percent by volume for most of FY 

2012. During that period, U.S. export volumes to Asia grew by less than 1 

percent. 

Rather than proposing a single annual GRI, WTSA member lines 

typically propose common rate actions targeted to specific commodity 

groups at different times during the year. This practice is dictated by the 

seasonality of demand for vessel space by various agricultural products 

that have different harvest seasons and peak shipping periods. In FY 2012, 

WTSA members were reportedly largely unsuccessful in achieving the rate 

increases they proposed. 

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Fiscal Year 2012

14

Due in part to WTSA’s inability to successfully implement its rate 

proposals, two carriers (American President Lines and Nippon Yusen Kaisha) terminated their membership in the Agreement in the final two months 

of the fiscal year. As a result, WTSA member lines’ average combined market share declined from approximately 62 percent to 51 percent, raising 

questions about WTSA’s continued viability as a rate discussion agreement.

Like TSA, WTSA modified its bunker adjustment formula, effective 

October 1st, in an effort to partially recover additional costs for the purchase of more expensive low-sulfur fuel. The requirement that carriers use 

low sulfur fuel took effect with the implementation of the 200-mile North 

American Emissions Control Area on August 1, 2012.

C. AUSTRALIA AND OCEANIA

The Oceania trade includes the nations and territories of Australia, 

New Zealand, Papua New Guinea, Western Samoa, and other South Pacific 

Islands. In the outbound direction of the trade, container volume is greater. 

However, in fiscal year 2012, the growth in U.S. container exports was modest at nearly 2 percent compared to the preceding fiscal year. Nonetheless, 

the number of container exports exceeded imports by a ratio of 1.75 to 1. 

The leading export commodities were auto parts, general merchandise, grocery products, paper and tires.

In the inbound direction, container imports from Australia/Oceania 

rose by 5 percent compared to fiscal year 2011. Container imports of meats 

and wine were the top two commodities, which accounted for 33 percent 

of the total import volume in TEUs. Other leading import commodities 

included paper, beverages, and lumber.

Federal Maritime Commission

Fiscal Year 2012

15
Carriers providing direct service in the trade are linked through a 

network of agreements. Two main rate discussion agreements cover the 

trade: seven carriers participate in the United States/Australia Discussion 

Agreement (USADA) in the outbound direction, and five carriers participate in the Australia and New Zealand-United States Discussion Agreement (ANZUSDA) in the inbound direction. Further, a number of major carriers serve the trade through transshipment arrangements. All of 

the carriers that serve the trade directly operate their services collectively 

through several vessel sharing agreements. In addition, five carriers serving the Pacific Islands participate in the Pacific Island Discussion Agreement. Given the extent of cooperation among the carriers through agreements, the Commission closely monitors the carriers’ activities in this trade.

During fiscal year 2012, a number of agreement and service changes 

occurred. In November 2011, Mediterranean Shipping Company (MSC) 

entered the trade as a direct service provider by purchasing vessel space 

from other direct service carriers under the HSDG/ML/MSC Space Charter Agreement and the OVSA/MSC Space Charter Agreement. Then, in June 

2012, MSC joined the two rate discussion agreements, USADA and ANZUSDA. In March 2012, Maersk Line withdrew its membership from the 

inbound rate discussion agreement, ANZUSDA. These membership changes resulted in a market share of approximately 75 percent for each of the 

discussion agreements. Notably, the largest operator in the trade is Hamburg Süd which, based on cargo volume, achieved a market share of 27 percent and 35 percent in the outbound and inbound directions, respectively.

D. INDIAN SUBCONTINENT AND THE MIDDLE EAST

For fiscal year 2012, the growth rate of U.S. container exports to the 

Indian Subcontinent was nearly 2 percent, compared to a growth rate of 9 

percent for fiscal year 2011. U.S. container exports to the Middle East grew 

by over 3 percent in fiscal year 2012, compared to a 12 percent increase

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Fiscal Year 2012

16

in the previous fiscal year. The United States exported approximately 451,000 

TEUs to the Indian Subcontinent and 600,000 TEUs to the Middle East. 

In this region, WTSA is the only rate discussion agreement covering 

part of the U.S. outbound container trade. WTSA’s geographic scope covers 

U.S. exports to the Indian Subcontinent countries of Bangladesh, Pakistan, 

and Sri Lanka, but not to India or to the Middle East.2

 For the fiscal year, 

WTSA’s market share for U.S. exports to Bangladesh, Pakistan, and Sri Lanka was only 38 percent, up from 32 percent in the previous fiscal year. In 

September 2012, APL and NYK Line resigned from WTSA. No major rate 

discussion agreement covers U.S. exports to the Middle East.

With the U.S. recovery from the 2008 global recession plateauing in 

fiscal year 2012, demand for foreign goods grew at a much slower rate. During fiscal year 2012, U.S. container imports from the Indian Subcontinent 

increased by 3 percent and by 2 percent from the Middle East. The U.S. 

imported approximately 668,000 TEUs from the Indian Subcontinent and 

166,000 TEUs from the Middle East during the fiscal year.

The TSA is the only rate discussion agreement covering U.S. inbound 

container movements from the Indian Subcontinent countries of Bangladesh, Pakistan and Sri Lanka.3

 For fiscal year 2012, TSA had a 95 percent 

market share of U.S. imports from the countries of Bangladesh, Pakistan 

and Sri Lanka. During the fiscal year, Maersk Line, along with its subsidiary 

Safmarine, and APL moved just over half of all container imports from the 

three Indian Subcontinent countries to the U.S. No major rate agreement 

covers Middle East imports to the United States.

2 WTSA’s geographic scope also includes northeast and southeast Asia.

3 TSA’s geographic scope also includes northeast and southeast Asia.

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Fiscal Year 2012

17
E. NORTH EUROPE

In fiscal year 2012, the flow of container cargo in the trade between 

the U.S. and North Europe reflected the effects of the troubled Eurozone 

economies and the depreciation of the euro against the U.S. dollar. In July 

2012, the exchange rate of the euro fell to a low of $1.23, which hurt the 

purchasing power of European consumers for U.S. exports but boosted the 

demand for European imports among U.S. consumers. Consequently, U.S. 

container exports to North Europe decreased by 4 percent compared to the 

preceding fiscal year. The leading export commodities for the period were 

paper, automobiles, wood pulp, general merchandise, and auto parts.

U.S. container imports from North Europe increased by 10 percent 

compared to fiscal year 2011. In addition to the weaker euro, it was reported 

that import growth could be caused, at least in part, by U.S. retailers stockpiling inventory in case of a threatened strike at U.S. Atlantic and Gulf ports 

by the members of the International Longshoreman’s Association (ILA). 

Beer and ale remained the top liner import commodity, accounting for 9 

percent of the total import volume in TEUs. Other top commodities from 

North Europe included auto parts, beverages, paper, and furniture. In terms 

of volume, container imports exceeded exports by a ratio of 1.25 to 1 in this 

region.

Carriers operating in the trade added about 8 percent more capacity to the market. Among these changes, in February 2012, members of 

The New World Alliance Agreement initiated the America Europe Express 

service operating five vessels in a weekly loop rotation between the U.S. Atlantic coast, Panama, and North Europe. Also, in May 2012, members of 

The Grand Alliance Agreement II (Grand Alliance) upgraded the size of the 

four vessels deployed in its weekly Atlantic Express loop service between 

the U.S. Atlantic coast and North Europe. The Grand Alliance operates the 

Atlantic Express service in cooperation with Zim Integrated Shipping Services, Ltd. (Zim) and Hamburg Süd under the Grand Alliance/Zim/HSDG 

Atlantic Space Charter Agreement. Also, as of July 2012, the Grand Alliance 

suspended its weekly Atlantic Express Shuttle running between the ports of

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Federal Maritime Commission

Fiscal Year 2012

New York/New Jersey, and Antwerp and Hamburg. With these service 

changes, the average utilization of vessel capacity for the fiscal year was reported to have been 78 percent in the outbound direction and 88 percent in 

the inbound direction.

The introduction of new services and capacity in the trade reportedly 

kept freight rates low. Attempts by carriers to implement GRIs throughout 

the fiscal year were modest and erratic. However, toward the end of the fiscal year, most of the major carriers had announced GRIs ranging from $150 

per TEU to $320 per TEU starting October 2012.

F. MEDITERRANEAN

The liner trade between the U.S. and South Europe in the Mediterranean was similarly affected by the economic problems in the Eurozone 

and the weak value of the euro. Compared to the preceding fiscal year, U.S. 

container exports to the Mediterranean decreased by 7 percent. The leading 

export commodities were paper, wood pulp, cotton, chemical resins, and 

lumber, which accounted for about 40 percent of the total export volume 

in TEUs. Most of the container exports of cotton were shipped to textile 

manufacturers in Turkey.

U.S. container imports from the Mediterranean increased by 11 percent compared to the preceding fiscal year. Therefore, the trade imbalance 

between imports and exports increased with imports exceeding exports by 

a ratio of 1.55 to 1. The leading import commodities were wine, furniture, 

vegetables, tiles, and beverages. Container imports of wine accounted for 9 

percent of total import volume in TEUs. 

Federal Maritime Commission

Fiscal Year 2012

19
Federal Maritime Commission

Fiscal Year 2012

20

Service changes made by carriers added more vessel capacity to the 

market. The amount of capacity deployed in each trade direction rose by 

approximately 12 percent. Specifically, in February 2012, Hapag-Lloyd upgraded the frequency and capacity of its Med Pacific Express service in partnership with Hamburg Süd under the HLAG/HSDG USWC-Mediterranean 

Vessel Sharing Agreement. The upgraded service operates with 10 vessels 

in a weekly rotation between ports in the Mediterranean, Panama, and the 

U.S. Pacific coast. In turn, Hamburg Süd discontinued the transatlantic leg 

of its weekly pendulum service that it operated with Compania Chilena De 

Navegacion Interoceanica, S.A. 

Among other changes, in March 2012, Maersk Line and CMA CGM 

upgraded the size of the five vessels they deploy in their weekly West Med 

loop service between the U.S. Atlantic coast and South Europe under the 

CMA CGM/Maersk Line Space Charter, Sailing and Cooperative Working 

Agreement. With the added space, Maersk Line exchanged a portion of its 

allocated space on the West Med service for space on a North Europe service 

of The New World Alliance under the Maersk Line/New World Alliance Mediterranean Slot Exchange Agreement. Further, in April 2012, members of the 

CKYH group entered the trade by connecting two service loops to form its 

weekly pendulum service between the U.S. Pacific coast, Southeast Asia, and 

the Mediterranean.

G. AFRICA

Cargo volumes between the U.S. and Africa increased 16 percent in 

fiscal year 2012. The increase in cargo volumes included a 20 percent increase in U.S. exports to Africa to 320,700 TEUs. Imports from Africa increased about 7 percent from the previous fiscal year to about 95,300 TEUs. 

The top commodities exported to Africa included automobiles, grocery 

products, fresh and frozen poultry, and auto parts during fiscal year 2012. 

The top container commodities imported from Africa consisted of cocoa 

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

Federal Maritime Commission

Fiscal Year 2012

21

The Republic of South Africa dominates the U.S. liner trade with 

Africa, accounting for about 25 percent of the overall container volume and 

45 percent of imported containers from the continent. Nigeria is the United 

States’ second largest trading partner in the region, with 14 percent of container volumes, and Ghana and Morocco are the third and fourth largest 

partners with about 10 percent and 6 percent, respectively.

There were no significant mergers, acquisitions, or changes in liner 

services during the fiscal year. Maersk Line, Safmarine (wholly owned by 

Maersk Line), and MSC continued to operate their joint weekly AMEX service under the authorities of the Southern Africa Agreement. This service, 

which sails from the U.S. east coast to Port Elizabeth, Durban and Cape 

Town, deploys eight vessels of about 2,400 TEUs in size. In the Africa trade, 

these three carriers are the top carriers and carry approximately 71 percent 

of the containers traveling between the U.S. and Africa. 

H. CENTRAL AMERICA AND THE CARIBBEAN

In fiscal year 2012, U.S. export and import cargo to Central America both increased 5 percent with exports increasing to 596,500 TEUs and 

imports increasing to 724,000 TEUs. Waste paper accounted for the largest 

share of U.S. containerized exports at 12.7 percent. The second largest export commodity category was fabrics, yarns, and raw cotton accounting for 

11.1 percent. Grocery products and used automobiles accounted for about 

5 percent each, and apparel accounted for about 4 percent. On the import 

side, fresh fruit made up 55 percent of all imports from the region. Almost 

three quarters of the fresh fruit imported consisted of bananas. The second 

largest commodity imported from this region was clothing and apparel with 

nearly 17 percent of the total.
Federal Maritime Commission

Fiscal Year 2012

22

Six of the largest carriers in the U.S./Central America trade participated in the Central America Discussion Agreement (CADA). Five of these 

are regional carriers: Seaboard Marine, Crowley Liner Services, King Ocean, 

Dole Ocean Cargo Express, and Great White Fleet. The sixth is the global carrier American President Lines (APL) which left the agreement during the last 

month of the fiscal year. Before APL’s departure, the combined market share 

of CADA members was 75 percent for exports and 71 percent for imports. 

After APL resigned from CADA in September 2012, the combined market 

share for the remaining members decreased to 66 percent in both directions.

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

mainly of food, consumer goods, and manufactured products increased 4 

percent to 541,000 TEUs. Imports to the U.S. increased by 24 percent to 

212,500 TEUs.

Carriers in the U.S./Caribbean trade participated in four rate discussion agreements covering discrete trades: (1) the Caribbean Shipowners Association, (2) the Florida-Bahamas Shipowners and Operators Association, (3) 

the Aruba Bonaire and Curacao Discussion Agreement, and (4) the Bermuda 

Discussion Agreement. In February 2012, the Florida-Bahamas Shipowners 

and Operators Association Agreement was not renewed and ceased to operate.

I. SOUTH AMERICA

In fiscal year 2012, U.S. containerized exports to South America decreased to 1,009,000 TEUs, a slight decrease from the previous year. U.S. 

import cargo from South America increased 2.1 percent to 831,000 TEUs. 

The South America region is generally divided between the west 

coast and east coast of the continent. Just over 50 percent of the region’s 

cargo moved between the U.S. and the west coast of South America in fiscal 

year 2012. U.S. export cargo to that coast grew 6 percent to 458,300 TEUs, 

and imports from the region grew just over 2 percent to 462,000 TEUs. The 

three largest U.S. exports to this region included waste paper, synthetic resins, and general merchandise cargo. On the U.S. import side, fresh fruit, still 

wines, and fresh vegetables were the top commodities moving in the trade. 

Federal Maritime Commission

Fiscal Year 2012

23

In fiscal year 2012, annualized vessel capacity in the U.S./west coast 

of South America trade decreased 1 percent from the year before in both 

the southbound and northbound trades to 1,187,000 and 1,136,000 TEUs, 

respectively.

Most of the carriers providing direct service to the west coast of 

South America are members of the West Coast of South America Discussion 

Agreement (WCSADA). During the fiscal year, the only membership change 

occurred when APL resigned from the agreement in September 2012. At 

the time APL left, its market share was 3 percent and 9 percent for exports 

and imports, respectively. Because of APL’s departure, the combined market 

share for WCSADA members decreased from 57 percent to 55 percent for 

the outbound direction and from 61 percent to 52 percent for the inbound 

direction. The U.S. inbound trade includes four carriers that are members 

of WCSADA (i.e., Dole Ocean Cargo Express, Great White Fleet, Network 

Shipping and Banacol Colombia) that mainly transport proprietary cargo, 

consisting of fresh fruits and vegetables. The agreement also faces competition from global carriers, such as NYK, Maersk Line, Evergreen, MOL, 

Hapag-Lloyd, and Zim. Only NYK provides a direct service to the U.S. Pacific Coast. The latter five carriers serve the trade via transshipment hubs 

in Panama, Mexico, and countries in the Caribbean. Several regional carriers compete with WCSADA, including Tropical Shipping, Antillean Lines, 

Isabella Shipping, Industrial Maritime Carriers, and West Coast Industrial 

Express. 

The trade between the U.S. and the east coast of South America accounted for slightly less than 50 percent of the liner cargo in this region. As 

in past years, no active rate discussion agreements operated in this trade. 

U.S. exports to the east coast of South America decreased 5 percent to 

550,600 TEUs during fiscal year 2012. The top export commodities included auto parts and waste paper. Imports from the region increased 1 percent 

to 369,000 TEUs during the same period and top commodities included logs 

and lumber, granite, and coffee. 
Federal Maritime Commission

Fiscal Year 2012

24
IV

THE FOREIGN SHIPPING 

PRACTICES ACT OF 1988

A. IN GENERAL

The Foreign Shipping Practices Act of 1988, which became effective on August 23, 1988, directs the Commission to investigate and address 

adverse conditions affecting U.S. carriers in U.S. oceanborne trades, when 

such conditions do not exist for foreign carriers in the United States under 

U.S. law or as a result of acts of U.S. carriers or others providing maritime or 

maritime-related services in the United States.

In fiscal year 2012, the Commission monitored potentially unfavorable or discriminatory shipping practices by a number of foreign governments. However, no direct FSPA action was necessary.

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Federal Maritime Commission

Fiscal Year 2012

B. TOP TWENTY U.S. LINER CARGO 

TRADING PARTNERS

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

Congress “a list of the twenty foreign countries which generated the largest 

volume of oceanborne liner cargo for the most recent calendar year in bilateral trade with the United States,” 46 U.S.C. § 306 (b)(1).

The Journal of Commerce’s Port Import Export Reporting Service 

(PIERS) database was used to derive the Commission’s list of top twenty 

trading partners. The most recent complete calendar year for which data are 

available is 2011. The table on the next page lists the twenty foreign countries 

that generated the largest volume of oceanborne liner cargo in bilateral trade 

with the United States in 2011. The figures in Table 1 represent each country’s total U.S. liner imports and exports combined in thousands of TEUs.

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Federal Maritime Commission

Fiscal Year 2012
Table 1: Top Twenty U.S. Liner Cargo

Trading Partners (2011)

Rank Country TEUs

 (000s)

 1 China (PRC) 10,572

 2 Japan 1,452

 3 South Korea 1,355

 4 Taiwan (ROC) 1,142

 5 Hong Kong4

 942

 6 Germany 783

 7 India 743

 8 Vietnam 681

 9 Brazil 604

10 Belgium and Luxembourg 563

11 Indonesia 517

12 Italy 499

13 Thailand 479

14 Netherlands 429

15 United Kingdom 403

16 Guatemala 352

17 Honduras 339

18 Malaysia 338

19 Australia 307

20 Chile 304

________________________

4

Although Hong Kong reverted to Chinese control in July 1997, PIERS continues to report data separately for Hong Kong because of its status as a 

major transshipment center.

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Federal Maritime Commission

Fiscal Year 2012

There was a 4 percent year-to-year increase in liner volumes in the 

United States’ bilateral trade with its top twenty trade partners. The membership of the top twenty list has remained the same, and the top eight countries have remained identical, since 2009. Allowing for some shifts in their 

individual rank order, the top six countries have topped the list for more 

than ten years. Three of the top twenty posted year-to-year volume increases of 10 percent or greater – Guatemala, Honduras and Chile. Bilateral liner 

trade with China had the least positive change in volume from the previous 

year. Three countries had a negative growth rate– Indonesia, Thailand and 

Hong Kong.

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Federal Maritime Commission

Fiscal Year 2012
V

SIGNIFICANT ACTIVITIES

BY

ORGANIZATIONAL UNIT

Federal Maritime Commission

Fiscal Year 2012
A. OFFICE OF THE SECRETARY

1. In General

The Office of the Secretary (OS) serves as the focal point for matters 

submitted to and emanating from the Commission. It is the public’s main 

contact point with the FMC. The Office receives and processes a variety 

of documents filed by the public, including: complaints initiating adjudicatory proceedings for alleged violations of the shipping statutes and other applicable laws; special docket applications and requests to correct clerical or 

administrative errors in service contracts or NVOCC Service Arrangements 

(NSAs); all communications, petitions, notices, pleadings, briefs, or other 

legal instruments in administrative proceedings; and subpoenas served on 

the FMC, its members, or employees.

The Office is responsible for organizing Commission Sunshine Act 

meetings, oral arguments, and public hearings; preparing and submitting 

regular and notation agenda matters for consideration by the Commission, 

and preparing and maintaining the minutes of actions taken on these agenda and notation matters; and issuing orders and notices of actions of the 

Commission. The office processes requests and ensures compliance with the 

Freedom of Information, Government in the Sunshine, and Privacy Acts; responds to information requests from the maritime industry and the public; 

issues publications; authenticates instruments and documents of the Commission; publishes Commission historical decisions; and maintains and promulgates the Commission’s regulations. The Office maintains a public reference/law library and a docket activity library; oversees the maintenance, 

organization, and content of the Commission’s website; develops and implements the agency’s Plain Writing Plan; manages the agency’s document 

scanning program; and participates in the development and coordination of 

agency-wide public relations/outreach strategies and initiatives.

During fiscal year 2012, the OS continued to administratively process and direct all filings addressed to the Commission and its component 

offices, including agreements filed under section 5 of the 1984 Act. The Office also issued 70 orders and notices in docketed proceedings on behalf of 

the Commission.

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Fiscal Year 2012

The Office serves as the Commission’s public information/press office. Accordingly, it prepares or coordinates the preparation of Commission 

news releases; responds to public and press inquiries or directs inquiries to 

the appropriate Commission bureau/office; and monitors the trade press for 

matters of agency interest for referral to the Chairman, Commissioners, and 

staff.

The Office is significantly involved with the Commission’s ongoing 

objective to enhance public awareness of the agency, its programs, and services. The Office promotes transparency and accountability on behalf of the 

Commission by evaluating, developing, and implementing improvements to 

the Commission’s website. 

In 2012, the Office completed work and launched a redesigned 

Commission website. The new design significantly improved quality, clarity, 

and accessibility of information and content organization to render a more 

citizen-centered website, enhanced navigation, added more social networking/communications capabilities, and further improved search engine optimization to better assist the public in locating Commission services. This 

upgrade supports the goals of the agency’s Plain Writing Act of 2010 Plan 

and President Obama’s directive that government should be transparent, 

participatory, and collaborative. 

Also during FY 2012, the Office completed compilation and website 

posting of 28 bound volumes of historical Commission decisions issued between 1919 and 1987. These historical decisions are no longer in publication 

in bound volume form, however with the completion of this project, the entire body of historical Commission decisions is now available on the FMC’s 

website in “electronic volumes.” Making this information readily available 

to the public in electronic form has proven to be a useful and cost effective 

resource, especially for attorneys practicing before the Commission. 

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Federal Maritime Commission

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During this fiscal year, the Office also generally increased the amount 

of information available on specific topics and issues related to the agency’s 

activities and important to stakeholders and the media. For example, the Office worked with other Commission components to publish alerts warning 

about consumer complaints against certain household goods movers, advice 

on proper documentation needed when boarding an international cruise, 

etc. These informative online resources provide easy public access to useful 

information and resources, increase public awareness of how the FMC is 

involved with daily events, and help to underscore our mission to oversee 

oceanborne transportation in the foreign commerce of the U.S.

The process of electronically scanning/imaging Commission records 

is an ongoing function of the Office. The Office electronically converts all 

official Commission files (both current and historical); and is responsible 

for planning, scheduling, and systematically scanning documents for other 

agency components. This Document Management Program supports the 

agency’s initiatives for Continuity of Operations (COOP) and disaster recovery by improving preservation of, and staff access to, Commission documents, improving staff response time to public inquiries; and providing direct public access to electronic files. The program also supports the Office’s 

continued effort to make key documents filed in formal proceedings available through its website.

The Office is also responsible for the Commission’s Freedom of Information Act (FOIA) Program. During the fiscal year, the office instituted 

a multi-track processing system to reduce the agency FOIA backlog. As a 

result, all FOIAs processed under the simple track were completed within 

statutory deadlines or ahead of schedule. These processing improvements 

also helped the office close the agency’s 10 oldest FOIA requests during the 

fiscal year.

In support of the Commission’s strategic goal to protect the public from unlawful, unfair, and deceptive ocean transportation practices and 

resolve shipping disputes, during fiscal year 2012 the Office led an agencywide team to continue the process of reviewing the Commission’s Rules of

34

Practice and Procedure. Emphasis is on evaluating the Commission’s procedures against current Federal Rules of Civil Procedure and updating Commission procedures where appropriate. Revision to 46 C.F.R. Subparts E & L 

concerning proceedings, pleadings and discovery were proposed and finalized in FY 2012. 

2. Library

The OS also oversees the Commission’s Library. The Library serves 

the needs of both the Commission and the public for research and information. It is a specialized repository of current and basic materials primarily 

covering the shipping industry, the history of shipping, and regulations covering all phases of shipping in the U.S. foreign trade. It contains a variety of 

books, directories, encyclopedias, journals, magazines, reports, microforms, 

and videos. The Library also contains material on several related fields such 

as engineering, economics, political science, and a collection of legal publications. The Library collection includes law encyclopedias, engineering textbooks, legal treatises, legislative materials, and selected titles of the National 

Reporter system. The Library’s holdings consist of approximately 8,700 volumes and numerous microfiches, CD-ROMs, and online services.

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B. OFFICE OF THE 

ADMINISTRATIVE LAW JUDGES

1. In General

Under the direction and management of the Chief Administrative 

Law Judge, the Office of Administrative Law Judges (OALJ) holds hearings 

and renders initial or recommended decisions in formal rulemaking and 

adjudicatory proceedings as provided in the 1984 Act, and other applicable 

laws and other matters assigned by the Commission, in accordance with the 

Administrative Procedure Act (APA) and the Commission’s Rules of Practice and Procedure. 

OALJ has the authority to administer oaths and affirmations; issue 

subpoenas; rule upon offers of proof and receive relevant evidence; take or 

cause depositions to be taken; regulate the course of the hearing; hold conferences for the settlement or simplification of the issues by consent of the 

parties; dispose of procedural requests or similar matters; make decisions or 

recommend decisions; and take any other action authorized by agency rule 

consistent with the APA. 

At the beginning of fiscal year 2012, sixteen formal proceedings were 

pending (on hand) before OALJ (07-01, 08-03, 09-01, 10-05, 10-06, 10-08, 

10-11, 11-06, 11-07, 11-08, 11-11, 11-12, 11-13, 11-14, 11-15, and 1923(F)). 

During the year, six new formal proceedings were added (11-18, 11-21, 12-

01, 12-02, 12-03, and 12-06) and four formal proceeding were remanded by 

the Commission (06-06, 06-09, 07-02, and 09-08).

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OALJ issued fourteen initial decisions or orders subject to review by 

the Commission in twelve proceedings: Initial decisions resolving five contested proceedings (10-06, 10-08, 11-08, 11-13, and 11-14); initial decisions 

on default in two proceedings (10-11 and 11-14); issued orders of voluntary 

dismissal in two proceedings (11-08 and 1923(F)); and initial decisions approving settlements in five proceedings (10-05, 11-06, 11-15, 11-18, and 11-

21).

2. Final Action by the Office of Administrative Law Judges on Initial 

Decisions and Orders Subject to Review

American Stevedoring, Inc. v. The Port Authority of New York and New Jersey 

[Docket No. 10-05]

On May 25, 2010, American Stevedoring, Inc. filed a complaint 

against the Port Authority of New York and New Jersey asserting that the 

Port Authority violated the 1984 Act, 46 U.S.C. §§ 421106(2) and 41106(3), 

which prohibit a marine terminal operator from giving any undue or unreasonable preference or advantage or imposing any undue or unreasonable 

prejudice or disadvantage with respect to any person and which prohibit 

unreasonably refusing to deal or negotiate. On October 14, 2011, the parties filed a joint motion seeking approval of a confidential settlement agreement and dismissal with prejudice. On October 27, 2011, the administrative 

law judge approved the confidential settlement agreement and dismissed the 

proceeding with prejudice. On December 2, 2011, the Commission served a 

notice not to review.

Yakov Kobel and Victor Berkovich v. Hapag-Lloyd A.G., Hapag-Lloyd America, 

Inc., Limco Logistics, Inc., and International TLC, Inc. [Docket No. 10-06]

On July 14, 2010, the complaint was served alleging that respondents 

violated the 1984 Act. An Order on Dispositive Motions, issued May 24, 

2011, granted in part and denied in part respondent Hapag-Lloyd’s motion 

to dismiss and/or for summary judgment and dismissed Complainants’

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claim for double damages. A hearing was held in Portland, Oregon, from 

August 8-11, 2011. Eleven witnesses testified, including one by video conference from the Ukraine and one by telephone from Poland. Two interpreters took turns translating the testimony for the complainants and other 

Russian speaking witnesses and another interpreter appeared by telephone 

for the witness who testified from Poland. Post trial briefing was completed 

on November 9, 2011. On February 14, 2012, the administrative law judge 

issued an initial decision ordering that the claim be dismissed with prejudice 

and that the proceeding be discontinued. On March 7, 2012, the complainants filed exceptions. The proceeding is currently pending before the Commission.

Bimsha International v. Chief Cargo Services, Inc., and Kaiser Apparel, Inc. 

[Docket No. 10-08]

On July 28, 2010, Bimsha filed a complaint alleging that Chief Cargo 

Services and Kaiser Apparel violated section 10(d)(1) of the 1984 Act on 

three separate shipments by releasing containers to the consignee without 

requiring presentation of an original bill of lading. On December 14, 2011, 

the administrative law judge issued an initial decision finding that Chief 

Cargo, a licensed NVOCC, violated the 1984 Act as alleged by Bimsha and 

issued a cease and desist order. Bimsha’s claim for reparations was denied 

for failure of proof. The complaint against Kaiser Apparel was dismissed because the evidence did not establish that it had operated as an ocean transportation intermediary on the shipments. On January 5, 2012, Bimsha and 

Chief Cargo each filed exceptions to the Initial Decision.

Smart Garments v. Worldlink Logix Services Inc. [Docket No. 10-11]

On November 30, 2010, the complaint filed by Smart Garments, a 

manufacturer and exporter of garments, was served alleging that respondent 

Worldlink Logix, an ocean transportation intermediary, violated sections 

10(d)(1), 10(d)(4), and 10(b)(13) of the 1984 Act, 46 U.S.C. §§ 41102(c), 

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41106(2), and 41103(a), by releasing goods without the original bills of lading, showing unreasonable preference to the buyer, and disclosing information about the shipment without the consent of the shipper. On October 

31, 2011, the administrative law judge issued a decision on default against 

Worldlink Logix. On November 18, 2011, the Commission served a notice 

to review. The proceeding is currently pending before the Commission.

Indigo Logistics, LLC; Liliya Ivanenko; and Leonid Ivanenko – Possible Violations of Section 19 of the Shipping Act of 1984 and the Commission’s Regulations 

at 46 C.F.R. Part 515 [Docket No. 11-06]

By Order of Investigation and Hearing dated April 7, 2011, the Commission commenced this proceeding to determine: 1) whether respondents 

violated section 19 of the 1984 Act, 46 U.S.C. §§ 40901, 40902, and the Commission’s regulations at 46 C.F.R. Part 515, by acting as an ocean transportation intermediary without a license or evidence of financial responsibility; 2) whether, in the event violations of the Shipping Act are found, civil 

penalties should be assessed against respondents and, if so, the amount of 

penalties to be assessed; and 3) whether, in the event violations are found, 

appropriate cease and desist orders should be issued. On October 14, 2011, 

the Bureau of Enforcement and respondents Indigo Logistics, LLC, Liliya 

Ivanenko, and Leonid Ivanenko filed a Proposed Settlement Agreement and 

a Joint Memorandum in Support of Proposed Settlement requesting approval of the Agreement. On October 20, 2011, the administrative law judge 

approved the proposed settlement and dismissed the proceeding with prejudice. On December 2, 2011, the Commission served a notice not to review.

Ndahendekire Barbara v. African Shipping; Njoroge Muhia; Alco Logistics, LLC; 

Brenda Alexander; and Air 7 Seas Transport Logistics, Inc. [Docket No. 11-08]

On May 10, 2011, the Federal Maritime Commission issued a notice of filing of complaint and assignment indicating that complainant Ndahendekire Barbara filed a claim alleging that respondents African Shipping; 

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Njoroge Muhia; Alco Logistics, LLC; Brenda Alexander; and Air 7 Seas 

Transport Logistics, Inc. violated section 10(d)(1) of the 1984 Act, now codified at 46 U.S.C. § 41102(c). On February 16, 2012, respondent Air 7 Seas 

was voluntarily dismissed with prejudice and on March 19, 2012, the Commission issued a notice not to review. On April 19, 2012, the administrative 

law judge issued an initial decision ordering that the claim against Alco Logistics and Brenda Alexander be dismissed without prejudice, that the claim 

against Njoroge Muhia and African Shipping be dismissed with prejudice, 

and that the proceeding be discontinued. On May 23, 2012, the Commission served a notice not to review.

Atlantic Shipping Company, Inc. v. Di Nos Shipping, Inc. [Docket No. 11-13]

On August 8, 2011, Atlantic Shipping filed a complaint alleging that 

Di Nos Shipping violated the 1984 Act by operating as an ocean transportation intermediary without a Commission license and without a bond, proof 

of insurance, or other surety and requested issuance of an order requiring Di 

Nos to cease and desist operating. Atlantic Shipping did not seek a reparation award. On April 17, 2012, the administrative law judge issued an initial 

decision holding that Di Nos operated as an NVOCC without a license and 

without a bond, proof of insurance, or other surety and ordered Di Nos to 

cease and desist. On May 18, 2012, the Commission served a notice not to 

review.

Petra Pet, Inc. (a/k/a Petrapport) v. Panda Logistics Limited; Panda Logistics 

Co., Ltd. (f/k/a Panda Int’l Transportation Co., Ltd.); and RDM Solutions, Inc. 

[Docket No. 11-14]

By complaint served on August 26, 2011, complainant Petra Pet, Inc. 

alleged that respondent RDM Solutions, an ocean transportation intermediary, violated the 1984 Act, 46 U.S.C. § 41102(c), by failing to establish, 

observe, and enforce reasonable regulations and practices relating to or

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connected with receiving, handling, storing, and delivering complainant’s 

shipments from China to the United States. On April 20, 2012, the administrative law judge issued an initial decision on default against respondent 

RDM Solutions. On May 24, 2012, the Commission served a notice not to 

review. The case against the remaining respondents continued. On August 

14, 2012, an Initial Decision was issued granting the claim and assessing 

damages against Panda Logistics Limited and Panda Logistics Co., Ltd. On 

August 20, 2012, the Commission served a notice to review.

Citgo Refining & Chemicals Company L.P. v. Port of Corpus Christi Authority of 

Nueces County, Texas [Docket No. 11-15]

On September 2, 2011, the Federal Maritime Commission issued a 

notice of filing of complaint and assignment indicating that complainant 

Citgo filed a claim asserting that the Port violated and continues to violate 

the 1984 Act, 46 U.S.C. §§ 41106(2) and (3) and 41102(c). Citgo alleged that 

the Port subjected Citgo to an undue or unreasonable prejudice or disadvantage; granted an undue preference or advantage with respect to certain users 

of its facilities; and failed to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with the receiving, 

handling, storing, or delivering of property. On July 11, 2012, the administrative law judge approved a settlement between the parties and dismissed 

the proceeding. On August 13, 2012, the Commission served a notice not 

to review.

Valero Refining-Texas, L.P. v. Port of Corpus Christi Authority of Nueces County, Texas [Docket No. 11-18]

On October 28, 2011, the Federal Maritime Commission issued a 

notice of filing of complaint and assignment indicating that complainant 

Valero filed a claim asserting that the Port violated and continues to violate 

the 1984 Act, 46 U.S.C. §§ 41106(2) and (3) and 41102(c). Valero alleged 

that the Port subjected Valero to an undue or unreasonable prejudice or

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disadvantage; granted an undue preference or advantage with respect to certain users of its facilities; and failed to establish, observe, and enforce just 

and reasonable regulations and practices relating to or connected with the 

receiving, handling, storing, or delivering of property. On July 11, 2012, 

the administrative law judge approved a settlement between the parties and 

dismissed the proceeding. On August 13, 2012, the Commission served a 

notice not to review. 

Minto Explorations, Ltd. v. Pacific and Arctic Railway and Navigation Company [Docket No. 11-21]

In a complaint served on November 25, 2011, Minto alleged that 

by charging a higher dockage fee per foot for ore vessels than for passenger vessels, respondent Pacific and Arctic Railway and Navigation Company (PARN), a marine terminal operator, violated 46 U.S.C. § 41102(c) of 

the 1984 Act, which requires marine terminal operators to establish, observe, and enforce just and reasonable regulations and practices relating to 

or connected with receiving, handling, storing, or delivering property, and 

46 U.S.C. § 41106(2), which prohibits marine terminal operators from imposing any undue or unreasonable prejudice and disadvantage on Minto 

or granting any undue or unreasonable preference or advantage to another 

person. PARN filed an answer denying it had violated the 1984 Act. On 

September 6, 2012, the parties filed a joint motion seeking approval of a settlement agreement and dismissal with prejudice. On September 7, 2012, the 

administrative law judge approved the settlement agreement and dismissed 

the proceeding with prejudice. 

The Eagles Wings Foundation v. Chatelain Cargo Services [Docket No. 1923(F)]

On June 1, 2011, Eagles Wings Foundation filed a small claims complaint alleging that Chatelain Cargo Services violated the 1984 Act. Chatelain objected to proceeding as a small claims case and on August 5, 2011, 

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the proceeding was assigned to OALJ. The evidence submitted with the 

complaint suggested that the Commission did not have subject matter jurisdiction over Eagles Wings’ complaint because the loss about which Eagles 

Wings complained occurred during transportation between two points in 

Haiti that was not part of transportation on a multimodal through bill of 

lading. Eagles Wings responded to an order to show cause why the complaint should not be dismissed for lack of subject matter jurisdiction by filing a notice of voluntary dismissal. On October 3, 2011, the administrative law judge dismissed the complaint without prejudice. On November 3, 

2011, the Commission served a notice not to review.

3. Pending Proceedings

At the end of fiscal year 2012, fourteen formal proceedings were 

counted as pending before the OALJ (06-06, 06-09, 07-01, 07-02, 08-03, 09-

01, 09-08, 11-07, 11-11, 11-12, 12-01, 12-02, 12-03, and 12-06). 

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C. OFFICE OF

THE GENERAL COUNSEL

The General Counsel provides legal counsel to the Commission. 

This includes reviewing staff recommendations for Commission action for 

legal sufficiency, drafting proposed rules to implement Commission policies, and preparing final decisions, orders, and regulations for Commission 

review. In addition, the Office of the General Counsel (OGC) provides 

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

public in appropriate cases. As described in more detail below, the General 

Counsel also represents the Commission before courts and Congress and 

administers the Commission’s international affairs program.

1. Rulemakings and Decisions 

The following are rulemakings and adjudications representative of matters 

prepared by the OGC:

Rulemakings by the Commission

NVOCC Negotiated Rate Arrangements [Docket 11-22], 32 S.R.R. 350 (December 20, 2011)

On March 2, 2011, the Commission issued a final rule, promulgating 46 C.F.R. Part 532, regulations which govern the exemption of licensed 

NVOCCs from their tariff rate publication obligations when entering into 

a “negotiated rate arrangement” (NRA). Commission Docket No. 10-03, 

76 Fed. Reg. 11351, effective April 18, 2011. The regulation allows licensed 

NVOCCs to enter into NRAs with their shipper customers. An NRA is 

defined as “a written and binding arrangement between a shipper and an 

eligible NVOCC to provide particular transportation service for a particular 

shipment at a particular rate prior to the receipt of the cargo by the common 

carrier or its agent (including originating carriers in the case of rates for 

through transportation).” The regulation exempts licensed NVOCCs who

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enter into NRAs from the following requirements of the Shipping Act: the 

requirement in Section 8(a), codified at 46 U.S.C. §§ 40501(a)-(c) that each 

common carrier keep open to public inspection in an automated tariff system tariffs showing all its rates; Section 8(b), codified at 46 U.S.C. § 40501(d)

(time volume rates); Section 8(d), codified at 46 U.S.C. § 40501(e) (tariff 

rate increase may not be effective on less than 30 days’ notice but decrease 

effective immediately); Section 8(e), codified at 46 U.S.C. § 40503 (carrier application to grant refunds); and Section 10(b)(2)(A)’s requirement of 

adhering to the published tariff rate, codified at 46 U.S.C. § 41104(2)(A). 

Licensed NVOCCs entering into NRAs must still comply with the prohibitions contained in Section 10(b)(4) of the Shipping Act, codified at 46 U.S.C. 

§ 41104(4)(prohibiting common carriers from unfair or unjustly discriminatory practices in service pursuant to a tariff), and Section 10(b)(8), codified at 46 U.S.C. § 41104(8)(prohibiting common carriers from undue or 

unreasonable preference or advantage or undue or unreasonable prejudice 

or disadvantage for tariff service). The Commission determined not to extend the ability to enter into NRAs to foreign-based NVOCCs who are unlicensed but bonded pursuant to 46 C.F.R. § 515.21(a)(3). 

On December 20, 2011, the Commission issued a Notice of Inquiry 

(NOI), Commission Docket No. 11-22, seeking comments on ways to make 

NRAs more useful, including the possible extension of the ability to offer 

NRAs to foreign-based NVOCCs not licensed by the Commission. December 27, 2011 at 76 Fed. Reg. 80866. The comments were due by March 26, 

2012. The Commission received 23 comments. An additional comment, that 

was not adverse, was received after the deadline. The Commission determined to issue a direct final rule revising 46 C.F.R. Part 532 and adopting 

many of the suggestions of the commenters, but not expanding the exemption to foreign-based NVOCCs who are unlicensed but bonded.

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47

Decisions by the Commission

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

Possible Violations of Section 10 of the Shipping Act of 1984 and the Commission’s Regulations at 46 C.F.R. § 515.27 [Docket No. 06-06], 32 S.R.R. 578 (FMC 

2012) 

 

This proceeding was instituted by Order of Investigation and Hearing served May 11, 2006, to determine whether respondents violated section 

10(b)(11) of the 1984 Act and the Commission’s regulations at 46 C.F.R. 

§ 515.27, by knowingly and willfully accepting cargo from or transporting 

cargo for the account of an ocean transportation intermediary that did not 

have a tariff and bond as required by sections 8 and 19 of the Act. With 

regard to EuroUSA, the Administrative Law Judge (ALJ) approved a Settlement Agreement between EuroUSA and the Bureau of Enforcement (BOE) 

on October 9, 2009. With regard to Tober Group (Tober), the ALJ issued 

an Initial Decision (ID) in which he concluded that BOE did not prove that 

the unlicensed intermediaries with whom Tober did business operated as 

non-vessel-operating common carriers, and therefore Tober did not violate 

section 10(b)(11) of the Shipping Act. The ALJ also concluded that Tober violated section 10(b)(2)(A) of the Act by providing service in the liner trade 

that was not in accordance with the rates and charges in its published tariff, 

but did not assess a penalty for these violations. BOE filed exceptions to the 

ALJ’s ID. Finally, with regard to Container Innovations, the ALJ concluded 

that it violated section 10(b)(11) and should be subject to a civil penalty 

of $390,000 for 13 knowing and willful violations of the Shipping Act. The 

ALJ’s decision regarding Container Innovations became administratively final on January 7, 2010. 

On April 12, 2012, a majority of the Commission vacated the ALJ’s 

ID in part, reversed in part, and remanded the proceedings. The Commission vacated conclusions in the ID that Tober did not violate section 10(b)

(11) of the 1984 Act, and remanded to the ALJ for reconsideration consistent with the Commission’s decision in Docket No. 06-01, Worldwide Relocations, Inc. – Possible Violations of the Shipping Act, 32 S.R.R. 495 (FMC 

2012). The Commission also reversed the ALJ’s denial of civil penalties and
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48

remanded for reconsideration consistent with the Commission’s order. Finally, the Commission granted a Motion to Withdraw as Counsel. The ALJ’s 

Initial Decision on Remand is due by December 31, 2012, and the Commission’s final decision is due by June 28, 2013.

Parks International Shipping Inc., Cargo Express International Shipping Inc., 

et al. – Possible Violations of Sections 8(a) of the Shipping Act and the Commission’s Regulations at 46 C.F.R., Parts 515 and 520 [Docket No. 06-09], 31 S.R.R. 

1166 (February 5, 2010) 

This proceeding was instituted by Order of Investigation and Hearing served September 19, 2006, to determine whether respondents violated 

sections 8(a) and 19 of the 1984 Act and the Commission’s regulations at 46 

C.F.R. Part 520 and 46 C.F.R. Part 515. On February 5, 2010, the Administrative Law Judge issued an Initial Decision finding that on twelve shipments, Parks International Shipping, Inc. violated section 8(a) by operating 

as a common carrier without publishing tariffs showing all of its active rates 

and charges, and violated section 19 by operating as an ocean transportation 

intermediary without obtaining a license from the Commission and without 

providing proof of financial responsibility. The ALJ also found that on fourteen shipments, Cargo Express International Shipping, Inc. violated section 

8(a) by operating as a common carrier without publishing tariffs showing 

all of its active rates and charges and violated section 19 by operating as an 

ocean transportation intermediary without obtaining a license and without 

providing proof of financial responsibility. The ALJ imposed civil penalties 

on both of these parties, and ordered them to cease and desist from violating 

the 1984 Act. The ALJ dismissed Bronx Barrels & Shipping Supplies Shipping Center, Inc. and Ainsley Lewis a.k.a. Jim Parks from the proceeding. 

On March 4, 2010, the Commission filed a Notice indicating its intention to 

review the ALJ’s Initial Decision. 

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49

On April 26, 2012, the Commission vacated the Initial and Supplemental Decisions and remanded the matter to the ALJ for further proceedings consistent with the Commission’s holding in Worldwide Relocations, 

Inc., et al. – Possible Violations of the Shipping Act, FMC Docket No. 06-01, 

32 S.R.R. 495.

The ALJ’s deadline for an Initial Decision on Remand is December 

31, 2012. The Commission’s deadline for a final decision is extended from 

October 29, 2012 until June 28, 2013. 

Anderson International Transport and Owen Anderson – Possible Violations 

of Sections 8(a) and 19 of the Shipping Act [Docket No. 07-02], 31 S.R.R. 1232 

(February 23, 2010)

This proceeding was instituted by Order of Investigation and Hearing served March 22, 2007, to investigate whether respondents violated sections 8, 19(a), and 19(b) of the 1984 Act and the Commission’s regulations 

at 46 C.F.R. Part 515 and Part 520. On August 28, 2009, the ALJ issued 

an Initial Decision finding that respondents violated section 19(a) of the 

Shipping Act by operating as an ocean transportation intermediary without 

obtaining a license, and also violated section 19(b) by operating as an ocean 

transportation intermediary without providing proof of financial responsibility. The ALJ ordered respondents to cease and desist from violating 

the 1984 Act. The ALJ did not impose a penalty, finding that the Bureau of 

Enforcement failed to introduce evidence regarding respondents’ ability to 

pay a civil penalty. On December 8, 2009, the Bureau of Enforcement filed a 

petition to reopen the proceeding for the purpose of taking further evidence 

regarding respondents’ ability to pay. The Commission granted this request 

and remanded the case to the ALJ for further consideration. On February 

23, 2010, the ALJ issued an order on remand imposing a penalty on respondents. On March 9, 2010, the Commission filed a notice to review the ALJ’s 

decision, and on March 15, 2010, the Bureau of Enforcement filed exceptions to the ALJ’s decision. 
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50

On April 26, 2012, the Commission vacated the Initial and Supplemental Decisions, and remanded the matter to the ALJ for further proceedings consistent with the its holding in Docket No. 06-01, Worldwide Relocations, Inc. – Possible Violations of the Shipping Act, 32 S.R.R. 495. The ALJ’s 

Initial Decision on Remand is due by December 31, 2012, and the Commission’s final decision is due by June 28, 2013.

Notice of Inquiry-- Non-Vessel-Operating Common Carrier Service Arrangements, [Docket No. 12-05], (April 12, 2012)

On April 12, 2012, the Commission issued a Notice of Inquiry 

(NOI), Commission Docket No. 12-05, 77 Fed. Reg. 23202, seeking public 

comment on ways to make non-vessel-operating common carrier service 

arrangements (NSAs) less burdensome and more effective and specifically 

requesting comments on extending the exemption to allow two or more unaffiliated NVOCCs to jointly offer NSAs. Comments were due by June 18, 

2012. This matter is under review by the Commission.

2. Litigation

The General Counsel represents the Commission in litigation before courts and other administrative agencies. Although the litigation work 

largely consists of representing the Commission upon petitions for review of

its orders filed with the U.S. Courts of Appeals, the General Counsel also 

participates in actions for injunctions, enforcement of Commission orders, 

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

interest may be affected by litigation.

The following is representative of matters litigated by the Office:

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51

City of Oakland v. Federal Maritime Commission, United States Court of Appeals for the District of Columbia Circuit, Case No. 12-1080

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

of the Commission’s Order in FMC Docket No. 09-08, SSA Terminals, LLC, 

et al. v. The City of Oakland, upholding the ALJ’s denial of its motion to 

dismiss on the ground of Eleventh Amendment sovereign immunity. On 

March 26, 2012, the FMC filed the certified index to the record. The court 

granted SSA Terminals’ Motion to Intervene on March 29, 2012. The Commission filed its brief July 5, 2012, and the Intervenor filed its brief July 18, 

2012. The Commission filed its Final Brief on August 24, 2012. No oral 

argument date has been scheduled.

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

Court for the Southern District of Florida, Case No. 06-60054 

On January 12, 2006, the Commission filed a Complaint for Injunctive Relief with the U.S. District Court for the Southern District of Florida 

to enjoin four household goods moving companies and three individuals 

from operating as NVOCCs in violation of the 1984 Act by accepting cargo 

for transportation, and for advertising for or soliciting cargo while operating as an ocean transportation intermediary without a valid license, bond or 

other security on file with the Commission. The District Court issued the 

requested preliminary injunction by order dated January 17, 2006. Specifically, the companies and individuals that are named and subject to the injunction are: All-In-One Shipping, Inc.; Around The World Shipping, Inc.; 

Boston Logistics Corp.; Global Direct Shipping; Daniel Cuadrado; Elizabeth 

F. Hudson; Joshua Morales. Injunctive relief remains in force pending conclusion of agency enforcement proceedings in FMC Docket No. 06-01. 
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On August 16, 2010, the ALJ issued an Initial Decision in Docket 

No. 06-01 finding violations of the 1984 Act and imposing civil penalties 

on the corporate and individual parties. No parties filed exceptions to the 

Initial Decision. The Commission determined to review the Initial Decision, and the Final Decision issued March 15, 2012, affirming the ALJ in 

part, reversing in part, and modifying in part. The Commission notified the 

District Court of the Final Decision on March 23, 2012, and the Court dissolved the preliminary injunction and terminated the case April 5, 2012.

3. Legislative Activities

The OGC represents the Commission’s interests in all matters before 

Congress. This includes preparing testimony for Commission officials, responding to Congressional requests for information, commenting on proposed legislation, and responding to the Office of Management and Budget 

requests for views on proposed bills and testimony.

During fiscal year 2012, 115 bills, proposals, and congressional inquiries were referred to the OGC for review or comment. OGC prepared 

and coordinated testimony for the agency’s fiscal year 2013 budget authorization hearing held before the U.S. House of Representatives’ Committee 

on Transportation and Infrastructure’s Subcommittee on Coast Guard and 

Maritime Transportation. In addition, OGC helped prepare three Presidential nominees for confirmation hearings before the Senate Committee on 

Commerce, Science and Transportation. On November 11, 2011, the Senate 

confirmed one of those nominees. 

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53

4. Foreign Shipping Restrictions and International Affairs

The OGC is responsible for the administration of the Commission’s 

international affairs program. The OGC monitors potentially restrictive foreign shipping laws and practices, and makes recommendations to the Commission for investigating and addressing such practices. The Commission 

has the authority to address restrictive foreign shipping practices under section 19 of the 1920 Act and the FSPA. Section 19 empowers the Commission to make rules and regulations governing shipping in the foreign trade 

to adjust or meet conditions unfavorable to shipping. The FSPA directs the 

Commission to address adverse conditions that affect U.S. carriers in foreign trade and that do not exist for foreign carriers in the U.S.

In fiscal year 2012, the OGC pursued informally several matters that 

involved potentially restrictive foreign practices including new legislation, 

new interpretations of existing legislation, new regulations of non-domestic 

carriers’ terminal handling charges and a requested change by the Ministry of Transport of the People’s Republic of China to revise the FMC’s rules 

implementing a US-PRC bilateral understanding addressing the ability of 

U.S. NVOCCs to do business in China. The Commission’s General Counsel 

served as a technical advisor to the U.S. delegation regarding Chinese requirements for rate-filing and related issues at the 5th U.S. - People’s Republic of China Consultations on the Maritime Bilateral Agreement held in St. 

Louis, Missouri, in January 2012. 

Another responsibility of the OGC is the classification of controlled 

carriers subject to section 9 of the 1984 Act. Common carriers that are owned 

or controlled by foreign governments are required to adhere to certain requirements under the 1984 Act, and their rates are subject to Commission 

review. The OGC investigates and makes appropriate recommendations to 

the Commission regarding the status of potential controlled carriers. The 

OGC, in conjunction with other Commission components, also monitors 

the activities of controlled carriers. The OGC republished the list of Controlled Carriers on August 22, 2012. 77 Fed. Reg. 51801 (August 22, 2012).
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The OGC continues to take the lead in accomplishing the agency’s 

performance goals relating to eliminating restrictions that unjustly disadvantage U.S. interests. OGC monitors foreign laws and practices to determine whether there are any unjust non-market barriers to trade. Where 

appropriate, the OGC will recommend Commission action.

 5. Designated Agency Ethics Official

The Ethics Official is designated by the Chairman and located in the 

OGC. The position is performed as a collateral duty by the attorney designated as Ethics Official.

The Commission’s Ethics Official is responsible for administering 

public and confidential financial disclosure systems in order to prevent 

conflicts of interest from arising in the execution of the agency’s regulatory 

functions. The Ethics Official also conducts annual training and offers dayto-day advice and guidance to ensure compliance with the standards of ethical conduct that apply to Executive Branch employees. 5 C.F.R. Part 2635. 

D. OFFICE OF EQUAL 

EMPLOYMENT OPPORTUNITY

The Federal Maritime Commission Office of Equal Employment 

Opportunity Program (EEO) follows Federal EEO and personnel management laws, concepts, procedures and regulations to develop, implement and 

manage a comprehensive program of equal employment opportunity. The 

program is statutorily mandated with required activities in complaints processing, adjudication, affirmative employment program planning, workforce 

diversity management, special emphasis programs, community outreach, 

monitoring and evaluation. 

The Chairman of the Federal Maritime Commission is responsible 

for ensuring equal opportunity in the Commission. The Chairman has delegated this authority to the Director of Equal Employment Opportunity. Operational responsibility for compliance with EEO policies and programs lies 

with the Commission’s front line managers. The Director of EEO (DEEO) 

works independently under the direction of the Chairman to provide advice 

to the Commission’s senior staff and management in improving and carrying 

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

affirmative employment program planning. The DEEO arranges for EEO 

counseling or ADR for employees who raise allegations of discrimination; 

provides for the investigation, hearing, fact-finding, adjustment, or early 

resolution of such complaints of discrimination; accepts or rejects formal 

complaints of discrimination; prepares and issues decisions for resolution 

of formal complaints; and monitors and evaluates the program’s impact and 

effectiveness. In addition, the DEEO represents the agency on several intergovernmental committees, coordinates all affirmative program planning 

efforts, directs programs of special emphasis, and coordinates the activities 

of the Selective Placement and Federal Equal Opportunity Recruitment Coordinators. The DEEO also supervises two collaterally-assigned EEO counselors. 

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The Office works closely with senior management and with the Commission’s Office of Human Resources (OHR) to: (1) monitor affirmative employment programs; (2) expand outreach and recruitment initiatives; (3) 

improve the representation, career development and retention of women, 

minorities and persons with disabilities; (4) provide adequate career counseling; (5) facilitate early resolution of employment-related problems; and 

(6) develop program plans and progress reports.

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E. OFFICE OF THE INSPECTOR GENERAL

The Inspector General Act of 1978, as amended, establishes the 

responsibilities and duties of an Inspector General. The Inspector General Act was amended in the 1980s to increase the number of agencies 

with statutory inspector generals (IG), culminating in 1988 with the establishment of Office of the Inspector General (OIG) in smaller, independent agencies, including the Federal Maritime Commission. Currently, 

there are 73 statutory IGs within executive and legislative departments 

and agencies. The mission of the OIGs, as identified in the IG Act, is to:

•	 Conduct and supervise independent and objective audits and investigations relating to agency programs and operations.

•	 Promote economy, effectiveness and efficiency within the agency.

•	 Prevent and detect fraud and abuse in agency programs and operations.

•	 Review and make recommendations regarding existing and proposed 

legislation and regulations relating to agency programs and operations.

•	 Keep the agency head and Congress informed of problems in agency 

programs and operations.

To ensure objectivity, the IG Act empowers independent IGs to determine what reviews to perform; to access all information deemed by the 

IG to be relevant to the reviews; and to publish findings and recommendations based on the reviews.

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During fiscal year 2012, the OIG issued the following audit reports 

and evaluations:

Audit Report Number Subject of Audit

A12-01 Audit of FMC’s FY 2011 Financial Statements

A12-01A Management Letter to the FY 2011 Financial 

 Statements

A12-02 Evaluation of FMC Implementation of the 

 Federal Information Security Management 

 Act for FY 2011

OR12-01 Review of the Compliance Audit Program in 

 the Bureau of Enforcement

OR12-02 FMC Controls over the Procurement, Lease 

 and Use of the Agency Vehicle 

In addition to these completed audits and reviews, the OIG performed fieldwork on the FY 2012 financial statement audit and the Federal 

Information Security Management Act evaluation, which includes privacy 

and data protection. The OIG also began a review of the agency’s transit 

subsidy program. 

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The OIG investigations unit received 12 complaints in fiscal year 

2012. The OIG responded to 5 of the complaints and forwarded 7 complaints 

to the appropriate FMC program area for disposition. The OIG opened 1 

new investigation and referred one matter to prosecutorial authorities during this period.

In addition to these audit and investigative activities and outcomes, 

OIG staff held information-sharing sessions with agency staff to identify 

and clarify the various OIG activities that assist in accomplishing the OIG’s 

mission to prevent and eliminate waste, fraud, abuse and mismanagement, 

and to promote efficiency and effectiveness. OIG staff also visited FMC area 

representatives in South Florida to enhance understanding of the functions 

and activities performed by FMC area representatives and, while there, gave 

a presentation to several members of the Miami business community and 

local government leaders about the role of Federal inspector general. 

We continued to respond to consumers who were victimized as part 

of an internet scam operation using FMC indicia and worked with the agency’s Office of the General Counsel to issue Commission regulations pertaining to IG reporting requirements as required by the Dodd-Frank Wall Street 

Reform and Consumer Protection Act (Public Law 111-203).

In addition to these audit and investigative activities and outcomes, 

the OIG responded to two congressional inquiries for information and responded to three Freedom of Information Act requests from the public. 

OIG staff participated in several activities associated with the Council of the Inspectors General on Integrity and Efficiency (CIGIE), including actively serving on the (1) Legislation Committee where OIG staff reviewed and commented on several legislative initiatives affecting the OIG 

community; and (2) Integrity Committee, where staff reviewed allegations 

of administrative (non-criminal) misconduct against inspectors general and 

designated senior staff members of the OIG. 

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F. OFFICE OF CONSUMER AFFAIRS

AND DISPUTE RESOLUTION SERVICES

The Office of Consumer Affairs and Dispute Resolution Services 

(CADRS) is responsible for developing and implementing the Commission’s 

Alternative Dispute Resolution (ADR) program. Through this program, the 

Commission provides services to assist parties in resolving shipping disputes. The Office provides a range of services designed to avoid the expense 

and delay inherent in litigation, and to facilitate the flow of U.S. commerce. 

With respect to matters already in litigation, or moving toward litigation, 

parties to a dispute are encouraged to avail themselves of mediation or other 

ADR processes to resolve their disputes. The Commission makes trained 

neutrals available to facilitate resolution at all stages. Outside neutrals also 

may be employed as needed. During fiscal year 2012, Commission mediators provided services in a number of matters, especially assisting parties in 

overcoming obstacles to delivery of transported goods.

CADRS also provides ombuds services to participants in ocean 

shipping transactions. Typical complaints include situations in which an 

NVOCC or VOCC has placed a hold on cargo in its possession, often for 

sums owed under a different contract of carriage. Other cases occur when 

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

transportation of the cargo, but failed to deliver the cargo. Urgent resolution 

may facilitate delivery of shipments to avoid additional demurrage/detention/storage charges. Household goods shippers often use unlicensed entities that demand additional payment and/or abandon the goods and refuse 

to communicate with the consumer. Tracking the location of a shipment can 

be difficult, and often additional charges accrue, necessitating payment of 

additional funds to obtain release of the shipment. CADRS also receives a 

significant number of complaints involving issues with cruise lines. Common examples of complaints include, but are not limited to, cruise cancellations, changes of itinerary, and difficulties encountered with connecting 

transportation (e.g. flight cancellations).

Another function of CADRS includes the adjudication of small 

claims through informal proceedings under the Commission’s Rules of

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Practice and Procedure at 46 C.F.R. Part 502, Subpart S. Office personnel 

serve as Settlement Officers in such cases, which involve complainants seeking reparations up to $50,000 for violations of the shipping statutes. Those 

claims generally involve alleged prohibited acts in connection with the international transportation of goods, or the failure to establish, observe, and 

enforce just and reasonable regulations and practices. 

During fiscal year 2012, 670 complaints were received that necessitated the opening of cases. These included 132 passenger complaints about 

cruise line issues, 274 complaints with respect to household goods shipments, and 264 complaints involving other cargo shipment matters. Cargo shipment complaints continued to be increasingly complex. Problems 

involving ocean transportation intermediaries with overextended finances 

and inability to complete the ocean transportation continued to be an issue. 

In addition, many household goods complaints pertained to initial charges 

quoted vis á vis the actual charges billed, often due to measurement discrepancies.

In fiscal year 2012, CADRS continued its “Rapid Response Team” 

activities established under Fact Finding Investigation No. 26 to ensure 

timely resolution of commercial shipping disputes. CADRS also continued 

to expand the use of its services through public outreach and educational 

sessions with shippers, ocean transportation intermediaries, and vessel operators. Such sessions encouraged parties to incorporate language in service 

contracts to use CADRS-provided ADR to address contractual, commercial, 

and regulatory disputes. Such public outreach efforts included developing 

brochures, making ADR presentations and participating in industry/shipper meetings and issue-solving activities, and attending ADR conferences 

and meetings with government ADR groups. 

CADRS also worked to implement several recommendations that 

were adopted by the Commission in Fact Finding No. 27 involving the review of potentially unlawful, unfair, or deceitful practices in the international shipment of household goods by water. As part of this effort, CADRS staff 

participated in the negotiation, execution, and implementation of a MOU 

with the Federal Motor Carrier Safety Administration (FMCSA). Under
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the MOU both agencies agree to conduct joint outreach and educational 

activities, share information via access to the FMCSA’s consumer complaint 

database, undertake joint enforcement activities, and refer disputes involving international household goods shipments to CADRS for the provision 

of ADR services. Pursuant to the Commission’s commitments under the 

MOU, CADRS staff provided training to FMCSA headquarters and field 

staff regarding the regulatory role of the FMC in international shipping 

and the role of CADRS in resolving commercial and regulatory disputes. 

CADRS staff also provided several educational webinars to FMCSA’s household goods partnership comprised of federal and state government agencies 

and industry participants. Further, CADRS participated in regular meetings with FMCSA’s partners and staff regarding various issues impacting 

the household goods industry and participated in FMCSA’s moving fraud 

task force. As a result of its efforts, CADRS received and addressed several 

inquiries and ADR referrals from FMCSA and its partners. One such example involved complaints involving two companies that were licensed both 

with the FMC and FMCSA that had gone out of business leaving consumers’ 

shipments stranded both domestically and abroad. In that matter CADRS 

staff worked with consumers to locate and ensure delivery of their household goods and personal effects. 

In addition to the Commission’s formal partnership with FMCSA, 

CADRS furthered the Commission’s Fact Finding No. 27 recommendations 

through enhanced relations with moving industry trade associations. As 

part of this effort CADRS staff attended various meetings with trade associations’ leadership and provided training to associations’ members regarding 

regulatory requirements that impact the international moving industry and 

the use of ADR to resolve international household goods disputes. These efforts resulted in the referral of several matters to CADRS for ADR services. 

While working with trade associations and other governmental 

agencies to address household goods matters CADRS staff undertook additional measures to implement the Commission’s Fact Finding No. 27 recommendations. First, CADRS coordinated with other Commission staff to 

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develop and implement a consumer resource webpage that provides information 

and resources to assist consumers contemplating an international move. Secondly, as part of the effort to assist consumers, CADRS issued several consumer 

alerts to inform the shipping public of trends and problems impacting international household goods shipments. 
G. OFFICE OF THE MANAGING DIRECTOR

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

executive responsible for the management and coordination of the Commission’s operating bureaus, exercising administrative direction or guidance 

over all units of the Commission. In addition to the major operating bureaus, the Managing Director oversees the Commission’s Area Representatives and all administrative offices.

The MD is the Commission’s Chief Operating Officer and is responsible to the Chairman for the management and coordination of the following:

■ Bureau of Certification and Licensing 

■ Bureau of Enforcement 

■ Bureau of Trade Analysis

■ Area Representatives 

■ Office of Budget and Finance 

■ Office of Human Resources 

■ Office of Information Technology

■ Office of Management Services 

The MD thus is responsible for implementing the regulatory policies 

of the Commission, as well as the administrative policies and directives of 

the Chairman.

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In addition, the MD provides administrative guidance to the: 

■ Office of the Secretary

■ Office of the General Counsel 

■ Office of Consumer Affairs and Dispute Resolution Services

■ Office of Administrative Law Judges

and administrative assistance to the:

■ Offices of the Commissioners

■ Office of the Inspector General 

■ Office of Equal Employment Opportunity

The MD’s responsibilities include serving as the FMC’s Chief Acquisition Officer (CAO), and Chief Financial Officer, among myriad other 

administrative responsibilities. The Deputy Managing Director serves as 

the Managing Director’s Deputy with respect to all operational and administrative programs, as well as having primary responsibility for many efforts, 

including serving as the Commission’s Competition Advocate. The Director 

of Strategic Planning and Regulatory Review within OMD coordinates development of the Commission’s strategic plan.

The Director of Field Investigations (DFI) is located within the Office of Managing Director (OMD). The OMD oversees activities of the ARs 

and the DFI provides oversight, coordination, direction and monitoring of 

Commission investigative activities, including those of ARs. The DFI’s responsibility includes extensive coordination among ARs and the Bureau of 

Enforcement, determining investigative priorities and goals and directly supervising all investigative cases. 

In managing the day-to-day operations of the Commission, the 

OMD provides direction and coordination among Commission administrative and program components to assure synergism and cohesive efforts to 

achieve the Commission’s strategic goals. The OMD initiates recommendations for long-range plans, new or revised policies and standards, and rules 

and regulations, while issuing internal directives to Commission staff.

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During fiscal year 2012, OMD staff continued to coordinate plans 

to implement the recommendations of Fact Finding Investigation No. 27.

The office was instrumental in pursuing and signing an MOU with FMCSA 

agreeing to cooperate in providing enhanced protection and assistance for 

consumers who move their household goods. 

OMD also initiated cooperation with other agencies to leverage existing government assets. The MD signed MOUs with the Surface Transportation Board and the Census Bureau to share trade data. In addition, 

OMD oversaw coordination with Department of Defense agencies and U.S. 

Agency for International Development regarding issues affecting their ocean 

transportation costs.

The OMD coordinated efforts to study the diversion of U.S. cargo 

through Canadian and Mexican ports, pursuant to a congressional request. 

This involved extensive collection of information and input from various 

industry and government sources, and assessment by Commission staff. 

During FY 2012, the MD initiated an effort to develop a long-range 

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

improve internal efficiencies, while providing improved data to support 

Commission programs. The Director of Strategic Planning and Regulatory 

Review was tasked with coordinating program office needs with OIT and 

the Chief information Officer (CIO). An assessment of the agency’s IT program was initiated and a study made of Disaster Recovery options. The 

assessment has demonstrated the need for significant upgrades of existing 

systems. As funds become available, plans are being developed to make 

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1. Area Representatives

The Commission’s ARs represent the FMC in their respective areas. 

The Commission maintains a presence in Southern California, South Florida, New Orleans, New York, Houston and Seattle through ARs based in each 

of those locales. These representatives serve major ports and transportation 

centers within their respective areas and beyond. In representing the Commission, ARs act as a conduit for information to and from the maritime 

industry and the shipping public, resolve complaints and disputes between 

parties involved in international oceanborne shipping (often coordinating 

with CADRS), investigate alleged violations of the shipping statutes, and 

function as an intelligence resource to Commission headquarters. They 

provide advice and guidance to the shipping public, collect and analyze information of regulatory significance, and assess industry conditions. The 

ARs frequently cooperate and coordinate with other governmental agencies 

and departments, including Federal, state and local, providing shipping expertise and information and relaying Commission policy. The ARs inform 

the public about Commission requirements and services through activities such as seminars, participating in various conferences and trade shows, 

making presentations, and through various local community contacts.

In fiscal year 2012, hundreds of informal complaints were handled 

by the ARs. These complaints often involved unlawful activity. Where possible, compliance with statutory and regulatory requirements was achieved 

informally. In other instances, investigative cases were opened and the ARs 

conducted thorough investigations to determine the extent of unlawful activity. The ARs conducted investigations in 2012 of unlawful shipping practices, including unlicensed OTI activities, misdescription of commodities 

by shippers, and improper service contract rate application by ocean carriers. The investigative actions by the ARs led to the development of several 

enforcement cases that were referred to the Bureau of Enforcement for pursuit of civil penalties. Investigative activity by the ARs assists the FMC in 

ensuring fair competition by all participants in the trades to and from the 

United States.

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The ARs were instrumental in the publication of public service announcements (PSAs) for each major port area in fiscal year 2012, warning 

consumers against the use of unlicensed OTIs. The ARs identified appropriate local publications, particularly those that would reach various ethnic 

communities that have been particularly vulnerable to fraudulent activity by 

unlicensed entities. The PSAs resulted in numerous inquiries and reports to 

the ARs regarding improper activity by both licensed and unlicensed OTIs, 

and appear to have helped educate consumers to be more alert to unlawful 

operators, saving many from potential losses. 

During fiscal year 2012, the ARs made a number of presentations to 

interested industry audiences in their areas, explaining OTI licensing requirements and compliance with the new NRA Tariff Rate Exemption. ARs also 

worked closely with a number of law enforcement agencies, including local 

jurisdictions such as the New York City Police Department, New Jersey State 

Police, and Houston Police Department, as well as Federal agencies, including 

the Federal Bureau of Investigation (FBI). In addition, the South Florida ARs 

continued to provide valuable expertise and assistance to the Export-Import 

Bank of the United States (Ex-Im Bank) to facilitate the investigation by ExIm Bank’s IG Office of several cases of fraud against the U.S. government.

The ARs also participated in task forces and initiatives sponsored by 

local law enforcement agencies, the U.S. Department of Justice, the Department of Homeland Security including Customs and Border Patrol (CBP) and 

Immigration and Customs Enforcement (ICE), the Department of Commerce 

(DOC) and the Federal Motor Carrier Safety Administration (FMCSA). This 

assistance and sharing of information contributed to the investigation of a 

wide range of unlawful activities.

ARs continued to provide valuable assistance in implementing recommendations of Commission Fact Finding Investigation No. 27. The ARs have 

been actively involved in reaching out to the public, consumer groups, trade 

associations, and other government agencies in efforts to achieve regulatory 

compliance and protection for the shippers of household goods and personal 

effects. 
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Under the MOU with FMCSA, the ARs joined with CADRS in providing a 

seminar to FMCSA staff on the Commission’s investigatory processes and 

dispute resolution program. In addition, the ARs coordinated with FMCSA 

in investigating certain “rogue movers.”

2. Office of Budget and Finance

(a) General Office Responsibilities

The Office of Budget and Finance (OBF) administers the Commission’s financial management program and is responsible for offering guidance on optimal use of the Commission’s fiscal resources. OBF is charged 

with interpreting government budgetary and financial policies and programs, and developing annual budget justifications. The Office also administers internal control systems for agency funds, travel, work years, and cash 

management. Additionally, OBF manages the Commission’s Travel Charge 

Card Program and administers all budget execution functions.

(b) Achievements

During fiscal year 2012, OBF:

•	 Collected and deposited $1,006,298 to the U.S. Treasury from fines and 

penalty collections, publications, reproductions, and user fees and pursued delinquent debts as required by the Debt Collection Act.

•	 Worked with Bureau of Public Debt (BPD) staff and the Commission’s 

independent auditors regarding the audits of fiscal years’ 2011 and 2012 

financial statements. The Commission received unqualified opinions for 

both fiscal years.

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•	 Prepared monthly internal status reports on workyears, funding, travel, 

receivables, and budget allocation report to provide management with 

meaningful and timely expenses data by program.

•	 Processed all of the Commission’s accounts payable documents in accordance with the Prompt Payment Act and worked with BPD to implement Treasury’s Internet Payment Platform (IPP) to process the payment of invoices received from commercial vendors.

•	 Prepared and processed official travel documents in an E-travel system 

in accordance with applicable Federal Travel Regulations and agency 

policy.

•	 Prepared a variety of reports/responses to OMB and other external entities.

•	 Completed migration from Treasury’s Paper Check Conversion (PCC) 

system of depositing remittances received from FMC customers to the 

new over the Counter Channel Application (OTCnet) and Transaction 

Reporting System (TRS). 

•	 Identified a new procedure for calculating user fees and recalculated the 

fees based upon fiscal year 2011 costs. 
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3. Office of Human Resources

(a) General Office Responsibilities

The Office of Human Resources (OHR) administers a complete human resources management program, including recruitment and placement, position classification and pay administration, occupational safety 

and health, employee assistance, employee relations, workforce discipline, 

performance management and incentive awards, employee benefits, career 

transition, retirement, employee development and training, and personnel 

and information security.

(b) Achievements

During fiscal year 2012, OHR: 

•	 Monitored activities of the agency’s payroll/personnel service provider, 

the National Finance Center (NFC), and worked with Administrative 

staff to ensure security, continuity and accuracy of payroll and personnel 

services.

•	 Addressed talent/leadership management and succession planning and 

continued to provide technical oversight of the SES Candidate Development Program and guidance to participants and mentors concerning 

developmental activities, special projects, and training, as well as monitor participants’ progress towards meeting program requirements and 

coordinate submission of requests to OPM for QRB certification, following program completion.

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•	 Conducted a comprehensive training program in accordance with the 

agency’s budget and strategic and performance plans, promoting elearning and on-line training opportunities, continued the college tuition reimbursement program, ensured training for new employees on 

the No Fear Act, participated in the Small Agency Council Training 

Program, and introduced more agency mission-critical training (e.g., 

Conflict Resolution and COR training), and conducted Hiring Reform 

training for managers. 

•	 Promoted programs for Retirement-Readiness, Personal Financial Literacy Education, and Volunteer/Community Service Awareness and issued newsletters highlighting appropriate information and activities. 

•	 Conducted a comprehensive personnel and information security program, including initiating and adjudicating security investigations for 

new and reinvestigated employees and incorporating new security regulations into agency policy.

•	 Revamped and updated the agency Human Capital, Workforce, Solutions Implementation, and Succession Management Plans to ensure 

consistency with revisions to the agency Strategic Plan’s goals and objectives.

•	 Coordinated with OPM, OMB, and the Small Agency Human Resources 

Council on human capital and related initiatives including, e.g., Hiring 

Reform, Voluntary Early Retirement Authority, employee satisfaction 

and wellness, potential sequestration and Presidential transition matters.
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•	 Conducted a comprehensive performance management and incentive 

awards program, including ensuring successful implementation of the 

revised performance appraisal system for non-SES employees through 

the agency Performance Appraisal System Taskforce (PAST), establishing a special working group devoted to evaluating and revising policy on 

the agency’s incentive and performance awards programs, and developing a system standard, agency policy, and appraisal documents necessary to seek approval to adopt OPM’s basic, “model” SES performance 

appraisal system.

•	 Continued work with respect to closing competency gaps identified last 

fiscal year through the online Federal Competency Assessment Tool 

for managers and HR staff to update FMC’s skill gap analysis, identify 

gaps in leadership competencies, support mission accomplishment, and 

guide planning for training and development. 

•	 Conducted comprehensive classification and position management programs, including coordinating assignments and evaluating contractor 

performance. 

•	 Managed and conducted employee benefits and charitable contributions 

programs and Open Seasons, such as the Combined Federal Campaign, 

Long-Term Care Insurance Program, Flexible Spending Accounts, the 

annual Benefits Open Season and FMC Health Fair.

•	 Conducted a proactive retirement program that included computing 

benefits, providing access to retirement seminars, related training and 

one-on-one counseling, and timely processing all retirements, as well as 

informing the workforce regarding Voluntary Early Retirement Authority.

•	 Coordinated with other administrative units and the General Services Administration’s Managed Service Office on matters pertaining to 

Homeland Security Presidential Directive 12 (HSPD-12) and the issuance of Federal employee credentials, including activities to implement 

physical and logical access provisions. 

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•	 Coordinated with OPM in the administration of the Federal Employee 

Viewpoint Survey (FEVS), analyzed results, prepared interpretation and 

trend analysis, worked with senior management to identify and reinforce 

successful activities and develop strategies to address areas of improvement, and worked with the Partnership for Public Service in connection 

with metrics and utilizing results of the Best Places to Work rankings.

•	 Continued to administer E-gov initiatives and implementation of the 

Enterprise Human Resources Integration Project and worked with the 

Small Agency Human Resources Consortium, OPM and Northrop 

Grumman Integic officials to complete program activities to implement 

the electronic Official Personnel Folder (eOPF). 

•	 Enhanced workplace flexibilities and provided recommendations to 

OPM regarding the agency’s work/life program and best practices. 

•	 Promoted the Preventive Health and Awareness Program and OPM’s 

Healthier Feds initiatives, publicized and hosted wellness seminars 

sponsored by the Employee Assistance and Federal Occupational Health 

Programs and coordinated with other administrative units on matters 

pertaining to the Automatic External Defibrillator (AED) program and 

Health Unit (clinical) services. 

•	 In concert with the President’s hiring reform initiative, conducted a 

comprehensive recruitment program, including continuing activities 

through the agency SWAT team to simplify the Federal application process and reduce the time-to-hire, as well as develop occupational assessment instruments and establish an interagency agreement with OPM to 

provide staffing services in the new recruitment environment.

•	 Maintained the partnership for acquisition of assistive devices through 

the Department of Defense’s Computer/Electronic Accommodations 

Program and continued to work with information technology personnel 

to ensure timely transmittal of training data to OPM through the automated training data management reporting system.
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4. Office of Information Technologies

(a) General Office Responsibilities:

The Office of Information Technology (OIT) provides management 

support to the program and administrative operations of the Commission 

with respect to information technology (IT), and thus is responsible for ensuring that the Commission’s IT program is administered in a manner consistent with applicable rules, regulations, and guidelines. 

The OIT Director serves as the Commission’s IT Officer, Telecommunications Manager, Help Desk and Database Administration Manager, 

and oversees the IT security program. The OIT Director plans, coordinates, 

and facilitates the use of automated information systems.

(b) Achievements

During fiscal year 2012, OIT:

•	 Contracted with a third-party vendor to move the FMC to a cloud-based, 

high-availability enterprise email and office automation system. Google 

Apps for Government will provide FMC with reliable, high-availability 

email and office automation (word processing, presentation, and spreadsheet) capabilities in the cloud ensuring survivability and accessible data.

•	 Completed installation of HSPD-12 hardware continuing toward full 

compliance with HSPD-12 guidance.

•	 Contracted with third-party vendors to establish an enterprise data and 

content management platform. Requirements analysis is in progress 

with analysis and recommendations due to FMC in second quarter FY 

2013.

•	 Awarded Pay.gov contract and began prototyping and implementation.

5. Office of Management Services

(a) General Office Responsibilities

The Office of Management Services (OMS) directs and administers 

a variety of management services functions that principally provide administrative support to the regulatory program operations of the Commission. 

The Director of the Office serves as the Commission’s Contracting Officer.

The Office’s support programs include procurement of administrative goods and services, property management, space management, printing 

and copying management, mail and record services, facilities and equipment 

maintenance, and transportation. The Office’s major functions are to secure 

and furnish all supplies, equipment and services required in support of the 

Commission’s mission, and to formulate regulations, policies, procedures, 

and methods governing the use and provision of these support services in 

compliance with the applicable Federal guidelines.

(b) Achievements

During fiscal year 2012, OMS:

•	 Negotiated with BPD to reduce the agency’s fiscal year 2012 Interagency 

Agency Agreement for cross services administrative support. 

•	 Established new Contracting Officer’s Representative (COR) training 

and certification program, in conjunction with the Small Agency Council, for agency personnel serving as program office leads on agency contracts, including a COR Roundtable that met bimonthly to share information and gain additional knowledge in the procurement and financial 

management arenas. 

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•	 In coordination with GSA, surveyed the northern New Jersey area for 

relocation of the Commission’s New York area field office to a less expensive and better agency mission-oriented locale.

•	 Arranged for the design and printing of BTA’s Study of the 2008 Repeal of 

the Liner Conference Exemption from European Union Competition Law, 

as well as reformatting to an assistive technology compliant document 

for website posting.

•	 Expanded the FMC’s in-house procurement and acquisition program 

to include major award contracts for financial audit services, enterprise 

content management platform services, global business information 

services, court reporting and transcription services, Google cloud services and GeoSearch IT services. 

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H. BUREAU OF CERTIFICATION AND LICENSING

1. In General

The Bureau of Certification and Licensing has responsibility 

for the Commission’s ocean transportation intermediary (OTI) licensing program and passenger vessel certification program. The Bureau:

•	 Licenses and regulates OTIs, including ocean freight forwarders and non-vessel-operating common carriers (NVOCCs).

•	 Issues certificates to owners and operators of passenger vessels that have 

evidenced financial responsibility to satisfy liability incurred for nonperformance of voyages or for death or injury to passengers and other persons.

•	 Manages programs assuring financial responsibility of OTIs and 

passenger vessel operators, by developing policies and guidelines, and analyzing financial instruments and financial reports. 

•	 Develops and maintains information systems that support the 

Bureau’s programs and those of other Commission entities.

The Bureau is organized into two offices: the Office of Transportation Intermediaries and the Office of Passenger Vessels and Information 

Processing. The former reviews and approves applications for OTI licenses, 

and maintains and updates records about licensees. The latter reviews applications for certificates of financial responsibility with respect to passenger 

vessels, manages all activities with respect to evidence of financial responsibility for OTIs and passenger vessel owner/operators, and develops and 

maintains all Bureau databases and records of OTI applicants and licensees. 

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2. Licensing of Ocean Transportation Intermediaries

OTIs are transportation middlemen for oceanborne cargo moving 

in the U.S.-foreign trades. There are two types: NVOCCs and ocean freight 

forwarders. NVOCCs are common carriers who do not operate the vessels 

by which transportation is provided. Ocean freight forwarders in the United 

States arrange for the transportation of cargo with a common carrier on 

behalf of shippers and process documents related to those shipments. Both 

NVOCCs and ocean freight forwarders must be licensed by the Commission 

if they are located in the U.S. NVOCCs doing business in the U.S. foreign 

trades but located outside the United States (foreign NVOCCs) may choose 

to become licensed, but are not required to do so. Whether licensed or not, 

foreign NVOCCs must establish financial responsibility. All NVOCCs must 

publish electronic tariffs which contain the NVOCC’s rates, charges, rules 

and practices. 

To become licensed by the Commission, an OTI must establish that 

it has the necessary character to render OTI services as well as establish its 

financial responsibility by means of a bond, insurance, or other instrument 

and through its Qualifying Individual (QI), has a minimum of three years of 

experience in ocean transportation intermediary activities in the U.S. An investigation of the applicant’s qualifications addresses such issues as accuracy 

of information provided in the application; integrity and financial responsibility of the applicant; character of the applicant and its QI; and length and 

nature of the QI’s experience handling OTI duties. Licensed ocean freight 

forwarders must establish financial responsibility in the amount of $50,000, 

and licensed NVOCCs, $75,000. An additional $10,000 of coverage is required for each unincorporated branch office in the United States other than 

one used to establish a U. S. presence, for a foreign licensed NVOCC.

If an OTI is a licensed NVOCC, it must file a Form FMC-1 and publish a tariff. Furthermore, non-U.S.-based NVOCCs that do not wish to be 

licensed must provide the Commission with proof of financial responsibility 

in the amount of $150,000, file a Form FMC-1, and ensure a tariff is published at the site listed on the Form FMC-1. A non-U.S.-based NVOCC 

must list in its tariff an agent for service of process in the United States, and

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it must use a licensed OTI for any OTI services performed on its behalf in 

the United States. The financial instrument must be available to pay claims 

against the OTI arising from its transportation-related activities, any order 

of reparation assessed under the Shipping Act, and any judgments for damages against an OTI arising from its transportation-related activities under 

the Shipping Act.

During fiscal year 2012, the Commission received 441 new OTI applications and 278 amended applications, issued 363 new OTI licenses, and 

revoked 261 licenses. At the end of the fiscal year, 1,030 OFFs, 1,759 U.S. 

NVOCCs, 1,807 joint NVOCC/OFFs, and 70 foreign NVOCCs held active 

OTI licenses. An additional 1,233 foreign NVOCCs maintain proof of financial responsibility on file with the Commission, but choose not to be 

licensed. Overall, there are 200 more licensed and/or bonded OTIs, representing approximately a 3.5 percent increase from 5,699 OTIs in fiscal year 

2011 to 5,899 in fiscal year 2012. U.S. NVOCCs may file riders to their existing NVOCC bonds to meet financial responsibility requirements imposed 

by the Chinese government. The Commission received 154 riders providing optional proof of financial responsibility for NVOCCs serving the U.S.-

China trade last year; 23 riders were terminated. As part of its continuing 

outreach effort, the Bureau in FY 2012 handled over 5,300 inquiries regarding licensing and related OTI issues. Figure 1 shows the number of freight 

forwarders and NVOCCs that held active OTI licenses over the past five 

fiscal years from 2008 through 2012.

The Bureau worked diligently during the fiscal year to streamline the 

OTI licensing process and reduce the time needed to reach a licensing decision. The Commission’s goal was to complete 70% of all OTI license applications within 60 calendar days during fiscal year 2012. The Bureau exceeded 

its goal by 20%, completing over 90% of all OTI applications within 60 business days. 
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The automated Form FMC-18, Application for an OTI License, permits filers to complete an OTI application on-line, scan and attach required 

documents, and submit the application electronically. The filing system incorporates significant security features for the purpose of protecting applicant data, and detecting and preventing unauthorized system intrusion. The 

Bureau seeks additional efficiencies in its OTI licensing program through 

improvements to the automated Form FMC-18 system. In FY 2012, 95 percent of all incoming OTI applications received were through the electronic 

system. Figure 2 shows the number of new applications processed over each 

of the last five fiscal years, 2008 through 2012.

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3. Passenger Vessel Certification

The Commission administers 46 U.S.C. §§ 44102-44103, which requires evidence of financial responsibility for vessels which have berth or 

stateroom accommodations for 50 or more passengers and embark passengers at U.S. ports and territories. At the end of FY 2012, the program 

encompassed 205 vessels and 40 operators, which had aggregate evidence 

of financial responsibility coverage in excess of $323 million for nonperformance and over $678 million for casualty. Certificates of performance cover 

financial responsibility for the indemnification of passengers for nonperformance of transportation. This requirement also helps prevent unscrupulous or financially weak operators from operating from U.S. ports. The 

required levels of coverage for nonperformance are determined by Commission regulation not to exceed $15 million per entity. Even after an operator 

has ceased operations and dissolved its corporate existence, the evidence of 

financial responsibility is still valid and available to claimants. Certificates of
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casualty are required to cover liability that may occur for death or injury to 

passengers or other persons on voyages to or from U.S. ports. The law provides for $20,000 coverage per person for the first 500 passengers, and the 

scale decreases to $5,000 per person for passengers in excess of 1,500. U.S. 

Customs and Border Protection are directed to refuse clearance to any vessel 

which does not comply with the FMC’s evidence of financial responsibility 

requirements for casualty and performance. During FY 2012, the Commission approved and issued 13 casualty certificates and 15 performance 

certificates.

In conjunction with CADRS, the Bureau offers information and 

guidance to the cruising public on passenger rights and obligations regarding monies paid to cruise lines that fail to perform voyages. Over the past 

few years, a number of cruise operators discontinued operations or filed for 

bankruptcy. When cruise lines fail to perform because of bankruptcies or 

other failures, the Commission works closely with the cruise line and the 

financial responsibility provider, if necessary, to facilitate the refund process. 

The public is kept informed through press releases posted on the Commission’s website and advice given to passengers who contact staff. During FY 

2012, no cruise operator ceased operation with unperformed cruises. 

The Bureau reviewed passenger vessel operator activities and operations by monitoring current industry events and examining cruise lines’ 

unearned passenger revenue (UPR) information. Oversight of cruise line 

operations and activities ensures compliance with applicable statutes and 

Commission regulations. No on-site review was conducted this fiscal year. A 

rulemaking, as approved by Commission vote on July 14, 2011, was initiated 

to strengthen protections for cruise line customer deposits and prepayments 

and to reduce financial responsibility requirements for small cruise lines. 

This Notice of Proposed Rulemaking (NPRM) was issued on September 

13, 2011, providing for public comment by November 21, 2011. The NPRM 

proposed to double the maximum coverage requirement for larger cruise

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lines from $15 million to $30 million, with a two year phase-in period; adjust the maximum coverage requirement automatically to account for inflations, give relief to smaller vessel operators by reducing their coverage 

requirements to account for alternative forms of financial protections available to their customers, revise the application form, and add an expiration 

date to the Certificate (Performance); and make some technical adjustments 

to the regulations. Analysis of the comments to the NPRM and options for 

Commission action were presented to the Commission for consideration.

4. Automated Database Systems

During FY 2012, the agency contracted with a vender to develop 

an enterprise solution to improve the agency’s database applications and to 

eliminate the need for duplicate data entry. BCL currently hosts two active 

databases, the Regulated Persons Index (RPI) and the FMC-18 for OTI applications. The RPI is a database containing up-to-date records of licensed 

OTIs, ocean common carriers, and other entities. A key function of the RPI 

is to display, on the Commission’s website, a list of compliant OTIs so that 

carriers and the public can ascertain whether an OTI is properly licensed, 

bonded, and if required, has posted the location of its automated tariff. The 

OTI list also indicates whether an NVOCC has filed an optional rider for 

additional proof of NVOCC financial responsibility for China activity. In 

FY 2012, this list was enhanced to allow for geo-searching based on an OTI’s 

location (e.g. city, state or zip code). 
I. BUREAU OF ENFORCEMENT

The Bureau of Enforcement is the primary prosecutorial arm of the 

Commission. Attorneys of the Bureau serve as trial attorneys in formal proceedings instituted under section 11 of the 1984 Act, and in investigations 

instituted under the FSPA. Bureau attorneys also may be designated investigative officers in nonadjudicatory fact-finding proceedings. The Bureau 

monitors all other formal proceedings, including relevant court proceedings, in order to identify major regulatory issues and advise the Managing 

Director and the other bureaus. The Bureau also participates in the development of Commission rules and regulations and serves on inter-bureau 

task forces and special committees. On occasion, under the direction of 

the General Counsel, attorneys from the Bureau may participate in matters of court or other agency litigation to which the Commission is a party. 

Through the agency’s investigative personnel, and information provided by the industry and other government entities, the Bureau monitors 

and provides liaison and legal advice in investigations of the activities of 

ocean common carriers, OTIs, shippers, ports, and terminals, and other 

persons to ensure compliance with the statutes and regulations administered by the Commission. Monitoring activities include: (1) service contract and NVOCC service arrangement (NSA) reviews to determine compliance with applicable statutes and regulations; (2) reviews and audits of 

ocean common carrier, NVOCC and ocean freight forwarder operations, 

including compliance with licensing, tariff, and bonding requirements; 

(3) audits of PVOs to ensure the financial protection of cruise passengers; 

(4) monitoring of agreements among ocean carriers and MTOs; and (5) 

various studies and analyses to support Commission programs. Investigations involve alleged violations of the full range of statutes and regulations administered by the Commission, including: illegal or unfiled agreements; abuses of antitrust immunity; unlicensed OTI activity, including 

servicing of noncompliant OTIs by VOCCs and licensed NVOCCs; illegal rebating; misdescriptions or misdeclarations of cargo; untariffed cargo 

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carriage; unbonded OTI and passenger vessel operations; and various types 

of consumer abuses, including failure of carriers or intermediaries to carry 

out transportation obligations, resulting in cargo delays or financial losses 

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

statutory compliance and ensuring equitable trading conditions.

The Bureau prepares and serves notices of violations of the shipping 

statutes and Commission regulations and may compromise and settle civil 

penalty demands arising out of those violations. Other Bureau investigations may be resolved through compliance measures. If settlement is not 

reached, Bureau attorneys act as prosecutors in formal Commission proceedings that may result in settlement or in the assessment of civil penalties. 

The Bureau also participates, in conjunction with other Commission units, 

in special enforcement initiatives, fact-finding investigations and rulemaking efforts.

During fiscal year 2012, the Bureau of Enforcement investigated 

and prosecuted possible illegal practices in many trade lanes, including 

the Transpacific, Oceania, North Atlantic, West Africa, Central and South 

American, and Caribbean trades. These market-distorting activities included various forms of rebates and absorptions, misdescription of commodities 

and misdeclaration of measurements, and unlawful use of service contracts, 

as well as carriage of cargo by and for untariffed and unbonded NVOCCs. 

Most of these investigations were resolved informally, some with compromise settlements and civil penalties. The following Figure 3 shows civil 

penalties collected by the FMC over the last five fiscal years.

Major investigations completed during fiscal year 2012 addressed 

investigations of household goods movers allegedly operating as unlicensed 

OTIs, including those VOCCs and licensed NVOCCs that provided service 

to unlicensed movers. Docket No. 11-06 (Indigo Logistics LLC, et al) was 

discontinued upon approval of a formal settlement agreement, payment 

of substantial civil penalties by the unlicensed, unbonded operator and its 

principals, and issuance of a cease and desist order barring the company
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and individual respondents from operating as an OTI or OTI agent for a 

period of 5 years. The Commission also pursued a formal investigation of 

OMJ International, OC International and Mr. Omar Collado in Docket No. 

12-01, to determine whether respondents violated section 10(a)(1) of the 

1984 Act by providing service to an unlicensed, unbonded NVOCC, and 

whether respondents should still qualify to be licensed as an OTI. The Bureau completed the formal discovery process in June, and filed its prehearing statement in August, 2012. In Docket No. 12-04, the Bureau submitted 

a memorandum of law and supporting affidavits seeking revocation of the 

OTI license of respondent Trans World Logistics Corp., for failure to report 

the resignation of the licensee’s Qualifying Individual and failure to respond 

to lawful inquiries of the agency. The Commission issued an Order in July 

2012, directing Trans World to cease and desist from operating as an OTI. 

In Docket No. 11-20 (Publication of Inaccurate or Inactive VOCC 

Tariffs), BOE activities included formal proceedings instituted against numerous VOCCs to show cause why their published tariffs should not be cancelled. In March 2012, the Commission issued an order to 41 defaulting

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 

Figure 3: Civil Penalties Collected 

FY 2007 - 2012

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respondents, directing them to cease and desist all carrier activities and 

cancelling their tariffs. An additional 5 carriers were dismissed from the 

proceeding. BOE also submitted briefs on remand in three additional unlicensed OTI cases, Docket Nos. 06-06, 06-09 and 07-02 respectively, addressing evidentiary and civil penalty issues raised in the Commission’s Orders 

vacating the initial decisions of the Administrative Law Judge and remanding for further proceedings therein.

Interaction between the Bureau, the Commission’s Area Representatives, and the U.S. Customs and Border Patrol (CBP) with respect to the exchange of investigative information continues to be beneficial to all parties. 

Cooperation with CBP included staff interactions and joint field operations 

to investigate entities suspected of violating both agencies’ statutes or regulations. Such cooperation also has included local police and other government entities, including the U.S. Attorney’s Office and the Federal Bureau of 

Investigation, when necessary. 

During FY 2012, BOE successfully pursued a formal MOU with the 

Census Bureau, U.S. Department of Commerce, providing the FMC with 

access to the Census’ Automated Export System (AES) database. Such data 

may be used only for FMC law enforcement purposes.

In fiscal year 2012, the compliance audit program continued. This 

program, conducted by BOE staff primarily by mail, reviews the operations 

of licensed OTIs to assist them in complying with the FMC statutory regulatory requirements. The audit program also includes review of entities 

holding themselves out as VOCCs where there is no indication of current 

vessel operations. During the fiscal year, 96 audits were commenced, 94 

audits were completed (including audits carried over from FY2011), and 10 

remained pending on September 30, 2012. During 2012, the Bureau’s compliance audit program was extensively reviewed by the agency’s Inspector 

General (Report OR12-01, issued March 2012), which reported that BOE’s
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audit program works well, meets program objectives, and produces results 

towards ensuring compliance with the Commission’s OTI regulations.

At the beginning of fiscal year 2012, 13 enforcement cases were pending final resolution by the Bureau, the Bureau was party to 8 formal proceedings, and there were 12 matters pending that the Bureau was monitoring 

or providing legal advice. During the fiscal year, 8 new cases were referred 

for enforcement action or informal compromise; 12 were compromised and 

settled, administratively closed, or referred for formal proceedings; and 9 

enforcement cases were pending resolution at fiscal year’s end. Also, 3 formal proceedings were initiated; 5 formal proceedings were completed, and 6 

were pending at the end of the fiscal year. Additionally, the Bureau opened 7 

matters involving monitoring or legal advice during the fiscal year, completed or closed 6 such matters, and 13 were pending on September 30, 2012.
J. BUREAU OF TRADE ANALYSIS

1. In General

The primary function of the Bureau is the oversight of concerted activity by ocean common carriers and marine terminal operators under the standards of the 1984 Act. The Bureau administers the Commission’s agreements, 

service contract, NSA, and NRA programs, and monitors the accessibility and 

accuracy of all published tariffs. The Bureau’s major program activities include:

•	 Administering comprehensive trade monitoring programs to identify and track relevant competitive, commercial, and economic activity in the major U.S. foreign trades, and to advise the Commission and its staff on current trade conditions, trends and 

regulatory concerns affecting oceanborne liner transportation.

•	 Conducting systematic surveillance of carrier activity in areas relevant to the Commission’s administration of statutory standards.

•	 Developing economic studies and analyses in support of the Commission’s regulatory responsibilities.

•	 Providing expert economic testimony and support in formal proceedings, particularly regarding unfair foreign shipping practices.

•	 Processing and analyzing ocean common carrier and MTO agreements.

•	 Reviewing and processing service contracts, NSAs and amendments filed by ocean common carriers, conferences of 

such carriers, and NVOCCs, including service contract and 

NSA statements of essential terms published by such entities. 

•	 Reviewing tariff publications in automated systems of carriers and 

conferences and ensuring that tariffs are accessible to the public 

and accurate, and overseeing application of the NRA regulations.

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2. Agreement Filings and Review

Under sections 4 and 5 of the Shipping Act, all agreements by or 

among ocean common carriers to fix rates or conditions of service, pool 

cargo revenue, allot ports or regulate sailings, limit or regulate the volume 

or character of cargo (or passengers) to be carried, control or prevent competition, or engage in exclusive or preferential arrangements, are required 

to be filed with the Commission. Except for certain exempted categories, 

agreements among MTOs and among one or more MTOs and one or more 

ocean common carriers also are required to be filed with the Commission. 

Generally, an agreement becomes effective 45 days after filing, unless the 

Commission has requested additional information. These agreements are 

reviewed pursuant to the standard set forth in section 6(g) of the 1984. Effective agreements are exempt from U.S. antitrust laws, and instead subject 

to 1984 Act restrictions and Commission oversight.

In fiscal year 2012, the Bureau received 153 agreement filings, a decrease of 4 percent, from the previous year. The Bureau analyzed and processed 143 agreement filings during the year. Statistics on agreement filings 

for fiscal year 2012 are contained in Appendix C. The following Figure 4 

graph illustrates the trend in agreement filings since FY 2008. 

While the annual number of filings changes year-to-year, the number of effective carrier agreements (Figure 5) on file with the Commission 

has remained relatively constant, averaging about 230 over the last five years, 

with a marked increase in FY 2012 due to an increase in vessel sharing agrement filings.

(a) Ocean Common Carrier Agreements

There are two broad categories of ocean common carrier agreements 

filed with the Commission: (1) pricing agreements, where the main focus is 

on rates, and (2) operational agreements, where the focus can range from 

the sharing of vessel space to the management of an internet portal. Descriptions of the two categories of agreements follow:

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(1) Pricing Agreements

There are two types of pricing agreements: conference agreements 

and rate discussion agreements (RDAs). Conference agreements provide for 

the collective discussion, agreement, and establishment of common ocean 

freight rates and practices by groups of ocean common carriers. Conferences publish a common rate tariff in which all the member lines participate. 

RDAs also focus on rate matters, but unlike conferences, any consensus on 

rates reached under RDAs is non-binding on the parties. RDA member lines 

each publish their own tariff. At the end of the fiscal year 2012, there were 

three effective conference agreements, and 22 RDAs on file. 

Conference agreements have become largely irrelevant to U.S. liner shipping. No new carrier conference agreement has been filed with the 

Commission since fiscal year 2000. The remaining three conferences cover 

only government cargoes. 

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Figure 4: Agreement Filings

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Today, RDAs are the primary pricing forum in U.S. trade lanes. Since 

fiscal year 2000, the number of RDAs on file have declined from 36 to 22 

agreements. During fiscal year 2012, RDA filings for the most part involved 

adding or removing members. No new RDAs were filed last year.

(2) Operational Agreements

Operational agreements include vessel-sharing agreements (VSAs), 

joint service agreements, cooperative working agreements, and non-rate 

discussion agreements without rate authority. At the end of the fiscal year, 

operational agreements accounted for 90 percent of all carrier agreements 

on file. 

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Figure 5: Effective Carrier Agreements

FY 2006 - FY 2011

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Figure 5: Effective Carrier Agreements

FY 2008 - FY 2012
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VSAs typically authorize some level of service cooperation with the 

goal of reducing individual line’s operating costs. VSAs range from alliance 

agreements, which involve close operational cooperation across multiple 

trade lanes, to slot charter agreements, which require only minimal commitments. VSAs account for the vast majority of filed carrier agreements, 78 

percent at the end of the fiscal year. They also accounted for 65 percent of 

carrier agreement filings received last year. Sixty-four new VSAs were filed 

in fiscal year 2012, and 15 VSAs either were terminated or expired. Last fiscal year, the total number of VSAs on file increased by 25 to 195 agreements.

Under joint service agreements (JSAs), two or more carriers operate a combined service under a single name in a specified trading area. The 

joint service issues its own bills of lading, sets its own rates, and acts as an 

individual ocean common carrier. No new JSAs or amendments to existing 

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

JSAs on file with the Commission.

Many cooperative working agreements (CWAs) are non-pricing 

agreements that tend to deal with unique operational considerations relating to acquisitions, sharing of administrative services, or internet portal 

management. Other CWAs filed with the Commission include agency, sailing, trans-shipment, and equipment interchange (including chassis pooling) 

agreements. At the end of the year, there were 17 CWAs; no new CWAs were 

filed last fiscal year. 

Discussion agreements without rate authority provide ocean common carriers a vehicle for discussing matters of mutual interest other than 

rates. Typically, these agreements focus on macro-economic, regulatory, 

safety, or security issues. At the end of the fiscal year, there were eight such 

agreements on file.

(b) Marine Terminal Operator Agreements

Marine terminals, operated by both public and private entities, provide facilities, services, and labor for the interchange of cargo and passengers between land and ocean carriers, and for the receipt and delivery of 

cargo from shippers and consignees. 

During fiscal year 2012, the Bureau received 14 MTO agreement filings, including one termination. At the end of the fiscal year, there were 149 

marine terminal agreements on file, down from 151 the previous year. The 

Figure 6 graph below shows the trend of MTO agreements on file over the 

last five years. 

Terminal leases accounted for most of the MTO agreements on file, 

followed by MTO discussion agreements, MTO joint ventures, and service 

agreements. Over the last five years, leases and services agreements experienced the deepest declines, due largely to the filing exemption afforded under the Commission’s regulations and notifications of previously unreported

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Figure 6: MTO Agreements on File

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Figure 6: MTO Agreements on File

FY 2008 - FY 2012 
terminations. MTO discussion agreements experienced the largest increase 

in numbers over the last five years, going from 11 agreements in 2008 to 21 

agreements at the end of 2012. This increase is due mainly to the MTOs’ 

need to discuss environmental, infrastructure, security, and congestion issues that the ports are facing today.

The following Figure 7 graph, charts the types of MTO agreements 

on file at the end of fiscal year.

3. Monitoring and Economic Analysis

 The systematic monitoring of common carrier activities and commercial conditions in the U.S. foreign trades is an integral part of the Commission’s responsibilities under the 1984 Act. The activities of certain types

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of MTO agreements are monitored in a similar fashion. Monitoring helps 

ensure that carriers and MTOs comply with the statutory standards of the 

1984 Act and the requirements of relevant Commission regulations. The 

Bureau administers monitoring programs, and conducts research into current trade conditions, emerging commercial trends, carrier pricing and service activities, and other issues that may affect U.S. liner shipping.

 The Commission’s monitoring program examines carrier competition in individual U.S. trade lanes, including market share, concentration, 

barriers to market entry, and coordination among carriers. The program 

also examines alternative service options and supply sources, cargo volume 

trends, congestion bottlenecks, commercial pricing practices, operational 

cost pressures, service offerings, vessel capacity utilization, service contracting activity, and shipper complaints.

In fiscal year 2012, the Bureau’s economists administered their agreement oversight responsibilities regarding ocean common carriers and MTOs 

and prepared various reports and analyses. These included: (1) completing 

the Bureau’s study of the impact of the repeal of the EU’s block exemption, 

Study of the 2008 Repeal of the Liner Conference Exemption from European 

Union Competition Law; (2) developing data sources for and researching 

economic factors relevant to Docket No. 11-19, U.S. Inland Containerized 

Cargo Moving Through Canadian and Mexican Seaports, including signing 

an agreement with the Surface Transportation Board to access and analyze 

the carload waybill sample files for 1998 through 2010; (3) compiling data 

for, conducting economic research relevant to, and preparing a feasibility 

analysis concerning the possible creation and maintenance of a set of freight 

rate indices for a group of U.S. agricultural exports using service contract 

data filed with the Commission; and subsequently preparing a Notice of Inquiry (NOI) to invite public comments on the likely utility and appropriateness of the proposed undertaking; (4) analyzing and making recommendations concerning the need for continuing or revising the Commission’s 

requirement that the TSA and the WTSA file transcripts of meetings rather
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than meeting minutes with the FMC for agreement monitoring purposes; 

(5) preparing a memorandum to the Commission on proposed reporting 

requirements for an amendment to the Consolidated Chassis Management 

Pool Agreement; (6) providing research assistance to the Bureau of Certification and Licensing with respect to possible adjustments in PVO financial 

responsibility coverage requirements, and providing economic analysis of 

the impact on small businesses of the resultant proposed rulemaking; (7) 

providing regular written reports and oral presentations to the Commission 

on international and national economic conditions and liner industry activities that are likely to affect U.S. liner trades in the near- and mid-term; (8) 

updating and expanding the BTA intranet website with trade and agreement 

profiles and other relevant information; (9) assisting with the computer programming of the SERVCON operating system to index and search service 

contracts; (10) participating in the Automated Commercial Environment 

(ACE) under the U.S. CBP; (11) providing data and information on liner 

trade conditions and agreement matters in response to requests from within 

and outside the Commission; (12) meeting separately with representatives 

of the TSA and WTSA pursuant to previous Commission investigations; 

and (13) preparing a quarterly economic and trade briefing paper for the 

Commission.

The Bureau also provides economic expertise for Commission initiatives, including rulemaking proceedings. Bureau economists may prepare 

testimony in investigations and cases of unfair shipping practices under section 19 of the 1920 Act and the FSPA. The Bureau also provides briefings 

and supporting materials for senior agency officials on agreements and trade 

conditions for the Commission’s hearings before Congress and the official 

speaking engagements of FMC Commissioners, and conducts outreach on 

behalf of the Commission to industry and the shipping public.

4. Tariffs

The 1984 Act requires common carriers and conferences to publish 

their tariffs electronically, in private systems. These electronic tariffs contain 

rates, charges, rules, and practices of common carriers operating in the U.S. 

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foreign commerce. The Bureau monitors the public accessibility of these private tariff systems and reviews published tariff material for compliance with 

the requirements of the 1984 Act. The Bureau also determines whether to 

grant applications for special permission to deviate from tariff publishing 

rules and regulations. During fiscal year 2012, the Bureau received and processed 14 special permission applications and 2 service contract correction 

applications.

The Bureau also is responsible for processing the electronic Form 

FMC-1, Tariff Registration Form, required to be filed with the Commission by common carriers, conferences, and MTOs. The data on this form 

identifies the location of common carrier tariffs, including common carrier 

and conference service contract essential terms publications or any MTO 

schedules. At the end of fiscal year 2012, 5,210 tariff location addresses were 

posted on the Commission’s website. Of that number, 4,807 tariff addresses 

were for NVOCCs. The Bureau also collaborates with other Commission 

bureaus and offices to verify that VOCCs and NVOCCs comply with the 

Commission’s licensing, bonding and tariff publication requirements.

Last fiscal year the Commission provided regulatory relief, allowing 

licensed NVOCCs to “opt out” of the requirement to file rate tariffs provided they use NRAs exclusively. NVOCCs are required to keep NRAs which 

must be memorialized in writing for a period of five years. Additionally, 

NVOCCs are required to maintain rules tariffs which must be made available free of charge. It is expected that NVOCCs will continue to take advantage of this opportunity, thereby significantly reducing the number of rate 

tariffs the Bureau must check to ensure compliance with all applicable regulations. At the end of fiscal year 2012, 465 NVOCCs had filed prominent 

notices or a rule in their respective tariff indicating that they had invoked 

the exemption.

5. Service Contracts 

Service contracts are an alternative to transportation of cargo under 

tariff rates. Service contracts enable the parties to tailor transportation services and rates to their commercial and operational needs and to keep these 

arrangements confidential.
Federal Maritime Commission

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102

During fiscal year 2012, the Commission received 47,664 new service contracts, compared to 50,068 in fiscal year 2011, and 498,727 contract 

amendments, compared to 466,493 in fiscal year 2011. The number of original contracts in fiscal year 2012 decreased by 2,404 whereas amendments increased by 32,234. The number of original contracts decreased as shippers 

projected slower growth, while contract amendments increased as trans-pacific carriers attempted to implement a series of general rate increases from 

January 1 through September 30, 2012. 

Original service contract or NSA filings that contain clerical errors 

can be corrected within two business days by filing a “corrected transmission” copy into SERVCON. During the fiscal year, 5,761 records involving 

corrected transmission copies were filed into SERVCON.

6. Service Arrangements

Commission rules allow NVOCCs to offer transportation services 

pursuant to individually negotiated, confidential service arrangements with 

customers known as NVOCC Service Arrangements (NSAs) rather than 

under a published tariff. 

Since January 2005, when NSA filing began, 7,896 NSAs and 14,410 

amendments have been filed with the Commission. In fiscal year 2012, 1,435 

NSAs and 2,114 amendments to NSAs were filed by a total of 75 NVOCCs. 

Of the 1,244 NVOCCs that are registered with the Commission to file NSAs, 

only 184 (about 15 percent) have done so.

7. Controlled Carriers

A controlled carrier is an ocean common carrier that is, or whose 

operating assets are, owned or controlled directly or indirectly by a foreign 

government. The 1984 Act provides that no controlled carrier may maintain 

rates or charges in its tariffs or service contracts that are below a level that is 

just and reasonable, nor may any such carrier establish, maintain, or enforce 

unjust or unreasonable classifications, rules or regulations in those tariffs or

Federal Maritime Commission

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103

service contracts. In addition, tariff rates, charges, classifications, rules, or 

regulations of a controlled carrier may not, without special permission of 

the Commission, become effective sooner than the 30th day after the date 

of publication.

The Commission monitors U.S. and foreign trade press and other 

information sources to identify controlled carriers and any unjust or unreasonable controlled carrier activity that might require Commission action. In 

fiscal year 2012, four controlled carriers operated in the U.S. trades:

(1) American President Lines, Ltd. and APL Co., Pte. (RPI No. 000240) – 

Republic of Singapore;

(2) COSCO Container Lines Company, Limited (RPI No. 015614) - People’s 

Republic of China; 

(3) China Shipping Container Lines Co., Ltd. and China Shipping Container 

Lines (Hong Kong) Company, Ltd. (RPI No. 019270) - People’s Republic of 

China; and

(4) Hainan P.O. Shipping Co., Ltd. (RPI No. 022860) – People’s Republic of 

China.

8. Marine Terminal Schedules

Pursuant to the Ocean Shipping Reform Act (OSRA), an MTO may 

make available to the public a schedule of rates, regulations, and practices, 

including limitations of liability for cargo loss or damage, pertaining to receiving, delivering, handling, or storing property at its marine terminal. Any 

such schedule made available to the public shall be enforceable by an appropriate court as an implied contract without proof of actual knowledge of 

its provisions. Pursuant to the Commission’s regulations governing MTO 

schedules, any terminal schedule that is made available to the public must be 

available during normal business hours and in electronic form. Each MTO
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104

must notify the Bureau of the electronic location of its terminal schedule 

by submitting Form FMC-1 before commencing operations. A total of 276 

MTOs have filed Form FMC-1, with only 159 electing to voluntarily publish 

their terminal schedules by the close of fiscal year 2012. The internet addresses for these MTO terminal schedules are posted on the Commission’s 

website.

9. Automated Database Systems

The Bureau currently maintains and uses the following automated 

databases and filing systems: (1) Form FMC-1 System; (2) SERVCON, the 

system for filing service contracts and NSAs (as well as internal database 

systems related to SERVCON registration forms); and (3) the Agreement 

Profile Database. 

At the end of fiscal year 2012, the Form FMC-1 System reflected the 

tariff location addresses of 239 VOCCs, 4,807 NVOCCs, 5 conferences, and 

159 MTOs. The FMC-1 System also allows the Commission to track the 

status of any Form FMC-1 submitted. The OSCT staff conducted extensive 

research in validating whether VOCCs were actively providing common 

carriage service in the waterborne commerce of the U.S. As a result of these 

efforts, the number of active VOCCs was significantly reduced.

SERVCON contains service contract and NSA data, most of which is 

available only to the Commission’s staff due to confidentiality requirements. 

Carriers must register to file service contracts by submitting Form FMC-83, 

and NVOCCs must submit Form FMC-78 to file NSAs. 

The Agreement Profile Database contains information about the status of carrier and terminal agreements, as well as related monitoring reports. 

These databases and filing systems provide support for many of the Commission’s programs and the Bureau’s monitoring efforts. Through specially 

tailored reports, the Commission makes certain database information available to the general public. The Bureau also maintains an electronic library of 

effective carrier and MTO agreements. This library is accessible through the 

Commission’s website.
APPENDICES
FEDERAL MARITIME COMMISSION 

ORGANIZATION CHART 

 Fiscal Year 2011

108

Federal Maritime Commission

Fiscal Year 2012

COMMISSIONER 

DYE

COMMISSIONER 

BRENNAN

COMMISSIONER 

CORDERO

CHAIRMAN 

LIDINSKY

Office of the 

Inspector 

General

Office of Equal 

Employment 

Opportunity

Office of the 

Managing 

Director

COMMISSIONER 

KHOURI

Office of the 

General 

Counsel

Office of the 

Secretary

Office of 

Administrative 

Law Judges

Office of Consumer 

Affairs and Dispute 

Resolution Services

Office of 

Budget and 

Finance

Office of 

Human 

Resources

Office of 

Management 

Services

Office of 

Information 

Technology

Bureau of 

Certification 

and 

Licensing

Bureau of 

Enforcement

Bureau of 

Trade 

Analysis

Area Representatives 

Houston, TX 

Los Angeles, CA 

New Orleans, LA 

New York, NY 

Seattle, WA 

South Florida

FEDERAL MARITIME COMMISSION 

ORGANIZATION CHART 

as of 

SEPTEMBER 30, 2011

Administrative Direction

Technical Direction

 APPENDIX B

 COMMISSION PROCEEDINGS 

 Fiscal Year 2012

Formal Proceedings

 Orders of Investigation Initiated 0

 Formal Complaints Filed 7

 ALJ Initial Decisions Issued* 5

 Initial Decisions Reviewed 1

 Exceptions Filed to Initial Decisions 1

Fact Finding Orders Issued (Final Report) 0

Rulemakings 

 Proposed Rules 5

 Final Rules 5

Informal Dockets

 Informal Complaints Filed 7

 Settlement Officer Decisions Issued 12

 Settlement Officer Decisions Reviewed 3

Notice of Inquiries Issued 5

Hearings Held (Public Forum) 1

*Initial Decisions includes four settlements approved and one dismissal.

109

Federal Maritime Commission

Fiscal Year 2012
APPENDIX C

AGREEMENT FILINGS AND STATUS 

Fiscal Year 2012

Agreements Filed 

(including modifications and terminations) 

Carrier ....................................................................... 139 

Terminal...................................................................... 14 

Total............................................................................. 153

Agreement Processing Categories 

Forty-Five Day Review..................................................... 60 

Expedited Review........................................................... 10 

Exempt-Effective Upon Filing............................................ 73 

Rejection of Filing.......................................................... 0 

Formal Extension of Review Period...................................... 0 

Withdrawals.................................................................. 0 

6(g) Injunction............................................................... 0 

Total............................................................................ 143

Carrier Reports Submitted for Commission Review 

Minutes of Meetings........................................................ 921 

Voluntary Service Contract Guidelines.................................... 115 

Monitoring Reports......................................................... 452 

Total....................................................................... ..... 1,488

Agreements on File as of September 30, 2012 

Conference.................................................................... 3 

Rate Discussion.............................................................. 21 

Non-Rate Discussion. ...................................................... 8 

Joint Service................................................................. 6 

Vessel-Sharing.............................................................. 195 

Cooperative Working & Other........................................... 17 

Terminal....................................................................... 149 

Total............................................................................. 399

110

Federal Maritime Commission

Fiscal Year 2012

APPENDIX D

FORM FMC-1 

TARIFF LOCATION ADDRESSES - SERVICE CONTRACT AND 

NSA FILINGS AND SPECIAL PERMISSION APPLICATIONS 

Fiscal Year 2012

Form FMC-1 Filings

VOCCs.......................................................... 239

OTI/NVOCCs................................................. 4,807

MTOs........................................................... 159

Conferences..................................................... 5

Electronic Service Contract Documents

New Service Contracts........................................ 47,664

Service Contract Amendments................................. 498,727

NVOCC Service Arrangement (NSA) Documents

New NSAs........................................................ 1,435

NSA Amendments............................................. 2,114

Special Permission Applications

Granted........................................................... 14

Denied............................................................. 0

Pending........................................................... 0

Withdrawn........................... ............................ 2

111

Federal Maritime Commission

Fiscal Year 2012
APPENDIX E

CIVIL PENALTIES COLLECTED 

Fiscal Year 2012

Orient Express Container Co., et al................................... $ 235,000.00

Pan-Link International Corp., et al. .................................... 75,000.00

Wanda Shipping Co. Inc. and Heng Shen USA Inc................. 35,000.00

Solex Logistics Inc....... .................................................. 105,000.00

Indigo Logistics LLC..................................................... 50,000.00

JIF Logistics Inc................................................................... 40,000.00

Proshipping Group Corp. .............................................. 60,000.00

King Shipping Co........................................................ 100,000.00

Icon Logistics Services LLC........................................... 20,000.00

U.S. Pacific Transport Inc........................................................ 50,000.00

Greating Shipping Co........ .......................................... 68,000.00

Total Civil Penalties Collected............................................... $838,000.00

112

Federal Maritime Commission

Fiscal Year 2012

APPENDIX F

STATEMENT OF APPROPRIATIONS, 

OBLIGATIONS AND RECEIPTS FOR 

THE FISCAL YEAR ENDED 

SEPTEMBER 30, 2012

APPROPRIATIONS:

For necessary expenses of the Federal Maritime Commission as authorized 

by section 201(d) of the Merchant Marine Act, 1936, as amended (46 U.S.C. 

307), including services as authorized by 5 U.S.C. 3109; hire of passenger 

motor vehicles as authorized by 31 U.S.C. 1343(b); and uniforms or allowances therefore, as authorized by 5 U.S.C. 5901–5902, $24,100,000: Provided, That not to exceed $2,000 shall be available for official reception and 

representation expenses.

Public Law 112-55 $24,100,000

Reimbursable Authority 54,660

Total Budgetary Resources $24,154,660

OBLIGATIONS AND UNOBLIGATED BALANCE:

Net obligations for salaries and expenses for the fiscal year ended September 

30, 2012.

 $24,013,348

STATEMENT OF RECEIPTS: 

Deposited with the General Fund of the Treasury for the Fiscal Year Ended 

September 30, 2012:

Publications and reproductions, 

fees and vessel certification, 

and freight forwarder applications $ 236,298

Fines and penalties $ 770,000 

Total general fund receipts $ 1,006,298

113

Federal Maritime Commission

Fiscal Year 2012