Opinion ID: 3066250
Heading Depth: 2
Heading Rank: 2

Heading: Surrogate Value for Truck Freight

Text: Because Commerce selected Thailand as the primary surrogate country for the Preliminary Results, it initially based the surrogate value for truck freight on publicly available data from a Thai consulting company of the price to transport goods by truck from Bangkok to five other provinces in Thailand in 2005 (“Thai freight data”). Preliminary Results, 77 Fed. Reg. at 26,505. At the urging of appellants, Commerce selected the Philippines instead of Thailand as the primary surrogate country in the Final Results. It therefore based the surrogate value for truck freight on the average reported rate of transporting goods by truck in the Philippines from Manila to Legazpi City (“Philippine freight data”). On appeal, Cherishmet and CAC argue that substan- tial evidence did not support Commerce’s use of the Philippine freight data instead of the Thai freight data to calculate the surrogate value for truck freight. Specifically, Cherishmet and CAC criticize the Philippine freight data as (1) unrepresentative of a broad market average; (2) nonspecific to the actual transportation costs; and (3) aberrational compared to the surrogate value for truck freight calculated during other periods of review of the subject merchandise. We disagree. It is true that the Philippine freight data, which Commerce calculated based on the cost of transporting goods over a single route, is less representative of a broad market average than the Thai freight data, which is based on ten different values representing the cost of transporting goods from Bangkok to five other Thai JACOBI CARBONS AB v. US 19 provinces. Although the Philippine freight data covers only a single route, it consists of data reported by multiple trucking companies. It is therefore broader than Cherishmet and CAC suggest. Furthermore, the Philippines is made up of many islands. A more representative sample would include overseas routes in addition to overland routes, and likely be less comparable to freight costs in the PRC. Cherishmet and CAC argue that the Philippine freight data is not specific to actual transportation costs because it represents “loose cargo,” while the respondents’ shipments were containerized. Cherishmet’s Br. 53 n.14; CAC’s Br. 15. However, the record does not clearly show that the respondents’ shipments were containerized. Cherishmet’s invoice, which indicates that Cherishmet’s products were shipped in a container, is for a shipment to the United States, not within the PRC. See J.A. 101 (packing slip with final address in New Jersey). It therefore does not speak to how Cherishmet’s products were shipped within the PRC. And the fact that Commerce calculated a surrogate value for packaging materials does not mean that all of Cherishmet’s and Jacobi’s shipments were transported in containers. See J.A. 404–05. Cherishmet and CAC also argue that the Philippine freight data is aberrational compared to the surrogate value for truck freight calculated during other periods of review of the subject merchandise. The surrogate value for freight calculated from the Philippine freight data is $0.3152 per metric ton per kilometer. Cherishmet’s Br. 48. Cherishmet calculates the surrogate values for prior periods of review as follows: 20 JACOBI CARBONS AB v. US Period of Surrogate Value Review 1st $0.0393/MT/km 2nd $0.0413/MT/km 3rd $0.0396/MT/km Id. at 47–48 (citations omitted). Cherishmet argues that the past surrogate values are more in line with the Thai freight data, which has a surrogate value of $0.0379 per metric ton per kilometer for truck freight. Id. at 48. However, this argument was not made to Commerce during the review period, and Cherishmet and CAC point to no evidence in the administrative record supporting it. Furthermore, as discussed earlier, Commerce selected India as the surrogate country for past review periods of the subject merchandize, so the surrogate values cited by Cherishmet and CAC are based on the cost of transporting freight in India. See J.A. 733–35. It is not surprising that the cost of transporting goods by truck was higher in the Philippines than it was in India. The record does not support all of Cherishmet and CAC’s critiques of the Philippine freight data. Moreover, the Thai freight data is also flawed. First, the Thai freight data is dated August 8, 2005, more than four years before the period of review. J.A. 316–20. The Thai freight data is thus not contemporaneous with the period of review, unlike the Philippine freight data. Second, 19 C.F.R. § 351.408(c)(2) provides that Commerce “normally will value all factors [of production] in a single surrogate country.” Cherishmet and CAC do not challenge Commerce’s selection of the Philippines as the surrogate country. JACOBI CARBONS AB v. US 21 In summary, in selecting the surrogate value for truck freight, Commerce was faced with two imperfect data sources. Substantial evidence supported Commerce’s selection of the contemporaneous, albeit less representative, Philippine freight data over the Thai freight data. Moreover, Commerce’s selection of the Philippine freight data was in accord with its preference for valuing all factors of production from a single surrogate country. 4