[Federal Register Volume 59, Number 229 (Wednesday, November 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29410]


[[Page Unknown]]

[Federal Register: November 30, 1994]


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FEDERAL MARITIME COMMISSION
[Docket No. 94-30]

 

Container Pool Practices of the Trans-Atlantic Agreement and its 
Members; Order of Investigation and Hearing

    The Trans-Atlantic Agreement (``TAA'' or ``Agreement''), FMC 
Agreement No. 202-011375, first became effective August 31, 1992, 
pursuant to the Shipping Act of 1984 (``1984 Act''), 46 U.S.C. app. 
1701 et seq. Sixteen ocean common carriers, identified in Appendix A 
hereto, currently are members of the Agreement.\1\
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    \1\On October 24, 1994, additional modifications of the basic 
agreement were permitted by the Federal Maritime Commission 
(``Commission'') to take effect under the 1984 Act, among which 
amendments was a change of the agreement's name to the Trans-
Atlantic Conference Agreement. While officially renamed to clarify 
its designation as a conference, the carrier members continue to 
refer to the Agreement as TAA.
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    By Order issued July 27, 1994, the Commission instituted Fact 
Finding Investigation No. 21, entitled Activities of the Trans-Atlantic 
Agreement and Its Members. Among issues to be examined in the course of 
the Fact Finding Investigation were, inter alia, whether the carrier 
members of the TAA had violated sections 10 (b)(1), (b)(4), and (b)(12) 
of the 1984 Act.\2\ The Fact Finding Order further provides that the 
designated Investigative Officers are not precluded from developing 
facts related to any other possible violations of the 1984 Act that may 
be uncovered in the course of the proceeding. In commencing the above 
nonadjudicatory investigation, the Commission's objective was to 
determine whether sufficient evidence exists to warrant formal 
adjudicatory, assessment or injunctive proceedings for alleged 
violations of the 1984 Act by the TAA or its carrier members.
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    \2\Section 10(b) of the 1984 Act, 46 U.S.C. app. 1709, states 
that no common carrier may:
    (1) charge, demand, collect, or receive greater, less, or 
different compensation for the transportation of property or for any 
service in connection therewith than the rates and charges that are 
shown in its tariffs or service contracts;
    *        *        *        *        *
    (4) allow any person to obtain transportation for property at 
less than the rates or charges established by the carrier in its 
tariff or service contract by means of false billing, false 
classification, false weighing, false measurement, or by any other 
unjust or unfair device or means;
    *        *        *        *        *
    (12) subject any particular person, locality, or description of 
traffic to an unreasonable refusal to deal or any undue or 
unreasonable prejudice or disadvantage in any respect whatsoever; * 
* *
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    Through responses to subpenas issued by the Investigative Officers, 
testimony in fact finding hearings and through other means, it now 
appears to the Commission that carrier members of the TAA have engaged 
in certain practices relating to the provision of chassis and container 
equipment to shippers at U.S. West Coast and interior locations other 
than the carrier's designated container yard (``CY'') or terminal 
facility at the port.\3\ It further appears that these practices may 
have encompassed the positioning by the carrier of an inventory of 
container equipment and chassis either at facilities operated by the 
shippers (so-called ``shippers' pools'') or at facilities operated by 
third parties such as trucking companies (``neutral container pools'' 
or ``equipment depots''). It is believed that the ocean common carriers 
have absorbed all or a portion of the inland costs of positioning empty 
equipment at these facilities on behalf of the shipper, for loading and 
subsequent use in the transportation of commodities in the TAA trades. 
The carriers also may have absorbed related costs of maintaining and 
controlling such equipment for the benefit of certain shippers, 
including benefits or concessions as to personnel, advance allocations 
of equipment, and extended freetime arrangements. It does not appear 
that these individual facilities or benefits are identified or held out 
generally to the shipping public through the tariffs of the TAA or its 
member carriers.
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    \3\Among the export commodities believed to be affected by this 
practice are dried fruits and nuts, cotton and cotton linters, 
agricultural commodities including vegetables and rice, and 
shipments of wines and spirits. Other commodities and U.S. locations 
also may be involved.
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    In addition, a review of materials furnished in response to 
subpenas by the Investigative Officers indicate that, in May 1994, the 
carrier members agreed in a meeting of the TAA to permit such pools to 
continue in existence through August 31, 1994, despite concerns and 
complaints by some members that operation of the pools was untariffed 
and unlawful. It appears that the membership agreed that such pools 
would be limited to those already established, and further limited to 
shippers of dried fruit and nuts for the balance of the 1993-1994 
shipping season. These latter allegations raise the implication that 
TAA member carriers, in addition to maintaining container pools or 
equipment depots on an individual carrier basis, may have participated 
in a TAA decision jointly to permit some carriers to operate container 
pools in violation of the 1984 Act. To the extent that TAA's action was 
further limited to certain shippers of dried fruit and nuts, other 
shippers of similar commodities or shippers in locations physically 
proximate to these so-called container pools may have been deprived of 
equivalent concessions or benefits, or subjected to undue or 
unreasonable prejudice or disadvantage in respect of such container 
pools.\4\
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    \4\It is unclear whether the TAA carriers individually limited 
their container pool practices to shippers of specified commodities 
as apparently was agreed for the period prior to August 31, 1994. It 
is also unclear that the carriers terminated these alleged practices 
by August 31, 1994.
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    Now therefore, it is ordered, That pursuant to sections 10, 11, and 
13 of the 1984 Act, 46 U.S.C. app. 1709, 1710, and 1712, an 
investigation is instituted to determine:
    (1) Whether the TAA or its carrier members, jointly or severally, 
violated section 10 (b)(1) or (b)(4) of the 1984 Act by charging a 
lesser or different compensation for transportation or services 
involving the use of container pools than the rates or charges set 
forth in its tariffs or service contracts, or allowed any person to 
obtain such transportation or services at less than applicable charges 
by an unjust or unfair device or means with respect to such container 
pools;
    (2) Whether the TAA or its carrier members, jointly or severally, 
violated section 10 (b)(3) or (b)(11) of the 1984 Act by extending to 
any person a privilege, concession, equipment or facility involving the 
use of container pools except in accordance with its tariffs or service 
contracts, or made or gave any undue or unreasonable preference or 
advantage to any particular person or description of traffic with 
respect to such container pools;
    (3) Whether the TAA or its carrier members, jointly or severally, 
violated section 10 (b)(3), (b)(6) or (b)(12) of the 1984 Act by 
denying to any person a privilege, concession, equipment or facility 
involving the use of container pools except in accordance with its 
tariffs or service contracts, engaged in any unfair or unjustly 
discriminatory practice in the matter of container pool facilities, or 
subjected any particular person or description of traffic to any undue 
or unreasonable disadvantage or prejudice with respect to such 
container pools;
    (4) Whether the TAA or its carrier members, jointly or severally, 
violated section 10 (b)(1), (b)(3), (b)(4), (b)(6), (b)(11), or (b)(12) 
of the 1984 Act by agreeing to permit the continuation by certain 
carriers of the use of container pools through the period ending August 
31, 1994;
    (5) Whether the TAA or its carrier members, jointly or severally, 
violated section 10 (b)(1), (b)(3), (b)(4), (b)(6), (b)(11), or (b)(12) 
of the 1984 Act by agreeing to permit the continuation by certain 
carriers of the use of container pools through the period ending August 
31, 1994, which agreement limited such privileged, concessions or 
facilities to shippers of dried fruits and nuts in California;
    (6) Whether, in event violations of section 10 (b)(1), (b)(3), 
(b)(4), (b)(6), (b)(11) or (b)(12) of the 1984 Act are found, civil 
penalties should be assessed and, if so, the amount of such penalties;
    (7) Whether, in the event violations of section 10 (b)(1), (b)(3) 
or (b)(4) of the 1984 Act are found, the Commission should suspend any 
common carrier's rights to use any or all tariffs of the TAA and, if 
so, the period of such tariff suspension; and
    (8) Whether, in the event violations are found, an appropriate 
cease and desist order should be issued.
    It is further ordered, That a public hearing be held in this 
proceeding and that this matter be assigned for hearing before an 
Administrative Law Judge of the Commission's Office of Administrative 
Law Judges at a date and place to be hereafter determined by the 
Administrative Law Judge in compliance with Rule 61 of the Commission's 
Rules of Practice and Procedure, 46 CFR 502.61. The hearing shall 
include oral testimony and cross-examination in the discretion of the 
Presiding Administrative Law Judge only after consideration has been 
given by the parties and the Presiding Administrative Law Judge to the 
use of alternative forms of dispute resolution, and upon a proper 
showing that there are genuine issues of material fact that cannot be 
resolved on the basis of sworn statements, affidavits, depositions, or 
other documents or that the nature of the matters in issue is such that 
an oral hearing and cross-examination are necessary for the development 
of an adequate record;
    It is further ordered, That TAA (Agreement No. 202-011375) and its 
carrier members specified in Appendix A are designated respondents in 
this proceeding;
    It is further ordered, That the Commission's Bureau of Hearing 
Counsel is designated a party to this proceeding;
    It is further ordered, That notice of this Order be published in 
the Federal Register, and a copy be served on parties of record;
    It is further ordered, That other persons having an interest in 
participating in this proceeding may file petitions for leave to 
intervene in accordance with Rule 72 of the Commission's Rules of 
Practice and Procedure, 46 CFR 502.72;
    It is further ordered, That all further notices, orders, and/or 
decisions issued by or on behalf of the Commission in this proceeding, 
including notice of the time and place of hearing or prehearing 
conference, shall be served on parties of record;
    It is further ordered, That all documents submitted by any party of 
record in this proceeding shall be directed to the Secretary, Federal 
Maritime Commission, Washington, D.C. 20573, in accordance with Rule 
118 of the Commission's Rules of Practice and Procedure, 46 CFR 
502.118, and shall be served on parties of record;
    It is further ordered, That in accordance with Rule 61 of the 
Commission's Rules of Practice and Procedure, the initial decision of 
the Administrative Law Judge shall be issued by August 23, 1995 and the 
final decision of the Commission shall be issued by November 23, 1995.
Joseph C. Polking,
Secretary.

Appendix A

Trans-Atlantic Agreement, Meadows Office Complex, 201 Route 17 
North, Rutherford, NJ 07070
Polish Ocean Lines, 1001 Durham Ave., South Plainfield, NJ 07080
Neptune Orient Lines Ltd., c/o Tricom Shipping Agency, 15 Exchange 
Place, 7th Floor, Jersey City, NJ 07302
Mediterranean Shipping Company S.A., 420 5th Avenue, 8th Floor, New 
York, NY 10008-2702
DSR/Senator Joint Service, 50 Cragwood Rd., South Plainfield, NJ 
07080
Sea-Land Service, Inc., 150 Allen Road, Liberty Corner, NJ 07938
P&O Containers Limited, One Meadowlands Plaza-12th Fl., E. 
Rutherford, NJ 07073
Hapag-Lloyd AG, 399 Hoes Lane, Piscataway, NJ 08854
Orient Overseas Container Line, 4141 Hacienda Drive, Pleasanton, CA 
90731
Atlantic Container Line AB, 50 Cragwood Road, South Plainfield, NJ 
07080
A.P. Moller-Maersk Line, Giralda Farms, P.O. Box 880, Madison, NJ 
07940-0880
Nedlloyd Lijnen BV, c/o Nedlloyd Lines (USA) Corp., 2100 RiverEdge 
Pkwy, Ste. 300, Atlanta, GA 30328-4656
Nippon Yusen Kaisha, NYK Line, 300 Lighting Way, 5th Floor, 
Secaucus, NJ 07094
Transportacion Maritima, Mexicana, S.A. de C.V., c/o Trans-America 
S.S. Agency, 140 W. 6th Street, San Pedro, CA 90731
Tecomar S.A. de C.V., c/o Phoenician Int'l Shipping, 2350 N. Belt 
East, Suite 720, Houston, TX 77032
Cho Yang Shipping Co. Ltd., 301 Route 17 North, 6th Floor, 
Rutherford, NJ 07070
Hanjin Shipping Co., Ltd., 1521 Pier C Street, Long Beach, CA 90813

[FR Doc. 94-29410 Filed 11-29-94; 8:45 am]
BILLING CODE 6730-01-M