[Federal Register Volume 61, Number 56 (Thursday, March 21, 1996)]
[Rules and Regulations]
[Pages 11564-11584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6600]



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FEDERAL MARITIME COMMISSION

46 CFR Part 572

[Docket No. 94-31]


Information Form and Post-Effective Reporting Requirements for 
Agreements Among Ocean Common Carriers Subject to the Shipping Act of 
1984

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

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SUMMARY: The Federal Maritime Commission is amending its regulations 
governing the information submission requirements for agreements among 
ocean common carriers subject to the Shipping Act of 1984. Certain 
kinds of newly filed agreements are required to be accompanied by a new 
information form, which requires the submission of specific data on the 
agreement member lines' cargo carryings, revenue results and port 
service patterns before they entered into the agreement. In addition, 
the member lines of certain kinds of effective agreements will be 
required to submit reports on their operations on a regular and ongoing 
basis, which will reflect the lines' cargo carryings, revenue results 
and port service patterns after they entered into the agreement. The 
application of this rule to a particular agreement depends primarily on 
whether the agreement authorizes its carrier members to engage in 
certain activities, and secondarily on the carrier members' combined 
market share. An agreement that does not authorize any of the 
activities specified by the rule must still be filed with the 
Commission, unless it qualifies for one of the Commission's filing 
exemptions, but does not have any information form or reporting 
obligations. The intent of this rule is to provide the Commission with 
improved information on the impact of concerted carrier practices on 
the foreign commerce of the United States, and to facilitate the 
processing and monitoring of ocean carrier agreements under the 
standards of the Shipping Act of 1984.

EFFECTIVE DATE: April 19, 1996, except for 46 CFR 572.701(a) and 46 CFR 
572.702, which are stayed until further notice.

FOR FURTHER INFORMATION CONTACT:

Robert D. Bourgoin, General Counsel, Federal Maritime Commission, 800 
North Capitol Street, NW., Washington, DC 20573-0001, (202) 523-5740

[[Page 11565]]

Austin L. Schmitt, Director, Bureau of Economics and Agreement 
Analysis, Federal Maritime Commission, 800 North Capitol Street, NW., 
Washington, DC 20573-0001, (202) 523-5787

SUPPLEMENTARY INFORMATION: 

A. Background

    The jurisdiction of the Federal Maritime Commission (``FMC'' or 
``Commission'') over ocean carrier agreements in the foreign commerce 
of the United States extends under section 4(a) of the Shipping Act of 
1984 (``1984 Act'') to all agreements to:

    (1) Discuss, fix, or regulate transportation rates, including 
through rates, cargo space accommodations, and other conditions of 
service;
    (2) Pool or apportion traffic, revenues, earnings, or losses;
    (3) Allot ports or restrict or otherwise regulate the number and 
character of sailings between ports;
    (4) Limit or regulate the volume or character of cargo or 
passenger traffic to be carried;
    (5) Engage in exclusive, preferential, or cooperative working 
arrangements * * *;
    (6) Control, regulate, or prevent competition in international 
ocean transportation; and
    (7) Regulate or prohibit * * * use of service contracts.

46 U.S.C. app. 1703(a).

    The reforms in 1984 to the Shipping Act were intended in large part 
to facilitate the swift effectiveness, with immunity from the antitrust 
laws, of such agreements. Section 15 of the former Shipping Act, 1916 
(``1916 Act''), had required carriers to secure Commission approval for 
any agreement governing rates, conditions of service, or similar 
matters, before such an agreement could become effective. Under 
standards set forth in section 15, the Commission was permitted to 
disapprove, cancel, or modify any agreement which it found to be 
unjustly discriminatory or unfair, or to operate to the detriment of 
the commerce of the United States, or to be contrary to the public 
interest, or to be in violation of the 1916 Act. 46 U.S.C. 814 (1982).
    The Commission, with Supreme Court approval, had taken the position 
that agreements to set rates, pool revenues, restrict capacity, or to 
engage in other activities that normally would be contrary to the 
antitrust laws were presumed to be contrary to the public interest, and 
would be approved only if they were shown to be ``required be a serious 
transportation need, necessary to secure important public benefits or 
in furtherance of a valid regulatory purpose of the Shipping Act.'' FMC 
v. Svenska Amerika Linien, 390 U.S. 238, 243 (1968). The burden of 
making this showing was placed upon the carrier proponents of an 
agreement, on the ground that information regarding the operation and 
probable future impact of an agreement ``[a]lmost uniformly * * * is in 
the hands of those seeking approval * * * and it is incumbent upon 
those in possession of such information to come forward with it.'' 
Mediterranean Pools Investigation, 9 F.M.C. 264, 290 (1966). Under 
these procedures, the implementation of agreements had often been 
delayed for considerable amounts of time, especially if formal protests 
were made. See Marine Space Enclosures, Inc. v. FMC, 420 F.2d 577 (D.C. 
Cir. 1969) (requiring that the Commission hold a hearing where a 
protest raising substantial issues had been filed). In many cases, 
protests were filed by other carriers, who effectively delayed or 
blocked the approval of their competitors' business plans.
    The 1984 Act did away with the requirement that an agreement had to 
be approved by the Commission before it could lawfully operate. 
Instead, agreements now generally become effective forty-five days 
after they are filed. As a partial counterbalance to this liberalized 
approach, conference agreements \1\ are required by section 5(b) of the 
Act, 46 U.S.C. app. 1704(b), to include a number of procompetitive 
provisions, and the Commission may reject a conference agreement that 
does not meet this standard. Especially noteworthy is the requirement 
that all conference agreements must clearly state that any member line 
may take ``independent action'' (``IA'') on any rate or service item 
required to be filed in a tariff with the Commission; this empowers any 
member line to set an individual rate below (or above) the conference 
rate, without having to obtain approval of the rate from the other 
member lines. The conference is then required to publish the IA rate in 
its conference tariff upon no more than ten days' notice.

    \1\ Under the 1984 Act, a conference is an association of ocean 
common carriers that engage in concerted activities and utilize a 
common tariff. Section 3(7), 46 U.S.C. app. 1702(7).
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    The Commission may also prescribe the ``form and manner'' in which 
agreements of any kind must be filed, and may reject an improperly 
drafted agreement. In addition, the Commission may request information 
and documents in connection with a newly filed agreement and, if its 
demand is not ``substantially'' met, may seek a delay in the 
agreement's effective date or other relief from the United States 
District Court for the District of Columbia.\2\

    \2\ Sections 6 (d) and (i) of the 1984 Act, 46 U.S.C. app. 1705 
(d) and (i).
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    The 1984 Act sets forth an extensive list of prohibited acts, 
barring many anticompetitive practices that previously had been 
outlawed under the broad ``public interest'' standard of section 15 of 
the 1916 Act. For example, section 10(b)(6) of the 1984 Act, 46 U.S.C. 
app. 1709(b)(6), carries forward section 15's prohibition of agreements 
that are unfair or unjustly discriminatory between shippers or ports. 
Sections 10(c) (1)-(3) and (5) of the 1984 Act, id. app. 1709(c) (1)-
(3) and (5), prohibit boycotts, restrictions on technological 
innovations, predatory practices and the denial of reasonable freight 
forwarded compensation, all of which the Commission previously had 
found violated section 15.\3\

    \3\ See S. Rep. No. 3, 98th Cong., 1st Sess. 35-37 (1984).
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    If the Commission has indications that an agreement may be 
operating in violation of the 1984 Act, it may institute an 
investigation of the agreement and its member lines. In addition, the 
Commission may ask any U.S. district court to temporarily enjoin the 
agreement while the investigation proceeds.\4\ If the court should find 
that continued operation of the agreement would be inequitable, it can 
issue an order barring further effectiveness of the agreement until ten 
days after issuance of the Commission's final decision. If the 
Commission should find in its final decision that violations of the 
1984 Act in fact occurred, it may ``disapprove, cancel or modify'' the 
agreement,\5\ which would in effect supersede the existing court 
injunction. In addition, the Commission may assess fines against the 
agreement member lines.\6\

    \4\ Section 11(h)(1) of the 1984 Act, 46 U.S.C. app. 1710(h)(1).
    \5\ Section 11(c) of the 1984 Act, 46 U.S.C. app. 1710(c).
    \6\ Section 13(a) of the 1984 Act, 46 U.S.C. app. 1712(a).
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    The other procedure provided by the 1984 Act by which the 
Commission can prevent an agreement from going into effect, or prevent 
further operation of an existing agreement, is set forth in section 
6(g). This provision authorizes the Commission to seek an injunction in 
the U.S. District Court for the District of Columbia against an 
agreement that is ``likely, by a reduction in competition, to produce 
an unreasonable reduction in transportation service or an unreasonable 
increase in transportation cost.'' 46 U.S.C. app. 1705(g). A proceeding 
under section 6(g) does not involve questions of discrimination or

[[Page 11566]]
unfairness, which are covered by the section 10 prohibited acts, nor 
does it involve questions of statutory violations or fines against the 
carriers. Section 6(g) was meant to provide a way of dealing with 
``unusual or severe cases not addressed by other prohibitions in the 
Act,'' \7\ and the only remedy available under the provision is an 
injunction against the agreement itself.

    \7\ H.R. Rep. No. 600, 98th Cong., 2d Sess. 37 (1984).
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B. The Commission's Agreement Program

    The Commission's procedures for evaluating and monitoring carrier 
agreements reflect the responsibilities and limitations imposed by the 
1984 Act. When an agreement is first filed, its provisions are 
immediately reviewed to ensure that they contain the 1984 Act's 
mandatory provisions and do not authorize activities barred by the 
prohibited acts sections. In the ordinary case, that is a one-time 
process and does not entail ongoing periodic review.
    An agreement's effect on shippers, ports and maritime commerce is a 
different matter. An agreement of significant anticompetitive 
dimensions--for example, a large market share combined with authority 
to fix rates and control service contracts--poses potential dangers of 
unjust discrimination and unreasonable rate increases or service 
reductions both when it is first filed and for as long as it remains in 
effect. Thus, under the new regulatory framework established by the 
1984 Act, the role of the Commission as a monitoring and surveillance 
agency was greatly enhanced. In discharging that responsibility, the 
Commission cannot merely examine an agreement's provisions; rather, it 
must continually gather, review and interpret data on the impact of the 
agreement on U.S. foreign commerce. As for the source of such 
information, the 1984 Act removed the burden of proof in agreement 
investigations from the carriers, but did not alter the accuracy of the 
Commission's 1966 observation in Mediterranean Pools Investigation that 
the primary source for information on the operation of an agreement is 
the carriers that are the parties to the agreement.

C. The Proposed Rule

    On December 5, 1994, the Commission published a Notice of Proposed 
Rulemaking (``NPR'' or ``proposed rule'') (59 FR 62372), which proposed 
significant amendments to the Commission's regulations governing the 
submission of information by ocean carriers about their agreements. The 
Commission explained that, while the existing regulations had served 
their purpose adequately, the increasingly comprehensive and complex 
agreements filed in recent years indicated a need for updating and 
augmentation. The Commission pointed out that agreements with multi-
country geographic ranges are now common, new devices and arrangements 
for dealing with excess capacity have appeared, rate discussion 
agreements between conference and nonconference lines have become more 
prevalent, and networks of vessel and space charter agreements covering 
a multitude of trade lanes have been established.
    In response to these industry developments, the Commission proposed 
new regulations designed to elicit more detailed and specific 
information on ocean carrier agreements in a more structured and 
comprehensive manner. The proposed rule formulated a sliding scale of 
information demands for three classes of agreements that authorized 
certain specific activities, ``Class A,'' ``Class B'' and ``Class C.'' 
An agreement that did not authorize any of the specified activities 
would still be required by law to be filed with the Commission, unless 
it qualified for one of the existing exemptions established by the 
Commission,\8\ but would not have any information obligations.

    \8\ See 46 CFR 572.302-11.
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1. Classification of Agreements: The Six Class A/B Activities

    Under the proposed rule, Class A and Class B agreements permitted 
the same kinds of activities; the difference between them was market 
share. An agreement would be a Class A or a Class B agreement if it 
authorized any one of the following six activities:
     Ratemaking. This specifically included not only 
traditional conference agreements, under which a group of lines agree 
upon fixed rates and practices and are bound to them under a common 
tariff, but also less formal agreements which authorize discussion and 
agreement upon rates on a ``non-binding'' basis. The Commission noted 
that the latter types of agreements have become increasingly common, 
and that their presence in a trade raises serious concerns about the 
true level of competition since they can involve discussions and 
agreements about rates between non-conference lines or between a 
conference and its non-conference competitors.
    Under the proposed rule, the ``ratemaking'' criterion would be met 
if the agreement authorizes its carrier members to (1) agree on a 
binding basis under a common tariff, (2) agree on a non-binding basis, 
or (3) discuss any kind of basic linehaul rate. On the other hand, the 
proposed rule specifically excluded those agreements that are limited 
to practices that affect the manner in which rates are collected from 
shippers--for example, credit conditions and the handling of delinquent 
accounts--but do not concern the level of the rates themselves, and 
those agreements that concern charges or payments to persons other than 
shippers, e.g., inland divisions of through rates, brokerage, freight 
forwarder compensation, employment of neutral bodies for self-policing 
purposes, or development of cargo information systems.
     Discussion or exchange of vessel-operating cost data. The 
Commission has received a number of agreements that do not authorize 
rate discussions or agreements of any kind, but do authorize discussion 
of or exchange of cost data among the member carriers. The most 
significant costs for ocean common carriers are vessel-operating costs, 
which the proposed rule defined to include wages of officers and crew, 
fringe benefits, consumable stores, supplies and equipment, maintenance 
and repair, insurance, vessel fuel, and charter hire. The Commission 
stated that it believed that agreements to discuss and exchange 
information about these costs should be subjected to the same degree of 
scrutiny as their close cousins, rate discussion agreements. On the 
other hand, the proposed rule did not apply the ``costs'' criterion to 
discussion of other types of expense that are less important for 
setting rates. In order to make this distinction effective, the 
proposed rule required agreements seeking to authorize discussion or 
exchange of cost data to specify whether that authority includes any of 
the vessel-operating costs.
     Joint service. The Commission observed that, while the 
introduction of a joint service into a trade by outside lines may 
increase the level of competition and the range of services available 
for shippers, there can be negative effects on competition and service 
if the joint service is formed by lines that up to that point had been 
competing in the trade, and especially if the new entity would have 
substantial market power.
     ``Capacity management'' or ``capacity regulation.'' This 
relatively new device for dealing with overtonnaging had appeared in 
two major agreements, the Trans-Atlantic Conference Agreement 
(``TACA'') and

[[Page 11567]]
the Transpacific Stabilization Agreement (``TSA''). It limited the 
availability of vessel space to shippers, but did not reduce the real 
capacity of the carriers.
     Regulation or discussion of service contracts. Most 
agreements engaging in this activity are conference agreements, which 
would already be covered by the ``ratemaking'' criterion. However, 
agreements among non-conference lines may include authority to confer 
and to reach ``non-binding'' agreements on service contract terms.
     Cargo or revenue pooling. The Commission explained that 
such agreements are severely anticompetitive by nature and must be 
closely regulated.

2. Classification of Agreements: The Importance of Market Share

    The proposed rule required any agreement that authorized one or 
more of the six Class A/B activities to be accompanied, upon its 
initial filing, with an information form showing its parties' market 
shares both for the entire agreement and in each of the sub-trades 
within the overall scope of the agreement, during the most recent 
calendar quarter for which complete data are available. ``Sub-trade'' 
was defined as all liner movements between each U.S. port range 
(Atlantic, Gulf and Pacific) and each foreign country within the 
overall scope of the agreement. For example, an agreement with an 
overall scope of U.S. Pacific Coast to the Far East would have sub-
trades of U.S. Pacific Coast to Japan, U.S. Pacific Coast to Taiwan, 
and so forth.
    An agreement that authorized at least one of the six Class A/B 
activities and whose parties held combined market shares of 50 percent 
or more in half or more of its sub-trades would be classified as a 
Class A agreement under the proposed rule.\9\ The parties to such an 
agreement would be required to submit extensive historical data on the 
initial information form and, if the agreement went into effect, to 
submit detailed quarterly reports on their operations under the 
agreement. An agreement that authorized at least one of the six 
activities, but whose parties did not hold market shares of 50 percent 
or more in at least half of its sub-trades, would be classified as a 
Class B agreement. It would file the same information form as a Class A 
agreement but, if it went into effect, would have significantly lighter 
reporting obligations. Under the proposed rule, classification of an 
agreement as Class A would not be permanent; the agreement's ongoing 
reporting obligations would include market share data, and at the 
beginning of each calendar year, the parties' sub-trade market shares 
during the third calendar quarter (July-September) of the previous 
calendar year would determine whether it would remain under Class A 
reporting obligations for the upcoming year.

    \9\ For example, if an agreement with ten sub-trades reported 
that it had market shares of 50 percent or more in five or more sub-
trades, it would be a Class A agreement. By using that methodology 
rather than average market share, the proposed rule sought to focus 
on those agreements with significant market power spread through at 
least half of their total geographic scope.
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    Market share is an important measure of an agreement's potential 
for abuse of economic power and unreasonable or discriminatory price 
and service practices. In the NPR, the Commission explained that the 
break point of 50 percent in at least half of the sub-trades was chosen 
``in the belief that an agreement that is a relatively minor presence 
in a majority of its sub-trades--that is, a `Class B' agreement--is 
unlikely to be able to impose unreasonable or unfair rates or practices 
regardless of what it authorizes its parties to do, and does not 
require extensive gathering of information about its operation.'' 59 FR 
at 62377. The Commission also pointed out, however, that an important 
feature of the proposed rule was that the market share calculation for 
a rate discussion agreement or a ``non-binding'' rate agreement between 
conference and non-conference lines would add the market shares held by 
the non-conference lines to those held by the conference lines for 
purposes of determining whether the agreement should be classified as 
Class A or Class B.
    The new focus on sub-trades resulted from the increasing number of 
agreements with multi-coast or even multi-continent geographic ranges. 
The Commission pointed out in the NPR that in some of the more 
geographically fragmented parts of the world, such as the Far East and 
the South Pacific, individual countries can constitute separate and 
cloistered markets, and that agreements that serve a comparatively 
unified landmass, such as Europe, might still implement practices that 
differ from area to area within the general market. The Commission 
concluded that these factors argued for information-gathering systems 
that acquire data relevant to an agreement's sub-trades, rather than 
only the market defined by the agreement's total scope. Accordingly, 
the information (besides market share) sought by the proposed rule for 
Class A agreements was, for the most part, concerned with the 
agreement's sub-trades.

3. Class A Agreements Under the Proposed Rule

    The proposed rule's informtion form for a Class A agreement began 
by requiring a listing of all effective agreements covering all or part 
of the geographic scope of the proposed agreement, whose parties 
include one or more of the parties to the proposed agreement. This 
provision was designed to ensure that the Commission has accurate 
information regarding the recent trend toward networks of agreements 
connected by common parties. Next, the form required an identification 
of all Class A/B activities that the agreement seeks to authorize.
    After obtaining the market share data discussed above, the 
information form then inquired into the recent agreement-wide cargo 
carryings and revenue results of each of the carriers that would now 
join together into the agreement. Otherwise, the information form 
focused primarily on the state of affairs in each of the agreement's 
sub-trades before the agreement was filed. This would be done by 
reference to the major commodities carried by the carriers to and from 
the United States in each sub-trade.
    Using the actual commodities potentially affected by a new 
agreement as the chief focus of analysis was a vital component of the 
proposed rule. The proposed information form, while continuing to 
require the submission of aggregate data in certain areas, mainly would 
require each party to the new agreement to identify the commodities 
that have made up the bulk of its cargo in each sub-trade and then to 
submit data on the revenues it has realized from each of those 
commodities. This information was intended to give the Commission a 
reasonably thorough summary of pre-agreement activity in each sub-trade 
covered by the new agreement, as well as in the agreement's entire 
geographic scope. If the agreement should go into effect, that summary 
would serve as a baseline for analyzing the corresponding information 
later obtained through the post-implementation reports. In the NPR, the 
Commission stated:

    In sum, the proposed rule both changes the orientation of 
agreement review to that of the cargo being affected, and also calls 
for more refined and differentiated data from the carriers. These 
reforms should provide the Commission with improved and more useful 
indicators of the potential or actual impact of an agreement on the 
needs of shippers for good service at reasonable rates, and in 
particular whether the agreement might cause or has caused unfair or 
unreasonable conditions for specific commodities, classes of 
shippers or geographic areas.


[[Page 11568]]

59 FR at 62377.
    Under the reporting requirements for effective Class A Agreements, 
the parties' market shares would continue to be tracked by sub-trade. 
In addition, the reporting requirements would mirror the information 
form in order to provide ``before and after'' depictions of the trade, 
with some additional provisions that can apply only to an effective 
agreement. For example, a new section entitled ``Independent Rate 
Actions'' was proposed for Class A conference agreements, which would 
require the submission of information designed to allow the Commission 
to monitor the level of independent rate activity (or the lack of such 
activity) on specific commodities.

4. Class B Agreements Under the Proposed Rule

    As already stated, the proposed rule prescribed the same 
information form for Class B agreements as for Class A agreements. This 
would establish the same pre-agreement baseline. However, assuming the 
Class B agreement was allowed to go into effect, the reporting 
requirements would be limited to quarterly updates on market share, 
agreement-wide (as opposed to sub-trade) cargo and revenue results, 
membership in other agreements, and changes in port service.

5. Class C Agreements Under the Proposed Rule

    An agreement that authorized service rationalization, such as space 
charters, coordination of service frequency and port rotations, and 
coordination of the size and capacity of vessels to be deployed by the 
parties, but did not authorize ``capacity management'' (or any of the 
other Class A/B activities), would be a Class C agreement under the 
proposed rule. The Commission noted that, although such agreements have 
rarely presented serious regulatory concerns, some oversight is 
necessitated by section 6(g)'s admonition against agreements that cause 
unreasonable reductions in service. For a Class C agreement, the 
proposed rule provided for information form and reporting requirements 
regarding membership in other agreements and service at the ports 
within the agreement's overall scope.

6. Other Amendments

    The proposed rule contained a number of other amendments to the 
Commission's existing agreement regulations. For the most part, these 
amendments were not substantive and were designed to make the existing 
regulations consistent with the proposed rule, to eliminate certain 
outdated regulations, or to reorganize certain subparts of the existing 
regulations.

7. Carrier Costs and Profits

    The Commission's obligation under section 6(g) to police against 
agreements that may cause, or have caused, unreasonable increases in 
transportation rates, and the 1984 Act's purpose of providing an 
efficient and economic transportation system in the ocean commerce of 
the United States, 46 U.S.C. app. 1701(2), raised the question whether 
these policies can or should be pursued by monitoring the costs or 
profits of the carriers to a particular agreement. The proposed rule 
did not include provisions on carrier costs or profits, but the 
Commission solicited comments on the lawfulness and feasibility of such 
provisions. Commenters were asked to address how such provisions might 
be structured, particularly given the proposed rule's focus on 
individual country sub-trades; whether costs or profits under a 
particular agreement can be measured accurately, particularly if the 
carriers to the agreement also have operations elsewhere; and whether 
arguments that an agreement is necessary to control costs or to improve 
profits are better explored in the context of an investigation of that 
agreement, rather than made the subject of regulations applicable to 
broad classes of agreements.

D. Summary of the Comments

    The comments on the Proposed Rule were all filed by carriers or 
carrier organizations. No shippers, shipper organizations, government 
agencies or other maritime interests responded to the NPR. Comments 
were filed by:

--TACA, the Asia North America Eastbound Rate Agreement, the 
Transpacific Westbound Rate Agreement, the Inter-American Freight 
Conference,and twenty-one other conferences and discussion agreements, 
filing jointly (referred to below as the ``25 Agreements'');
--the Council of European & Japanese National Shipowners' Associations 
(``CENSA'');
--TSA, which adopted the comments of the 25 Agreements and filed 
additional comments on the special topic of capacity management 
programs;
--the Trans-Pacific Freight Conference of Japan, the Japan-Atlantic and 
Gulf Freight Conference, and their member lines (``Japan 
Conferences'');
--the India, Pakistan, Bangladesh, Ceylon and Burma Outward Freight 
Conference and the Calcutta, East Coast of India and Bangladesh/U.S.A. 
Conference (the ``Associated India/Pakistan Conferences''); and
--Hanjin Shipping Co., Ltd.

1. Hanjin

    Hanjin's comments attacked the lawfulness of the proposed rule. The 
carrier made no counterproposals and suggested no alternatives, but 
merely urged that the rule be withdrawn.
    Hanjin's central objection was to the proposed rule's model of 
generalized regulations that prescribe information requirements for 
classes of agreements; the gist of its position was that the Commission 
is restricted, as a matter of law, to requiring information only on an 
``as needed'' basis for individual agreements. Hanjin contended that, 
when an agreement is first filed, the FMC's only authority is to ensure 
that the agreement complies with the content requirements of section 5 
of the 1984 Act and does not transgress the standards of section 6(g), 
and that to discharge those functions the FMC does not need the 
information required under the proposed rule. Much of that information, 
Hanjin argued, would be overly burdensome to produce and is not 
sufficiently tied to the scope, size, or other specifics of a 
particular agreement. Similarly, with respect to effective agreements, 
Hanjin submitted that the Commission should act only through targeted 
investigations where information demands can be properly focused and 
limited.
    Discussion Hanjin's arguments are incorrect. The Commission has 
ample statutory authority to promulgate general regulations governing 
the initial evaluation and subsequent surveillance of carrier 
agreements. Section 5(a) of the 1984 Act states specifically that 
``[t]he Commission may by regulation prescribe the form and manner in 
which an agreement shall be filed and the additional information and 
documents necessary to evaluate the agreement.'' 46 U.S.C. app. 1704(a) 
(emphases added). In addition, the Commission has broad rulemaking 
authority under section 17(a) of the Act, id. app. 1716(a), and there 
is nothing in the language or legislative history of the Act that bars 
the application of that authority to carrier agreements. Hanjin does 
not acknowledge that the Commission has had in effect since 1984 
extensive rulemaking-generated regulations governing the filing and 
monitoring of agreements, including regulations prescribing the current 
information form. It should also be pointed out that the Commission 
could obtain the same information set forth in the proposed

[[Page 11569]]
rule--both the new information form data and the correlated monitoring 
report data--by issuing a demand for a ``periodical or special report'' 
under section 15 of the 1984 Act, 46 U.S.C. app. 1714(a). However, the 
Commission believes that, over the long run, regular and universally 
applicable information gathering is less burdensome on the industry 
than ad hoc section 15 orders or investigative subpoenas, because it 
enhances predictable and consistent regulation and the information 
obtained can persuade the agency that more formal and costly 
investigations are not necessary.

2. Other Comments

    Of the other commenters, none challenged the proposed rule's 
central thesis that changes to the FMC's information-gathering 
processes were required by the changes in the nature, scope and 
complexity of carrier agreements since 1984. The Japan Conferences, for 
example, said that they ``* * * do not oppose the concept embodied in 
the Proposed Rule which would enable the Commission to become better 
informed relative to newly filed agreement activity and their post-
effective implementation.'' (Comments at 3). None of these commenters 
objected to the intensified treatment under the rule of rate discussion 
agreements, ``non-binding'' rate agreements, and agreements to discuss 
or exchange vessel-operating cost data. None argued against the rule's 
proposal to distinguish between Class A and Class B agreements on the 
basis of market share, and there were no objections to the rule's 
proposed demarcation of a 50 percent market share. None argued against 
the rule's intention to monitor the impact of effective agreements 
according to the revenue realized from leading commodities. None took 
issue with the rule's proposal to require by regulation--rather than by 
negotiated consent--the submission of reports at regular intervals for 
effective agreements, although issues were raised regarding the 
frequency of such reports.

E. Specific Issues

    The following analysis of the specific issues raised by the 
comments is organized by subject matter. In general, the issues raised 
by the comments apply both to the proposed rule's revised information 
form and to the rule's new post-effective monitoring reports. Where an 
issue raised special concerns for either the information form or for 
the monitoring reports, that is indicated in the text.

1. Class A/B Activities

(a) Duplicative Filings
    The members of the Japan Conferences are also members of three 
inter-conference ``policy agreements'' (FMC Nos. 206-010838, 206-
008600, and 206-010707) that contain authority to discuss and agree on 
rate and service contract issues of common interest. The Conferences 
did not object to the fact that these agreements would be Class A/B 
agreements under the proposed rule, but argued that they should not be 
required to submit the same information for both the basic conference 
agreements and the inter-conference agreements:

    These supplementary agreements involve the identical Conference 
parties, the same TPFCJ and JAGFC trades and subtrades, the same 
vessels and services, and the same Conference rates and service 
contracts. . . . [T]he Proposed Rule should be revised to permit the 
information which is required to be submitted by the relevant 
conference to qualify as the supplementary arrangement's economic 
information submission.

(Comments at 6).

    Discussion It is unnecessary to amend the rule to deal with this 
concern. Complaints from the members of an agreement that they are 
being asked to submit information that duplicates information submitted 
in connection with another agreement can and will be handled on a case-
by-case basis, under the rule's waiver procedure.
(b) Non-binding Rate Authority That Can Only Be Implemented Through 
Other Agreements
    A related issue was also raised by the Japan Conference lines, 
which stated that they ``also operate under space charter and sailing 
agreements within the Conference trades, as well as in other trades and 
beyond.'' (Comments at 2). Such agreements typically contain authority 
to discuss and agree upon rates on a ``non-binding'' basis, a Class A/B 
activity. The Japan Conferences argued, however, that under the terms 
of these agreements, any rate agreements arrived under them can only be 
implemented through the Conferences themselves, and so all relevant 
information about the impact of the smaller agreements would be 
provided to the Commission through the Conferences' submissions.
    Discussion Again, such discrete, fact-specific situations will be 
left for the rule's waiver procedure. A waiver may well be appropriate 
for side agreements between two or more conference members that are 
subject to reporting requirements through their membership in the 
conference agreement itself. However, a different situation would be 
presented by an agreement allowing ``non-binding'' rate discussions 
between a conference line and non-conference line.

2. Information Form for Class A/B Agreements

(a) Scope of Requirement
    The Japan Conferences raised a general objection to the proposed 
rule's requirement that all new agreements authorizing any of the Class 
A/B activities must file an information form, and to the Commission's 
intention, as stated in the proposed rule, to require all effective 
agreements that authorize any of the Class A/B activities to file 
equivalents of information forms in order to establish baselines for 
future monitoring. The Japan Conferences proposed instead that such 
requirements be imposed only on agreements with a 35 percent market 
share. This change, it was argued, would excuse ``smaller agreements 
which are likely never to threaten dominance in the trade they serve or 
ever to imperil the (section 6(g)) general standard * * *.'' (Comments 
at 10).
    Discussion This suggested modification is rejected. The information 
form requirement for Class A/B agreements is triggered by the 
anticompetitive activities that such agreements authorize, rather than 
by market share. This is because the collusion on price or service that 
a Class A/B agreement would introduce into a trade has sufficiently 
serious implications for shippers and the foreign commerce of the 
United States that extensive information on the parties' pre-agreement 
prices and services is necessary. If the parties have a low market 
share initially, that may ease the agreement's initial review under 
section 6(g). However, the agreement's potential for unreasonable price 
increases or service reductions would always be present, particularly 
since the Commission cannot lawfully impose a term limit on an 
agreement's effectiveness. 46 U.S.C. app. 1705(f). If the parties 
should eventually obtain a high market share and if the agreement 
became the subject of a section 6(g)-- investigation, comparisons with 
the pre-agreement profile of the trade would clearly be relevant. In 
addition, even a 35 percent market share may make the agreement parties 
the price leaders in the trade if the remaining 65 percent is spread 
out among many other carriers.
(b) Actual Versus Authorized Activity
    The Associated India/Pakistan Conferences suggested that ``[a]s an 
additional question or, in the

[[Page 11570]]
alternative, the information form could query whether the parties 
actually do discuss or exchange data on operating costs, pool cargoes 
or revenues, etc., as the case may be.'' (Comments at 1).
    Discussion This suggested amendment is rejected. It would be 
impractical to attempt to adjust the level of regulation according to 
whether the parties were or were not using the authority contained in 
the agreement. Agreements must be taken at face value, and permitted 
activities must be assumed to be actual activities. With regard to the 
information form, it should be noted that the parties would be 
violating the Shipping Act and the antitrust laws if they were already 
engaged in the activities that the newly filed agreement sought to 
authorize.

3. Market Share

    As stated above, no commenter objected to the proposed rule's 
provision that an agreement that authorized at least one of the Class 
A/B activities and held market shares of 50 percent or more in half or 
more of its sub-trades would be classified as a Class A agreement for 
purposes of the rule's monitoring report requirements. However, there 
were some comments on how market share should be calculated.
(a) Definition of ``Sub-trade''
    As stated above, the proposed rule defined ``sub-trade'' as all 
liner movements between each U.S. port range (Atlantic, Gulf and 
Pacific) and each foreign country within the overall scope of the 
agreement.
    The 25 Agreements (joined by TSA) said that carriers ``do not 
necessarily'' collect and maintain data on cargo movements according to 
the proposed rule's definition, and that using that definition would 
result in a ``huge'' amount of data for some conferences. (Comments at 
4). They would narrow the definition in two ways.
    First, the United States should be considered as one unit (i.e., no 
port ranges). The same argument was made by CENSA.
    Second, it was argued that the Commission should * * *

    * * * recognize that agreements may cover a large number of 
foreign countries, many of which are small and may be considered 
together by the agreement as one market. In such a case, the 
agreement should be allowed to provide data to the Commission 
regarding this group of foreign countries, rather than having to 
break down the data on a country-by-country basis. Accordingly, the 
Conferences suggest that the Commission allow the members of an 
agreement to provide the data in the manner in which they define 
their markets. If, in a particular case, the Commission believes 
more detailed data is required, it can request additional 
information.

(Comments at 5-6). A similar, though less specific, argument was made 
by the Japan Conferences, which contended that the Commission should 
allow the substitution of ``broader geographic ranges of countries 
wherever possible,'' in order to reduce the burden of complying with 
the Rule. (Comment at 13).
    Discussion The question of how to define an agreement's sub-trades 
is extremely important, because much of the substantive information 
required by the final rule--not just market share--is to be collected 
and submitted by sub-trade.
    Any deviation from the rule's definition of sub-trade, for either 
the U.S. side or for the foreign side, will be allowed only through the 
rule's waiver procedure. Further, the burden will be on the carriers to 
show that their marketing and pricing are done by multi-country regions 
rather than by individual countries, or, in the case of the United 
States, by the United States as one unit rather than by separate port 
ranges. If such a showing is made, then an appropriate adjustment from 
the rule's requirements can and should be made. The rule is intended to 
measure and monitor actual economic behavior, not to impose its own 
model on the industry.
    It should be noted, however, that waivers of the definition of 
``sub-trade'' could involve difficult issues of fact. For example, in 
the case of a newly filed agreement, the information form requires data 
from the agreement signatory carriers on their operations in the 
agreement trade and sub-trades before the agreement was filed, when the 
carriers presumably were not coordinating their marketing and pricing. 
Therefore, an attempt to construct a regional definition of ``sub-
trade'' that could be used by all carriers for their information from 
data submissions will succeed only if it can be shown that the 
carriers, though operating individually, were nevertheless applying 
essentially similar regional marketing and pricing practices.
    A somewhat easier situation may be presented by the monitoring 
reports, which track the market shares, services and revenue results of 
the agreement parties after the agreement has been implemented. For 
conference agreements at least, this would allow the use of the 
agreement common tariff as the indicator of the parties' marketing and 
pricing practices, and it should not be difficult to define the 
agreement's sub-trades according to the construction of the agreement 
tariff. Similarly, a joint service operated by a single entity, see 46 
U.S.C. app. 1709(e), would presumably be utilized only one tariff.
    Because efforts to agree upon an alternative definition of ``sub-
trade'' for a particular agreement may be arduous and time-consuming, 
the final rule provides that a waiver of the rule's definition must be 
obtained in advance of the required information submission, whether 
that be an information form or a monitoring report.
(b) Market Shares of Non-member Carriers
    CENSA, the Japan Conferences and the Associated India/Pakistan 
Conferences argued that they should not be required to produce market 
share data for carriers not parties to their agreements.
    Discussion This suggested modification is rejected. The current 
information form already requires the parties to a new agreement to 
provide ``estimates (or precise information where available) of non-
party liner operator market share (shown either for each individual 
operator or for all operators collectively).'' 46 CFR part 572, at 314 
(1994). The final rule is thus only an incremental refinement of an 
existing requirement. The rule requires that non-party market shares be 
stated by individual liner operator in order that the true extent of 
non-party competition can be gauged accurately; as observed above, an 
agreement with a market share of only 35 percent could nevertheless 
have significant market power if the non-party carriers all have small 
market shares.
(c) Cargo Not Measured in TEUs
    The proposed rule required market share, cargo carrying and revenue 
results to be measured by TEUs. The 25 Agreements and the Associated 
India/Pakistan Conferences pointed out that data on breakbulk and 
certain other types of cargo are not available in TEUs.
    Discussion The final rule clarifies that the member lines of an 
agreement should include only containerized cargo (stated in TEUs) in 
their information submissions, if the cargo they carry in the agreement 
trade--or sub-trade, if that is the focus of the particular report--is 
predominantly containerized. If the cargo they carry is predominately 
non-containerized, the carriers' reports of market share, cargo 
carryings and revenue results should include only non-containerized 
cargo. The rule does not impose a particular unit of measure of non-
containerized cargo, requiring

[[Page 11571]]
only that the unit employed be stated clearly and applied consistently.

4. Reports on Cargo Carryings

    In response to a comment by the Associated India/Pakistan 
Conferences, the final rule clarifies that reports on cargo carryings 
should include cargo not subject to tariff filing.

5. Reports on Carrier Revenues

    The comments on the proposed rule's provisions for the submission 
of carrier revenue data focused on the commercial sensitivity of such 
data. The commenters--the 25 Agreements, CENSA and the Japan 
Conferences--were apparently concerned that reporting individual 
carrier revenue data to the Commission, as the rule would require, will 
result in exposure of confidential business information. Three 
protective limitations were proposed:

--Conferences with four or more members would provide total revenue and 
average-revenue-per-TEU but on an aggregated, agreement-wide basis 
rather than on a line-by-line basis. It was argued that this would give 
the Commission the necessary information on the agreement's impact, 
while safeguarding the confidentiality of the revenue data.
--Conferences with three or fewer members should be exempt from 
providing revenue data altogether. The 25 Agreements contended that 
even the aggregate approach is not sufficiently protective for smaller 
conferences ``***because even with an average, there are so few figures 
contributing to the average, the average revenue per line is likely to 
be fairly obvious.'' (Comments at 7). It was also submitted that small 
conferences often do not have secretariats or other central staff who 
can protect sensitive information, and that the demands of the proposed 
rule would be especially burdensome for small conferences.
--Rate discussion agreements which do not have binding rate-making 
authority should be exempt from providing revenue data if their 
membership includes carriers who belong to a conference. The rationale 
was that in such cases the Commission would obtain the carriers' 
revenue data through the conference's reporting. It was also argued 
that, like small conferences, discussion agreements generally do not 
have a central staff to collect the data from the member lines and 
maintain its confidentiality.

    Discussion These limitations are rejected. By requiring individual 
carrier revenue data, the rule recognizes that Shipping Act agreements, 
unlike a merger, maintain the separate trade identities of their 
parties (with the limited exception of joint services). Thorough and 
accurate regulation of these ongoing price and service consortia 
requires knowledge of the business results of the actual operating 
entities. The rule's emphasis on sub-trades also requires individual 
carrier data, since a particular agreement sub-trade may not be served 
by all the parties to the agreement. Similarly, individual carrier data 
will further appropriate oversight of multiple agreements that are 
connected by common parties.
    The comments would have the form and manner of appropriate 
regulation determined, not by the carriers that are the regulated 
entities under the Shipping Act, but by the form of organization that 
the carrier choose for themselves. The requirement for individual 
carrier data accommodates the apparent trend in ocean shipping away 
from traditional conferences, which have featured relatively 
independent chairmen and established central offices, and toward looser 
discussion agreements administered in some cases by rotation among the 
member lines. If this trend should continue, the excuse offered by the 
comments as to why even aggregate data should not be required from some 
agreements might eventually be raised for all agreements.
    Taken on its own terms, the suggested distinction between 
conference is flawed: A three-member conference serving a small trade 
may well have a dominant market share, and therefore require careful 
monitoring. More generally, small conferences do not necessarily mean 
small member lines; a relatively small conference may have as members 
large carriers with established and sophisticated information systems. 
The proposal for rate discussion agreements would be workable only if 
all of the members of a particular discussion agreement were also 
members of a conference and if the discussion agreement and the 
conference agreement had identical geographic scopes. In such a 
situation, a waiver might be merited to avoid duplicative reporting as 
discussed above, but a general exemption is unworkable and in 
appropriate.
    With regard to the carriers' concern about disclosure of their 
revenue data, there is no reasonable ground for anticipating improper 
public use of such data by the Commission. Once received by the 
Commission, revenue data is protected under section 6(j) of the 1984 
Act and is exempt from disclosure under the Freedom of Information 
Act.\10\

    \10\ 5 U.S.C. 552(b)(4); see, e.g., Gulf & Western Industries, 
Inc. v. United States, 615 F.2d 527, 529 (D.C. Cir. 1979).
---------------------------------------------------------------------------

6. Carriage and Revenues Data by Leading Commodities in Each Sub-trade

    The heart of the proposed rule can be found in parts VI and VII of 
the information form for Class A/B agreements and the corresponding 
parts VI and VII of the monitoring report for Class A agreements. These 
provisions required each member line of such an agreement to submit 
extensive data for each ``top 10'' commodity carried in each sub-trade.
    The provisions triggered strong opposition from most of the 
commenters, particularly the requirement in the two parts VII that each 
carrier provide detailed information on how it carried each major 
commodity in each sub-trade (i.e., TEUs carried port-to-port under 
tariff rates; TEUs carried under intermodal tariff rates; TEUs carried 
port-to-port under service contracts; and TEUs carried in intermodal 
service under service contracts) and then the average revenue per TEU 
realized by the carrier from each type of carriage. The 25 Agreements, 
for example, contended:

    Determining the method by which cargo moves, e.g., tariff vs. 
service contract, port-to-port vs. intermodal, would likely require 
a review of every bill of lading for every shipment in the trade. 
The potential cost and burden of performing such a review is 
staggering.

(Comments at 11).

    Discussion Significant revisions to these sections of the proposed 
rule are warranted in response to the concerns of the commenters. 
Specifically, each member line will be required to provide total 
carriage and average revenue data for each leading commodity in each 
sub-trade, but will no longer be required to calculate such data 
separately for port-to-port and intermodal services, or for tariff and 
service contract services. This modification essentially adopts an 
alternative offered by the 25 Agreements (except that the Agreement 
urged limitations on reporting revenue data which were identical to 
those already rejected above (i.e., aggregate instead of individual 
line data, no reporting for small conferences, and so on)). As revised, 
the new regulations will obtain cargo and revenue data most directly 
relevant to review of an agreement under the section 6(g) general 
standard, while eliminating the aspects of the

[[Page 11572]]
proposed rule that would have placed the greatest burden on the 
industry.
    The comments addressed the ``top 10'' scheme only in passing; in 
response to a comment by the Associated India/Pakistan Conferences, the 
final rule clarifies that individual commodities should be identified 
at the 4-digit level of customarily used commodity coding schedules.

7. Port Service Data

    Part VIII of the proposed information form required data on the 
number of calls by each member-line during the most recent 12-month 
period at each port covered by the agreement, and any change in the 
nature or type of service to be effected immediately ``by the 
agreement,'' including base port designations and frequency of vessel 
calls. Similar data was required by the proposed monitoring report for 
Class A agreements.
    The 25 Agreements (joined by CENSA) suggested that ``port'' be 
limited to U.S. ports, ``* * * since the FMC does not require 
information regarding calls at foreign ports to fulfill its regulatory 
responsibilities.'' (Comments at 12). Also, they proposed that changes 
in service be clarified to mean only those changes ``* * * that are 
required by the agreement, rather than any changes made by an 
individual carrier for its own commercial reasons.'' (Id.).
    Discussion The Commission disagrees that the impact of agreements 
on liner service in U.S. foreign trades can be adequately monitored by 
reference only to U.S. ports, but will make other modifications to this 
part of the Rule. The phrase ``by the agreement'' will be deleted from 
the information form, so that it is clear that each member line of a 
new agreement should state whether it (rather than ``the agreement'') 
will be making any changes in the nature or frequency of its service at 
any port covered by the agreement, once the agreement goes into effect. 
In the corresponding part of the monitoring report, the requirement 
that each member line list the number of calls at each port during the 
previous calendar quarter is deleted; instead, the lines are simply 
asked to describe any changes in the nature of their services at each 
agreement port, e.g., serving a port by substituted rather than direct 
service.

8. Capacity Management Programs

    The special provisions of the proposed rule that deal with 
agreements authoring ``capacity management'' or ``capacity 
regulation,'' including the identification of ``capacity management'' 
or ``capacity regulation'' as one of the Class A/B activities, are 
deleted. There are now no agreements on file with the Commission 
containing such programs, and accordingly there is no need at present 
for specific regulations addressing this unusual and highly 
controversial area of carrier activity. Any future capacity management 
filings will be dealt with on a case-by-case basis. Through its 
statutory authorities in section 6(d) and 15 of the 1984 Act, the 
Commission will have sufficient means of analyzing any such agreements 
by obtaining and reviewing all planning documents, trade reports, 
capacity calculations, and any other relevant information that was used 
to negotiate the capacity limits in the new agreement. If reporting is 
necessary, that could be done through imposition of a permanent section 
15 order.

9. Data on Independent Actions

    For the monitoring reports filed by Class A conferences, the 
proposed rule required each member line to state the number of IAs 
taken on each leading commodity within each sub-trade, and the total 
number of TEUs of that commodity covered by the IAs. The 25 Agreements 
opposed this requirement on the ground of burdensomeness. The Japan 
Conferences claimed that ``the Conferences'' do not maintain data on 
the TEUs carried by their member lines under IA rates, and suggested 
that many of their member lines do not maintain such data either.
    The proposed rule also required identification of each shipper for 
whom an IA was taken on a leading commodity during the calendar 
quarter, and a statement as to whether the shipper was a beneficial 
cargo owner, a non-vessel-operating common carrier, or a shipper's 
association. The 25 Agreements responded that IAs are often not taken 
for a specific shipper:

    Instead, they may be taken to service a particular market so 
that a carrier can break into that market or remain competitive in 
it. In such instances, therefore, the carriers obviously cannot 
provide any shipper information.

(Comments at 15-16). Similar objections were filed by the Japan 
Conferences and CEMSA, although the Japan Conferences were willing to 
provide data on the type of shipper for whom IAs had been taken.
    Discussion The requirement for reporting the number of TEUs moving 
under the IAs taken for each leading commodity has been deleted. The 
final rule requires each member of a ``Class A'' conference to submit 
data both on the number of IAs taken on each leading commodity in each 
agreement sub-trade and, in part VII of the conference's monitoring 
report, on the average revenue per TEU realized by the member line from 
its carriage of each leading commodity in each sub-trade. The 
Commission believes that it will be able to accurately monitor the true 
level of IA activity within a conference by comparing and contrasting 
these two sets of data.
    Reductions have also been made in the amount of shipper-related IA 
data. Rather than requiring the name of each shipper for whom an IA was 
taken during the calendar quarter, the final rule instead requires each 
member line to state how many of its total IA actions for each leading 
commodity during the quarter were taken to service specific shipper 
accounts (rather than for general commercial reasons) and of those, how 
many were taken for NVO accounts and how many for shippers' association 
accounts. These changes respond to observations of the commenters that 
many IAs are taken to preserve market share or to penetrate new 
markets, rather than for specific customers, and to the commenters' 
concerns about protecting the identity of those shippers for whom IA 
was taken.

10. Quarterly Reporting

    Objections were raised to the proposed rule's requirements that 
monitoring reports be submitted on a quarterly basis. The Japan 
Conferences, for example, said that ``* * * economic trends in the 
ocean shipping business do not ordinarily change to any significant 
degree in the space of a three month period, or even over six months or 
a year.'' (Comments at 4). They asked that reports be submitted 
annually ``* * * or, certainly, with no greater frequency than semi-
annually.'' Id. at 5).
    Discussion The final rule retains the requirement for quarterly 
monitoring reports. The Commission specifically disagrees with the 
Japan Conferences' characterization of the cycles of international 
ocean shipping; the experience of the Pacific trades during 1995 was 
certainly to the contrary. More important, given the significant 
modifications and reductions made by the final rule to the information 
demands of the proposed rule, there is no basis to conclude on this 
record that quarterly reporting will be unduly burdensome or otherwise 
unreasonable. It should be pointed out again, however, that an 
individual waiver of the quarterly reporting requirement can be 
obtained under the proper circumstances.

[[Page 11573]]


11. Miscellaneous

    The proposed monitoring report for Class A agreements required a 
statement as to whether the agreement is a conference or has capacity 
management provisions. This was meant to facilitate checking of the 
carriers' compliance with the special requirements for such agreements. 
The 25 Agreements viewed this as ``duplicative information'' (Comments 
at 15) that should be required only if there has been some change since 
the last report. As discussed above, the proposed rule's provisions for 
capacity management agreements have been deleted, but the requirement 
that a conference identify itself as such in its monitoring reports is 
retained to avoid any uncertainties from the fact that conference names 
often do not include the word ``conference.''
    In response to a suggestion from the Associated India/Pakistan 
Conferences, the ``contact person'' provisions of the information forms 
and monitoring reports have been updated to include fax and telex 
numbers as well as cable addresses.
    The number of copies required for an agreement filing by subpart 
572.401 has been reduced from an original and ten copies to an original 
and seven copies. In addition, subpart 572.701 and the instructions for 
the Information Forms and Monitoring Reports have been clarified with 
respect to joint services.

12. Carrier Costs and Profits

    The 25 Agreements and CENSA argued that data on profits and/or 
costs in the agreement trade are irrelevant to a section 6(g) analysis. 
The Japan Conferences were also opposed, but took a less dogmatic 
position:

    The Conferences do not contend that there will never be a case 
where it would be appropriate or necessary for the Commission to 
review cost or profit information, or that in a proper case 
involving a particular agreement, section 15 should not be used to 
demand such information.

(Comments at 14). Rather, they argued that rulemaking is too broad a 
procedure and is not tied to a specific need for such data. Also, they 
pointed out that the proposed rule is based on sub-trade data, and that 
cost and profit data by sub-trade would be very suspect.
    Discussion: The Commission will not propose a further rulemaking at 
this time to capture cost and profit data. However, we wish to stress 
that the costs incurred and the profits realized by the carrier parties 
to a particular agreement could well be relevant to a section 6(g) 
analysis of that agreement, especially if purported revenue losses are 
being used to justify the agreement.
    For the most part, these amended regulations will become effective 
thirty days after publication in the Federal Register. New agreements 
then will be required to comply with the revised information form 
provisions. However, the proper application of the new monitoring 
report provisions in 46 CFR 572.701-705 to agreements already in effect 
cannot be determined immediately, because the market share data 
necessary to separate Class A/B agreements into Class A and Class B are 
not readily available.
    Accordingly, effectiveness of the monitoring report provisions of 
the final rule is stayed until further notice. The Commission will 
direct all existing Class A/B agreements to submit reports under 
section 15 of the 1984 Act that will include all the information 
demanded of new Class A/B agreements under the information form 
regulations, including market share data. Upon review of these reports, 
those agreements will be appropriately classified into Class A or Class 
B, the stay of monitoring report provisions will be lifted, and the 
orderly filing of the regular monitoring reports (including those 
applicable to Class C agreements) will begin.
    For those agreements already in effect that are subject to 
negotiated reporting requirements, those requirements will remain in 
effect until the stay is lifted and the new reporting requirements 
become applicable. Also, the stay does not apply to the pre-existing 
obligation (now codified at 572.706-708) of certain agreements to 
submit minutes of their meetings.
    The Federal Maritime Commission certifies, pursuant to section 
605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that this 
rule will not have a significant economic impact on a substantial 
number of small entities, including small businesses, small 
organizational units and small government jurisdictions. The ocean 
carriers affected by the rule are not ``small organizations'' or 
``small governmental jurisdictions'' as defined by 5 U.S.C. 601 and, as 
large and predominantly foreign-based enterprises, are not ``small 
business concerns'' as defined by 15 U.S.C. 632 and regulations issued 
thereunder.
    The collection of information requirements contained in this rule 
has been approved by the Office of Management and Budget under the 
provisions of the Paperwork Reduction Act of 1995, and has been 
assigned OMB control number 3072-0045. Under the proposed rule, the 
incremental public reporting burden was estimated to range from an 
average of 46 to 144 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. With the modifications made to the proposed 
rule, the incremental public reporting burden for preparing responses 
to the collection of information requirements of the final rule is 
estimated to range from an average of 36 to 97 hours per response. Send 
comments regarding this burden estimate, including suggestions for 
reducing this burden, to Bruce A. Dombrowski, Deputy Managing Director, 
Federal Maritime Commission, Washington, DC 20573, and to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Washington, DC 20503.

List of Subjects in 46 CFR Part 572

    Administrative practice and procedure; Maritime carriers; Reporting 
and recordkeeping requirements.

    Therefore, pursuant to 5 U.S.C. 553 and sections 4, 5, 6, 10, 15 
and 17 of the Shipping Act of 1984, 46 U.S.C. app. 1703, 1704, 1705, 
1709, 1714 and 1716, part 572 of Title 46, Code of Federal Regulations, 
is amended as follows:

PART 572--AGREEMENTS BY OCEAN COMMON CARRIERS AND OTHER PERSONS 
SUBJECT TO THE SHIPPING ACT OF 1984

    1. The authority citation for part 572 continues to read as 
follows:

    Authority: 5 U.S.C. 553, 46 U.S.C. app. 1701-1707, 1709-1710, 
1712 and 1714-1717.

    2. In Sec. 572.103, the first sentence of paragraph (a), the first 
two sentences of paragraph (b), the first sentence of paragraph (c), 
and the second sentence of paragraph (d) are revised; in paragraph (e), 
the third sentence is revised, the last sentence is revised, and a new 
sentence is added as follows:


Sec. 572.103  Policies.

    (a) The Act requires that agreements be processed and reviewed, 
upon their initial filing, according to strict statutory deadlines. * * 
*
    (b) The Act requires that agreements be reviewed, upon their 
initial filing, to ensure compliance with all applicable provisions of 
the Act and empowers the Commission to obtain information to conduct 
that review. This part identifies those classes of agreements which 
must be accompanied by information submissions when they are first 
filed, and sets forth the kind of information for each class of 
agreement which the

[[Page 11574]]
Commission believes relevant to that review. * * *
    (c) In order to further the goal of expedited processing and review 
of agreements upon their initial filing, agreements are required to 
meet certain minimum requirements as to form. * * *
    (d) * * * In order to minimize delay in implementation of routine 
agreements and to avoid the private and public cost of unnecessary 
regulation, the Commission is exempting certain classes of agreements 
from the filing requirements of this part.
    (e) * * * This, however, requires greater monitoring of agreements 
after they have become effective, to assure continued compliance with 
all applicable provisions of the Act. * * * Only that information which 
is necessary to assure that Commission monitoring responsibilities will 
be fulfilled is requested. It is the policy of the Commission to keep 
the costs of regulations to a minimum and at the same time obtain 
information needed to fulfill its statutory responsibility.
* * * * *
    3. In Sec. 572.104, paragraphs (ee) and (ff) are redesignated (ii) 
and (jj); (dd) is redesignated (hh); (z) through (cc) are redesignated 
(dd) through (gg); (y) is redesignated (cc); (s) through (x) are 
redesignated (u) through (z); and (e) through (r) are redesignated (f) 
through (s); new paragraphs (e), (t), (aa), (bb), and (kk) are added; 
in newly redesignated (g), the last sentence is revised; newly 
redesignated (j) is revised; the heading of newly redesignated (o) is 
revised; newly redesignated (cc) is revised; and in newly redesignated 
(hh), the last sentence is revised to read as follows:


Sec. 572.104  Definitions.

* * * * *
    (e) Capacity management or capacity regulation agreement means an 
agreement between two or more ocean common carriers which authorizes 
withholding some part of the capacity of the parties' vessels from a 
specified transportation market, without reducing the real capacity of 
those vessels. The term does not include sailing agreements or space 
charter agreements.
* * * * *
    (g) Conference agreement * * * The term does not include joint 
service, pooling, sailing, space charter, or transshipment agreements.
* * * * *
    (j) Effective agreement means an agreement approved pursuant to the 
Shipping Act, 1916, or effective pursuant to an exemption under that 
act, or effective under the Act.
* * * * *
    (o) Joint service agreement * * *
* * * * *
    (t) Monitoring report means the report containing economic 
information which must be filed at defined intervals with regard to 
certain kinds of agreements that are effective under the Act.
* * * * *
    (aa) Rate, for purposes of this part, includes both the basic price 
paid by a shipper to an ocean common carrier for a specified level of 
transportation service for a stated quantity of a particular commodity, 
from origin to destination, on or after a stated effective date or 
within a defined time frame, and also any accessorial charges or 
allowances that increase or decrease the total transportation cost to 
the shipper.
    (bb) Rate agreement means an agreement between ocean common 
carriers which authorizes agreement upon, on either a binding basis 
under a common tariff or on a non-binding basis, or discussion of, any 
kind of rate.
    (cc) Sailing agreement means an agreement between ocean common 
carriers which provides for the rationalization of service by 
establishing a schedule of ports which each carrier will serve, the 
frequency of each carrier's calls at those ports, and/or the size and 
capacity of the vessels to be deployed by the parties. The term does 
not include joint service agreements, or capacity management or 
capacity regulation agreements.
* * * * *
    (hh) Space charter agreement * * * The arrangement may include 
arrangements for equipment interchange and receipt/delivery of cargo, 
but may not include capacity management or capacity regulation as used 
in this subpart.
* * * * *
    (kk) Vessel-operating costs means any of the following expenses 
incurred by an ocean common carrier: Salaries and wages of officers and 
unlicensed crew, including relief crews and others regularly employed 
aboard the vessel; fringe benefits; expenses associated with consumable 
stores, supplies and equipment; vessel fuel and incidental costs; 
vessel maintenance and repair expense; hull and machinery insurance 
costs; protection and indemnity insurance costs; costs for other marine 
risk insurance not properly chargeable to hull and machinery insurance 
or to protection and indemnity insurance accounts; and charter hire 
expenses.


Sec. 572.301  [Amended]

    4. In Sec. 572.301, paragraph (b) is amended by removing the words 
``Information Form'' and the comma immediately thereafter.


Sec. 572.302  [Amended]

    5. In Sec. 572.302, paragraph (b) is amended by removing the words 
``Information Form'' and the comma immediately thereafter.


Sec. 572.303  [Amended]

    6. In Sec. 572.303, paragraph (b) is amended by removing the words 
``and Information Form.''


Sec. 572.304  [Amended]

    7. In Sec. 572.304, paragraph (b) introductory text is amended by 
removing the words ``and Information Form.''


Sec. 572.305  [Amended]

    8. In Sec. 572.305, paragraph (b) is amended by removing the words 
``and Information Form.''


Sec. 572.306  [Amended]

    9. In Sec. 572.306, paragraph (b) is amended by removing the words 
``and Information Form.''


Sec. 572.308  [Amended]

    10. In Sec. 572.308, paragraph (b) is amended by removing the words 
``and Information Form.''


Sec. 572.309  [Amended]

    11. In Sec. 572.309, paragraph (a) introductory text, is amended by 
removing the words ``Information Form'' and the comma immediately 
thereafter.
    12. In subpart D, the heading is revised to read as follows:

Subpart D--Filing of Agreements

    13. In Sec. 572.401, the heading and paragraphs (a)(1), (a)(2), 
(c), (d), and (e) are revised to read as follows:


Sec. 572.401  General requirements.

    (a) * * *
    (1) A true copy and 7 additional copies of the filed agreement;
    (2) Where required by this part, an original and five copies of the 
completed Information Form Referenced at subpart E of this part; and
* * * * *
    (c) Any agreement which does not meet the filing requirements of 
this section, including any applicable Information Form requirements, 
shall be rejected in accordance with Sec. 572.601.
    (d) Assessment agreements shall be filed and shall be effective 
upon filing.
    (e) Parties to agreements with expiration dates shall file any

[[Page 11575]]
modification seeking renewal for a specific term or elimination of a 
termination date in sufficient time to accommodate the waiting period 
required under the Act.
* * * * *


Sec. 572.402  [Amended]

    14. In Sec. 572.402, paragraph (e)(2) is amended by revising the 
reference to ``Secs. 572.501 and 572.502'' to read ``Secs. 572.403 and 
572.404,'' paragraph (f) is amended by revising the reference to 
``Secs. 572.501(b)(3), 572.501(b)(6) and 572.502(a)(1)'' to 
``Secs. 572.403(b)(3), 572.403(b)(6) and 572.404(a)(1),'' and paragraph 
(h) is removed.


Sec. 572.403  [Redesignated as Sec. 572.405 and Amended]

    15. Section 572.405 is removed and Sec. 572.403 is redesignated 
Sec. 572.405 with paragraphs (a) and (g)(3) revised as follows:


Sec. 572.405  Modifications of agreements.

* * * * *
    (a) Agreement modifications shall be: filed in accordance with the 
provisions of 572.401 and in the format specified in 572.402; with the 
content and organization specified in 572.403 and 572.404 and in 
accordance with this section.
* * * * *
    (g) * * *
    (3) The filing of a republished agreement, as described in 
paragraph (g)(2) of this section, may be accomplished by filing only an 
executed original true copy. No Information Form requirements apply to 
the filing of a republished agreement.


Sec. 572.501  [Redesignated as Sec. 572.403 and Amended]

    16. Section 572.501 is redesignated 572.403 and paragraphs (a) and 
(b) are amended by revising the references to ``Sec. 572.502'' to read 
``Sec. 572.404.''


Sec. 572.406  [Redesignated as Sec. 572.407] 
Sec. 572.404  [Redesignated as Sec. 572.406]

    17. Section 572.406 is redesignated Sec. 572.407 and 572.404 is 
redesignated Sec. 572.406 and revised to read as follows;


Sec. 572.406  Application for waiver.

    (a) Upon showing of good cause, the Commission may waive the 
requirements of Secs. 572.401, 572.402, 572.403, 572.404 and 572.405.
    (b) Requests for such a waiver shall be submitted in advance of the 
filing of the agreement to which the requested waiver would apply and 
shall state:
    (1) The specific provisions from which relief is sought;
    (2) The special circumstances requiring the requested relief; and
    (3) Why granting the requested waiver will not substantially impair 
effective regulation of the agreement.


Sec. 572.202  [Redesignated as Sec. 572.404 and Amended]

    18. Section 572.502 of subpart E is redesignated Sec. 572.404 and 
paragraphs (a) and (b)(1) are amended by revising the reference to 
``Sec. 572.501'' to read ``Sec. 572.403.''
    19. The heading of subpart E is removed and new subpart E is added 
as follows:

Subpart E--Information Form Requirements

Sec.
572.501  General requirements.
572.502  Subject agreements.
572.503  Information form for Class A/B agreements.
572.504  Information form for Class C agreements.
572.505  Application for waiver.

Subpart E--Information Form Requirements


Sec. 572.501  General requirements.

    (a) Certain agreements must be accompanied, upon their initial 
filing, with an Information Form setting forth information and data on 
the filing parties' prior cargo carryings, revenue results and port 
service patterns.
    (b) The filing parties to an agreement subject to this subpart 
shall complete and submit an original and five copies of the applicable 
Information Form at the time the agreement is filed. Copies of the 
applicable Form may be obtained at the Office of the Secretary or by 
writing to the Secretary of the Commission.
    (c) A complete response in accordance with the instructions on the 
Information Form shall be supplied to each item. Whenever the party 
answering a particular part is unable to supply a complete response, 
that party shall provide either estimated data (with an explanation of 
why precise data are not available) or a detailed statement of reasons 
for noncompliance and the efforts made to obtain the required 
information.
    (d) The Information Form for a particular agreement may be 
supplemented with any other information or documentary material.
    (e) The Information Form and any additional information submitted 
in conjunction with the filing of a particular agreement shall not be 
disclosed except as provided in Sec. 572.608.


Sec. 572.502  Subject agreements.

    Agreements subject to this subpart are divided into two classes, 
Class A/B and Class C. When used in this subpart:
    (a) Class A/B agreement means an agreement that is one or more of 
the following:
    (1) A rate agreement as defined in Sec. 572.104(aa) and 
Sec. 572.104(bb);
    (2) A joint service agreement as defined in Sec. 572.104(o);
    (3) A pooling agreement as defined in Sec. 572.104(y);
    (4) An agreement authorizing discussion or exchange of data on 
vessel-operating costs as defined in Sec. 572.104(kk); or
    (5) An agreement authorizing regulation or discussion of service 
contracts as defined in Sec. 572.104(dd).
    (b) Class C agreement means an agreement that is one or more of the 
following:
    (1) A sailing agreement as defined in Sec. 572.104(cc); or
    (2) A space charter agreement as defined in Sec. 572.104(hh).


Sec. 572.503  Information form for Class A/B agreements.

    The Information Form for Class A/B agreements, with accompanying 
instructions that are intended to facilitate the completion of the 
Form, is set forth in appendix A of this part.
    The instructions should be read in conjunction with the Shipping 
Act of 1984 and with this part 572.


Sec. 572.504  Information form for Class C agreements.

    The Information Form for Class C agreements, with accompanying 
instructions that are intended to facilitate the completion of the 
Form, is set forth in appendix B of this part. The explanation and 
instructions should be read in conjunction with the Shipping Act of 
1984 and 46 CFR part 572.


Sec. 572.505  Application for waiver.

    (a) Upon a showing of good cause, the Commission may waive any part 
of the information form requirements of Sec. 572.503 or Sec. 572.504.
    (b) A request for such a waiver must be approved in advance of the 
filing of the information form to which the requested waiver would 
apply. The Commission will take into account the presence or absence of 
shipper complaints in considering an application for a waiver. Requests 
for a waiver shall state:
    (1) The specific requirements from which relief is sought;
    (2) The special circumstances requiring the requested relief; and
    (3) Why granting the requested waiver will not substantially impair 
effective regulation of the agreement, either during pre-implementation 
review or during post-implementation monitoring.

[[Page 11576]]

    20. In Sec. 572.601, paragraph (a) and the first sentence of 
paragraph (b)(1) are revised, as follows:


Sec. 572.601  Preliminary review--rejection of agreements.

    (a) The Commission shall make a preliminary review of each filed 
agreement to determine whether the agreement is in compliance with the 
filing requirements of the Act and this part and, where applicable, 
whether the accompanying Information Form is complete or, where not 
complete, whether the deficiency is adequately explained or is excused 
by a waiver granted by the Commission under Sec. 572.505.
    (b)(1) The Commission shall reject any agreement that otherwise 
fails to comply with the filing and Information Form requirements of 
the Act and this part. * * *
* * * * *
    21. In Sec. 572.608, paragraph (b)(2) is revised, as follows:


Sec. 572.608  Confidentiality of submitted materials.

* * * * *
    (b) * * *
    (2) It is disclosed to either body of Congress or to a duly 
authorized committee or subcommittee of Congress.
* * * * *
    22. In Sec. 572.701, paragraphs (b), (c) and (d) are removed, 
paragraph (f) is redesignated (i) and is revised, paragraph (e) is 
redesignated (f) and is revised, paragraph (a)(1) is redesignated (d) 
and is revised, paragraph (a)(2) is redesignated (e) and the second 
sentence thereof is revised, a new paragraph (a) is added, a new 
paragraph (b) is added, a new paragraph (c) is added, a new paragraph 
(g) is added, and a new paragraph (h) is added, as follows:


Sec. 572.701  General requirements.

    (a) Certain agreements are required to submit quarterly Monitoring 
Reports on an ongoing basis for as long as they remain in effect, 
setting forth information and data on the agreement member lines' cargo 
carryings, revenue results and port service patterns under the 
agreement.
    (b) Certain agreements are required to submit minutes of their 
meetings for as long as they remain in effect.
    (c) Joint Services. For purposes of the requirements of this 
Subpart, a joint service filing its own Monitoring Report shall file as 
one carrier. If a joint service is a party to another agreement that is 
otherwise subject to the requirements of this Subpart, the joint 
service shall be treated as one member of that agreement for purposes 
of that agreement's Monitoring Reports.
    (d) Address. Monitoring Reports and minutes required by this 
subpart should be addressed to the Commission as follows: Director, 
Bureau of Economics and Agreement Analysis, Federal Maritime 
Commission, Washington, DC 20573-0001. Copies of the applicable 
Monitoring Report form may be obtained from the Bureau of Economics and 
Agreement Analysis. The lower, left-hand corner of the envelope in 
which each Monitoring Report or set of minutes is forwarded should 
indicate the nature of its contents and the related agreement number. 
For example: ``Monitoring Report, Agreement 5000'' or ``Minutes, 
Agreement 5000.''
    (e) Electronic filing.  * * * Detailed information on electronic 
transmission is available from the Commission's Bureau of Economics and 
Agreement Analysis.
* * * * *
    (f) Time for filing. Monitoring Reports shall be filed within 30 
days of the end of each calendar quarter. Other documents shall be 
filed within 30 days of the end of a quarter-year, a meeting, or the 
receipt of a request for documents.
    (g) A complete response in accordance with the instructions on the 
applicable Monitoring Report shall be supplied to each item. Whenever 
the party answering a particular part is unable to supply a complete 
response, that party shall provide either estimated data (with an 
explanation of why precise data are not available) or a detailed 
statement of reasons for noncompliance and the efforts made to obtain 
the required information.
    (h) A Monitoring Report for a particular agreement may be 
supplemented with any other information or documentary material.
    (i) Confidentiality. (1) The Monitoring Reports, minutes, and any 
other additional information submitted for a particular agreement will 
be exempt from disclosure under 5 U.S.C. 552, except to the extent:
    (i) It is relevant to an administrative or judicial action or 
proceeding; or
    (ii) It is disclosed to either body of Congress or to a duly 
authorized committee or subcommittee of Congress.
    (2) Parties may voluntarily disclose or make Monitoring Reports, 
minutes or any other additional information publicly available. The 
Commission must be promptly informed of any such voluntary disclosure.


Sec. 572.202  [Redesignated as Sec. 572.706 and Amended]

    23. Section 572.702 is redesignated 572.706, the heading thereof is 
revised, and a new paragraph (d) is added, as follows:


Sec. 572.706  Filing of minutes--including shippers' requests and 
complaints, and consultations.

* * * * *
    (d) Serial numbers. (1) Each set of minutes filed with the 
Commission should be assigned a number. For example, a conference 
filing minutes of its first meeting upon the effective date of this 
rule should assign Meeting No. 1 to its minutes, the next meeting will 
be assigned Meeting No. 2, and so on.
    (2) Any conference or rate agreement which, for its own internal 
purposes, has a system for assigning sequential numbers to its minutes 
in a manner which differs from that set forth in paragraph (d)(1) of 
this section may continue to utilize its own system thereof.


Sec. 572.703  [Redesignated as Sec. 572.707 and Amended]

    24. Section 572.703 is redesignated 572.707, and the reference to 
``Sec. 572.702'' in the introductory text is revised to read 
``Sec. 572.706.''


Sec. 572.704  [Redesignated as Sec. 572.909 and Revised]

    25. Section 572.704 is redesignated 572.709 and is revised as 
follows:


Sec. 572.709  Application for waiver.

    (a) Upon a showing of good cause, the Commission may waive any 
requirement of this subpart.
    (b) A request for such a waiver must be approved in advance of the 
filing of the Monitoring Report or minutes to which the requested 
waiver would apply. The Commission will take into account the presence 
or absence of shipper complaints in considering an application for a 
waiver. Requests for a waiver shall state:
    (1) The specific requirements from which relief is sought;
    (2) the special circumstances requiring the requested relief; and
    (3) why granting the requested waiver will not substantially impair 
effective regulation of the agreement.
    26. A new Sec. 572.702 is added to read as follows:


Sec. 572.702  Agreements subject to Monitoring Report requirements.

    (a) Agreements subject to the Monitoring Report requirements of 
this subpart are divided into three classes, Class A, Class B and Class 
C. When used in this subpart:

[[Page 11577]]

    (i) Class A agreement means an agreement that is subject to the 
definition set forth in Sec. 572.502(a) and has market shares of 50 
percent or more in half or more of its sub-trades.
    (2) Class B agreement means an agreement that is subject to the 
definition set forth in Sec. 572.502(a) but does not have market shares 
of 50 percent or more in half or more of its sub-trades.
    (b) Classification of an agreement as ``Class A'' or ``Class B'' 
for purposes of its reporting obligations under this subpart shall be 
done by the Bureau of Economics and Agreement Analysis, based in the 
first instance on the market share data reported on the agreement's 
Information Form pursuant to Sec. 572.503, or on similar data otherwise 
obtained. Thereafter, at the beginning of each calendar year, the 
Bureau of Economics and Agreement Analysis shall determine whether the 
agreement should be classified as ``Class A'' or ``Class B'' for that 
year, based on the market share data reported on the agreement's 
quarterly Monitoring Report for the third quarter (July-September) of 
the previous calendar year.
    (c) Class C agreement means an agreement that is subject to the 
definition set forth in Sec. 572.502(b).
    27. A new Sec. 572.703 is added, as follows:


Sec. 572.703  Monitoring report for Class A agreements.

    The Monitoring Report form for Class A agreements, with 
accompanying instructions that are intended to facilitate the 
completion of the Report, is set forth in appendix C of this part. The 
instructions should be read in conjunction with the Shipping Act of 
1984 and with 46 CFR part 572.
    28. A new Sec. 572.704 is added, as follows:


Sec. 572.704  Monitoring report for Class B agreements.

    The Monitoring Report form for Class B agreements, with 
accompanying instructions that are intended to facilitate the 
completion of the Report, is set forth in appendix D of this part. The 
instructions should be read in conjunction with the Shipping Act of 
1984 and with 46 CFR part 572.
    29. A new Sec. 572.705 is added, as follows:


Sec. 572.705  Monitoring report for Class C agreements.

    The Monitoring Report form for Class C agreements, with 
accompanying instructions that are intended to facilitate the 
completion of the Report, is set forth in appendix E of this part. The 
explanation and instructions should be read in conjunction with the 
Shipping Act of 1984 and 46 CFR part 572.
    30. A new Sec. 572.708 is added as follows:


Sec. 572.708  Retention of records.

    Each agreement required to file minutes pursuant to this subpart 
shall retain a copy of each document listed in said minutes for a 
minimum period of 3 years after the date the document is distributed to 
the members. Such documents may be requested by the Director, Bureau of 
Economics and Agreement Analysis, in writing by reference to a specific 
minute, and shall indicate that the documents will be received in 
confidence. Requested documents shall be furnished by the parties 
within the time specified.
    31. Section 572.902 is revised as follows:


Sec. 572.702  Falsification of reports.

    Knowing falsification of any report required by the Act or this 
part, including knowing falsification of any item in any applicable 
Information Form or Monitoring Report, is a violation of the rules of 
this part and is subject to the civil penalties set forth in section 
13(a) of the Act and may be subject to the criminal penalties provided 
for in 18 U.S.C. 1001.


Sec. 572.991  [Amended]

    32. Section 572.991 is amended by revising the reference to ``the 
Paperwork Reduction Act of 1980, Public Law 96-511'' to read ``the 
Paperwork Reduction Act of 1995, Public Law 104-13'' and by revising 
the reference to ``section 3507(f)'' to read ``section 3507(a)(3).''
    33. Appendix A to Part 572 is revised to read as follows:

Appendix A to Part 572--Information Form for Class A/B Agreements and 
Instructions

Instructions

    All agreements between ocean common carriers that are Cass A/B 
agreements as defined in 46 CFR 572.502(a) must be accompanied by a 
completed Information Form for such agreements. A complete response 
must be supplied to each part of the Form. Where the party answering 
a particular part is unable to supply a complete response, that 
party shall provide either estimated data (with an explanation of 
why precise data are not available) or a detailed statement of 
reasons for noncompliance and the efforts made to obtain the 
required information. For purposes of the requirements of this Form, 
if one of the agreement signatories is a joint service operating 
under an effective agreement, that signatory shall respond to the 
Form as a single agreement party. All sources must be identified.

Part I

    Part I requires a statement of the full name of the agreement as 
also provided under 46 CFR 572.403.

Part II

    Part II requires a list of all effective agreements covering all 
or part of the geographic scope of the filed agreement, whose 
parties include one or more of the parties to the filed agreement.

Part III(A)

    Part III(A) requires a statement as to whether the agreement 
authorizes the parties to collectively fix rates under a common 
tariff, to agree upon rates on a non-binding basis, or to discuss 
rates. Such rate activities may be authorized by a conference 
agreement, an interconference agreement, an agreement among one or 
more conferences and one or more non-conference ocean common 
carriers, an agreement between two or more conference member lines, 
an agreement between one or more conference member lines and one or 
more non-conference ocean common carriers, or an agreement among two 
or more non-conference ocean common carriers.

Part III(B)

    Part III(B) requires a statement as to whether the agreement 
authorizes the parties to establish a joint service.

Part III(C)

    Part III(C) requires a statement as to whether the agreement 
authorizes the parties to pool cargo or revenues.

Part III(D)

    Part III(D) requires a statement as to whether the agreement 
authorizes the parties to discuss or exchange data on vessel-
operating costs as defined in 46 CFR 572.104(kk).

Part III(E)

    Part III(E) requires a statement as to whether the agreement 
authorizes the parties to regulate or discuss service contracts.

Part IV

    Part IV requires the market shares of all liner operators within 
the entire geographic scope of the agreement and in each sub-trade 
within the scope of the agreement, during the most recent calendar 
quarter for which complete data are available. A joint service shall 
be treated as a single liner operator, whether it is an agreement 
line or a non-agreement line. Sub-trade is defined as the scope of 
all liner movements between each U.S. port range within the scope of 
the agreement and each foreign country within the scope of the 
agreement. Where the agreement covers both U.S. inbound and outbound 
liner movements, inbound and outbound market shares should be shown 
separately.
    U.S. port ranges are defined as follows:
    Atlantic--Includes ports along the eastern seaboard from the 
northern boundary of Maine to, but not including, Key West, Florida. 
Also includes all ports bordering upon the Great Lakes and their 
connecting

[[Page 11578]]
waterways as well as all ports in the State of New York on the St. 
Lawrence River.
    Gulf--Includes all ports along the Gulf of Mexico from Key West, 
Florida, to Brownsville, Texas, inclusive. Also includes all ports 
in Puerto Rico and the U.S. Virgin Islands.
    Pacific--Includes all ports in the States of Alaska, Hawaii, 
California, Oregon and Washington. Also includes all ports in Guam, 
American Samoa, Northern Marianas, Johnston Island, Midway Island 
and Wake Island.
    An application may be filed for a waiver of the definition of 
``sub-trade,'' under the procedure described in 46 CFR 572.505. In 
any such application, the burden shall be on the filing carriers to 
show that their marketing and pricing practices have been done by 
ascertainable multi-country regions rather than by individual 
countries or, in the case of the United States, by broader areas 
than the port ranges defined herein. The carriers must further show 
that, though operating individually, they were nevertheless applying 
essentially similar regional practices.
    The formula for calculating market share in the entire agreement 
scope or in a sub-trade is as follows:
    The total amount of liner cargo carried on each liner operator's 
liner vessels in the entire agreement scope or in the sub-trade 
during the most recent calendar quarter for which complete data are 
available, divided by the total liner movements in the entire 
agreement scope or in the sub-trade during the same calendar 
quarter, which quotient is multiplied by 100. The calendar quarter 
used must be clearly identified. The market shares held by non-
agreement lines as well as by agreement lines must be provided, 
stated separately in the format indicated.
    If 50 percent or more of the total liner cargo carried by the 
agreement lines in the entire agreement scope or in the sub-trade 
during the calendar quarter was containerized, only containerized 
liner movements (measured in TEUs) must be used for determining 
market share. If 50 percent or more of the total liner cargo carried 
by the agreement lines was non-containerized, only non-containerized 
liner movements must be used for determining market share. The unit 
of measure used in calculating amounts of non-containerized cargo 
must be specified clearly and applied consistently.
    Liner movements is the carriage of liner cargo by liner 
operators. Liner cargoes are cargoes carried on liner vessels in a 
liner service. A liner operator is a vessel-operating common carrier 
engaged in liner service. Liner vessels are those vessels used in a 
liner service. Liner service refers to a definite, advertised 
schedule of sailings at regular intervals. All these definitions, 
terms and descriptions apply only for purposes of the Information 
Form.

Part V

    Part V requires, for each agreement member line that served all 
or any part of the geographic area covered by the agreement during 
all or any part of the most recent 12-month period for which 
complete data are available, a statement of each line's total liner 
cargo carryings within the geographic area, total liner revenues 
within the geographic area, and average revenue.
    If 50 percent or more of the total liner cargo carried by all 
the agreement member lines in the geographic area covered by the 
agreement during the 12-month period was containerized, each 
agreement member line should report only its total carryings of 
containerized liner cargo (measured in TEUs) within the geographic 
area, total revenues generated by its carriage of containerized 
liner cargo, and average revenue per TEU. Conversely, if 50 percent 
or more of the total liner cargo carried by all the agreement member 
lines in the geographic area covered by the agreement during the 12-
month period was non-containerized, each line should report only its 
total carryings of non-containerized liner cargo (specifying the 
unit of measurement used), total revenues generated by its carriage 
of non-containerized liner cargo, and average revenue per unit of 
measurement.
    The Information Form specifies the format in which the 
information is to be reported. Where the agreement covers both U.S. 
inbound and outbound liner movements, inbound and outbound data 
should be stated separately.

Part VI

    Part VI requires a list, for each sub-trade within the scope of 
the agreement, of the top 10 liner commodities (including 
commodities not subject to tariff filing) carried by all the 
agreement member lines during the same 12-month period used in 
responding to Part V, or a list of the commodities accounting for 50 
percent of the total liner cargo carried by all the agreement member 
lines during the 12-month period, whichever list is longer. If 50 
percent or more of the total liner cargo carried by all the 
agreement member lines in the sub-trade during the 12-month period 
was containerized, this list should include only containerized 
commodities. If 50 percent or more of the total liner cargo carried 
by all the agreement member lines in the sub-trade during the 12-
month period was non-containerized, this list should include only 
non-containerized commodities. Commodities should be identified at 
the 4-digit level of customarily used commodity coding schedules. 
Where the agreement covers both U.S. inbound and outbound liner 
movements, inbound and outbound sub-trades should be stated 
separately.

Part VII

    Part VII requires a statement of the cargo volume and revenue 
results experienced by each of the parties to the proposed agreement 
from each major commodity in each subtrade. The Information Form 
specifies the format in which the information is to be reported.

Part VIII

    Part VIII is concerned with the levels of service at each port 
within the entire geographic scope of the agreement. Each of the 
agreement lines is required to provide the number of calls it made 
at each port over the 12-month period used in responding to Parts V, 
VI and VII, and also to indicate any immediate change it plans to 
make in the nature or type of service at a particular port after the 
agreement goes into effect.

Part IX(A)

    Part IX(A) requires the name, title, address, telephone number 
and cable address, telex or fax number of a person the Commission 
may contact regarding the Information Form and any information 
provided therein.

Part IX(B)

    Part IX(B) requires the name, title, address, telephone number 
and cable address, telex or fax number of a person the Commission 
may contact regarding a request for additional information or 
documents.

Part IX(C)

    Part IX(C) requires that a representative of the agreement lines 
sign the Information Form and certify that the information in the 
Form and all attachments and appendices are, to the best of his or 
her knowledge, true, correct and complete. The representative is 
also required to indicate his or her relationship with the parties 
to the agreement.

Federal Maritime Commission

Information Form For Certain Agreements By Or Among Ocean Common 
Carriers

Agreement Number-------------------------------------------------------
(Assigned by FMC)

Part I  Agreement Name:

Part II  Other Agreements

    Lists all effective agreements covering all or part of the 
geographic scope of this agreement, whose parties include one or 
more of the parties to this agreement.

Part III  Agreement Type

    (A) Rate Agreements
    Does the agreement authorize the parties to collectively fix 
rates on a binding basis under a common tariff, or to agree upon 
rates on a non-binding basis, or to discuss rates?

Yes {time}       No {time} 

    (B) Joint Service Agreements
    Does the agreement authorize the parties to establish a joint 
service?

Yes {time}       No {time} 

    (C) Pooling Agreements
    Does the agreement authorize the parties to pool cargoes or 
revenues?

Yes {time}       No {time} 

    (D) Vessel-Operating Costs
    Does the agreement authorize the parties to discuss or exchange 
data on vessel-operating costs?

Yes {time}       No {time} 

    (E) Service Contracts
    Does the agreement authorize the parties to discuss or agree on 
service contract terms and conditions, on either a binding or non-
binding basis?

Yes {time}       No {time} 

Part IV  Market Share Information

    Provide the market shares of all liner operators within the 
entire scope of the agreement and within each agreement sub-trade 
during the most recent calendar quarter

[[Page 11579]]
for which complete data are available. The information should be 
provided in the format below:

Market Share Report for (Indicate Either Entire Agreement Scope, or Sub-
                         Trade Name) Time Period                        
------------------------------------------------------------------------
                                                    TEUs or             
                                                   other unit           
                                                       of       Percent 
                                                  measurement           
------------------------------------------------------------------------
Agreement Market Share:                                                 
  Line A........................................       X,XXX          XX
  Line B........................................       X,XXX          XX
  Line C........................................       X,XXX          XX
                                                 -----------------------
    Total Agreement Market Share................       X,XXX          XX
                                                 -----------------------
Non-Agreement Market Share:                                             
  Line X........................................       X,XXX          XX
  Line Y........................................       X,XXX          XX
  Line Z........................................       X,XXX          XX
                                                 -----------------------
    Total Non-Agreement Market Share............       X,XXX          XX
                                                 -----------------------
      Total Market..............................       X,XXX         100
------------------------------------------------------------------------

Part V  Cargo and Revenue Results Agreement-Wide

    For each party that served all or any part of the geographic 
area covered by the entire agreement during all or any part of the 
most recent 12-month period for which complete data are available, 
state total cargo carrying in TEUs or other unit of measurement 
within the entire geographic area, total revenues within the 
geographic area, and average revenue per TEU or other unit of 
measurement. The same 12-month period must be used for each party. 
The information should be provided in the format below:

                               Time Period                              
------------------------------------------------------------------------
                                                                 Avg.   
                                       Total TEUs            revenue per
                                        or other     Total      TEU or  
               Carrier                  unit of    revenues   other unit
                                      measurement                 of    
                                                             measurement
------------------------------------------------------------------------
A...................................  ...........   $           $       
B...................................  ...........   $           $       
C...................................  ...........   $           $       
Etc.................................  ...........   $           $       
------------------------------------------------------------------------

Part VI  Leading Commodities

    For each sub-trade within the scope of the agreement, list the 
top 10 commodities carried by all the parties during the same time 
period used in responding to Part V, or list the commodities 
accounting for 50 percent of the total carried by all the parties 
during the same 12-month period, whichever list is longer. The same 
12-month period must be used in reporting for each sub-trade. The 
information should be provided in the format below:
    Time Period (Same as That Used in Responding to Part V)

I. Sub-Trade

    A. First leading commodity
    B. Second leading commodity
    C. Third leading commodity etc.

II. Sub-Trade

    A. First leading commodity etc.

Part VII  Cargo and Revenue Results by Sub-Trade

    For the same time period used in responding to Parts V and VI, 
and for each sub-trade within the scope of the agreement, and for 
each of the leading commodities listed for each sub-trade in the 
response to Part VI, and for each party, state the total TEUs (or 
other unit of measurement) carried and average gross revenue per TEU 
(or other unit of measurement).
    The information should be provided in the format below:

Time Period (Same as That Used in Responding to Part V)

I. Sub-trade A
    A. First leading commodity
    1. Carrier A
    (a) Total TEUs (or other unit of measurement) carried
    (b) Average gross revenue per TEU (or other unit of measurement)
    2. Carrier B
    (a) etc.
    B. Second leading commodity
    1. Carrier A
    (a) etc.
II. Sub-trade B
    A. First leading commodity
    1. etc.

Part VIII  Port Service

    For each port within the entire geographic scope of the 
agreement, state the number of port calls by each of the parties 
over the same time period used in responding to Parts V, VI and VII. 
The information should be provided in the format below:

                                                   Time Period                                                  
                                   [Same as that used in responding to Part V]                                  
----------------------------------------------------------------------------------------------------------------
                                                     Port         Port         Port         Port         Port   
----------------------------------------------------------------------------------------------------------------
Carrier A......................................                                                                 
Carrier B......................................                                                                 
Carrier C......................................                                                                 
Etc............................................                                                                 
----------------------------------------------------------------------------------------------------------------

    Also, for each party, indicate any planned change in the nature 
or type of service (such as base port designation, frequency of 
vessel calls, use of indirect rather than direct service, etc.) to 
be effected at any port within the entire geographic scope of the 
agreement after the effective date of the agreement.

Part IX

    (A) Identification of Person(s) to Contact Regarding the 
Information Form

(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------

    (B) Identification of an Individual Located in the United States 
Designated for the Limited Purpose of Receiving Notice of an 
Issuance of a Request for Additional Information or Documents (see 
46 CFR 572.606).

(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------

    (C) Certification
    This Information Form, together with any and all appendices and 
attachments thereto, was prepared and assembled in accordance with 
instructions issued by the Federal Maritime Commission. The 
information is, to the best of my knowledge, true, correct, and 
complete.

Name (please print or type)
----------------------------------------------------------------------
Title------------------------------------------------------------------
Relationship with parties to agreement
----------------------------------------------------------------------
----------------------------------------------------------------------
Signature--------------------------------------------------------------
Date-------------------------------------------------------------------

    34. A new appendix B to part 572 is added to read as follows:

Appendix B to Part 572--Information Form for Class C Agreements and 
Instructions.

Instructions

    All agreements between or among ocean common carriers that are 
Class C agreements as defined in 46 CFR 572.502(b) must be

[[Page 11580]]
accompanied by a completed Information Form for such agreements. A 
complete response must be supplied to the Form. Where the filing 
party is unable to supply a complete response, that party shall 
provide either estimated data (with an explanation of why precise 
data are not available) or a detailed statement of reasons for 
noncompliance and the efforts made to obtain the required 
information. For purposes of the requirements of this Form, if one 
of the agreement signatories is a joint service operating under an 
effective agreement, that signatory shall respond to the Form as a 
single agreement party. All sources must be identified.

Part I

    Part I requires a statement of the full name of the agreement as 
also provided under 46 CFR 572.403.

Part II

    Part II requires a list of all effective agreements covering all 
or part of the geographic scope of the filed agreement, whose 
parties include one or more of the parties to the filed agreement.

Part III

    Part III is concerned with the level of service at each port 
within the entire geographic scope of the agreement. Each agreement 
line is required to state the number of calls it made at each port 
over the most recent 12-month period for which complete data are 
available, and also to indicate any immediate change it plans to 
make in the nature or type of service at a particular port after the 
agreement goes into effect.

Part IV(A)

    Part IV(A) requires the name, title, address, telephone number 
and cable address, telex or fax number of a person the Commission 
may contact regarding the Information Form and any information 
provided therein.

Part IV(B)

    Part IV(B) requires the name, title, address, telephone number 
and cable address, telex or fax number of a person the Commission 
may contact regarding a request for additional information or 
documents.

Part IV(C)

    Part IV(C) requires that a representative of the agreement lines 
sign the Information Form and certify that the information in the 
Form and all attachments and appendices are, to the best of his or 
her knowledge, true, correct and complete. The representative is 
also required to indicate his or her relationship with the parties 
to the agreement.

Federal Maritime Commission

Information Form For Certain Agreements By or Among Ocean Common 
Carriers

Agreement Number-------------------------------------------------------
(Assigned by FMC)
Part I Agreement Name:
----------------------------------------------------------------------

Part II  Other Agreements

    List all effective agreements covering all or part of the 
geographic scope of this agreement, whose parties include one or 
more of the parties to this agreement.

Part III Port Service

    For each port within the entire geographic scope of the 
agreement, state the number of port calls by each of the parties 
over the most recent 12-month period for which complete data are 
available. The information should be provided in the format below.

                                                   Time Period                                                  
----------------------------------------------------------------------------------------------------------------
                                                     Port         Port         Port         Port         Port   
----------------------------------------------------------------------------------------------------------------
Carrier A                                                                                                       
Carrier B                                                                                                       
Carrier C                                                                                                       
Etc............................................                                                                 
----------------------------------------------------------------------------------------------------------------

    Also, for each party, indicate any planned change in the nature 
or type of service (such as base port designation, frequency of 
vessel calls, use of indirect rather than direct service, etc.) to 
be effected at any port within the entire geographic scope of the 
agreement after the effective date of the agreement.

Part IV

    (A) Identification of Person(s) to Contact Regarding the 
Information Form
(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------

    (B) Identification of an Individual Located in the United States 
Designated for the Limited Purpose of Receiving Notice of an 
Issuance of a Request for Additional Information or Documents (see 
46 CFR 572.606).
(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------

    (C) Certification
    This Information Form, together with any and all appendices and 
attachments thereto, was prepared and assembled in accordance with 
instructions issued by the Federal Maritime Commission. The 
information is, to the best of my knowledge, true, correct, and 
complete.

Name (please print or type)
----------------------------------------------------------------------
Title------------------------------------------------------------------
Relationship with parties to agreement
----------------------------------------------------------------------
Signature--------------------------------------------------------------
Date-------------------------------------------------------------------

    36. A new appendix C to part 572 is added to read as follows:

Appendix C to Part 572--Monitoring Report for Class A Agreements and 
Instructions

Instructions

    A complete response must be supplied to each part of the Report. 
Where the party answering a particular part is unable to supply a 
complete response, that party shall provide either estimated data 
(with an explanation of why precise data are not available) or a 
detailed statement of reasons for noncompliance and the efforts made 
to obtain the required information. All sources must be identified.

Part I

    Part I requires a statement of the full name of the agreement, 
and the assigned FMC number.

Part II

    Part II requires a statement of any change occurring during the 
calendar quarter to the list of other agreements set forth in Part 
II of the Information Form.

Part III

    Part III requires the filing party to indicate whether the 
agreement authorizes the parties to operate as a conference.

Part IV

    Part IV requires the market shares of all liner operators within 
the entire geographic scope of the agreement and in each sub-trade 
within the scope of the agreement during the calendar quarter. A 
joint service shall be treated as a single liner operator, whether 
it is an agreement line or a non-agreement line.
    Sub-trade is defined as the scope of all liner movements between 
each U.S. port range within the scope of the agreement and each 
foreign country within the scope of the agreement. Where the 
agreement covers both U.S. inbound and outbound line movements, 
inbound and outbound market shares should be shown separately.
    U.S. port ranges are defined as follows:
    Atlantic--Includes ports along the eastern seaboard from the 
northern boundary of

[[Page 11581]]
Maine to, but not including, Key West, Florida. Also includes all 
ports bordering upon the Great Lakes and their connecting waterways 
as well as all ports in the State of New York on the St. Lawrence 
River.
    Gulf--Includes all ports along the Gulf of Mexico from Key West, 
Florida, to Brownsville, Texas, inclusive. Also includes all ports 
in Puerto Rico and the U.S. Virgin Islands.
    Pacific--Includes all ports in the States of Alaska, Hawaii, 
California, Oregon and Washington. Also includes all ports in Guam, 
American Samoa, Northern Marinas, Johnston Island, Midway Island and 
Wake Island.
    An application may be filed for a waiver of the definition of 
``sub-trade,'' under the provisions described in 46 CFR 572.709. In 
any such application, the burden shall be on the agreement carriers 
to show that their marketing and pricing practices are done by 
ascertainable multi-country regions rather than by individual 
countries or, in the case of the United States, by broader areas 
than the port ranges defined herein. The Commission will also 
consider whether the alternate definition of ``sub-trade'' requested 
by the waiver application is reasonably consistent with the 
definition of ``sub-trade'' applied in the original Information Form 
filing for the agreement.
    The formula for calculating market share in the entire agreement 
scope or in a sub-trade is as follows:
    The total amount of liner cargo carried on each liner operator's 
liner vessels in the entire agreement scope or in the sub-trade 
during the calendar quarter, divided by the total liner movements in 
the entire agreement scope or in the sub-trade during the calendar 
quarter, which quotient is multiplied by 100. The market shares held 
by non-agreement lines as well as by agreement lines must be 
provided, stated separately in the format indicated.
    If 50 percent or more of the total liner cargo carried by the 
agreement lines in the entire agreement scope or in the sub-trade 
during the calendar quarter was containerized, only containerized 
liner movements (measured in TEUs) must be used for determining 
market share. If 50 percent or more of the total liner cargo carried 
by the agreement lines was non-containerized, only non-containerized 
liner movements must be used for determining market share. The unit 
of measure used in calculating amounts of non-containerized cargo 
must be specified clearly and applied consistently.
    Liner movements is the carriage of liner cargo by liner 
operators. Liner cargoes are cargoes carried on liner vessels in a 
liner service. A liner operator is a vessel-operating common carrier 
engaged in liner service. Liner vessels are those vessels used in a 
liner service. Liner service refers to a definite, advertised 
schedule of sailings at regular intervals. All these definitions, 
terms and descriptions apply only for purposes of the Monitoring 
Report.

Part V

    Part V requires each agreement member line's total liner cargo 
carryings within the entire geographic area covered by the agreement 
during the calendar quarter, each line's total liner revenues within 
the geographic area during the calendar quarter, and average 
revenue.
    If 50 percent or more of the total liner cargo carried by all 
the agreement member lines in the geographic area covered by the 
agreement during the calendar quarter was containerized, each 
agreement member line should report only its total carryings of 
containerized liner cargo (measured in TEUs) during the calendar 
quarter within the geographic area, total revenues generated by its 
carriage of containerized liner cargo, and average revenue per TEU. 
Conversely, if 50 percent or more of the total liner cargo carried 
by all the agreement member lines in the geographic area covered by 
the agreement during the calendar quarter was non-containerized, 
each agreement member line should report only its total carryings of 
non-containerized liner cargo during the calendar quarter 
(specifying the unit of measurement used), total revenues generated 
by its carriage of noncontainerized liner cargo, and average revenue 
per unit of measurement.
    The Monitoring Report specifies the format in which the 
information is to be reported. Where the agreement covers both U.S. 
inbound and outbound liner movements, inbound and outbound data 
should be stated separately.

Part VI

    Part VI requires a list, for each sub-trade within the scope of 
the agreement, of the top 10 liner commodities (including 
commodities not subject to tariff filing) carried by all the 
agreement member lines during the calendar quarter, or a list of the 
commodities accounting for 50 percent of the total liner cargo 
carried by all the agreement member lines during the calendar 
quarter, whichever list is longer. If 50 percent or more of the 
total liner cargo carried by all the agreement member lines in the 
sub-trade during the calendar quarter was containerized, this list 
should include only containerized commodities. If 50 percent or more 
of the total liner cargo carried by all the agreement member lines 
in the sub-trade during the calendar quarter was noncontainerized, 
this list should include only non-containerized commodities. 
Commodities should be identified at the 4-digit level of customarily 
used commodity coding schedules. Where the agreement covers both 
U.S. inbound and outbound liner movements, inbound and outbound sub-
trades should be stated separately.

Part VII

    Part VII requires a statement of the cargo volume and revenue 
results experience by each of the agreement lines from each major 
commodity in each sub-trade during the calendar quarter. The 
Monitoring Report specifies the format in which the information is 
to be reported.

Part VIII

    Part VIII is required to be completed if Part III is answered 
``YES.'' Each conference line is required to indicate the extent to 
which it has taken independent rate actions on each of the leading 
commodities in each of the sub-trades. Part VIII also inquires into 
the type of shipper for whom independent rate actions have been 
taken. The Monitoring Report specifies the format in which the 
information is to be reported.

Part IX

    Part IX requires each of the agreement lines to indicate any 
change in the nature or type of service it provided at any port 
within the entire geographic range of the agreement during the 
calendar quarter.

Part X(A)

    Part X(A) requires the name, title, address, telephone number 
and cable address, telex or fax number of a person the Commission 
may contact regarding the Monitoring Report and any information 
provided therein.

Part X(B)

    Part X(B) requires that a representative of the agreement lines 
sign the Monitoring Report and certify that the information in the 
Report and all attachments and appendices are, to the best of his or 
her knowledge, true, correct and complete. The representative is 
also required to indicate his or her relationship with the parties 
to the agreement.

Federal Maritime Commission

Monitoring Report For Class A agreements Between or Among Ocean Common 
Carriers

Agreement Number-------------------------------------------------------
(Assigned by FMC)
Part I Agreement Name:

----------------------------------------------------------------------

Part II Other Agreements

    Indicate any change occurring during the calendar quarter to the 
list of other agreements set forth in Part II of the Information 
Form.

Part III  Conference Agreements

    Does the agreement authorize the parties to operate as a 
conference?

Yes {time}       No {time} 

Part IV  Market Share Information

    Provide the market shares of all liner operators within the 
entire geographic scope of the agreement and within each agreement 
sub-trade during the calendar quarter. The information should be 
provided in the format below:

                Market Share Report for Calendar Quarter                
       [Indicate either entire agreement scope, or sub-trade name]      
------------------------------------------------------------------------
                                                  TEUs or               
                                                 other unit             
                                                     of        Percent  
                                                measurement             
------------------------------------------------------------------------
Agreement Market Share:                                                 
  Line A......................................        X,XXX          XX%
  Line B......................................        X,XXX          XX%
  Line C......................................        X,XXX          XX%
                                               -------------------------

[[Page 11582]]
                                                                        
      Total Agreement Market Share............        X,XXX          XX%
Non-Agreement Market Share:                                             
  Line X......................................        X,XXX          XX%
  Line Y......................................        X,XXX          XX%
  Line Z......................................        X,XXX          XX%
                                               -------------------------
      Total Non-Agreement Market Share........        X,XXX          XX%
      Total Market............................        X,XXX         100%
------------------------------------------------------------------------



Part V  Cargo and Revenue Results Agreement-Wide

    For each agreement member line, provide total cargo carryings 
(measured in TEUs or other unit of measurement) during the calendar 
quarter within the entire geographic area covered by the agreement, 
total revenues within the geographic area during the calendar 
quarter, and average revenue per TEU or other unit of measurement. 
The information should be provided in the format below:

                            Calendar Quarter                            
------------------------------------------------------------------------
                                                                 Acg.   
                                       Total TEUs            Revenue per
                                        or other     Total      TEU or  
               Carrier                  unit of    revenues   other unit
                                      measurement                 of    
                                                             measurement
------------------------------------------------------------------------
A...................................  ...........   $           $       
B...................................  ...........   $           $       
C...................................  ...........   $           $       
Etc.................................  ...........   $           $       
------------------------------------------------------------------------

Part VI  Leading Commodities

    For each sub-trade within the scope of the agreement, list the 
top 10 commodities carried by all the parties during the calendar 
quarter, or list the commodities accounting for 50 percent of the 
total carried by all the parties during the calendar quarter, 
whichever list is longer. The information should be provided in the 
format below:

Calendar Quarter

I. Sub-trade
    A. First leading commodity
    B. Second leading commodity
    C. Third leading commodity etc.
II. Sub-trade
    A. First leading commodity etc.

Part VIII  Cargo and Revenue Results by Sub-Trade

    For each sub-trade within the scope of the agreement, and for 
each of the leading commodities listed for each sub-trade in the 
response to Part VI, and for each party, state the total TEUs (or 
other unit of measurement) carried and average gross revenue per TEU 
(or other unit of measurement).
    The information should be provided in the format below:

Calendar Quarter

I. Sub-trade A
    A. First leading commodity
    1. Carrier A
    (a) Total TEUs (or other units of measurement) carried
    (b) Average gross revenue per TEU (or other unit of measurement)
    2. Carrier B)
    (a) etc.
II. Sub-trade B
    A. First leading commodity
    1. etc.

Part VIII  Independent Rate Actions (if applicable)

    For each sub-trade within the scope of the agreement, and for 
each of the leading commodities listed for each sub-trade in the 
response to Part VI, and for each party, state (a) the total number 
of independent rate actions taken during the calendar quarter 
applicable to that commodity moving in that sub-trade; (b) how many 
of the total were independent rate actions taken to service specific 
shipper accounts; (c) of those, how many were for non-vessel-
operating common carriers, and how many were for shippers' 
associations. The information should be provided in the format 
below:

Calendar Quarter

I. Sub-trade A
    A. First leading commodity
    1. Carrier A
    (a) Number of IA rate actions
    (i) Number of IA rate actions taken to service specific shipper 
accounts
    (i)(a) Number taken to service non-vessel-operating common 
carrier accounts
    (1)(b) Number taken to service shippers' association accounts
    2. Carrier B
    (a) etc.
    B. Second leading commodity
    1. Carrier A
    (a) etc.
II. Sub-trade B
    A. First leading commodity
    1. etc.

Part IX  Port Service

    For each party, state any change in the nature or type of 
service (such as base port designation, frequency of vessel calls, 
use of indirect rather than direct service, etc.) effected at any 
port within the entire geographic scope of the agreement during the 
calendar quarter.

Part X

(A) Identification of Person(s) to Contact Regarding the Monitoring 
Report
(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------
(B) Certification

    This Monitoring Report, together with any and all appendices and 
attachments thereto, was prepared and assembled in accordance with 
instructions issued by the Federal Maritime Commission. The 
information is, to the best of my knowledge, true, correct, and 
complete.

Name (please print or type)
----------------------------------------------------------------------
Title------------------------------------------------------------------
Relationship with parties to agreement
----------------------------------------------------------------------
Signature--------------------------------------------------------------
Date-------------------------------------------------------------------

    37. A new appendix D to Part 572 is added to read as follows:

Appendix D to Part 572--Monitoring Report for Class B Agreements and 
Instructions.

Instructions

    A complete response must be supplied to each part of the Report. 
Where the party answering a particular part is unable to supply a 
complete response, that party shall provide either estimated data 
(with an explanation of why precise data are not available) or a 
detailed statement of reasons for noncompliance and the efforts made 
to obtain the required information. All sources must be identified.

Part I

    Part I requires a statement of the full name of the agreement, 
and the assigned FMC number.

Part II

    Part II requires a statement of any change occurring during the 
calendar quarter to the list of other agreements set forth in Part 
II of the Information Form.

Part III

    Part III requires the market shares of all liner operators 
within the entire geographic scope of the agreement and in each sub-
trade within the scope of the agreement during the calendar quarter. 
A joint service shall be treated as a single liner operator, whether 
it is an agreement line or a non-agreement line.
    Sub-trade is defined as the scope of all liner movements between 
each U.S. port range within the scope of the agreement and each 
foreign country within the scope of the agreement. Where the 
agreement covers both U.S. inbound and outbound liner movements, 
inbound and outbound market shares should be shown separately.
    U.S. port ranges are defined as follows:
    Atlantic--Includes ports along the eastern seaboard from the 
northern boundary of Maine to, but not including, Key West, Florida. 
Also includes all ports bordering

[[Page 11583]]
upon the Great Lakes and their connecting waterways as well as all 
ports in the State of New York on the St. Lawrence River.
    Gulf--Includes all ports along the Gulf of Mexico from Key West, 
Florida, to Brownsville, Texas, inclusive. Also includes all ports 
in Puerto Rico and U.S. Virgin Islands.
    Pacific--Includes all ports in the State of Alaska, Hawaii, 
California, Oregon and Washington. Also includes all ports in Guam, 
American Samoa, Northern Marinas, Johnston Island, Midway Island and 
Wake Island.
    An application may be filed for a waiver of the definition of 
``sub-trade,'' under the provisions described in 46 CFR 572.709. In 
any such application, the burden shall be on the agreement carriers 
to show that their marketing and pricing practices are done by 
ascertainable multi-country regions rather than by individuals 
countries or, in the case of the United States, by broader areas 
than the port ranges defined herein. The Commission will also 
consider whether the alternate definition of ``sub-trade'' requested 
by the waiver application is reasonably consistent with the 
definition of ``sub-trade'' applied in the original Information Form 
filing for the agreement.
    The formula for calculating market share in the entire agreement 
scope or in a sub-trade is as follows:
    The total amount of liner cargo carried on each liner operator's 
liner vessels in the entire agreement scope or in the sub-trade 
during the calendar quarter, divided by the total liner movement in 
the entire agreement scope or in the sub-trade during the calendar 
quarter, which quotient is multiplied by 100. The market shares held 
by non-agreement lines as by agreement lines must be provided, 
stated separately in the format indicated.
    If 50 percent or more of the total liner cargo carried by the 
agreement lines in the entire agreement scope or in the sub-trade 
during the calendar quarter was containerized, only containerized 
liner movements (measured in TEUs) must be used for determining 
market share. If 50 percent or more of the total liner cargo carried 
by the agreement lines was non-containerized cargo, only non-
containerized liner movements must be used for determining market 
share. The unit of measure used in calculating amounts of non-
containerized cargo must be specified clearly and applied 
consistently.
    Liner movements is the carriage of liner cargo by liner 
operators. Liner cargoes are cargoes carried on liner vessels in a 
liner service. A liner operator is a vessel-operating common carrier 
engaged in liner service. Liner vessels are those vessels used in a 
liner service. Liner service refers to a definite, advertised 
schedule of salings at regular intervals. All these definitions, 
terms and descriptions apply only for purposes of the Monitoring 
Report.

Part IV

    Part IV requires each agreement member line's total liner cargo 
carrying within the entire geographic area covered by the agreement 
during the calendar quarter, each line's total liner revenues within 
the geographic area during the calendar quarter, and average 
revenue.
    If 50 percent or more of the total liner cargo carried by all 
the agreement member lines in the geographic area covered by the 
agreement during the calendar quarter was containerized, each 
agreement member line should report only its total carrying of 
containerized liner cargo (measured in TEUs) during the calender 
quarter within the geographic area, total revenues generated by its 
carriage of containerized liner cargo, and average revenue per TEU. 
Conversely, if 50 percent or more of the total liner cargo carried 
by all the agreement member lines in the geographic area covered by 
the agreement during the calendar quarter was non-containerized, 
each agreement member line should report only its total carryings of 
non-containerized liner cargo during the calendar quarter 
(specifying the unit of measurement used), total revenues generated 
by its carriage of non-containerized cargo, and average revenue per 
unit of measurement.
    The Monitoring Report specifies the format in which the 
information is to be reported. Where the agreement covers both U.S. 
inbound and outbound liner movements, inbound and outbound data 
should be stated separately.

Part V

    Part V requires each of the agreement member lines to indicate 
any change in the nature or type of service it provided at any port 
within the entire geographic scope of the agreement during the 
calendar quarter.

Part VI(A)

    Part VI(A) requires the name, title, address, telephone number 
and cable address, telex or fax number of a person the Commission 
may contact regarding the Monitoring Report and any information 
provided therein.

Part VI(B)

    Part VI(B) requires that a representative of the agreement lines 
sign the Monitoring Report and certify that the information in the 
Report and all attachments and appendices are, to the best of his or 
her knowledge, true, correct and complete. The representative is 
also required to indicate his or her relationship with the parties 
to the agreement.

Federal Maritime Commission

Monitoring Report For Class B Agreements Between or Among Ocean Common 
Carriers

Agreement Number-------------------------------------------------------
(Assigned by FMC)

Part I  Agreement

Name:
----------------------------------------------------------------------

Part II  Other Agreements

    Indicate any change occurring during the calendar quarter to the 
list of other agreements set forth in Part II of the Information 
Form.

Part III  Market Share Information

    Provide the market shares of all liner operators within the 
entire geographic scope of the agreement and within each sub-trade 
during the calendar quarter. The information should be provided in 
the format below:

                Market Share Report for Calendar Quarter                
       [Indicate either entire agreement scope, or sub-trade name]      
------------------------------------------------------------------------
                                                    TEUs or             
                                                   other unit           
                                                       of       Percent 
                                                  measurement           
------------------------------------------------------------------------
Agreement Market Share:                                                 
Line A..........................................       X,XXX          XX
Line B..........................................       X,XXX          XX
Line C..........................................       X,XXX          XX
                                                 -----------------------
  Total Agreement Market Share..................       X,XXX          XX
                                                 =======================
Non-Agreement Market Share:                                             
Line X..........................................       X,XXX          XX
Line Y..........................................       X,XXX          XX
Line Z..........................................       X,XXX          XX
                                                 -----------------------
  Total Non-Agreement Market Share..............       X,XXX          XX
  Total Market..................................       X,XXX         100
------------------------------------------------------------------------

Part IV  Cargo and Revenue Results Agreement-Wide

    For each agreement member line, provide total cargo carryings 
(measured in TEUs or other unit of measurement) during the calendar 
quarter within the entire geographic area covered by the agreement, 
total revenues within the geographic area during the calendar 
quarter, and average revenue per TEU or other unit of measurement. 
The information should be provided in the format below:

                            Calendar Quarter                            
------------------------------------------------------------------------
                                                                 Avg.   
                                       Total TEUs            revenue per
                                        or other     Total      TEU or  
               Carrier                  unit of    revenues   other unit
                                      measurement                 of    
                                                             measurement
------------------------------------------------------------------------
A...................................  ...........   $           $       
B...................................  ...........   $           $       
C...................................  ...........   $           $       
Etc.................................  ...........   $           $       
------------------------------------------------------------------------

Part V  Port Service

    For each party, state any change in the nature or type of 
service (such as base port designation, frequency of vessel calls, 
use of indirect rather direct service, etc.) effected at any port 
within the entire geographic scope of the agreement during the 
calendar quarter.

Part VI

(A) Identification of Person(s) to Contact Regarding the Monitoring 
Report

(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number

[[Page 11584]]

----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------
(B) Certification

    This Monitoring Report, together with any and all appendices and 
attachments thereto, was prepared and assembled in accordance with 
instructions issued by the Federal Maritime Commission. The 
information is, to the best of my knowledge, true, correct, and 
complete.

Name (please print or type)
----------------------------------------------------------------------
Title------------------------------------------------------------------
Relationship with parties to agreement
----------------------------------------------------------------------
Signature--------------------------------------------------------------
Date-------------------------------------------------------------------

    38. A new appendix E to part 572 is added to read as follows:

Appendix E to Part 572--Monitoring Report for Class C Agreements and 
Instructions

Instructions

    A complete response must be supplied to the Report. Where the 
filing party is unable to supply a complete response, that party 
shall provide either estimated data (with an explanation of why 
precise data are not available) or a detailed statement of reasons 
for noncompliance and the efforts made to obtain the required 
information. All sources must be identified.

Part I

    Part I requires a statement of the full name of the agreement, 
and the assigned FMC number.

Part II

    Part II requires a statement of any change occurring during the 
calendar quarter to the list of other agreements set forth in Part 
II of the Information Form.

Part III

    Part III requires a statement of any change in the nature or 
type of service at any of the ports within the entire geographic 
scope of the agreement.

Part IV(A)

    Part IV(A) requires the name, title, address, telephone number 
and cable address, telex or fax number of a person the Commission 
may contact regarding the Monitoring Report and any information 
provided therein.

Part IV(B)

    Part IV(B) requires that a representative of the agreement lines 
sign the Monitoring Report and certify that the information in the 
Report and all attachments and appendices are, to the best of his or 
her knowledge, true, correct and complete. The representative is 
also required to indicate his or her relationship with the parties 
to the agreement.

Federal Maritime Commission

Monitoring Report For Class C Agreements Between or Among Ocean Common 
Carriers

Agreement Number-------------------------------------------------------
(Assigned by FMC)

Part I  Agreement

Name:
----------------------------------------------------------------------

Part II  Other Agreements

    Indicate any change occurring during the calendar quarter to the 
list of other agreements set forth in Part II of the Information 
Form.

Part III  Port Service

    For each party, state any change in the nature or type of 
service (such as base port designation, frequency of vessel calls, 
use of indirect rather direct service, etc.) effected at any port 
within the entire geographic scope of the agreement during the 
calendar quarter.

Part IV

(A) Identification of Person(s) to Contact Regarding the Monitoring 
Report

(1) Name---------------------------------------------------------------
(2) Title--------------------------------------------------------------
(3) Firm Name and Business
----------------------------------------------------------------------
(4) Business Telephone Number
----------------------------------------------------------------------
(5) Cable Address, Telex or Fax Number
----------------------------------------------------------------------
(B) Certification

    This Monitoring Report, together with any and all appendices and 
attachments thereto, was prepared and assembled in accordance with 
instruments issued by the Federal Maritime Commission. The 
information is, to the best of my knowledge, true, correct, and 
complete.

Name (please print or type)
----------------------------------------------------------------------
Title------------------------------------------------------------------
Relationship with parties to agreement
----------------------------------------------------------------------
----------------------------------------------------------------------
Signature--------------------------------------------------------------
Date-------------------------------------------------------------------

    By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 96-6600 Filed 3-20-96; 8:45 am]
BILLING CODE 6730-01-M