[Federal Register Volume 62, Number 47 (Tuesday, March 11, 1997)]
[Notices]
[Pages 11198-11199]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6038]


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FEDERAL MARITIME COMMISSION
[Docket No. 97-04]


Ever Freight International Ltd., Sigma Express Inc., and Mario F. 
Chavarria dba Transcargo Intl.--Possible Violations of Sections 
10(a)(1) and 10(b)(1) of the Shipping Act of 1984; Order of 
Investigation and Hearing

    Ever Freight International Ltd. (``Ever Freight'') is a tariffed 
and bonded non-vessel-operating common carrier (NVOCC) located at 18th 
Floor, Kam Sang Building, 255-257 Des Voeux Road Central, Sheung Wan in 
Hong Kong. Ever Freight holds itself out as an NVOCC pursuant to its 
ATFI tariff FMC No. 001, filed June 17, 1996.
    Ever Freight currently maintains an NVOCC bond, No. 8941414, in the 
amount of $50,000 with the Washington International Insurance Company, 
located in Schaumburg, Illinois. Pursuant to Rule 24 of Ever Freight's 
tariff, Washington International Insurance Company also serves as the 
U.S. resident agent for purposes of receiving service of process on 
behalf of Ever Freight International Ltd.
    Ever Freight is believed to have been established by former 
employees of Goldline Ltd., an NVOCC which has operated without a 
tariff or bond since May 1995.\1\ Likewise, Ever Freight is believed to 
have operated as an NVOCC from March 1996 through June 16, 1996 without 
benefit of the bond or tariff required by the 1984 Act. During that 
period and at times subsequent to the filing of its tariff and bond, 
Ever Freight participated in numerous apparent acts of misdescription 
of cargo on shipments from Hong Kong to the U.S., in concert with U.S. 
consignees Sigma Express Inc. and Mario F. Chavarria d/b/a/ Transcargo 
International, among others.
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    \1\ Goldline currently operates under the name Comm-Sino Ltd. 
but has adopted numerous pseudonyms in the past, including Harvesta 
Ltd., Gain Sharp Trading, Truest Ltd., Vastmas Intl. Ltd. and 
Wellsources Ltd. A formal investigation, FMC Docket No. 96-19, is 
presently underway as to Comm-Sino, alleging violations of sections 
10(a)(1) and 10(b)(1).
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    Respondent Sigma Express Inc. (``Sigma Express'') is a tariffed and 
bonded NVOCC located at 11222 La Cienaga Blvd., Suite 330, Inglewood, 
California 90304. The President of Sigma Express is Echo Tsai. As 
relevant herein, Sigma Express acts as the U.S. consignee and notify 
party on certain inbound NVOCC shipments from Ever Freight.
    Respondent Mario F. Chavarria is a licensed ocean freight forwarder 
(FMC license No. 4175) and a tariffed and bonded NVOCC doing business 
as Transcargo International (``Transcargo''). Transcargo's offices are 
located at 5155 Rosecrans Avenue, Suite 110, Hawthorne, California 
90250. As relevant herein, Transcargo acts as the U.S. consignee and 
notify party on certain inbound NVOCC shipments from Ever Freight.
    It appears that Ever Freight, acting as shipper in relation to an 
ocean common carrier, misdescribed the commodity on numerous shipments 
transported by an ocean common carrier between March 1, 1996 and 
December 31, 1996.\2\ The shipments primarily originated in Hong Kong, 
and were destined for Los Angeles and other U.S. ports and points. In 
each of these instances, Ever Freight was listed as shipper on the 
ocean carrier's bill of lading, and Ever Freight destination agents in 
the U.S., including respondents Sigma Express and Transcargo, acted as 
the consignee or notify party. Each shipment generally reflects that an 
Ever Freight ``house'', or NVOCC, bill of lading was issued for tender 
by the ultimate consignee to Ever Freight's agent upon arrival of the 
cargo at destination, which correctly describes the commodity shipped.
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    \2\ Based on import data available from the PIERS subsidiary of 
the Journal of Commerce, Ever Freight has acted as shipper on over 
1100 inbound shipments during the nine month period ending November 
1996, accounting for nearly 2700 TEUs of cargo. PIERS reports that 
the primary ocean common carriers transporting cargo on behalf of 
Ever Freight are Sea-Land and Hanjin Shipping, which together 
account for 95% of the total tonnage moved during this period. More 
than 200 of these shipments originated during the months of March-
June 1996, at a time when Ever Freight did not yet have any tariff 
rates effective for its NVOCC services.
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    It further appears that the ocean common carrier rated the 
commodities in accordance with the inaccurate description furnished by 
Ever Freight, while the U.S. consignees of Ever Freight's shipments 
accepted delivery of the cargo and made payment to the ocean common 
carrier on the basis of the lower rate attributable to the inaccurate 
commodity description. Contemporaneous with the payment of any freight 
due to the ocean common carrier, Ever Freight's agents in the U.S also 
would issue arrival notices and

[[Page 11199]]

obtain payment of the NVOCC's freight charges from the U.S. importer, 
in each case correctly describing the commodity based on actual 
contents shipped.
    In addition, during time periods subsequent to the filing of Ever 
Freight's NVOCC tariff and bond in June 1996, Ever Freight appears both 
as shipper and as a carrier issuing its own (Ever Freight) NVOCC bill 
of lading with respect to the commodity being shipped. The rates 
assessed and collected by Ever Freight and its U.S. agents for these 
shipments, however, bear no relation to the rates set forth in Ever 
Freight's ATFI tariff on file with the Commission.\3\ Since Ever 
Freight has never subsequently modified its tariff rates, it would 
appear that all shipments in which Ever Freight issued its NVOCC bill 
of lading may be found to constitute violations of section 10(b)(1) of 
the 1984 Act.
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    \3\ Since filing its tariff in the ATFI system in June 1996, 
Ever Freight has maintained a tariff consisting only of three 
classes of Cargo N.O.S. rates. Ever Freight does not publish ``per 
container'' rates, nor does it appear to charge those Cargo N.O.S. 
rates which it does publish, inasmuch as its rates are tariffed 
solely on a weight/measurement (W/M) ton basis.
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    Section 10(a)(1) of the Shipping Act of 1984 (``1984 Act''), 46 
U.S.C. app Sec. 1709(a)(1), prohibits any person knowingly and 
willfully, directly or indirectly, by means of false billings, false 
classification, false weighing, false report of weight, false 
measurement, or by any other unjust or unfair device or means, to 
obtain or attempt to obtain ocean transportation for property at less 
than the rates or charges that would otherwise be applicable. Section 
10(b)(1), 46 U.S.C. app. Sec. 1709(b)(1), prohibits a common carrier 
from charging, collecting or receiving greater, less or different 
compensation for the transportation of property than the rates and 
charges set forth in its tariff. Under section 13 of the 1984 Act, 46 
U.S.C. app. Sec. 1712, a person is subject to a civil penalty of not 
more than $25,000 for each violation knowingly and willfully committed, 
and not more than $5,000 for other violations. Section 13 further 
provides that a common carrier's tariff may be suspended for violations 
of section 10(b)(1) for a period not to exceed one year, while section 
23 of the 1984 Act, 46 U.S.C. app. Sec. 1721 provides for a similar 
suspension in the case of violations of section 10(a)(1) of the 1984 
Act. Finally, section 19(b) of the 1984 Act, 46 U.S.C. app. 
Sec. 1717(b), provides that the license of a freight forwarder shall be 
suspended or revoked if it appears that the licensee is no longer 
qualified to render forwarding services to the public or has willfully 
failed to comply with any provisions of the 1984 Act.
    Now therefore, it is ordered, That pursuant to section 10, 11, 13, 
19 and 23 of the 1984 Act, 46 U.S.C. app. Secs. 1709, 1710, 1712, 1717 
and 1721, an investigation is instituted to determine:
    (1) Whether Ever Freight International Ltd., Sigma Express Inc., 
and Mario Chavarria dba Transcargo International, violated section 
10(a)(1) of the 1984 Act by directly or indirectly obtaining 
transportation at less than the rates and charges otherwise applicable 
through the means of misdescription of the commodities actually 
shipped;
    (2) Whether Ever Freight International Ltd., in its capacity as a 
common carrier, violated section 10(b)(1) of the 1984 Act by charging, 
demanding, collecting or receiving less or different compensation for 
the transportation of property than the rates and charges shown in its 
NVOCC tariff;
    (3) Whether, in the event violations of sections 10(a)(1) and 
10(b)(1) of the 1984 Act are found, civil penalties should be assessed 
against Ever Freight International Ltd., Sigma Express Inc. and Mario 
F. Chavarria dba Transcargo International and, if so, the amount of 
penalties to be assessed against any or all of the parties;
    (4) Whether, in the event violations of sections 10(a)(1) and 
10(b)(1) of the 1984 Act are found, the tariff of Ever Freight 
International Ltd. should be suspended;
    (5) Whether, in the event violations of sections 10(a)(1) of the 
1984 Act are found, the freight forwarding license of Mario F. 
Chavarria should be suspended or revoked; and
    (6) Whether, in the event violations are found, an appropriate 
cease and desist order should be issued against any or all of the 
parties.
    It is further ordered, That a public hearing be held in this 
proceeding and that this matter be assigned for hearing before an 
Administrative Law Judge of the Commission's Office of Administrative 
Law Judges at a date and place to be hereafter determined by the 
Administrative Law Judge in compliance with Rule 61 of the Commission's 
rules of practice and procedure, 46 CFR 502.61. The hearing shall 
include oral testimony and cross-examination in the discretion of the 
Presiding Administrative Law Judge only after consideration has been 
given by the parties and the Presiding Administrative Law Judge to the 
use of alternative forms of dispute resolution, and upon a proper 
showing that there are genuine issues of material fact that cannot be 
resolved on the basis of sworn statements, affidavits, depositions, or 
other documents or that the nature of the matters in issue is such that 
an oral hearing and cross-examination are necessary for the development 
of an adequate record;
    It is further ordered, That Ever Freight International Ltd., Sigma 
Express Inc. and Mario F. Chavarria dba Transcargo International are 
designated as Respondents in this proceeding;
    It is further ordered, That the Commission's Bureau of Enforcement 
is designated a party to this proceeding;
    It is further ordered, That notice of this Order be published in 
the Federal Register, and a copy be served on parties of record;
    It is further ordered, That other persons having an interest in 
participating in this proceeding may file petitions for leave to 
intervene in accordance with Rule 72 of the Commission's rules of 
practice and procedure, 46 CFR 502.72;
    It is further ordered, That all further notices, orders, and/or 
decisions issued by or on behalf of the Commission in this proceeding, 
including notice of the time and place of hearing or prehearing 
conference, shall be served on parties of record;
    It is further ordered, That all documents submitted by any party of 
record in this proceeding shall be directed to the Secretary, Federal 
Maritime Commission, Washington, DC 20573, in accordance with Rule 118 
of the Commission's rules of practice and procedure, 46 CFR 502.118, 
and shall be served on parties of record; and
    It is further ordered, That in accordance with Rule 61 of the 
Commission's rules of practice and procedure, the initial decision of 
the Administrative Law Judge shall be issued by March 6, 1998 and the 
final decision of the Commission shall be issued by July 6, 1998.
Joseph C. Polking,
Secretary.
[FR Doc. 97-6038 Filed 3-10-97; 8:45 am]
BILLING CODE 6730-01-M