[Federal Register Volume 62, Number 65 (Friday, April 4, 1997)]
[Notices]
[Pages 16158-16160]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8635]


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FEDERAL MARITIME COMMISSION
[Docket No. 97-06]


Shipman International (Taiwan) Ltd.; Possible Violations of 
Sections 8, 10(a)(1) and 10(b)(1) of the Shipping Act of 1984 and 46 
C.F.R. Part 514

Order of Investigation and Hearing

    Shipman International (Taiwan) Ltd. (``Shipman International'') is 
a tariffed

[[Page 16159]]

and bonded non-vessel-operating common carrier (NVOCC) located at 4th 
Floor, No. 89, Lane 155, Tun Hwa North Road, Taipei, Taiwan. Shipman 
International has held itself out as an NVOCC pursuant to its ATFI 
tariff FMC No. 004, filed September 5, 1993.\1\
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    \1\ Tariff FMC No. 004 expired August 24, 1996. It was 
subsequently replaced by tariff FMC No. 005, effective October 18, 
1996.
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    Shipman International currently maintains an NVOCC bond, No. 
NVOC0143, in the amount of $50,000 with the American Motorists 
Insurance Company, 2 World Trade Center, New York, New York 10048. 
Pursuant to Rule 24 of its NVOCC tariff, Shipman International's tariff 
publisher, Distribution Publications Inc., serves as the U.S. resident 
agent for purposes of receiving service of process on behalf of Shipman 
International.
    It appears that Shipman International, acting as shipper in 
relation to an ocean common carrier, misdescribed the commodity on 
numerous shipments transported by an ocean common carrier between 
December 1, 1995, and December 31, 1996.\2\ The shipments primarily 
originated in Taiwan, and were destined for Los Angeles and other U.S. 
ports and points. In each of these instances, Shipman International was 
listed as shipper on the ocean carrier's bill of lading, while Shipman 
International destination agents in the U.S. acted as the consignee or 
notify party. Each shipment generally reflects that a Shipman 
International ``house'', or NVOCC, bill of lading was issued for tender 
by the ultimate consignee to Shipman International'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, Shipman International has acted as shipper 
on over 550 inbound shipments during the twelve-month period ending 
November 1996, accounting for nearly 1100 TEUs of cargo. PIERS 
reports that the primary ocean common carrier transporting cargo on 
behalf of Shipman International was Mitsui OSK Line, which accounted 
for 91% of the total tonnage moved during this period. More than 100 
of these shipments originated during the 54-day period in August-
October 1996 when Shipman International did not have a tariff 
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 
Shipman International while the U.S. consignees of Shipman 
International'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 shown on the bill 
of lading. Contemporaneous with the payment of any freight due to the 
ocean common carrier, Shipman International's agents in the U.S. also 
would issue arrival notices and 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 prior to the cancellation of 
Shipman International's ATFI tariff No. 004 in August 1996 and 
subsequent to the filing of Shipman International's ATFI tariff No. 005 
in October 1996, Shipman International appears both as shipper and as a 
carrier issuing its own (Shipman International) NVOCC bill of lading 
with respect to the commodity being shipped. The rates assessed and 
collected by Shipman International and its U.S. agents for these 
shipments, however, bear no relation to the rates set forth in Shipman 
International's ATFI tariffs on file with the Commission.\3\ Since 
Shipman International never modified its tariff rates during these 
respective periods, it would appear that all shipments for which 
Shipman International issued its NVOCC bill of lading during the above 
time periods may be found to constitute violations of section 10(b)(1) 
of the Shipping Act of 1984 (``1984 Act'').
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    \3\ Since filing its tariff No. 004 in the ATFI system in 1993, 
Shipman International has maintained a tariff consisting solely of 
three classes of Cargo N.O.S. rates, i.e. hazardous, non-hazardous 
and refrigerated, and a separate rate for Hardware N.O.S. Subsequent 
to the filing of its NVOCC tariff No. 005 in October 1996, Shipman 
International has maintained only three classes of Cargo N.O.S. 
rates. Shipman International 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 or measurement ton basis.
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    During the period between August 24, 1996, when Shipman 
International canceled its tariff FMC No. 004, and October 18, 1996, 
when its replacement tariff FMC No. 005 became effective, it appears 
that Shipman International continued its business operations as an 
NVOCC without having an effective tariff on file for such services. 
During this period, Shipman International continued to act in the 
capacity of a shipper in relation to an ocean common carrier, to be 
identified on various Mitsui OSK Lines' bills of lading as the shipper 
for whose account the transportation was to be provided during this 
period, and to have such Mitsui bills of lading issued which reflect 
that freight charges had been prepaid to the ocean common carrier at 
origin. It thus appears that Shipman International operated as an NVOCC 
without an effective tariff on file for a period of 54 days. Each day 
of a continuing violation may be treated as a separate violation of the 
1984 Act.
    Section 10(a)(1) of the 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) of the 1984 Act, 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. Section 8 of the 1984 Act, 46 U.S.C. app. 1707, sets forth the 
requirement that each common carrier file and maintain with the 
Commission a tariff of its rates, rules and charges, while section 
514.1 of the Commission's tariff regulations, 46 C.F.R. Sec. 514.1, 
effectuates the above statutory mandate by prohibiting common carriers 
from operating without an effective tariff on file with the Commission. 
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 for NVOCCs in the case of 
violations of section 10(a)(1) of the 1984 Act.
    Now therefore, it is ordered, that pursuant to sections 8, 10, 11, 
13, and 23 of the 1984 Act, 46 U.S.C. app. Secs. 1707, 1709, 1710, 
1712, and 1721, an investigation is instituted to determine:
    (1) Whether Shipman 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 Shipman International, 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 Shipman International violated section 8 of the 1984 
Act and the Commission's tariff regulations at 46 C.F.R. Sec. 514.1 by 
operating as a non-vessel-operating common carrier during

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the period August 25, 1996 through October 18, 1996, without having a 
tariff for such services on file and effective with the Commission;
    (4) Whether, in the event violations of sections 8, 10(a)(1) and 
10(b)(1) of the 1984 Act and Commission regulations are found, civil 
penalties should be assessed against Shipman International and, if so, 
the amount of penalties to be assessed;
    (5) Whether, in the event violations of sections 10(a)(1) and 
10(b)(1) of the 1984 Act are found, the tariff of Shipman International 
should be suspended; and
    (6) Whether, in the event violations are found, an appropriate 
cease and desist order should be issued.
    It is further ordered, that a public hearing be held in this 
proceeding and that this matter be assigned for hearing before an 
Administrative Law Judge of the Commission's Office of Administrative 
Law Judges at a date and place to be hereafter determined by the 
Administrative Law Judge in compliance with Rule 61 of the Commission's 
Rules of Practice and Procedure, 46 C.F.R. Sec. 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 Shipman International (Taiwan) Ltd. is 
designated as Respondent 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 C.F.R. Sec. 502.72;
    It is further ordered, that all further notices, orders, and/or 
decisions issued by or on behalf of the Commission in this proceeding, 
including notice of the time and place of hearing or prehearing 
conference, shall be served on parties of record;
    It is further ordered, that all documents submitted by any party of 
record in this proceeding shall be directed to the Secretary, Federal 
Maritime Commission, Washington, D.C. 20573, in accordance with Rule 
118 of the Commission's Rules of Practice and Procedure, 46 C.F.R. 
Sec. 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 31, 1998 and the 
final decision of the Commission shall be issued by July 29, 1998.

Joseph C. Polking,
Secretary.
[FR Doc. 97-8635 Filed 4-3-97; 8:45 am]
BILLING CODE 6730-01-M