[Federal Register Volume 64, Number 148 (Tuesday, August 3, 1999)]
[Proposed Rules]
[Pages 42057-42058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19847]


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FEDERAL MARITIME COMMISSION

46 CFR Part 535

[Docket No. 99-13]


The Content of Ocean Common Carrier and Marine Terminal Operator 
Agreements Subject to the Shipping Act of 1984

AGENCY: Federal Maritime Commission.

ACTION: Notice of inquiry.

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SUMMARY: The Federal Maritime Commission is issuing this Inquiry to 
solicit comments concerning the appropriate content of agreements filed 
with the Commission pursuant to the Shipping Act of 1984, as amended by 
the Ocean Shipping Reform Act of 1998. The comments received will 
assist the Commission in preparing a proposal to update or refine the 
existing content standards.

DATES: Submit comments on or before October 4, 1999.

ADDRESSES: Address all comments concerning this Inquiry to: Bryant L. 
VanBrakle, Secretary, Federal Maritime Commission, 800 North Capitol 
St., N.W., Room 1046, Washington, D.C. 20573-0001.

FOR FURTHER INFORMATION CONTACT:

Florence A. Carr, Director, Bureau of Economics and Agreement Analysis, 
Federal Maritime Commission, 800 North Capitol Street, N.W., 
Washington, D.C. 20573-0001, (202) 523-5787
Thomas Panebianco, General Counsel, Federal Maritime Commission, 800 
North Capitol St., N.W., Washington, D.C. 20573-0001, (202) 523-5740

SUPPLEMENTARY INFORMATION: The Federal Maritime Commission 
(``Commission'') is seeking comments from interested parties regarding 
possible changes to its rules that govern the content of ocean common 
carrier and marine terminal operator agreements filed with the 
Commission. This proceeding is being initiated in response to the 
suggestions of several commenters in a recent rulemaking, Docket No. 
98-26, Ocean Common Carrier and Marine Terminal Operator Agreements 
Subject to the Shipping Act of 1984, 64 FR 11236 (March 8, 1999), 
urging the Commission to address, by rule, the issue of what is 
required to be included in agreements subject to the Shipping Act of 
1984, 46 U.S.C. app. 1701 et seq. (``1984 Act''), as amended by the 
Ocean Shipping Reform Act of 1998, Pub. L. 105-258, 112 Stat. 1902 
(``OSRA'').
    Effective May 1, 1999, in Docket No. 98-26, the Commission amended 
its rules governing agreements among ocean common carriers and marine 
terminal operators to reflect changes made to the 1984 Act by OSRA. As 
part of that proceeding, the Commission also eliminated some agreement 
form and manner requirements that had previously been in effect. The 
Commission stated, however, that the elimination of the form and manner 
requirements had no substantive effect on the content requirements for 
agreements. Rather, the Commission retained the content requirements, 
which mirror section 5(a) of the 1984 Act, which section was not 
changed by OSRA. Section 5(a) requires that ``a true copy of every 
agreement entered into with respect to any activity described in 
section 4 (a) or (b) of this Act shall be filed with the Commission. * 
* *''
46 U.S.C. app. 1704(a).
    Section 4, as amended by OSRA, describes the agreements that are 
within the scope of the 1984 Act. Section 4(a) applies to agreements by 
or among ocean common carriers 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 among themselves or with one or more marine terminal 
operators;
    (6) control, regulate, or prevent competition in international 
ocean transportation; or
    (7) discuss and agree on any matter related to service 
contracts.

46 U.S.C. app. 1703(a).
    Section 4(b) applies to agreements among marine terminal operators 
and among one or more marine terminal operators and one or more ocean 
common carriers to

    (1) discuss, fix, or regulate rates or other conditions of 
service; or
    (2) engage in exclusive, preferential, or cooperative working 
arrangements, to the extent that such agreements involve ocean 
transportation in the foreign commerce of the United States.

46 U.S.C. app. 1703(b).
    The Commission's rules governing agreements echo the requirement in 
section 5(a) of the 1984 Act that agreements filed with the Commission 
must be true and complete. 46 CFR 535.103(g) provides:

    An agreement filed under the Act must be clear and definite in 
its terms, must embody the complete understanding of the parties, 
and must set forth the specific authorities and conditions under 
which the parties to the agreement will conduct their present 
operations and regulate the relationships among the agreement 
members.

Similarly, 46 CFR 535.407(a) states:

    Any agreement required to be filed by the Act and this part 
shall be the complete agreement among the parties and shall specify 
in detail the substance of the understanding of the parties.

    In comments filed in Docket No. 98-26, a number of carrier 
commenters expressed concerns that elimination of form and manner 
requirements could create uncertainty as to what substantive content 
should be included in filed agreements. The Commission rejected these 
arguments; however, it further determined that it would institute a 
subsequent rulemaking proceeding on the issue of the content of filed 
agreements in response to requests from a nearly unanimous carrier 
community. The carrier commenters sought more specific requirements as 
to what matters do or do not have to be filed. They also suggested that 
the Commission's rules should provide protections for confidential 
business information, provide maximum flexibility for carriers to 
modify cooperative arrangements without overly burdensome filing 
requirements or waiting periods, and possibly include guidance tailored 
for different types of arrangements. 64 FR at 11238-9.
    At this juncture, the Commission is undertaking a review of its 
existing agreement content regulations to determine whether, and in 
what manner, they should be updated or refined. Comments received in 
response to this Inquiry will assist the

[[Page 42058]]

Commission in fashioning a notice of proposed rulemaking reflecting the 
evolving shipping industry and the Commission's statutory mission.
    Commenters are free to address any issue relevant to the agreement 
content rules. In addition, set forth below are questions suggesting 
particular areas of concern or focus for the Commission:
    1. Should the current filing exemption for routine operational or 
administrative matters be eliminated, retained in its current form, or 
modified? If so, describe how.
    2. If parties were required to file every arrangement or 
understanding among themselves that came within the scope of section 4 
(including all operational or administrative matters), would they be 
subject to commercial harm or burden? If so, describe in detail 
(providing copies of and using as many specific examples as possible 
of) actual arrangements or understandings for which filing would give 
rise to such burdens or harm; explain (and where possible, quantify) 
exactly what such burdens would be.
    3. Should the Commission adopt different standards for agreement 
content for different types of agreements, i.e., would it be 
appropriate to tailor content rules to rate agreements (conferences and 
rate discussion agreements) vis-a-vis operational agreements (alliances 
and space/vessel charter arrangements)?
    4. Are there types of agreements currently filed with the 
Commission that would be appropriate for exemption from filing under 
the standard set forth in section 16 of the Act, i.e., the filing 
exemption will not result in a substantial reduction in competition or 
be detrimental to commerce? Exemptions may be either partial (e.g., 
eliminating waiting periods, or requiring notification in lieu of 
filing) or complete.
    5. Should the rates charged by one carrier to another for use of 
space and/or vessels be exempt from filing or withheld from public 
disclosure?
    6. Is public disclosure of agreements filed with the FMC useful to 
shippers, intermediaries, labor, non-party carriers, marine terminal 
operators, or other interested persons? If so, describe in detail the 
types of agreements and information used, and why the disclosure of 
such information is useful.
    7. Given the public notice requirement of section 6 of the 1984 
Act, can the Commission implement measures to protect commercially 
sensitive information contained in agreements?
    8. How are competing concerns of completeness, burden, and 
confidentiality resolved in the filing requirements of other regulatory 
authorities, including antitrust and sector specific agencies?
    Now therefore, It is ordered that this Notice of Inquiry be 
published in the Federal Register.

    By the Commission.
Bryant L. VanBrakle,
Secretary.
[FR Doc. 99-19847 Filed 8-2-99; 8:45 am]
BILLING CODE 6730-01-P