[Federal Register Volume 67, Number 167 (Wednesday, August 28, 2002)]
[Notices]
[Pages 55255-55256]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-21950]


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FEDERAL MARITIME COMMISSION


Fact Finding Investigation No. 25-; Practices of Transpacific 
Stabilization Agreement Members Covering the 2002-2003 Service Contract 
Season; Order of Investigation

    Pursuant to the Shipping Act of 1984, 46 U.S.C. app. 1701 et seq. 
(``1984 Act''), the Federal Maritime Commission (``Commission'') is 
responsible for administering a non-discriminatory regulatory process 
for the common carriage of goods by water in the foreign commerce of 
the United States. Section 10 of the Act contains specific prohibitions 
against conduct which would conflict with this system of common 
carriage.
    On May 10, 2002, the National Customs Brokers and Forwarders 
Association of America, Inc. (``NCBFAA'') and the International 
Association of NVOCCs, Inc. (``IANVOCC'') filed a joint petition, 
Petition No. P1-02, in which they alleged that members of the 
Transpacific Stabilization Agreement (``TSA'') have engaged in 
violations of certain section 10 prohibitions. The petitioners assert 
that TSA members engaged in a concerted practice of discrimination 
against non-vessel-operating common carriers (``NVOCCs'') regarding the 
negotiation of service contracts and the rates established therein for 
the 2002-2003 contracting season. Specifically, the petitioners alleged 
that TSA members had entered into an internal agreement, which they 
subsequently executed, to complete the negotiation and signing of 
service contracts with proprietary shippers before commencing 
negotiation of service contracts with NVOCCs. The petitioners further 
alleged that TSA members had colluded to charge NVOCCs significantly 
higher rates than assessed to proprietary shippers for the same 
services. The manner in which TSA members allegedly implemented this 
agreement was through the discriminatory subjection of NVOCCs, through 
their service contracts, to general rate increases (``GRIs'') and a 
peak season surcharge (``PSS''), which were not applied to proprietary 
shippers through their service contracts.
    Upon the filing of Petition No. P1-02, the Commission initially 
directed its staff to secure and assess additional information 
regarding TSA member practices during the 2002-2003 contracting season. 
During the pendency of this informal investigation, TSA and its members 
announced a second GRI during this contracting season to become 
effective August 19, 2002. If the petitioners' allegations of concerted 
action are correct, it would appear that this second GRI was agreed to 
among TSA members with the knowledge that certain shippers would be 
exempt from the increase by the terms of their 2002-2003 service 
contracts. In view of the information presently available and with due 
regard for the seriousness of the allegations, the Commission has 
determined to commence this non-adjudicatory investigation to gather 
additional facts. Specifically, the Investigative Officer named herein 
is to develop a record on various practices allegedly engaged in by TSA 
and its members, either individually or collectively, during the 2002-
2003 contracting season, including but not limited to:
    1. Refusals to deal with NVOCCs until the substantial completion of 
negotiations with proprietary shippers;
    2. The discriminatory application in NVOCC service contracts of 
GRIs and/or a PSS while waiving or otherwise not requiring similar 
application in proprietary shipper service contracts;
    3. The extent and degree to which the rate increases and service 
contract policies, practices, and guidelines of TSA have been, and 
remain, voluntary and non-binding upon its respective members;
    4. The extent and degree to which TSA and its members have 
maintained and transmitted to the Commission full, complete, and 
accurate minutes of all meetings required to be filed with the 
Commission; and
    5. The development and utilization of open-ended provisions that 
permit the unilateral implementation of GRIs and/or a PSS by TSA 
members in their service contracts with NVOCCs, without genuine further 
negotiation, while waiving or not requiring similar

[[Page 55256]]

provisions in their service contracts for proprietary shippers.
    The Investigative Officer is to report to the Commission within the 
time specified herein, with recommendations for any further Commission 
action, including any formal adjudicatory, injunctive, or rulemaking 
proceedings, warranted by the factual record developed in this 
proceeding.
    Interested persons are invited and encouraged to contact the 
Investigative Officer named herein, at (202) 523-5724 (Phone) or (202) 
275-0518 (Fax), or by e-mail at [email protected] should they wish 
to provide testimony or evidence, or to contribute in any other manner 
to the development of a complete factual record in this proceeding.
    Therefore, it is ordered, That pursuant to sections 5, 8, 10, 11, 
12 and 15 of the Shipping Act of 1984, 46 U.S.C. app. 1704, 1707, 1709, 
1710, 1711 and 1714, and Part 502, Subpart R of Title 46 of the Code of 
Federal Regulations, 46 CFR 502.281, et seq., a non-adjudicatory 
investigation is hereby instituted into the practices of TSA and its 
members, to develop the issues set forth above and to provide a basis 
for any subsequent regulatory, adjudicatory or injunctive action by the 
Commission.
    It is further ordered, That the Investigative Officer shall be 
Commissioner Joseph E. Brennan of the Commission. The Investigative 
Officer shall be assisted by staff members as may be assigned by the 
Commission's Executive Director and shall have full authority to hold 
public or non-public sessions, to resort to all compulsory process 
authorized by law (including the issuance of subpoenas ad testificandum 
and duces tecum), to administer oaths, to require reports, and to 
perform such other duties as may be necessary in accordance with the 
laws of the United States and the regulations of the Commission;
    It is further ordered, That the Investigative Officer shall issue a 
report of findings and recommendations no later than January 17, 2003, 
and interim reports if it appears that more immediate Commission action 
is necessary, such reports to remain confidential unless and until the 
Commission provides otherwise;
    It is further ordered, That this proceeding shall be discontinued 
upon acceptance of the final report of findings and recommendations by 
the Commission, unless otherwise ordered by the Commission; and
    It is further ordered, That notice of this Order be published in 
the Federal Register.

    By the Commission.
Bryant L. VanBrakle,
Secretary.
[FR Doc. 02-21950 Filed 8-27-02; 8:45 am]
BILLING CODE 6730-01-P