[Federal Register Volume 67, Number 200 (Wednesday, October 16, 2002)]
[Notices]
[Pages 63924-63925]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-26246]


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FEDERAL MARITIME COMMISSION

[Petition No. P2-02]


Petition of the South Florida NVOCC-NAOCC Association, Inc. for 
an Investigation of the Service Contracting and Rating Practices of the 
Caribbean Shipowners Association; Notice of Filing and Request for 
Comments

    Notice is hereby given that, by petition filed October 8, 2002, the 
South Florida NVOCC-NAOCC Association, Inc. (``Petitioner'') has 
petitioned the Commission for an investigation under section 11(c) of 
the Shipping Act of 1984 (``Shipping Act'') of certain activities by 
the members of the Caribbean Shipowners Association (``CSA'').
    In particular, Petitioner requests the Commission to determine 
whether CSA's members have violated the Shipping Act through 
discriminatory service contracting and rating practices in the 
Caribbean trades that intentionally discriminate against Ocean 
Transportation Intermediaries (``OTIs'') in violation of sections 
10(c)(1), 10(c)(3), 10(c)(7) and 10(c)(8) of the Shipping Act. 
Petitioner contends that these practices reduce competition in the 
involved trades and produce unreasonable reductions in transportation 
service and unreasonable increases in transportation cost to OTIs, 
their shippers and the shipping public within the meaning of section 
6(g) of the Shipping Act. Petitioner further alleges that CSA and its 
members may be in violation of section 5(c) of the Shipping Act by 
either adopting mandatory agreements relating to OTI rates and services 
or failing to file true copies of their voluntary guidelines thereon 
with the Commission. Petitioner finally alleges that, in taking these 
actions, CSA is operating in violation of its agreement and is 
therefore also in violation of section 10(c)(3) of the Shipping Act.
    In support of these contentions, Petitioner claims that Non-Vessel-
Operating common carrier OTIs (``NVOs'') depend upon CSA members to 
transport their shipments, approximately 90% of which move under 
service contracts. On or about July 1, 2002, CSA members announced a 
selective rate increase plan targeting service contract and tariff 
rates for the commodity descriptions almost exclusively used by NVOs 
for consolidated containers of less than container load (``LCL'') 
cargo: Freight All Kinds (``FAK'') and General Department Store 
Merchandise (``GDSM''). Petitioner states that the increases were 
substantial (from 10% to 40%); however, CSA purportedly did not take 
across-the-board increases for any other commodities or categories of 
shippers. Petitioner asserts that CSA's members' service contract 
offers to NVOs have eliminated all commodity rates other than FAK and 
GDSM, thereby depriving NVOs of a rate basis on which to compete for 
full container load (``FCL''), single commodity shipments. Petitioner 
further alleges that, at the same time, a wholly-owned NVO subsidiary 
of CSA member Tropical Shipping and Construction Co., Ltd. 
(``Tropical'') (described by Petitioner as the largest vessel-operating 
carrier in most of the involved markets and virtually the only CSA 
member competing in the LCL market) reduced its LCL rates. Petitioner 
argues the

[[Page 63925]]

combination of CSA members raising the FAK and GDSM rates on which NVOs 
base their LCL rates, and Tropical lowering its LCL rates, has created 
a ``price squeeze'' on the NVOs. Petitioner alleges that CSA's members' 
``obviously coordinated series of actions'' has severely and unfairly 
injured the ability of Petitioner's members to compete. Moreover, 
Petitioner suggests that CSA's members' unreasonably raising rates may 
foreclose U.S. exporters from certain of the involved trades. Finally, 
Petitioner states that it has been advised that the CSA's goal and 
purpose in adopting the ``selective'' rate increase plan is to 
``destroy non-conference competition'' and ``diminish the influence of 
the NVOs''.
    If the Commission's investigation concludes that Shipping Act 
violations have occurred, Petitioner urges the Commission to: (1) Issue 
sanctions against CSA and its members pursuant to section 13 of the 
Shipping Act for violations found; (2) require CSA member lines to pay 
reparations pursuant to section 11(g) of the Shipping Act to those OTIs 
who have been damaged;\1\ and (3) seek appropriate injunctive relief to 
enjoin further operation of CSA pursuant to sections 6(g) and (h) of 
the Shipping Act.
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    \1\ Section 11(g) of the Shipping Act, 46 App. U.S.C. 1710(g), 
provides that, for any complaint filed within 3 years after the 
cause of action accrued, the Commission shall, upon petition of the 
complainant and after notice and hearing, direct payment of 
reparations to the complainant for injury caused by a violation of 
the Act.
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    The Petition was filed under Rule 69 of the Commission's Rules of 
Practice and Procedure, 46 CFR 502.69, and states that it was served 
upon CSA. Replies to the petition, as provided by Rule 69 and Rule 74, 
46 CFR 502.74, are due October 23, 2002. In order for the Commission to 
make a thorough evaluation of the petition, the Commission is also 
inviting interested persons to submit their comments on the petition no 
later than October 23, 2002. Comments shall consist of an original and 
15 copies, or, if e-mailed, as an attachment in WordPerfect 8, 
Microsoft Word 97, or earlier versions of these applications; be 
directed to the Secretary, Federal Maritime Commission, 800 North 
Capitol Street, NW., Washington, DC 20573-0001 (e-mail to: 
[email protected]); and be served on Petitioner's counsel: David P. 
Street, Galland, Kharasch, Greenberg, Fellman & Swirsky, P.C., 1054 
Thirty-First Street, NW., Washington, DC 20007-4492; and on CSA, Suite 
414, Galleria Professional Building, 915 Middle River Drive, Fort 
Lauderdale, FL 22204-3561.
    Copies of the petition are available at the Office of the Secretary 
of the Commission, 800 N. Capitol Street, NW., Room 1046, by telephone 
request at 202-523-5725 or through email request directed to 
[email protected].
    Parties participating in this proceeding may elect to receive 
service of the Commission's issuances in this proceeding through e-mail 
in lieu of service by U.S. mail. A party opting for electronic service 
shall advise the Office of the Secretary in writing and provide an e-
mail address where service can be made.

Bryant L. VanBrakle,
Secretary.
[FR Doc. 02-26246 Filed 10-15-02; 8:45 am]
BILLING CODE 6730-01-P