[Federal Register Volume 68, Number 231 (Tuesday, December 2, 2003)]
[Proposed Rules]
[Pages 67510-67555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-29738]



[[Page 67509]]

-----------------------------------------------------------------------

Part II





Federal Maritime Commission





-----------------------------------------------------------------------



46 CFR Parts 501 and 535



Ocean Common Carrier and Marine Terminal Operator Agreements Subject to 
the Shipping Act of 1984; Proposed Rule

  Federal Register / Vol. 68, No. 231 / Tuesday, December 2, 2003 / 
Proposed Rules  

[[Page 67510]]


-----------------------------------------------------------------------

FEDERAL MARITIME COMMISSION

46 CFR Parts 501 and 535

[Docket No. 03-15]

RIN 3072-AC28


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

AGENCY: Federal Maritime Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Federal Maritime Commission proposes to amend its 
regulations governing agreements among ocean common carriers and marine 
terminal operators in response to changes in the shipping industry 
since the enactment of the Ocean Shipping Reform Act of 1998 
(``OSRA''), which amended the Shipping Act of 1984 (``Shipping Act''). 
The Commission proposes to delegate additional authority to the 
Director of the Commission's Bureau of Trade Analysis (46 CFR part 
501). The Commission also proposes to update its rules relating to 
standards and exceptions for information that a filed agreement must 
contain and to revise its regulations pertaining to transshipment 
agreements (46 CFR part 535). Further, the Commission proposes to 
modify its Information Form and Monitoring Reports regulations and 
appendices (46 CFR part 535) to reflect changes in the amount and kind 
of data the Commission deems necessary to monitor carriers' use of 
their antitrust immunity for filed agreements. Finally, the Commission 
proposes to revise its regulations regarding the filing of agreement 
minutes (46 CFR part 535). The revision would reduce inadequate 
inclusion or coverage of substantive issues and insufficient levels of 
detail to describe carrier discussions, clarify regulations on meetings 
for which minutes are required to be filed, and identify and provide 
for timely Commission access to materials used or discussed in such 
meetings.

DATES: Submit an original and 15 copies of comments (paper), or e-mail 
comments as an attachment in WordPerfect 10, Microsoft Word 2000, or 
earlier versions of these applications, no later than January 30, 2004. 
Requests for meetings to make oral presentations to individual 
Commissioners must be received, and the meetings completed, by this 
date as well.

ADDRESSES: Address all comments concerning this proposed rule to: 
Bryant L. VanBrakle, Secretary, Federal Maritime Commission, 800 North 
Capitol Street, NW., Room 1046, Washington, DC 20573-0001, (202) 523-
5725, E-mail: [email protected].

FOR FURTHER INFORMATION CONTACT:
Carol J. Neustadt, Acting General Counsel, Federal Maritime Commission, 
800 North Capitol Street, NW., Room 1018, Washington, DC 20573-0001, 
(202) 523-5740, E-mail: [email protected].

Florence A. Carr, Director, Bureau of Trade Analysis, Federal Maritime 
Commission, 800 North Capitol Street, NW., Room 940, Washington, DC 
20573-0001, (202) 523-5796, E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Outline

I. Delegations to the Director, Bureau of Trade Analysis, 46 CFR 
501.26.
II. The Content of Ocean Common Carrier and Marine Terminal Operator 
Agreements Subject to the Shipping Act of 1984, 46 CFR part 535, 
subparts A, B, C, and D.
    A. Background--Docket No. 99-13
    1. Introduction
    2. Summary of the Comments
    B. The Proposed Rule
    1. Proposed Changes to Address Concerns for Certainty
    2. Proposed Changes to Address Concerns for Future Commercial 
Flexibility
    a. Requirement to File Every Agreement
    b. Modifications to Effective Agreements
    c. Exemptions
    i. Low Market Share Exemption and Definition of Capacity 
Rationalization
    ii. Revision of the Present Exemptions for Non-substantive 
Agreements and Amendments, Miscellaneous Modifications (proposed 
Sec. Sec.  535.302 and 535.309), and Public Notice of Filings 
(proposed Sec.  535.602)
    iii. Transshipment Agreements
    3. Confidentiality of Sensitive Commercial Information in Filed 
Agreements
III. Information Forms and Monitoring Reports, 46 CFR part 535, 
subparts E and G.
    A. Introduction
    B. Background
    1. The Current Regulations
    2. Changes in Carrier Agreements since OSRA
    C. The Proposed Rule
    1. Information Form Regulations
    2. Information Form a. Section I b. Section II c. Section III d.
    Section IV
    i. Market Share
    ii. Total Average Revenue
    iii. Cargo Volume and Revenue Results for the Top 10 Agreement-
Wide Commodities
    iv. Vessel Capacity and Utilization
    v. Port Service
    e. Section V
    3. Monitoring Report Regulations
    4. Monitoring Report
    a. Section I
    b. Section II
    c. Section III
    D. Implementation of the Proposed Information Form and 
Monitoring Report Regulations
IV. Minutes, 46 CFR part 535, subpart G.
    A. Introduction
    B. Discussion of the components of the current minutes rules and 
the proposed changes
    1. Agreements Required to File Minutes
    2. Definition of Meeting
    3. Content of Minutes
    4. Serial Numbers
    5. Filing Deadlines
V. Miscellaneous Changes to 46 CFR part 535
VI. Oral Presentations
VII. Statutory Reviews and Request for Comments

I. Delegations to the Director, Bureau of Trade Analysis, 46 CFR 501.26

    The proposed rule amends Sec.  501.26 to account for modifications 
in the delegations of the Commission's authority to the Director, 
Bureau of Trade Analysis (``BTA'') in connection with the proposed 
modifications in 46 CFR part 535. Specifically, sections 501.26(c) and 
(d) are being revised to match the re-coded section numbers for 
applications for waivers to the reporting requirements for carrier 
agreements in part 535 of the proposed rule. Sections 501.26(o) and (p) 
are being added to provide new delegations of authority to the Director 
of BTA pertaining to the proposed Monitoring Report regulations for 
carrier agreements in part 535 of the proposed rule.

II. The Content of Ocean Common Carrier and Marine Terminal Operator 
Agreements Subject to the Shipping Act of 1984, 46 CFR Part 535, 
Subparts A, B, C, and D

A. Background--Docket No. 99-13

1. Introduction
    The Shipping Act of 1984, 46 U.S.C. app. Sec. Sec.  1701-1719 
(``Shipping Act''), requires, at section 5(a), the filing of certain 
types of commercial agreements by and among ocean common carriers and 
marine terminal operators with the Federal Maritime Commission 
(``Commission'' or ``FMC''). 46 U.S.C. app. Sec.  1704(a). The 
Commission's current regulations implementing this provision were first 
adopted by the Commission in that same year. Docket Nos. 84-26 and 84-
32, Rules Governing Agreements by Ocean Common Carriers and Other 
Persons Subject to the Shipping Act of 1984, 22 S.R.R. 1453, 49 FR 
45320 (final rule) (November 15, 1984) (``Docket Nos. 84-26 and 84-32 
(final rule)''). The Commission most recently amended its agreement 
rules in 1999, in response to changes made to the Shipping Act by the 
Ocean Shipping Reform Act of 1998, Public Law No.

[[Page 67511]]

105-258 (``OSRA''). 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, (``Docket No. 98-26'').
    Pursuant to changes mandated by OSRA, Docket No. 98-26 eliminated 
most of the ``form and manner'' rules describing the procedural rules 
for filing these agreements, but left unchanged the substantive 
``content'' requirements, which were not affected by OSRA. 64 FR 11238. 
Comments submitted in the course of Docket No. 98-26 revealed concerns 
and uncertainties about the Commission's substantive requirements for 
agreements, and requested further clarifications, enhancements or new 
rules on agreements. In response to these concerns, the Commission 
initiated Docket No. 99-13, The Content of Ocean Common Carrier and 
Marine Terminal Operator Agreements Subject to the Shipping Act of 
1984, by the publication of a Notice of Inquiry (``NOI'') on August 3, 
1999, requesting comment on the specific manner in which the 
Commission's agreement content rules should be updated or refined. 64 
FR 42057.\1\ The Commission asked commenters to include concrete 
examples and to quantify their answers in response to the NOI. Id.
---------------------------------------------------------------------------

    \1\ Docket No. 99-13, The Content of Ocean Common Carrier and 
Marine Terminal Operators Agreements Subject to the Shipping Act of 
1984, has been discontinued by separate order. The instant 
proceeding, Docket No. 03-15, Ocean Common Carrier and Marine 
Terminal Operator Agreements Subject to the Shipping Act of 1984, 
encompasses former Docket No. 99-13 and expands it to cover 
additional matters. As indicated below, the five comments submitted 
to the Commission in Docket No. 99-13 are incorporated by reference 
into the record of the instant proceeding and have been considered 
by the Commission.
---------------------------------------------------------------------------

    The Commission received five comments in response to the NOI, all 
of which requested that the Commission's rules on content standards for 
agreement filings be updated or refined in a further rulemaking and 
identified three main concerns: certainty, flexibility, and 
confidentiality. These comments are summarized below.
2. Summary of the Comments
    The Commission received comments from the National Industrial 
Transportation League (``NITL''), the Council of European & Japanese 
National Shipowners'' Associations (``CENSA''), the International 
Longshoreman's Association (``ILA'') P&O Nedlloyd, Ltd. (``PONL''), and 
the Ocean Carrier Working Group Agreement (``OCWGA'').\2\
---------------------------------------------------------------------------

    \2\ Members of OCWGA at the time of this submission were: the 
Latin America Agreement; Israel Trade Conference; Trans-Atlantic 
Conference Agreement; Transpacific Stabilization Agreement; United 
States/Australia-New Zealand Association; United States/South Europe 
Conference; United States/Southern Africa Conference; Westbound 
Transpacific Stabilization Agreement; Mediterranean-North Pacific 
Coast Freight Conference; A.P. Moller-Maersk Line; Contship 
Containerlines, Ltd.; Crowley American Transport, Inc; Evergreen 
Marine Corporation (Taiwan) Ltd.; King Ocean Service de Venezuela, 
S.A.; Sea-Land Service, Inc.; Star Shipping A/S; Tropical Shipping & 
Construction Company, Ltd.; Wallenius Wilhelmsen Lines AS; Zim-
Israel Navigation Company; and Hapag-Lloyd Container Linie GmbH.
---------------------------------------------------------------------------

    In addition to responses directed at particular questions posed by 
the Commission in the NOI, summarized below, there were some general 
comments in response to the Commission's initial inquiry. OCWGA 
recommends that the Commission revise the rules by affirmatively 
defining what must be included in the filed agreement, rather than 
enumerating what need not be filed. OCWGA at 11. It states that this 
approach would allow for incremental adjustments to the regulations and 
clarify any uncertainty in the rule. Id. at 11-12.
    OCWGA and PONL both assert that the Commission should determine the 
level of specificity it requires for such filings to be meaningful, and 
balance that need against the burden on filers. OCWGA at 19; PONL at 8. 
OCWGA suggests that the Commission seek to alleviate commercial harm 
arising from the disclosure of sensitive business information and the 
administrative costs associated with filing agreements so specific that 
they require constant amendments which also must be filed. OCWGA at 19.
    A summary of comments addressed to the specific questions contained 
in the NOI follows. (a) The Commission asked whether the current filing 
exemption for routine operational or administrative matters should be 
eliminated, retained in its current form, or modified (NOI Question 1). 
Although the current regulations provide that filed agreements be ``the 
complete agreement among the parties and * * * specify in detail the 
substance of the understanding of the parties'' (46 CFR 535.407(a)), as 
summarized below, several comments generally remark that there are 
exceptions to this requirement. The comments cite the Commission's 
rules allowing ``permissive authority'' at 46 CFR 535.407(b) \3\ and 
the exemption from additional filing for interstitial implementation of 
routine operational or administrative matters at 46 CFR 407(c). OCWGA 
contends that the Commission has never required the parties to a filed 
agreement to actually exercise all the authority in an agreement. It 
also alleges that the Commission's proceedings in Docket No. 97-07, 
Possible Unfiled Agreement between Hyundai Merchant Marine Co., Ltd. 
and Mediterranean Shipping Co., S.A., 28 S.R.R. 1428 (2000) and Docket 
No. 97-08, Possible Unfiled Agreement Among A.P. Moller-Maersk Line, 
P&O Nedlloyd Limited and Sea-Land Service, Inc., 28 S.R.R. 1431 (2000) 
(``Docket No. 97-08''), deviate from that position. OCWGA at 12-13. 
OCWGA asserts that allowing permissive authority benefits both the 
Commission and the carriers because it allows the Commission to 
consider both the immediate and potential future effects of the 
agreement, while providing carriers essential operational and 
commercial flexibility. Id. at 13. OCWGA suggests that not allowing 
such permissive authority would be impossibly burdensome for both 
carriers and the Commission. Id.
---------------------------------------------------------------------------

    \3\ That provision states:
    Except as provided in paragraph (c) of this section, agreement 
clauses which contemplate a further agreement or give the parties 
authority to discuss and/or negotiate a further agreement, the terms 
of which are not fully set forth in the enabling agreement, will be 
permitted only if the enabling agreement indicates that any such 
further agreement cannot go into effect unless filed and effective 
under the Shipping Act and that interstitial implementation of 
routine operational or administrative matters is permitted without 
requiring further filings.
---------------------------------------------------------------------------

    OCWGA gives four instances in which permissive authority could 
promote flexibility. Id. at 14-17. First, with regard to the 
requirement that an agreement provide information as to the number of 
vessels and vessel capacity/slots it intends to utilize, OCWGA asserts 
it would be useful for the Commission to formalize the current policy 
that an agreement may set forth a maximum number (or range) of vessels 
and capacity, or maximum number of slots, that may be used without 
amendment to the agreement. Id. at 14.
    Second, OCWGA states that the Commission's practice allowing 
agreements to describe their geographic scope in terms of port ranges 
rather than the specific ports served is beneficial because operational 
and commercial considerations may require diversions on short notice. 
Id. at 15. OCWGA further asserts that there is no regulatory purpose in 
requiring that an agreement name the specific ports it intends to serve 
rather than port ranges, because such information is provided to the 
Commission in the information forms and monitoring reports, and 
typically is also provided to the public through published sailing 
schedules. Id.
    Third, OCWGA recommends that agreements continue to have the 
ability to contain permissive authority for their members to discuss 
and agree on joining

[[Page 67512]]

other agreements, as the Commission would have notice of any action 
taken under such authority through a subsequent filing. Id. at 15-16. 
OCWGA objects to any requirement that an amendment to the original 
agreement also be filed when the parties exercise permissive authority. 
It asserts that such a requirement would serve no legitimate regulatory 
purpose and would be duplicative. It notes that there are 25 effective 
agreements currently on file with the Commission which contain this 
authority. Id. at 16. Finally, OCWGA recommends that the Commission 
allow permissive authority to include operational agreements, such as 
slot or space charters.\4\
---------------------------------------------------------------------------

    \4\ OCWGA's position on operational agreements generally is 
discussed below.
---------------------------------------------------------------------------

    PONL and CENSA contend that the term, ``routine operational or 
administrative matters'' used in section 535.407(c), lacks clarity. 
PONL at 6; CENSA at 1. CENSA suggests that the Commission identify and 
define those aspects of agreements which are relevant to its initial 
review and subsequent monitoring responsibilities, and establish 
specific rules with respect to them. CENSA at 2. OCWGA, however, 
recommends that the existing exemption for ``routine operational or 
administrative matters'' be retained in its current form. OCWGA at 10.
    PONL contends that the Commission's interpretations of the term 
``interstitial implementation'' \5\ in Docket No. 97-08 and Docket No. 
96-14, Compania Sud Americana de Vapores, S.A. v. Inter-American 
Freight Conference, 28 S.R.R. 137 (1998) (``CSAV''), have made that 
term very unclear. PONL asserts that its attempts to use the term 
``interstitial'' in agreements have met with objection from the 
Commission's Bureau of Trade Analysis Office of Agreements. PONL at 5.
---------------------------------------------------------------------------

    \5\ The terms ``interstitial implementation'' and ``routine 
operational or administrative matters'' are found in 46 CFR 
535.407(c), which provides that:
    [f]urther specific agreements or understandings which are 
established pursuant to express enabling authority in an agreement 
are considered interstitial implementation and are permitted without 
further filing under section 5 of the Act only if the further 
agreement concerns routine operational or administrative matters, 
including the establishment of tariff rates, rules and regulations.
---------------------------------------------------------------------------

    PONL asserts that if the Commission considers a conference's 
implementation of its tariff rate agreement authority an ``interstitial 
implementation,'' as indicated in the example in 535.407(c), then it 
should similarly consider implementation of authority to agree on a 
joint approach to joining a conference to be a routine administrative 
matter and an interstitial implementation of such authority. Id. PONL 
further asserts that the implementation of rates, terms, and conditions 
by an agreement with space charter authority should also be considered 
interstitial. Id. PONL suggests that an agreement that, for example, 
includes the authority for its members to enter into space charters, as 
well as other authorities, can enter into a space charter without any 
additional filings, as contemplated by 46 CFR 535.407(b). PONL asserts 
that little purpose would be served by requiring the public filing of 
agreements that involve interstitial implementation of express enabling 
authority contained in a filed and effective agreement. Id. at 8.
    (b) The Commission posed the question, ``if parties were required 
to file every arrangement or understanding that came within the scope 
of section 4, would they be subject to commercial harm or burden?'' 
(NOI Question 2). Section 5(a) of the Shipping Act requires the filing 
of a ``true copy of every agreement.'' 46 U.S.C. app. Sec.  1704(a). 
The Commission's regulations currently require that the filed agreement 
be true, complete, detailed and specific. 46 CFR 535.103(g), 
535.401(a)(1), 535.407(a). PONL, CENSA and OCWGA all assert that the 
Commission's requirement that the ``complete'' agreement be filed 
cannot be interpreted literally. PONL asserts that a literal reading 
would create an internal conflict between the Shipping Act's 45-day 
waiting period imposed on agreements before they become effective, and 
the fact that tariff rate reductions may become effective immediately. 
PONL at 7. Similarly, OCWGA believes that the 45-day waiting provision 
indicates that Congress did not intend to require every detail of 
coordinated carrier activity to be filed. OCWGA maintains that the 
Shipping Act's use of the phrase ``every agreement'' should not be 
construed literally or else it would be impossible to file every detail 
of joint or group arrangements. OCWGA at 8, 19. OCWGA asserts that 
imposing such a requirement on service contracting agreements would 
subject them to an enormous and repetitive filing burden (because the 
service contracts themselves are filed) and, in the case of contracts 
with confidentiality clauses, might violate the terms of the service 
contract itself and the Shipping Act. Id. at 21. OCWGA believes that at 
some level of specificity, ``agreements'' cease to have any relevance 
to the Commission's statutory duties. Id.
    CENSA contends that the term ``complete'' is of little guidance to 
the industry. CENSA at 1. PONL objects to the current regulation's 
requirement that a ``true and complete'' agreement be filed, stating 
that the statutory requirement is only that a ``true copy'' of the 
agreement be filed. PONL at 2 (comparing section 5(a) of the Shipping 
Act with 46 CFR 535.407(a)). It notes that the Commission's 
jurisdiction may not cover the ``complete'' agreement if, for example, 
it involves trade between foreign ports; and states that based on the 
Commission's regulations, ``complete'' does not include ``routine 
operational or administrative matters.'' Id. at 2-3 (citing 46 CFR 
535.407(c)).
    PONL asserts that certain agreements, for example, cross space 
charters, vessel sharing, and alliance agreements, that are on their 
face subject to additional understandings have been accepted for filing 
and allowed to go into effect by the Commission. Id. at 3. It further 
asserts that, therefore, the Commission's jurisdictional limitations, 
its current regulations, and its past practice of not objecting to the 
filing of agreements using permissive authority phrases indicate that 
the term ``complete'' does not literally mean complete. Id. at 4.
    NITL urges that only those carrier agreements which are likely to 
have a significant impact on competition in a given market continue to 
require ``complete'' filing with the Commission. NITL at 4. NITL 
asserts that the Commission and the public need to have the ability to 
read and understand the scope and terms of agreements that are likely 
to result in a reduction in competition or otherwise artificially 
influence the supply of and demand for ocean transportation service. 
Id. at 3-4. NITL opines that detailed and complete information filed by 
the carrier parties to such agreements is required. However, NITL 
cautions that the requirement for the filing of a complete agreement 
should not be interpreted so as to restrict useful operational 
flexibility, particularly in non-conference type settings such as 
space/slot charter and sailing agreements. Id.
    (c) The Commission asked whether it should adopt different 
standards for agreement content for different types of agreements. (NOI 
Question 3). OCWGA points out that the Commission already distinguishes 
between conference and other types of agreements in 46 CFR 535.404, but 
warns that developing further general standards for different types of 
agreements may create more confusion. OCWGA at 22. With respect to 
alliances and space/vessel sharing agreements, which do not easily fit 
into fixed categories however, OCWGA suggests that the Commission 
clarify the filing requirements through guidance stated in functional 
terms, as opposed to

[[Page 67513]]

the rules' current use of classification terms. Id. at 22. OCWGA 
suggests as an example, that the Commission's rules direct that each 
``agreement that provides for the sharing of vessels or space on 
vessels shall state the maximum number and capacity of vessels that may 
be so employed.'' Id.
    NITL believes that the level of detail for filings related to 
agreements that would not significantly alter competitive conditions in 
a given market should be relaxed. NITL at 5. CENSA simply urges that 
the Commission avoid unnecessary and burdensome requirements and 
provide carriers with a reasonable amount of operational flexibility. 
CENSA at 2.
    (d) The Commission asked whether commenters could identify types of 
agreements currently filed which would be appropriate for exemption 
from filing under section 16 of the Shipping Act.\6\ (NOI Question 4). 
OCWGA, PONL and CENSA maintain that agreements with little or no 
competitive effect, agreements concerning operations, and slot charter 
agreements should all be exempt from the filing requirements of the 
Shipping Act. OCWGA asserts that agreements which typically have little 
or no competitive effect (such as those that do not authorize 
discussion or agreement on rates, vessel operating costs, shared vessel 
usage, service contracts, or capacity) should be completely exempt from 
the filing requirements of the Shipping Act. OCWGA at 23. OCWGA 
contends that this exemption would serve the dual purposes of defining 
the applicability of the term ``cooperative working arrangement'' found 
in section 4(a)(5) of the Shipping Act \7\ and providing certainty 
regarding the filing requirements. Id. It urges the Commission to 
retain the other existing exemptions. Id.
---------------------------------------------------------------------------

    \6\ Section 16 provides, inter alia, that the Commission ``may 
exempt for the future any class of agreements * * * if it finds that 
the exemption will not result in substantial reduction in 
competition or be detrimental to commerce.'' 46 U.S.C. app. Sec.  
1715.
    \7\ Section 4(a)(5) of the Shipping Act reads, ``This Act 
applies to agreements by or among ocean common carriers to--(5) 
engage in exclusive, preferential, or cooperative working 
arrangements among themselves or with one or more marine terminal 
operators * * * .'' 46 U.S.C. app. Sec.  1703(a)(5). The 
Commission's regulations define a ``cooperative working 
arrangement'' as an agreement which establishes exclusive, 
preferential, or cooperative working relationships which are subject 
to the Shipping Act of 1984, but which do not fall precisely within 
the arrangements of any specifically defined agreement. 46 CFR 
535.104(i).
---------------------------------------------------------------------------

    NITL suggests that the Commission consider further exemptions for 
other types of agreements that do not significantly affect competition. 
NITL at 6. NITL approves of the existing exemption from filing for 
interstitial implementation of routine operational or administrative 
matters found in section 535.407(c). Where full exemption for a certain 
type of agreement is not warranted, NITL believes that the Commission 
should consider a relaxation of other procedural requirements, such as 
the waiting period requirement. Id.
    OCWGA observes that in late 1996 and early 1997, Commission staff 
began informally requiring space charter, slot charter, sailing and 
other forms of cooperative agreements among carriers (collectively 
referred to as ``slot charter agreements'') to contain a greater degree 
of detail than had been required at any time since 1984. OCWGA at 4-5. 
OCWGA contends that there is now considerable uncertainty stemming from 
recent Commission proceedings as to what must be set forth in such 
agreements. Id.
    PONL suggests that the Commission adopt an exemption for simple 
space charter agreements where one carrier charters space to another, 
stating that this enhances, not reduces competition. PONL at 9. OCWGA 
opines that most slot charter agreements ``resemble a joint venture or 
partnership in which on-going and extensive operational coordination is 
necessary to provide an efficient, competitive, and coordinated 
service.'' OCWGA at 5-6. OCWGA urges that the Commission resolve this 
uncertainty in the proposed rules bearing in mind such things as the 
purpose of agreement filing, what information is practical to include, 
the procedural requirements of the Shipping Act, and flexibility for 
the Commission and carriers to process amendments to agreements. Id. at 
6.
    OCWGA contends that the Shipping Act's replacement of the ``public 
interest'' standard (which required an affirmative showing of public 
benefit before an agreement could be approved) with the presumption 
that agreements are permissible, changed the Commission's need for 
certain information. Id. at 7. OCWGA states that, therefore, the 
information necessary to analyze whether an agreement is likely to 
result in an unreasonable increase in rates or unreasonable reduction 
in services is identifiable and limited to the nature of the 
coordinated activities, the identity and number of parties involved, 
and the trades in which the agreement will operate. Id. Beyond these 
basic points of information, OCWGA contends, there is a dispute over 
what should be filed. Id. at 7-8.
    OCWGA further contends that operational arrangements arising from 
slot charter agreements that detail how the parties put into effect the 
authority set forth in the filed agreement should be exempted from 
filing, arguing the documents are ``non-standard'' and not ``created to 
fulfill a regulatory purpose.'' Id. at 17. OCWGA also opines that 
filing operational arrangements arising from slot charter agreements 
would be unworkable, because of their excessive specificity, and 
impractical, because including such details would require the frequent 
filing of amendments. Id.
    (e) The Commission asked whether the rates charged by one carrier 
to another for use of space and/or vessels should be exempt from filing 
or withheld from public disclosure. (NOI Question 5). PONL and OCWGA 
contend that for the last 15 years there has been a de facto exemption 
to the Shipping Act's filing requirements for slot charter costs. PONL 
at 9; OCWGA at 24. PONL states that requiring the filing and subsequent 
public disclosure of that information would harm carriers because other 
carriers would insist on getting the same rates, and competing carriers 
and shippers could use the price information in any further pricing and 
rate negotiation. PONL at 9. PONL believes that there would be no 
regulatory benefit to requiring that such rates be made public. Id. 
Similarly, OCWGA believes that these rates should be confidential and 
that the public has no legitimate interest in them. OCWGA at 24. OCWGA 
also maintains that such disclosure would be anticompetitive because it 
would ``circumscribe the ability of carriers to negotiate different 
rates with different carriers.'' Id.
    CENSA also asserts that the ``industry needs some degree of 
confidentiality with respect to the commercial terms of their 
operational agreements.'' CENSA at 2. It claims that requiring carriers 
to disclose the amounts they pay for vessel space ``could prove to be 
anticompetitive and contrary to the objectives of OSRA.'' Id.
    (f) The Commission requested comments on whether public disclosure 
of filed agreements is useful to shippers, intermediaries, labor, non-
party carriers, marine terminal operators or other interested persons. 
(NOI Question 6). PONL and OCWGA state that beneficial shippers and 
ocean transportation intermediaries (``OTIs'') have shown little 
interest in filed agreements. PONL at 10; OCWGA at 24. OCWGA opines 
that on the rare occasions that shippers or OTIs do express such 
interest they usually request the information directly from the carrier 
or from the agreement rather than from the Commission.

[[Page 67514]]

OCWGA at 24. PONL suggests that the Commission answer this question by 
reviewing its records pertaining to requests for copies of agreements 
and comments on filed agreements. PONL at 10.
    ILA would like certain matters in agreement filings to be made 
public and for agreements filed with the Commission (and noticed in the 
Federal Register) to document the origins, destinations, and points of 
entry and departure of cargo accurately and in an easily understandable 
manner that will not handicap it in administering and enforcing the 
provisions of its own collective bargaining agreements. ILA at 1. ILA 
argues that not making such information publicly available would hamper 
its ability to detect the movements of containers destined for a 
designated port area but off-loaded at different port. Id. at 1-2. ILA 
states that it requires access to the carriers' electronic systems, and 
that it is concerned by some carriers' practice of making certain 
information public but masking it in digitized codes. Id. at 2. ILA 
maintains that it is not seeking to have the Commission require 
disclosure of competitive rates of carriers, their surrogates or 
allies. Id. Although ILA asserts that its labor contracts apply 
regardless of whether the filed agreement is classified as a ``rate 
agreement'' or an ``operational agreement,'' ILA wants the ``ability to 
anticipate and locate the shipments which its contracts entitle its 
[l]ongshorepersons to handle and which are subject to charges as 
defined under those agreements.'' Id.
    (g) The Commission asked whether it can implement measures to 
protect commercially sensitive information contained in filed 
agreements. (NOI Question 7). Some commenters assert that there may be 
sensitive commercial information in filed agreements that the parties 
may legitimately need to protect. OCWGA notes that while section 6(a) 
requires publication in the Federal Register, section 6(j) appears to 
specify a different treatment for section 5 agreements than for 
``documentary material'' submitted under sections 5 and 6. OCWGA at 24-
25. It maintains that this may place some procedural restrictions on 
how the Commission implements its authority to protect such information 
from disclosure and urges that, ``[s]pecifically, in order for 
information to be unambiguously protected from disclosure, such 
information must not be required to be included in the agreement 
required to be filed under section 5.'' Id. PONL opines that the 
Commission has already implemented measures to protect commercially 
sensitive information because it does not require conferences to 
publicly file minutes and notes that the Commission's exemption 
authority can shield such information. PONL at 10.
    NITL believes that the Commission should not shield from disclosure 
information that would enable shippers to gain a thorough and complete 
understanding of the scope of a filed agreement likely to have a 
substantial impact on competition, such as conference or discussion 
agreements. NITL at 7. However, NITL asserts that information of a 
purely operational nature, and not relating to competition may be 
appropriately protected from public disclosure and should be determined 
on a case-by-case basis. Id.
    ILA believes that the Commission should require that agreements 
filed with it contain provisions which, while neither exposing rates 
nor other truly confidential data, would allow labor interests to track 
the movements of containerized cargoes subject to collective bargaining 
agreements. ILA at 2.
    (h) The Commission requested commenters to provide information on 
how competing concerns of completeness, burden and confidentiality are 
resolved in the filing requirements of other regulatory agencies. (NOI 
Question 8). OCWGA notes that no other agency operates under a 
statutory provision identical to section 6(j) of the Shipping Act but 
cites some comparable provisions used by other agencies. OCWGA at 26. 
These include provisions by the Department of Transportation (``DOT'') 
for air carrier agreements, the Surface Transportation Board (``STB'') 
for agreements among railroads, the Federal Trade Commission (``FTC'') 
for general pre-merger notifications and the Securities and Exchange 
Commission (``SEC'') for registration statements for securities. OCWGA 
notes that under 49 U.S.C. 41308 and 49 U.S.C. 41309(a) the Secretary 
of Transportation has the authority to exempt from antitrust laws 
cooperative air carrier agreements filed with it and that to obtain 
this exemption, an air carrier must file ``a true copy * * * and 
complete memorandum of an agreement.'' Id. OCWGA further notes that DOT 
has implemented regulations to protect the confidentiality of this 
information (14 CFR 302.39(b)) which provide a procedure by which a 
carrier may mark as confidential portions of an agreement and may move 
to withhold such portion from public disclosure.\8\ Id.
---------------------------------------------------------------------------

    \8\ The rule reads, in pertinent part:
    Any person who objects to the public disclosure of any 
information in any paper filed in any proceeding * * * shall 
segregate, or request the segregation of, such information into a 
separate paper and shall file it * * * separately in a sealed 
envelope, bearing the caption of the enclosed paper, and the 
notation ``Classified or Confidential Treatment Requested Under Sec. 
302.39.''
    14 CFR 302.39(b).
---------------------------------------------------------------------------

    OCWGA also cites to 49 U.S.C. 10502 which grants the STB authority 
to exempt rail carriers from the antitrust laws and directs it to 
approve and monitor those agreements pursuant to 49 U.S.C. 10704 and 
10705. OCWGA urges that 49 CFR 1313.7 and 1313.16 be used as examples 
for the confidential treatment of agreement information. Id. Finally, 
OCWGA notes that the FTC receives pre-merger notification filings for 
companies under its jurisdiction and that 15 U.S.C. 18a(h) exempts from 
disclosure any information filed pursuant to the pre-merger 
notification requirement, unless relevant to any administrative or 
judicial action or proceeding. Id.
    Similarly, PONL notes that the Antitrust Division of the Department 
of Justice (``DOJ'') receives pre-merger filings as well as requests 
for Business Review Letters and that DOJ may ask filers for more 
information and prevent disclosure of confidential information. PONL at 
10.
    PONL and OCWGA observe that the SEC receives securities 
registrations as authorized by its controlling statute which enumerates 
all information required to be submitted in the registration, but that 
SEC regulations allow filers to request confidential treatment by 
separating the confidential portion from the regulation statement and 
filing it separately. 17 CFR 230.406(2). PONL at 10; OCGWA at 26.

B. The Proposed Rule

    In accommodating the concerns expressed in the comments, the 
Commission must reconcile what may appear to be conflicting missions of 
the agency--on the one hand, to exercise the meaningful oversight of 
agreements to check any abuses arising from antitrust immunity required 
by section 6 of the Shipping Act, and on the other, to minimize 
regulatory intrusions and burdens, as required by section 1. Therefore, 
the Commission proposes the following regulations, which are intended 
to permit it to exercise effective oversight consistent with the 
Commission's statutory responsibilities without imposing undue 
regulatory burdens.

[[Page 67515]]

1. Proposed Changes To Address Concerns for Certainty

    Section 5(a) of the Shipping Act requires that a true copy of 
every agreement entered into with respect to an activity described 
in section 4(a) or (b) of this Act shall be filed with the 
Commission, except agreements related to transportation to be 
performed within or between foreign countries and agreements among 
common carriers to establish, operate, or maintain a marine terminal 
in the United States. 46 U.S.C. app. Sec.  1704.

    Many commenters assert that it is simply not reasonable to require 
the filing of a true copy of every agreement because there are some 
details which cannot reasonably be expected to be specifically 
reflected, and also for the following reasons:
    [sbull] Doing so would subject sensitive commercial information to 
disclosure, due to the notice requirement of section 6(a) of the 
Shipping Act;
    [sbull] The parties need more flexibility than the 45-day waiting 
period would provide;
    [sbull] There are details which have not yet been agreed upon when 
the agreement is filed;
    [sbull] Some details have no anticompetitive potential; and/or
    [sbull] The details are not reflected in standardized documents, so 
drafting them would be burdensome for the filer and reviewing them 
would be burdensome for the Commission.

Therefore, they argue that the text of the Shipping Act cannot be 
interpreted to literally mean a copy of the commercial agreement.
    The present text of the Commission's policy, stated at section 
535.103(g), was originally added in rulemakings in 1984.\9\ It 
represented a codification of the Commission's then-existing policy. 
Early on in its administration of the Shipping Act, the Commission had 
received agreements with unacceptably vague, incomplete or indefinite 
statements of authority. See, Docket Nos. 84-26 and 84-32 (final rule). 
Therefore, the Commission created this rule to ensure that ``a complete 
agreement is filed in sufficient detail to conduct a meaningful 
review.'' Id.
---------------------------------------------------------------------------

    \9\ 46 CFR 535.103(g) states:
    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.
---------------------------------------------------------------------------

    Such review, based on the requirements of section 6 of the Shipping 
Act, includes: (1) A preliminary review of the section 5 requirements; 
(2) a review for section 6(g) compliance; and (3) a general review of 
the agreement to ensure that it does not facially contravene other 
sections of the Shipping Act (e.g., acts prohibited by section 10). 
Section 535.103(g) reflects the Commission's need for specificity in 
order that it may: (1) Evaluate the probable impact of an agreement; 
(2) conduct ongoing monitoring of agreement operations (especially for 
section 10(a)(2) and (3) prohibitions); and (3) avoid ambiguities 
concerning antitrust immunity granted to agreements.\10\
---------------------------------------------------------------------------

    \10\ In Docket Nos. 84-26 and 84-32 (final rule), the Commission 
stated, ``agreements should be sufficiently precise and definite to 
determine whether a particular activity is within the scope of the 
antitrust immunity conferred upon them by section 7 of the 
[Shipping] Act.'' 49 FR at 45332.
---------------------------------------------------------------------------

    The policy presently stated at section 535.103(g) is carried out 
through section 535.407(a)\11\ which requires an agreement to ``reflect 
the full and complete present understanding of the parties as to its 
essential terms.'' Docket No. 84-32, Rules Governing Agreements by 
Ocean Common Carriers and Other Persons, 49 FR 36371 (Interim Rule and 
Request for Comments) (``1984 Interim Agreement Rule''). The 1984 
Interim Agreement Rule also described the reach of section 535.407(a) 
as follows:
---------------------------------------------------------------------------

    \11\ Section 535.407(a) provides:
    (a) 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.

    The rule does not contemplate that every activity be enumerated 
in detail. However, general grants of authority which do not specify 
the activities under the agreement are not favored. For example, an 
agreement which, as its authority, merely recited the language of 
section 4(a)(1)-(7) of the Act would require some further 
clarification. Otherwise, review of such an agreement would be 
virtually meaningless. Such general statements of authority, even 
where clarified by subsequent refinement, should be avoided. Id. at 
---------------------------------------------------------------------------
36372.

    Some commenters claim that the industry does not have a clear 
understanding of the significance of the term ``true and complete,'' 
and argue that the phrase cannot be interpreted literally if it is read 
concurrently with the exemption allowing routine operational or 
administrative matters interstitial to a filed agreement without 
further filing. Some commenters also point out that matters which may 
be part of the commercial arrangement but which are outside the scope 
of the Commission's jurisdiction necessarily must not be included in 
the filed agreement.
    The Commission's rules (as well as past Commission case law) are 
not more extensive than its jurisdiction: section 535.103(g) refers to 
an ``agreement filed under the Act'' and section 535.407(a) refers to 
``any agreement required to be filed by the Act.'' These jurisdictional 
limitations, also discussed in Transpacific Westbound Rate Agreement, 
951 F.2d 950 (9th Cir. 1991) (``TWRA''), provide boundaries to the 
information required in a filed agreement. Nevertheless, these concerns 
appear to be addressed to the limits of the Commission's subject matter 
jurisdiction over agreements, as opposed to the completeness with which 
matters within that jurisdiction must be reflected.
    The Commission has consistently interpreted 46 U.S.C. app. Sec.  
1704(a) to require filed agreements to be complete, specific, detailed 
reflections of the present understanding of the parties. 46 CFR 
535.103(g) and 535.407(a). The commenters point to no legislative 
history to demonstrate that the subject matter jurisdictional 
limitations of the Shipping Act indicate that its drafters did not 
intend the phrase ``true copy'' to be interpreted literally. A general 
definition of the term indicates ``[a] true copy does not mean an 
absolute exact copy but means that the copy shall be so true that 
anybody can understand it.'' Black's Law Dictionary (1995 ed.).\12\ For 
oral agreements, the Shipping Act requires that ``a complete memorandum 
specifying in detail the substance of the agreement'' be filed. 46 
U.S.C. app. Sec.  1704(a). The Commission finds no indication that 
Congress intended the Commission to subject oral agreements to greater 
requirements than those which are written. Therefore, we disagree with 
the commenters' assertion that the text of the Shipping Act cannot be 
interpreted literally.
---------------------------------------------------------------------------

    \12\ See also, Associated-Banning Co. v. Matson Nav. Co., 5 
F.M.B. 336, 342 (1957), interpreting the ``true and complete'' 
standard under the 1916 Act(``when parties file an agreement for 
approval they must include all understandings and arrangements of 
the character covered by section 15 which exist between them at the 
time.'')
---------------------------------------------------------------------------

    Nevertheless, we recognize that there may be some legitimate 
confusion as to what the Commission expects a filed agreement to 
contain. This confusion may have arisen from the Commission's 
historical usage of suggested language for form and manner, especially 
for filed agreements' ``authority'' clauses. We believe confusion may 
also arise when the policy reflected in sections 535.103(g) and 
535.407(a) is read in tandem with the allowances of sections 535.407(b) 
and (c) for further agreements on certain routine matters. However, we 
find no precedent to support the proposition that the term ``true and 
complete'' means only those

[[Page 67516]]

details which the Commission had positively required to be filed in its 
prior form and manner regulations.
    For the sake of clarity, the Commission now proposes to remove 
current sections 535.103(g) and 535.407(a) and replace them with a 
newly created section 535.402 to serve as one concise and clearly 
controlling rule. The new section is intended to reassert the 
Commission's original interpretation requiring the filing of the 
commercial document as agreed to by the parties, in contrast to the 
filing of a document drafted solely to meet U.S. regulatory 
requirements.
2. Proposed Changes to Address Concerns for Future Commercial 
Flexibility
a. Requirement to File Every Agreement (46 CFR 535.402)
    In promulgating what is now section 535.407(a), the Commission 
asserted that the statute and the new rule required that an agreement 
``reflect the * * * present understanding of the parties as to its 
essential terms.''\13\ 1984 Interim Agreements Rule at 36372. Thus, the 
Shipping Act does not require or allow for the filing of proposed, 
draft or preliminary agreements. In addition, the Commission's rules 
positively prohibit clauses in agreements which contemplate a further 
agreement, sometimes called ``agreements to agree.'' 46 CFR 
535.407(b).\14\ Allowing vague authority clauses to be filed in 
agreements appears to conflict somewhat with the Commission's policy 
requiring that the agreement ``set forth the specific authorities and 
conditions under which the parties to the agreement will conduct their 
present operations' (46 CFR 535.103(g)). However, forward-looking 
clauses have been permitted when there is an indication that any 
further contemplated agreements will not be carried out unless and 
until filed and effective under the Shipping Act. 46 CFR 407(b).
---------------------------------------------------------------------------

    \13\ See also, Isbrandtsen Co. v. States Marine, 6 F.M.B. 422, 
434 (1961)(``There is no filing requirement until there is an 
agreement or a meeting of minds * * * regarding activities described 
in Sec. 15.''). The issue in this case concerned unacceptably vague 
authority statements in agreements that were being filed at the 
time.
    \14\ This prohibition might appear to be inconsistent with the 
Shipping Act's specific provision for agreements ``to discuss and 
agree on any matter related to service contracts.'' 46 U.S.C. app. 
Sec.  1703(a)(7). However, we believe the statute provides 
consistent treatment by providing that any resulting agreement with 
respect to service contracts be reflected in confidentially filed 
``voluntary guidelines.'' 46 U.S.C. app. Sec.  1704(c)(3).
---------------------------------------------------------------------------

    In order to address parties' needs to maintain future flexibility 
in agreements describing their collaborative arrangements, the 
Commission generally has permitted the filing of agreements containing 
statements of authority which must be amended when the parties have 
reached the details of their agreement. The Commission has also crafted 
an exemption for certain day-to-day details, thereby removing the 
filing requirement for ``interstitial implementation of routine 
operational and administrative matters.'' 46 CFR 535.407(c). However, 
the comments appear to suggest that this approach has proved 
unsatisfactory.
    In suggesting that the statute be read broadly enough to 
accommodate the future needs of parties, the commenters use a term that 
appears neither in the Shipping Act nor in the Commission's 
regulations: ``permissive authority.'' This term apparently refers to: 
(1) Authority that may never actually be exercised (e.g., ``the parties 
may discuss rates'' or ``the parties are authorized to discuss 
rates''); (2) broad statements of authority (e.g., ``the parties are 
authorized to exchange slots on such terms as they may from time to 
time agree''); or (3) an agreement to act ``within a range,'' for 
example, of capacity or ports served. Such forward-looking statements 
frequently appear in filed agreements. Indeed, the Commission itself 
may have encouraged their use by referring in its rules to agreement 
``authority,'' a term that itself implies future implementing 
agreements.
    Moreover, we recognize that parties may not wish to file details of 
their collaboration for at least two reasons. For example, this may be 
because: (1) agreement on the details has not yet been reached and the 
parties are still in negotiation, but wish to file and thereby commence 
the 45-day waiting period; or (2) the parties have reached a final and 
specific agreement, but anticipate changes to those understandings and 
wish to build flexibility into the document they file. No commenter has 
cited nor has the Commission found any legislative history of the 
Shipping Act which would support the suggestion that Congress intended 
that parties may file a ``preliminary draft'' of an agreement, which 
would commence the running of the 45-day review period. Therefore, the 
proposed regulations clarify that the Commission will not accept any 
such ``preliminary draft'' agreements.
    This determination is reflected in the revised section 535.402, 
which retains the Commission's core interpretation of the Shipping 
Act's requirement that a ``true copy of every agreement'' be filed. The 
proposed rule also clarifies this by rephrasing it as a positive 
requirement in section 535.402 rather than as a policy statement.
b. Modifications to Effective Agreements (46 CFR 535.407)
    While the Commission interprets the Shipping Act to generally 
require that parties file their final, detailed agreement, rather than 
a general agreement to collaborate, the Commission has also 
historically recognized certain exceptions to that general standard. 
The first of these exceptions is explicit in the Shipping Act: section 
4 necessarily contemplates certain agreements which cannot contain 
implementing details because they are by their very nature agreements 
to discuss future collaboration. These are the rate agreements 
authorized by section 4(a)(1), 4(a)(7) and 4(b)(1). 46 U.S.C. app. 
Sec. Sec.  1703(a)(1), (a)(7), (b)(1).
    We believe that the most logical interpretation of section 4 is 
that certain matters may not be discussed in detail unless and until 
the parties have a filed and effective agreement. Therefore, the 
parties cannot be required to file a detailed, complete or specific 
agreement for those types of agreements. We believe this view is 
supported by the Commission's historical treatment of conference and 
other rate-setting agreements in its rulemakings.
    The use of authority that might (or might not) be exercised 
pursuant to a filed agreement but would not require further filings, 
was first recognized by the Commission in ``suggested agreement 
language'' published in Docket No. 67-55 (General Order 24), Filing of 
Agreements Between Common Carriers of Freight by Water in the Foreign 
Commerce of the United States, 33 FR 11655 (1968). Those rules were 
intended to ``establish guidelines for the filing, format and content 
of agreements'' to ``encourage uniformity of agreements'' and expedite 
their review by the Commission. 46 CFR 522.1 (1968). To that end, the 
regulations suggested language to be used by conference and rate 
agreements.\15\ Although the 1968 ``guidelines'' for agreements 
included some suggested language for agreements other than conference 
and rate agreements, the suggested terms did not include ``authority'' 
clauses.\16\
---------------------------------------------------------------------------

    \15\ For conference agreements, the Commission's rules included 
the following suggested language:
    \16\ Pooling, joint service, sailing, transshipment and 
cooperative working agreements did not include the ``authority'' 
provisions which were suggested for conference and rate agreements. 
46 CFR 521.6(c)-(g)(1970).
    Authority Under This Agreement
    Subject to applicable provisions of law, the Conference is 
authorized to:
    1. Agree upon and establish rates and charges for the carriage 
of cargo and rules and regulations governing the application thereof 
and defining the service to be rendered therefor;
    2. Declare rates for specified commodities to be ``open'' with 
or without agreed minimum, and thereafter declare the rates for such 
commodities to be ``closed'';
    3. Agree upon and establish tariffs, tariff amendments, and 
supplements;
    4. Make rules and regulations for the handling and carriage of 
cargo;
    5. Provide for use of a contract/noncontract rate system for 
filing with the Commission for approval pursuant to section 14b of 
the Shipping Act, 1916;
    6. Agree on amounts of brokerage and/or compensation to 
forwarders and the conditions for the payment thereof as permitted 
by applicable law;
    7. Keep such records and statistics as may be required by the 
parties or deemed helpful to their interests.
    46 CFR 522.6(a)(1968)(emphasis added).
    Similar ``authority'' provisions were also suggested for non-
conference rate agreements. 46 CFR 522.6(b)(196

---------------------------------------------------------------------------

[[Page 67517]]

    On their face, therefore, such agreements were, in fact, 
``agreements to agree.'' The two sets of guidelines for agreement 
language (both intended for agreements with rate-making activity) were 
the only such Commission-provided examples for agreements containing 
such open-ended authority. It appears that over the years, the 
``suggested authority'' language has been adopted for use in non-rate-
making agreements (also called ``operational agreements'') as well.
    The Commission subsequently recognized and addressed the need for 
some open-ended authority in agreements through current section 
535.407(b). This provision permits ``agreement clauses which 
contemplate a further agreement or give the parties authority to 
discuss and/or negotiate a further agreement, the terms of which are 
not fully set forth in the enabling agreement'' to be included in filed 
agreements only if ``the enabling agreement indicates that any such 
further agreement cannot go into effect unless filed and effective 
under the Act.'' The 1984 Interim Agreements Rule's supplementary 
information described the Commission's reasons for requiring that 
provisions in agreements that contemplate further agreements not become 
operative until filed and effective under the Shipping Act:

    [a] problem of open-ended authority arises where an agreement 
allows for future substantive modification of an agreement without 
specifically requiring filing under section 5. Such general 
authority to make future modifications without filing with the 
Commission would subvert the Commission's ability to review and 
monitor an agreement. 49 FR 36372.

    The Commission's 1984 Agreements Rules offered a further degree of 
commercial flexibility to agreement parties through another provision: 
the exception from filing for the ``interstitial implementation of 
routine operational and administrative matters'' under section 
535.407(c).\17\ The Commission explained in the 1984 Interim Agreements 
Rule that the provision was originally intended to ``allow[] 
flexibility to make changes for tariff matters or routine operational 
and administrative matters having no anticompetitive effect.'' 49 FR 
36372. The Commission asserted that this section ``provide[s] that 
activities which may reasonably be viewed as interstitial to a stated 
agreement authority need not be expressly stated.'' Id. The Interim 
Rule gave only the following two examples: (1) authority to establish 
``overland common point'' rates would be interstitial to general 
ratemaking authority, but establishing a tariffed contract rate system 
would not; and (2) changes in the terms and conditions of a charter 
party (contract) underlying a space charter agreement would generally 
be interstitial, but changes in the number of vessels (or range of 
number of vessels) and definition of vessel capacity (or range of 
capacities) dedicated in a joint service or space charter agreement 
would not. Id.\18\
---------------------------------------------------------------------------

    \17\ Section 535.407(c) reads:
    ``Further specific agreements or understandings which are 
established pursuant to express enabling authority in an agreement 
are considered interstitial implementation and are permitted without 
further filing under section 5 of the Act only if the further 
agreement concerns routine operational or administrative matters, 
including the establishment of tariff rates, rules, and 
regulations.''
    \18\ The Commission also gave the following guidance:
    ``[A]n agreement which merely stated that the parties are 
authorized ``to operate a joint service,'' without indicating the 
number, or range of vessels, committed to the service would not be 
deemed to reflect the full understanding of the parties. Such a 
deficiency would defeat any meaningful Commission review. Similarly, 
a statement in a joint service agreement which authorized the 
parties to ``acquire substitute or additional tonnage'' would result 
in a situation where the Commission would be unable to evaluate the 
economic impact of the agreement on the trade under section 6(g). 
Finally, a filed agreement which referred to or was governed by 
another agreement not filed with the Commission would be 
incomplete.''
    Id.
---------------------------------------------------------------------------

    Until recently, conferences (and other rate) agreements were those 
with which the Commission had the most concern. The Commission's 
current rules on agreements were adopted at a time when conferences 
were the principal method by which ocean common carriers exercised 
their antitrust immunity to achieve price discipline and rate 
stabilization. Now, however, there has been a precipitous decline in 
the number and role of traditional conferences, and their influence has 
been supplanted by discussion agreements on pricing. This development, 
concurrent with the appearance of global strategic alliances, has 
resulted in agreements which may be more effective than conferences 
ever were at stabilizing rates by controlling capacity.
    As a result of the above-discussed history, the commenters assert 
that ``permissive authority'' has come to be invoked for matters much 
broader than simply the implementation of rate-related authority, i.e. 
tariffs and service contracts. In addition, the exemption from filing 
for ``interstitial implementation of routine operational and 
administrative matters'' under section 535.407(c) has been a prime 
source of confusion. Some commenters assert that ``interstitial 
implementation of routine operational or administrative matters'' could 
be indicated by the use of phrases such as, ``the parties agree to ----
-- according to terms, rates and conditions as the parties may from 
time to time agree.'' Thus, with respect to ``permissive authority,'' 
responses to the NOI generally proffer two types of future actions 
taken pursuant to an agreement: (1) those allowed by grants of 
authority which might (or might not) be exercised, but which do not 
anticipate subsequent filing if exercised; and (2) those allowed 
without further filing due to their categorization as ``interstitial 
implementation of routine operational or administrative matters.'' 
There also appears to be another type of ``permissive authority'': that 
which outlines a range (for example of capacity, ports, etc.) in which 
the agreement may operate. The following discussion addresses each of 
these interpretations.
    In promulgating the exception for ``interstitial implementation of 
routine operational and administrative matters,'' the Commission 
explained that section 535.407(c) would be interpreted on an ad hoc 
basis. Id. The comments received in the NOI demonstrate that this ad 
hoc approach may have created some confusion. Recently, the Commission 
found a violation of section 10(a)(2) of the Shipping Act \19\ where a 
conference failed to file its understanding as to the winding up of its 
affairs. The respondent conference argued that such a matter was 
``routine operational or administrative'' and therefore exempt from the 
filing requirements. Compania

[[Page 67518]]

Sud Americana De Vapores S.A. v. Inter-American Freight Conference 
(``CSAV''), 28 S.R.R. 141, 141-142 (1998). The Commission found that 
the winding up was not ``routine operational,'' but extraordinary and, 
therefore, not falling within the exemption of section 535.407(c).
---------------------------------------------------------------------------

    \19\ Section 10(a)(2) reads, ``No person may . . . operate under 
an agreement required to be filed under section 5 of this Act that 
has not become effective under section 6, or that has been rejected, 
disapproved or canceled.''
---------------------------------------------------------------------------

    In CSAV, the Commission provided further guidance as to matters it 
would consider ``routine operational or administrative,'' namely, the 
establishment of individual tariff rates; \20\ the scheduling of 
individual meetings; the securing of office space or supplies; and the 
circulation of particular reports or memoranda to members. These are 
matters which require day-to-day operational flexibility.CSAV, 28 
S.R.R. at 142.
---------------------------------------------------------------------------

    \20\ The establishment of individual tariff rates are 
specifically enumerated as exempt in the text of the rule. 46 CFR 
535.407(c).
---------------------------------------------------------------------------

    As discussed above, the Commission's general rule has been that all 
agreements must be true, complete, detailed and specific and represent 
the present understanding of the parties. With the exception of 
agreement clauses which anticipate a further agreement to be filed that 
are permitted under section 535.407(b), only two types of ``further 
agreements'' may be acted upon without further filing: agreements which 
fall under section 535.407(c), or which are otherwise exempt from 
filing under an explicit exemption found in subpart C of this part.
    OCWGA suggests that the Commission recognize four additional types 
of ``further agreements'' as ``interstitial implementation of routine 
operational or administrative matters'': (1) Changes to the number of 
vessels/slots (or changes within a quantified range); (2) changes in 
port calls; (3) decisions on operation within another filed agreement; 
and (4) ``operational'' agreements generally. OCWGA at 14-17. While we 
rejected the first three suggestions in our previous rulemaking on 
``routine operational or administrative matters,'' we now reconsider 
these suggestions in light of the comments and recent changes in the 
industry.
    It has been the Commission's approach since the passage of the 
Shipping Act to determine on an ad hoc basis what it considers 
``routine operational and administrative matters'' to be implemented 
without further filing. However, we believe the comments indicate the 
public's desire that the better approach is to list specifically 
operational matters that are exempted and revise the current 
regulations accordingly.
    OCWGA's suggestion that the Commission enumerate what must be 
contained (a positive list), rather than what need not be contained (a 
negative list or exemptions) appears impractical. The Commission 
chooses to follow the latter approach. While it is true that the 
Commission may anticipate some developments in the industry, we do not 
have the ability to predict them all, nor should we seek to stifle 
innovation or dictate what must be contemplated in an agreement. We 
can, however, determine what activities, as they are presently employed 
by agreements, are most likely not to raise concerns about competition.
    The Commission, therefore, proposes to remove the current terms 
``interstitial implementation'' and ``routine operational and 
administrative'' altogether from its rules, and add a list of specific 
exemptions for certain types of operations. Under section 16 of the 
Shipping Act, the Commission has the discretion to grant exemptions it 
finds will neither cause substantial reduction in competition nor be 
detrimental to commerce. 46 U.S.C. app. Sec.  1715. The Commission has 
determined to propose several new specific exemptions to replace the 
current exemptions for ``routine operational and administrative 
matters'' and other operational matters which it finds have met the 
criteria for exemptions under section 16.
    The initial proposals for a list begin with the activities already 
determined by the Commission to be ``routine operational and 
administrative matters,'' such as those enumerated in CSAV. 
Additionally, the Commission proposes to include the following matters 
previously treated as ``interstitial implementation of routine 
operational and administrative matters'' not requiring further filing:
    [sbull] charter parties arising out of filed agreements (such as 
those pursuant to a space, slot or vessel sharing agreement);
    [sbull] specific monetary amounts for compensation for space; 
booking and documentation procedures;
    [sbull] insurance;
    [sbull] procedures for resolution of disputes relating to loss and/
or damage to cargo;
    [sbull] maintenance of books and records;
    [sbull] force majeure clauses;
    [sbull] common terminal and stevedoring arrangements;
    [sbull] procedures for allocating space and forecasting demand; and
    [sbull] schedule adjustments.\21\
---------------------------------------------------------------------------

    \21\ We recognize that most if not all of these commercially 
essential matters are likely determined before an agreement can be 
implemented and are unlikely to require frequent changes in the 
course of carrying out the agreement. We are skeptical that these 
need the sort of day-to-day flexibility the current exemption 
contemplates. Nevertheless, as a practical matter, we also recognize 
that these details of agreement implementation may be the most 
commercially sensitive and their absence appears to be unlikely to 
impair the Commission's ability to assess the relationship among the 
parties.
---------------------------------------------------------------------------

    With regard to the suggestion that changes to the number of vessels 
or slots to be operated (i.e., capacity) be implemented without 
amendment to an agreement, we find that it may be acceptable to change 
these terms without further filing if the originally-filed agreement 
contains an adequately described range (i.e., maximum and minimum) of 
slots or vessels to be used under the agreement and if the changes fall 
within that range. This approach would allow filers to adjust their 
agreement from time to time without the need to file, and allow the 
Commission to make an assessment of the commercial impact of the 
agreement for both ends of the range.
    OCWGA also urges the Commission to exempt slot charter costs from a 
filed slot charter agreement. As the comments point out, it has been 
the practice of the Commission to allow slot charter costs to be agreed 
upon from time to time (without requiring further filings or 
amendments), and not specifically disclosed in the filed agreement, 
under an interpretation of 535.407(b) and (c). The phrases, ``as may be 
agreed upon from time to time'' or ``whatever is reasonable based on 
actual costs'' have been used in filed agreements to this effect. We 
have therefore proposed to treat slot charter rates as matters 
specifically exempted in proposed section 535.408.
    The Commission is also proposing to codify its de facto exemption 
from the filing requirements for vessel charter parties in a new 
section 535.312. This codification would eliminate uncertainty the 
commenters now appear to have regarding which agreements must be filed. 
These contracts, which are generally for the control of single vessels, 
do not appear to have potential to result in a substantial reduction in 
competition or be detrimental to commerce, and are therefore within the 
Commission's section 16 authority for exemption from the requirements 
of the Shipping Act and its regulations.
    The commenters are also concerned about operational flexibility for 
changes to port calls which typically are commercial decisions that 
must be made quickly. It appears that most agreements are filed 
reciting only a general ``geographic scope'' within which they will 
operate. While it

[[Page 67519]]

remains a required term in the Commission's rules,\22\ geographic scope 
may be put forth in terms of ports or port ranges. This requirement has 
in the past provided adequate detail for Commission review purposes, 
while allowing changes in specific port calls or rotations to be made 
without filing a modification.\23\ Therefore, OCWGA's concern that port 
calls cannot presently be changed on an emergency or ``as-needed'' 
basis without filing a modification of the agreement (entailing a 45-
day waiting period) appears to be unfounded. Because the Commission's 
regulations currently provide that an agreement's scope may be defined 
in terms of port ranges, such a situation would only arise if the 
agreement were so specifically drafted as to contain each individual 
port. We agree that if within a port range, any changes would generally 
be acceptable with no need for further filing. We note OCWGA's 
assertion that the public generally is apprised of changes to port 
calls by the carriers themselves. While the Commission is sensitive to 
ILA's concern that allowing an agreement's specific port calls to be 
changed on an ad hoc basis may hamper its ability to anticipate where 
the cargo which its membership is entitled to handle will arrive or 
depart,\24\ we believe that the current approach, reflected explicitly 
in the proposed exemption, is an adequate accommodation to the 
legitimate commercial needs of parties to agreements.
---------------------------------------------------------------------------

    \22\ Section 535.403(b) requires, in pertinent part, that the 
parties ``[s]tate the ports or port ranges to which the agreement 
applies and any inland points or areas to which it also applies with 
respect to the collective activities contemplated and authorized in 
the agreement.''
    \23\ The Commission is apprised of parties' past service levels 
and initial changes resulting from an agreement through the 
concurrently-filed Information Form. 46 CFR part 535 App. A 
(Information Form, parts V, VI, and VIII). Thereafter, changes to 
the port calls which expand the overall geographic scope of the 
agreement must be indicated by the filing of a modification and in 
some cases an accompanying Information Form. 46 CFR 535.503(b). The 
Commission does not require such a filing for changes to port calls 
which effectively reduce the scope of an agreement.
    \24\ It appears that ILA may have confused Shipping Act 
agreements (a term of art in Shipping Act context) with 
``agreements'' used as a general term, and that their comments may 
more appropriately address issues which arise in a ``service 
contract'' context. It is unclear to which ``electronic systems'' 
ILA's comments refer--perhaps it is to the carriers' electronic 
container tracking systems or to electronic tariff publications.
---------------------------------------------------------------------------

    Third, OCWGA suggests that the Commission allow ``permissive 
authority'' to ensure flexibility as to how agreement parties would 
operate vis-a-vis another filed agreement. This appears to run afoul of 
NITL's concern that the public will not have adequate notice of how an 
agreement will operate. Further, PONL's assertion that any 
implementation of such an agreement will be reflected in an agreement 
filing, does not take into consideration either an agreement that the 
parties participate only to a limited extent or in a particular 
concerted manner in another agreement. The Commission's ability to 
assess an agreement's potential impact on competition would be severely 
impaired if the relationship between facially ``non-restrictive'' 
agreements and other agreements which contain market or capacity 
restrictions were not revealed. The Commission therefore declines to 
adopt such an interpretation.
    Fourth, the OCWGA recommends that the Commission allow agreements 
to implement ``operational'' agreements contemplated in, and pursuant 
to, authority within filed agreements without further filing. We note 
that NITL expresses no objections to permissive authority in agreements 
for ``purely operational matters which are not likely to have impact on 
competition.'' The proposed language attempts to address these 
concerns, without creating an exemption so broad as to render other 
provisions of the regulations meaningless, by an exemption for terms 
and conditions of space allocation and slot sales, the establishment of 
space charter rates, and terms and conditions of charter parties, if 
contemplated by a filed agreement.
    While we see nothing contradictory between the Commission's current 
rules requiring true, complete, and detailed agreements to be filed and 
those providing exemptions from filing certain agreements, the comments 
indicate that this position should be clarified. The Commission, 
therefore, proposes to revise sections 535.407(b) and sections 
535.407(c). New section 535.408 provides that an agreement reached 
pursuant to general authority in a filed agreement is not considered 
part of the filed agreement unless it provides for one or more of the 
``technical or operational matters'' specifically listed or is 
otherwise exempt from filing under the rules.
c. Exemptions
    Subpart C of part 535 of the Commission's current rules contains 
exemptions (either partial or full) from the filing requirements of the 
Shipping Act for several types of agreements and modifications to 
agreements.\25\ The commenters suggest further vague categories of 
agreements the Commission might exempt from filing, such as: (a) 
Agreements that have little or no competitive effect (but do not 
suggest what those may be); (b) agreements for routine operations (be 
exempt or have a reduced waiting period for effectiveness); and (c) 
slot charter arrangements (be fully exempt from filing). The Commission 
has the authority and discretion to grant exemptions from all 
requirements, or to grant exemptions limited to one or more of the 
specific filing, notice, and waiting requirements of the Shipping Act 
and its regulations, consistent with the policies of Congress.\26\ 46 
U.S.C. app. Sec.  1715. The Commission proposes one new exemption and 
several changes to existing exemptions, as discussed below.
i. Low Market Share Exemption and Definition of Capacity 
Rationalization (proposed Sec. Sec.  535.311, 535.104(e))
    The Shipping Act's general scheme is to enable filers to obtain 
immunity from prosecution for commercial collaborations that might 
otherwise be violative of the antitrust laws, in return for oversight 
of these collaborations by the Commission. 46 U.S.C. app. Sec.  1706. 
If not filed with the Commission, in addition to being a violation of 
the Shipping Act itself, collaborations restraining competition are 
otherwise subject to the antitrust laws and the scrutiny of the 
agencies which administer those laws.
---------------------------------------------------------------------------

    \25\ The Commission's current regulations contain various 
exemptions for the following types of agreements: non-substantive 
agreements and non-substantive modifications to existing agreements 
(exempt from notice and waiting requirements); husbanding agreements 
(fully exempt from filing requirements); agency agreements (limited 
exemption from filing requirements); equipment interchange 
agreements (fully exempt from filing requirements); non-exclusive 
transshipment agreements (limited exemption from filing 
requirements); marine terminal agreements (exempt from waiting 
requirements); agreements between or among wholly-owned subsidiaries 
and/or their parent (fully exempt from filing requirements); 
miscellaneous modifications to agreements (if filed for 
informational purposes, exempt from notice and waiting); marine 
terminal service agreements (limited exemption from filing and 
waiting requirements, but no antitrust immunity unless the agreement 
is filed); and marine terminal facilities agreements (exempt from 
filing and waiting requirements). 46 CFR 535.302-311.
    \26\ S. Rep. No. 61, 105th Cong., 1st Sess. 30 (1997) (``Senate 
Report'').
---------------------------------------------------------------------------

    The Commission believes that exemption from the Shipping Act's 
waiting period requirement of certain types of agreements that fall 
under a market share threshold (or ``safety zone'') may fall within the 
criteria of section 16 and be a reasonable way to meet the purposes of 
the Shipping Act by reducing the regulatory burdens on the industry. 
This approach also appears consistent with current

[[Page 67520]]

practices by other regulatory entities charged with oversight of 
commercial agreements affecting competition.\27\
---------------------------------------------------------------------------

    \27\ The Antitrust Guidelines for Collaborations among 
Competitors, (``Guidelines'') issued by the FTC and DOJ in April 
2000, provides a ``safety zone'' for ``situations in which 
anticompetitive effects are so unlikely that [FTC and DOJ] presume 
the arrangements to be lawful without inquiring into particular 
circumstances.'' Guidelines at section 4. To qualify for this 
exemption the parties to commercial collaborations must meet 
established market share thresholds as well as meet other enumerated 
conditions. The European Commission's Competition Directorate has 
adopted a similar ``safety zone'' approach for international ocean 
carrier collaborations which do not involve price-fixing of freight 
rates and fall below a certain market share threshold.
---------------------------------------------------------------------------

    Appropriately exempted agreements would appear to include those 
which: (1) have neither pricing nor capacity or trade lane allocation 
authority; and (2) have less than 20% combined market share in the 
relevant trade lane and all sub-trades, or 15%, if operating within a 
rate agreement. This exemption might cover, for example, non-exclusive 
two-party vessel sharing agreements and slot/space charters and other 
types of collaborative agreements in which the parties' combined market 
share falls below the 20% level. A definition of ``sub-trade'' 
consistent with the definition in the appendix to the Monitoring Report 
has been added to the Commission's regulations at Sec.  535.104(hh).
    The types of agreements outlined above would appear to meet the 
criteria under which the Commission has the authority to grant 
exemptions from requirements of the Shipping Act. The Commission has 
discretion to grant such exemptions only if doing so (1) will not 
result in substantial reduction in competition or (2) be detrimental to 
commerce. 46 U.S.C. app. Sec.  1715. Agreements within the safety zone 
exemption would appear to cause neither a substantial reduction in 
competition nor otherwise be detrimental to commerce.\28\ The 
Commission, therefore, proposes new section 535.311 providing for an 
exemption from the 45-day waiting period for agreements meeting the 
above-discussed criteria.
---------------------------------------------------------------------------

    \28\ We estimate 87 presently effective agreements would have 
qualified for this exemption.
---------------------------------------------------------------------------

    In connection with this proposed new exemption, the Commission also 
proposes to introduce a new term, ``capacity rationalization,'' to 
describe one of the authorities that would prevent an agreement from 
qualifying for this low market share exemption. The Commission's rules 
currently utilize the term ``capacity management agreement,'' which is 
defined very narrowly: only ``artificial'' reduction of space on a per 
vessel basis is contemplated. See, 46 CFR 535.104(e). However, sailing 
or space charter agreements, especially those with exclusivity clauses, 
such as vessel sharing arrangements or alliances, may also be properly 
considered agreements which manage or restrict the amount or use of 
productive capacity. Therefore, the Commission proposes to revise 
section 535.104(e) to utilize the term ``capacity rationalization'' 
rather than the term ``capacity management agreement,'' in order to 
distinguish between those agreements reflecting simple operational 
arrangements and those which actively impose restrictions on capacity, 
thereby raising section 6(g) concerns for effects on price and service, 
and to promote consistency with other Commission regulations. 
Agreements with capacity rationalization authority would include, for 
example, agreements in which the parties restrict their ability to 
provide transportation in the Trade on vessels other than those 
utilized by the agreement or to enter into services that are alternate 
to/or in competition with the services provided under the agreement, 
without the prior consent of the agreement members.
ii. Revision of the Present Exemptions for Non-substantive Agreements 
and Amendments, Miscellaneous Modifications (proposed Sec.  535.302), 
and Public Notice of Filings (proposed Sec.  535.602)
    As another effort to address the commenters' concern about the need 
for flexibility, the Commission proposes to retain and clarify its 
existing exemptions for certain types of modifications to agreements 
that may go into effect upon filing, or be filed for informational 
purposes only: namely, ``non-substantive'' modifications (46 CFR 
535.302) and ``miscellaneous'' modifications (46 CFR 535.309).
    We believe that the current ``non-substantive'' exemption is 
unnecessarily broader than the pre-1984 exemption for modifications 
which it was intended to continue, but which contained no category for 
``non-substantive'' initial agreements. The Commission believes that 
the scope of this exemption is unclear and thus should be revised. In 
addition, the Commission has determined to eliminate the practice of 
determining on an ad hoc basis through delegated authority whether an 
amendment to an agreement is ``non-substantive.'' 46 CFR 535.302(c). 
Therefore, the Commission proposes to combine some of the language of 
section 535.309 with that of a revised section 535.302 to eliminate the 
exemption for non-substantive initial agreements and enumerate the 
``non-substantive'' and ``miscellaneous'' modifications that are exempt 
from filing.
    The Commission proposes to remove the current exemption for 
``miscellaneous modifications'' for changes to parties to a discussion 
agreement contained in present section 535.309(a)(2)(i). Such additions 
in members to a discussion agreement may alter the potential 
competitive impact of the discussion agreement. On the other hand, the 
Commission believes that it is appropriate to continue the current 
exemption from the 45-day waiting period otherwise required by the 
Shipping Act for conferences, which are required to be open to all 
carriers serving the conference trade. Therefore, the Commission is 
proposing a revision to former 535.309(a)(2)(i) to indicate this 
change.
    In addition to the specific exemption changes discussed above, the 
Commission is also proposing to change its current policy regarding 
publication of notice in the Federal Register of agreement filings that 
are otherwise exempt from the requirements of this part. At present, 
the Commission does not publish notice of optionally-filed agreements 
and modifications, or agreements and modifications exempted from the 
45-day waiting period. However, the Commission recognizes that public 
notice is the most effective way for the public to know what agreements 
and modifications to agreements are being filed. The Commission 
believes it is important for the public to know, for example, whether a 
carrier joins a conference agreement or resigns from one, or whether 
certain marine terminal operators have leases. To that end, the 
Commission is proposing to revise Sec.  535.602 to indicate that a 
notice will be published in the Federal Register of each new agreement 
and agreement modification, including those agreements that are exempt 
from the 45-day waiting period and those that are optionally filed 
under the various exemptions in subpart C.
iii. Transshipment Agreements (proposed Sec. Sec.  535.104(jj) and 
535.306(a))
    The proposed rule changes for transshipment agreements are intended 
to clarify the Commission's view of what constitutes a transshipment 
agreement but not remove the filing exemption for nonexclusive 
transshipment agreements. The Commission has traditionally viewed 
transshipment agreements as agreements under which two ocean common 
carriers that both operate

[[Page 67521]]

vessels provide a through service between the United States and a 
foreign port. However, the Commission also recognizes that the ocean 
transportation industry has substantially evolved since the 
Commission's current agreement rules were drafted. One notable change 
is the increased use of vessel sharing or space charter agreements by 
ocean common carriers to replace or augment their direct services. This 
change may have led to the development of what the Commission considers 
to be nontraditional transshipment arrangements, such as those in which 
a publishing carrier provides a transshipment service solely by taking 
space on vessels operated by other ocean common carriers. In an effort 
to provide a regulatory environment that promotes commercial 
flexibility and the resulting economic efficiencies for the carriers 
involved and the shipping public, the Commission is amending its 
definition of transshipment agreement to clarify that such arrangements 
between two ocean common carriers may be considered to be a 
transshipment agreement subject to the Shipping Act if the publishing 
carrier operates its own vessel in the through movement or provides 
service on its leg of the through service in accordance with a filed 
and effective space charter agreement.
    The Commission acknowledged that there is some overlap between 
transshipment agreements and space charter agreements in promulgating 
the final rules implementing the Shipping Act, by stating that ``a 
transshipment agreement is a type of space charter.'' 49 FR 45324 
(November 15, 1984). This observation remains accurate in today's 
marketplace. Just as a space charter agreement permits an ocean common 
carrier to offer service in a trade without having to introduce its own 
vessels, a transshipment agreement permits a carrier to offer a service 
that it would not otherwise be able to provide unless it operated 
vessels on both legs of the transshipment. The publishing carrier pays 
the connecting carrier for space on the connecting carrier's vessel, 
just as a space charterer pays for the space that it uses on another 
ocean common carrier's vessel. Inevitably, therefore, a transshipment 
agreement includes space chartering.
    In 1984, the Commission exempted nonexclusive transshipment 
agreements from the filing requirements for policy and practical 
considerations. Though the publishing carrier provides certain 
information regarding the transshipment arrangement in its tariff 
pursuant to Section 535.306(b) and (c),\29\ the filing exemption has 
resulted in reduced transparency for transshipment arrangements. As a 
result, the shipping public may lack a clear understanding of how the 
through transportation is being provided. To address the issue of 
transparency that arises when an ocean common carrier does not use its 
own vessels in the through transportation as well as to clarify the 
Commission's view of what constitutes a transshipment agreement, the 
Commission is proposing the addition of new language to the definition 
of a transshipment agreement.
---------------------------------------------------------------------------

    \29\ Under Section 535.306, nonexclusive transshipment 
agreements are exempt from the filing requirement of the Shipping 
Act provided that the publishing carrier publishes in its tariff the 
through rate, the routings, any additional charges, and the 
participating carriers. The publishing carrier also issues the bill 
of lading.
---------------------------------------------------------------------------

    The added language would clearly set forth the Commission's 
position that an ocean common carrier offering a transshipment service 
must either operate a vessel involved in the through movement or have a 
filed and effective space charter agreement to cover the portion of its 
service between the United States and the port of transshipment. The 
Commission believes that it is consistent with the provisions of the 
Shipping Act relating to agreements (46 U.S.C. app. Sec. Sec.  1703, 
1704) to require an ocean common carrier offering a transshipment 
service pursuant to a transshipment agreement to operate at least one 
vessel involved in the through movement. Nevertheless, in recognition 
that many ocean common carriers in U.S. trades now depend on space 
charter agreements, in addition to their own vessels, to provide their 
services, the Commission is including such arrangements in the revised 
definition of a transshipment agreement. In both instances, the goal of 
transparency would be achieved.
3. Confidentiality of Sensitive Commercial Information in Filed 
Agreements
    The Commission has determined not to re-examine its interpretation 
of section 6(j) of the Shipping Act at this time. That provision reads,
    (j) Nondisclosure of Submitted Material.

Except for an agreement filed under section 5 of this Act, information 
and documentary material filed with the Commission under section 5 or 6 
is exempt from disclosure under section 552 of title 5, United States 
Code [FOIA] and may not be made public except as may be relevant to an 
administrative or judicial action or proceeding.

    The Commission's current regulation at 46 CFR 535.608(a) states,

(a) Except for an agreement filed under section 5 of the Act, all 
information submitted to the Commission by the filing party will be 
exempt from disclosure under 5 U.S.C. 552. Included in this 
disclosure exemption is information provided in the Information 
Form, voluntary submission of additional information, reasons for 
non-compliance, and replies to requests for additional information.

    Section 6 (j) of the Shipping Act should be read harmoniously with 
the notice provision of section 6(a), which states that ``[w]ithin 7 
days after an agreement is filed, the Commission shall transmit a 
notice of its filing to the Federal Register for publication.'' 46 
U.S.C. app. Sec.  1705(a). In this regard, current Commission 
regulations further define what the notice of filing must contain, 
reflecting a long-held understanding that the Commission should make 
the complete agreement as filed available to the public. 46 CFR 
535.602(b)(5). The current regulation is nearly identical to that 
originally adopted under the Shipping Act, 1916. 46 CFR 572.6(1997); 46 
CFR 522.6; General Order 24 (1968).
    The Commission has long interpreted the Shipping Act to require the 
public availability of the complete filed agreement, and to protect 
from Freedom of Information Act (``FOIA'') disclosure only information 
supplementing the agreement. The Commission has never provided by rule 
for the protection of information contained in a filed agreement and no 
objection has ever been filed to the disclosure of such information. 
Most of the commenters appear to assume that the only means of 
protecting sensitive information contained in agreements is through 
filing exemptions.
    Although no other statute precisely mirrors the Shipping Act 
procedures, especially as to the public's role in agreement review and 
their generally automatic effectiveness, we recognize that some 
agencies responsible for filings similar to agreements under the 
Shipping Act provide for confidentiality.\30\ While it may be

[[Page 67522]]

arguable, therefore, whether the drafters intended to preclude the 
Commission from protecting sensitive commercial information contained 
in the agreement itself, it appears unnecessary for the Commission to 
make any such determination now. As the Commission is now proposing to 
exempt the information identified by the commenters as potentially 
sensitive commercial information, we see no need to address this issue 
further at this time. Therefore, the proposed rule contains no further 
proposals in this respect. However, commenters may wish to raise this 
issue, as well as to identify any item of sensitive commercial 
information which would be included in an agreement required to be 
filed that is not within the terms listed in section 535.408 or 
otherwise exempted. Such comments should also address the issue of the 
Commission's authority to protect commercially sensitive information 
contained in filed agreements.
---------------------------------------------------------------------------

    \30\ See, e.g., DOT (14 CFR 302.39(b)), STB (49 CFR 1001.4) and 
SEC (17 CFR 230.406). It is unclear what effect Executive Order 
12,600 of June 23, 1987, may have on the Commission's ability to 
protect sensitive commercial information in filed agreements. 
Section 2(b) of that order directs Federal agencies ``to permit 
submitters of confidential commercial information to designate, at 
the time the information is submitted to the Federal government or a 
reasonable time thereafter, any information the disclosure of which 
the submitter claims could reasonably be expected to cause 
substantial competitive harm.'' The Commission's rules provide for 
such protection generally: for nondisclosure of filings generally, 
46 CFR 502.119; and for third party comments on agreements, 46 CFR 
535.603.
---------------------------------------------------------------------------

III. Information Forms and Monitoring Reports, 46 CFR Part 535, 
Subparts E and G.

A. Introduction

    Currently, when a carrier agreement is filed with the Commission, 
the Information Form regulations (subpart E of part 535) require that 
certain historic revenue and/or operational data be furnished for each 
party to the agreement. The Information Form must accompany the filed 
agreement. In addition, certain modifications filed as amendments that 
expand the geographic scope or authority of an existing agreement must 
also be accompanied by an Information Form at the time of filing. Once 
an agreement goes into effect under the Shipping Act, the Monitoring 
Report regulations (subpart G of part 535) require that ongoing revenue 
and/or operational data on the parties' activities under the agreement 
be submitted to the Commission for as long as the agreement remains in 
effect.
    The jurisdiction to set rules requiring carrier agreement 
information is conferred on the Commission by the Shipping Act. Section 
5(a) states that ``[t]he Commission may by regulation prescribe the 
form and manner in which an agreement shall be filed and the additional 
information and documents necessary to evaluate the agreement.'' 
Further, section 17(a) authorizes the Commission to ``prescribe rules 
and regulations as necessary to carry out'' the Shipping Act. 
Additionally, the Shipping Act gives the Commission the direct 
authority to obtain any relevant information from carriers. Pursuant to 
section 15, the Commission may issue an order to require any common 
carrier ``to file with it any periodical or special report * * * 
appertaining to the business of that common carrier.'' \31\
---------------------------------------------------------------------------

    \31\ The Commission has consistently held the view that the most 
reliable source of information on carrier agreements is directly 
obtained from the parties to the agreement. In Docket No. 94-31, the 
Commission stressed ``that information regarding the operation and 
probable future impact of an agreement ``[a]lmost uniformly is in 
the hands of those seeking approval * * * and it is incumbent upon 
those in possession of such information to come forward with it.'' 
Mediterranean Pools Investigation 9 F.M.C. 264, 290 (1966).'' See 
Dkt. No. 94-31, Information Form and Post-Effective Reporting 
Requirements for Agreements Among Ocean Common Carriers Subject to 
the Shipping Act of 1984, 61 FR 11564, 11565 (March 21, 1996). The 
Commission further emphasized this point by stating that ``the 1984 
Act removed the burden of proof in agreement investigations from the 
carriers, but did not alter the accuracy of the Commission's 1996 
observation in the Mediterranean Pools Investigation that the 
primary source for information on the operation of an agreement is 
the carriers that are the parties to the agreement.'' Id.at page 
11566.
---------------------------------------------------------------------------

    The proposed rule replaces the current regulations with regulations 
that would require all carrier agreements identified in Sec.  
535.201(a) and subject to the forty-five day waiting period to submit 
an Information Form for the Commission's review upon filing with 
information and data on the agreement and the authority in the 
agreement.\32\ The proposed rule limits the application of the 
Monitoring Report regulations to require reporting only from parties to 
agreements with certain authority. For some authority, the Monitoring 
Report regulations are further limited based on the parties' market 
share.
---------------------------------------------------------------------------

    \32\ ``Low market share agreements'' defined in section 535.311 
of the proposed rule would be exempted from the waiting period 
requirements, and from the Information Form and Monitoring Report 
requirements unless otherwise instructed by the Commission.
---------------------------------------------------------------------------

    The reporting requirements for the proposed Information Form and 
Monitoring Report have been modified in relation to changes that have 
occurred in carrier agreements. Reporting requirements that are no 
longer necessary have been eliminated. New reporting requirements have 
been added to obtain essential data, such as vessel capacity, from 
agreements with authority that poses concerns under the Shipping Act. 
New terms and definitions have also been provided in the instructions 
of the proposed Information Form and Monitoring Report. These terms and 
definitions are intended to provide carriers with clearer instructions 
that should help to improve the accuracy and consistency of the 
agreement data reported to the Commission. Commenters are encouraged to 
review these proposals with this intent in mind, and to suggest further 
refinements or feasible alternatives to the proposed terms and 
definitions.
    In general, the proposed modifications herein seek to ensure that 
the Commission receives the most meaningful and reliable agreement data 
to carry out its statutory responsibilities, without placing an undue 
regulatory burden on carriers. In this regard, the Commission has 
incorporated its experience in administering the current Information 
Form and Monitoring Report regulations. Changes in carrier agreements 
that have occurred since OSRA became effective have resulted in the 
changes reflected in the proposed rule. The proposed modifications also 
reduce, where possible, the reporting burden on the carriers.

B. Background

1. The Current Regulations
    The Information Form regulations for carrier agreements were 
originally established under the Shipping Act in Docket Nos. 84-26 and 
84-32 (final rule). Under this rule, depending on the agreement's 
authority, the Information Form required such data as market share, 
cargo carriage, and/or planned changes in port calls or services 
relating to the agreement. The rule did not prescribe standard periodic 
reporting requirements for carrier agreements after they become 
effective under the Shipping Act.
    The current Information Form and Monitoring Report regulations were 
promulgated in Docket No. 94-31, Information Form And Post-Effective 
Reporting Requirements For Agreements Among Ocean Common Carriers 
Subject To The Shipping Act of 1984, 61 FR 11564 (March 21, 1996). The 
Information Form is used in the agreement review process to analyze the 
probable economic impact of filed agreements, or certain agreement 
modifications. Carrier agreements are initially reviewed upon filing to 
assess their compliance with the Shipping Act, particularly with 
respect to section 6(g) and the prohibited acts in section 10. Upon 
review, the Commission determines whether any action under the Shipping 
Act is necessary within the 45-day waiting period before an agreement 
becomes effective. In addition, the data submitted in the Information 
Form provides historic (or baseline) economic figures for analyzing 
changes that may occur after the agreement goes into effect.

[[Page 67523]]

    The Monitoring Report enables the Commission to track and analyze 
the ongoing economic effects of an agreement after it becomes 
effective, and accordingly, determine whether any action under the 
Shipping Act may be necessary. Monitoring Reports also are used to 
assess the probable economic effects of modifications filed. Monitoring 
Reports further help the Commission to stay informed of agreement 
activity in the U.S. trades, and to address agreement issues that might 
arise in connection with investigations, complaints, inquiries, or 
petitions for Commission action against an agreement.
    The Commission's current regulations require some level of revenue 
and/or operational data from almost all carrier agreements subject to 
the Shipping Act. The degree of required data is determined by the 
agreement's classification. The current regulations classify agreements 
into three categories: Class A, Class B, and Class C. Upon a showing of 
good cause by an agreement, the Commission may waive any of the 
reporting requirements pursuant to sections 535.505 and 535.709.\33\ 
Carrier agreements that fall outside of the classifications set in the 
current regulations are not obligated to submit the specified agreement 
information, unless otherwise instructed by the Commission.\34\
---------------------------------------------------------------------------

    \33\ The Commission's authority to grant or deny waiver 
applications is delegated to the Director of the BTA in subpart C of 
part 501.
    \34\ Such agreements currently include housekeeping agreements, 
equipment management agreements, portal agreements, credit policy 
agreements, non-compete agreements associated with acquisitions, and 
general discussion agreements.
---------------------------------------------------------------------------

    For the Information Form, Class A and B agreements are grouped 
together as ``Class A/B,'' and are identified in section 535.502(a) as: 
rate agreements, joint service agreements, pooling agreements, 
agreements authorizing discussion or exchange of data on vessel-
operating costs, and agreements authorizing regulation or discussion of 
service contracts. Class A/B agreements contain forms of pricing or 
pooling authority that can have a significant impact on competition. 
The Commission thoroughly addressed its concerns with the agreement 
authorities included in the Class A/B category and the potential 
effects of each of these authorities on competition in its Notice of 
Proposed Rulemaking (``NPRM'')in Docket No. 94-31. See Dkt. No. 94-31, 
59 FR 62372, 62375-62376 (December 5, 1994).
    When a Class A/B agreement is filed for review, an Information Form 
must also be filed in accordance with the reporting requirements 
specified in appendix A of part 535 (section 535.503). These reporting 
requirements address the following topics relating to the parties 
activities in the agreement trade: other agreement participation, 
identification of agreement authority, market share for all liner 
operators, total average revenue, cargo volume and revenue results for 
major commodities, and port service. Much of this data must be 
specified for each sub-trade within the geographic scope of the 
agreement. The regulations define sub-trade to mean all liner movements 
between each U.S. port range and each foreign country within the scope 
of the agreement. The U.S. port ranges are specified separately for the 
Atlantic, Gulf, and Pacific coasts.
    Information Forms for Class C agreements require much less data. 
Class C agreements contain various forms of operational authority, and 
are identified in section 535.502(b) as sailing agreements and space 
charter agreements.\35\ In its NPRM in Docket No. 94-31, the Commission 
noted that ``[a]lthough such agreements have rarely presented serious 
regulatory concerns, some oversight is necessitated by section 6(g)'s 
admonition against agreements that cause unreasonable reductions in 
service.'' Id. at 62378. Thus, Class C agreements are only required to 
submit data on the parties' other agreement participation and port 
service within the agreement trade, in accordance with the reporting 
requirements specified in appendix B of part 535 (section 535.504).
---------------------------------------------------------------------------

    \35\ The Class C category does not include agreements 
authorizing capacity management or regulation as currently defined 
in section 535.104(e). Such authority was intentionally not included 
in section 535.502. At the time of the Commission's rulemaking, 
agreements with capacity management or regulation programs also 
contained rate authority, and therefore, automatically fell within 
the regulations. Subsequently, the authority for capacity management 
was withdrawn from agreements or held in abeyance. Presently, no 
agreements engage in capacity management programs as currently 
identified in section 535.104(e).
---------------------------------------------------------------------------

    For Monitoring Reports, however, the current regulations 
distinguish between Class A and B agreements.\36\ Class A agreements 
are identified as those agreements specified in section 535.502(a) with 
market shares of 50 percent or more in half or more of the their sub-
trades (section 535.702(a)(1)). Class B agreements are identified as 
those agreements specified in section 535.502(a) that do not have 
market shares of 50 percent or more in half or more of their sub-trades 
(section 535.702(a)(2)). To account for changes in market share that 
may alter an agreement's classification, the regulations direct BTA to 
classify all Class A and B agreements annually based on their second 
quarter market share data (section 535.702(b)). Class C agreements are 
also required to file quarterly Monitoring Reports and are identified 
as those agreements specified in section 535.502(b) (section 
535.702(c)).
---------------------------------------------------------------------------

    \36\ Under section 535.702(b), the classification of an 
agreement as Class A or Class B for purposes of its Monitoring 
Report obligations is initially based on the market share data 
reported on the agreement's Information Form pursuant to section 
535.503, or on similar data otherwise obtained. Thereafter, before 
the beginning of each calendar year, the agreement is classified as 
Class A or Class B for that year, based on the market share data 
reported on the agreement's quarterly monitoring report for the 
previous second quarter (April-June).
---------------------------------------------------------------------------

    Class A agreements file the most Monitoring Report data in line 
with the same sub-trade specificity required for the Information Form, 
as instructed in appendix C of part 535 (section 535.703). The amount 
of Monitoring Report data and sub-trade specificity is reduced for 
Class B agreements, as instructed in appendix D to part 535 (section 
535.704). Class C agreements only report on changes in the parties' 
other agreement participation and port service in the agreement trade, 
as instructed in appendix E to part 535 (section 535.705). As of August 
2003, there were 29 Class A agreements, 51 Class B agreements, and 133 
Class C agreements, for a total of 213 classified agreements on file 
with the Commission.\37\
---------------------------------------------------------------------------

    \37\ At the same time, there were 24 agreements on file with the 
Commission that were not subject to the reporting requirements.
---------------------------------------------------------------------------

    Since the current regulations became effective in 1996, carriers 
have continued to raise issues specifically regarding the Monitoring 
Report requirements. The Ocean Carrier Working Group Agreement 
commented on the Monitoring Report requirements in Docket No. 98-26, 64 
FR at 11240; Docket No. 01-01, The Impact Of The Ocean Shipping Reform 
Act Of 1998; Notice of Issuance of Notice of Inquiry, 66 FR 7764 
(January 25, 2001); and the Commission's Notice of Request for Public 
Comments Regarding Extensions to Existing OMB Clearances, 67 FR 10407 
(March 7, 2002).
    In sum, carriers have generally voiced concerns about the burden 
involved in preparing the quarterly sub-trade data for the Monitoring 
Reports for Class A agreements. To ease this burden, carriers have 
repeatedly requested that the level of Monitoring Report data for Class 
A agreements be reduced to the lesser level required for Class B 
agreements. In support of this request,

[[Page 67524]]

carriers have argued that market changes since OSRA have rendered the 
level of Monitoring Report data for Class A agreements unnecessary. In 
Docket No. 98-26, the Commission dismissed the carriers' request noting 
that ``[a]ny modifications in the current agreement monitoring program 
based on changed market conditions will be considered only after an 
opportunity to evaluate the competitive effects of OSRA's regulatory 
changes.'' See Dkt. No. 98-26, 64 FR at 11240.
2. Changes in Carrier Agreements Since OSRA
    The legislative reforms introduced by OSRA have considerably 
altered the ocean shipping industry in the U.S. trades. OSRA has 
encouraged carriers to operate more independently in response to 
competitive market forces. While these changes have improved 
competition, carriers are still very committed to cooperating in 
agreements and actively using their agreement authority to pursue and 
achieve their collective objectives. Thus, under OSRA, carrier 
agreements still can exert a powerful collective influence over 
competition in the U.S. trades. The Commission's need for reliable and 
specific information to evaluate and monitor carrier agreements 
remains.
    Under OSRA, a clear pattern in carrier agreement activity has 
emerged in most of the U.S. trades. Collective pricing by carriers 
under conference agreements has declined in favor of voluntary rate 
authority under discussion agreements.\38\ In addition, carriers are 
cooperating more in operational arrangements which can affect rate and 
service levels in the trades, particularly in agreements with capacity 
rationalization authority.\39\
---------------------------------------------------------------------------

    \38\ The preference for voluntary rate discussion agreements 
between carriers has evolved in most of the major U.S. trades, 
except for those trades that include member nations of the European 
Union (``EU''), where the conference system has remained in place. 
Conference agreements between ocean common carriers are specifically 
exempted from the competition laws of the EU, and the European 
Commission (``EC'') opposes other forms of collective pricing 
outside of formal conference agreements. The effects of conferences, 
however, have been mitigated under OSRA because most conference 
carriers heavily engage in individual service contracts to stay 
competitive in the trades. The EC further restricts conference 
carriers from adopting voluntary service contract guidelines and 
disclosing information relating to service contracts negotiated 
outside the conference system. Nonetheless, conferences still 
represent the main rate agreements in the U.S./Europe trades, and 
require close monitoring.
    \39\ The Commission's proposed rule defines capacity 
rationalization as the concerted reduction, stabilization, 
withholding, or other limitation in any manner whatsoever by ocean 
common carriers on the size or number of vessels or available space 
offered collectively or individually to shippers in any trade or 
service.
---------------------------------------------------------------------------

    Liner cargo in today's trades is predominantly shipped under 
individual service contracts with independently-negotiated freight 
rates and terms. While cargo carriage under a common conference tariff 
has diminished, discussion agreements and the concerted activities of 
their parties continue to pose significant anticompetitive and 
statutory concerns under the Shipping Act.
    Although compliance is voluntary, discussion agreements contain 
considerable, broad authority over rate, service contract, and service 
matters spanning large geographic areas in the U.S. trades. Further, 
many discussion agreements include most of the major carriers operating 
within their respective geographic scopes. Thus, discussion agreements 
generally have high market shares which contribute toward their ability 
to affect freight rates and competitive conditions. For example, each 
of the agreement market shares for the Transpacific Stabilization 
Agreement (``TSA'') and the Westbound Transpacific Stabilization 
Agreement (``WTSA'') in the U.S./Asia trades exceeds 70 percent.
    OSRA prohibited any mandatory restrictions on individual service 
contracts, but it allowed agreements to adopt voluntary service 
contract guidelines applicable to their parties' individual contracts. 
On a voluntary basis, carriers may collectively set and adhere to rates 
and terms for their individual service contracts. Thus, while agreement 
carriers are pricing more independently under OSRA, they still have the 
power to exert their collective influence over contract rates and 
terms.
    The extent to which voluntary authority and adherence are effective 
under discussion agreements likely depends on the prevailing and 
anticipated economic conditions in the respective agreement trades. 
Such conditions, however, are difficult to discern and even harder to 
anticipate without reliable agreement and trade information.
    Carriers are also relying more heavily on operational agreements to 
control the supply of excess vessel capacity. These agreements allow 
carriers to rationalize services and remove excess vessel capacity 
through vessel-sharing, space or slot chartering, sailing, and/or 
service arrangements. Operational agreements with capacity 
rationalization authority raise particular concerns under section 6(g). 
This concerted authority not only affects the amount of vessel capacity 
supplied in a trade, but also imposes restrictions on the parties' 
ability to freely participate in other service arrangements and/or 
independently operate competing services within the geographic scope of 
the agreement. Some carriers use this concerted authority to form 
complex and highly integrated alliance arrangements where the parties 
fix and allocate their collective vessel capacity on a global scale. 
Many of these alliances enter into space chartering agreements as a 
group with other carriers or groups of carriers.
    Carriers assert that operational agreements, even those with 
capacity rationalization authority, produce cost and service benefits 
for the shipping public. Carriers may use their concerted authority to 
better align the supply of vessel space with the demand for vessel 
space in specific trade lanes. In trade lanes burdened with high excess 
capacity, the coordination of vessel space between carriers can achieve 
efficiencies by lowering operational costs while still preserving, or 
even enhancing, the level and frequency of ocean liner services. 
Alternatively, a concerted reduction in vessel capacity and the 
restrictions imposed by capacity rationalization authority can result 
in a shortage of vessel space in a trade causing unreasonable service 
decreases and/or unreasonable rate increases in violation of section 
6(g). Even if a shortage does not occur, a concerted reduction in 
vessel capacity decreases the amount of market pressure placed on 
carriers competing to fill excess vessel space. This reduction in 
competition may be significant enough to enable carriers to increase or 
maintain rates more easily by discouraging rate discounting.
    These concerns are compounded where carrier agreements contain both 
rate and capacity rationalization authority. Even if these authorities 
are not in the same agreement, many carriers participate in large rate 
discussion agreements that cover broad trade areas and also participate 
in separate agreements with capacity rationalization authority in the 
same trade areas. These authorities are interrelated and complementary. 
Carriers may discuss and agree on their overall rate and service 
objectives under the broad authority of their discussion agreements, 
and implement and fix their service and capacity levels within the same 
trade using their capacity rationalization authority contained in 
separate agreements. Likewise, carriers may collectively fix the supply 
of vessel capacity in a trade, through their capacity rationalization 
authority contained in separate agreements, to

[[Page 67525]]

augment the overall rate objectives agreed upon in their discussion 
agreements. Thus, in addition to market conditions, the structure of 
complementary authority in agreements within trades further helps 
carriers achieve their collective objectives, depending on how well 
they can coordinate and maintain these efforts.
    While the use of conferences has subsided under OSRA, the benefits 
carriers enjoy as a result of their ability to participate in 
antitrust-exempted agreements under the Shipping Act has clearly not 
diminished. The developments in carrier agreements under OSRA reinforce 
the need for the Commission to obtain firsthand information directly 
from the carriers involved in agreements.

C. The Proposed Rule

    To account for the changes that have occurred in carrier agreements 
since OSRA, and considering the views of carriers, the Commission 
proposes the following modifications to the Information Form and 
Monitoring Report regulations and requirements.
1. Information Form Regulations
    The proposed rule no longer identifies carrier agreements by 
specific classes for the purpose of assigning reporting requirements. 
Instead, section 535.502(a) of the proposed rule would require that all 
carrier agreements identified in section 535.201(a), except for low 
market share agreements identified in section 535.311, submit an 
Information Form when the agreement is filed with the Commission. 
Agreements with certain authorities that have significant potential to 
affect competition would be required to submit Information Form data 
pertaining to the specific authority contained in the agreement.
    The current agreement classification regulations in section 535.502 
provide procedures for assigning specific reporting requirements to 
specific types of agreements. Agreements filed at the Commission, 
however, have evolved since the current classification regulations were 
implemented, especially under OSRA. Now, multiple or complex forms of 
authority may be contained in a single agreement that might not neatly 
fall under one specific agreement type or class. Further, the reporting 
requirements assigned to a particular type or class of agreement may 
not adequately address the full authority of the agreement. For 
instance, the current reporting requirements for Class C agreements do 
not distinguish between simple operational agreements, such as vessel 
space charter arrangements, and the more complex and anticompetitive 
operational agreements with capacity rationalization authority that 
include global alliance arrangements.
    Section 535.503(b) of the proposed rule addresses these concerns by 
assigning specific reporting requirements to specific authorities 
contained in agreements. While no rule can cover all circumstances, the 
Commission believes that this approach would more directly address the 
elements of concern within the agreement, i.e., the parties' authority 
and the concerted activities they may pursue with such authority. 
Further, the proposed rule would replace the current agreement 
classification procedures with simpler regulations and clearer 
instructions.
    Section 535.502(b) of the proposed rule would require an 
Information Form when a modification to an existing agreement is filed 
that adds the authority to discuss or agree on capacity 
rationalization, or pricing or pooling authority.\40\ Further, a 
modification that expands the geographic scope of such authority within 
an existing agreement would also require an Information Form under 
section 535.502(c) of the proposed rule. Aside from adding the 
Information Form requirement for agreements containing capacity 
rationalization authority, the proposed rule is not likely to increase 
the number of agreement modifications which would be subject to 
Information Form requirements. The proposed rule refers to agreement 
modifications by listing the actual authorities in place of the current 
agreement class labels. When authority is added or expanded, the 
competitive impact of the existing agreement is altered, and must be 
re-examined with a new Information Form.
---------------------------------------------------------------------------

    \40\ For ease of reference, the term ``pricing or pooling 
authority'' is used herein to identify agreements containing any of 
the following authorities: (a) The discussion of, or agreement upon, 
whether on a binding basis under a common tariff or a non-binding 
basis, any kind of rate or charge; (b) the establishment of a joint 
service; (c) the pooling or division of cargoes, earnings, or 
revenues and/or losses; (d) the discussion or exchange of data on 
vessel-operating costs; and/or (e) the discussion of service 
contract matters. These authorities are listed in the proposed rule.
---------------------------------------------------------------------------

    Section 535.504 of the proposed rule provides waiver procedures 
whereby carriers may request relief from any of the Information Form 
requirements. Additional information, however, would be required for 
the Commission's review of waiver requests. Applications for waiver of 
the Information Form requirements would have to provide data and 
information in support of the requested relief along with details on 
the agreement or agreement modification that is to be filed with the 
Commission.
2. Information Form
    The proposed rule changes the format of the Information Form. 
Section 535.503(a) of the proposed rule replaces the current 
Information Forms for Class A/B and Class C agreements with one form in 
appendix A of part 535. The form is divided into sections I through V. 
Section 535.503(b) of the proposed rule would require that agreement 
parties complete each section of the Information Form applicable to the 
agreement and the authority contained in the agreement. Sections I and 
V would apply to all carrier agreements subject to the Information Form 
requirements.\41\ Sections II, III and IV would apply based on the 
authority contained in the agreement. The Information Form would be 
made available in electronic format using Microsoft Office 2000 (Word 
and Excel) that could be downloaded from the Commission's home page. 
Parties may complete and submit their Information Form in paper format, 
or in electronic format on diskette or CD-ROM. This procedure will 
remain available until the Commission develops and implements an 
electronic filing system for such documents.
---------------------------------------------------------------------------

    \41\ Low market share agreements identified in section 535.311 
of the proposed rule would be exempted from all Information Form and 
Monitoring Report requirements unless otherwise specifically 
instructed by the Commission.
---------------------------------------------------------------------------

a. Section I
    As noted, section I of the proposed Information Form would be 
required from all carrier agreements subject to the Information Form 
requirements. Section I would require basic information on the 
following topics: the name of the agreement, narrative statements on 
the purpose and commercial circumstances relating to the agreement, a 
list of the parties' other agreement participation within the 
geographic scope of the filed agreement, and the identification of the 
authority and provisions contained in the agreement.
    Section I requires carriers to supply relevant agreement 
information to the Commission at the start of the review process. This 
information would be used in the initial review and analysis of an 
agreement, and would help to avoid formal requests for additional 
information which delay the effective date of the agreement. The 
Commission does not believe that section I would impose any undue 
burden on carriers because most agreements that fall under

[[Page 67526]]

the current regulations provide some degree of this information 
already. Carrier agreement filings that fall outside of the current 
classification regulations would also be required to provide this 
information. However, the number of such filings is very limited. 
Further, the Commission believes that this information is readily 
available to carriers and would not require any costly or extensive 
preparation that could affect or delay the filing of an agreement.
    The requirements for narrative statements on the purpose and 
commercial circumstances of the agreement are new. These statements are 
not intended to elicit a justification of the agreement. They would 
simply provide the Commission with a clearer understanding of the 
parties' collective objectives under the agreement in relation to their 
services within the agreement trade. It may be that the parties formed 
an agreement to start a new liner service to expand into a new trade 
area. Such information would be relevant to the Commission's review of 
the agreement, but might not be readily apparent by the terms of the 
agreement without seeking additional information from the parties.
    The proposed Information Form retains the existing requirement for 
a list of the parties' other agreements. The term ``other agreements'' 
refers to all other carrier agreements within the geographic scope of 
the filed agreement in which the parties to the filed agreement are 
participants. It remains important for the Commission to understand the 
parties' full authority within the context of all their agreements in a 
given trade. Given the brevity of the review period established by 
section 6 of the Shipping Act, it is necessary that the parties supply 
this information at the outset.
    The proposed Information Form continues to require that the parties 
identify the specific authorities contained in the filed agreement. 
Authorities identified in the Information Form would now be expanded to 
include authorities and provisions relating to operational agreements 
and capacity rationalization. This modification reflects the increased 
importance and use of such authorities by carriers. Further, in 
assigning reporting requirements based on the parties' authority, it is 
important that the full authority of the agreement be identified.
b. Section II
    Section II of the proposed Information Form would apply to carrier 
agreements that contain simple operational authority including vessel 
space charter and sailing or service rationalization arrangements. Such 
authority, however, would not include the establishment of a joint 
service, or capacity rationalization authority. The proposed 
Information Form retains the requirement that parties with operational 
authority provide data on their vessel calls at ports, along with a 
narrative statement of any changes in port service that are anticipated 
or planned to occur when the agreement goes into effect. For 
clarification, however, this requirement would be modified to limit the 
information required to vessel calls directly related to the parties' 
liner services covered by the agreement, rather than any or all vessel 
calls within the agreement trade. Similarly, changes in port service 
would be modified to mean anticipated or planned changes that the 
parties would implement under the agreement after it goes into effect, 
rather than any change in port service within the agreement trade. 
These modifications would refine the parties' data so that the actual 
impact of the agreement could be analyzed with greater accuracy.
c. Section III
    Section III of the proposed Information Form would apply to carrier 
agreements with the authority to discuss or agree on capacity 
rationalization. Section III distinguishes the more complex operational 
agreements with capacity rationalization authority from the simpler 
operational authorities identified in section II above. As such, new 
reporting requirements have been added. To enable the Commission to 
properly analyze these agreements, parties with capacity 
rationalization authority would be required to provide, for a calendar 
quarter period, data on their vessel capacity and percentage of vessel 
capacity utilization for their liner services that would be covered by 
the agreement. In order to secure accurate and consistent data, 
definitions of vessel capacity and capacity utilization are provided in 
the instructions of the proposed Information Form. In addition, parties 
with capacity rationalization authority would also be required to 
provide data on their vessel calls at ports for their liner services 
that would be covered by the agreement. Lastly, such parties would be 
required to identify and state any anticipated or planned changes in 
their vessel capacity and/or liner services (including ports) that 
would be implemented under the agreement after it goes into effect.
    Under the current Information Form regulations, operational 
agreements with capacity rationalization authority that do not contain 
pricing or pooling authority are Class C agreements. As such, the only 
operational data required from these agreements when filed relates to 
the parties' port services. As discussed above, however, capacity 
rationalization authority not only allows the parties to fix the levels 
of capacity and service as to which they will cooperate in a trade, it 
also restricts any other collective and individual operations of the 
parties within the agreement trade. In reviewing these agreements under 
section 6(g), the Commission is concerned about the likely impact of 
capacity rationalization authority on both service and rate levels in a 
trade. To determine this impact, the Commission has found it necessary 
in the past to request vessel capacity and capacity utilization 
information from parties to such agreements during the review process.
    The proposed Information Form would require this necessary 
information when the agreement is first filed. The Commission does not 
believe that these additional reporting requirements would impose any 
undue burden because the parties readily have this information when 
entering into such agreements.
d. Section IV
    Section IV of the proposed Information Form would apply to carrier 
agreements with pricing or pooling authority. Section 535.503(b)(4) of 
the proposed rule identifies the particular authorities contained in 
agreements which causes them to be subject to reporting information and 
data under section IV of the Information Form. These authorities are: 
(a) The discussion of, or agreement upon, whether on a binding basis 
under a common tariff or a non-binding basis, any kind of rate or 
charge; (b) the establishment of a joint service; (c) the pooling or 
division of cargoes, earnings, or revenues and/or losses; (d) the 
discussion or exchange of data on vessel-operating costs; and/or (e) 
the discussion of service contract matters.\42\
---------------------------------------------------------------------------

    \42\ Carrier agreements with these authorities currently fall 
under the Class A/B category and are listed as types of agreements.
---------------------------------------------------------------------------

    Agreements with any of these authorities would be required to 
submit data and information on the following topics in section IV: 
market share, total average revenue, cargo volume and revenue results 
for the top 10 agreement-wide commodities, vessel capacity and capacity 
utilization, and port service.

[[Page 67527]]

i. Market Share
    The proposed Information Form retains the requirement for market 
share data showing all liner operators for the entire geographic scope 
of the agreement and in each sub-trade within the scope of the 
agreement. The number of sub-trade reports, however, would be reduced 
by combining the separate U.S. Atlantic and Gulf port ranges into one 
U.S. port range. Liner services and pricing at U.S. Atlantic and Gulf 
ports are very similar, which allows these sub-trades to be combined. 
The different service and pricing circumstances prevalent at U.S. 
Pacific ports dictate that the Pacific be considered a separate U.S. 
sub-trade.
ii. Total Average Revenue
    The proposed Information Form continues the current requirement 
that the parties report their total liner revenues, total liner cargo 
carried, and average revenue within the geographic scope of the 
agreement. A definition of total liner revenues is provided in the 
instructions to improve the accuracy and consistency of the parties' 
revenue data. Without a clear definition, the parties could calculate 
their total liner revenues differently, which makes it difficult to 
conduct a proper analysis of the data.
iii. Cargo Volume and Revenue Results for the Top 10 Agreement-Wide 
Commodities
    The proposed Information Form retains, but significantly reduces, 
the reporting requirements for commodity data. Currently, when a Class 
A/B agreement is filed, the parties must report their cargo volume and 
revenue results for each major commodity for each sub-trade within the 
geographic scope of the agreement. The Commission first established 
these reporting requirements to incorporate commodity specific data 
into its impact analysis of agreements with pricing or pooling 
authority. See Docket No. 94-31, 59 FR at 62377. Commodity specific 
data remains an important component of the Commission's impact analysis 
of such agreements. The Commission, however, believes that the amount 
of commodity data reported can be reduced without hindering its ability 
to gauge the general impact of pricing or pooling agreements. 
Therefore, the proposed Information Form would eliminate the sub-trade 
requirement, and instead, would require that parties to pricing or 
pooling agreements report their cargo volume and revenue results on 
only the top 10 agreement-wide commodities. Commodity data reported on 
an agreement-wide basis, instead of a sub-trade basis, should be 
readily available to the parties and less burdensome to report. 
Further, a definition of revenue results is provided in the 
instructions to improve the accuracy and consistency of the parties' 
commodity revenue data. To maintain a consistent commodity reporting 
standard, the requirement that commodities be identified at the 4-digit 
level of customarily used commodity coding schedules remains. While 
some parties may not use commodity coding schedules to identify and 
track their cargo and revenues, such discrepancies should be easier to 
resolve under the reduced commodity reporting requirements proposed 
herein.
iv. Vessel Capacity and Utilization
    The proposed Information Form adds new reporting requirements for 
agreements with pricing or pooling authority. Parties to such 
agreements would be required to report, for a calendar quarter period, 
their vessel capacity and percentage of vessel capacity utilization for 
their liner services that would fall under the agreement. Further, the 
parties would be required to identify and describe any significant 
changes in the amounts of vessel capacity for their liner services that 
are anticipated or planned to occur when the agreement goes into 
effect. For consistency and clarity, the Information Form instructions 
provide definitions of vessel capacity, capacity utilization, and the 
term ``significant changes in the amounts of vessel capacity.''
    Parties to rate discussion and conference agreements collectively 
set freight rates in relation to the supply and demand conditions 
within trades. Even if these agreements do not contain operational 
authority, many rate discussion and conference agreements authorize the 
parties to exchange information and collectively discuss their vessel 
capacity, capacity utilization, and service levels. These agreements 
may regularly track and distribute this information to their carrier 
members. Further, as discussed, the parties may augment the overall 
rate objectives of their rate discussion or conference agreements by 
controlling the supply of vessel capacity under their separate 
operational agreements within trades.
    To analyze the likely impact of agreements with pricing or pooling 
authority accurately, the Commission must examine such authority in 
close connection with the amounts of vessel capacity supplied by the 
parties along with their corresponding capacity utilization 
percentages. For a complete analysis, the Commission also would need to 
know whether the parties are planning to significantly alter their 
vessel capacity levels after the agreement goes into effect. Often, the 
Commission has requested such information from parties to pricing or 
pooling agreements during the review process, and after such agreements 
have become effective as concerns under section 6(g) have arisen. The 
proposed Information Form would provide the Commission with this 
necessary information. As such, the Commission would be better able to 
analyze both the supply and demand conditions in the U.S. trades, and 
consequently, the potential impact of pricing or pooling agreements on 
freight rates. Carriers to such agreements are the best source of 
accurate vessel capacity and capacity utilization information regarding 
their liner services. The Commission does not believe that the addition 
of these reporting requirements would impose an undue burden since 
carriers already routinely track this information for their operations.
v. Port Service
    The proposed Information Form retains the requirement that parties 
to pricing or pooling agreements provide their vessel calls and 
describe any port service changes that are anticipated or planned to 
occur when the agreement goes into effect. As with similar 
modifications, this requirement would be clarified to limit the 
parties' reporting to only those vessel calls and port service changes 
relating to their liner services that would fall under the agreement, 
rather than any or all vessel calls and changes within the agreement 
trade.
e. Section V
    Section V would require that parties to all subject agreements 
identify contact persons for the Information Form and the agreement, 
and that the Information Form be certified and signed by a 
representative of the parties.
3. Monitoring Report Regulations
    Subpart G of part 535 of the proposed rule modifies the Monitoring 
Report regulations to mirror the proposed changes to the Information 
Form regulations in subpart E of part 535. Agreements subject to 
Monitoring Reports are identified by the authority contained in the 
agreement, rather than using the current agreement classifications. 
Most notably, the proposed rule reduces the number of agreements 
subject to Monitoring Reports and limits the application of the 
regulations.

[[Page 67528]]

    Currently, all Class A, B, and C agreements that are effective 
under the Shipping Act are required to submit quarterly Monitoring 
Reports. Section 535.702(a) of the proposed rule would require 
Monitoring Reports from all agreements with the authority to discuss or 
agree on capacity rationalization, and from agreements with pricing or 
pooling authority \43\ where the parties to a pricing or pooling 
agreement hold a combined market share of 35 percent or more in the 
entire U.S. inbound or outbound geographic scope of the agreement.\44\ 
The Commission estimates that the number of agreements subject to 
Monitoring Reports would be reduced from 213 to 63. These 63 agreements 
would include rate discussion, conference, and major global alliance 
agreements in effect throughout the U.S. trades. The Commission 
believes that Monitoring Reports from these agreements would generally 
provide sufficient information to monitor the collective activities of 
carriers within the U.S. trades pursuant to the standards of the 
Shipping Act.
---------------------------------------------------------------------------

    \43\ ``Pricing or pooling authority'' as referred to in the 
Monitoring Report regulations is identical to the use of the term in 
the Information Form regulations; i.e., it refers to any of the 
following authorities: (a) The discussion of, or agreement upon, 
whether on a binding basis under a common tariff or a non-binding 
basis, any kind of rate or charge; (b) the establishment of a joint 
service; (c) the pooling or division of cargoes, earnings, or 
revenues and/or losses; (d) the discussion or exchange of data on 
vessel-operating costs; and/or (e) the discussion of service 
contract matters.
    \44\ Under section 535.702(b) of the proposed rule, the 
Commission's Director of BTA may determine the Monitoring Report 
obligations of agreements with pricing or pooling authority using 
the 35 percent market share threshold. For newly filed agreements, 
this would be based on the market share data from the Information 
Form submitted with the agreement. Thereafter, at the beginning of 
each calendar year, BTA would notify such agreements of any change 
in their reporting obligations based on the market share data from 
their Monitoring Reports for the previous second calendar quarter 
(April-June).
---------------------------------------------------------------------------

    The Commission's proposal to apply a market share threshold of 35 
percent to monitor pricing or pooling agreements is analogous to the 
Horizontal Merger Guidelines issued jointly by the U.S. Department of 
Justice and the Federal Trade Commission in 1992. 1992 Horizontal 
Merger Guidelines (``1992 Guidelines''), 57 FR 41552 (Sept. 10, 1992). 
In analyzing horizontal mergers between firms, the 1992 guidelines set 
forth economic standards that the agencies use to apply U.S. antitrust 
law. Part of their analysis involves evaluating the likely effects of a 
merger on the competitive behavior of firms within a market. The intent 
is to determine whether a merger would likely lead to increased 
coordinated interaction between firms in a market, and/or create the 
incentive for merging firms to alter their unilateral behavior by 
increasing prices and suppressing output, i.e., supply. The agencies 
conclude that:

[w]here the merging firms have a combined market share of at least 
thirty-five percent, merged firms may find it profitable to raise 
price and reduce joint output below the sum of their premerger 
outputs because the lost markups on the foregone sales may be 
outweighed by the resulting price increase on the merged base of 
sales.\45\

    \45\ As discussed, carriers collectively set freight rates in 
relation to the supply and demand conditions within trades. The 
authorities to agree on rate levels and vessel capacity are 
interrelated and complementary even if such authorities are not 
contained within a single agreement. Many carriers in a trade may 
participate in a large rate discussion agreement and separate 
agreements with capacity rationalization authority, which such 
carriers may use to control the supply of vessel capacity to further 
their rate objectives under the discussion agreement. The Commission 
must examine the collective rate activities of carriers in relation 
to the vessel capacity supplied by carriers and any collective 
activities that might affect the supply of vessel capacity in a 
trade. For these reasons, the Commission believes that the 
underlying economic rationale used to apply the 35 percent market 
share standard under U.S. antitrust law makes it comparable and 
appropriate as a threshold for monitoring agreements with pricing or 
pooling authority.
    The proposed rule does not apply a market share threshold for 
monitoring agreements with capacity rationalization authority. These 
arrangements tend to operate globally, which makes it difficult or 
impractical to apply a standard market share threshold to the entire 
geographic scope of the agreement, or any one particular trade 
within the scope of the agreement. The definition of capacity 
rationalization authority, however, distinguishes it from simpler 
forms of operational authority, and therefore, limits the 
application of the Monitoring Report regulations.

---------------------------------------------------------------------------
1992 Guidelines at 41561.

    Market share provides a general economic measure to gauge the 
competitive influence of carrier agreements. Under the Shipping Act, 
however, the Commission does not solely rely on market share in 
assessing the competitive impact of a carrier agreement on freight 
rates and service levels in the U.S. trades. Other factors must be 
considered, including the authority and terms of the agreement, the 
competitive structure of the agreement trade, and the prevailing and 
projected economic conditions within the agreement trade. We note, 
however, that the 35 percent market share threshold used for 
application of periodic reporting requirements should not be construed 
as establishing a determination of the likely impact of an agreement 
for purposes of section 6(g) of the Shipping Act, nor does it imply 
that we consider pricing or pooling agreements below this threshold to 
be economically insignificant.
    The Commission recognizes that the Monitoring Report regulations 
must be flexible enough to provide for exceptional cases. These cases 
may occur when a pricing or pooling agreement with a market share below 
35 percent constitutes the major rate agreement in a trade, or poses 
unique anticompetitive or statutory concerns that would require close 
monitoring. Therefore, section 535.702(c) of the proposed rule provides 
that the Commission may, as necessary, require Monitoring Reports from 
an agreement with pricing or pooling authority with a market share 
below the 35 percent threshold.\46\
---------------------------------------------------------------------------

    \46\ The Commission's authority on this matter would be 
delegated to the Director of BTA in subpart C of part 501.
---------------------------------------------------------------------------

    In addition, the Commission occasionally may find it necessary to 
prescribe alternative periodic reports on the use of certain authority 
contained in an agreement. This may occur when an agreement contains 
unique authority, the effects of which may require monitoring, but is 
not captured under the standard Monitoring Reports. For example, the 
Commission currently requires alternative periodic reports, in addition 
to Monitoring Reports, from the Trans-Atlantic Conference Agreement on 
its temporary slot assist chartering authority. Traditionally, these 
types of reports have been negotiated on an informal basis with the 
parties when an agreement or an agreement modification was filed with 
the Commission. Section 535.702(d) of the proposed rule clarifies the 
Commission's authority in this regard by providing that in addition to 
or instead of the Monitoring Report, the Commission may, as necessary, 
prescribe alternative periodic reporting requirements on parties to any 
agreement subject to section 535.201.\47\
---------------------------------------------------------------------------

    \47\ Section 535.201 applies to carrier agreements, agreements 
between marine terminal operators, and agreements between carriers 
and marine terminal operators. At present, the Commission does not 
require any specifically prescribed periodic reports from any 
agreements between marine terminal operators, or between marine 
terminal operators and carriers. The Commission's jurisdiction to 
require additional information and documents from all such 
agreements is stated in section 5(a) of the Shipping Act. The 
proposed rule would delegate the Commission's authority to prescribe 
alternative periodic reports to the Director of BTA in subpart C of 
part 501.
---------------------------------------------------------------------------

    Section 535.705 of the proposed rule provides waiver procedures 
whereby carriers may request relief from any of the Monitoring Report 
requirements. Additional data and information in support of the 
requested relief, however, would be required for the Commission's 
review.

[[Page 67529]]

4. Monitoring Report
    Section 535.703(a) of the proposed rule replaces the current 
Monitoring Report forms with one form in appendix B of part 535 and 
divides the form into three sections. Section 535.703(b) of the 
proposed rule would require that parties to an agreement complete each 
section of the Monitoring Report applicable to the agreement and the 
authority contained in the agreement. Sections I and II would apply 
based on the authority contained in the agreement. Section III would 
apply to all agreements required to submit Monitoring Reports under 
section 535.702(a) of the proposed rule. The Monitoring Report form 
would be made available in electronic format using Microsoft Office 
2000 (Word and Excel) that could be downloaded from the Commission's 
home page. Parties may complete and submit their Monitoring Reports in 
paper format, or in electronic format on diskette or CD-ROM. This 
procedure will remain available until the Commission has developed and 
implemented an electronic filing system for such documents.
    It is further proposed to stay section 535.701(e) until such time 
as the Commission has developed and implemented an electronic system 
for filing Monitoring Reports and Minutes.
a. Section I
    Section I of the proposed Monitoring Report would apply to all 
agreements with the authority to discuss or agree on capacity 
rationalization. Parties to agreements subject to this section would be 
required to submit quarterly data on their vessel capacity and capacity 
utilization. These reporting requirements correspond to the proposed 
requirements in section III of the Information Form.\48\
---------------------------------------------------------------------------

    \48\ At present, the Commission estimates that there are 30 
agreements in effect with capacity rationalization authority.
---------------------------------------------------------------------------

    Section I would also require that a narrative statement of any 
changes in vessel capacity and/or liner services (including ports) that 
the parties plan to implement under the agreement be submitted to the 
Commission's Director of BTA no later than 15 days after a change has 
been agreed upon by the parties but prior to the implementation of that 
change (See section 535.703(c) of the proposed rule). Advance notice of 
the parties' planned changes in connection with this agreement 
authority is necessary. The Commission believes it should have more 
timely notice of such information than quarterly submissions would 
provide, in order to determine whether action pursuant to section 6(g) 
of the Shipping Act is necessary prior to implementation of a harmful 
reduction in vessel capacity or liner service.
b. Section II
    Section II of the proposed Monitoring Report would apply to 
agreements under which the parties to an agreement hold a combined 
market share, based on cargo volume, of 35 percent or more in the 
entire U.S. inbound or outbound geographic scope of the agreement and 
the agreement contains any of the following authorities: (a) The 
discussion of, or agreement upon, whether on a binding basis under a 
common tariff or a non-binding basis, any kind of rate or charge; (b) 
the establishment of a joint service; (c) the pooling or division of 
cargoes, earnings, or revenues and/or losses; (d) the discussion or 
exchange of data on vessel-operating costs; and/or (e) the discussion 
of service contract matters.\49\
---------------------------------------------------------------------------

    \49\ At present, the Commission estimates that there are 33 such 
agreements in effect.
---------------------------------------------------------------------------

    Parties to agreements subject to this section would be required to 
submit the following quarterly data and information: market share, 
total average revenue, cargo volume and revenue results on the top 10 
agreement-wide commodities, vessel capacity and capacity utilization, 
significant changes in vessel capacity, and significant changes in 
service at ports. These requirements correspond to the proposed 
requirements in section IV of the Information Form. The proposed 
Monitoring Report would no longer require quarterly reporting on 
independent rate actions for parties to conference agreements. With the 
industry changes which have occurred since OSRA, the Commission no 
longer believes that a quarterly reporting burden on conference parties 
to monitor this information is necessary.
    Regarding the commodity data requirements in this section, the 
Commission believes that quarterly information on the top 10 agreement-
wide commodities would be sufficient for most agreements subject to 
this section. The Commission, however, recognizes that exceptional 
circumstances may arise in which it would be appropriate to require the 
submission of data on a sub-trade or regional basis, rather than an 
agreement-wide basis. This may occur when an agreement with extremely 
high market share covers a broad trade area comprised of large distinct 
sub-trades or regions, and establishes rates distinctly by sub-trade or 
region. For example, the Commission believes that it may be appropriate 
to require large rate discussion agreements, such as TSA and WTSA, to 
report commodity data for this section on a sub-trade or regional 
basis. In addition, sub-trade commodity data may be necessary where 
unique anticompetitive concerns are present, or where competitive 
issues affect pricing for certain commodities. Therefore, section 
535.703(d) of the proposed rule provides that the Commission may, in 
its discretion, require sub-trade commodity data from agreements 
subject to this section of the Monitoring Reports.\50\
---------------------------------------------------------------------------

    \50\ The Commission's authority on this matter would be 
delegated to the Director of BTA in subpart C of part 501.
---------------------------------------------------------------------------

c. Section III
    Section III would require that parties to all subject agreements 
identify a contact person for the Monitoring Report, and that the 
Monitoring Report be certified and signed by a representative of the 
parties.

D. Implementation of the Proposed Information Form and Monitoring 
Report Regulations

    In order to assure a smooth transition from the Commission's 
existing system for collecting information and data in connection with 
filed agreements to the system proposed in this proceeding, the 
Commission proposes to implement the Information Form and Monitoring 
regulations as follows. The new regulations would become effective 30 
days after publication of a final rule in the Federal Register. All new 
agreements filed after that time would be required to comply with the 
new Information Form provisions. The new Monitoring Report provisions 
would become effective 90 days after publication, and would apply to 
all agreements then in effect under the Shipping Act. Commenters are 
encouraged to provide input on this proposed timetable.

IV. Minutes, 46 CFR Part 535, Subpart G

A. Introduction

    The Commission requires that certain agreements authorized to 
operate pursuant to section 4 of the Shipping Act, 46 U.S.C. app. 1703, 
file confidentially with the Commission a report of designated meetings 
describing all matters within the scope of the agreement which are 
discussed or addressed at any such meeting, and indicate any action 
taken. 46 CFR 535.706. The current minutes filing regulations, which 
largely reflect the original rules adopted nearly twenty

[[Page 67530]]

years ago following the enactment of the Shipping Act, provide the 
Commission with a summary of the business transacted at a meeting of 
parties to an agreement filed with the Commission. Minutes provide the 
Commission with information on specific areas on which agreement 
parties focus their attention (i.e., rates, service contracting, 
conditions of service), as well as the economic and competitive 
conditions of the trade that influence their collective activity. 
Minutes have been recognized by Congress as ``perhaps the chief means 
whereby the [agency] was to be kept apprised of conference action'' 
\51\ and are useful in monitoring the activities of the agreement and 
its members, and in understanding important topics and issues discussed 
by the agreement members. More recently, during the legislative process 
that led to the enactment of OSRA, the Commission was encouraged to be 
more vigilant in exercising its agreements oversight function.\52\
---------------------------------------------------------------------------

    \51\ Report of the Antitrust Subcommittee on the Judiciary on 
the Ocean Freight Industry, House of Representatives, 87th Cong., 
2nd Sess., 363 (1962).
    \52\ Senate Report at 13.
---------------------------------------------------------------------------

    The liner shipping industry has undergone significant regulatory 
and structural change since the enactment of the Shipping Act and the 
adoption of the Commission's current minutes regulations. Carrier 
agreements have become more complex, and many include authority to 
engage in a wider variety of activities. These changes have made it 
more difficult for the Commission to monitor agreement activities and 
assess economic and competitive trade conditions. Moreover, our 
experience reviewing agreement minutes, discussions with agreement 
filing counsel and representatives, and recent fact findings and other 
investigative proceedings have highlighted areas of concern that 
necessitate an enhancement of our minutes program. These areas of 
concern include: (1) Inadequate inclusion and coverage of substantive 
issues and insufficient level of detail used to describe carrier 
discussions; (2) failure to file minutes of meetings held under 
authority of the agreement where substantive issues are being 
discussed; (3) inadequate identification of and lack of provision for 
Commission access to documents used or discussed in agreement meetings; 
and (4) untimely filing of agreement minutes.
    To address these concerns, the Commission proposes to replace its 
rules governing the filing of minutes by agreements, currently set 
forth at 46 CFR 535.706-07.\53\ Our proposal would: (1) Require minutes 
to be filed by agreements based on the types of authority specified in 
the agreement, rather than according to agreement type as currently 
provided for in 46 CFR 535.706(b); (2) eliminate current regulatory 
language that limits the minutes filing requirement to meetings at 
which the parties are authorized to take ``final action'; (3) clarify 
the level of detail required to describe matters discussed or 
considered at agreement meetings; (4) establish a new requirement that 
each document distributed, discussed, or exchanged at meetings be 
submitted with the minutes of such meetings; (5) clarify the format 
used for assigning sequential numbers for minutes currently provided in 
46 CFR 535.706(d); (6) reduce the time period for filing minutes with 
the Commission from 30 days as required in 46 CFR 535.701(f), to 15 
days from the date of the meeting; and (7) amend language throughout 
the existing minutes rules to update definitions and Bureau 
designations, and replace references to ``conferences'' with the term 
``agreement,'' clarifying the broad range of agreements to which these 
provisions apply.
---------------------------------------------------------------------------

    \53\ Sections 535.706-07 will be redesignated as section 
535.704.
---------------------------------------------------------------------------

B. Discussion of the components of the current minutes rules and the 
proposed changes

1. Agreements Required to File Minutes
    The Commission's current rules require that minutes of agreement 
meetings be filed by ``conferences, interconference agreements, 
agreements between a conference and other ocean common carriers, 
pooling agreements, equal access agreements, discussion agreements, 
marine terminal conferences, and marine terminal rate fixing agreements 
* * *'' 46 CFR 535.706(b). Although most of these named agreement types 
are specifically defined in 46 CFR 535.104, others are not, e.g., 
discussion agreements.\54\ Thus, 46 CFR 535.706(b) identifies those 
agreements that must file minutes based on a specific type of 
agreement, rather than on the actual activities in which the parties 
are authorized to engage. Due to the changes in the industry and the 
concurrent increase in the types of agreement activities, this approach 
may not reflect all of the actual authority contained in the agreement 
itself, or the activities in which the agreement parties are engaged. 
Moreover, use of these agreement categories to identify which 
agreements must file minutes with the Commission often raises questions 
about agreements' compliance with Commission regulations. Further, use 
of these categories has often resulted in lengthy discussions with 
filing counsel as to an agreement's minutes filing responsibilities, 
particularly for those agreements that contain multiple authorities, 
e.g., vessel space sharing, voluntary rate discussion, and joint 
service contracting authority.
---------------------------------------------------------------------------

    \54\ While the Commission's rules do not specifically define a 
``discussion agreement,'' 46 CFR 535.104(aa) defines ``rate 
agreement'' to mean an agreement between ocean common carriers which 
authorizes agreement upon, on either a binding basis under a common 
tariff or on a non-binding basis, or discussion of, any kind of 
rate. An agreement between ocean common carriers that authorizes 
voluntary, non-binding agreement on or discussion of a variety of 
pricing or operational matters including rates and terms of 
individual carrier tariffs or service contracts, or capacity 
rationalization, is what is commonly referred to as a ``discussion 
agreement.''
---------------------------------------------------------------------------

    When the Commission's rules governing the filing of agreement 
minutes were promulgated under the Shipping Act, the authority of most 
carrier agreements generally fit into the enumerated categories in the 
rules. At that time, the specified agreement types represented the 
universe of consequential agreements filed with the Commission and 
minutes were filed by agreements considered to be of significant 
regulatory concern. Rarely was there a question as to an agreement's 
minutes filing responsibilities based on its agreement classification. 
However, over time these agreement categories have not kept pace with 
the evolving nature of collective carrier activities. For example, most 
agreements now on file with the Commission combine a number of 
activities under one agreement (e.g., operational agreements that also 
include authority to discuss service contract rates or terms), or have 
established new authority not anticipated when the current definitions 
were drafted (e.g., portal agreements).
    To address the evolving nature of carrier agreements and to clarify 
which agreements must file minutes of their meetings, we propose to 
create a new subsection (a) for the redesignated 46 CFR 535.704. This 
new subsection would provide that the filing requirement be based on 
the specific type of authority contained in the filed agreement, rather 
than on a generic agreement type. Thus, agreements authorized to engage 
in ``discussion or establishment of any type of rates, whether in 
tariffs or service contracts; pooling or apportioning of cargo; 
discussion of revenues, earnings, or losses; discussion or exchange of 
vessel operating costs; or discussion of service contract matters, 
including the

[[Page 67531]]

establishment of voluntary service contract guidelines'' would be 
required to file minutes of meetings with the Commission. We believe 
this approach more efficiently captures the true nature of agreements' 
activities.
2. Definition of Meeting
    Section 535.706(a) currently defines the term ``meetings'' as 
including ``any meeting of the parties to the agreement, including 
meetings of their agents, principals, owners, committees or sub-
committees of the parties authorized to take final action on behalf of 
the parties.'' Section 535.706(b) requires certain specified agreements 
to file ``a report of each meeting * * * describing all matters within 
the scope of the agreement which are discussed or considered at any 
such meeting * * * and shall indicate the action taken.''
    The Commission's review of agreement minutes, discussions with 
filing counsel and agreement representatives, and recent fact findings 
and other investigative proceedings, all indicate that the current 
definition of ``meeting'' is ambiguous and causes confusion over which 
meetings or discussions held under an agreement are subject to the 
requirement to file minutes with the Commission. Further, differing 
interpretations of the regulations have resulted in minutes of meetings 
not being filed when such meetings covered substantive issues. 
Questions have arisen over whether the minutes filing requirement is 
based on the level of authority of the participants at a given meeting 
(i.e., carrier representatives, committees, and subcommittees 
authorized to take final action on behalf of their respective lines or 
on behalf of the agreement, even if the discussions did not result in 
``final'' decisions), or on whether ``final action'' was taken. 
Moreover, numerous documents obtained in Commission proceedings 
indicate that the Commission has not received minutes for 
communications for which we believe the regulations contemplate the 
filing of minutes.
    Market-oriented regulatory reforms under the Shipping Act, and more 
recently under OSRA, especially those focused on liberalizing service 
contracting, encourage carriers to act more independently within 
discussion agreements, yet also challenge carriers to find effective 
ways to communicate and share information. Today, the Internet and 
agreement-administered email systems allow carriers to collect and 
share unlimited information on a more frequent and timely basis. Some 
agreements have comprehensive communications networks and procedures to 
ensure and support transparency through the flow of information among 
carrier members and the agreement secretariat. As a result, major 
discussions are being conducted under circumstances that may not be 
viewed as a meeting.
    Agreements structure their organizations in varied ways and utilize 
many methods for decision-making. Many conduct their business under 
multiple committees and sub-committees and file minutes of meetings 
held under some of those groups. Other agreements have a more 
streamlined structure and file few, if any, minutes for committees or 
sub-committees, even if major policy discussions are conducted at these 
levels. As a consequence, time-consuming staff follow-up with agreement 
representatives is often necessary to gain a clear understanding of the 
origins of and issues behind those discussions that are reported.
    In order to address these issues, the Commission proposes to revise 
the current definition of meeting at redesignated subsection 535.704(b) 
to include ``all discussions at which any agreement is reached among 
any number of parties to the agreement relating to the business of the 
agreement; and all other discussions among three or more members of the 
agreement (or all members if fewer than three) relating to the business 
of the agreement.'' Further, the rule would specify that this 
definition is intended to encompass meetings of the members' agents, 
principals, owners, officers, employees, representatives, committees or 
subcommittees. Thus, agreements authorized to engage in certain 
enumerated activities would be required to file minutes of all 
discussions among any number of members relating to the business of the 
agreement when an agreement is reached, and all discussions between 
three or more members relating to the business of the agreement 
regardless of whether an agreement is reached. Agreements with less 
than three members would submit minutes on all discussions relating to 
the business of the agreement. The proposal would also encompass 
discussions held via electronic means, and through agreement 
secretariats. The Commission considered eliminating completely the 
final action provision and proposing that minutes of all discussions 
among any number of members be filed. However, we believe that minutes 
of discussions between three or more members, whether or not agreement 
is reached, should provide the necessary coverage and details of 
relevant meetings enabling the Commission to obtain a clear picture of 
the activities of the agreement.\55\ Further, it is not the intent of 
the Commission to require the filing of minutes for such discussions as 
two-party electronic communications. Requiring the filing of minutes 
for discussions of this nature would put an undue burden on the 
industry and appears to be unnecessary.
---------------------------------------------------------------------------

    \55\ The term ``final action'' has been eliminated. See 
discussion, infra.
---------------------------------------------------------------------------

    We propose to retain the present waiver provision, currently at 46 
CFR 535.709 (redesignated as Sec.  535.705). Under that provision, a 
waiver from the minutes filing requirement may be granted in advance 
upon a showing of good cause.
3. Content of Minutes
    The Commission's current rules governing the content of minutes, at 
46 CFR 535.706(b), provide that specified agreements shall file with 
the Commission ``a report of each meeting * * * describing all matters 
within the scope of the agreement which are discussed or considered at 
any such meeting * * * and shall indicate the action taken.'' The rules 
do not, however, specify the degree of detail such reports are expected 
to contain. As a result, the minutes currently being filed under this 
provision vary considerably in detail and scope. We are particularly 
concerned about the filing of vague and obscure minutes by some 
agreements. As a consequence, the minutes being filed by some 
agreements are not useful in assisting the Commission in its oversight 
of activities taking place under the authority of the filed agreement.
    To that end, we are proposing to amend the minutes regulation, at 
redesignated subsection 535.704(c), to require that descriptions of 
agreement meetings be ``detailed enough that a non-participant reading 
the minutes could reasonably gain a clear understanding of the nature 
and extent of the discussions, and where applicable any decisions 
reached * * *'' We believe that this proposal more clearly enunciates 
our intention that the parties who are granted limited antitrust 
immunity to operate in concert under filed agreements must provide a 
sufficient degree of detail of the discussions permitted under these 
agreements. Further, we seek to make clear that full disclosure is 
required, and any efforts to obscure the true nature of discussions or 
actions taken is prohibited.
    The Commission's current rules, at 46 CFR 535.707, require 
agreements subject

[[Page 67532]]

to the minutes filing requirement to list in their minutes ``all 
reports, circulars, notices, statistics, analytical studies or other 
documents, not otherwise filed with the Commission, * * * which are 
distributed to the member lines and are used to reach a ``final 
decision'' on a variety of matters. The extent of compliance with this 
requirement is difficult to assess accurately since such documents may 
not be mentioned in minutes if they are not viewed as related to a 
``final decision.'' Such documents may not be used to reach a final 
decision, but may be used to guide members' independent activities. The 
general paucity of such listings in current minutes, as well as 
material developed from Commission information demand orders and 
through discussions with agreement secretariats and filing counsel 
suggest that compliance with this requirement is far from complete. 
Further, in instances where a document is identified in the minutes, 
Commission staff must then determine its importance and attempt to 
obtain a copy of the document. We believe it is more likely that many 
documents, collectively prepared or used by agreement members, remain 
unknown to the Commission.
    The Commission believes that effective monitoring of agreement 
activity requires efficient and timely access to such documents. To 
address this issue, we are proposing to eliminate the reference to 
``final decision'' and add to the redesignated 46 CFR 535.704(c) a 
subparagraph that agreements must file with their minutes ``any report, 
circular, notice, statistical compilation, analytical study, survey, or 
other work distributed, discussed, or exchanged at the meeting, whether 
presented by oral, written, electronic, or other means.'' However, the 
parties would not be required to submit publicly available materials, 
provided they are identified in the minutes and are readily accessible.
    This proposal is intended to provide the Commission with the 
relevant information necessary to fulfill its statutory obligation of 
monitoring carriers' collective activities to ensure they do not result 
in an unreasonable increase in transportation cost or an unreasonable 
reduction in transportation service. The Commission considered, as an 
alternative, requiring agreements to submit a summary of all documents 
discussed at minuted meetings in lieu of the actual documents. However, 
we rejected this proposal, believing that requiring agreements to 
create a summary, simply for filing purposes, would be more burdensome 
than requiring submission of the documents themselves. In addition, 
this approach would be less burdensome on the Commission's staff as it 
would reduce the utilization of scarce resources in tracking down 
documents, and instead allow us to focus on review and analysis of 
concerted activities.
4. Serial Numbers
    Current section 535.706(d)(1) requires each set of minutes filed 
with the Commission to be assigned a serial number, and provides an 
illustrative example suggesting that minutes of meetings be 
sequentially numbered from the date the agreement becomes effective. 
Section 535.706(d)(2) provides that any conference or rate agreement 
which has a system for assigning sequential numbers to its minutes 
which differs from the example may continue to use its own system.
    We now propose, at the redesignated 46 CFR 535.704(e), to require 
that each set of minutes filed with the Commission shall include the 
agreement name and number, and a unique identification number 
indicating the sequence in which the meeting took place during the 
calendar year. For example, the first meeting of 2003 for agreement 
``A'' would be listed as: ``A (Agreement Number), 1/2003.'' The second 
meeting would be listed as ``A (Agreement Number), 2/2003'' and so on, 
irrespective of whether the meeting is of a specific committee or 
subcommittee. Numbering would start over in the following calendar 
year, i.e., the first meeting of the 2004 calendar year would be ``A 
(Agreement Number), 1/2004.''
    The current rule suggests that serial numbers be applied 
sequentially. Almost all agreements currently assign serial numbers in 
this manner to meetings held during a calendar year and start a new 
numbering sequence for each consecutive year. In addition, about one-
third of those assign serial numbers based on the type of meeting or 
sub-committee, while a few agreements only refer to the date of the 
meeting and do not assign a unique serial number at all.
    Agreements filed with the Commission today typically have a complex 
organizational structure. Policy level meetings and committees are used 
to establish pricing policy and to discuss and address broad trade and 
competitive issues, while working committees or sub-committees (usually 
consisting of less than the full membership) conduct research; collect, 
compile and analyze data and information; and make recommendations to 
the higher level policy committees on significant matters. Ad hoc 
committees also are established as necessary, and teleconferences are 
frequently used as a means to conduct collective carrier business.
    Therefore, in order to establish and facilitate an efficient system 
for filing agreement minutes, as well as to manage the information for 
compliance and research purposes, the Commission proposes a regulation 
requiring a standard format for assigning serial numbers to agreement 
minutes. This proposal requires that agreement minutes' serial numbers 
be unique, sequentially assigned numbers reflecting the year in which 
the meeting takes place, adopting the format currently used by a number 
of carrier agreements.
5. Filing Deadlines
    Section 535.701(f) currently requires, among other things, that 
minutes of agreement meetings be filed within 30 days of the meeting, 
and that any documents requested by the Commission be filed within 30 
days from the receipt of a request. The 30-day requirement was 
established prior to the widespread adoption and use of new forms of 
electronic communications. Today, most agreements have electronic mail 
systems administered through a secretariat and use such systems to 
electronically record, review and disseminate information, including 
minutes of their meetings. Based on draft minutes of agreement meetings 
obtained in Commission investigations and responses to other Commission 
information demand orders, it appears that minutes for some agreement 
meetings are prepared within one or two days of the meeting (and 
sometimes the same day), and are provided promptly to the participants 
for review (mainly via email). These agreements then typically allow up 
to two weeks for the participants to respond with any revisions. Based 
on our comparison of the samples of draft minutes with the final 
versions, it appears that revisions are rare. Moreover, Commission 
records show that some agreements do file minutes of their meetings 
prior to the current 30-day deadline, and in fact, agreements have 
expedited their filings in response to informal staff requests for 
minutes of particular interest.
    The Commission therefore proposes that the time period for filing 
minutes of meetings, set forth at section 535.701(f), be reduced from 
30 to 15 calendar days from the date of the meeting. Relevant documents 
referenced in filed minutes would be submitted with the minutes.

[[Page 67533]]

V. Miscellaneous Changes to 46 CFR Part 535

    Along with all the proposed changes discussed above, the Commission 
is also taking this opportunity to update and clarify language in some 
rule sections. For the most part, these changes involve rewording of 
rules with no substantial change in the intent or effect of the 
affected rules. Apart from non-substantive language changes throughout 
the rules, some of the miscellaneous changes include rearranging the 
sequence of marine terminal agreement exemptions under subpart C of the 
rules; updating the name of the Bureau of Trade Analysis; clarifying 
the identities of parties to husbanding and agency agreements in 
Sec. Sec.  535.303 and 535.304, respectively; and clarifying the 
wording of the rules regarding requests for expedited review of 
agreements in Sec.  535.605, requests for additional information in 
Sec.  535.606, and failures to comply with requests for additional 
information in Sec.  535.607.
    Finally, the Commission is proposing removing obsolete language 
regarding the form requirements for agreements and agreement 
amendments; specifically, in Sec.  535.403 removing reference to the 
generic classification of agreements and the date of the last 
republication of an agreement from the title page. The Commission 
further proposes to add minor form requirements for reflecting the 
original effective date on the title page of an agreement when the 
title page is revised and requiring that the latest amendment number be 
reflected on each revised page in Sec.  535.403.

VI. Oral Presentations

    Pursuant to Rule 53(a) of the Commission's Rules of Practice and 
Procedure, 46 CFR 502.53(a) (2002), in notice-and-comment rulemakings 
the Commission may permit interested persons to make oral presentations 
in addition to filing written comments. The Commission has determined 
to permit interested persons to make such presentations to individual 
Commissioners in this proceeding, at the discretion of each 
Commissioner.
    Interested persons may request one-on-one meetings at which they 
may make presentations describing their views on the proposed rule. Any 
meeting or meetings shall be completed before the close of the comment 
period. The summary or transcript of oral presentations will be 
included in the record and must be submitted to the Secretary of the 
Commission within 5 days of the meeting. Interested persons wishing to 
make an oral presentation should contact the Office of the Secretary to 
secure contact names and numbers for individual Commissioners.

VII. Statutory Reviews and Request for Comments

    The reporting, recordkeeping, and disclosure requirements contained 
in this proposed rule have been submitted to the Office of Management 
and Budget (OMB). Public burden for this collection of information is 
estimated to average 37 hours per response for agreement filings 
(including information forms); 170 hours per quarterly response for 
monitoring reports from pricing or pooling agreements; 40 hours per 
quarterly response for monitoring reports from capacity rationalization 
agreements; and two hours per response for minutes filing. The overall 
estimated burden is 41,947 hours per annum, a reduction of 52.85 
percent from the current estimated burden of 88,970 hours per annum. 
These estimates include, as applicable, the time needed to review 
instructions, develop, acquire, install, and utilize technology and 
systems for the purposes of collecting, validating, and verifying 
information, processing and maintaining information, and disclosing and 
providing information; adjust the existing ways to comply with any 
previously applicable instructions and requirements; train personnel to 
respond to a collection of information, search existing data sources, 
gather and maintain the data needed, and complete and review the 
collection of information; and transmit or otherwise disclose the 
information.
    Send comments regarding the burden estimate to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Attention: Desk Officer for the Federal Maritime Commission, New 
Executive Office Building, 725 17th Street, NW., Washington, DC 20503 
within 30 days of publication in the Federal Register.
    The Commission would also like to solicit comments to: (a) Evaluate 
whether the proposed collection of information is necessary for the 
proper performance of the functions of the agency, including whether 
the information will have practical utility; (b) evaluate the accuracy 
of the Commission's burden estimates for the proposed collection of 
information; (c) enhance the quality, utility, and clarity of the 
information to be collected; and (d) minimize the burden of the 
collection of information on respondents, including through the use of 
automated collection techniques or other forms of information 
technology. Comments submitted in response to this proposed rulemaking 
will be summarized and/or included in the final rule and will become a 
matter of public record.
    The Chairman of the Federal Maritime Commission certifies, pursuant 
to section 605 of the Regulatory Flexibility Act, 5 U.S.C. 605, that 
the proposed rules will not, if promulgated, have a significant impact 
on a substantial number of small entities. The affected universe of 
parties is limited to ocean common carriers, passenger vessel 
operators, and marine terminal operators. The Commission has determined 
that these entities do not come under the program and policies mandated 
by the Small Business Regulatory Enforcement Act as they typically 
exceed the threshold figures for number of employees or annual receipts 
or both to qualify as a small entity under the Small Business 
Administration Guidelines.

List of Subjects

46 CFR Part 501

    Authority delegations, Organization and functions, Seals and 
insignia.

46 CFR Part 535

    Freight, Maritime carriers, Reporting and recordkeeping 
requirements.

    For the reasons discussed in the preamble, the Federal Maritime 
Commission proposes to amend parts 501 and 535 of Subchapter A and 
Subchapter B, respectively, of Chapter IV of Title 46 Code of Federal 
Regulations as follows:

PART 501--THE FEDERAL MARITIME COMMISSION--GENERAL

    1. The authority citation for part 501 continues to read as 
follows:

    Authority: 5 U.S.C. 551-557, 701-706, 2903, and 6304; 31 U.S.C. 
3721; 41 U.S.C. 414 and 418; 44 U.S.C. 501-520 and 3501-3520; 46 
U.S.C. app. 876, 1111, and 1701-1720; Reorganization Plan No. 7 of 
1961, 26 FR 7315, August 12, 1961; Pub. L. 89-56, 70 Stat. 195; 5 
CFR part 2638; Pub. L. 89-777, 80 Stat. 1356; Pub L. 104-320, 110 
Stat. 3870.

    2. Amend Sec.  501.26 by revising paragraphs (c) and (d), and 
adding new paragraphs (o) and (p) to read as follows:


Sec.  501.26  Delegation to the Director, Bureau of Trade Analysis

* * * * *
    (c) Authority to grant or deny applications filed under Sec.  
535.504 of this chapter for waiver of the Information Form requirements 
in Sec.  535.503 of this chapter.
    (d) Authority to grant or deny applications filed under Sec.  
535.705 of

[[Page 67534]]

this chapter for waiver of the reporting requirements in subpart G of 
part 535 of this chapter.
* * * * *
    (o) Authority to require Monitoring Reports from, or prescribe 
alternative periodic reporting requirements for, parties to agreements 
under Sec. Sec.  535.702(c) and (d) of this chapter.
    (p) Authority to require parties to agreements subject to the 
Monitoring Report requirements in Sec.  535.702(a)(2) of this chapter 
to report their agreement commodity data on a sub-trade basis pursuant 
to Sec.  535.703(d) of this chapter.
    3. Revise part 535 to read as follows:

PART 535--OCEAN COMMON CARRIERS AND MARINE TERMINAL OPERATORS 
AGREEMENTS SUBJECT TO THE SHIPPING ACT OF 1984

Subpart A--General Provisions
Sec.
535.101 Authority.
535.102 Purpose.
535.103 Policies.
535.104 Definitions.
Subpart B--Scope
535.201 Subject agreements.
535.202 Non-subject agreements.
Subpart C--Exemptions
535.301 Exemption procedures.
535.302 Exemptions for certain modifications of effective 
agreements.
535.303 Husbanding agreements--exemption.
535.304 Agency agreements--exemption.
535.305 Equipment interchange agreements--exemption.
535.306 Nonexclusive transshipment agreements--exemption.
535.307 Agreements between or among wholly-owned subsidiaries and/or 
their parent--exemption.
535.308 Marine terminal agreements--exemption.
535.309 Marine terminal services agreements--exemption.
535.310 Marine terminal facilities agreements--exemption.
535.311 Low market share agreements-exemption.
535.312 Vessel charter party-exemption.
Subpart D--Filing of Agreements
535.401 General requirements.
535.402 Complete and definite agreements.
535.403 Form of agreements.
535.404 Agreement provisions.
535.405 Organization of conference and interconference agreements.
535.406 Modification of agreements.
535.407 Application for waiver.
535.408 Activities that may be conducted without further filings.
Subpart E--Information Form Requirements
535.501 General requirements.
535.502 Agreements subject to the Information Form requirements.
535.503 Information Form.
535.504 Application for waiver.
Subpart F--Action on Agreements
535.601 Preliminary review--rejection of agreements.
535.602 Federal Register notice.
535.603 Comment.
535.604 Waiting period.
535.605 Requests for expedited review.
535.606 Requests for additional information.
535.607 Failure to comply with requests for additional information.
535.608 Confidentiality of submitted material.
535.609 Negotiations.
Subpart G--Reporting Requirements
535.701 General requirements.
535.702 Agreements subject to Monitoring Report and alternative 
periodic reporting requirements.
535.703 Monitoring Report form.
535.704 Filing of minutes.
535.705 Application for waiver.
Subpart H--Mandatory and Prohibited Provisions
535.801 Independent action.
535.802 Service contracts.
535.803 Ocean freight forwarder compensation.
Subpart I--Penalties
535.901 Failure to file.
535.902 Falsification of reports.
Subpart J--Paperwork Reduction
535.991 OMB control numbers assigned pursuant to the Paperwork 
Reduction Act.

Appendix A To Part 535--Information Form and Instructions

Appendix B To Part 535--Monitoring Report and Instructions

    Authority: 5 U.S.C. 553; 46 U.S.C. app. 1701-1707, 1709-1710, 
1712 and 1714-1718; Pub. L. 105-258, 112 Stat. 1902 (46 U.S.C. app. 
1701 note); Sec. 424, Pub. L. 105-383, 112 Stat. 3440.

Subpart A--General Provisions


Sec.  535.101  Authority.

    The rules in this part are issued pursuant to the authority of 
section 4 of the Administrative Procedure Act (5 U.S.C. 553), sections 
2, 3, 4, 5, 6, 7, 8, 10, 11, 13, 15, 16, 17, and 19 of the Shipping Act 
of 1984 (``the Act''), and the Ocean Shipping Reform Act of 1998, Pub. 
L. 105-258, 112 Stat. 1902.


Sec.  535.102  Purpose.

    This part implements those provisions of the Act that govern 
agreements by or among ocean common carriers and agreements among 
marine terminal operators and among one or more marine terminal 
operators and one or more ocean common carriers. This part also sets 
forth more specifically certain procedures provided for in the Act.


Sec.  535.103  Policies.

    (a) The Act requires that agreements be processed and reviewed, 
upon their initial filing, according to strict statutory deadlines. 
This part is intended to establish procedures for the orderly and 
expeditious review of filed agreements in accordance with the statutory 
requirements.
    (b) The Act requires that agreements be reviewed, upon their 
initial filing, to ensure compliance with all applicable provisions of 
the Act and empowers the Commission to obtain information to conduct 
that review. This part identifies those classes of agreements that must 
be accompanied by information submissions when they are first filed, 
and sets forth the kind of information for certain agreements that the 
Commission believes relevant to that review. Only information that is 
relevant to such a review is requested. It is the policy of the 
Commission to keep the costs of regulation to a minimum and at the same 
time obtain information needed to fulfill its statutory responsibility.
    (c) To further the goal of expedited processing and review of 
agreements upon their initial filing, agreements are required to meet 
certain minimum requirements as to form. These requirements are 
intended to ensure expedited review and should assist parties in 
preparing agreements. These requirements as to form do not affect the 
substance of an agreement and are intended to allow parties the freedom 
to develop innovative commercial relationships and provide efficient 
and economic transportation systems.
    (d) The Act itself excludes certain agreements from the filing 
requirements and authorizes the Commission to exempt other classes of 
agreements from any requirement of the Act or this part. To minimize 
delay in the implementation of routine agreements and to avoid the 
private and public cost of unnecessary regulation, certain classes of 
agreements are exempted from the filing requirements of this part.
    (e) Under the regulatory framework established by the Act, the role 
of the Commission as a monitoring agency has been enhanced. The Act 
favors greater freedom in allowing parties to form their commercial 
arrangements. This, however, requires greater monitoring of agreements 
after they have become effective to assure their continued compliance 
with all applicable provisions of the Act. The Act empowers the 
Commission to impose certain recordkeeping and reporting

[[Page 67535]]

requirements. This part identifies those agreements that require 
specific record retention and reporting to the Commission and 
prescribes the applicable period of record retention, the form and 
content of such reporting, and the applicable time periods for filing 
with the Commission. Only information that is necessary to assure that 
the Commission's monitoring responsibilities will be fulfilled is 
requested.
    (f) The Act requires that conference agreements contain certain 
mandatory provisions. Each conference agreement must:
    (1) State its purpose;
    (2) Provide reasonable and equal terms and conditions for admission 
and readmission to membership;
    (3) Allow for withdrawal from membership upon reasonable notice 
without penalty;
    (4) Require an independent neutral body to police the conference, 
if requested by a member;
    (5) Prohibit conduct specified in sections 10(c)(1) or 10(c)(3) of 
the Act;
    (6) Provide for a consultation process;
    (7) Establish procedures for considering shippers' requests and 
complaints; and
    (8) Provide for independent action.
    (g) To promote competitive and efficient transportation and a 
greater reliance on the marketplace, the Act places limits on carriers' 
agreements regarding service contracts. Carriers may not enter into an 
agreement to prohibit or restrict members from engaging in contract 
negotiations, may not require members to disclose service contract 
negotiations or terms and conditions (other than those required to be 
published), and may not adopt mandatory rules or requirements affecting 
the right of an agreement member or agreement members to negotiate and 
enter into contracts. However, agreement members may adopt voluntary 
guidelines covering the terms and procedures of members' contracts.


Sec.  535.104  Definitions.

    When used in this part:
    (a) Agreement means an understanding, arrangement, or association, 
written or oral (including any modification, cancellation or appendix), 
entered into by or among ocean common carriers and/or marine terminal 
operators, but does not include a maritime labor agreement.
    (b) Antitrust laws means the Act of July 2, 1890 (ch. 647, 26 Stat. 
209), 15 U.S.C. 1, as amended; the Act of October 15, 1914 (ch. 323, 38 
Stat. 730), 15 U.S.C. 12, as amended; the Federal Trade Commission Act 
(38 Stat. 717), 15 U.S.C. 41, as amended; sections 73 and 74 of the Act 
of August 27, 1894 (28 Stat. 570), 15 U.S.C. 8, 9, as amended; the Act 
of June 19, 1936 (ch. 592, 49 Stat. 1526), 15 U.S.C. 13, as amended; 
the Antitrust Civil Process Act (76 Stat. 548), 15 U.S.C. 1311, note as 
amended; and amendments and Acts supplementary thereto.
    (c) Appendix means a document containing additional material of 
limited application and appended to an agreement, distinctly 
differentiated from the main body of the basic agreement.
    (d) Assessment agreement means an agreement, whether part of a 
collective bargaining agreement or negotiated separately, that provides 
for collectively bargained fringe benefit obligations on other than a 
uniform man-hour basis regardless of the cargo handled or type of 
vessel or equipment utilized.
    (e) Capacity rationalization means a concerted reduction, 
stabilization, withholding, or other limitation in any manner 
whatsoever by ocean common carriers on the size or number of vessels or 
available space offered collectively or individually to shippers in any 
trade or service. The term does not include sailing agreements or space 
charter agreements.
    (f) Common carrier means a person holding itself out to the general 
public to provide transportation by water of passengers or cargo 
between the United States and a foreign country for compensation that:
    (1) Assumes responsibility for the transportation from the port or 
point of receipt to the port or point of destination; and
    (2) Utilizes, for all or part of that transportation, a vessel 
operating on the high seas or the Great Lakes between a port in the 
United States and a port in a foreign country, except that the term 
does not include a common carrier engaged in ocean transportation by 
ferry boat, ocean tramp, or chemical parcel tanker, or by a vessel when 
primarily engaged in the carriage of perishable agricultural 
commodities:
    (i) If the common carrier and the owner of those commodities are 
wholly owned, directly or indirectly, by a person primarily engaged in 
the marketing and distribution of those commodities; and
    (ii) Only with respect to those commodities.
    (g) Conference agreement means an agreement between or among two or 
more ocean common carriers that provides for the fixing of and 
adherence to uniform tariff rates, charges, practices, and conditions 
of service relating to the receipt, carriage, handling and/or delivery 
of passengers or cargo for all members. The term does not include joint 
service, pooling, sailing, space charter, or transshipment agreements.
    (h) Consultation means a process whereby a conference and a shipper 
confer for the purpose of promoting the commercial resolution of 
disputes and/or the prevention and elimination of the occurrence of 
malpractices.
    (i) Cooperative working agreement means an agreement that 
establishes exclusive, preferential, or cooperative working 
relationships that are subject to the Act, but that do not fall 
precisely within the parameters of any specifically defined agreement.
    (j) Effective agreement means an agreement effective under the Act.
    (k) Equal access agreement means an agreement between ocean common 
carriers of different nationalities, as determined by the incorporation 
or domicile of the carriers' operating companies, whereby such ocean 
common carriers associate for the purpose of gaining reciprocal access 
to cargo that is otherwise reserved by national decree, legislation, 
statute or regulation to carriage by the merchant marine of the 
carriers' respective nations.
    (l) Independent neutral body means a disinterested third party, 
authorized by a conference and its members to review, examine, and 
investigate alleged breaches or violations of the conference agreement 
and/or the conference's properly promulgated tariffs, rules, or 
regulations by any member of the conference.
    (m) Information form means the form containing economic information 
that must accompany the filing of certain agreements and modifications.
    (n) Interconference agreement means an agreement between 
conferences.
    (o)(1) Joint service agreement means an agreement between ocean 
common carriers operating as a joint venture whereby a separate service 
is established that:
    (i) Holds itself out in its own distinct operating name;
    (ii) Independently fixes its own rates, charges, practices, and 
conditions of service or chooses to participate under its operating 
name in another agreement that is duly authorized to determine and 
implement such activities;
    (iii) Independently publishes its own tariff or chooses to 
participate under its operating name in an otherwise established 
tariff;
    (iv) Issues its own bills of lading; and
    (v) Acts generally as a single carrier.
    (2) The common use of facilities may occur, and there is no 
competition

[[Page 67536]]

between members for traffic in the agreement trade; but they otherwise 
maintain their separate identities.
    (p) Marine terminal facilities means one or more structures (and 
services connected therewith) comprising a terminal unit, including, 
but not limited to docks, berths, piers, aprons, wharves, warehouses, 
covered and/or open storage space, cold storage plants, grain elevators 
and/or bulk cargo loading and/or unloading structures, landings, and 
receiving stations, used for the transmission, care and convenience of 
cargo and/or passengers or the interchange of same between land and 
ocean common carriers or between two ocean common carriers. This term 
is not limited to waterfront or port facilities and includes so-called 
off-dock container freight stations at inland locations and any other 
facility from which inbound waterborne cargo may be tendered to the 
consignee or outbound cargo may be received from shippers for vessel or 
container loading.
    (q) Marine terminal operator means a person engaged in the United 
States in the business of furnishing wharfage, dock, warehouse, or 
other terminal facilities in connection with a common carrier, or in 
connection with a common carrier and a water carrier subject to 
subchapter II of chapter 135 of Title 49 U.S.C. This term does not 
include shippers or consignees who exclusively furnish marine terminal 
facilities or services in connection with tendering or receiving 
proprietary cargo from a common carrier or water carrier.
    (r) Maritime labor agreement means a collective-bargaining 
agreement between an employer subject to the Act or group of such 
employers, and a labor organization representing employees in the 
maritime or stevedoring industry, or an agreement preparatory to such a 
collective-bargaining agreement among members of a multi-employer 
bargaining group, or an agreement specifically implementing provisions 
of such a collective-bargaining agreement or providing for the 
formation, financing or administration of a multi-employer bargaining 
group; but the term does not include an assessment agreement.
    (s) Modification means any change, alteration, correction, 
addition, deletion, or revision of an existing effective agreement or 
to any appendix to such an agreement.
    (t) Monitoring report means the report containing economic 
information that must be filed at defined intervals with regard to 
certain kinds of agreements that are effective under the Act.
    (u) Ocean common carrier means a common carrier that operates, for 
all or part of its common carrier service, a vessel on the high seas or 
the Great Lakes between a port in the United States and a port in a 
foreign country, except that the term does not include a common carrier 
engaged in ocean transportation by ferry boat, ocean tramp, or chemical 
parcel-tanker.
    (v) Ocean freight forwarder means a person in the United States 
that dispatches shipments from the United States via common carriers 
and books or otherwise arranges space for those shipments on behalf of 
shippers; and processes the documentation or performs related 
activities incident to those shipments.
    (w) Person means individuals, corporations, partnerships and 
associations existing under or authorized by the laws of the United 
States or of a foreign country.
    (x) Pooling agreement means an agreement between ocean common 
carriers that provides for the division of cargo carryings, earnings, 
or revenue and/or losses between the members in accordance with an 
established formula or scheme.
    (y) Port means the place at which an ocean common carrier 
originates or terminates (and/or transships) its actual ocean carriage 
of cargo or passengers as to any particular transportation movement.
    (z) Rate, for purposes of this part, includes both the basic price 
paid by a shipper to an ocean common carrier for a specified level of 
transportation service for a stated quantity of a particular commodity, 
from origin to destination, on or after a stated effective date or 
within a defined time frame, and also any accessorial charges or 
allowances that increase or decrease the total transportation cost to 
the shipper.
    (aa) Rate agreement means an agreement between ocean common 
carriers that authorizes discussion of or agreement on, either on a 
binding basis under a common tariff or on a non-binding basis, any kind 
of rate or charge.
    (bb) Sailing agreement means an agreement between ocean common 
carriers to provide service by establishing a schedule of ports that 
each carrier will serve, the frequency of each carrier's calls at those 
ports, and/or the size and capacity of the vessels to be deployed by 
the parties. The term does not include joint service agreements, or 
capacity rationalization agreements.
    (cc) Service contract means a written contract, other than a bill 
of lading or a receipt, between one or more shippers and an individual 
ocean common carrier or an agreement between or among ocean common 
carriers in which the shipper or shippers make a commitment to provide 
a certain volume or portion of cargo over a fixed time period, and the 
ocean common carrier or the agreement commits to a certain rate or rate 
schedule and a defined service level, such as assured space, transit 
time, port rotation, or similar service features. The contract may also 
specify provisions in the event of nonperformance on the part of any 
party.
    (dd) Shipper means:
    (1) A cargo owner;
    (2) The person for whose account the ocean transportation is 
provided;
    (3) The person to whom delivery is to be made;
    (4) A shippers' association; or
    (5) A non-vessel-operating common carrier (i.e., a common carrier 
that does not operate the vessels by which the ocean transportation is 
provided and is a shipper in its relationship with an ocean common 
carrier) that accepts responsibility for payment of all charges 
applicable under the tariff or service contract.
    (ee) Shippers' association means a group of shippers that 
consolidates or distributes freight on a nonprofit basis for the 
members of the group in order to secure carload, truckload, or other 
volume rates or service contracts.
    (ff) Shippers' requests and complaints means a communication from a 
shipper to a conference requesting a change in tariff rates, rules, 
regulations, or service; protesting or objecting to existing rates, 
rules, regulations or service; objecting to rate increases or other 
tariff changes; protesting allegedly erroneous service contract or 
tariff implementation or application, and/or requesting to enter into a 
service contract. Routine information requests are not included in the 
term.
    (gg) Space charter agreement means an agreement between ocean 
common carriers whereby a carrier (or carriers) agrees to provide 
vessel space for use by another carrier (or carriers) in exchange for 
compensation or services. The arrangement may include arrangements for 
equipment interchange and receipt/delivery of cargo, but may not 
include capacity rationalization as defined in this subpart.
    (hh) Sub-trade means the scope of ocean liner cargo carried between 
each U.S. port range and each foreign country within the scope of the 
agreement. U.S. port ranges are defined as follows:
    (1) Atlantic and Gulf shall encompass ports along the eastern 
seaboard and the Gulf of Mexico from the northern boundary of Maine to 
Brownsville, Texas. It also includes all ports bordering upon the Great 
Lakes and their connecting waterways, all ports in

[[Page 67537]]

the State of New York on the St. Lawrence River, and all ports in 
Puerto Rico and the U.S. Virgin Islands; and
    (2) Pacific shall encompass all ports in the States of Alaska, 
Hawaii, California, Oregon, and Washington. It also includes all ports 
in Guam, American Samoa, Northern Marianas, Johnston Island, Midway 
Island, and Wake Island.
    (ii) Through transportation means continuous transportation between 
origin and destination for which a through rate is assessed and which 
is offered or performed by one or more carriers, at least one of which 
is an ocean common carrier, between a United States point or port and a 
foreign point or port.
    (jj) Transshipment agreement means an agreement between an ocean 
common carrier serving a port or point of origin and another such 
carrier serving a port or point of destination, whereby cargo is 
transferred from one carrier to another carrier at an intermediate port 
served by direct vessel call of both such carriers in the conduct of 
through transportation and the publishing carrier performs the 
transportation on one leg of the through transportation on its own 
vessel or on a vessel on which it has rights to space under a filed and 
effective agreement. Such an agreement does not provide for the 
concerted discussion, publication or otherwise fixing of rates for the 
account of the cargo interests, conditions of service or other tariff 
matters other than the tariff description of the transshipment service 
offered, the port of transshipment and the participation of the 
nonpublishing carrier. An agreement that involves the movement of cargo 
in a domestic offshore trade as part of a through movement of cargo via 
transshipment involving the foreign commerce of the United States shall 
be considered to be in the foreign commerce of the United States and, 
therefore, subject to the Act and this part.
    (kk) Vessel-operating costs means any of the following expenses 
incurred by an ocean common carrier: salaries and wages of officers and 
unlicenced crew, including relief crews and others regularly employed 
aboard the vessel; fringe benefits; expenses associated with consumable 
stores, supplies and equipment; vessel fuel and incidental costs; 
vessel maintenance and repair expense; hull and machinery insurance 
costs; protection and indemnity insurance costs; costs for other marine 
risk insurance not properly chargeable to hull and machinery insurance 
or to protection and indemnity insurance accounts; and charter hire 
expenses.

Subpart B--Scope


Sec.  535.201  Subject agreements.

    (a) Ocean common carrier agreements. This part 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.
    (b) Marine terminal operator agreements. This part applies to 
agreements among marine terminal operators and among one or more marine 
terminal operators and one or more ocean 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.


Sec.  535.202  Non-subject agreements.

    This part does not apply to the following agreements:
    (a) Any acquisition by any person, directly or indirectly, of any 
voting security or assets of any other person;
    (b) Any maritime labor agreement;
    (c) Any agreement related to transportation to be performed within 
or between foreign countries;
    (d) Any agreement among common carriers to establish, operate, or 
maintain a marine terminal in the United States; and
    (e) Any agreement among marine terminal operators that exclusively 
and solely involves transportation in the interstate commerce of the 
United States.

Subpart C--Exemptions


Sec.  535.301  Exemption procedures.

    (a) Authority. The Commission, upon application or its own motion, 
may by order or rule exempt for the future any class of agreement 
involving ocean common carriers and/or marine terminal operators from 
any requirement of the Act if it finds that the exemption will not 
result in substantial reduction in competition or be detrimental to 
commerce.
    (b) Optional filing. Notwithstanding any exemption from filing, or 
other requirements of the Act and this part, any party to an exempt 
agreement may file such an agreement with the Commission.
    (c) Application for exemption. Applications for exemptions shall 
conform to the general filing requirements for exemptions set forth at 
Sec.  502.67 of this title.
    (d) Retention of agreement by parties. Any agreement that has been 
exempted by the Commission pursuant to section 16 of the Act shall be 
retained by the parties and shall be available upon request by the 
Bureau of Trade Analysis for inspection during the term of the 
agreement and for a period of three years after its termination.


Sec.  535.302  Exemptions for certain modifications of effective 
agreements.

    (a) Non-substantive modifications to effective agreements. A non-
substantive modification to an effective agreement between ocean common 
carriers and/or marine terminal operators, acting individually or 
through approved agreements, is one which:
    (1) Reflects changes in the name of any geographic locality stated 
therein, the name of the agreement or the name of a party to the 
agreement, the names and/or numbers of any other section 4 agreement or 
designated provisions thereof referred to in an agreement;
    (2) Corrects typographical and grammatical errors in the text of 
the agreement or renumbers or reletters articles or sub-articles of 
agreements and references thereto in the text; or
    (3) Reflects changes in the titles or persons or committees 
designated therein or transfers the functions of such persons or 
committees to other designated persons or committees or which merely 
establishes a committee.
    (b) Other Miscellaneous Modifications to effective agreements. A 
miscellaneous modification to an effective agreement is one that:
    (1) Cancels the agreement;
    (2) Deletes an agreement party;
    (3) Changes the parties to a conference agreement or a discussion 
agreement among passenger vessel operating common carriers that is open 
to all ocean common carriers operating passenger vessels of a class 
defined in the agreement and that does not contain ratemaking, pooling, 
joint service, sailing or space chartering authority; or

[[Page 67538]]

    (4) Changes the officials of the agreement and delegations of 
authority.
    (c) A copy of a modification described in (a) or (b) above shall be 
submitted to the Commission but is otherwise exempt from the waiting 
period requirement of the Act and this part.
    (d) Parties to agreements may seek a determination from the 
Director of the Bureau of Trade Analysis as to whether a particular 
modification is a non-substantive or other miscellaneous modification 
within the meaning of this section.
    (e) The filing fee for non-substantive or other miscellaneous 
modifications is provided in Sec.  535.401(g).


Sec.  535.303  Husbanding agreements--exemption.

    (a) A husbanding agreement is an agreement between an ocean common 
carrier and another ocean common carrier or marine terminal operator, 
acting as the former's agent, under which the agent handles routine 
vessel operating activities in port, such as notifying port officials 
of vessel arrivals and departures; ordering pilots, tugs, and 
linehandlers; delivering mail; transmitting reports and requests from 
the Master to the owner/operator; dealing with passenger and crew 
matters; and providing similar services related to the above 
activities. The term does not include an agreement that provides for 
the solicitation or booking of cargoes, signing contracts or bills of 
lading and other related matters, nor does it include an agreement that 
prohibits the agent from entering into similar agreements with other 
carriers.
    (b) A husbanding agreement is exempt from the filing requirements 
of the Act and of this part.
    (c) The filing fee for optional filing of husbanding agreements is 
provided in Sec.  535.401(g).


Sec.  535.304  Agency agreements--exemption.

    (a) An agency agreement is an agreement between an ocean common 
carrier and another ocean common carrier or marine terminal operator, 
acting as the former's agent, under which the agent solicits and books 
cargoes and signs contracts of affreightment and bills of lading on 
behalf of the ocean common carrier. Such an agreement may or may not 
also include husbanding service functions and other functions 
incidental to the performance of duties by agents, including processing 
of claims, maintenance of a container equipment inventory control 
system, collection and remittance of freight and reporting functions.
    (b) An agency agreement as defined above is exempt from the filing 
requirements of the Act and of this part, except those:
    (1) Where a common carrier is to be the agent for a competing ocean 
common carrier in the same trade; or
    (2) That permit an agent to enter into similar agreements with more 
than one ocean common carrier in a trade.
    (c) The filing fee for optional filing of agency agreements is 
provided in Sec.  535.401(g).


Sec.  535.305  Equipment interchange agreements--exemption.

    (a) An equipment interchange agreement is an agreement between two 
or more ocean common carriers for:
    (1) The exchange of empty containers, chassis, empty LASH/SEABEE 
barges, and related equipment; and
    (2) The transportation of the equipment as required, payment 
therefor, management of the logistics of transferring, handling and 
positioning equipment, its use by the receiving carrier, its repair and 
maintenance, damages thereto, and liability incidental to the 
interchange of equipment.
    (b) An equipment interchange agreement is exempt from the filing 
requirements of the Act and of this part.
    (c) The filing fee for optional filing of equipment interchange 
agreements is provided in Sec.  535.401(g).


Sec.  535.306  Nonexclusive transshipment agreements--exemption.

    (a) A nonexclusive transshipment agreement is a transshipment 
agreement by which one ocean common carrier serving a port of origin by 
direct vessel call and another such carrier serving a port of 
destination by direct vessel call provide transportation between such 
ports via an intermediate port served by direct vessel call of both 
such carriers and at which cargo will be transferred from one to the 
other and which agreement does not:
    (1) Prohibit either carrier from entering into similar agreements 
with other carriers;
    (2) Guarantee any particular volume of traffic or available 
capacity; or
    (3) Provide for the discussion or fixing of rates for the account 
of the cargo interests, conditions of service or other tariff matters 
other than the tariff description of the service offered as being by 
means of transshipment, the port of transshipment and the participation 
of the nonpublishing carrier.
    (b) A nonexclusive transshipment agreement is exempt from the 
filing requirements of the Act and of this part, provided that the 
tariff provisions set forth in paragraph (c) of this section and the 
content requirements of paragraph (d) of this section are met.
    (c) The applicable tariff or tariffs shall provide:
    (1) The through rate;
    (2) The routings (origin, transshipment and destination ports); 
additional charges, if any (i.e. port arbitrary and/or additional 
transshipment charges); and participating carriers; and
    (3) A tariff provision substantially as follows:

    The rules, regulations, and rates in this tariff apply to all 
transshipment arrangements between the publishing carrier or 
carriers and the participating, connecting or feeder carrier. Every 
participating connecting or feeder carrier which is a party to 
transshipment arrangements has agreed to observe the rules, 
regulations, rates, and routings established herein as evidenced by 
a connecting carrier agreement between the parties.

    (d) Nonexclusive transshipment agreements must contain the entire 
arrangement between the parties, must contain a declaration of the 
nonexclusive character of the arrangement and may provide for:
    (1) The identification of the parties and the specification of 
their respective roles in the arrangement;
    (2) A specification of the governed cargo;
    (3) The specification of responsibility for the issuance of bills 
of lading (and the assumption of common carriage-associated 
liabilities) to the cargo interests;
    (4) The specification of the origin, transshipment and destination 
ports;
    (5) The specification of the governing tariff(s) and provision for 
their succession;
    (6) The specification of the particulars of the nonpublishing 
carrier's concurrence/participation in the tariff of the publishing 
carrier;
    (7) The division of revenues earned as a consequence of the 
described carriage;
    (8) The division of expenses incurred as a consequence of the 
described carriage;
    (9) Termination and/or duration of the agreement;
    (10) Intercarrier indemnification or provision for intercarrier 
liabilities consequential to the contemplated carriage and such 
documentation as may be necessary to evidence the involved obligations;
    (11) The care, handling and liabilities for the interchange of such 
carrier equipment as may be consequential to the involved carriage;
    (12) Such rationalization of services as may be necessary to ensure 
the cost

[[Page 67539]]

effective performance of the contemplated carriage; and
    (13) Such agency relationships as may be necessary to provide for 
the pickup and/or delivery of the cargo.
    (e) No subject other than as listed in paragraph (d) of this 
section may be included in exempted nonexclusive transshipment 
agreements.
    (f) The filing fee for optional filing of nonexclusive 
transshipment agreements is provided in Sec.  535.401(g).


Sec.  535.307  Agreements between or among wholly-owned subsidiaries 
and/or their parent--exemption.

    (a) An agreement between or among wholly-owned subsidiaries and/or 
their parent means an agreement under section 4 of the Act between or 
among an ocean common carrier or marine terminal operator subject to 
the Act and any one or more ocean common carriers or marine terminal 
operators which are ultimately owned 100 percent by that ocean common 
carrier or marine terminal operator, or an agreement between or among 
such wholly-owned carriers or terminal operators.
    (b) All agreements between or among wholly-owned subsidiaries and/
or their parent are exempt from the filing requirements of the Act and 
this part.
    (c) Ocean common carriers are exempt from section 10(c) of the Act 
to the extent that the concerted activities proscribed by that section 
result solely from agreements between or among wholly-owned 
subsidiaries and/or their parent.
    (d) The filing fee for optional filing of these agreements is 
provided in Sec.  535.401(g).


Sec.  535.308  Marine terminal agreements--exemption.

    (a) Marine terminal agreement means an agreement, understanding, or 
association written or oral (including any modification or appendix) 
that applies to future, prospective activities between or among the 
parties and that relates solely to marine terminal facilities and/or 
services among marine terminal operators and among one or more marine 
terminal operators and one or more ocean common carriers that 
completely sets forth the applicable rates, charges, terms and 
conditions agreed to by the parties for the facilities and/or services 
provided for under the agreement. The term does not include a joint 
venture arrangement among marine terminal operators to establish a 
separate, distinct entity that fixes its own rates and publishes its 
own tariff.
    (b) Marine terminal conference agreement means an agreement between 
or among two or more marine terminal operators and/or ocean common 
carriers for the conduct or facilitation of marine terminal operations 
that provides for the fixing of and adherence to uniform maritime 
terminal rates, charges, practices and conditions of service relating 
to the receipt, handling, and/or delivery of passengers or cargo for 
all members.
    (c) Marine terminal discussion agreement means an agreement between 
or among two or more marine terminal operators and/or marine terminal 
conferences and/or ocean common carriers solely for the discussion of 
subjects including marine terminal rates, charges, practices and 
conditions of service relating to the receipt, handling and/or delivery 
of passengers or cargo.
    (d) Marine terminal interconference agreement means an agreement 
between or among two or more marine terminal conference and/or marine 
terminal discussion agreements.
    (e) All marine terminal agreements, as defined in Sec.  535.308(a), 
with the exception of marine terminal conference, marine terminal 
interconference, and marine terminal discussion agreements as defined 
in Sec.  535.308(b), (c), and (d), are exempt from the waiting period 
requirements of the Act and this part and will, accordingly, be 
effective on filing with the Commission.
    (f) The filing fee for marine terminal agreements is provided in 
Sec.  535.401(g).


Sec.  535.309  Marine terminal services agreements--exemption.

    (a) Marine terminal services agreement means an agreement, 
contract, understanding, arrangement, or association, written or oral, 
(including any modification or appendix) between a marine terminal 
operator and an ocean common carrier that applies to marine terminal 
services that are provided to and paid for by an ocean common carrier. 
These services include: Checking, dockage, free time, handling, heavy 
lift, loading and unloading, terminal storage, usage, wharfage, and 
wharf demurrage and including any marine terminal facilities that may 
be provided incidentally to such marine terminal services. The term 
``marine terminal services agreement'' does not include any agreement 
that conveys to the involved carrier any rights to operate any marine 
terminal facility by means of a lease, license, permit, assignment, 
land rental, or similar other arrangement for the use of marine 
terminal facilities or property.
    (b) All marine terminal services agreements as defined in Sec.  
535.309(a) are exempt from the filing and waiting period requirements 
of the Act and this part on condition that:
    (1) They do not include rates, charges, rules, and regulations that 
are determined through a marine terminal conference agreement, as 
defined in Sec.  535.308(b); and
    (2) No antitrust immunity is conferred under the Act with regard to 
terminal services provided to an ocean common carrier under a marine 
terminal services agreement that is not filed with the Commission.
    (c) The filing fee for optional filing of terminal services 
agreements is provided in Sec.  535.401(g).


Sec.  535.310  Marine terminal facilities agreement--exemption.

    (a) Marine terminal facilities agreement means any agreement 
between or among two or more marine terminal operators, or between one 
or more marine terminal operators and one or more ocean common 
carriers, to the extent that the agreement involves ocean 
transportation in the foreign commerce of the United States, that 
conveys to any of the involved parties any rights to operate any marine 
terminal facility by means of lease, license, permit, assignment, land 
rental, or other similar arrangement for the use of marine terminal 
facilities or property.
    (b) All marine terminal facilities agreements as defined in Sec.  
535.310(a) are exempt from the filing and waiting period requirements 
of the Act and this part.
    (c) Parties to marine terminal facilities agreements currently in 
effect shall be provide copies to any requesting party for a reasonable 
copying and mailing fee.
    (d) The filing fee for optional filing of terminal facilities 
agreements is provided in Sec.  535.401(g).


Sec.  535.311  Low market share agreements--exemption.

    (a) Low market share agreement means any agreement among ocean 
common carriers that neither authorizes agreement on or discussion of 
any rate or charge nor the rationalization of capacity, and for which 
the combined market share of the parties is either:
    (1) Less than 15 percent if all parties are members of the same 
agreement having pricing or capacity rationalization authority in the 
relevant trade lane and all sub-trades; or
    (2) Less than 20 percent if the parties are not members of the same 
agreement having pricing or capacity rationalization authority in the 
relevant trade lane and all sub-trades.
    (b) Low market share agreements are exempt from the waiting period

[[Page 67540]]

requirement of the Act and of this part, and are effective on filing.
    (c) Parties to agreements may seek a determination from the 
Director, Bureau of Trade Analysis, as to whether a proposed agreement 
meets the general definition of a low market share agreement.


Sec.  535.312  Vessel charter party--exemption.

    (a) For purposes of this section, vessel charter party means a 
contractual agreement between two ocean common carriers for the charter 
of the full reach of a vessel, which agreement sets forth the entire 
terms and conditions (including duration, charter hire, and 
geographical or operational limitations, if any) under which the vessel 
will be employed.
    (b) Vessel charter parties, as defined in paragraph (a) of this 
section, are exempt from the filing requirements of the Act and this 
part.
    (c) The filing fee for optional filing of vessel charter parties is 
provided in Sec.  535.401(g).

Subpart D--Filing of Agreements


Sec.  535.401  General Requirements.

    (a) All agreements (including oral agreements reduced to writing in 
accordance with the Act) subject to this part and filed with the 
Commission for review and disposition pursuant to section 6 of the Act, 
shall be submitted during regular business hours to the Secretary, 
Federal Maritime Commission, Washington, DC 20573. Such filing shall 
consist of:
    (1) A true copy and seven additional copies of the executed 
agreement;
    (2) Where required by this part, an original and five copies of the 
completed Information Form referenced at subpart E of this part; and
    (3) A letter of transmittal as described in paragraph (b) of this 
section.
    (b) The letter of transmittal shall:
    (1) Identify all of the documents being transmitted including, in 
the instance of a modification to an effective agreement, the full name 
of the effective agreement, the Commission-assigned agreement number of 
the effective agreement and the revision, page and/or appendix number 
of the modification being filed;
    (2) Provide a concise, succinct summary of the filed agreement or 
modification separate and apart from any narrative intended to provide 
support for the acceptability of the agreement or modification;
    (3) Clearly provide the typewritten or otherwise imprinted name, 
position, business address, and telephone number of the filing party; 
and
    (4) Be signed in the original by the filing party or on the filing 
party's behalf by an authorized employee or agent of the filing party.
    (c) To facilitate the timely and accurate publication of the 
Federal Register notice, the letter of transmittal shall also provide a 
current list of the agreement's participants where such information is 
not provided elsewhere in the transmitted documents.
    (d) Any agreement that does not meet the filing requirements of 
this section, including any applicable Information Form requirements, 
shall be rejected in accordance with Sec.  535.601(b).
    (e) Assessment agreements shall be filed and shall be effective 
upon filing.
    (f) Parties to agreements with expiration dates shall file any 
modification seeking renewal for a specific term or elimination of a 
termination date in sufficient time to accommodate the 45-day waiting 
period required under the Act.
    (g) Fees. The filing fee is $1,834 for new agreements requiring 
Commission review and action; $931 for agreement modifications 
requiring Commission review and action; $442 for agreements processed 
under delegated authority (for types of agreements that can be 
processed under delegated authority, see 46 CFR 501.26(e)); and $145 
for carrier and terminal exempt agreements.
    (h) The fee for a copy of the Commission's agreement database 
report is $32.


Sec.  535.402  Complete and definite agreements.

    An agreement filed under the Act must be clear and definite in its 
terms, must embody the complete, present understanding of the parties, 
and must set forth the specific authorities and conditions under which 
the parties to the agreement will conduct their operations and regulate 
the relationships among the agreement members, unless those details are 
matters specifically enumerated as exempt from the filing requirements 
of this part.


Sec.  535.403  Form of agreements.

    The requirements of this section apply to all agreements except 
marine terminal agreements and assessment agreements.
    (a) Agreements shall be clearly and legibly written. Agreements in 
a language other than English shall be accompanied by an English 
translation.
    (b) Every agreement shall include a Title Page indicating:
    (1) The full name of the agreement;
    (2) Once assigned, the Commission-assigned agreement number;
    (3) If applicable, the expiration date of the agreement; and
    (4) The original effective date of the agreement whenever the Title 
Page is revised.
    (c) Each agreement page (including modifications and appendices) 
shall be identified by printing the agreement name (as shown on the 
agreement title page) and, once assigned, the applicable Commission-
assigned agreement number at the top of each page. For agreement 
modifications, the appropriate amendment number for each modification 
should also appear on the page along with the basic agreement number.
    (d) Each agreement and/or modification filed will be signed in the 
original by an official or authorized representative of each of the 
parties and shall indicate the typewritten full name of the signing 
party and his or her position, including organizational affiliation. 
Faxed or photocopied signatures will be accepted if replaced with an 
original signature as soon as practicable before the effective date.
    (e) Every agreement shall include a Table of Contents indicating 
the location of all agreement provisions.


Sec.  535.404  Agreement provisions.

    Generally, each agreement should:
    (a) Indicate the full legal name of each party, including any FMC-
assigned agreement number associated with that name, and the address of 
its principal office (not the address of any agent or representative 
not an employee of the participating party);
    (b) State the ports or port ranges to which the agreement applies 
as well as any inland points or areas to which it also applies with 
respect to the exercise of the collective activities contemplated and 
authorized in the agreement; and
    (c) Specify, by organizational title, the administrative and 
executive officials determined by the agreement parties to be 
responsible for designated affairs of the agreement and the respective 
duties and authorities delegated to those officials. At a minimum, the 
agreement should specify:
    (1) The official(s) with authority to file the agreement and any 
modification thereto and to submit associated supporting materials; and
    (2) A statement as to any designated U.S. representative of the 
agreement required by this chapter.


Sec.  535.405  Organization of conference agreements.

    Each conference agreement shall:
    (a) State that, at the request of any member, the conference shall 
engage the services of an independent neutral body

[[Page 67541]]

to fully police the obligations of the conference and its members. The 
agreement must include a description of any such neutral body authority 
and procedures related thereto.
    (b) State affirmatively that the conference parties shall not 
engage in conduct prohibited by sections 10(c)(1) or 10(c)(3) of the 
Act.
    (c) Specify the procedures for consultation with shippers and for 
handling shippers' requests and complaints.
    (d) Include provisions for independent action in accordance with 
Sec.  535.801 of this part.


Sec.  535.406  Modification of agreements.

    The requirements of this section apply to all agreements except 
marine terminal agreements and assessment agreements.
    (a) Agreement modifications shall be filed in accordance with the 
provisions of Sec. Sec.  535.401 and 535.403.
    (b) Agreement modifications shall be made by reprinting the entire 
page on which the matter being changed is published (``revised page''). 
The revised page shall indicate the consecutive denomination of the 
revision (e.g., ``1st Revised Page 7''). Additional material may be 
published on a new original page. New original pages inserted between 
existing effective pages shall be numbered with an alpha suffix (e.g., 
a page inserted between page 7 and page 8 shall be numbered 7a).
    (c) Each revised page shall be accompanied by a duplicate page, 
submitted for illustrative purposes only, indicating the language being 
modified in the following manner:
    (1) Language being deleted or superseded shall be struck through; 
and,
    (2) New and initial or replacement language shall immediately 
follow the language being superseded and be underlined.
    (d) If a modification requires the relocation of the provisions of 
the agreement, such modification shall be accompanied by a revised 
Table of Contents page that shall indicate the new location of the 
provisions.


Sec.  535.407  Application for waiver.

    (a) Upon a showing of good cause, the Commission may waive the 
requirements of Sec. Sec.  535.401, 535.403, 535.404, 535.405, and 
535.406.
    (b) Requests for such a waiver shall be submitted in advance of the 
filing of the agreement to which the requested waiver would apply and 
shall state:
    (1) The specific provisions from which relief is sought;
    (2) The special circumstances requiring the requested relief; and
    (3) Why granting the requested waiver will not substantially impair 
effective review of the agreement.


Sec.  535.408  Activities that may be conducted without further 
filings.

    (a) Agreements that arise from authority of an effective agreement 
but whose terms are not fully set forth in the effective agreement to 
the extent required by Sec.  535.402 are permitted without further 
filing only if they:
    (1) Are themselves exempt from the filing requirements of this part 
(pursuant to subpart C--Exemptions of this part); or
    (2) Concern matters set forth in paragraph (b) of this section.
    (b) Unless otherwise exempt in subpart C of this part, only the 
following technical or operational matters of an agreement's affairs 
established pursuant to express enabling authority in an agreement are 
considered part of the effective agreement and do not require further 
filing under section 5 of the Act:
    (1) Establishment of tariff rates, rules and regulations and their 
joint publication;
    (2) The terms and conditions of space allocation and slot sales, 
the establishment of space charter rates, and terms and conditions of 
charter parties;
    (3) Stevedoring, terminal, and related services, including the 
operation of tonnage centers or other joint container marshaling 
facilities;
    (4) The following administrative matters:
    (i) Scheduling of agreement meetings;
    (ii) Collection, collation and circulation of data and reports from 
or to members; and
    (iii) Procurement, maintenance, or sharing of office facilities, 
furnishings, equipment and supplies, the allocation and assessment of 
costs thereof, or the provisions for the administration and management 
of such agreements by duly appointed individuals.
    (5) operational matters such as port rotations, changes in vessel 
size or number of vessels if within a range specified in the agreement, 
or vessel substitution or replacement if, as a result, there is no 
significant change in capacity; and
    (6) neutral body policing (limited to the description of neutral 
body authority and procedures related thereto).

Subpart E--Information Form Requirements


Sec.  535.501  General requirements.

    (a) Agreements and modifications to agreements identified in Sec.  
535.502 shall be accompanied by an Information Form containing 
information and data on the agreement and the parties' authority under 
the agreement.
    (b) Parties to an agreement subject to this subpart shall complete 
and submit an original and five copies of the Information Form at the 
time the agreement is filed. A copy of the Form in Microsoft Word and 
Excel format may be downloaded from the Commission's home page at 
www.fmc.gov, or a paper copy of the Form may be obtained from the 
Bureau of Trade Analysis. In lieu of submitting paper copies, parties 
may complete and submit their Information Form in the Commission's 
prescribed electronic format, either on diskette or CD-ROM.
    (c) A complete response in accordance with the instructions on the 
Information Form shall be supplied to each item. If a party to the 
agreement is unable to supply a complete response, that party shall 
provide either estimated data (with an explanation of why precise data 
are not available) or a detailed statement of reasons for noncompliance 
and the efforts made to obtain the required information.
    (d) Agreement parties may supplement the Information Form with any 
additional information or material to assist the Commission's review of 
an agreement.
    (e) The Information Form and any additional information submitted 
in conjunction with the filing of an agreement shall not be disclosed 
by the Commission except as provided in Sec.  535.608.


Sec.  535.502  Agreements subject to the Information Form requirements.

    Agreements and modifications to agreements between or among ocean 
common carriers subject to this subpart are:
    (a) All agreements identified in Sec.  535.201(a), except for low 
market share agreements identified in Sec.  535.311; or
    (b) Modifications to an agreement that add any of the following 
authorities:
    (1) The discussion of, or agreement on, whether on a binding basis 
under a common tariff or a non-binding basis, any kind of rate or 
charge;
    (2) The discussion of, or agreement on, capacity rationalization;
    (3) The establishment of a joint service;
    (4) The pooling or division of traffic, earnings, or revenues and/
or losses;
    (5) The discussion or exchange of data on vessel-operating costs; 
and/or
    (6) The discussion of service contract matters; or
    (c) For an agreement containing any authority identified in Sec.  
535.502(b),

[[Page 67542]]

modifications to the agreement that expand the geographic scope of the 
agreement.


Sec.  535.503  Information Form.

    (a) The Information Form, with instructions, for agreements and 
modifications to agreements subject to this subpart, is set forth in 
sections I through V of appendix A of this part. The instructions 
should be read in conjunction with the Act and this part.
    (b) The Information Form shall apply as follows:
    (1) Sections I and V shall be completed by parties to all 
agreements identified in Sec.  535.502;
    (2) Section II shall be completed by parties to agreements 
identified in Sec.  535.502(a) that contain any of the following 
authorities: the charter or use of vessel space in exchange for 
compensation or services; and/or the rationalization of sailings or 
services relating to a schedule of ports, the frequency of port calls, 
and/or the size and capacity of vessels for deployment. Such 
authorities do not include the establishment of a joint service, nor 
capacity rationalization;
    (3) Section III shall be completed by parties to agreements 
identified in Sec.  535.502 that contain the authority to discuss or 
agree on capacity rationalization; and
    (4) Section IV shall be completed by parties to agreements 
identified in Sec.  535.502 that contain any of the following 
authorities:
    (i) The discussion of, or agreement on, whether on a binding basis 
under a common tariff or a non-binding basis, any kind of rate or 
charge;
    (ii) The establishment of a joint service;
    (iii) The pooling or division of cargoes, earnings, or revenues 
and/or losses;
    (iv) The discussion or exchange of data on vessel-operating costs; 
and/or
    (v) The discussion of service contract matters.


Sec.  535.504  Application for waiver.

    (a) Upon a showing of good cause, the Commission may waive any part 
of the Information Form requirements of Sec.  535.503.
    (b) A request for such a waiver must be submitted and approved by 
the Commission in advance of the filing of the Information Form to 
which the requested waiver would apply. Requests for a waiver shall be 
submitted in writing to the Director, Bureau of Trade Analysis, Federal 
Maritime Commission, Washington, DC 20573-0001, and shall state:
    (1) The specific requirements from which relief is sought;
    (2) The special circumstances requiring the requested relief;
    (3) Relevant trade and industry data and information to 
substantiate and support the special circumstances requiring the 
requested relief;
    (4) Why granting the requested waiver will not substantially impair 
effective review of the agreement; and
    (5) A description of the full membership, geographic scope, and 
authority of the agreement or the agreement modification that is to be 
filed with the Commission.
    (c) The Commission may take into account the presence or absence of 
shipper complaints as well as the past compliance of the agreement 
parties with any reporting requirement under this part in considering 
an application for a waiver.

Subpart F--Action on Agreements


Sec.  535.601  Preliminary review--rejection of agreements.

    (a) The Commission shall make a preliminary review of each filed 
agreement to determine whether the agreement is in compliance with the 
requirements of the Act and this part and, where applicable, whether 
the accompanying Information Form is complete or, where not complete, 
whether the deficiency is adequately explained or is excused by a 
waiver granted by the Commission under Sec.  535.504.
    (b) (1) The Commission shall reject any agreement that fails to 
comply with the filing and Information Form requirements of the Act and 
this part. The Commission shall notify the filing party in writing of 
the reason for rejection of the agreement. The original filing, along 
with any supplemental information or documents submitted, shall be 
returned to the filing party.
    (2) Should a rejected agreement be refiled, the full 45-day waiting 
period will apply to the refiled agreement.


Sec.  535.602   Federal Register notice.

    (a) A notice of any filed agreement that has not already been 
rejected pursuant to Sec.  535.601 will be transmitted to the Federal 
Register within seven days of the date of filing.
    (b) The notice will include:
    (1) A short title for the agreement;
    (2) The identity of the parties to the agreement and the filing 
party;
    (3) The Federal Maritime Commission agreement number;
    (4) A concise summary of the agreement's contents;
    (5) A statement that the agreement is available for inspection at 
the Commission's offices; and
    (6) The final date for filing comments regarding the agreement.


Sec.  535.603  Comment.

    (a) Persons may file with the Secretary written comments regarding 
a filed agreement. Such comments will be submitted in an original and 
ten (10) copies and are not subject to any limitations except the time 
limits provided in the Federal Register notice. Late-filed comments 
will be received only by leave of the Commission and only upon a 
showing of good cause. If requested, comments and any accompanying 
material shall be accorded confidential treatment to the fullest extent 
permitted by law. Such requests must include a statement of legal basis 
for confidential treatment including the citation of appropriate 
statutory authority. Where a determination is made to disclose all or a 
portion of a comment, notwithstanding a request for confidentiality, 
the party requesting confidentiality will be notified prior to 
disclosure.
    (b) The filing of a comment does not entitle a person to:
    (1) Reply to the comment by the Commission;
    (2) The institution of any Commission or court proceeding;
    (3) Discussion of the comment in any Commission or court proceeding 
concerning the filed agreement; or
    (4) Participation in any proceeding that may be instituted.


Sec.  535.604  Waiting period.

    (a) The waiting period before an agreement becomes effective shall 
commence on the date that an agreement is filed with the Commission.
    (b) Unless suspended by a request for additional information or 
extended by court order, the waiting period terminates and an agreement 
becomes effective on the latter of the 45th day after the filing of the 
agreement with the Commission or on the 30th day after publication of 
notice of the filing in the Federal Register.
    (c) The waiting period is suspended on the date when the 
Commission, either orally or in writing, requests additional 
information or documentary materials pursuant to section 6(d) of the 
Act. The 45-day waiting period begins anew on the date of receipt of 
all the additional material requested or of a statement of the reasons 
for noncompliance, and the agreement becomes effective in 45 days 
unless the waiting period is further extended by court order or the 
Commission grants expedited review.

[[Page 67543]]

Sec.  535.605  Requests for expedited review.

    (a) Upon written request of the filing party, the Commission may 
shorten the waiting period. In support of a request, the filing party 
should provide a full explanation, with reference to specific facts and 
circumstances, of the necessity for a shortened waiting period. In 
reviewing requests, the Commission will consider the parties' needs and 
the Commission's ability to complete its review of the agreement's 
potential impact. In no event, however, may the period be shortened to 
less than fourteen days after the publication of the notice of the 
filing of the agreement in the Federal Register. When a request for 
expedited review is denied, the normal 45-day waiting period will 
apply. Requests for expedited review will not be granted routinely and 
will be granted only on a showing of good cause. Good cause would 
include, but is not limited to, the impending expiration of the 
agreement; an operational urgency; Federal or State imposed time 
limitations; or other reasons that, in the Commission's discretion, 
constitute grounds for granting the request.
    (b) A request for expedited review will be considered for an 
agreement whose 45-day waiting period has begun anew after being 
stopped by a request for additional information.


Sec.  535.606  Requests for additional information.

    (a) The Commission may request from the filing party any additional 
information and documents necessary to complete the statutory review 
required by the Act. The request shall be made prior to the expiration 
of the 45-day waiting period. All responses to a request for additional 
information and documents shall be submitted to the Director, Bureau of 
Trade Analysis, Federal Maritime Commission, Washington, DC 20573.
    (b) Where the Commission has made a request for additional 
information, the agreement's effective date will be 45 days after 
receipt of the complete response to the request for additional 
information. If all questions are not fully answered or requested 
documents are not supplied, the parties must include a statement of 
reasons why questions were not fully answered or documents supplied. In 
the event all material is not submitted, the agreement's effective date 
will be 45 days after receipt of both the documents and information 
which are submitted, if any, and the statement indicating the reasons 
for noncompliance. The Commission may, upon notice to the Attorney 
General, and pursuant to sections 6(i) and 6(k) of the Act, request the 
United States District Court for the District of Columbia to further 
extend the agreement's effective date until there has been substantial 
compliance.
    (c) A request for additional information may be made orally or in 
writing. In the case of an oral request, a written confirmation of the 
request shall be mailed to the filing party within seven days of the 
oral request.
    (d) The Commission shall publish a notice in the Federal Register 
that it has requested additional information and serve that notice on 
any commenting party. The notice shall indicate only that a request was 
made and will not specify what information is being sought. Interested 
parties will have fifteen (15) days after publication of the notice to 
file further comments on the agreement.


Sec.  535.607  Failure to comply with requests for additional 
information.

    (a) A failure to comply with a request for additional information 
results when a person filing an agreement, or an officer, director, 
partner, agent, or employee thereof fails to substantially respond to 
the request or does not file a satisfactory statement of reasons for 
noncompliance. An adequate response is one which directly addresses the 
Commission's request. When a response is not received by the Commission 
within a specified time, failure to comply will have occurred.
    (b) The Commission may, pursuant to section 6(i) of the Act, 
request relief from the United States District Court for the District 
of Columbia when it considers that there has been a failure to 
substantially comply with a request for additional information. The 
Commission may request that the court:
    (1) Order compliance with the request;
    (2) Extend the review period until there has been substantial 
compliance; or
    (3) Grant other equitable relief that under the circumstances seems 
necessary or appropriate.
    (c) Where there has been a failure to substantially comply, section 
6(i)(2) of the Act provides that the court shall extend the review 
period until there has been substantial compliance.


Sec.  535.608  Confidentiality of submitted material.

    (a) Except for an agreement filed under section 5 of the Act, all 
information submitted to the Commission by the filing party will be 
exempt from disclosure under 5 U.S.C. 552. Included in this disclosure 
exemption is information provided in the Information Form, voluntary 
submission of additional information, reasons for noncompliance, and 
replies to requests for additional information.
    (b) Information that is confidential pursuant to paragraph (a) of 
this section may be disclosed, however, to the extent:
    (1) It is relevant to an administrative or judicial action or 
proceeding; or
    (2) It is disclosed to either body of Congress or to a duly 
authorized committee or subcommittee of Congress.
    (c) Parties may voluntarily disclose or make information publicly 
available. If parties elect to disclose information they shall promptly 
inform the Commission.


Sec.  535.609  Negotiations.

    At any time after the filing of an agreement and prior to the 
conclusion of judicial injunctive proceedings, the filing party or an 
authorized representative may submit additional factual or legal 
support for an agreement or may propose modifications of an agreement. 
Such negotiations between Commission personnel and filing parties may 
continue during the pendency of injunctive proceedings. Shippers, other 
government departments or agencies, and other third parties may not 
participate in these negotiations.

Subpart G--Reporting Requirements


Sec.  535.701  General requirements.

    (a) Parties to agreements identified in Sec.  535.702(a) shall 
submit quarterly Monitoring Reports on an ongoing basis for as long as 
the agreement remains in effect, containing information and data on the 
agreement and the parties' authority under the agreement.
    (b) Parties to agreements identified in Sec.  535.704 are required 
to submit minutes of their meetings for as long as their agreements 
remain in effect.
    (c) If a joint service is a party to an agreement that is subject 
to the requirements of this subpart, the joint service shall be treated 
as one member of that agreement for purposes of that agreement's 
Monitoring Reports.
    (d) Monitoring Reports and minutes required to be filed by this 
subpart should be submitted to: Director, Bureau of Trade Analysis, 
Federal Maritime Commission, Washington, DC 20573-0001. A copy of the 
Monitoring Report form in Microsoft Word and Excel format may be 
downloaded from the Commission's Home page at http:\\www.fmc.gov, or a 
paper copy may be obtained from the Bureau of Trade Analysis. In lieu 
of submitting paper copies, parties may complete and submit their 
Monitoring Reports in the Commission's prescribed electronic format, 
either on diskette or CD-ROM.

[[Page 67544]]

    (e) (1) The regulations in this paragraph (e) are stayed until 
further notice.
    (2) Reports and minutes required to be filed by this subpart may be 
filed by direct electronic transmission in lieu of hard copy. Detailed 
information on electronic transmission is available from the 
Commission's Bureau of Trade Analysis. Certification and signature 
requirements of this subpart can be met on electronic transmissions 
through use of a pre-assigned Personal Identification Number (PIN) 
obtained from the Commission. PINs can be obtained by submission by an 
official of the filing party of a statement to the Commission agreeing 
that inclusion of the PIN in the transmission constitutes the signature 
of the official. Only one PIN will be issued for each agreement. Where 
a filing party has more than one official authorized to file minutes or 
reports, each additional official must submit such a statement 
countersigned by the principal official of the filing party. Each 
filing official will be issued a unique password. A PIN or designation 
of authorized filing officials may be canceled or changed at any time 
upon the written request of the principal official of the filing party. 
Direct electronic transmission filings may be made at any time except 
between the hours of 8:30 a.m. and 2:00 p.m. Eastern time on Commission 
business days.
    (f) Time for filing. Except as otherwise instructed, Monitoring 
Reports shall be filed within 75 days of the end of each calendar 
quarter. Minutes of meetings shall be filed within 15 days after the 
meeting. Other documents shall be filed within 15 days of the receipt 
of a request for documents.
    (g) A complete response in accordance with the instructions on the 
Monitoring Report shall be supplied to each item. If a party to an 
agreement is unable to supply a complete response, that party shall 
provide either estimated data (with an explanation of why precise data 
are not available) or a detailed statement of reasons for noncompliance 
and the efforts made to obtain the required information.
    (h) A Monitoring Report for a particular agreement may be 
supplemented with any other relevant information or documentary 
material.
    (i) Confidentiality.
    (1) The Monitoring Reports, minutes, and any other additional 
information submitted by a particular agreement will be exempt from 
disclosure under 5 U.S.C. 552, except to the extent:
    (i) It is relevant to an administrative or judicial action or 
proceeding; or
    (ii) It is disclosed to either body of Congress or to a duly 
authorized committee or subcommittee of Congress.
    (2) Parties may voluntarily disclose or make Monitoring Reports, 
minutes or any other additional information publicly available. The 
Commission must be promptly informed of any such voluntary disclosure.
    (j) Monitoring Report or alternative periodic reporting 
requirements in this subpart shall not be construed to authorize the 
exchange or use by or among agreement members of information required 
to be submitted.


Sec.  535.702  Agreements subject to Monitoring Report and alternative 
periodic reporting requirements.

    (a) Agreements subject to the Monitoring Report requirements of 
this subpart are:
    (1) An agreement that contains the authority to discuss or agree on 
capacity rationalization; and/or
    (2) Where the parties to an agreement hold a combined market share, 
based on cargo volume, of 35 percent or more in the entire U.S. inbound 
or outbound geographic scope of the agreement and the agreement 
contains any of the following authorities:
    (i) The discussion of, or agreement on, whether on a binding basis 
under a common tariff or a non-binding basis, any kind of rate or 
charge;
    (ii) The establishment of a joint service;
    (iii) The pooling or division of cargoes, earnings, or revenues 
and/or losses;
    (iv) The discussion or exchange of data on vessel-operating costs; 
and/or
    (v) The discussion of service contract matters.
    (b) The determination of an agreement's reporting obligation under 
Sec.  535.702(a)(2) in the first instance shall be based on the market 
share data reported on the agreement's Information Form submitted 
pursuant to Sec.  535.503. Thereafter, at the beginning of each 
calendar year, the Bureau of Trade Analysis will notify the agreement 
parties of any changes in its reporting requirements based on market 
share data reported on the agreement's quarterly Monitoring Report for 
the previous second quarter (April-June).
    (c) The Commission may require, as necessary, that the parties to 
an agreement with market share below the 35 percent threshold, as 
identified and defined in Sec.  535.702(a)(2), submit Monitoring 
Reports pursuant to Sec.  535.703.
    (d) In addition to or instead of the Monitoring Report in Sec.  
535.703, the Commission may prescribe, as necessary, alternative 
periodic reporting requirements for parties to any agreement identified 
in Sec.  535.201.


Sec.  535.703  Monitoring Report form.

    (a) For agreements subject to the Monitoring Report requirements in 
Sec.  535.702(a), the Monitoring Report form, with instructions, is set 
forth in sections I through III of appendix B of this part. The 
instructions should be read in conjunction with the Act and this part.
    (b) The Monitoring Report shall apply as follows:
    (1) Section I shall be completed by parties to agreements 
identified in Sec.  535.702(a)(1);
    (2) Section II shall be completed by parties to agreements 
identified in Sec.  535.702(a)(2); and
    (3) Section III shall be completed by parties to all agreements 
identified in Sec.  535.702(a).
    (c) In accordance with the requirements and instructions in 
appendix B of this part, parties to an agreement subject to part 3 of 
section I of the Monitoring Report shall submit a narrative statement 
on any planned changes in the vessel capacity and/or liner services 
that the parties will implement under the agreement. This statement 
shall be submitted to the Director, Bureau of Trade Analysis, no later 
than 15 days after a vessel capacity and/or liner service change has 
been agreed upon by the parties but prior to the implementation of the 
actual change under the agreement.
    (d) (1) The Commission may require, in its discretion, that the 
information on the top agreement commodities in part 4 of section II of 
the Monitoring Report be reported on a sub-trade basis, as defined in 
appendix B of this part, rather than on an agreement-wide basis. When 
commodity sub-trade information is required under this section, the 
Commission shall notify the parties to the agreement.
    (2) For purposes of Sec.  535.703(d)(1), the top agreement 
commodities shall mean the top 10 liner commodities (including 
commodities not subject to tariff publication) carried by all the 
agreement parties in each sub-trade within the geographic scope of the 
agreement during the calendar quarter. Where the agreement covers both 
U.S. inbound and outbound liner movements, inbound and outbound sub-
trades shall be stated separately. All other instructions, definitions, 
and terms shall apply as specified and required in appendix B of this 
part.

[[Page 67545]]

Sec.  535.704  Filing of minutes.

    (a) Agreements Required To File Minutes.
    (1) This section applies to agreements authorized to engage in any 
of the following activities: discussion or establishment of any type of 
rates, whether in tariffs or service contracts; pooling or 
apportionment of cargo; discussion of revenues, losses, or earnings; 
discussion or exchange of vessel-operating costs; discussion or 
agreement on service contract matters, including the establishment of 
voluntary service contract guidelines.
    (2) Each agreement to which this section applies shall file with 
the Commission, through a designated official, minutes of all meetings 
defined in paragraph (b) of this section, except as provided in 
paragraph (d) of this section.
    (b) Meetings. For purposes of this subpart, the term meeting shall 
include all discussions at which any agreement is reached among any 
number of the parties to an agreement relating to the business of the 
agreement, and all other discussions among three or more members of the 
agreement (or all members if fewer than three) relating to the business 
of the agreement. This includes, but is not limited to, meetings of the 
members' agents, principals, owners, officers, employees, 
representatives, committees, or subcommittees, and communications among 
members facilitated by agreement officials. Discussions conducted by 
telephone, electronic device, or other means are included.
    (c) Content of minutes. Minutes shall include the following: (1) 
The date, time, and place of the meeting;
    (2) A list of attendees and companies represented;
    (3) A description of discussions detailed enough so that a non-
participant reading the minutes could reasonably gain a clear 
understanding of the nature and extent of the discussions and, where 
applicable, any decisions reached; and
    (4) Any report, circular, notice, statistical compilation, 
analytical study, survey, or other work distributed, discussed, or 
exchanged at the meeting, whether presented by oral, written, 
electronic, or other means. Where the aforementioned materials are 
reasonably available to the public, a citation to the work or relevant 
part thereof is acceptable in lieu of the actual work.
    (d) Exemption. Minutes are not required to reflect discussions of 
administrative matters, as set forth in Sec.  535.408(b)(4)(iii), or 
discussions of or actions taken with regard to rates that, if adopted, 
would be required to be published in an appropriate tariff. This 
exemption does not apply to discussions concerning general rate policy, 
general rate changes, the opening or closing of rates, service 
contracts, or time/volume rates.
    (e) Serial numbers. Each set of minutes filed with the Commission 
shall include the agreement name and FMC number and a unique 
identification number indicating the sequence in which the meeting took 
place during the calendar year.


Sec.  535.705  Application for waiver.

    (a) Upon a showing of good cause, the Commission may waive any 
requirement of this subpart.
    (b) A request for such a waiver must be submitted and approved by 
the Commission in advance of the filing date of the Monitoring Report 
or minutes to which the requested waiver would apply. Requests for a 
waiver shall be submitted in writing to the Director, Bureau of Trade 
Analysis, Federal Maritime Commission, Washington, DC 20573-0001, and 
shall state and provide the following:
    (1) The specific requirements from which relief is sought;
    (2) The special circumstances requiring the requested relief;
    (3) Relevant trade and industry data and information to 
substantiate and support the special circumstances requiring the 
requested relief; and
    (4) Why granting the requested waiver will not substantially impair 
effective monitoring of the agreement.
    (c) The Commission may take into account the presence or absence of 
shipper complaints as well as the past compliance of the agreement 
parties with any reporting requirement under this part in considering 
an application for a waiver.

Subpart H--Mandatory and Prohibited Provisions


Sec.  535.801  Independent action.

    (a) Each conference agreement shall specify the independent action 
(``IA'') procedures of the conference, which shall provide that any 
conference member may take independent action on any rate or service 
item upon not more than 5 calendar days' notice to the conference and 
shall otherwise be in conformance with section 5(b)(8) of the Act.
    (b) (1) Each conference agreement that provides for a period of 
notice for independent action shall establish a fixed or maximum period 
of notice to the conference. A conference agreement shall not require 
or permit a conference member to give more than 5 calendar days' notice 
to the conference, except that in the case of a new or increased rate 
the notice period shall conform to the tariff publication requirements 
of this chapter.
    (2) A conference agreement shall not prescribe notice periods for 
adopting, withdrawing, postponing, canceling, or taking other similar 
actions on independent actions.
    (c) Each conference agreement shall indicate the conference 
official, single designated representative, or conference office to 
which notice of independent action is to be provided. A conference 
agreement shall not require notice of independent action to be given by 
the proposing member to the other parties to the agreement.
    (d) A conference agreement shall not require a member who proposes 
independent action to attend a conference meeting, to submit any 
further information other than that necessary to accomplish the 
publication of the independent tariff item, or to comply with any other 
procedure for the purpose of explaining, justifying, or compromising 
the proposed independent action.
    (e) A conference agreement shall specify that any new rate or 
service item proposed by a member under independent action (except for 
exempt commodities not published in the conference tariff) shall be 
included by the conference in its tariff for use by that member 
effective no later than 5 calendar days after receipt of the notice and 
by any other member that notifies the conference that it elects to 
adopt the independent rate or service item on or after its effective 
date.
    (f) (1) As it pertains to this part, ``adopt'' means the assumption 
in identical form of an originating member's independent action rate or 
service item, or a particular portion of such rate or service item. If 
a carrier adopts an IA at a lower rate than the conference rate when 
there is less than 30 days remaining on the original IA, the adopted IA 
should be made to expire 30 days after its effectiveness to comply with 
the statutory 30-day notice requirement. In the case of an independent 
action time/volume rate (``IA TVR''), the dates of the adopting IA may 
vary from the dates of the original IA, so long as the duration of the 
adopting IA is the same as that of the originating IA. Furthermore, no 
term other than ``adopt'' (e.g., ``follow,'' ``match'') can be used to 
describe the action of assuming as one's own an initiating carrier's 
IA. Additionally, if a party to an agreement chooses to take on an IA 
of another party, but alters it, such action is considered a new IA and 
must

[[Page 67546]]

be published pursuant to the IA publication and notice provisions of 
the applicable agreement.
    (2) An IA TVR published by a member of a ratemaking agreement may 
be adopted by another member of the agreement, provided that the 
adopting member takes on the original IA TVR in its entirety without 
change to any aspect of the original rate offering (except beginning 
and ending dates in the time period) (i.e., a separate TVR with a 
separate volume of cargo but for the same duration). Any subsequent IA 
TVR offering that results in a change in any aspect of the original IA 
TVR, other than the name of the offering carrier or the beginning date 
of the adopting IA TVR, is a new independent action and shall be 
processed in accordance with the provisions of the applicable 
agreement. The adoption procedures discussed above do not authorize the 
participation by an adopting carrier in the cargo volume of the 
originating carrier's IA TVR. Member lines may publish and participate 
in joint IA TVRs, if permitted to do so under the terms of their 
agreement; however, no carrier may participate in an IA TVR already 
published by another carrier.
    (g) A conference agreement shall not require or permit individual 
member lines to be assessed on a per carrier usage basis the costs and/
or administrative expenses incurred by the agreement in processing 
independent action filings.
    (h) A conference agreement may not permit the conference to 
unilaterally designate an expiration date for an independent action 
taken by a member line. The right to determine the duration of an IA 
remains with the member line, and a member line must be given the 
opportunity to designate whatever duration it chooses for its IA, 
regardless if the duration is for a specified period or open ended. 
Only in instances where a member line gives its consent to the 
conference, or where a member line freely elects not to provide for the 
duration of its IA after having been given the opportunity, can the 
conference designate an expiration date for the member line's IA.
    (i) Any new conference agreement or any modification to an existing 
conference agreement that does not comply with the requirements of this 
section shall be rejected pursuant to Sec.  535.601 of this part.
    (j) If ratemaking is by sections within a conference, then any 
notice to the conference required by this section may be made to the 
particular ratemaking section.


Sec.  535.802  Service contracts.

    (a) Ocean common carrier agreements may not prohibit or restrict a 
member or members of the agreement from engaging in negotiations for 
service contracts with one or more shippers.
    (b) Ocean common carrier agreements may not require a member or 
members of the agreement to disclose a negotiation on a service 
contract, or the terms and conditions of a service contract, other than 
those terms or conditions required by section 8(c)(3) of the Act.
    (c) Ocean common carrier agreements may not adopt mandatory rules 
or requirements affecting the right of an agreement member or agreement 
members to negotiate or enter into service contracts.
    (d) An agreement may provide authority to adopt voluntary 
guidelines relating to the terms and procedures of an agreement 
member's or agreement members' service contracts if the guidelines 
explicitly state the right of the members of the agreement not to 
follow these guidelines.
    (e) Voluntary guidelines shall be submitted to the Director, Bureau 
of Trade Analysis, Federal Maritime Commission, Washington, DC 20573. 
Voluntary guidelines shall be kept confidential in accordance with 
Sec.  535.608 of this part. Use of voluntary guidelines prior to their 
submission is prohibited.


Sec.  535.803  Ocean freight forwarder compensation.

    No conference or group of two or more ocean common carriers may
    (a) deny to any member of such conference or group the right, upon 
notice of not more than 5 calendar days, to take independent action on 
any level of compensation paid to an ocean freight forwarder; or
    (b) agree to limit the payment of compensation to an ocean freight 
forwarder to less than 1.25 percent of the aggregate of all rates and 
charges applicable under the tariff assessed against the cargo on which 
the forwarding services are provided.

Subpart I--Penalties


Sec.  535.901  Failure to file.

    Any person operating under an agreement, involving activities 
subject to the Act pursuant to sections 4 and 5(a) of the Act and this 
part and not exempted pursuant to section 16 of the Act or excluded 
from filing by the Act, that has not been filed and that has not become 
effective pursuant to the Act and this part is in violation of the Act 
and this part and is subject to the civil penalties set forth in 
section 13(a) of the Act.


Sec.  535.902  Falsification of reports.

    Knowing falsification of any report required by the Act or this 
part, including knowing falsification of any item in any applicable 
agreement information and/or reporting requirements pursuant to 
subparts E and G of this part is a violation of the rules of this part 
and is subject to the civil penalties set forth in section 13(a) of the 
Act and may be subject to the criminal penalties provided for in 18 
U.S.C. 1001.

Subpart J--Paperwork Reduction


Sec.  535.991  OMB control numbers assigned pursuant to the Paperwork 
Reduction Act.

    This section displays the control number assigned to information 
collection requirements of the Commission in this part by the Office of 
Management and Budget pursuant to the Paperwork Reduction Act of 1995, 
Pub. L. 104-13. The Commission intends that this section comply with 
the requirements of section 3507(a)(3) of the Paperwork Reduction Act, 
which requires that agencies display a current control number assigned 
by the Director of the Office of Management and Budget (OMB) for each 
agency information collection requirement:

------------------------------------------------------------------------
                                                            Current OMB
                         Section                            control No.
------------------------------------------------------------------------
535.101 through 535.902.................................       3072-0045
------------------------------------------------------------------------

Appendix A to Part 535--Information Form and Instructions

Instructions

    All agreements and modifications to agreements between or among 
ocean common carriers identified in 46 CFR 535.502 must be 
accompanied by a completed Information Form to the full extent 
required in sections I through V of this Form. Sections I and V must 
be completed by all such agreements. In addition, sections II, III 
and IV must be completed, as applicable, in accordance with the 
authority contained in each agreement. Where an agreement containing 
multiple authorities is subject to duplicate reporting requirements 
in the various sections of this Form, the parties may provide only 
one response so long as the reporting requirements within each 
section are fully addressed. The Information Form specifies the data 
and information which must be reported for each section and the 
format in which it must be provided. If a party to an agreement is 
unable to supply a complete response to any item of this Form, that 
party shall provide either estimated data (with an explanation of 
why precise data are not available) or a detailed statement of 
reasons for noncompliance and the efforts made to obtain the 
required

[[Page 67547]]

information. For purposes of this Form, if one of the agreement 
signatories is a joint service operating under an effective 
agreement, that signatory shall respond to the Form as a single 
agreement party. For clarification of the agreement terminology used 
in this Form, the parties may refer to the definitions provided in 
46 CFR 535.104. In addition, the following definitions shall apply 
for purposes of this Form: liner movement means the carriage of 
liner cargo by liner operators; liner cargo means cargo carried on 
liner vessels in a liner service; liner operator means a vessel-
operating common carrier engaged in liner service; liner vessel 
means a vessel used in a liner service; liner service means a 
definite, advertised schedule of sailings at regular intervals; and 
TEU means a unit of measurement equivalent to one 20-foot shipping 
container. Further, when used in this Form, the terms ``entire 
geographic scope of the agreement'' or ``agreement-wide'' refer to 
the combined U.S. inbound trade and/or the combined U.S. outbound 
trade as such trades apply to the geographic scope of the agreement, 
rather than ``sub-trades'' which refer to the specific foreign 
countries and specific U.S. port ranges that are included in the 
geographic scope of the agreement. Whether required on a combined 
trade basis or a sub-trade basis, the U.S. inbound trade (or sub-
trades) and the U.S. outbound trade (or sub-trades) shall always be 
stated separately.

Section I

    Section I applies to all agreements and modifications to 
agreements identified in 46 CFR 535.502. Parties to such agreements 
must complete parts 1 through 4 of this section.

Part 1

    State the full name of the agreement.

Part 2(A)

    Provide a narrative statement describing the specific purpose(s) 
of the agreement pertaining to the parties' business activities as 
ocean common carriers in the foreign commerce of the United States.

Part 2(B)

    Provide a narrative statement describing the commercial or other 
relevant circumstances within the geographic scope of the agreement 
that led the parties to enter into the agreement.

Part 3

    List all effective agreements that cover all or part of the 
geographic scope of this agreement, and whose parties include one or 
more of the parties to this agreement.

Part 4(A)

    Identify whether the agreement authorizes the parties to 
discuss, or agree upon, whether on a binding basis under a common 
tariff or a non-binding basis, any kind of rate or charge.

Part 4(B)

    Identify whether the agreement authorizes the parties to 
establish a joint service.

Part 4(C)

    Identify whether the agreement authorizes the parties to pool 
cargoes or revenues.

Part 4(D)

    Identify whether the agreement authorizes the parties to discuss 
or exchange data on vessel-operating costs.

Part 4(E)

    Identify whether the agreement authorizes parties to discuss 
service contract matters.

Part 4(F)

    Identify whether the agreement authorizes the parties to discuss 
or agree on capacity rationalization as defined in 46 CFR 
535.104(e).

Part 4(G)

    Identify whether the agreement contains provisions that place 
conditions or restrictions on the parties' agreement participation, 
and/or use or offering of competing services within the geographic 
scope of the agreement.

Part 4(H)

    Identify whether the agreement authorizes the parties to charter 
or use vessel space in exchange for compensation or services. This 
authority does not include capacity rationalization as referred to 
in part 4(F) of this section.

Part 4(I)

    Identify whether the agreement authorizes the parties to 
rationalize sailings or services relating to a schedule of ports, 
the frequency of port calls, and/or the size and capacity of vessels 
for deployment. This authority does not include establishment of a 
joint service or capacity rationalization as referred to in parts 
4(B) and 4(F) of this section.

Part 4(J)

    Identify any other authority contained in the agreement that is 
not otherwise covered in part 4 of this section. If there is no 
other authority in the agreement, it shall be noted with the term 
``none'' in response to part 4(J) of this section.

Section II

    Section II applies to agreements identified in 46 CFR 535.502(a) 
that contain any of the following authorities: (a) the charter or 
use of vessel space in exchange for compensation or services; and/or 
(b) the rationalization of sailings or services relating to a 
schedule of ports, the frequency of port calls, and/or the size and 
capacity of vessels for deployment. Such authorities do not include 
the establishment of a joint service, nor capacity rationalization 
as defined in 46 CFR 535.104(e). Parties to agreements identified in 
this section must complete all items in part 1.

Part 1(A)

    For the most recent 12-month period for which complete data are 
available, provide the number of vessel calls each party made at 
each port for its liner services that would be covered by the 
agreement within the entire geographic scope of the agreement.

Part 1(B)

    Provide a narrative statement that clearly describes the nature, 
level, or type of any anticipated or planned changes in service at 
ports that the parties would implement under the agreement after it 
goes into effect. Examples of such changes include a change in the 
base port designation, the frequency of vessel calls, and the use of 
indirect as opposed to direct service. If no change is anticipated 
or planned, it shall be noted with the term ``none'' in response to 
part 1(B) of this section.

Section III

    Section III applies to agreements identified in 46 CFR 535.502 
that contain the authority to discuss or agree on capacity 
rationalization as defined in 46 CFR 535.104(e). Parties to such 
agreements must complete parts 1 through 3 of this section.

Part 1(A)

    For the most recent calendar quarter for which complete data are 
available, provide the amount of vessel capacity for each party for 
each of its liner services that would be covered by the agreement 
within the entire geographic scope of the agreement, stated 
separately for the U.S. inbound and outbound trades as applicable to 
the geographic scope of the agreement. For purposes of this Form, 
vessel capacity means a party's total commercial liner space on 
line-haul vessels, whether operated by it or other parties from whom 
space is obtained, sailing to and/or from the continent of North 
America for each of its liner services that would be covered by the 
agreement. When 50 percent or more of the total liner cargo carried 
by all the parties in the geographic scope of the agreement during 
the calendar quarter was containerized, the amount(s) of vessel 
capacity for each party shall be reported in TEUs. When 50 percent 
or more of the total liner cargo carried by all the parties in the 
geographic scope of the agreement during the calendar quarter was 
non-containerized, the amount(s) of vessel capacity for each party 
shall be reported in non-containerized units of measurement. The 
unit of measurement used in calculating the amounts of non-
containerized vessel capacity must be specified clearly and 
consistently applied.

Part 1(B)

    Provide the percentage of vessel capacity utilization for each 
party for each of its liner services that would be covered by the 
agreement within the entire geographic scope of the agreement, 
corresponding to the figures and time period used in part 1(A) of 
this section, stated separately for the U.S. inbound and outbound 
trades as applicable to the geographic scope of the agreement. For 
purposes of this Form, the percentage of vessel capacity utilization 
means a party's total volume of liner cargo, for each of its liner 
services that would be covered by the agreement, carried on any 
vessel space counted under part 1(A) of this section, divided by its 
total vessel capacity as defined and derived in part 1(A) of this 
section, which quotient is multiplied by 100.

[[Page 67548]]

Part 2

    For the most recent 12-month period for which complete data are 
available, provide the number of vessel calls each party made at 
each port for its liner services that would be covered by the 
agreement within the entire geographic scope of the agreement.

Part 3

    Provide a narrative statement that clearly describes the nature, 
basis, and effects of any anticipated or planned changes in the 
vessel capacity and/or liner services (including service at ports) 
that the parties would implement under the agreement after it goes 
into effect. If no change is anticipated or planned, it shall be 
noted with the term ``none'' in response to part 3 of this section.

Section IV

    Section IV applies to agreements identified in 46 CFR 535.502 
that contain any of the following authorities: (a) The discussion 
of, or agreement upon, whether on a binding basis under a common 
tariff or a non-binding basis, any kind of rate or charge; (b) the 
establishment of a joint service; (c) The pooling or division of 
cargoes, earnings, or revenues and/or losses; (d) the discussion or 
exchange of data on vessel-operating costs; and/or (e) the 
discussion of service contract matters. Parties to such agreements 
must complete parts 1 through 5 of this section.

Part 1

    For the most recent calendar quarter for which complete data are 
available, provide the market shares of all liner operators for the 
entire geographic scope of the agreement and in each sub-trade 
within the scope of the agreement. A joint service shall be treated 
as a single liner operator, whether it is an agreement line or a 
non-agreement line. Sub-trade is defined as the scope of all liner 
movements between each U.S. port range within the scope of the 
agreement and each foreign country within the scope of the 
agreement. Where the agreement covers both U.S. inbound and outbound 
liner movements, inbound and outbound market shares shall be shown 
separately.
    U.S. port ranges are defined as follows:
    Atlantic and Gulf--Includes ports along the eastern seaboard and 
the Gulf of Mexico from the northern boundary of Maine to 
Brownsville, Texas. Also includes all ports bordering upon the Great 
Lakes and their connecting waterways, all ports in the State of New 
York on the St. Lawrence River, and all ports in Puerto Rico and the 
U.S. Virgin Islands.
    Pacific--Includes all ports in the States of Alaska, Hawaii, 
California, Oregon, and Washington. Also includes all ports in Guam, 
American Samoa, Northern Marianas, Johnston Island, Midway Island, 
and Wake Island.
    An application may be filed for a waiver of the definition of 
``sub-trade'' under the procedure described in 46 CFR 535.504. In 
any such application, the burden shall be on the parties to show 
that their marketing and pricing practices have been done by 
ascertainable multi-country regions rather than by individual 
countries or, in the case of the United States, by broader areas 
than the port ranges defined herein. The parties must further show 
that, though operating individually, they were nevertheless applying 
essentially similar regional practices.
    The formula for calculating market share in the entire agreement 
scope or in a sub-trade is as follows: The total amount of liner 
cargo carried on each liner operator's liner vessels in the entire 
agreement scope or in the sub-trade during the most recent calendar 
quarter for which complete data are available, divided by the total 
liner movements in the entire agreement scope or in the sub-trade 
during the same calendar quarter, which quotient is multiplied by 
100. The calendar quarter used must be clearly identified. The 
market shares held by non-agreement lines as well as by agreement 
lines must be provided, stated separately in the format indicated.
    If 50 percent or more of the total liner cargo carried by the 
parties in the entire agreement scope or in the sub-trade during the 
calendar quarter was containerized, only containerized liner 
movements (measured in TEUs) must be used for determining market 
share. If 50 percent or more of the total liner cargo carried by the 
parties was non-containerized, only non-containerized liner 
movements must be used for determining market share. The unit of 
measurement used in calculating amounts of non-containerized cargo 
must be specified clearly and applied consistently.

Part 2

    For each party that served all or any part of the geographic 
scope of the agreement during all or any part of the most recent 12-
month period for which complete data are available, provide each 
party's total liner revenues within the geographic scope, total 
liner cargo carried within the geographic scope, and average 
revenue. For purposes of this Form, total liner revenues means the 
total revenues, in U.S. dollars, of each party corresponding to its 
total cargo carried for its liner services that would fall under the 
agreement, inclusive of all ocean freight charges, whether assessed 
on a port-to-port basis or a through intermodal basis; accessorial 
charges; surcharges; and charges for inland cargo carriage. Average 
revenue shall be calculated as the quotient of each party's total 
liner revenues within the geographic scope divided by its total 
cargo carried within the geographic scope.
    When 50 percent or more of the total liner cargo carried by all 
the parties in the geographic scope of the agreement during the 12-
month period was containerized, each party shall report only its 
total carryings of containerized liner cargo (measured in TEUs) 
within the geographic scope, total revenues generated by its 
carriage of containerized liner cargo, and average revenue per TEU. 
When 50 percent or more of the total liner cargo carried by all the 
parties in the geographic scope of the agreement during the 12-month 
period was non-containerized, each party shall report only its total 
carryings of non-containerized liner cargo (specifying the unit of 
measurement used), total revenues generated by its carriage of non-
containerized liner cargo, and average revenue per unit of 
measurement. When the agreement covers both U.S. inbound and 
outbound liner movements, inbound and outbound data shall be stated 
separately.

Part 3(A)

    For the same 12-month period used in part 2 of this section, 
provide a list, for the entire geographic scope of the agreement, of 
the top 10 liner commodities (including commodities not subject to 
tariff publication) carried by all the parties for their liner 
services that would fall under the agreement. For purposes of this 
Form, commodities shall be identified at the 4-digit level of 
customarily used commodity coding schedules. When 50 percent or more 
of the total liner cargo carried by all the parties in the 
geographic scope of the agreement during the 12-month period was 
containerized, this list shall include only containerized 
commodities. When 50 percent or more of the total liner cargo 
carried by all the parties in the geographic scope of the agreement 
during the 12-month period was non-containerized, this list shall 
include only non-containerized commodities. When the agreement 
covers both U.S. inbound and outbound liner movements, inbound and 
outbound data shall be stated separately.

Part 3(B)

    Provide the cargo volume and revenue results for each party for 
each of the major commodities listed in part 3(A) of this section, 
corresponding to the same 12-month period and unit of measurement 
used. For purposes of this Form, revenue results means the revenues, 
in U.S. dollars, earned by each party on the cargo volume of each 
major commodity listed in part 3(A) of this section, inclusive of 
all ocean freight, whether assessed on a port-to-port basis or a 
through intermodal basis; accessorial charges; surcharges; and 
charges for inland cargo carriage. If a party has no cargo volume 
and revenue results for a commodity listed in part 3(A) of this 
section, it shall be noted by using a zero for that party in 
response to part 3(B) of this section.

Part 4(A)

    For the same calendar quarter used in part 1 of this section, 
provide the amount of vessel capacity for each party for each of its 
liner services that would fall under the agreement within the entire 
geographic scope of the agreement, stated separately for the U.S. 
inbound and outbound trades as applicable to the geographic scope of 
the agreement. For purposes of this Form, vessel capacity means a 
party's total commercial liner space on line-haul vessels, whether 
operated by it or other parties from whom space is obtained, sailing 
to and/or from the continent of North America for each of its liner 
services that would fall under the agreement. When 50 percent or 
more of the total liner cargo carried by all the parties in the 
geographic scope of the agreement during the calendar quarter was 
containerized, the amount(s) of vessel capacity for each party shall 
be reported in TEUs. When 50 percent or more of the total liner 
cargo carried by all the parties in the geographic scope of the 
agreement during the calendar quarter was non-containerized, the 
amount(s) of vessel capacity for each party shall be reported in

[[Page 67549]]

non-containerized units of measurement. The unit of measurement used 
in calculating the amounts of non-containerized vessel capacity must 
be specified clearly and consistently applied.

Part 4(B)

    Provide the percentage of vessel capacity utilization for each 
party for each of its liner services that would fall under the 
agreement within the entire geographic scope of the agreement, 
corresponding to the figures and time period used in part 4(A) of 
this section, stated separately for the U.S. inbound and outbound 
trades as applicable to the geographic scope of the agreement. For 
purposes of this Form, the percentage of vessel capacity utilization 
means a party's total volume of liner cargo, for each of its liner 
services that would fall under the agreement, carried on any vessel 
space counted under part 4(A) of this section, divided by its total 
vessel capacity as defined and derived in part 4(A) of this section, 
which quotient is multiplied by 100.

Part 4(C)

    Provide a narrative statement describing the nature, basis, and 
effects of any significant changes in the amounts of vessel 
capacity, anticipated or planned for when the agreement goes into 
effect, for the parties' liner services that would fall under the 
agreement within the entire geographic scope of the agreement. For 
purposes of this Form, the term ``significant changes in the amounts 
of vessel capacity'' means the removal from or addition to a liner 
service of vessels or vessel space for a fixed, seasonally planned, 
or indefinite period of time, as opposed to incidental operational 
changes when vessels may be temporarily repositioned or shifted from 
one service to another, or when vessel space may be temporarily 
altered, on short notice. If no significant change is anticipated or 
planned, it shall be noted with the term ``none'' in response to 
part 4(C) of this section.

Part 5(A)

    For the same 12-month period used in parts 2 and 3 of this 
section, provide the number of vessel calls each party made at each 
port for its liner services that would fall under the agreement 
within the entire geographic scope of the agreement.

Part 5(B)

    Provide a narrative statement that clearly describes the nature, 
level, or type of any changes, anticipated or planned for when the 
agreement goes into effect, in service at ports for the parties' 
liner services that would fall under the agreement within the entire 
geographic scope of the agreement. Examples of such changes include 
a change in the base port designation, the frequency of vessel 
calls, and the use of indirect as opposed to direct service. If no 
change is anticipated or planned, it shall be noted with the term 
``none'' in response to part 5(B) of this section.

Section V

    Section V applies to all agreements identified in 46 CFR 
535.502. Parties to such agreements must complete all items in part 
1 of this section.

Part 1(A)

    State the name, title, address, telephone and fax numbers, and 
electronic mail address of a person the Commission may contact 
regarding the Information Form and any information provided therein.

Part 1(B)

    State the name, title, address, telephone and fax numbers, and 
electronic mail address of a person the Commission may contact 
regarding a request for additional information or documents.

Part 1(C)

    A representative of the parties shall sign the Information Form 
and certify that the information in the Form and all attachments and 
appendices are, to the best of his or her knowledge, true, correct 
and complete. The representative also shall indicate his or her 
relationship with the parties to the agreement.

FEDERAL MARITIME COMMISSION

INFORMATION FORM FOR AGREEMENTS BETWEEN OR AMONG OCEAN COMMON CARRIERS

Section I
Part 1
 Agreement Name:

Part 2

 (A) Narrative statement on agreement purpose:-------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------

 (B) Narrative statement on the commercial or other circumstances 
requiring the agreement:-----------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Part 3
List all effective agreements covering all or part of the geographic 
scope of this agreement, whose parties include one or more of the 
parties to this agreement.

Part 4
This agreement includes:
  (A) Authority to discuss or      Yes [ballot]        No [ballot]
   agree upon rates or charges?
  (B) Joint service?               Yes [ballot]        No [ballot]
  (C) Pooling of cargoes or        Yes [ballot]        No [ballot]
   revenues?
  (D) Authority to discuss or      Yes [ballot]        No [ballot]
   exchange data on vessel-
   operating costs?
  (E) Authority to discuss or      Yes [ballot]        No [ballot]
   agree on service contracts and
   their terms?
  (F) Authority to discuss or      Yes [ballot]        No [ballot]
   agree on capacity
   rationalization?
  (G) Conditions or restrictions   Yes [ballot]        No [ballot]
   on the parties' agreement
   participation, and/or use or
   offering of competing services
   in the geographic scope?
  (H) Authority to charter vessel  Yes [ballot]        No [ballot]
   space?
  (I) Authority to rationalize     Yes [ballot]        No [ballot]
   sailings or services?
 

 (J) Other authority:--------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------


                                                   Section II
Part 1
(A) Vessel Calls
Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [12-Months]
[Port Names]                          Port 1             Port 2             Port 3             Etc. . . .
Carrier A [Name]

[[Page 67550]]

 
Carrier B
Carrier C
Etc. . . .
 

 (B) Narrative statement on anticipated or planned changes:------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------


                                                   Section III
 
Part 1 Vessel Capacity And Utilization
Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [Calendar Quarter]
                                                                               (A) Vessel Capaci(B) Utilization
                                                                     [TEUs or Other Units]            [Percent]
Carrier A [Name]
  Liner Service 1 [Name]........................................                    XX,XXX                   XX
  Liner Service 2...............................................                    XX,XXX                   XX
  Liner Service 3...............................................                    XX,XXX                   XX
 Etc. . . .
Carrier B
  Liner Service 1...............................................                    XX,XXX                   XX
  Liner Service 2...............................................                    XX,XXX                   XX
  Liner Service 3...............................................                    XX,XXX                   XX
 Etc. . . .
Etc. . . .
 


Part 2 Vessel Calls
Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [12-Months]
[Port Names]                          Port 1             Port 2             Port 3             Etc. . . .
Carrier A [Name]
Carrier B
Carrier C
Etc. . . .
 
Part 3 Planned Changes
 

 Narrative statement on anticipated or planned changes:----------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------


                               Section IV
Part 1 Market Share
Agreement-Wide Trade [or Sub-Trade]: U.S. Inbound (or Outbound) Name
Time Period: [Calendar Quarter]
                                                   TEUs [or  ...........
                                                      other      Percent
                                                     units]
Agreement Market Share
  Line A [Name]...............................        X,XXX           XX
  Line B......................................        X,XXX           XX
  Line C......................................        X,XXX           XX
 Etc. . . .
      Total Agreement.........................        X,XXX           XX
Non-Agreement Market Share
  Line X......................................        X,XXX           XX
  Line Y......................................        X,XXX           XX
  Line Z......................................        X,XXX           XX
 Etc. . . .
      Total Agreement.........................        X,XXX           XX
Total Trade [or Sub-Trade]....................        X,XXX          100
 


Part 2 Total Liner Cargo and Revenues
Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [12-Months]
                                         Total revenues                TEUs [or other   Average revenue
                                                                               units]
[Name]
  Carrier A............................  $                                      X,XXX   $
  Carrier B............................  $                                      X,XXX   $
  Carrier C............................  $                                      X,XXX   $
 Etc. . . .
 


Part 3 Top Liner Commodities
Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [Same 12-Months in part 2 of this section]
[Name]                                    Carrier A               Carrier B               Etc. . . .
Commodity 1 [Name and 4-Digit Code]
  TEUs [or other units]                   X,XXX                   X,XXX
  Revenues                                $                       $
Commodity 2
  TEUs                                    X,XXX                   X,XXX

[[Page 67551]]

 
  Revenues                                $                       $
 Etc. . . .
 


Part 4 Vessel Capacity and Utilization
Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [Same Calendar Quarter in part 1 of this section]
                                                                               (A) Vessel Capaci(B) Utilization
                                                                     [TEUs or Other Units]            [Percent]
Carrier A [Name]
  Liner Service 1 [Name].......................................                     XX,XXX                   XX
  Liner Service 2..............................................                     XX,XXX                   XX
  Liner Service 3..............................................                     XX,XXX                   XX
  Etc. . ......................................................
Carrier B
  Liner Service 1..............................................                     XX,XXX                   XX
  Liner Service 2..............................................                     XX,XXX                   XX
  Liner Service 3..............................................                     XX,XXX                   XX
  Etc. . ......................................................
  Etc. . ......................................................
 

 (C) Narrative Statement on anticipated or planned significant changes:
-----------------------------------------------------------------------
-----------------------------------------------------------------------


Part 5
(A) Vessel Calls
Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [Same 12-Months in parts 2 and 3 of this section]
[Port Names]                              Port 1            Port 2            Port 3            Etc. . . .
Carrier A [Name]
Carrier B
Carrier C
Etc. . . .
 

 (B) Narrative statement on anticipated or planned changes:------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Section V

Part 1 Contact Persons and Certification
(A) Person(s) to Contact Regarding Information Form.
 (1) Name--------------------------------------------------------------
 (2) Title-------------------------------------------------------------
 (3) Firm Name and Business--------------------------------------------
 (4) Business Telephone Number-----------------------------------------
 (5) Fax Number--------------------------------------------------------
 (6) E-Mail Address----------------------------------------------------

(B) Individual Located in the United States Designated for the 
Limited Purpose of Receiving Notice of an Issuance of a Request for 
Additional Information or Documents (see 46 CFR 535.606).

 (1) Name--------------------------------------------------------------
 (2) Title-------------------------------------------------------------
 (3) Firm Name and Business--------------------------------------------
 (4) Business Telephone Number-----------------------------------------
 (5) Fax Number--------------------------------------------------------
 (6) E-Mail Address----------------------------------------------------
 (C) Certification-----------------------------------------------------

This Information Form, together with any and all appendices and 
attachments thereto, was prepared and assembled in accordance with 
instructions issued by the Federal Maritime Commission. The 
information is, to the best of my knowledge, true, correct, and 
complete

 Name (please print or type)-------------------------------------------
 Title-----------------------------------------------------------------
 Relationship with parties to agreement--------------------------------
 Signature-------------------------------------------------------------
 Date------------------------------------------------------------------

Appendix B to Part 535--Monitoring Report and Instructions

Instructions

    All agreements between or among ocean common carriers identified 
in 46 CFR 535.702(a) must submit completed Monitoring Reports to the 
full extent required in sections I through III of this Report. 
Sections I and II must be completed, as applicable, in accordance 
with the authority contained in each agreement. Section III must be 
completed by all agreements subject to Monitoring Report 
requirements. Where an agreement containing multiple authorities is 
subject to duplicate reporting requirements in the various sections 
of this Report, the parties may provide only one response so long as 
the reporting requirements within each section are fully addressed. 
The Monitoring Report specifies the data and information which must 
be reported for each section and the format in which it must be 
provided. If a party to an agreement is unable to supply a complete 
response to any item of this Report, that party shall provide either 
estimated data (with an explanation of why precise data are not 
available) or a detailed statement of reasons for noncompliance and 
the efforts made to obtain the required information. For purposes of 
this Report, if one of the agreement signatories is a joint service 
operating under an effective agreement, that signatory shall respond 
to the Report as a single agreement party. For clarification of the 
agreement terminology used in this Report, the parties may refer to 
the definitions provided in 46 CFR 535.104. In addition, the 
following definitions shall apply for purposes of this Report: liner 
movement means the carriage of liner cargo by liner operators; liner 
cargo means cargo carried on liner vessels in a liner service; liner 
operator means a vessel-operating common carrier engaged in liner 
service;

[[Page 67552]]

liner vessel means a vessel used in a liner service; liner service 
means a definite, advertised schedule of sailings at regular 
intervals; and TEU means a unit of measurement equivalent to one 20-
foot shipping container. Further, when used in this Report, the 
terms ``entire geographic scope of the agreement'' or ``agreement-
wide'' refer to the combined U.S. inbound trade and/or the combined 
U.S. outbound trade as such trades apply to the geographic scope of 
the agreement, rather than ``sub-trades'' which refer to the trade 
between specific foreign countries and specific U.S. port ranges 
that are included in the geographic scope of the agreement. Whether 
required on a combined trade basis or a sub-trade basis, the U.S. 
inbound trade (or sub-trades) and the U.S. outbound trade (or sub-
trades) shall always be stated separately.

Section I

    Section I applies to agreements, identified in 46 CFR 
535.702(a)(1), that contain the authority to discuss or agree on 
capacity rationalization as defined in 46 CFR 535.104(e). Parties to 
such agreements must complete parts 1 through 3 of this section.

Part 1

    State the full name of the agreement and the agreement number 
assigned by the FMC.

Part 2(A)

    For the preceding calendar quarter, provide the amount of vessel 
capacity for each party for each of its liner services that is 
covered by the agreement within the entire geographic scope of the 
agreement, stated separately for the U.S. inbound and outbound 
trades as applicable to the geographic scope of the agreement. For 
purposes of this Report, vessel capacity means a party's total 
commercial liner space on line-haul vessels, whether operated by it 
or other parties from whom space is obtained, sailing to and/or from 
the continent of North America for each of its liner services that 
is covered by the agreement.
    When 50 percent or more of the total liner cargo carried by all 
the parties in the geographic scope of the agreement during the 
calendar quarter was containerized, the amount(s) of vessel capacity 
for each party shall be reported in TEUs. When 50 percent or more of 
the total liner cargo carried by all the parties in the geographic 
scope of the agreement during the calendar quarter was non-
containerized, the amount(s) of vessel capacity for each party shall 
be reported in non-containerized units of measurement. The unit of 
measurement used in calculating the amounts of non-containerized 
vessel capacity must be specified clearly and consistently applied.

Part 2(B)

    For the preceding calendar quarter, provide the percentage of 
vessel capacity utilization for each party for each of its liner 
services that is covered by the agreement within the entire 
geographic scope of the agreement, corresponding to the figures used 
in part 2(A) of this section, stated separately for the U.S. inbound 
and outbound trades as applicable to the geographic scope of the 
agreement. For purposes of this Report, the percentage of vessel 
capacity utilization means a party's total volume of liner cargo, 
for each of its liner services that is covered by the agreement, 
carried on any vessel space counted under part 2(A) of this section, 
divided by its total vessel capacity as defined and derived in part 
2(A) of this section, which quotient is multiplied by 100.

Part 3

    Provide a narrative statement that clearly describes the nature, 
basis, and effects of any planned changes in the vessel capacity 
and/or liner services (including service at ports) that the parties 
will implement under the agreement. This narrative statement shall 
be submitted to the Director, Bureau of Trade Analysis, no later 
than 15 days after a vessel capacity and/or liner service change has 
been agreed upon by the parties but prior to the implementation of 
the actual change under the agreement.

Section II

    Section II applies to agreements, identified in 46 CFR 
535.702(a)(2), where the parties to the agreement hold a combined 
market share, based on cargo volume, of 35 percent or more in the 
entire U.S. inbound or outbound geographic scope of the agreement 
and the agreement contains any of the following authorities: (a) The 
discussion of, or agreement upon, whether on a binding basis under a 
common tariff or a non-binding basis, any kind of rate or charge; 
(b) the establishment of a joint service; (c) the pooling or 
division of cargoes, earnings, or revenues and/or losses; (d) the 
discussion or exchange of data on vessel-operating costs; and/or (e) 
the discussion of service contract matters. Parties to such 
agreements must complete parts 1 through 6 of this section.

Part 1

    State the full name of the agreement and the agreement number 
assigned by the FMC.

Part 2

    For the preceding calendar quarter, provide the market shares of 
all liner operators for the entire geographic scope of the agreement 
and in each sub-trade within the scope of the agreement. A joint 
service shall be treated as a single liner operator, whether it is 
an agreement line or a non-agreement line. Sub-trade is defined as 
the scope of all liner movements between each U.S. port range within 
the scope of the agreement and each foreign country within the scope 
of the agreement. Where the agreement covers both U.S. inbound and 
outbound liner movements, inbound and outbound market shares shall 
be shown separately.
    U.S. port ranges are defined as follows:
    Atlantic and Gulf--Includes ports along the eastern seaboard and 
the Gulf of Mexico from the northern boundary of Maine to 
Brownsville, Texas. Also includes all ports bordering upon the Great 
Lakes and their connecting waterways, all ports in the State of New 
York on the St. Lawrence River, and all ports in Puerto Rico and the 
U.S. Virgin Islands.
    Pacific--Includes all ports in the States of Alaska, Hawaii, 
California, Oregon, and Washington. Also includes all ports in Guam, 
American Samoa, Northern Marianas, Johnston Island, Midway Island, 
and Wake Island.
    An application may be filed for a waiver of the definition of 
``sub-trade'' under the procedure described in 46 CFR 535.705. In 
any such application, the burden shall be on the parties to show 
that their marketing and pricing practices have been done by 
ascertainable multi-country regions rather than by individual 
countries or, in the case of the United States, by broader areas 
than the port ranges defined herein. The Commission will also 
consider whether the alternative definition of ``sub-trade'' 
requested by the waiver application is reasonably consistent with 
the definition of ``sub-trade'' applied in the original Information 
Form for the agreement.
    The formula for calculating market share in the entire agreement 
scope or in a sub-trade is as follows: The total amount of liner 
cargo carried on each liner operator's liner vessels in the entire 
agreement scope or in the sub-trade during the most recent calendar 
quarter for which complete data are available, divided by the total 
liner movements in the entire agreement scope or in the sub-trade 
during the same calendar quarter, which quotient is multiplied by 
100. The market shares held by non-agreement lines as well as by 
agreement lines must be provided, stated separately in the format 
indicated.
    If 50 percent or more of the total liner cargo carried by the 
parties in the entire agreement scope or in the sub-trade during the 
calendar quarter was containerized, only containerized liner 
movements (measured in TEUs) must be used for determining market 
share. If 50 percent or more of the total liner cargo carried by the 
parties was non-containerized, only non-containerized liner 
movements must be used for determining market share. The unit of 
measurement used in calculating amounts of non-containerized cargo 
must be specified clearly and applied consistently.

Part 3

    For the preceding calendar quarter, provide each party's total 
liner revenues in the entire geographic scope of the agreement, 
total liner cargo carried in the entire geographic scope of the 
agreement, and average revenue. For purposes of this Report, total 
liner revenues means the total revenues, in U.S. dollars, of each 
party corresponding to its total cargo carried for its liner 
services that fall under the agreement, inclusive of all ocean 
freight charges, whether assessed on a port-to-port basis or a 
through intermodal basis; accessorial charges; surcharges; and 
charges for inland cargo carriage. Average revenue shall be 
calculated as the quotient of each party's total liner revenues in 
the entire geographic scope divided by its total cargo carried in 
the entire geographic scope.
    When 50 percent or more of the total liner cargo carried by all 
the parties in the geographic scope of the agreement during the 
calendar quarter was containerized, each party shall report only its 
total carryings of containerized liner cargo (measured in TEUs) 
during the calendar quarter, total revenues generated by its 
carriage of containerized liner cargo, and average revenue per TEU. 
When 50 percent or more of the total liner

[[Page 67553]]

cargo carried by all the parties in the geographic scope of the 
agreement during the calendar quarter was non-containerized, each 
party shall report only its total carryings of non-containerized 
liner cargo during the calendar quarter (specifying the unit of 
measurement used), total revenues generated by its carriage of non-
containerized liner cargo, and average revenue per unit of 
measurement. When the agreement covers both U.S. inbound and 
outbound liner movements, inbound and outbound data shall be stated 
separately.

Part 4(A)

    For the preceding calendar quarter, provide a list, for the 
entire geographic scope of the agreement, of the top 10 liner 
commodities (including commodities not subject to tariff 
publication) carried by all the parties for their liner services 
that fall under the agreement. For purposes of this Report, 
commodities shall be identified at the 4-digit level of customarily 
used commodity coding schedules. When 50 percent or more of the 
total liner cargo carried by all the parties in the geographic scope 
of the agreement during the calendar quarter was containerized, this 
list shall include only containerized commodities. When 50 percent 
or more of the total liner cargo carried by all the parties in the 
geographic scope of the agreement during the calendar quarter was 
non-containerized, this list shall include only non-containerized 
commodities. When the agreement covers both U.S. inbound and 
outbound liner movements, inbound and outbound data shall be stated 
separately.

Part 4(B)

    For the preceding calendar quarter, provide the cargo volume and 
revenue results for each party for each of the major commodities 
listed in part 4(A) of this section, corresponding to the same unit 
of measurement used. For purposes of this Report, revenue results 
means the revenues, in U.S. dollars, earned by each party on the 
cargo volume of each major commodity listed in part 4(A) of this 
section, inclusive of all ocean freight, whether assessed on a port-
to-port basis or a through intermodal basis; accessorial charges; 
surcharges; and charges for inland cargo carriage. If a party has no 
cargo volume and revenue results for a commodity listed in part 4(A) 
of this section, it shall be noted by using a zero for that party in 
response to part 4(B) of this section.

Part 5(A)

    For the preceding calendar quarter, provide the amount of vessel 
capacity for each party for each of its liner services that falls 
under the agreement within the entire geographic scope of the 
agreement, stated separately for the U.S. inbound and outbound 
trades as applicable to the geographic scope of the agreement. For 
purposes of this Report, vessel capacity means a party's total 
commercial liner space on line-haul vessels, whether operated by it 
or other parties from whom space is obtained, sailing to and/or from 
the continent of North America for each of its liner services that 
falls under the agreement. When 50 percent or more of the total 
liner cargo carried by all the parties in the geographic scope of 
the agreement during the calendar quarter was containerized, the 
amount(s) of vessel capacity for each party shall be reported in 
TEUs. When 50 percent or more of the total liner cargo carried by 
all the parties in the geographic scope of the agreement during the 
calendar quarter was non-containerized, the amount(s) of vessel 
capacity for each party shall be reported in non-containerized units 
of measurement. The unit of measurement used in calculating the 
amounts of non-containerized vessel capacity must be specified 
clearly and consistently applied.

Part 5(B)

    For the preceding calendar quarter, provide the percentage of 
vessel capacity utilization for each party for each of its liner 
services that falls under the agreement within the entire geographic 
scope of the agreement, corresponding to the figures used in part 
5(A) of this section, stated separately for the U.S. inbound and 
outbound trades as applicable to the geographic scope of the 
agreement. For purposes of this Report, the percentage of vessel 
capacity utilization means a party's total volume of liner cargo, 
for each of its liner services that falls under the agreement, 
carried on any vessel space counted under part 5(A) of this section, 
divided by its total vessel capacity as defined and derived in part 
5(A) of this section, which quotient is multiplied by 100.

Part 5(C)

    Provide a narrative statement describing the nature, basis, and 
effects of any significant changes in the amounts of vessel capacity 
that occurred during the preceding calendar quarter for the parties' 
liner services that fall under the agreement within the entire 
geographic scope of the agreement. For purposes of this Report, the 
term ``significant changes in the amounts of vessel capacity'' means 
the removal from or addition to a liner service of vessels or vessel 
space for a fixed, seasonally planned, or indefinite period of time, 
as opposed to incidental operational changes when vessels may be 
temporarily repositioned or shifted from one service to another, or 
when vessel space may be temporarily altered, on short notice. If no 
significant change occurred during the calendar quarter, it shall be 
noted with the term ``none'' in response to part 5(C) of this 
section.

Part 6

    Provide a narrative statement that clearly describes the nature, 
level, or type of any significant changes in service at ports that 
occurred during the preceding calendar quarter for the parties' 
liner services that fall under the agreement within the entire 
geographic scope of the agreement. For purposes of this Report, the 
term ``significant changes in service at ports'' means a planned 
change in port service for a fixed, seasonal, or indefinite period 
of time, as opposed to an incidental or unplanned alteration in port 
service that was temporary. If no significant change occurred during 
the calendar quarter, it shall be noted with the term ``none'' in 
response to part 6 of the section.

Section III

    Section III applies to all agreements identified in 46 CFR 
535.702(a). Parties to such agreements must complete all items in 
part 1 of this section.

Part 1(A)

    State the name, title, address, telephone and fax numbers, and 
electronic mail address of a person the Commission may contact 
regarding the Monitoring Report and any information provided 
therein.

Part 1(B)

    A representative of the parties shall sign the Monitoring Report 
and certify that the information in the Report and all attachments 
and appendices are, to the best of his or her knowledge, true, 
correct and complete. The representative also shall indicate his or 
her relationship with the parties to the agreement.

FEDERAL MARITIME COMMISSION

MONITORING REPORT FOR AGREEMENTS BETWEEN OR AMONG OCEAN COMMON CARRIERS

Section I

Part 1

 Agreement Name:-------------------------------------------------------
 FMC Number:-----------------------------------------------------------

 
Part 2 Vessel Capacity And Utilization
Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [Calendar Quarter]

[[Page 67554]]

 
                                                                               (A) Vessel Capaci(B) Utilization
                                                                     [TEUs or Other Units]            [Percent]
Carrier A [Name]
  Liner Service 1 [Name].......................................                     XX,XXX                   XX
  Liner Service 2..............................................                     XX,XXX                   XX
  Liner Service 3..............................................                     XX,XXX                   XX
 Etc. . . .
Carrier B
  Liner Service 1..............................................                     XX,XXX                   XX
  Liner Service 2..............................................                     XX,XXX                   XX
  Liner Service 3..............................................                     XX,XXX                   XX
 Etc. . . .
Etc. . . .
 
Part 3 Planned Changes
 

Narrative statement on planned changes to be implemented (submit 
statement no later than 15 days after a change has been agreed upon 
but prior to the implementation of the change):

-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Section II

Part 1
 Agreement Name:-------------------------------------------------------
 FMC Number:-----------------------------------------------------------

Part 2 Market Share
Agreement-Wide Trade [or Sub-Trade]: U.S. Inbound (or Outbound) Name
Time Period: [Calendar Quarter]
                                                                                             TEUs       Percent
                                                                                 [or other units]
Agreement Market Share
  Line A [Name]............................................................                 X,XXX            XX
  Line B...................................................................                 X,XXX            XX
  Line C...................................................................                 X,XXX            XX
 Etc. . . .
      Total Agreement......................................................                 X,XXX            XX
 Non-Agreement Market Share
  Line X...................................................................                 X,XXX            XX
  Line Y...................................................................                 X,XXX            XX
  Line Z...................................................................                 X,XXX            XX
 Etc. . . .
      Total Non-Agreement..................................................                 X,XXX            XX
  Total Trade [or Sub-Trade]...............................................                 X,XXX           100
 
Part 3 Total Liner Cargo and Revenues
Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [Calendar Quarter]
 


                                                                     Total                   TEUs       Average
                                                                  Revenues       [or other units]       Revenue
[Name]
Carrier A....................................................            $                  X,XXX             $
Carrier B....................................................            $                  X,XXX             $
Carrier C....................................................            $                  X,XXX             $
 Etc. . . .
 
Part 4 Top Liner Commodities
Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [Calendar Quarter]
[Name]                                                                    Carrier A              Carrier B  Etc
Commodity 1 [Name and 4-Digit Code]
  TEUs [or other units]......................................        X,XXX                  X,XXX
  Revenues...................................................            $                      $
Commodity 2
  TEUs.......................................................        X,XXX                  X,XXX
  Revenues...................................................            $                      $
 Etc. . . .
 
Part 5 Vessel Capacity and Utilization
Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [Calendar Quarter]
 


                                                                              (A) Vessel Capacit(B) Utilization
                                                                    [TEUs or Other Units]             [Percent]
Carrier A [Name]
  Liner Service 1 [Name]......................................                     XX,XXX                    XX

[[Page 67555]]

 
  Liner Service 2.............................................                     XX,XXX                    XX
  Liner Service 3.............................................                     XX,XXX                    XX
 Etc. . . .
Carrier B
  Liner Service 1.............................................                     XX,XXX                    XX
  Liner Service 2.............................................                     XX,XXX                    XX
  Liner Service 3.............................................                     XX,XXX                    XX
 Etc. . . .
Etc. . . .
 

 (C) Narrative Statement on significant changes that occurred during 
the calendar quarter:--------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Part 6 Port Service

 Narrative statement on significant changes in service at ports that 
occurred during the calendar quarter:----------------------------------

Section III

Part 1 Contact Person and Certification

(A) Person(s) to Contact Regarding Monitoring Report.

 (1) Name--------------------------------------------------------------
 (2) Title-------------------------------------------------------------
 (3) Firm Name and Business--------------------------------------------
 (4) Business Telephone Number-----------------------------------------
 (5) Fax Number--------------------------------------------------------
 (6) E-Mail Address----------------------------------------------------

 (B) Certification-----------------------------------------------------

This Monitoring Report, together with any and all appendices and 
attachments thereto, was prepared and assembled in accordance with 
instructions issued by the Federal Maritime Commission. The 
information is, to the best of my knowledge, true, correct, and 
complete

 Name (please print or type)-------------------------------------------
 Title-----------------------------------------------------------------
 Relationship with parties to agreement--------------------------------
 Signature-------------------------------------------------------------
 Date------------------------------------------------------------------

    By Order of the Commission.
Bryant VanBrakle,
Secretary.

[FR Doc. 03-29738 Filed 12-1-03; 8:45 am]
BILLING CODE 6730-01-P