[Federal Register Volume 69, Number 18 (Wednesday, January 28, 2004)]
[Notices]
[Pages 4158-4159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1804]


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FEDERAL MARITIME COMMISSION

[Petition No. P3-99]


Petition of China Ocean Shipping (Group) Company for a Partial 
Exemption From the Controlled Carrier Act

Served: January 22, 2004.

Order

    By petition filed March 31, 1999, China Ocean Shipping (Group) 
Company (``COSCO'' or ``Petitioner'') has requested that the Federal 
Maritime Commission (``FMC'' or ``Commission'') partially exempt it 
from certain provisions of section 9 of the Shipping Act of 1984, 46 
U.S.C. app. 1708 (``Controlled Carrier Act''). The requested exemption 
would enable COSCO to reduce tariff rates immediately, rather than 
subject to the 30-day waiting period prescribed by the Controlled 
Carrier Act, or the partial exemption granted by the Commission in 
1998.\1\ See infra at 3.
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    \1\ Section 9(c) states, in relevant part: ``Notwithstanding 
section 8(d) of this Act and except for service contracts, the 
rates, charges, classifications, rules, or regulations of controlled 
carriers may not, without special permission of the Commission, 
become effective sooner than the 30th day after the date of filing 
with the Commission.'' 46 U.S.C. app. 1708(c).
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    Notice of the filing of the Petition was published in the Federal 
Register on April 8, 1999, and interested parties were given until May 
7, 1999 (later extended to September 7, 1999, in response to unopposed 
motions of American President Lines, Ltd. (``APL'') and Sea-Land 
Service, Inc. (``Sea-Land'')), to file comments. 64 FR 17181 (April 8, 
1999). For the reasons set forth below, the Commission has determined 
to re-open this proceeding for a brief comment period before it makes 
its final determination in this matter.

I. The Petition

    COSCO explains that ocean common carriers, with the exception of 
controlled carriers, are permitted to reduce their rates effective 
immediately upon filing.\2\ Only controlled carriers are subject to the 
30-day waiting period for reductions in tariff rates, as set forth in 
section 9(c).\3\
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    \2\ Section 8(d) of the Shipping Act of 1984 (``Shipping Act'') 
requires that all common carriers, controlled or otherwise, must 
give 30 days notice for rate increases. 46 U.S.C. app. 1707(d).
    \3\ Section 3(8) of the Shipping Act defines ``controlled 
carrier'' as:
    an ocean common carrier that is, or whose operating assets are, 
directly or indirectly, owned or controlled by the government under 
whose registry the vessels of the carrier operate; ownership or 
control by a government shall be deemed to exist with respect to any 
carrier if--
    (A) a majority portion of the interest in the carrier is owned 
or controlled in any manner by that government, by any agency 
thereof, or by any public or private person controlled by that 
government; or
    (B) that government has the right to appoint or disapprove the 
appointment of a majority of the directors, the chief operating 
officer, or the chief executive officer of the carrier.
    46 U.S.C app. 1702(8).
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    On March 27, 1998, the Commission granted COSCO a limited exemption 
from the 30-day waiting requirement of section 9(c), allowing COSCO to 
decrease its tariff rates to levels which would meet or exceed those of 
its competitors with no waiting period. Petition of China Ocean 
Shipping (Group) Company for a Limited Exemption from Section 9(c) of 
the Shipping Act of 1984, Petition No. P1-98, 28 S.R.R. 144 
(1998)(hereinafter ``1998 Order''). In the current petition, COSCO 
seeks authority to reduce rates on less than 30 days notice, regardless 
of whether it is meeting a rate published by a competitor.

II. Comments

    COSCO filed supporting comments from many of its shipper, freight 
forwarder/customs broker and NVOCC customers: Evapco, Inc.; Metro 
International Trading Corporation; McQuay International; Kamden 
International Shipping, Inc.; Shintech, Inc.; Consolidated Factors, 
Inc.; Fresh Western International, Inc.; Kanematsu USA, Inc.; Paramount 
Export Company; Nichirei Foods, Inc.; Twin City Foods, Inc.; Mincepa 
Inc., K-Swiss; DSL Transportation Services; Global Transportation 
Services, Inc.; Pacific/Atlantic Crop Exchange; Action Freight & 
Logistics USA, Inc.; Golden Gem Growers, Inc.; Louis Dreyfus Export 
Corp.; Beical International (USA) Corp.; LandOcean Management, Inc.; 
Medical Books for China International; AEI Ocean Services; BWWI (USA), 
Inc.; Trans USA Corp.; Tanimura and Antle; Porky Products, Inc.; ANRO; 
Suncoast Moving and Storage; Hellman International Forwarders, Inc.; 
Ponica Industrial Co., Ltd.; Norman Kreiger, Inc.; Freight Solutions 
International; Zen Trading Co., Ltd.; Forte Lighting, Inc.; Zen 
Continental Co., Inc.; AFS Logistic Management, Inc.; Coaster Co. of 
America; Edward Mittelstaedt, Inc.; Chase Leavitt (Customhouse 
Brokers), Inc.; Inter-Freight Logistics, Inc.; Calcot, Ltd.; Phoenix 
International Freight Services, Ltd.; Titan Steel Corporation; Pfizer, 
Inc.; Allen's Family Foods, Inc.; Townsends, Inc.; Boston Logistics, 
Inc.; Asian Metals & Alloys Corp.; MSAS Global Logistics, Inc.; Polonez 
Parcel

[[Page 4159]]

Service, Inc.; Ionics, Inc.; Del-Tank International, Ltd.; and the MI 
Group.
    The Commission also received comments from AEI Ocean Services; the 
Baltic and International Maritime Council; Zhang Liyong, President of 
China Ocean Shipping Company Americas, Inc.; U.S. Senator Patty Murray, 
together with U.S. Representatives Norm Dicks and Jim McDermott (all of 
Washington); American President Lines, Ltd.; and Sea-Land Service, Inc.
    Recently, the Commission received letters from the Maritime 
Administrator, Captain William G. Schubert, and from the Under 
Secretary of State for Business, Economics and Agricultural Affairs, 
Alan P. Larson, reporting on the recently-signed bilateral Maritime 
Agreement with China.\4\ Both the Maritime Administrator and the Under 
Secretary of State urge the Commission to favorably consider the 
petitions of three Chinese controlled carriers currently under review 
by the Commission.\5\ The Maritime Administrator also urges U.S. 
carriers and shippers to support these petitions.
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    \4\ The Commission will include these letters in the record of 
the proceeding.
    \5\ In addition to the instant Petition, they are: Petition No. 
P6-03, Petition of Sinotrans Container Lines Co., Ltd. for a Full 
Exemption from the First Sentence of Section 9(c) of the Shipping 
Act of 1984, as Amended; and Petition No. P4-03, Petition of China 
Shipping Container Lines Co., Ltd. for Permanent Full Exemption from 
the First Sentence of Section 9(c) of the Shipping Act of 1984.
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III. Discussion

    The comment period in this proceeding originally closed on 
September 7, 1999. However, in light of the information provided by the 
Maritime Administration and the Department of State, the Commission has 
determined to open a brief comment period to allow all persons 
interested in the petition a full and fair opportunity to comment.

Conclusion

    As the Commission will consider the recommendations of the Maritime 
Administration and the Department of State, and is concerned that all 
interested parties have an opportunity to comment, the Commission has 
determined that it will invite further comments from the shipping 
public in this proceeding. The Commission will consider the petition in 
light of these further comments at a meeting to be scheduled promptly 
after close of the comment period.
    Therefore, it is ordered that interested parties may file comments 
relevant to this proceeding until February 23, 2004.

    By the Commission.
Bryant L. VanBrakle,
Secretary.
[FR Doc. 04-1804 Filed 1-27-04; 8:45 am]
BILLING CODE 6730-01-P