[Federal Register Volume 69, Number 213 (Thursday, November 4, 2004)]
[Rules and Regulations]
[Pages 64398-64438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-24438]



[[Page 64397]]

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Part III





Federal Maritime Commission





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46 CFR Parts 501 and 535



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

  Federal Register / Vol. 69, No. 213 / Thursday, November 4, 2004 / 
Rules and Regulations  

[[Page 64398]]


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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; Final Rule

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

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SUMMARY: The Federal Maritime Commission issued a Notice of Proposed 
Rulemaking on December 2, 2003, that set forth proposed changes in the 
Commission's regulations for Ocean Common Carrier and Marine Terminal 
Operator Agreements Subject to the Shipping Act of 1984. The proposal 
also included changes to the delegation of authority to the 
Commission's Bureau of Trade Analysis. The Commission requested that 
comments be filed by January 30, 2004. This notice of Final Rule 
summarizes the comments submitted and revises the proposed regulations 
based on those comments.

DATES: This rule is effective on January 3, 2005, except for Sec. Sec.  
535.702 and 535.703, which are effective February 2, 2005, and Sec.  
535.701(e), which is stayed until further notice.

FOR FURTHER INFORMATION CONTACT: 

Amy W. Larson, 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:

I. Introduction

    The Notice of Proposed Rulemaking (``NPR'') (68 FR 67510, Dec. 2, 
2003) sought to amend the Commission's regulations governing the filing 
of agreements pursuant to the Shipping Act of 1984, 46 U.S.C. 1701-1719 
(``Shipping Act''). In particular, the NPR addressed the concerns that 
had been raised by regulated entities that are parties to agreements 
regarding regulatory certainty, flexibility, and confidentiality. These 
concerns were raised in comments submitted in response to a Notice of 
Inquiry published by the Commission on August 3, 1999. 64 FR 42057. 
Specifically, in the NPR the Commission proposed the following changes 
to 46 CFR parts 501 and 535: the addition of new delegations of 
authority to the Commission's Director, Bureau of Trade Analysis 
(``BTA''); revisions to the requirements for the content of filed 
agreements, including a new exemption for ``low market share'' 
agreements (proposed 46 CFR 535.311) and a new term ``capacity 
rationalization'' (proposed 46 CFR 535.104(e)); revisions to its 
current exemptions for ``non-substantive'' and ``miscellaneous'' 
modifications and transshipment agreements (proposed 46 CFR 535.302, 
535.309, 535.104(jj) and 535.306(a)); a revision to 46 CFR 535.602(a) 
(to indicate that the Commission will submit a notice to the Federal 
Register for publication of all filed agreements); revised requirements 
for information to be submitted in conjunction with filed agreements 
(proposed 46 CFR part 535, subparts E and G); and miscellaneous changes 
to update, clarify, and remove obsolete language from its rules 
(proposed 46 CFR 535.303, 535.304, 535.403, 535.605, 535.606, 535.607).
    Six comments on the NPR were received. These came from Maersk 
Sealand (``MSL''); American President Lines, Ltd. and APL Co. Pte., 
Ltd. (``APL''); P&O Nedlloyd Limited (``PONL''); FESCO Ocean Management 
Limited (``FOML''); Trans-Net, Inc. (``Trans-Net''); and the Ocean 
Common Carriers and Agreements (``OCCA'').\1\ Trans-Net also made oral 
presentations to individual Commissioners.
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    \1\ OCCA includes the following FMC-filed agreements and 
carriers that participate in them: ABC Discussion Agreement; 
Australia/United States Containerline Association; Australia/United 
States Discussion Agreement; Caribbean Shipowners Association; 
Central America Discussion Agreement; East Coast of South America 
Discussion Agreement; Eastern Mediterranean Discussion Agreement; 
Florida Bahamas Shipowners Association; Grand Alliance Agreement II; 
Hispaniola Discussion Agreement; Israel Trade Conference; New 
Caribbean Service Rate Agreement; New Zealand/United States Inter-
carrier and Conference Discussion Agreement; New Zealand/United 
States Container Lines Association Conference; Trans-Atlantic 
Conference Agreement; Transpacific Stabilization Agreement; United 
States/Australasia Discussion Agreement; United States/South Europe 
Conference; Venezuelan Discussion Agreement; West Coast of South 
America Discussion Agreement; and Westbound Transpacific 
Stabilization Agreement.
    The individual carriers are: A.P. Moller-Maersk A/S; Allianca 
Navegacao e Logistica Ltda.; American President Lines, Ltd. and APL 
Co. PTE Ltd.; Arawak Line Ltd.; Atlantic Container Line AB; 
Australia-New Zealand Direct Line and Contship Containerlines, 
divisions of CP Ships (UK) Limited; Bahamas Ro Ro Service 
(Freeport), Inc.; Bernuth Lines, Ltd.; Caicos Cargo Ltd. d/b/a Turks 
Island Shipping Line; China Shipping Container Lines Co., Ltd.; CMA 
CGM, S.A.; Compagnie Maritime Marfret S.A.; Companhia Libra de 
Navegacao; Compania Chilena de Navigacion Interoceania, S.A.; 
Compania Sud Americana de Vapores, S.A.; COSCO Container Lines 
Company Limited; Crowley Liner Services, Inc.; Dole Ocean Cargo 
Express; Evergreen Marine Corporation (Taiwan) Limited; Farrell 
Lines, Inc.; FESCO Ocean Management Inc.; Frontier Liner Services, 
Inc.; G&G Marine, Inc.; Hamburg Sudamerikanische Dampfschifffahrts-
Gesellschaft KG; Hanjin Shipping Co., Ltd.; Hapag-Lloyd Container 
Linie GmbH; Hyundai Merchant Marine Co., Ltd.; Interline Connection, 
N.V.; Kawasaki Kisen Kaisha, Ltd.; King Ocean Services Limited; King 
Ocean Services de Venezuela; LauritzenCool AB; Seatrade Group N.V.; 
Lykes Lines Limited, LLC; Mediterranean Shipping Co. S.A.; Mitsui 
O.S.K. Lines, Ltd.; Montemar Maritima S.A.; Nippon Yusen Kaisha; 
Orient Overseas Container Line Inc., Orient Overseas Container Line 
Limited, and Orient Overseas Container Line (Europe) Limited; P&O 
Nedlloyd B.V and P&O Nedlloyd Limited; Pioneer Shipping, Ltd.; 
Seafreight Line, Ltd.; Seaboard Marine, Ltd.; South Pacific Shipping 
Co., Ltd.; Tecmarine Lines, Inc.; Trinity Shipping Line, S.A.; 
Tropical Shipping & Construction, Ltd.; Turkon Container 
Transportation and Shipping, Inc.; Wallenius Wilhelmsen Lines AS; 
Yangming Marine Transport Corp.; and Zim Israel Navigation Co., Ltd.
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II. Agreement Content and Transshipment Agreements

A. Agreement Content--Generally and Proposed Exemptions

1. Summary of Comments
    APL notes that the operations of global alliances are extremely 
complex and fluid, and are affected by factors outside the U.S. trades. 
APL at 1. APL stresses: (1) the critical importance that alliances and 
vessel sharing agreements (``VSAs'') have flexibility to make operating 
decisions on a timely and efficient basis; and (2) that a major 
alliance is a continuous work in progress. Id. at 2. Although APL takes 
no issue with the NPR's assertions about the effect of the capacity/
demand relationship on rates, APL urges the Commission to consider that 
alliances and other VSAs give carriers the ability to achieve 
efficiencies and cost savings, which in turn result in benefits to 
shippers through improved service levels and increases in capacity. Id. 
at 2-3.
    APL describes the operational matters of alliance agreements as 
often evolving via e-mail exchanges augmenting the original document, 
an ``implementing agreement'' and separate documents that may set forth 
particular aspects of cooperation. Id. at 3. APL believes that it is 
not entirely realistic to suggest that the commercial agreement among 
alliance partners is ``relatively static once signed, or that the full 
commercial agreement is contained in a readily identifiable single 
document.'' Id. at 4. On the other hand, APL believes that the NPR 
achieves a balanced approach through the combination of specified 
exemptions to the filing requirements for operations-related matters 
paired with an increase in monitoring report

[[Page 64399]]

obligations. It strongly supports the NPR's codification of current 
practice as outlined in proposed section 535.408(b). Id. at 4, 5.
    OCCA and MSL support the elimination of the 45-day waiting period 
for space charters and other operational agreements, particularly in 
instances where the parties' combined market shares do not give rise to 
serious competitive concerns. OCCA at 9; MSL at 1. MSL also argues that 
eliminating the waiting period for space charters and similar 
agreements would not undermine the Commission's regulatory oversight, 
as the proposed exemption would not relieve the subject agreements from 
either the substantive requirements of the Shipping Act or its filing 
requirement. MSL at 2.
    Nevertheless, OCCA and MSL believe that the market share threshold 
for a ``low market share'' agreement should be increased from 15 
percent to 30 percent if operating within a pricing agreement, and from 
20 percent to 35 percent if not. OCCA at 11; MSL at 2. OCCA argues that 
the market share considered for the low market share exemption should 
include the entire agreement scope because doing so would increase the 
relief provided by the exemption. OCCA at 10. OCCA submits that an 
agreement with low overall market share that includes one or more small 
sub-trades in which it has a large market share should not be 
disqualified from the exemption. Id. OCCA argues that the Commission 
has read the Antitrust Guidelines for Collaborations Among Competitors 
(``Antitrust Guidelines'') too narrowly, and believes that the types of 
agreements which would be eligible for the proposed low market share 
exemption are just the types of efficiency enhancing and/or 
competitively neutral arrangements contemplated by those Guidelines. 
Id. at 11-12. Further, OCCA points out that the European Commission 
regulation levels are set at 30 percent and 35 percent. OCCA also 
recommends that the Commission's regulations state that the time period 
used to determine market share will be the most recent calendar quarter 
for which such data is available, because this is the same period the 
Information Form rules require. Id. at 10-11.
    In addition to its other suggestions, OCCA urges the Commission to 
include specific activities in proposed section 535.408(b) exempting 
certain activities from amendment filing, namely: insurance; procedures 
for resolution of disputes relating to loss and/or damage of cargo; 
maintenance of books and records; force majeure clauses; procedures for 
allocating space and forecasting demand; and schedule adjustments. Id. 
at 12-13. OCCA argues that the catch-all provision in section 
535.408(b)(5), which it asserts generally covers operational matters 
and is not restricted to a specific list, would not require 
modification to include these matters. Id. at 13.
    Finally, OCCA requests that the Commission adopt a new exemption 
from the notice and waiting requirements to allow agreement amendments 
reflecting a change in party due to corporate acquisition to become 
effective upon filing. Id. This, OCCA asserts, would prevent a gap in 
antitrust immunity due to matters over which the Commission has no 
jurisdiction. Id. at 14. OCCA also requests that the disused term 
``classes'' in sections 535.103(b) and 535.103(d) be replaced with a 
generic term such as ``types''; and that ``or a portion thereof'' be 
added to the end of the provision in section 535.302(b)(1) to indicate 
that cancellation of an agreement, in part or in whole, is a 
``miscellaneous modification'' which may take effect upon filing. Id. 
at 15. OCCA believes these technical revisions would codify current 
practice and conform to other portions of the Commission's rules. Id. 
OCCA also recommends that the Commission provide agreement parties some 
period of time (for example, six months) from the effective date of the 
regulations to comply with the new requirements, and to prevent the 
revised regulation from having retroactive application. Id. at 16.

B. Discussion

    The Commission is gratified that the comments generally recognize 
and agree with the NPR's stated purpose and approach in proposing an 
exemption from the statutory 45-day waiting period for agreements that 
contain neither capacity rationalization nor pricing authority. In 
response to the commenters' specific suggestions, the Commission has 
determined to revise the proposed rule as discussed below.
1. 46 CFR 535.402
    The NPR included a proposal to replace sections 535.103(g) and 
535.407(a) with a new section 535.402 to serve as a single controlling 
rule reasserting and clarifying the Commission's interpretation of the 
Shipping Act's requirements for the content of a filed agreement. The 
Commission agrees with APL's comments that the approach it has taken, 
namely reaffirming its interpretation of the Shipping Act to require 
the filing of the true and complete agreement balanced by additional 
exemptions and reductions in the filing, waiting period, and reporting 
requirements of the Commission's rules, achieves the balance the 
Commission articulated in the NPR.
2. 46 CFR 535.103(b), 535.103(d)
    The Commission agrees with OCCA's suggestion that the term 
``classes'' as it appears in proposed section 535.103(b), in light of 
the Commission's new approach to its information submission 
requirements, is no longer appropriate. The Final Rule changes the 
term, as suggested by OCCA, from ``classes'' to ``types.'' However, as 
to the Commission's use of the term ``classes'' in proposed section 
535.103(d), describing the Commission's exemption authority for 
``classes of agreements'' from requirements of the Shipping Act or 
these rules, the Commission has determined to retain the term as it 
mirrors the language of section 16 of the Shipping Act, 46 U.S.C. app. 
1715.
3. 46 CFR 535.302(b)(1)
    We agree with OCCA's suggestion that ``or a portion thereof'' be 
included in 46 CFR 535.302(b)(1), which will therefore allow 
cancellation of an agreement, or a portion thereof, to become effective 
upon filing. Much like amendments that delete an agreement party (46 
CFR 535.302(b)(2)), the Commission believes cancellation of a portion 
of an agreement that, for example, would reduce the geographic scope or 
authority of an agreement, appears unlikely to have any potentially 
detrimental effects and therefore may become effective upon filing. The 
Final Rule reflects these changes.
4. 46 CFR 535.602(a)
    No comments were received opposing the proposed changes to this 
provision indicating the Commission will transmit notices of all filed 
agreements, and their amendments, to the Federal Register for 
publication, and it is adopted in this Final Rule.
5. 46 CFR 535.311
    The Commission proposed a new exemption from the Shipping Act's 
standard 45-day waiting period for ``low market share agreements.'' The 
Final Rule reflects commenters'' request that the market share level of 
such low market share agreements be raised, but the Commission declines 
to expand the definition of ``market'' for the exemption.
    The commenters are correct to note that the Commission's proposed 
rule used the Antitrust Guidelines and

[[Page 64400]]

European regulations, which outline the types and size of competitor 
collaborations those regulators have represented they would presume 
lawful under generally-applicable competition laws, as points of 
departure for an exemption it may reasonably establish within the 
confines of section 16 of the Shipping Act. As such, the Commission is 
persuaded that the sub-trade market share levels for this exemption may 
be raised without exceeding the limitations of section 16 of the 
Shipping Act. We therefore adopt OCCA's and MSL's suggestion to permit 
certain agreements with less than 35 percent market share in any sub-
trade in which they operate, or 30 percent market share if operating 
within another agreement with the authorities listed in 46 CFR 502(b), 
to be exempt from the 45-day notice and waiting period and the 
Information Form requirements (subpart E of this part), and thereby 
become effective upon filing.
    We have revised the provision to clarify that such low market share 
agreements do not include agreements containing any of the authorities 
listed at section 535.502(b). The provision is revised thus:

    (a) Low market share agreement means an agreement among ocean 
common carriers which contains none of the authorities listed in 
535.502(b) and for which the combined market share of the parties in 
any of the agreement's sub-trades is either:
    (1) Less than 30 percent, if all parties are members of another 
agreement in the same trade or sub-trade containing any of the 
authorities listed in Sec.  535.502(b); or
    (2) Less than 35 percent, if all parties are not members of 
another agreement in the same trade or sub-trade containing any of 
the authorities listed in Sec.  535.502(b).

This is consistent with agreements required to file minutes under 
section 535.704(a)(1).
    We decline, however, to adopt the commenters' suggestion to make 
the exemption based upon the entire agreement trade, and find that 
basing the market share limit on sub-trades is a better measure for 
competitive concerns, as the geographic scope of an agreement may be 
extremely broad. We note that the definition of a sub-trade in section 
535.104(hh) is revised by combining the U.S. East Coast and U.S. Gulf 
Coast segments of the trade and that this combination will provide 
regulatory relief to filers of agreements that are unlikely to have 
major implications on competition. Section 535.311 of the Final Rule is 
revised to reflect this change.
    In response to the commenters' request for guidance on market 
shares for purposes of determining whether an agreement may be eligible 
for the low market share exemption, and in the interests of 
consistency, we have determined that the appropriate period should be 
the same as that found in the Commission's Information Form rules 
(appendix A to this part), namely the latest available calendar 
quarter. We encourage parties to seek the opinion of the Director, BTA, 
available under section 535.311(c), as to whether a proposed agreement 
may qualify for the exemption prior to filing. As with other 
exemptions, filers wishing to invoke this low market share exemption 
should note such a desire in the transmittal letter accompanying the 
filing. In the Final Rule, the Commission has added a cross-reference 
to the appropriate filing fee for low-market share agreements in new 
section 535.311(d).
    We are confident that the exemptions reflected in this Final Rule 
provide the industry flexibility for the matters it has identified as 
requiring flexibility within the confines of the Shipping Act. As such, 
we have revised the proposed rule at section 535.408 to include all the 
matters OCCA's comments suggest, and to codify current Commission 
practice. The term ``such as,'' which appeared in proposed section 
535.408(b)(5), is removed in the Final Rule in the interest of 
certainty. As proposed, section 535.408(a)reads,

    (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.

The Final Rule revises section 535.408(a)(2) to read, ``(2) are listed 
in paragraph (b) of this section'' instead of ``concern matters set 
forth in paragraph (b) of this section.'' This more accurately reflects 
the Commission's intent, as explained in the NPR, that it will no 
longer interpret what may fall under ``operational'' activities on an 
``ad hoc'' basis.
    Proposed section 535.408(b)(2) is revised to codify the 
Commission's existing policy as to what may be acted upon without 
further amendment to a filed agreement. The NPR proposed, ``The terms 
and conditions of space allocation and slot sales, the establishment of 
space charter rates, and terms and conditions of charter parties.'' The 
Final Rule revises the section as follows:

    (2) The terms and conditions of space allocations and slot 
sales, the procedures for allocating space, the establishment of 
space charter rates, and the terms and conditions of charter 
parties.

The Commission intends ``procedures for allocating space'' to mean the 
method by which parties will make requests for space or notification of 
space availability, e.g., whether by e-mail, telephone, etc., and to 
which individual or department such requests or notices should be 
directed.
    Similarly, section 535.408(b)(4) as proposed is revised to add two 
matters correctly identified by the commenters as reasonable to include 
in the exemption from further filing, namely, procedures for 
anticipating parties' space requirements and the maintenance of books 
and records. The Final Rule revises the proposed language:

    (4) The following administrative matters:
    (i) Scheduling of agreement meetings;
    (ii) Collection, collation and circulation of data and reports 
from or to members;
    (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;
    (iv) Procedures for anticipating parties' space requirements;
    (v) Maintenance of books and records; and
    (vi) Details as to the following matters as between parties to 
the agreement: insurance; procedures for resolutions of disputes 
relating to loss and/or damage of cargo; and force majeure clauses.

For clarity's sake, the Commission notes its intention that 
``procedures for anticipating parties' space requirements'' includes 
changes to how members inform one another of their anticipated needs, 
but does not include changes to how parties discuss market demand on a 
broader level.
    As noted in the NPR, the Commission finds it possible to exempt 
changes to the number of vessels or slots to be operated by an 
agreement if the originally-filed agreement contains an adequately 
described range of slots of vessels to be used under the agreement and 
if the changes fall within that range. 68 FR 67518, December 2, 2003. 
See also, infra, discussion of 46 CFR 535.704(d). Section 535.408(b)(5) 
is also revised to adopt the commenters' suggestion to allow changes in 
vessel substitution or replacement to become effective upon filing, and 
for clarity removes the phrase, ``and there is no significant change in 
capacity'' thus:

    (5) the following operational matters:
    (i) port rotations and schedule adjustments; and
    (ii) changes in vessel size, number of vessels, or vessel 
substitution or replacement, if the resulting change is within a 
capacity range specified in the agreement.


[[Page 64401]]


    The Commission declines to include in this Final Rule an exemption 
from the 45-day waiting period for a change in agreement parties due to 
corporate acquisition as there may be situations in which such a change 
significantly alters the competitive landscape in a trade. Filing 
parties are always free to request expedited review for such 
amendments.

B. Agreement Content--Definition of ``Capacity Rationalization''

    The Commission received comments from APL and OCCA in response to 
its proposal to introduce a new term, ``capacity rationalization,'' to 
describe authority that may be contained in some agreements. Inclusion 
of such authority would prevent an agreement from being eligible for 
the low market share exemption at section 535.311 and would subject 
filing parties to certain periodic reporting requirements under the 
Commission's monitoring program.\2\
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    \2\ As proposed, the definition changed and replaced the 
existing definition of ``capacity management'' at section 535.104(e) 
of the Commission's rules as follows:
    (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.
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    OCCA objects not only to the proposed definition of the new term, 
but also to the removal of the existing definition of ``capacity 
management.'' OCCA at 4. OCCA argues that the proposed definition would 
include activities of certain ``operational'' agreements, such as 
alliance, cross slot charter, space charter or vessel sharing 
agreements, that preclude members, under certain expressed conditions, 
from initiating services independently in the agreement trade. Such 
restrictions, according to OCCA, have been recognized as legitimate 
commercial restrictions that are part of the quid pro quo to share 
space or vessels and serve a valid purpose. OCCA cites, for example, 
European Commission Regulation 823/2000, Article III(3)(a), Lektro-Vend 
Corp. v. Vendo Co., 660 F.2d 255 (7th Cir. 1981), and Red Sage Ltd. 
Partnership v. Despa Deutsche, 254 F.3d 1120 (D.C. Cir. 2001) (``Red 
Sage'').\3\ OCCA contends that the types of restrictions the 
Commission's proposal would include within the meaning of capacity 
rationalization are similar to those held valid in Red Sage, and, 
therefore, do not require closer monitoring.
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    \3\ In Red Sage, a covenant not to compete in a lease was held 
valid.
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    However, assuming arguendo that the Commission retains the proposed 
level of monitoring for agreements that contain certain types of 
restrictions on their members, OCCA proposes that it should 
nevertheless revise the proposed definition of ``capacity 
rationalization.'' OCCA argues that the proposed definition is too 
broad and goes beyond the Commission's expressed intent of focusing on 
restrictions imposed on capacity to be offered outside the terms of a 
filed agreement. OCCA suggests that the Commission may wish to rewrite 
the capacity rationalization definition to avoid inadvertently 
capturing legitimate activities that it believes the Commission should 
not subject to heightened reporting requirements, such as adjustments 
in capacity within a range specified in an agreement. OCCA also 
contends that the definition is unacceptably vague because it includes 
the term ``stabilization,'' which is not itself defined. Id. at 6. OCCA 
suggests that the Commission replace its definition of capacity 
rationalization with one that focuses on three specific restrictions. 
OCCA proposes the following definition:


    Capacity rationalization means any agreement between or among 
two or more ocean common carriers that: (i) Restricts or limits the 
ability of any or all of those carriers to provide transportation in 
a trade on vessels other than those utilized under that agreement; 
(ii) restricts or limits the ability of any or all of those carriers 
to provide services that are alternate to or in competition with the 
services provided under that agreement; or (iii) which results in 
the withholding of vessel capacity on vessels being operated in the 
trade covered by that agreement. The term does not include 
adjustments to capacity made by adding or removing vessels or 
strings of vessels pursuant to and within the authority of sailing 
agreements, consortia, vessel sharing agreements or space charter 
agreements.

Id.
    We decline to adopt the definition suggested by OCCA, as it would 
omit some conference and discussion agreements that contain authority 
for members to discuss and agree upon rationalization of capacity by 
members in specific trades. In addition, the Commission continues to be 
of the view expressed in the NPR that the potential effects of such 
arrangements are heavily dependent on conditions particular to an 
agreement trade and how the agreement is related to other agreements.
    APL notes, without further comment, the OCCA suggestion that the 
definition be ``clarified'' if the Commission elects to adopt the 
proposed use of the term. APL at 6. APL, however, recognizing the 
Commission's purpose in the NPR as increasing reporting requirements 
for agreements with such provisions rather than reducing the carriers' 
operating flexibility, suggests instead that the Commission refine the 
reporting requirements rather than the definition. Id. at 6.
    In proposing this definition, the Commission's purpose was to 
identify arrangements that impose restrictions on capacity, and to 
distinguish those from simple operational exchanges of space. APL 
correctly assesses the purpose of the definition; the Commission 
intends to apply a level of monitoring to agreements that address 
members' participation in the market through manipulation or 
restriction of the potential supply of vessel capacity in a trade, 
similar to the level it applies to agreements covering members' pricing 
activities. It also intends to ensure that agreements containing such 
authority continue to be accompanied by sufficient information and 
receive the degree of scrutiny on initial filing that the Commission 
deems appropriate, without the waiver of the 45-day waiting period and 
Information Form that would apply based solely on the low market share 
of such agreements pursuant to section 535.311 and as discussed in this 
Supplemental Information. However, the Commission concurs with APL's 
assessment that not all of the heightened degree of ongoing reporting 
reflected in the proposed rule is necessary for agreements that contain 
authority that comes within the definition of capacity rationalization. 
The Final Rule will address that concern by revising the Monitoring 
Report regulations at section 535.703(c).
    Finally, we note that the definition of capacity rationalization as 
published in the NPR inadvertently included language that was part of 
the Commission's existing definition of ``capacity management.'' The 
last sentence, which reads, ``The term does not include sailing 
agreements or space charter agreements'' should have been deleted. 
Consistent with the Commission's intention to apply its rules according 
to the authority contained in an agreement rather than by ``type'' or 
``class'' of agreement, this language should not have been retained. 
Therefore, it is deleted from the definition of capacity 
rationalization in the Final Rule.

C. Transshipment Agreements

    The Commission proposed a revision to the definition of a 
transshipment agreement and a corresponding change to the definition of 
a nonexclusive

[[Page 64402]]

transshipment agreement.\4\ The changes would specify that a publishing 
carrier perform the transportation on one leg of the transshipment on 
its own vessel or on a vessel on which it has rights to space under a 
filed and effective agreement. The proposed changes would recognize the 
two ways by which an ocean common carrier may provide service: by 
operating its own vessel or by taking space on another carrier's vessel 
pursuant to a filed and effective agreement. Comments on the proposed 
rule came from Trans-Net, PONL, FOML, and OCCA.
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    \4\ Sec.  535.104 Definitions.
    (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.
    Sec.  535.306 Nonexclusive transshipment agreements'exemption.
    (a) A nonexclusive transshipment agreement is a transshipment 
agreement by which one ocean common carrier * * *
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    Trans-Net, a licensed and bonded non-vessel-operating common 
carrier from Washington State, was the only commenter in favor of the 
proposed rule change. Trans-Net conveyed its views via written comments 
and meetings with individual Commissioners. Trans-Net argues that the 
change in the definition will provide greater transparency of carrier 
actions for both shippers and the Commission. Trans-Net at 3-4. At the 
same time, Trans-Net maintains that the filing of an agreement with the 
Commission would not be unduly burdensome to the carriers and that the 
proposed rule accommodates the carriers' desire for flexibility. Trans-
Net at 5-7. PONL, FOML, and OCCA, however, disagree with Trans-Net and 
the Commission in that they do not consider the proposed rule changes 
either necessary or desirable.
    In their comments, PONL and FOML challenge the Commission's 
``traditional view'' of a transshipment agreement as stated in the 
supplemental information that accompanied the proposed rule. The 
Commission's ``traditional view'' of a transshipment agreement is an 
agreement ``under which two ocean common carriers that both operate 
vessels provide a through service between the United States and a 
foreign port.'' 68 FR 67520-21, December 2, 2003. However, PONL and 
FOML both challenge this view of a transshipment agreement as lacking 
legal and factual basis. PONL at 5, FOML at 3. The Commission's 
traditional view of a transshipment agreement is based mostly on 
experience in dealing with transshipment agreements filed prior to the 
current Shipping Act, when carriers participating in transshipment 
agreements typically operated one of the vessels involved in the 
transshipment. The optional provisions for nonexclusive transshipment 
agreements included in the Commission's regulations at section 
535.306(d), based on the manner in which transshipments were conducted 
in 1984, tend to reinforce the Commission's traditional view.
    PONL and FOML also assert that there is no basis to the 
Commission's contention that the definition needs clarification. PONL 
at 3, FOML at 1. In response, we note that the shipping industry has 
changed a great deal since 1984, with the increased use of vessel-
sharing agreements and service contracts. We also note that Docket 99-
10, Ocean Common Carriers Subject to the Shipping Act of 1984, has 
reduced dramatically the number of transshipment agreements that would 
now come under the Commission's jurisdiction. While the shipping 
industry has changed, the definition of a transshipment agreement has 
not changed, and we are taking this opportunity to update the 
definition accordingly.
    OCCA claims that there is already sufficient transparency because 
the publishing carrier is required to state the name of the connecting 
carrier in its tariff (pursuant to the Commission's regulations for 
nonexclusive transshipment agreements). OCCA at 27. OCCA further 
maintains that most shippers would be aware of how their cargo is being 
transported because they have agreed to such service in their service 
contracts, and even if the shipper were unaware of how its cargo was 
being transported, the publishing carrier is responsible for the entire 
movement under its through bill of lading. OCCA at 28. Therefore, OCCA 
asserts that the rule changes are unnecessary. However, transparency is 
not the only issue with which the Commission is concerned. As stated 
earlier, we feel that the definition needs to be updated to reflect 
more accurately the manner in which transshipments are conducted at the 
present time.
    With regard to the Commission's proposed rule, PONL, FOML, and OCCA 
are particularly concerned about the inclusion of the language ``filed 
and effective agreement'' in the Commission's proposed rule. They 
charge that this would create two different meanings for the term ``by 
direct vessel call'' in the definition for a nonexclusive transshipment 
agreement. OCCA at 28-29, PONL at 8-9, FOML at 5-7. According to PONL, 
FOML, and OCCA, the Commission's proposed rule would stipulate that a 
carrier taking space pursuant to a space charter agreement may be 
considered to make a ``direct vessel call'' in the portion of the 
transshipment between the U.S. port and the transshipment port, but not 
in the portion of the transshipment between the transshipment port and 
the foreign port because the publishing carrier would not have a filed 
and effective agreement to cover that portion of the transshipment.
    By including the term ``filed and effective agreement'' in the 
definitions, PONL, FOML, and OCCA assert that the Commission appears to 
be dictating to carriers how they should structure their operations in 
the foreign-to-foreign portion of a transshipment, where, OCCA points 
out, the Commission has no jurisdiction. OCCA at 28-29. OCCA suggests 
that a publishing carrier that uses space chartered from another 
carrier in the foreign-to-foreign portion of a transshipment be 
considered as making a direct vessel call pursuant to the Commission's 
definition of a transshipment agreement. Id. at 29.
    In consideration of those carriers that already participate in 
filed and effective alliance and vessel-sharing agreements, the 
Commission included the option of having a filed and effective 
agreement. It is not the Commission's intent to create a definition for 
the term ``direct vessel call.'' With regard to the concerns expressed 
by PONL, FOML, and OCCA, we note that a publishing carrier would only 
be required to have a filed and effective agreement or operate its own 
vessel on one leg of the transshipment. A publishing carrier that 
either operates its own vessel or takes space from another carrier 
pursuant to a filed and effective agreement in the U.S. portion of the 
transshipment may transport the cargo in the manner that is most 
advantageous to it commercially in the foreign-to-foreign portion of 
the transshipment.\5\
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    \5\ PONL, FOML, and OCCA point out that in cases where a 
publishing carrier charters space from other carriers on both 
portions of a transshipment, the publishing carrier would no longer 
need a transshipment agreement because it would have two vessel-
sharing agreements to cover its service. PONL at 10, FOML at 7, OCCA 
at 29. The consequence is that the publishing carrier would no 
longer be required to publish the name of the connecting carrier in 
its tariff. Given the concerns over national security, PONL, FOML, 
and OCCA suggest that the Commission may want to reconsider its 
proposal. However, we find their arguments to be unpersuasive.

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[[Page 64403]]

    OCCA also questions whether agreements that are otherwise exempt 
from filing, such as an agreement between a parent company and its 
wholly owned subsidiary, would be required to be filed. Id. Provided 
that the parent company is an ocean common carrier, it is the 
Commission's view that the proposed rule would not affect that 
exemption.
    In addition to the arguments expressed above, PONL and FOML contend 
that the Commission is departing from its view that the publishing 
carrier may be the carrier serving the foreign-to-foreign portion of a 
transshipment. PONL at 9, FOML at 6. According to PONL and FOML, under 
the revised definition a publishing carrier that does not operate a 
vessel involved in the transshipment would have to be the origin 
carrier in the export trade of the United States and the destination 
carrier in the import trade of the United States because of the 
requirement that the publishing carrier have a filed and effective 
agreement. We disagree with this assessment on the grounds that 
pursuant to the Commission's regulations a publishing carrier is only 
the carrier offering the service. The Commission's regulations do not 
include the terms ``origin carrier'' and ``destination carrier'' or 
seek to dictate whether the publishing carrier should be the carrier 
serving the port of origin or the carrier serving the port of 
destination. The regulations refer to the ``publishing carrier'' and 
the ``nonpublishing carrier'' or ``participating, connecting or feeder 
carrier.''
    PONL and FOML further claim that they would be forced to 
discontinue many of their current transshipment arrangements because 
they would not be able to conduct them subject to transshipment 
agreements. PONL at 9-10, FOML at 7. In response to PONL's and FOML's 
complaint, we note that PONL and FOML may enter into vessel-sharing 
agreements that would enable them to continue those arrangements. 
Furthermore, under the changes outlined above for ``low market share'' 
agreements, those vessel-sharing agreements may become effective upon 
filing.

III. Information Form and Monitoring Report, 46 CFR Part 535, Subparts 
E and G

A. Background

    The NPR issued by the Commission replaced the current Information 
Form and Monitoring Report regulations with modified regulations that 
update the reporting requirements for carrier agreements. The modified 
regulations account for changes in carrier agreements that have 
occurred since the Ocean Shipping Reform Act of 1998, Public Law No. 
105-258 (``OSRA'') became effective. As such, the Commission seeks to 
obtain the most relevant and accurate agreement information from 
carriers for its analysis of agreements under the Shipping Act, without 
placing an undue regulatory burden on carriers. In addition, the 
regulations were modified to reduce, where possible, the reporting 
burden on carriers.
    The Information Form and Monitoring Report provide the Commission 
with essential information on an agreement from the parties to the 
agreement, and the Commission has consistently found that parties to an 
agreement are the most reliable source of information on the agreement. 
See Dkt. No. 94-13, Information Form and Post-Effective Reporting 
Requirements for Agreements Among Ocean Common Carriers Subject to the 
Shipping Act of 1984, 61 FR 11564, 11565-11566, March 21, 1996. The 
regulations in subpart E of part 535 require that an Information Form 
accompany a filed agreement and certain modifications to an existing 
agreement in effect under the Shipping Act. The Information Form is 
used in the agreement review process to analyze the probable 
competitive impact of a filed agreement or an agreement modification. 
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.
    Once an agreement goes into effect under the Shipping Act, the 
regulations in subpart G of part 535 require that certain agreements 
submit ongoing revenue and/or operational data on the parties' 
activities for as long as the agreement remains in effect. As such, the 
Monitoring Report enables the Commission to track and analyze the 
ongoing competitive effects of an agreement after it becomes effective 
and, accordingly, determine whether any action under the Shipping Act 
may be necessary. Monitoring Reports also 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 on an 
agreement.
1. Information Form Regulations
    The NPR revised the Information Form regulations by requiring all 
carrier agreements to submit an Information Form upon filing with the 
Commission. Specifically, proposed section 535.502(a) requires that all 
carrier agreements identified in section 535.201(a), except low market 
share agreements identified in section 535.311, submit an Information 
Form when the agreement is filed with the Commission. Proposed section 
535.502(b) requires an Information Form when a modification to an 
existing agreement is filed that adds the authority to discuss, or 
agree on, capacity rationalization, or adds pricing or pooling 
authority.\6\ A modification that expands the geographic scope of an 
agreement with such authority must also submit an Information Form as 
required in proposed section 535.502(c). Proposed section 535.504 
provides waiver procedures whereby carriers may request relief from any 
of the Information Form requirements in subpart E of part 535.
---------------------------------------------------------------------------

    \6\ For ease of reference, the term ``pricing or pooling 
authority'' is used herein to identify agreements containing any of 
the following authorities: (1) 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; (2) the establishment of a joint 
service; (3) the pooling or division of traffic, earnings, or 
revenues and/or losses; (4) the discussion or exchange of data on 
vessel-operating costs; or (5) the discussion of service contract 
matters. These authorities were listed in the NPR. 68 FR 67541, 
December 2, 2003.
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2. Information Form
    The Commission's proposed rule replaced the format of the 
Information Form in current sections 535.503 and 535.504 with one form 
under section 535.503(a) divided into sections I through V, as set 
forth in appendix A of part 535. Proposed section 535.503(b) requires 
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 apply to all carrier agreements subject to 
the Information Form requirements. Sections II, III and IV apply based 
on the authority contained in the agreement.
a. Section I
    Section I of the Information Form applies to all carrier agreements 
subject to the Information Form requirements as identified in section 
535.502(a) of the proposed rule. Parties to such agreements must 
complete parts 1 through 4 of section I with information on the 
following topics: the name of the agreement, narrative statements on 
the

[[Page 64404]]

purpose of and commercial circumstances for the agreement, a list of 
the parties' other agreement participation within the geographic scope 
of the filed agreement, and the identification of the authorities and 
provisions contained in the agreement.
b. Section II
    Section II of the Information Form applies to carrier agreements 
that contain simple operational authority including vessel space 
charter, and sailing or service rationalization arrangements. This 
authority does not include the establishment of a joint service as 
defined in section 535.104(o), or capacity rationalization as defined 
in section 535.104(e), of the proposed rule. Parties to such agreements 
must complete all items in part 1 of section II with information on 
their vessel calls at ports along with a narrative statement on any 
changes in port service that are anticipated or planned to occur when 
the agreement goes into effect.
c. Section III
    Section III of the Information Form applies to carrier agreements 
with the authority to discuss, or agree on, capacity rationalization as 
defined in section 535.104(e) of the proposed rule. Parties to such 
agreements must complete parts 1 through 3 of section III with 
information on their vessel capacity and capacity utilization, their 
vessel calls at ports, and a narrative statement on any anticipated or 
planned changes in their vessel capacity and/or liner services 
(including ports) that would be implemented under the agreement when it 
goes into effect.
d. Section IV
    Section IV of the Information Form applies to carrier agreements 
with pricing or pooling authority. Section 535.503(b)(4) of the 
proposed rule specifically identifies these authorities as: (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 
cargo traffic, earnings, or revenues and/or losses; (d) the discussion 
or exchange of data on vessel-operating costs; or (e) the discussion 
of, or agreement on, any service contract matter.
    Parties to agreements with any of these authorities must complete 
parts 1 through 5 of section IV with information on the following 
topics: 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. The agreement parties must also 
provide narrative statements on any changes in their vessel capacity or 
port service that are anticipated or planned to occur when the 
agreement goes into effect. Changes in vessel capacity are qualified to 
mean ``significant changes in the amounts of vessel capacity,'' as 
defined in part 4(C) of section IV.
e. Section V
    Section V requires 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
    The proposed rule modified the Monitoring Report regulations to 
require reporting only from parties to agreements with certain 
authority. For agreements that contain pricing or pooling authority,\7\ 
the proposed rule limited the application of the regulations to include 
only those agreements with a combined market share of 35 percent or 
more.\8\ Specifically, proposed section 535.702(a) requires Monitoring 
Reports from agreements with pricing or pooling authority where the 
parties to such agreements hold a combined market share of 35 percent 
or more in the entire U.S. inbound or outbound geographic scope of the 
agreement.\9\ It also requires Monitoring Reports from all agreements 
with the authority to discuss, or agree on, capacity rationalization. 
At the time of the NPR, the Commission estimated that 63 agreements 
would be subject to the modified Monitoring Report regulations; this 
would be a reduction from 213 agreements.\10\
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    \7\ ``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: (1) 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; (2) the establishment of a joint 
service; (3) the pooling or division of cargoes, earnings, or 
revenues and/or losses; (4) the discussion or exchange of data on 
vessel-operating costs; or (5) the discussion of service contract 
matters. 68 FR 67544, December 2, 2003.
    \8\ The Commission's market share threshold of 35 percent for 
monitoring 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 antitrust law. Accordingly, the agencies find 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.
    57 FR 41561, Sept. 10, 1992.
    \9\ Under section 535.703(b) of the proposed rule, the 
Commission's Director of BTA will determine the Monitoring Report 
obligations of agreements with pricing or pooling authority using 
the 35 percent market share threshold. For newly filed agreements, 
this will be based on the market share data from the Information 
Form submitted with the agreement. Thereafter, at the beginning of 
each calendar year, BTA will 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).
    \10\ Since the NPR was published, some carrier agreements on 
file at the Commission have been canceled. The Commission now 
estimates that a total of 57 agreements will be subject to the 
Monitoring Report regulations under the Final Rule.
---------------------------------------------------------------------------

    For exceptional agreements, proposed section 535.702(c) 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.\11\ Further, section 535.702(d) 
clarifies the Commission's authority 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.\12\ As with the Information Form 
regulations, proposed section 535.705 provides waiver procedures 
whereby carriers may request relief from any of the reporting 
requirements in subpart G of part 535.
---------------------------------------------------------------------------

    \11\ 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 anti-competitive or statutory 
concerns that require close monitoring. The proposed rule delegates 
the Commission's authority under section 535.702(c) to the Director 
of BTA in section 501.26(o).
    \12\ The Commission may find it necessary to prescribe 
alternative reporting requirements when an agreement contains unique 
authority, the effects of which may require monitoring, that is not 
captured under the standard Monitoring Report. The Commission's 
authority under section 535.702(d) is delegated to the Director of 
BTA in section 501.26(o).
---------------------------------------------------------------------------

4. Monitoring Report Form
    The proposed rule replaced the format of the Monitoring Report in 
current sections 535.703, 535.704, and 535.705 with one form in 
proposed section 535.703(a) divided into sections I through III, as set 
forth in appendix B of part 535. Section 535.703(b) of the proposed 
rule requires 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 apply based on the 
authority contained in the agreement, and section III applies to all 
agreements required to submit

[[Page 64405]]

Monitoring Reports under proposed section 535.702(a).
a. Section I
    Section I of the Monitoring Report applies to all agreements with 
the authority to discuss, or agree on, capacity rationalization, as 
defined in section 535.104(e) of the proposed rule. Parties to such 
agreements must complete parts 1 through 3 of section I with quarterly 
information on their vessel capacity and capacity utilization. In 
addition, proposed section 535.703(c), as set forth in part 3 of 
section I, requires 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 the change.
b. Section II
    As proposed, section II of the Monitoring Report applies to 
agreements in which the parties 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 cargo traffic, earnings, or 
revenues and/or losses; (d) the discussion or exchange of data on 
vessel-operating costs; or (e) the discussion of, or agreement on, any 
service contract matter.
    Parties to such agreements must complete parts 1 through 6 of 
section II with the following quarterly information: Market share, 
total average revenue, cargo volume and revenue results on the top 10 
agreement-wide commodities, vessel capacity and capacity utilization, 
and narrative statements on any significant changes that occurred in 
vessel capacity and service at ports. The meaning of significant 
changes for these items is qualified in parts 5(C) and 6 of section II. 
The proposed rule substantially reduced the reporting burden for major 
agreement commodities by requiring parties to report their data on an 
agreement-wide basis, instead of a sub-trade basis.\13\ For exceptional 
agreements, however, 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 section II of the Monitoring 
Report.\14\
---------------------------------------------------------------------------

    \13\ The former regulations required that parties to certain 
agreements, categorized as Class A, report their cargo volume and 
revenue results for each major agreement commodity in each sub-trade 
within the geographic scope of the agreement. For purposes of 
reporting, sub-trade is defined to mean all liner movements between 
each U.S. port range and each foreign country within the scope of 
the agreement.
    \14\ Sub-trade commodity data may be necessary when an agreement 
with extremely high market share covers a broad trade area comprised 
of distinct sub-trades or regions, and establishes rates distinctly 
by sub-trade or region. In addition, such data may be necessary 
where unique anti-competitive concerns are present, or where 
competitive issues exist that affect pricing for certain 
commodities. Proposed section 501.26(p) would delegate this 
authority to the Director of BTA.
---------------------------------------------------------------------------

c. Section III
    Section III requires 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 for the 
parties.

B. Summary of Comments and Discussion

    Comments directly addressing the Information Form and Monitoring 
Report regulations of the proposed rule were submitted by OCCA and APL. 
As noted above, OCCA represents most of the conference and rate 
discussion agreements and their members in the U.S. trades. As a member 
of OCCA, APL endorses OCCA's comments on the proposed rule. APL at 1. 
However, APL also submitted separate comments as a supplement to OCCA's 
comments to elaborate on particular aspects of the proposed rule. Id. 
Summaries of the issues raised by the commenters as they pertain to the 
Information Form and Monitoring Report regulations proposed in the NPR 
are provided below with the Commission's discussion on each issue.
    OCCA expressed its view that since OSRA became effective, the 
current Information Form and Monitoring Report regulations for carrier 
agreements are unduly burdensome and unnecessary given: (1) The 
extensive use of individual service contracts in the shipment of cargo, 
(2) the confidentiality of service contract terms, and (3) the 
reduction in the number of conference agreements in the U.S. trades. 
OCCA at 16-17. Overall, OCCA recognizes the Commission's efforts to 
reduce the current reporting burden on carriers and supports most of 
the proposed changes pertaining to the Information Form and Monitoring 
Report regulations. Id. at 17. Nonetheless, OCCA raises the following 
issues and recommendations that would in its view further improve the 
rule. Id.
1. Reporting Requirements for Agreements With Capacity Rationalization 
Authority
    OCCA objects to the heightened reporting requirements on agreements 
that authorize capacity rationalization, as the term is defined in 
section 535.104(e) of the proposed rule. Id. at 5. OCCA interprets the 
meaning of capacity rationalization to include certain types of 
agreements, based upon its reading of the supplementary information of 
the NPR. Id. at 4. These are: (1) An agreement that prohibits or 
restricts the introduction of vessels into the agreement trade in a 
service other than that operated under the agreement; (2) an agreement 
that prohibits or restricts the use of space on non-agreement vessels 
in the agreement trade by an agreement party; and (3) an agreement that 
results in an artificial withholding of vessel capacity. Id. OCCA 
argues that operational agreements with restrictive provisions on its 
members' activities within the agreement trade are legitimate, 
understandable, and serve a valid purpose. Id. at 5. OCCA's objections 
to the new term ``capacity rationalization'' and its suggestions for 
changes to the definition, as well as our response to OCCA's 
suggestions, are addressed earlier, in Part II(B) of the Supplemental 
Information.
    On a related issue, OCCA recommends that the Commission delete the 
term ``discussion of'' when identifying agreement modifications that 
add capacity rationalization authority in section 535.502(b)(2).\15\ 
Id. at 15. OCCA argues that an agreement modification to discuss 
capacity rationalization does not require an Information Form because 
such authority does not permit the parties to engage in any capacity 
rationalization. Id. OCCA believes that an Information Form would only 
be necessary when an agreement modification is filed that permits the 
parties to engage in capacity rationalization, and thus, it finds 
section 535.502(b)(2) of the proposed rule, as it presently reads, to 
be unnecessarily duplicative and burdensome. Id.
---------------------------------------------------------------------------

    \15\ Section 535.502(b)(2) of the proposed rule reads as, ``The 
discussion of, or agreement on, capacity rationalization.''
---------------------------------------------------------------------------

    OCCA also opposes proposed section 535.703(c), as set forth in part 
3 of section I of the Monitoring Report, that requires parties to an 
agreement authorizing capacity rationalization to report to the 
Commission their planned vessel capacity and/or liner service

[[Page 64406]]

changes prior to implementation.\16\ Id. at 19. OCCA recommends that 
the Commission delete section 535.703(c) and part 3 of section I of the 
Monitoring Report. Id. It argues that a requirement to provide advance 
notice is not synchronous with the Monitoring Report, which must be 
submitted on a historical quarterly basis. Id. at 19-20. It also notes 
that major agreements of this nature publicly announce their vessel 
capacity changes. Id. at 20.
---------------------------------------------------------------------------

    \16\ For an agreement that authorizes capacity rationalization, 
section 535.703(c), as set forth in part 3 of section I of the 
Monitoring Report, requires a narrative statement of 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, BTA, 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.
---------------------------------------------------------------------------

    OCCA further believes the advance notice requirement to be 
unnecessary and duplicative because the rule requires vessel capacity 
data from many agreements in their quarterly Monitoring Reports. Id. 
Moreover, it argues that advance notice of capacity changes serves no 
legitimate regulatory purpose because carriers may lawfully act in 
concert to reduce capacity under the authority of a filed agreement, 
e.g., the authority to operate a number of vessels within a specified 
range. Id.
    In its supplemental comments, APL endorses OCCA's position to 
delete the advance notice requirement in section 535.703(c) of the 
proposed rule, and part 3 of section I of the Monitoring Report, for 
agreements authorizing capacity rationalization. APL at 6. As an 
alternative, however, APL suggests that the Commission limit the 
advance notice requirement to cover only concerted actions that reduce 
the total vessel capacity of such agreements. Id. at 6-7. It notes that 
increases in vessel capacity could be adequately reported on a 
quarterly basis in the regular Monitoring Report. Id. at 7. Further, 
APL suggests that the Commission qualify the meaning of vessel capacity 
and/or liner service changes to exclude temporary or minor changes that 
have little or no impact, regardless of whether reported in advance or 
on a historical quarterly basis. Id. APL finds the prospect of 
reporting such temporary or minor changes to be unduly burdensome and 
of no useful regulatory purpose. Id.
    For the reasons discussed above in Part II of the Supplementary 
Information, we are not adopting OCCA's suggested definition of 
capacity rationalization. We are retaining the definition in proposed 
section 535.104(e), with the last sentence deleted in the Final Rule. 
This section addresses the reporting requirements for agreements that 
authorize capacity rationalization.
    Based on its reading of the Supplementary Information in the NPR, 
OCCA interprets the intention of the reporting requirements for 
agreements authorizing capacity rationalization as primarily limited to 
certain types of operational agreements with restrictive provisions on 
their members' activities in the agreement trade. OCCA's interpretation 
is not entirely accurate. We addressed operational agreements in the 
Supplementary Information of the NPR to distinguish and illustrate some 
of the agreements that are included in the definition of capacity 
rationalization. Specifically, we determined that operational 
agreements included in the definition of capacity rationalization are 
those that affect the supply of vessel capacity in a trade or market 
and prohibit or place conditions on its members' independent agreement 
participation with other carriers and/or competing liner services 
outside of the agreement within the agreement trade. We discussed these 
agreements to distinguish them from simple operational agreements, 
which do not place such restrictions on their members, so that the 
agreement filing and reporting regulations would be understood and 
applied correctly. In focusing our discussion on operational 
agreements, it was not our intention to imply that the reporting 
requirements for agreements authorizing capacity rationalization are 
limited to certain types of agreements.
    The proposed rule explicitly eliminated the identification of 
agreements by type or class in the Information Form and Monitoring 
Report regulations. The current regulations, which identify carrier 
agreements by type or class for the purpose of assigning reporting 
requirements, have become outdated and inadequate in relation to the 
changes that have occurred in carrier agreements and their increasingly 
complex authorities, as was explained in the Supplementary Information 
to the NPR:

    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.

68 FR 67525, December 2, 2003.
    To address these concerns, the proposed rule modified the 
regulations to assign reporting requirements to specific authorities 
contained in agreements. In this regard, we stated that:

    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.

Id.
    The Information Form and Monitoring Report regulations in the 
proposed rule provide that any agreement authorizing the discussion of, 
or agreement on, capacity rationalization is subject to the reporting 
requirements. The regulations include all carrier agreements with such 
authority, regardless of agreement type. In addition to operational 
agreements with capacity rationalization authority, there are a number 
of conference and rate discussion agreements with authority to discuss, 
or agree on, capacity rationalization. Such agreements will be subject 
to the reporting requirements for capacity rationalization authority in 
addition to all other reporting requirements applicable to their 
pricing or pooling authority under this Final Rule.\17\
---------------------------------------------------------------------------

    \17\ The instructions in appendices A and B to part 535 provide 
that where an agreement containing multiple authorities is subject 
to duplicate reporting requirements in the various sections of the 
Information Form or Monitoring Report, the parties may provide only 
one response so long as the reporting requirements within each 
section are fully addressed.
---------------------------------------------------------------------------

    In assigning reporting requirements to capacity rationalization 
authority, the Commission is intentionally increasing the level of its 
analysis and monitoring of the concerted actions that are planned or 
implemented by carriers under this authority of their agreements. We 
believe this increase in reporting is reasonable, judicious, and 
proportional to the increasing prevalence and use of capacity 
rationalization authority occurring in agreements between or among 
carriers in the U.S. trades. The Commission views these reporting 
requirements as a necessary measure within its authority under section 
5(a) and based on its statutory

[[Page 64407]]

responsibilities under the Shipping Act, particularly with respect to 
the section 6(g) standard for agreements. 46 U.S.C. app. 1704(a) and 
1705(g).
    By promulgating reporting requirements for capacity rationalization 
authority, the Commission does not dispute, as OCCA argues, the 
legitimacy of such authority in agreements. Further, we do not dispute 
the lawfulness of carriers to act in concert under such authority 
within the standards of the Shipping Act. In the Supplementary 
Information to the NPR, we acknowledged that operational agreements, 
even those with capacity rationalization authority, can achieve 
efficiencies in a trade or market by lowering operational costs and 
even enhancing ocean liner services to the benefit of the shipping 
public. Id. at 67524. The efficiencies associated with capacity 
rationalization authority in conference or rate discussion agreements, 
however, are less apparent and would seem to be aimed at achieving the 
rate objectives of the agreement. Further, in the NPR, we cautioned 
that 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 leading to an unreasonable decrease in 
service. Id. A concerted reduction in vessel capacity can also produce 
an artificially-induced upward pressure on rate levels, potentially 
leading to an unreasonable increase in rates in violation of section 
6(g). Id.
    The reporting requirements for agreements authorizing capacity 
rationalization should not be viewed in any way as a punitive measure 
against such agreements. Rather, the purpose of the reporting 
requirements is to provide the Commission with necessary information to 
gauge the reasonableness of the parties' actions under such authority 
in accordance with the standards of the Shipping Act, and within the 
prevailing market conditions of the agreement trade.
    We do not believe that reporting vessel capacity information places 
any undue regulatory burden on carriers because carriers engaged in 
capacity rationalization have such information readily available. 
Moreover, the Final Rule provides regulations that allow carriers to 
request a waiver, with a showing of good cause, from any of the 
Information Form and Monitoring Report requirements. Accordingly, in 
conjunction with the definition in section 535.104(e) of the Final 
Rule, all agreements identified in sections 535.502 and 535.702(a) that 
authorize the discussion of, or agreement on, capacity rationalization 
are subject to the applicable reporting requirements in subparts E and 
G of the Final Rule, as modified below.
    With respect to section 535.502(b)(2) of the proposed rule, the 
Commission rejects OCCA's recommendation to delete the term 
``discussion of'' for agreement modifications that add capacity 
rationalization authority. The term accurately reflects the intention 
of the Commission's reporting requirements. We view the ``discussion 
of'' capacity rationalization as potentially anti-competitive, 
especially within conference and rate discussion agreements, similar to 
the anti-competitive authority to discuss pricing information.
    Adding authority for the discussion of capacity rationalization, or 
the discussion of pricing information, to an existing agreement alters 
the competitive composition of the agreement, and the agreement must be 
re-examined with a new Information Form. Absent such a reporting 
requirement, the Commission would have to request vessel capacity 
information from parties to an agreement modification authorizing the 
discussion of capacity rationalization after the modification was 
filed, which could delay the effective date. Further, deleting the term 
``discussion of'' for agreement modifications would conflict with the 
reporting requirements for newly filed agreements, which require 
information on the authority to discuss, or agree on, capacity 
rationalization. The Commission believes that authority to discuss 
capacity rationalization would not be any less anti-competitive based 
solely on it being filed as a modification to an existing agreement 
than it would be if filed in a new agreement.
    On the issue of proposed section 535.703(c), and part 3 of section 
I of the Monitoring Report, the Commission does not agree with OCCA's 
recommendation to delete the reporting requirement for notice to the 
Commission of planned vessel capacity and/or liner service changes 
prior to implementation from parties to agreements authorizing capacity 
rationalization. OCCA incorrectly infers that the reporting requirement 
is an unnecessary imposition by the Commission that ignores or negates 
the legality of carriers to act within the authority of their 
agreements. As previously stressed, we do not dispute the lawfulness of 
carriers to act in concert under the authority of their agreements 
within the reasonable standards of the Shipping Act.
    The reporting requirement is a judicious regulatory measure that 
enables the Commission to gauge the reasonableness of a pending action 
that the parties plan to implement under the authority of their 
agreement. With such reporting, the Commission can receive timely 
notice to take any necessary action under the Shipping Act to prevent a 
concerted action by carriers that would likely cause harm in the 
agreement trade prior to its implementation.
    To make this determination, the Commission must first be informed 
in advance of the parties' pending action under the agreement. The 
Commission must also be able to weigh the severity of such action 
within the prevailing market conditions of the agreement trade. While 
an agreement may specify a range of vessel capacity within which the 
parties intend to operate, this range of vessel capacity may be broad 
spanning multiple trade lanes and liner services under the geographic 
scope of the agreement, especially in cases where the geographic scope 
covers all the U.S. trades. Moreover, market conditions in the 
agreement trade might have substantially changed from the time when the 
Commission initially analyzed the likely competitive impact of the 
agreement upon filing. Therefore, accurate and current information on 
the likely effects of a pending action under an agreement is required 
directly from the parties to the agreement. In accordance with the 
jurisdictional authority of the Commission governing agreements in 
effect under the Shipping Act, we find it both prudent and necessary to 
retain section 535.703(c) in the Final Rule for notice prior to 
implementation of pending actions planned by parties to agreements 
authorizing capacity rationalization.
    We do not believe that this reporting requirement places any undue 
regulatory burden on carriers. As OCCA noted, parties to agreements 
often publish this information. Therefore, we believe that they can 
easily and readily submit the required information to the Commission. 
We do, however, concur with the alternative modifications suggested by 
APL for this reporting requirement.
    APL correctly discerns that the underlying intention of the 
Commission for this reporting requirement focuses on receiving advance 
notice of concertedly planned reductions in vessel capacity that might 
potentially violate the standards of reasonableness under the Shipping 
Act. Further, as APL surmises, it is our intention that such reporting 
be limited to reductions in vessel capacity that would be

[[Page 64408]]

significant. Such a qualification includes reductions in vessel 
capacity that are strategically planned to be implemented for a period 
of time, or intended to be more permanent in nature. It excludes 
incidental alterations in vessel capacity that would be temporary in 
nature, or operational changes in vessel capacity that would have 
little or no impact on the amount of vessel capacity offered in a liner 
service or a trade. In addition, it is our intention that all reporting 
requirements set forth in appendices A and B of part 535 for similar 
information on changes in vessel capacity, or vessel calls at ports, be 
limited and qualified for reporting purposes to mean significant 
changes.
    Therefore, section 535.703(c) has been modified in the Final Rule 
to require notice prior to implementation of any significant reductions 
in vessel capacity under the agreement. Part 3 of section I of the 
Monitoring Report in the proposed rule has been modified and parts 2(C) 
and 2(D) of section I have been added in the Final Rule. Part 2(C) of 
section I sets forth instructions on reporting significant reductions 
in vessel capacity prior to implementation. Part 2(D) of section I sets 
forth instructions on reporting other significant changes in vessel 
capacity for the preceding calendar quarter. Part 3 of section I of the 
Monitoring Report in the Final Rule has been modified and now sets 
forth instructions on reporting significant changes in vessel calls at 
ports for the preceding calendar quarter. In a similar manner, all 
other reporting requirements in appendices A and B of part 535 in the 
Final Rule have been modified and qualified for reporting purposes to 
mean significant changes in vessel capacity, or vessel calls at ports.
2. Reporting Requirements for Agreements With Authority To Discuss or 
Exchange Vessel-Operating Cost Data
    OCCA objects to the heightened reporting requirements on agreements 
that contain the authority to discuss or exchange data on vessel-
operating costs. OCCA at 7. OCCA notes that reporting on such authority 
was first adopted by the Commission in its rulemaking in Information 
Form and Post-Effective Reporting Requirements for Agreements Among 
Ocean Common Carriers Subject to the Shipping Act of 1984, FMC Docket 
No. 94-31, which established the current Information Form and 
Monitoring Report regulations. Id. It argues that the Commission's 
initial rationale for assigning heightened reporting requirements to 
such authority was, and continues to be, questionable from both a legal 
and a practical perspective. Id. at 7-8.
    Specifically, OCCA refers to the Commission's application of 
Supreme Court cases,\18\ where the Commission stated that ``the sharing 
of pricing information can have a significant impact on price 
competition.'' \19\ Id. at 7. It argues that these Supreme Court cases 
involved the sharing of price information rather than cost information, 
and therefore, it questions the validity of the Commission's previous 
legal analysis in FMC Docket No. 94-31. Id. at 7-8. OCCA further cites 
case law where it was found that the sharing of cost information by 
competing manufacturers was lawful because it improved efficiency and 
lowered costs.\20\ Id. at 8.
---------------------------------------------------------------------------

    \18\ Sugar Institute, Inc. v. United States, 297 U.S. 553 
(1936), and American Column & Lumber Co. v. United States, 257 U.S. 
377 (1921).
    \19\ See Docket No. 94-31, 59 FR 62372, 62376, December 5, 1994.
    \20\ United States v. National Malleable Steel & Castings Co., 
1957 Trade Cas. (CCH) ]68,890 (N.D. Ohio 1957) aff'd per curiam 358 
U.S. 38 (1958).
---------------------------------------------------------------------------

    From a practical perspective, OCCA argues that the authority to 
discuss or exchange vessel-operating cost data has no meaningful impact 
on pricing because carriers price based on total costs, in addition to 
market conditions, and vessel-operating costs are only a portion of 
total costs. Id. Moreover, OCCA points out that most vessel-operating 
cost data is publicly available information and can be readily obtained 
or discerned regardless of whether carriers are authorized to share 
such data. Id. at 8-9. Further, OCCA believes that heightened reporting 
requirements on such authority creates an excessive burden for carriers 
that obstructs efficiency because carriers generally discuss or 
exchange such data within their vessel-sharing agreements, which 
promote cost-effective services. Id. at 9. For these reasons, it 
recommends that the Commission delete all references to such authority 
from the rule, including the Information Form and Monitoring 
Report.\21\ Id.
---------------------------------------------------------------------------

    \21\ These references are cited as proposed sections 
535.104(kk), 535.502(b)(v), 535.503(b)(iv), 535.702(a)(2)(iv), and 
535.704(a)(1).
---------------------------------------------------------------------------

    The Commission disagrees that its legal or economic rationale in 
FMC Docket No. 94-31 was misguided, as OCCA argues. The Commission 
considers the ``sharing of pricing information'' between parties to an 
agreement, which affects price competition in a market, to include the 
authority to discuss or exchange cost information. In the case of the 
ocean shipping industry, such information includes vessel-operating 
cost data.
    We recognize, however, that it is unnecessarily redundant to 
subject such authority to reporting requirements where vessel-operating 
cost data is shared by carriers for pricing purposes in agreements. 
Agreements that contain authority to discuss, or agree upon, pricing 
are already subject to the reporting requirements. Further, we agree 
that the authority to share vessel-operating cost data in agreements 
that do not contain pricing authority, such as a vessel-sharing 
agreement, is for operational purposes.
    It is not our intention in this rule to subject such an agreement 
to a level of reporting on par with agreements containing potentially 
highly anti-competitive authorities when such reporting is not 
necessary or required. Therefore, the reference to the authority to 
discuss or exchange data on vessel-operating costs has been deleted 
from sections 535.502, 535.503, 535.702, and appendices A and B of part 
535 of the Final Rule. The definition of vessel-operating costs, 
however, has been retained in section 535.104(kk) in the Final Rule for 
any future reference that may be necessary in 46 CFR part 535.
3. Section I of the Information Form in Appendix A of Part 535
    OCCA recommends that the Commission delete parts 2, 4(D), and 4(J) 
of section I of the Information Form in the proposed appendix A.\22\ 
Id. at 18. In general, OCCA views these reporting requirements as 
unnecessary, duplicative, and burdensome. Id. at 19. It notes that 
information on these matters can instead be obtained from the content 
of the agreement itself. Id. It further argues that these proposed 
requirements neither serve a legitimate regulatory purpose, nor advance 
the Commission's analysis of agreements with respect to the section 
6(g) standards of the Shipping Act. Id. at 18-19.
---------------------------------------------------------------------------

    \22\ Part 2 of section I requires that the parties provide 
narrative statements on the purpose of, and the commercial 
circumstances for, the filed agreement. Part 4(D) of section I 
requires the parties to identify whether the agreement authorizes 
the parties to discuss or exchange vessel-operating cost data. Part 
4(J) of section I requires the parties to identify any other 
authority contained in the agreement that is not otherwise covered 
in part 4 of section I of the Information Form.
---------------------------------------------------------------------------

    The Commission declines to adopt OCCA's recommendation to delete 
parts 2(A) and 2(B) of section I of the Information Form that require 
narrative statements elaborating on the purpose and commercial aspects 
of an agreement between or among carriers filed at the Commission. We 
disagree with OCCA's arguments that such information has no regulatory 
purpose nor advances the

[[Page 64409]]

Commission's analysis of agreements under section 6(g). In the 
---------------------------------------------------------------------------
Supplementary Information of the NPR, we explained that:

    Section I [of the Information Form] 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.

68 FR 67525, December 2, 2003.
    With respect to part 2 of section I, we further explained that this 
specific information provides the Commission with a clearer 
understanding of the parties' collective objectives under the agreement 
in relation to their services within the agreement trade. Id. at 67526. 
We noted that 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. Id.
    The statutes and regulations governing the filing of agreements 
under the Shipping Act only require that conference agreements contain 
a statement of purpose. For other agreements, it is at the discretion 
of the parties as to whether a statement of purpose is contained in the 
filed agreement. As such, the Commission cannot always rely on the 
content of agreements to disclose such information. The Commission has 
a vast amount of experience in reviewing and analyzing agreement 
filings under the Shipping Act. Accordingly, we have found that 
agreements filed at the Commission are generally crafted to meet the 
legal requirements of the Shipping Act, and very little additional 
information elaborating on the purpose or commercial aspects of an 
agreement accompanies the agreement filing. As previously noted, the 
authority of the Commission to promulgate rules on the form and manner 
of filed agreements and any additional information and documents that 
need to accompany the agreement filings is set forth in section 5(a) of 
the Shipping Act.
    In some instances, parties to an agreement publish relevant 
information on the purpose and/or commercial circumstances pertaining 
to the agreement. The Commission uses any published information that is 
available to gain a clearer understanding of an agreement for its 
analysis. However, we find it wholly inadequate and inefficient that 
the receipt of relevant information useful to the Commission's review 
and analysis of an agreement may be dependent upon whether the parties 
choose to publish information, and limited to whatever sort of 
information they may choose to publish about the agreement. Instead, we 
believe that the relevant and straightforward agreement information 
required in part 2 of section I of the Information Form can be easily 
and readily submitted by the parties at the time that the agreement is 
first filed at the Commission.
    When questions arise about an agreement that cannot be addressed by 
the content of the agreement or any published information, the 
Commission can request additional information from the parties, which 
could delay the effective date of the agreement. Part 2 of section I 
provides carriers with the opportunity to avoid requests for additional 
information on their agreements, and it is in their best interest to 
respond accordingly with meaningful agreement information that fully 
addresses this reporting requirement.
    We do, however, see a need to modify this part of the Information 
Form. We believe that the purpose and commercial aspects of an 
agreement are interrelated and may more easily be addressed in a single 
narrative statement. Therefore, parts 2(A) and 2(B) have been 
consolidated into a requirement for one narrative statement in part 2 
of section I of the Information Form in appendix A of part 535 of the 
Final Rule.
    Regarding OCCA's issues with the other parts of section I of the 
Information Form, part 4(D) on the authority to discuss or exchange 
data on vessel-operating costs has been deleted from the Final Rule for 
the reasons previously stated. Further, we agree that agreements filed 
under the Shipping Act must comply with 46 CFR 535.402, and thus, part 
4(J) of section I of the Information Form is unnecessary and has been 
deleted from the Final Rule because the complete and specific 
authorities between the parties can be obtained from the content of the 
agreement.
4. Reporting Requirements on the Cargo Volume and Revenue Results for 
the Top 10 Agreement-Wide Commodities
    OCCA strongly urges the Commission to eliminate all reporting 
requirements for cargo volume and revenue data on agreement 
commodities.\23\ OCCA at 17. It stresses that eliminating such 
reporting is the ``single most significant change'' the Commission 
could make to reduce the current burden on the industry. Id. OCCA 
believes that the modification in the proposed rule that reduces 
reporting to the top 10 agreement-wide commodities still imposes a 
significant burden because carriers generally do not track revenue on a 
per-commodity basis. Id. It questions the value of this data given the 
wide use of confidential service contracts, where many such contracts 
apply a single rate for multiple commodities, such as a rate for 
General Department Store Merchandise, or Freight All Kinds. Id. It 
further questions whether fluctuations in this data for a particular 
carrier can be directly attributed to an agreement action, or to 
numerous other factors external to the agreement. Id. at 18. It argues 
that even if this data is of some use to the Commission, the burden of 
continually reporting such data outweighs its usefulness. Id. As an 
alternative, OCCA suggests that the Commission could require this data 
on an ``as needed'' basis to address specific issues or concerns for a 
particular agreement. Id.
---------------------------------------------------------------------------

    \23\ The former Information Form for Class A/B agreements and 
Monitoring Report for Class A agreements require each party to 
report its cargo volume and revenue results for each major commodity 
for each sub-trade within the geographic scope of the agreement. The 
Commission retained these requirements in the proposed rule, but 
reduced the amount of reporting to each party's cargo volume and 
revenue results on only the top 10 agreement-wide commodities.
---------------------------------------------------------------------------

    In the Supplementary Information of the NPR, the Commission 
acknowledged that since OSRA became effective, collective pricing under 
conference agreements has declined in favor of voluntary rate authority 
under discussion agreements. 68 FR 67524, December 2, 2003. 
Nevertheless, we stated that although coordination is voluntary, 
discussion agreements contain considerable and broad authority to 
influence tariff rates, service contract rates, and other service 
matters spanning large geographic areas in the U.S. trades. Id. We 
explained that:

    OSRA prohibited any mandatory restrictions on individual service 
contracts, but it allowed agreements to adopt voluntary service 
contract guidelines on 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.

Id.
    For this reason, the Commission declines to adopt OCCA's 
recommendation to eliminate part 3 of section IV of the Information 
Form (appendix A of part 535) and part 4 of section II of the 
Monitoring Report

[[Page 64410]]

(appendix B of part 535) that require reporting on each party's cargo 
volume and revenue results on the top 10 agreement-wide commodities for 
agreements that contain pricing or pooling \24\ authority.
---------------------------------------------------------------------------

    \24\ Pooling authority in a carrier agreement provides for the 
division of cargo carryings [cargo traffic], earnings, or revenues 
and/or losses between or among the parties in accordance with an 
established formula or scheme, as defined in 46 CFR 535.104(x). Such 
authority affects pricing by reducing price competition between the 
parties in the agreement trade.
---------------------------------------------------------------------------

    A review of the voluntary service contract guidelines filed with 
the Commission indicates that parties to most major agreements with 
pricing authority, whether a conference or a discussion agreement, 
collectively set guidelines on rate levels and/or rate increases for 
specific commodities. Parties to such agreements may use and adhere to 
the commodity rate guidelines in their individual service contracts. As 
such, agreements with authority to affect pricing, even with the 
changes that have occurred under OSRA, can and do affect commodity-
specific freight rates in the ocean transportation of cargo moving 
under the individual service contracts of their members.
    As stressed throughout this rule, the Commission is assigned the 
responsibility of overseeing and regulating the concerted behavior of 
ocean common carriers that, but for the Shipping Act, would otherwise 
be subject to the antitrust laws. 49 U.S.C. app. 1706. To carry out its 
statutory duty, the Commission must assess the competitive effects of 
the concerted behavior of agreement parties on the ocean carriage of 
cargo in the foreign commerce of the United States. Where parties to an 
agreement have authority to affect cargo freight rates and charges 
collectively, reporting requirements for specific information 
pertaining to such potentially anti-competitive authority is necessary 
for the Commission to gauge the reasonableness of the parties' behavior 
in accordance with the standards of the Shipping Act.
    It is our view that in most major agreements with pricing authority 
the parties set freight rates for specific commodities, whether in 
tariffs or in service contracts, and adopt voluntary service contract 
guidelines that can affect the cargo freight rates of specific 
commodities. To regulate this behavior properly, it remains necessary 
for the Commission to receive some commodity-specific information 
directly from parties to agreements with authority that may affect 
pricing.
    As such, we disagree with OCCA's arguments regarding the value and 
usefulness of the commodity specific data collected under the 
Commission's reporting requirements. This information provides the 
Commission with meaningful insight on the trends in, and the direction 
of, pricing under agreements for major commodity movements in the U.S. 
trades. By examining these data trends for an agreement, the Commission 
can more accurately gauge the competitive effects of the concerted 
pricing behavior of the parties in the agreement trade. The ability of 
the Commission to analyze pricing under an agreement is especially 
important in cases where the combined market share of the parties is 
inordinately high, which gives them considerable market power to affect 
pricing.\25\
---------------------------------------------------------------------------

    \25\ As discussed supra, the Commission modified the Monitoring 
Report regulations in the rule to limit reporting from agreements 
with pricing or pooling authority to those with a combined market 
share of 35 percent or more, recognizing that such higher market 
share agreements possess greater market power to affect competition 
and pricing in the marketplace.
---------------------------------------------------------------------------

    The commodity information from the reporting requirements is also 
used by the Commission for guidance in addressing inquiries, 
complaints, and petitions for Commission action on an agreement in 
cases where such issues involve specific commodities. Issues on the 
pricing behavior of agreement parties continue to be brought before the 
Commission under OSRA.
    We recognize the problems and burden for carriers associated with 
the former reporting requirements for agreement commodity data. 
Consequently, we modified these requirements by adding definitions and 
qualifications with better instructions in the proposed rule to assist 
carriers in preparing their data, and to improve the consistency and 
accuracy of the data reported to the Commission. We further 
substantially reduced the amount of required commodity data to ease the 
reporting burden on carriers.
    We believe that the modified reporting requirements for the 
commodity data in the proposed rule represent a fair and reasonable 
compromise for carriers, and are compatible with the changes that have 
occurred in agreements under ORSA. Further, we believe that most major 
carriers maintain records of some form on their cargo volume and 
revenue results by commodity in the agreement trades that they serve. 
Accordingly, we do not believe that the modified reporting requirements 
for agreement commodity data in the proposed rule place an undue 
regulatory burden on carriers. Therefore, these requirements have been 
retained in this Final Rule. In cases where unique compliance problems 
or issues arise, a carrier may request relief, with a showing of good 
cause, from any of the Information Form and Monitoring Report 
requirements under the waiver procedures provided in the Final Rule.

C. Implementation of the Information Form and Monitoring Report 
Regulations

    In the Supplementary Information of the NPR, the Commission 
indicated that the new Information Form regulations shall become 
effective 30 days after publication of a Final Rule in the Federal 
Register, and the new Monitoring Report regulations shall become 
effective 90 days after publication. To make this section consistent 
with the balance of the Final Rule, the effective date for the new 
Information Form regulations has been extended to 60 days after 
publication. The effective date for the new Monitoring Report 
regulations remains at 90 days after publication.

IV. Minutes, 46 CFR Part 535, Subpart G

A. Background

    In the NPR, the Commission proposed to replace its current 
regulations in sections 535.706 through 535.708 on the filing 
requirements for minutes of meetings between parties to certain 
agreements with modified regulations in proposed section 535.704. The 
Commission found that modifications to the regulations were necessary 
to address problems it had encountered in the quality of information 
being reported in agreement minutes. As such, the proposed rule updated 
the regulations to require more descriptive reporting on relevant 
matters discussed at meetings between parties at levels that are 
pertinent to the decision-making process of the agreement. The proposed 
rule also sought to accommodate the changes in agreements that have 
occurred since OSRA.
    Specifically, the NPR proposed to modify the current regulations 
to: (1) Require minutes from agreements based on the authority 
contained in the agreement; (2) eliminate the filing requirement that 
limits reporting 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; (5) clarify the

[[Page 64411]]

sequential numbering of minutes; (6) reduce the filing time from 30 
days to 15 days from the date of the meeting; and (7) update 
definitions and BTA designations, and, in particular, replace 
references to ``conference [agreements]'' with the term ``agreement.'' 
The Commission set forth these changes to improve the coverage of 
substantive issues in the filed minutes of meetings while deterring 
agreement parties from submitting minutes with insufficient 
descriptions of the relevant matters discussed at their meetings.

B. Summary of Comments and Discussion

    Comments on the minutes requirements of the NPR were submitted by 
OCCA, APL, and PONL. Commenters acknowledged the need for the 
Commission to receive meaningful minutes of agreement meetings in a 
timely fashion. OCCA at 20. In general, however, they believe that the 
proposed minutes requirements are overly broad and unduly burdensome. 
OCCA at 21-22, APL at 8. In their view, if promulgated as proposed, the 
minutes regulations would overwhelm both the carriers and the 
Commission's staff with unnecessary paperwork and information. Id. They 
raise the following specific issues with respect to the proposed 
minutes regulations.
1. Agreements Subject to the Minutes Requirements
    OCCA and APL take issue with section 535.704(a)(1) of the proposed 
rule, which assigned minutes requirements to agreements based on the 
authority contained in the agreement, as opposed to the former 
regulations, which assigned minutes requirements based on defined types 
of agreements.\26\ Id. They are particularly concerned with the effects 
of the proposed minutes requirements on operational agreements that 
contain rate authority. Id. Specifically, OCCA points out that 
operational agreements with rate authority would be required to file 
minutes of meetings not only related to rate matters, but also to the 
``business of the agreement,'' which includes routine operational 
matters such as the scheduling of vessels, terminal and stevedoring 
arrangements, and other day-to-day functions. OCCA at 21-22. OCCA 
believes that minutes reporting on everyday operational issues imposes 
a significant burden on carriers and exceeds the intent of the rule. 
Id. To reduce this burden, OCCA recommends that the Commission revise 
the exemption provisions in section 535.704(d) to limit minutes 
reporting for types of operational agreements to matters solely 
relating to the authorities identified in section 535.704(a)(1) of the 
proposed rule.\27\ Id.
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    \26\ Section 535.704(a)(1) of the proposed rule reads:
    [t]his 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.''
    68 FR 67545, December 2, 2003.
    \27\ OCCA suggests that a new paragraph be added to section 
535.704(d) to state,
    [t]o the extent a space charter, sailing or capacity 
rationalization agreement contains one or more types of the 
authority set forth in Sec.  535.704(a), the minutes of meetings of 
the agreement need only reflect discussions held and agreements 
reached pursuant to such authority, and need not reflect discussion 
of or agreement upon routine operational matters such as those 
identified in Sec. Sec.  535.508(b)(2), (b)(3), (b)(4) and (b)(5).
    OCCA at 22.
---------------------------------------------------------------------------

    APL concurs with OCCA's comments, and also recommends that the 
Commission delete the discussion or exchange of vessel-operating costs 
as an authority subject to the minutes requirements in section 
535.704(a)(1). APL at 9. Among its comments, APL argues that parties to 
operational agreements, such as alliance arrangements, must, by the 
very nature of their agreements, discuss vessel-operating costs. Id. at 
7. It asserts that the discussion of such costs is inherently relevant 
to making vessel deployment and operational decisions, which achieve 
efficiencies and cost savings. Id. Moreover, as mentioned above, APL 
questions the validity of the Commission's decision in FMC Docket No. 
94-31, which originally assigned reporting requirements to agreements 
with such authority. Id. at 8.
    It is not the intention of the Commission to elicit unnecessary 
information or impose an unjust reporting burden on agreement members 
under the minutes requirements. As such, we advise carriers to examine 
the authorities contained in their agreements, and where appropriate, 
eliminate any unnecessary or underutilized authority identified in 
section 535.704(a)(1) in the Final Rule, as modified below. While the 
Commission recognizes that revisions to the proposed rule would provide 
greater clarity and reduce any unnecessary reporting burden, 
particularly with respect to minor administrative and operational 
matters, the Commission disagrees with OCCA's recommendation on the 
exemption provisions in section 535.704(d).
    To exempt types of agreements and to tie minutes reporting to 
discussions solely relating to the authorities in section 
535.704(a)(1), as OCCA recommends, would undermine the clear intent of 
this rule. As previously discussed, the proposed rule updates the 
regulations to identify agreements by their authorities instead of 
narrowly defined agreement types. Similarly, the Commission believes 
that limiting minutes reporting to the authorities in section 
535.704(a)(1) might also be interpreted too narrowly and relevant 
information might be omitted from the minutes.
    The authorities in an agreement are interrelated, and the decisions 
reached pursuant to one authority may have a bearing on the decisions 
reached under the other authorities of the agreement. Without clear 
reporting in the minutes, the cause and effect relationship between the 
authorities in an agreement might not be apparent to the Commission. 
For instance, the discussion by parties of substantive operational 
matters that would affect the supply of vessel capacity under an 
agreement that also has rate authority would be relevant because supply 
can have a direct impact on the level of pricing in the marketplace. 
Consequently, such discussions must be fully addressed in minutes filed 
with the Commission.
    Instead of specifically identifying which relevant issues need to 
be addressed in the minutes, the Commission believes that the correct 
approach to add clarity and reduce the reporting burden is to identify 
those matters that can be exempted from the minutes for all agreements 
subject to this section. Therefore, section 535.704(d) has been revised 
to include the following exemptions in the Final Rule:

    (d) Exemptions. For parties to agreements subject to this 
section, the following exemptions shall apply:
    (1) Minutes of meetings between parties are not required to 
reflect discussions of matters set forth in Sec. Sec.  
535.408(b)(2), (b)(3), (b)(4)(iii), (b)(4)(iv), (b)(4)(v) and 
(b)(4)(vi); \28\
---------------------------------------------------------------------------

    \28\ These sections include the following operational and 
administrative matters: (1) The terms and conditions of space 
allocation and slot sales, the procedures for allocating space, the 
establishment of space charter rates, and the terms and conditions 
of charter parties; (2) stevedoring, terminal, and related services 
including the operation of tonnage centers or other joint container 
marshaling facility; (3) 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; (4) procedures for anticipating parties' 
space requirements; (5) maintenance of books and records; and (6) 
details as to the following matters as between parties to the 
agreement: Insurance, procedures for resolutions of disputes 
relating to loss and/or damage of cargo, and force majeure clauses.

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

[[Page 64412]]

    (2) Minutes of meetings between parties are not required to 
reflect discussions of matters set forth in Sec.  535.408(b)(5) to 
the extent that such discussions involve minor operational matters 
that have little or no impact on the frequency of vessel calls at 
ports or the amount of vessel capacity offered by the parties in the 
geographic scope of the agreement; and
    (3) Minutes of meetings between parties are not required to 
reflect 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.

    It should be noted that section 535.408(b)(4)(ii) regarding the 
collection, collation, and circulation of data and reports from or to 
members of an agreement is omitted from the exemptions in section 
535.704(d) in the Final Rule. The collection and circulation of 
commercial information in an agreement can directly impact competition 
between the agreement parties and in the agreement trade. To analyze 
the competitive impact of an agreement properly, it is important for 
the Commission to remain aware of how and what commercial information 
is being shared and used under the agreement. Consequently, a full 
account of the discussions in meetings between parties on 
administrative matters for sharing information within the agreement 
must be addressed in the minutes. For agreement filing purposes, 
however, the Commission recognizes that the regulations must provide 
parties with enough flexibility to perform their daily administrative 
functions pursuant to the express enabling authority of their 
agreements without requiring the filing of continuous agreement 
modifications on such matters. The Commission can remain informed of 
the information sharing activities of the parties through filed 
minutes.
    With respect to the discussion or exchange of vessel-operating cost 
data, the Commission finds it unnecessarily redundant to include such 
authority in section 535.704(a)(1), as was similarly the Commission's 
finding for the Information Form and Monitoring Report regulations. We 
are primarily concerned with the sharing of pricing information, which 
includes costs, as such information sharing affects price competition. 
Where vessel-operating cost data is shared for pricing purposes, the 
agreement would already be subject to the minutes requirements because 
it contains pricing authority. Agreements authorizing the exchange of 
vessel-operating cost data without any of the other authorities in 
section 535.704(a)(1), such as a simple vessel-sharing arrangement, are 
operational in nature, and, therefore, not subject to the minutes 
requirements. Accordingly, the requirement to file minutes based on 
agreement authority to discuss or exchange vessel-operating cost data 
has been deleted from section 535.704(a)(1) in the Final Rule.
    The Commission believes that these revisions in the Final Rule 
provide carriers with a sufficient degree of reporting relief sought 
under the minutes requirements. It should also be noted that parties to 
an agreement subject to this section may request a waiver for good 
cause from any of the minutes requirements in accordance with the 
procedures provided in section 535.705. The Commission would consider 
granting a waiver of some or all of the minutes requirements in cases 
where the parties could specifically demonstrate that the agreement 
raises little or no anti-competitive concern under the Shipping Act, or 
where the parties could demonstrate that such reporting would be 
irrelevant or would create an undue burden.
2. Definition of Meetings
    OCCA contends that the definition of the term ``meeting'' proposed 
in section 535.704(b) would increase the number of minutes filings and 
impose a significant burden on carriers by eliminating ``authority to 
take final action'' as a precondition to the minutes requirements and 
by including discussions among as few as two parties within the meaning 
of the term. OCCA at 21. PONL raises a number of questions on what 
constitutes a meeting under the Commission's proposed definition. PONL 
at 2. As such, PONL recommends that the Commission clarify the 
definition of a meeting for it to be meaningful, enforceable, and one 
to which carriers can adhere. Id. Specifically, PONL suggests that the 
Commission make clear that informal discussions outside the context of 
an agreement, especially when the representatives do not have 
responsibilities relating to the agreement, should not be included in 
the minutes requirements. Id.
    The Commission believes that the definition in proposed section 
535.704(b) clearly conveys the meaning and intent of the term 
``meeting,'' and has adopted this definition in the Final Rule without 
any further revision.\29\ In the NPR, we explained that:
---------------------------------------------------------------------------

    \29\ The Commission's revisions to sections 535.704(a)(1) and 
535.704(d) of the Final Rule lessen the reporting burden on carriers 
and reduce the number of minutes filings that would have been 
required by the proposed rule, while focusing minutes reporting on 
the substantive issues discussed in meetings between agreement 
parties.

    [T]he 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 the agreement, even if the discussions did not result in 
---------------------------------------------------------------------------
``final'' decisions), or on whether ``final action'' was taken.

68 FR 67531, December 2, 2003.
    Accordingly, the Commission finds the current ``final action'' 
concept for meetings to be unworkable because of the persistently 
inadequate information we have received in agreement minutes. The 
definition in the Final Rule corrects this deficiency to ensure that 
the Commission receives sufficient information on the substantive 
issues discussed among parties to agreements subject to the minutes 
requirements, as such discussions relate to the business of the 
agreement. Where informal discussions occur among three or more parties 
pertaining to the business of the agreement, this constitutes a meeting 
as defined in section 535.704(b) of the Final Rule, and minutes of such 
discussions must be filed with the Commission. The business of the 
agreement includes all of the authorities provided for in the filed 
agreement. If the discussion in a meeting is of a nature that 
implicates an authority contained in the filed agreement, minutes of 
the discussion must be filed with the Commission unless specifically 
exempted under section 535.704(d).
    With respect to electronic communication, we noted in the NPR that 
``it is not the intent of the Commission to require the filing of 
minutes for such discussions as two-party electronic communication.'' 
Id. For further clarity, we add that a meeting subject to this section 
would take place where electronic communication is used by three or 
more parties to discuss the business of the agreement, or where an 
agreement is reached between any number of parties via electronic 
communication. More

[[Page 64413]]

precisely, a meeting would occur where electronic communication 
performs the functional equivalent of a person-to-person discussion 
between parties to an agreement. Such a meeting is subject to the 
minutes requirements.\30\ This would include polls of the agreement 
membership conducted via electronic communication or telephone. The 
electronic transmission of information between or among the parties, 
which does not contemplate discussion among the parties, however, would 
not be considered a meeting subject to the minutes requirements.
---------------------------------------------------------------------------

    \30\ Where a meeting subject to this section has occurred, 
actual copies of any textual communications, which were 
electronically transmitted between the parties, are not required to 
be filed with the Commission, except for those that constitute 
documents as identified in section 535.704(c)(4) of the Final Rule. 
Rather, the minutes of such a meeting that must be filed with the 
Commission should contain a description of the discussions that took 
place via electronic communication.
---------------------------------------------------------------------------

3. Content of Minutes
    OCCA objects to section 535.704(c)(3) of the proposed rule in that 
it omits language in the current regulations which provides that the 
content of minutes need not disclose the identity of parties that 
participate in discussions or the votes taken. OCCA at 23. OCCA argues 
that if the proposed minutes requirements intend for participants in 
discussions to be identified, agreement parties would be reluctant to 
make proposals and state their positions clearly, which would have a 
``chilling effect'' on agreement meetings. Id. at 23-24. To remedy this 
concern, OCCA recommends that the Commission revise section 
535.704(c)(3) to include similar language as formerly provided.\31\ Id.
---------------------------------------------------------------------------

    \31\ OCCA suggests that section 535.704(c)(3) be revised to 
state,
    [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. Such description need not 
disclose the identity of the parties that participated in the 
discussion or the votes taken.
    OCCA at 24.
---------------------------------------------------------------------------

    OCCA further objects to section 535.704(c)(4) of the proposed rule 
that requires the submission of documents distributed, discussed, or 
exchanged at meetings between agreement parties. Id. OCCA argues that 
the proposed requirement is so expansive that it would disclose 
documents reflecting individual positions or proposals circulated at 
meetings whether or not such matters were adopted by the agreement. Id. 
OCCA also claims that disclosing the identity of the individual 
positions or proposals of parties under the proposed minutes 
requirements would have a ``chilling effect'' on agreement meetings, 
and that the submission of documents, as proposed, would create a huge 
burden for the carriers and the Commission. Id. at 23-25. OCCA 
recommends that the Commission revise section 535.704(c)(4) to limit 
the submission of documents to only those relating to the subject 
matter for which minutes would be filed.\32\ Id. at 25. In this manner, 
OCCA believes that the minutes requirements would preserve anonymity by 
enabling agreement minutes to reflect proposals and discussions without 
attributing them to a particular party. Id.
---------------------------------------------------------------------------

    \32\ Specifically, OCCA suggests that section 535.704(c)(4) be 
revised to read,
    [a]ny report, statistical compilation, analytical study, or 
other similar work in written or electronic format which is 
distributed, exchanged or discussed at the meeting. Memoranda or 
proposals prepared by one or more member lines or the agreement 
secretariat (other than reports, statistical compilations, 
analytical studies or similar works) need not be provided if the 
minutes reflect discussion of the subject of the memorandum or 
proposal.
    OCCA at 25.
---------------------------------------------------------------------------

    The Commission agrees with OCCA to the extent that the proposed 
minutes requirements were not intended to disclose the identity of 
parties to individual proposals, positions, or votes that transpired at 
agreement meetings. Accordingly, section 535.704(c)(3) has been revised 
to include OCCA's recommended language in the Final Rule.
    With respect to the submission of documents, the Commission 
believes that OCCA's recommendation to provide minutes reporting in 
lieu of submitting certain types of documents would undermine the 
intent of this requirement. Specifically, this requirement is aimed at 
uncovering and obtaining copies of all relevant documents circulated at 
agreement meetings.\33\
---------------------------------------------------------------------------

    \33\ We note that documents circulated at meetings pertaining to 
matters exempted in section 535.704(d) of the Final Rule are not 
required to be submitted with minutes filings.
---------------------------------------------------------------------------

    In the NPR, we explained that:

    [I]n 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.

68 FR 67532, December 2, 2003.
    On the issue of burden, we further noted in the NPR that:

    The Commission considered, as an alternative, requiring 
agreements to submit a summary of all documents discussed at minuted 
meetings in lieu of the actual document. 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.

Id.
    The above notwithstanding, the Commission understands OCCA's 
concerns for protecting the anonymity of the individual parties with 
respect to the submission of documents. The Commission is not overly 
concerned with who circulated a proposal at a meeting, but rather what 
proposals were circulated and the discussions or decisions that took 
place. Consistent with the revised language added to section 
535.704(c)(3), section 535.704(c)(4) in the Final Rule has been revised 
to add the following statement:

    [a]ny documents submitted to the Commission pursuant to this 
section need not disclose the identity of the party or parties that 
circulated the document at the meeting.

4. Filing Time for Minutes
    OCCA objects to the shorter filing time for minutes as proposed in 
the NPR, which was reduced from 30 days to 15 days after a meeting. 
OCCA at 26. It argues that under the new minutes requirements, and the 
resulting increase in the number of minutes filings, agreements will 
need more time, not less, to file minutes in compliance with the 
regulations. Id. OCCA recommends that if a shorter period is necessary, 
the Commission revise the rule by adjusting the filing time to 21 days 
after a meeting. Id. PONL concurs with OCCA's recommendation and 
further recommends that minutes of meetings between two or three 
agreement parties be permitted to file within 30 days because an 
administrator for the agreement might not necessarily be present at 
such a meeting. PONL at 3.
    OCCA requests that the Commission stay the implementation of the 
shorter filing time for six months after the Final Rule becomes 
effective, whereby agreement parties may acclimate to the new 
regulations. OCCA at 26-27. OCCA also seeks clarification to ensure 
that the new regulations will only apply to meetings after the Final 
Rule becomes effective. Id. at 27.
    In consideration of these concerns, we have revised the Final Rule 
by adjusting the time for filing minutes to 21 days after a meeting. 
The revised filing time, however, shall apply to all meetings subject 
to the minutes requirements of the Final Rule regardless of the number

[[Page 64414]]

of agreement parties participating in a meeting. To craft regulations 
with varying filing periods based on the number of participants in a 
meeting would overly complicate the filing process. Moreover, we 
anticipate that, in general, minutes of meetings between two or three 
agreement parties would be less involved, and thus easier to prepare 
for filing, than minutes of meetings with more attendees.
    OCCA's request for a stay on the implementation of the shorter 
filing time is denied.\34\ As with other sections of this rule, the new 
minutes requirements shall become effective 60 days after the Final 
Rule is published in the Federal Register, at which time meetings 
between parties in agreements identified in section 535.704(a)(1) of 
the Final Rule shall be subject to the new regulations.
---------------------------------------------------------------------------

    \34\ Again, the Commission believes that the revisions to the 
minutes requirements in the Final Rule, which reduce the reporting 
burden and the number of minutes filings that would have been 
required by the NPR, provide sufficient relief for agreement parties 
subject to this section.
---------------------------------------------------------------------------

5. Liability for the Filing of Minutes
    In response to the proposed minutes requirements, PONL raises 
questions regarding who has the obligation to file minutes and who is 
liable for any violation of the filing requirements. PONL at 2. PONL 
believes that the failure of two or three agreement parties to file 
minutes of their meetings should not extend liability to the other 
agreement parties that did not participate in the meetings. Id. at 3.
    The Commission disagrees with PONL's view regarding the liability 
of agreement parties to file minutes of their meetings. It is our 
policy that the obligation and liability for complying with filing 
requirements pertaining to an agreement, whether minutes, Information 
Forms, Monitoring Reports, or other documentation, are shared equally 
by all parties to the agreement.
    In terms of the filing practices of agreements, we note that 
agreements often choose to divide the various filing requirements among 
themselves or through a third party, such as an agreement secretariat 
or a filing counsel. Even though some agreements file portions of their 
data individually, such as Monitoring Report information, all parties 
of an agreement are jointly liable for the failure of the agreement to 
comply with the regulations.\35\ By promulgating this rule, the 
Commission has not altered liability for violations. One party's 
failure to file imposes liability on the entire agreement, as well as 
its members. Under the new regulations, a party to an agreement 
continues to be liable for the actions, and failures, of the other 
parties to the agreement.\36\
---------------------------------------------------------------------------

    \35\ For some agreements, the Commission has granted a waiver to 
allow each party to file its commercially sensitive data separately 
under the Monitoring Report requirements. These are usually smaller 
agreements that do not employ a third party to handle such matters. 
Nevertheless, where one party fails to file its required data, the 
entire agreement fails to meet the Monitoring Report requirements in 
violation of the Commission's regulations and may be subject to 
civil penalties under section 13(a) of the Shipping Act. 46 U.S.C. 
app. 1712(a).
    \36\ We have also clarified the proposed rule at section 535.902 
regarding falsification of reports to encompass all of the 
information and reporting requirements contained in subparts E and G 
of part 535.
---------------------------------------------------------------------------

V. Statutory Reviews

    The reporting, recordkeeping, and disclosure requirements contained 
in this Final 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); 250 hours per quarterly response for 
Monitoring Reports from major pricing agreements; 170 hours per 
quarterly response for Monitoring Reports from less anti-competitive 
pricing 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 35,770 
hours per annum, a reduction of 59.8 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.
    The Chairman of the Federal Maritime Commission certifies, pursuant 
to section 605 of the Regulatory Flexibility Act, 5 U.S.C. 605, that 
this Final Rule will not 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 Fairness 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.


0
The Federal Maritime Commission is amending parts 501 and 535 of 
subchapter A and subchapter B, respectively, of chapter IV of title 46 
of the Code of Federal Regulations as follows:

PART 501--THE FEDERAL MARITIME COMMISSION--GENERAL

0
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, 79 Stat. 195; 5 
CFR part 2638; Pub. L. 89-777, 80 Stat. 1356; Pub. L. 104-320, 110 
Stat. 3870.


0
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 subpart E of part 535.
    (d) Authority to grant or deny applications filed under Sec.  
535.705 of 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.  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.

0
3. Revise part 535 to read as follows:

[[Page 64415]]

PART 535--OCEAN COMMON CARRIER AND MARINE TERMINAL OPERATOR 
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 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. 1701-1707, 1709-1710, 1712 
and 1714-1718; Pub. L. 105-258, 112 Stat. 1902 (46 U.S.C. 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 types 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 exempt 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 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;

[[Page 64416]]

    (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.
    (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 in a joint service may occur, and 
there is no competition between members for cargo 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

[[Page 64417]]

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 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 the 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 makes 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 on 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; 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

[[Page 64418]]

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 
unlicensed 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 of 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 or a portion thereof;
    (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 agreements and that does not contain ratemaking, 
pooling, joint service, sailing or space chartering authority; or
    (4) Changes the officials of the agreement and delegations of 
authority.
    (c) A copy of a modification described in (a) or (b) of this 
section 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-

[[Page 64419]]

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 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.

[[Page 64420]]

    (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 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 which contains none of the authorities listed in 
535.502(b) and for which the combined market share of the parties in 
any of the agreement's sub-trade is either:
    (1) Less than 30 percent, if all parties are members of another 
agreement in the same trade or sub-trade containing any of the 
authorities listed in Sec.  535.502(b); or
    (2) Less than 35 percent, if all parties are not members of another 
agreement in the same trade or sub-trade containing any of the 
authorities listed in Sec.  535.502(b).
    (b) Low market share agreements are exempt from the waiting period 
requirement of the Act and 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.
    (d) The filing fee for low market share agreements is provided in 
Sec.  535.401(g).

[[Page 64421]]

Sec.  535.312  Vessel charter party-exemption.

    (a) For purposes of this section, vessel charter party shall mean 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; 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 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.

[[Page 64422]]

    (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, 535.402, 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) Are listed 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 procedures for allocating space, the establishment of space charter 
rates, and the 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;
    (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;
    (iv) Procedures for anticipating parties' space requirements;
    (v) Maintenance of books and records; and
    (vi) Details as to the following matters as between parties to the 
agreement: insurance, procedures for resolutions of disputes relating 
to loss and/or damage of cargo, and force majeure clauses;
    (5) The following operational matters:
    (i) Port rotations and schedule adjustments; and
    (ii) Changes in vessel size, number of vessels, or vessel 
substitution or replacement, if the resulting change is within a 
capacity range specified in the agreement; 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 
http://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;
    (b) Modifications to an agreement that add any of the following 
authorities:
    (1) 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;
    (2) The discussion of, or agreement on, capacity rationalization;
    (3) The establishment of a joint service;
    (4) The pooling or division of cargo traffic, earnings, or revenues 
and/or losses; or
    (5) The discussion of, or agreement on, any service contract 
matter; and
    (c) Modifications that expand the geographic scope of an agreement 
containing any authority identified in Sec.  535.502(b).

[[Page 64423]]

Sec.  535.503  Information Form.

    (a) The Information Form, with instructions, for agreements and 
modifications to agreements subject to this subpart, are 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; or the rationalization of sailings or 
services relating to a schedule of ports, the frequency of vessel calls 
at ports, 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 upon, 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 cargo traffic, earnings, or 
revenues and/or losses; or
    (iv) The discussion of, or agreement on, any service contract 
matter.


Sec.  535.504  Application for waiver.

    (a) Upon a showing of good cause, the Commission may waive any part 
of the Information Form requirements in this subpart.
    (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 substantially with the filing and Information Form 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 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) A 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. A new 45-day waiting period begins 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.


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

[[Page 64424]]

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 (14) 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 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 will publish a notice in the Federal Register 
that it has requested additional information and serve that notice on 
any commenting parties. The notice will 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.
    (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

[[Page 64425]]

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 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 21 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; 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 upon, 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 cargo traffic, earnings, or 
revenues and/or losses; or
    (iv) The discussion of, or agreement on, any service contract 
matter.
    (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 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 2(C) 
of section I of the Monitoring Report shall submit a narrative 
statement on any significant reductions in vessel capacity that the 
parties will implement under the agreement. The term ``a significant 
reduction'' is defined in appendix B. The narrative statement shall be 
submitted to the Director, Bureau of Trade Analysis, no later than 15 
days after a significant reduction in vessel capacity has been agreed 
upon by the parties but prior to the implementation of the actual 
reduction 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.


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 or charges, whether in tariffs or service contracts; pooling or 
apportionment of cargo traffic; discussion of revenues, losses, or 
earnings; or discussion or

[[Page 64426]]

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 participants 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. Such description need not disclose 
the identity of the parties that participated in the discussion or the 
votes taken; 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. Any documents 
submitted to the Commission pursuant to this section need not disclose 
the identity of the party or parties that circulated the document at 
the meeting.
    (d) Exemption. For parties to agreements subject to this section, 
the following exemption shall apply:
    (1) Minutes of meetings between parties are not required to reflect 
discussions of matters set forth in Sec.  535.408(b)(2), (b)(3), 
(b)(4)(iii), (b)(4)(v), and (b)(4)(vi);
    (2) Minutes of meetings between parties are not required to reflect 
discussion of matters set forth in Sec.  535.408(b)(5) to the extent 
that such discussions involve minor operational matters that have 
little or no impact on the frequency of vessel calls at ports or the 
amount of vessel capacity offered by the parties in the geographic 
scope of the agreement; and
    (3) Minutes of meetings between parties are not required to reflect 
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 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 a 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

[[Page 64427]]

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 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 Sec.  535.801 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-
0001. 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 in the following table:

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

Appendix A to Part 535--Information Form and Instructions

Information Form Instructions

    1. 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

[[Page 64428]]

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 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.
    2. 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, as opposed to the term 
``sub-trade,'' which is defined for reporting purposes as the scope 
of all liner movements between each U.S. port range and each foreign 
country within the 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 identified in 46 CFR 
535.502. Parties to such agreements must complete parts 1 through 4 
of this section. The authorities listed in part 4 of this section do 
not necessarily include all of the authorities that must be set 
forth in an agreement filed under the Act. The specific authorities 
between the parties to an agreement, however, must be set forth, 
clearly and completely, in a filed agreement in accordance with 46 
CFR 535.402.

Part 1

    State the full name of the agreement.

Part 2

    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, 
and 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 
cargo traffic or revenues.

Part 4(D)

    Identify whether the agreement authorizes the parties to 
discuss, or agree on, any service contract matter.

Part 4(E)

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

Part 4(F)

    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(G)

    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(E) of this section.

Part 4(H)

    Identify whether the agreement authorizes the parties to 
rationalize sailings or services relating to a schedule of ports, 
the frequency of vessel calls at ports, or the size and capacity of 
vessels for deployment. This authority does not include the 
establishment of a joint service or capacity rationalization as 
referred to in parts 4(B) and 4(E) 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; or b) the 
rationalization of sailings or services relating to a schedule of 
ports, the frequency of vessel calls at ports, or the size and 
capacity of vessels for deployment. Such authorities do not include 
the establishment of a ``joint service,'' nor ``capacity 
rationalization'' as these terms are defined in 46 CFR 535.104 (o) 
and (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 on any significant changes, 
anticipated or planned to be implemented when the agreement goes 
into effect, in the number of vessel calls at a port for the 
parties' liner services that would be covered by the agreement 
within the entire geographic scope of the agreement. Specifically, 
explain the nature of the significant change and its effect on the 
frequency of vessel calls at the port for the liner service that 
would be subject to the change. For purposes of this part, a 
significant change refers to an increase or a decrease in the number 
of vessel calls at a port for a fixed, seasonally planned, or 
indefinite period of time. A significant change excludes an 
incidental or temporary alteration in the number of vessel calls at 
a port, or an operational change in vessel calls that would have 
little or no impact on the number of vessel calls at a port. If no 
significant 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 and 2 of this section.

Part 1(A)

    1. 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.
    2. 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.

[[Page 64429]]

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.

Part 1(C)

    Provide a narrative statement on any significant changes, 
anticipated or planned to be implemented when the agreement goes 
into effect, in the amounts of vessel capacity for the parties' 
liner services that would be covered by the agreement within the 
entire geographic scope of the agreement. Specifically, explain the 
nature of and the reasons for the significant change and its effects 
on the liner service and the total amount of vessel capacity for 
such service that would be subject to the change. For purposes of 
this part, a significant change refers to the removal from or 
addition to a liner service of vessels or vessel space for a fixed, 
seasonally planned, or indefinite period of time. A significant 
change excludes instances when vessels may be temporarily 
repositioned or shifted from one service to another, or when vessel 
space may be temporarily altered, or when vessels are removed from a 
liner service and vessels of similar capacity are substituted. It 
also excludes operational changes in vessels or vessel space that 
would have little or no impact on the amount of vessel capacity 
offered in a liner service or a trade. If no significant change is 
anticipated or planned, it shall be noted with the term ``none'' in 
response to part 1(C) of this section.

Part 2(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 2(B)

    Provide a narrative statement on any significant changes, 
anticipated or planned to be implemented when the agreement goes 
into effect, in the number of vessel calls at a port for the 
parties' liner services that would be covered by the agreement 
within the entire geographic scope of the agreement. Specifically, 
explain the nature of the significant change and its effect on the 
frequency of vessel calls at the port for the liner service that 
would be subject to the change. For purposes of this part, a 
significant change refers to an increase or a decrease in the number 
of vessel calls at a port for a fixed, seasonally planned, or 
indefinite period of time. A significant change excludes an 
incidental or temporary alteration in the number of vessel calls at 
a port, or an operational change in vessel calls that would have 
little or no impact on the number of vessel calls at a port. If no 
significant change is anticipated or planned, it shall be noted with 
the term ``none'' in response to part 2(B) 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 
cargo traffic, earnings, or revenues and/or losses; or d) the 
discussion of, or agreement on, any service contract matter. Parties 
to such agreements must complete parts 1 through 5 of this section.

Part 1

    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.
    2. U.S. port ranges are defined as follows:
    a. 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.
    b. 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.
    3. An application may be filed for a waiver of the definition of 
``sub-trade'' under the procedures 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.
    4. 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.
    5. If 50 percent or more of the total liner cargo carried by the 
parties in the entire agreement scope 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

    1. 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.
    2. 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

[[Page 64430]]

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 charges, 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 
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 on any significant changes, 
anticipated or planned for when the agreement goes into effect, in 
the amounts of vessel capacity for the parties' liner services that 
would fall under the agreement within the entire geographic scope of 
the agreement. Specifically, explain the nature of and reasons for 
the significant change and its effects on the liner service and the 
total amount of vessel capacity for such service that would be 
subject to the change. For purposes of this part, a significant 
change refers to the removal from or addition to a liner service of 
vessels or vessel space for a fixed, seasonally planned, or 
indefinite period of time. A significant change excludes instances 
when vessels may be temporarily repositioned or shifted from one 
service to another, or when vessel space may be temporarily altered, 
or when vessels are removed from a liner service and vessels of 
similar capacity are substituted. It also excludes operational 
changes in vessels or vessel space that would have little or no 
impact on the amount of vessel capacity offered in a liner service 
or a trade. 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 on any significant changes, 
anticipated or planned for when the agreement goes into effect, in 
the number of vessel calls at a port for the parties' liner services 
that would fall under the agreement within the entire geographic 
scope of the agreement. Specifically, explain the nature of the 
significant change and its effect on the frequency of vessel calls 
at the port for the liner service that would be subject to the 
change. For purposes of this part, a significant change refers to an 
increase or decrease in the number of vessel calls at a port for a 
fixed, seasonally planned, or indefinite period of time. A 
significant change excludes an incidental or temporary alteration in 
vessel calls at a port, or an operational change in vessel calls 
that would have little or no impact on the number of vessel calls at 
a port. If no significant 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.

Privacy Act and Paperwork Reduction Act Notice

    1. The collection of this information is authorized generally by 
section 15 of the Shipping Act of 1984, 46 U.S.C. app. Sec.  1714. 
The submission of this form is mandatory for parties to agreements 
that contain certain authorities.
    2. You are not required to provide information requested on a 
form that is subject to the Paperwork Reduction Act unless the form 
displays a valid OMB control number. The valid control number for 
this information collection is 3072-0045.
    3. The time needed to complete and submit this form will vary 
depending on individual circumstances. The total estimated average 
time to complete this form is about 30 hours. This estimate includes 
reading the instructions, collecting necessary data, and compiling 
that data.
    4. If you have any comments concerning the accuracy of the above 
estimate or have any suggestions for simplifying the form, please 
contact Secretary, Federal Maritime Commission, 800 North Capitol 
Street, NW., Washington, DC 20573-0001; or by e-mail 
[email protected].

FMC Form-150                                   OMB Control No. 3072-0045

[[Page 64431]]

 
                       FEDERAL MARITIME COMMISSION
                          INFORMATION FORM FOR
            AGREEMENTS BETWEEN OR AMONG OCEAN COMMON CARRIERS
 

Section I

Part 1

Agreement Name:--------------------------------------------------------

Part 2

Narrative statement on agreement purpose, and 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 agree upon rates    Yes [squ]   No [squ]
     or charges?..................................
    (B) Joint service?............................  Yes [squ]   No [squ]
    (C) Pooling of cargo traffic or revenues?.....  Yes [squ]   No [squ]
    (D) Authority to discuss or agree on service    Yes [squ]   No [squ]
     contracts and their terms?...................
    (E) Authority to discuss or agree on capacity   Yes [squ]   No [squ]
     rationalization?.............................
    (F) Conditions or restrictions on the parties'  Yes [squ]   No [squ]
     agreement participation, and/or use or
     offering of competing services in the
     geographic scope?............................
    (G) Authority to charter vessel space?........  Yes [squ]   No [squ]
    (H) Authority to rationalize sailings or        Yes [squ]   No [squ]
     services?....................................
 

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 Port 4 Etc. . . .
Carrier A [Name]
Carrier B
Carrier C
Etc. . . .

(B) Narrative statement on significant changes in vessel calls:--------

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

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

Section III

Part 1 Vessel Capacity And Utilization

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [Calendar Quarter]

 
                                            (A)  Vessel
                                             Capacity           (B)
                                          [TEUs or other    Utilization
                                              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 significant changes in vessel capacity:-----

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

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

Part 2 Vessel Calls

(A) Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [12-Months]
[Port Names] Port 1 Port 2 Port 3 Port 4 Etc. . . .
Carrier A [Name]

[[Page 64432]]

Carrier B
Carrier C
Etc. . . .

(B) 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 units]       Percent
 
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 2 Total Liner Cargo and Revenues

Agreement-Wide Trade: U.S. Inbound (or Outbound) Name
Time Period: [12-Months]

 
                                                                       Total         TEUs  [or        Average
                             [Name]                                  revenues      other units]       revenue
 
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
    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
                                             capacity           (B)
                                          [TEUs or other    Utilization
                                              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

[[Page 64433]]

 
    Etc. . . .
Etc. . . .
 

(C) Narrative statement on significant changes in vessel capacity:-----

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

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

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 Port 4 Etc. . . .
Carrier A [Name]
Carrier B
Carrier C
Etc. . . .
(B) Narrative statement on significant changes in vessel calls:--------

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

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

Section V

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

Monitoring Report Instructions

    1. 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.
    2. 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.
    3. 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; 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, as opposed to the term 
``sub-trade,'' which is defined for reporting purposes as the scope 
of all liner movements

[[Page 64434]]

between each U.S. port range and each foreign country within the 
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)

    1. 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.
    2. 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 2(C)

    Provide a narrative statement on any significant reductions, to 
be implemented under the agreement, in the amounts of vessel 
capacity for the parties' liner services that are covered by the 
agreement within the entire geographic scope of the agreement. 
Specifically, explain the nature of and the reasons for the 
significant reduction and its effects on the liner service and the 
total amount of vessel capacity for such service that would be 
subject to the reduction. The narrative statement for part 2(C) of 
this section shall be submitted to the Director, Bureau of Trade 
Analysis, no later than 15 days after a significant reduction in the 
amount of vessel capacity has been agreed upon by the parties but 
prior to the implementation of the actual reduction under the 
agreement. For purposes of this part, a significant reduction refers 
to the removal from a liner service of vessels or vessel space for a 
fixed, seasonally planned, or indefinite period of time. A 
significant reduction excludes instances when vessels may be 
temporarily repositioned or shifted from one service to another, or 
when vessel space may be temporarily altered, or when vessels are 
removed from a liner service and vessels of similar or greater 
capacity are substituted. It also excludes operational changes in 
vessels or vessel space that would have little or no impact on the 
amount of vessel capacity offered in a liner service or a trade.

Part 2(D)

    Excluding those changes already reported in part 2(C) of this 
section, provide a narrative statement on any other significant 
changes, implemented under the agreement during the preceding 
calendar quarter, in the amounts of vessel capacity for the parties' 
liner services that are covered by the agreement within the entire 
geographic scope of the agreement. Specifically, explain the nature 
of and the reasons for the significant change and its effects on the 
liner service and the total amount of vessel capacity for such 
service that was subject to the change. For purposes of this part, a 
significant change refers to the addition to a liner service of 
vessels or vessel space for a fixed, seasonally planned, or 
indefinite period of time. A significant change excludes instances 
when vessels were temporarily repositioned or shifted from one 
service to another, or when vessel space was temporarily altered, or 
when vessels were removed from a liner service and vessels of 
similar capacity were substituted. It also excludes operational 
changes in vessels or vessel space that had little or no impact on 
the amount of vessel capacity offered in a liner service or a trade. 
If no significant change was implemented, it shall be noted with the 
term ``none'' in response to part 2(D) of this section.

Part 3

    Provide a narrative statement on any significant changes, 
implemented under the agreement during the calendar quarter, in the 
number of vessel calls at a port for the parties' liner services 
that are covered by the agreement within the entire geographic scope 
of the agreement. Specifically, explain the nature of the 
significant change and its effect on the frequency of vessel calls 
at the port for the liner service that was subject to the change. 
For purposes of this part, a significant change refers to an 
increase or a decrease in the number of vessel calls at a port for a 
fixed, seasonally planned, or indefinite period of time. A 
significant change excludes an incidental or temporary alteration in 
the number of vessel calls at a port, or an operational change in 
vessel calls that had little or no impact on the number of vessel 
calls at a port. If no significant change was implemented, it shall 
be noted with the term ``none'' in response to part 3 of this 
section.

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 
cargo traffic, earnings, or revenues and/or losses; or d) the 
discussion of, or agreement on, any service contract matter. 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

    1. 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.
    2. U.S. port ranges are defined as follows:
    a. 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.
    b. 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.
    3. An application may be filed for a waiver of the definition of 
``sub-trade'' under the procedures 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

[[Page 64435]]

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.
    4. 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.
    5. If 50 percent or more of the total liner cargo carried by the 
parties in the entire agreement scope 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

    1. 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.
    2. 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 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 charges, 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 on any significant changes in the 
amount 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. 
Specifically, explain the nature of and the reasons for the 
significant change and its effects on the liner service and the 
total amount of vessel capacity for such service that was subject to 
the change. For purposes of this part, a significant change refers 
to the removal from or addition to a liner service of vessels or 
vessel space for a fixed, seasonally planned, or indefinite period 
of time. A significant change would exclude instances when vessels 
were temporarily repositioned or shifted from one service to 
another, or when vessel space was temporarily altered, or when 
vessels were removed from a liner service and vessels of similar 
capacity were substituted. It also excludes operational changes in 
vessels and vessel space that had little or no impact on the amount 
of vessel capacity offered in a liner service or a trade. 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 on any significant changes in the 
number of vessel calls at a port 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. 
Specifically, explain the nature of the significant change and its 
effect on the frequency of vessel calls at the port for the liner 
service that was subject to the change. For purposes of this part, a 
significant change refers to an increase or a decrease in the number 
of vessel calls at a port for a fixed, seasonally planned, or 
indefinite period of time. A significant change excludes an 
incidental or temporary alteration in the number of vessel calls at 
a port, or an operational change in vessel calls that had little or 
no impact on the number of vessel calls at a port. If no significant 
change occurred during the calendar quarter, it shall

[[Page 64436]]

be noted with the term ``none'' in response to part 6 of this 
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.

Privacy Act and Paperwork Reduction Act Notice

    1. The collection of this information is authorized generally by 
section 15 of the Shipping Act of 1984, 46 U.S.C. app. Sec.  1714. 
The submission of this form is mandatory for parties to agreements 
that contain certain authorities.
    2. You are not required to provide information requested on a 
form that is subject to the Paperwork Reduction Act unless the form 
displays a valid OMB control number. The valid control number for 
this information collection is 3072-0045.
    3. The time needed to complete and submit this form will vary 
depending on individual circumstances. The total estimated average 
time to complete this form is about 63.5 hours. This estimate 
includes reading the instructions, collecting necessary data, and 
compiling that data.
    4. If you have any comments concerning the accuracy of the above 
estimate or have any suggestions for simplifying the form, please 
contact Secretary, Federal Maritime Commission, 800 North Capitol 
Street, NW., Washington, DC 20573-0001; or by e-mail 
[email protected].

FMC Form-151                                   OMB Control No. 3072-0045
                       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]

 
                                            (A)  Vessel
                                             capacity           (B)
                                          [TEUs or other    Utilization
                                              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 significant reductions in vessel capacity to 
be implemented (submit statement no later than 15 days after a 
reduction has been agreed upon but prior to the implementation of the 
reduction):------------------------------------------------------------

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

(D) Narrative statement on other significant changes in vessel capacity 
implemented during the calendar quarter:-------------------------------

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

Part 3 Vessel Calls

Narrative statement on significant changes in vessel calls implemented 
during the calendar quarter:-------------------------------------------

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

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  [or
                                           other units]       Percent
 
Agreement Market Share:
    Line A [Name].......................           X,XXX              XX

[[Page 64437]]

 
    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]

 
                                                                                  TEUs [or other      Average
                             [Name]                               Total revenues      units]          revenue
 
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
                                             capacity           (B)
                                          [TEUs or other    Utilization
                                              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 significant changes in vessel capacity that 
occurred during the calendar quarter:----------------------------------

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

Part 6 Vessel Calls

Narrative statement on significant changes in vessel calls 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--------------------------------------------------------------


[[Page 64438]]

-----------------------------------------------------------------------
(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 L. VanBrakle,
Secretary.
[FR Doc. 04-24438 Filed 11-3-04; 8:45 am]
BILLING CODE 6730-01-P