[Federal Register Volume 75, Number 124 (Tuesday, June 29, 2010)]
[Notices]
[Pages 37435-37436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-15724]


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FEDERAL MARITIME COMMISSION


Fact Finding Investigation No. 27; Potentially Unlawful, Unfair 
or Deceptive Ocean Transportation Practices Related to the Movement of 
Household Goods or Personal Property in U.S.-Foreign Oceanborne Trades; 
Order of Investigation

    Pursuant to the Shipping Act of 1984, 46 U.S.C. 40101 et seq. 
(``Shipping Act''), the Federal Maritime Commission (``FMC'' or 
``Commission'') is charged with regulating the common carriage of goods 
by water in the foreign commerce of the United States (``liner 
service''). In doing so, the Commission must be mindful of the purpose 
of its regulation, which includes protecting the public from unlawful, 
unfair or deceptive ocean transportation practices and resolving 
shipping disputes in the movement of cargo in U.S.-foreign oceanborne 
trades.
    Each year, the Commission receives a substantial number of 
complaints from individuals that have experienced various problems with 
their international household goods or personal property shipments. 
Between 2005 and 2009, the Commission received over 2,500 consumer 
complaints related to household goods moving companies transporting 
household goods or personal property between various locations in the 
United States and foreign destinations. Many of those complaints are 
filed by individuals who are first-time or very occasional users of 
international shipping services. This issue is a serious and 
substantial consumer protection problem within the Commission's area of 
responsibility.
    Typical complaints allege failure to deliver the cargo and refusal 
to return the pre-paid ocean freight; loss of the cargo; significant 
delay in delivery; charges to the shipper for marine insurance that was 
never obtained; misinformation as to the whereabouts of the cargo; 
significantly inflated charges after the cargo was tendered and threats 
to withhold the shipment unless the increased freight was paid; or 
failure to pay the common carrier engaged by the company as another 
intermediary. In many cases, a shipper has been forced to pay another 
carrier or warehouse a

[[Page 37436]]

second time in order to have the cargo released.
    Individuals and companies have held themselves out to perform ocean 
transportation to the public and accepted responsibility for the 
transportation of these shipments without obtaining an Ocean 
Transportation Intermediary (``OTI'') license and providing required 
proof of financial responsibility to the FMC. In many cases, these 
individuals and corporations operate without publishing a tariff 
showing its rates and charges, and do not observe just and reasonable 
regulations and practices relating to or connected with receiving, 
handling, storing or delivering property.
    Section 19 of the Shipping Act of 1984 (``the Act''), 46 U.S.C. 
40901(a), prohibits any person from providing OTI services prior to 
being issued a license from the Commission and obtaining a bond, proof 
of insurance or other surety in a form and amount determined by the 
Commission to ensure financial responsibility. An OTI is defined as 
either a freight forwarder or a non-vessel-operating common carrier 
(``NVOCC''). 46 U.S.C. 40102(19). Any person operating as an NVOCC in 
the United States must provide evidence of financial responsibility in 
the amount of $75,000. 46 CFR 515.21(a)(2).
    Furthermore, section 8(a) of the Act, 46 U.S.C. 40501(a), requires 
NVOCCs to maintain tariffs showing their rates, charges, 
classifications and practices. These tariffs must be open to the public 
for inspection in an automated tariff system. The Commission's 
regulations at 46 C.F.R. Sec.  520.3 affirm this statutory requirement 
by directing each NVOCC to notify the Commission, prior to providing 
transportation services, of the location of its tariffs, as well as the 
publisher used to maintain those tariffs by filing a Form FMC-1. 
Section 10(b)(11) of the Act, 46 U.S.C. 41104(11), prohibits a common 
carrier from knowingly and willfully accepting cargo from or 
transporting cargo for the account of an OTI that does not have a 
tariff or a bond (an NVOCC). Finally, under section 10(d)(1), no common 
carrier or ocean transportation intermediary may fail to establish, 
observe, and enforce just and reasonable regulations and practices 
relating to or connected with receiving, handling, storing or 
delivering property. 46 U.S.C. 41102(c).
    Therefore, consistent with its statutory duty, the Commission 
hereby orders a non-adjudicatory investigation to develop a record of 
the nature, scope and frequency of potentially unlawful, unfair or 
deceptive ocean transportation practices by household goods movers in 
the movement of cargo in U.S.-foreign oceanborne trades.
    The Commission will use the information obtained in this 
investigation and recommendations of the Fact-Finding Officer (``FFO'') 
to determine its policies with respect to compliance, consumer 
protection, and enforcement issues.
    Specifically, the FFO named herein is to develop a record on the 
following:

The nature and scope of the problem presented by potentially unfair, 
unlawful or deceptive practices in the shipping of household goods 
or personal property in U.S.-foreign oceanborne trades.

    The FFO is to report to the Commission within the time specified 
herein, with recommendations for any further Commission action, 
including any policies, rulemaking proceedings, or other actions 
warranted by the factual record developed in this proceeding.
    Interested persons are invited and encouraged to contact the FFO 
named herein, at (202) 523-5712 (telephone), (202) 275-0522 
(facsimile), or by e-mail at [email protected], should they wish to 
provide testimony or evidence, or to contribute in any other manner to 
the development of a complete factual record in this proceeding.
    Therefore, it is ordered, That, pursuant to 46 U.S.C. 41302, 40502 
to 40503, 41101 to 41109, 41301 to 41309, and 40104, and 46 CFR 502.281 
to 502.291, a non-adjudicatory investigation is hereby instituted into 
the nature, scope and frequency of potentially unlawful, unfair or 
deceptive ocean transportation practices related to the carriage of 
household goods or personal property in the oceanborne foreign commerce 
of the United States, in order to gather facts and establish a record 
related to the issues set forth above and to provide a basis for any 
subsequent action by the Commission;
    It is further ordered, That, pursuant to 46 CFR 502.284 and 502.25, 
Commissioner Michael A. Khouri is designated as the FFO. The FFO shall 
have, pursuant to 46 CFR 502.281 to 502.291, full authority to hold 
public or non-public sessions, to resort to all compulsory process 
authorized by law (including the issuance of subpoenas ad testifacandum 
and duces tecum), to administer oaths, to require reports, and to 
perform such other duties as may be necessary in accordance with the 
laws of the United States and the regulations of the Commission. The 
FFO shall be assisted by staff members as may be assigned by the 
Commission's Managing Director, and the FFO is authorized to delegate 
any authority enumerated herein to any assigned staff member as the FFO 
determines to be necessary.
    It is further ordered, That the FFO shall issue an interim report 
of findings and recommendations no later than November 15, 2010, a 
final report of findings and recommendations no later than February 15, 
2011, and provide further interim reports if it appears that more 
immediate Commission action is necessary, such reports to remain 
confidential unless and until the Commission provides otherwise;
    It is further ordered, That this proceeding shall be discontinued 
upon acceptance of the final report of findings and recommendations by 
the Commission, unless otherwise ordered by the Commission; and
    It is futher ordered, That notice of this Order be published in the 
Federal Register.

    By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. 2010-15724 Filed 6-28-10; 8:45 am]
BILLING CODE 6730-01-P