FR Doc 04-24438

[Federal Register: November 4, 2004 (Volume 69, Number 213)]
[Rules and Regulations]
[Page 64397-64438]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04no04-9]

[[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

[[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: GeneralCounsel@fmc.gov.
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: tradeanalysis@fmc.gov.

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,

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\
---------------------------------------------------------------------------

\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.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

\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)

Part 2(B)

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
secretary@fmc.gov.

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. . . .

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

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]

[[Page 64433]]

Etc. . . .
Etc. . . .

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

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

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
secretary@fmc.gov.

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

Part 4 Top Liner Commodities

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

[Name] Carrier A Carrier B 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]

(C) Narrative statement on significant changes in vessel capacity that
occurred during the calendar quarter:----------------------------------

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Part 6 Vessel Calls

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

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Section III

Part 1 Contact Person and Certification

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

(1) Name---------------------------------------------------------------

(2) Title--------------------------------------------------------------

[[Page 64438]]

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(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