Information Form and Post-Effective Reporting Requirements for Agreements Among Ocean Common Carriers Subject to the Shipping Act of 1984

FEDERAL MARITIME COMMISSION

46 CFR Part 572

[Docket No. 94-31]

Information Form and Post-Effective Reporting Requirements for

Agreements Among Ocean Common Carriers Subject to the Shipping Act of

1984

AGENCY: Federal Maritime Commission.

ACTION: Proposed rule.

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SUMMARY: The Federal Maritime Commission proposes to amend its

regulations governing the information submission requirements for

agreements among ocean common carriers subject to the Shipping Act of

1984. The Commission proposes to replace the current information form

that accompanies newly filed agreements with a new form applicable to

certain kinds of agreements, which requires the submission of specific

data on the agreement member lines' cargo carryings, revenue results

and port service patterns before they entered into the agreement. In

addition, the Commission proposes regulations that require the member

lines of certain kinds of effective agreements to submit reports on

their operations on a regular and ongoing basis, which would reflect

the lines' cargo carryings, revenue results and port service patterns

after they entered into the agreement. The application of the proposed

rule to a particular agreement depends primarily on whether the

agreement authorizes its carrier members to engage in certain

activities, and secondarily on the carrier members' combined market

share. An agreement that does not authorize any of the activities

specified by the proposed rule would still be filed with the

Commission, unless it qualifies for one of the Commission's existing

filing exemptions, but would not have any information form or reporting

obligations. The intent of the proposed rule is to provide the

Commission with improved information on the impact of concerted carrier

practices on the foreign commerce of the United States, and to

facilitate the processing and monitoring of ocean carrier agreements

under the standards of the Shipping Act of 1984.

DATES: Comments due February 3, 1995.

ADDRESSES: Send comments (original and fifteen copies) to: Joseph C.

Polking, Secretary, Federal Maritime Commission. 800 North Capitol

Street NW., Washington, DC 20573-0001.

FOR FURTHER INFORMATION CONTACT:

Robert D. Bourgoin, General Counsel, Federal Maritime Commission, 800

North Capitol Street NW., Washington, DC 20573-0001, (202) 523-5740

Austin L. Schmitt, Director, Bureau of Trade Monitoring and Analysis,

Federal Maritime Commission, 800 North Capitol Street NW., Washington,

DC 20573-0001, (202) 523-5787

SUPPLEMENTARY INFORMATION:

A. Background

The jurisdiction of the Federal Maritime Commission (``FMC'' or

``Commission'') over ocean carrier agreements in the foreign commerce

of the United States extends under section 4(a) of the Shipping Act of

1984 (``1984 Act'') to all agreements 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 * * *;

(6) Control, regulate, or prevent competition in international

ocean transportation; and

(7) Regulate or prohibit * * * use of service contracts.

46 U.S.C. app. 1703(a).

The reforms in 1984 to the Shipping Act were intended in large part

to facilitate the swift effectiveness, with immunity from the antitrust

laws, of such agreements. Section 15 of the former Shipping Act, 1916

(``1916 Act''), had required carriers to secure Commission approval for

any agreement governing rates, conditions of service, or similar

matters, before such an agreement could become effective. Under

standards set forth in section 15, the Commission was permitted to

disapprove, cancel, or modify any agreement that it found to be

unjustly discriminatory or unfair, or to operate to the detriment of

the commerce of the United States, or to be contrary to the public

interest, or to be in violation of the 1916 Act. 46 U.S.C. 814 (1982).

The Commission, with Supreme Court approval, had taken the position

that agreements to set rates, pool revenues, restrict capacity, or to

engage in other activities that normally would be contrary to the

antitrust laws were presumed to be contrary to the public interest, and

would be approved only if they were shown to be ``required by a serious

transportation need, necessary to secure important public benefits or

in furtherance of a valid regulatory purpose of the Shipping Act.'' FMC

v. Svenska Amerika Linien, 390 U.S. 238, 243 (1968). The burden of

making this showing was placed upon the carrier proponents of an

agreement, on the ground that information regarding the operation and

probable future impact of an agreement ``[a]lmost uniformly * * * is in

the hands of those seeking approval * * * and it is incumbent upon

those in possession of such information to come forward with it.''

Mediterranean Pools Investigation, 9 F.M.C. 264, 290 (1966). Under

these procedures, the implementation of agreements had often been

delayed for considerable amounts of time, especially if formal protests

were made. See Marine Space Enclosures, Inc. v. FMC, 420 F.2d 577 (D.C.

Cir. 1969) (requiring that the Commission hold a hearing when a protest

raising substantial issues had been filed). In many cases, protests

were filed by other carriers, who effectively delayed or blocked their

competitors' business plans.

The 1984 Act did away with the requirement that an agreement had to

be approved by the Commission before it could lawfully operate.

Instead, agreements now generally become effective forty-five days

after they are filed. As a partial counterbalance to this liberalized

approach, conference agreements\1\ are required by section 5(b) of the

Act, 46 U.S.C. app. 1704(b), to include a number of procompetitive

provisions, and the Commission may reject a conference agreement that

does not meet this standard. Especially noteworthy is the requirement

that all conference agreements must clearly state that any member line

may take ``independent action'' on any rate or service item required to

be filed in a tariff with the Commission; this empowers any member line

to set an individual rate below (or above) the conference rate, without

having to obtain approval of the rate from the other member lines. The

conference is then required to publish the independent action rate in

its conference tariff upon no more than ten days' notice.

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\1\Under the 1984 Act, a conference is an association of ocean

common carriers which engage in concerted activities and utilize a

common tariff. Section 3(7), 46 U.S.C. app. 1702(7).

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The Commission may also prescribe the ``form and manner'' in which

agreements of any kind must be filed, and may reject an improperly

drafted agreement. In addition, the Commission may request information

and documents in connection with a newly filed agreement and, if its

demand is not ``substantially'' met, may seek a delay in the

agreement's effective date or other relief from the United States

District Court for the District of Columbia.\2\

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\2\Sections 6 (d) and (i) of the 1984 Act, 46 U.S.C. app. 1705

(d) and (i).

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The 1984 Act sets forth an extensive list of prohibited acts,

barring many anticompetitive practices that previously had been

outlawed under the broad ``public interest'' standard of section 15 of

the 1916 Act. For example, section 10(b)(6) of the 1984 Act, 46 U.S.C.

app. 1709(b)(6), carries forward section 15's prohibition of agreements

that are unfair or unjustly discriminatory between shippers or ports.

Sections 10(c)(1)-(3) and (5) of the 1984 Act, id. app. 1709(c)(1)-(3)

and (5), prohibit boycotts, restrictions on technological innovations,

predatory practices and the denial of reasonable freight forwarder

compensation, all of which the Commission previously had found violated

section 15.\3\

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\3\See S. Rep. No. 3, 98th Cong., 1st Sess. 35-37 (1984).

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If the Commission has indications that an agreement may be

operating in violation of the 1984 Act, it may institute an

investigation of the agreement and its member lines. In addition, the

Commission may ask any U.S. district court to temporarily enjoin the

agreement while the investigation proceeds.\4\ If the court should find

that continued operation of the agreement would be inequitable, it can

issue an order barring further effectiveness of the agreement until ten

days after issuance of the Commission's final decision. If the

Commission should find in its final decision that violations of the

1984 Act in fact occurred, it may ``disapprove, cancel or modify'' the

agreement,\5\ which would in effect supersede the existing court

injunction. In addition, the Commission may assess fines against the

agreement member lines.\6\

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\4\Section 11(h)(1) of the 1984 Act, 46 U.S.C. app. 1710(h)(1).

\5\Section 11(c) of the 1984 Act, 46 U.S.C. 1710(c).

\6\Section 13(a) of the 1984 Act, 46 U.S.C. 1712(a).

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The other procedure provided by the 1984 Act by which the

Commission can prevent an agreement from going into effect, or prevent

further operation of an existing agreement, is set forth in section

6(g). This provision authorizes the Commission to seek an injunction in

the U.S. District Court for the District of Columbia against an

agreement that is ``likely, by a reduction in competition, to produce

an unreasonable reduction in transportation service or an unreasonable

increase in transportation cost.'' 46 U.S.C. app. 1705(g). A proceeding

under section 6(g) does not involve questions of discrimination or

unfairness, which are covered by the section 10 prohibited acts, nor

does it involve questions of statutory violations or fines against the

carriers. Section 6(g) was meant to provide a way of dealing with

``unusual or severe cases not addressed by other prohibitions in the

Act,''\7\ and the only remedy available under the provision is an

injunction against the agreement itself.

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\7\H.R. Rep. No. 600, 98th Cong., 2d Sess. 37 (1984).

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B. The Commission's Agreement Program

The Commission's procedures for evaluating and monitoring carrier

agreements reflect the new responsibilities and limitations imposed by

the 1984 Act. When an agreement is first filed, its provisions are

immediately reviewed to ensure that they contain the 1984 Act's

mandatory provisions and do not run afoul of the prohibited acts

sections. In the ordinary case, that is a one-time process and does not

entail ongoing periodic review.

An agreement's effect on shippers, ports and maritime commerce is a

different matter. An agreement of significant anticompetitive

dimensions--for example, a large market share combined with authority

to fix rates and control service contracts--poses potential dangers of

unlawful activities and unreasonable rate increases or service

reductions both when it is first filed and for as long as it remains in

effect. Thus, under the new regulatory framework established by the

1984 Act, the role of the Commission as a monitoring and surveillance

agency was greatly enhanced. In discharging that responsibility, the

Commission cannot merely examine an agreement's provisions; rather, it

must continually gather, review and interpret data on the impact of the

agreement on U.S. foreign commerce. As for the source of such

information, the 1984 Act removed the burden of proof in agreement

investigations from the carriers, but did not alter the accuracy of the

Commission's 1966 observation in Mediterranean Pools Investigation that

the primary source for information on the operation of an agreement is

the carriers that are the parties to the agreement.

At present, the Commission has regulations in place that obtain

information from carriers about their agreements in two principal ways.

All new agreements, unless specifically exempted,\8\ and all

``significant modifications'' to existing agreements\9\ must submit an

information form\10\ which, at a minimum, requires the parties to state

the full name of the agreement (Part I); whether the agreement

authorizes collective rate fixing (Part II(A)), cargo or revenue

pooling (Part II(B)), or the establishment of a ``joint service/

consortium'' arrangement (Part II(C)); whether the agreement was

entered into as a response to any law or other official action by a

foreign government (e.g., cargo reservation laws) (Part VI); and

persons who can be contacted by the Commission's staff for further

information if necessary (Part IX). If an agreement does authorize

collective rate fixing, cargo or revenue pooling, or the establishment

of a ``joint service/consortium'' arrangement, the parties are required

additionally to provide market share and cargo carryings information

for the previous year (Part III), to identify the nature and extent of

any competition on the trade (Part IV), and to identify any reports,

studies or other research on competitive conditions in the trade (Part

VIII). Agreements that authorize service rationalization are required

to provide information on any changes in port calls or reductions in

service that will result from the agreement within the next twelve

months (Part V). In addition, filing parties may voluntarily describe

the benefits that they anticipate will accrue from the agreement to

themselves (such as improved operational efficiencies) or to shippers

and U.S. commerce (such as improved service) (Part VII).

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\8\See 46 CFR 572.302-11.

\9\``Significant modifications'' are presently defined at 46 CFR

572.403(a)(3) to include * * *

* * * significant changes in the geographic scope of conference

or pooling agreements which expand the scope to cover additional

foreign countries or U.S. port ranges, including initial conference

intermodal authority, or the extension of the scope of a joint

service agreement to ports outside the scope of the existing joint

service agreement currently served by two or more of the parties;

additions to the number of parties in pooling or joint service

agreements; significant reductions in service levels; significant

changes in pool penalty provisions or carrying charges; and changes

in cargo categories or descriptions that result in a significant

increase in the amount of cargo subject to the pool, or changes in

the allocation of cargo or revenue that significantly change the

cargo or revenue shares of national or non-national flag lines.

\10\The current information form is published as appendix A to

part 572 of the Commission's regulations, following 46 CFR 572.991.

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The data and information shown on an agreement's information form

are the basis for pre-implementation review of an agreement under

section 10 and section 6(g) of the 1984 Act, unless additional

information is obtained as a result of a formal request issued under

section 6(d),\11\ in which case the agreement's effective date is

delayed until the 45th day after the Commission receives the

information requested, so that pre-implementation review can include

the additional material.

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\11\N. 2, supra, and accompanying text.

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In addition, parties to effective agreements are required to file

minutes of meetings of the carriers or other persons authorized to take

action on behalf of the carriers, which include reports on shippers'

requests and complaints and reports on consultations with shippers and

shippers' associations.\12\

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\12\46 CFR 572.702-703.

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C. Areas of Needed Improvement

While the information-gathering processes for agreements

established by the Commission immediately after passage of the 1984 Act

have served their purpose adequately, the increasingly comprehensive

and complex agreements filed in recent years indicate a need for

updating and augmentation. Agreements with multi- country geographic

ranges are now common. New devices and arrangements for dealing with

excess capacity have appeared. Rate discussion agreements between

conference and nonconference lines have become more prevalent, and such

arrangements have not been required to include the procompetitive

provisions applicable to conferences. Networks of vessel and space

charter agreements covering a multitude of trade lanes have been

established, and some of those agreements operate within larger

conference agreements.

In addition, some of the provisions of the current information form

have not produced much useful information. It appears that these

provisions either have become outdated or, with the benefit of

hindsight, were not sufficiently relevant to the Commission's pre-

implementation review of a new agreement under the standards of the

1984 Act. This is particularly true of Part VI, which concerns whether

the agreement was entered into as a response to a law or other action

by a foreign government, and Part VII, which allows the carriers to

describe the expected benefits of the agreement if they wish. Further,

the activity queries in Part II of the current form which, if answered

in the affirmative, trigger the further requirements of Parts III, IV

and VIII, do not reach rate discussion agreements between independent

lines or between conference lines and independents, nor do they reach

agreements to discuss costs or exchange cost information. These types

of agreements do not directly authorize rate setting but nonetheless

have a direct and substantial impact on rate competition, as discussed

further below.

Due to the limitations of the current post-implementation reporting

requirements, monitoring of effective agreements at present depends

primarily on other reports that are not required by regulation, but

rather must be negotiated as to content and frequency by the

Commission's staff with the carrier parties during the initial review

period. Such reports produce data bearing on the carriers' concerted

practices and operating results, such as percentage of capacity being

utilized by shippers and average gross revenue per twenty-foot-

equivalent container unit (``TEU'') of cargo. Major agreements that

currently are subject to negotiated reporting requirements include the

Trans Atlantic Conference Agreement, the Transpacific Stabilization

Agreement and the Inter-American Discussion Agreement.

Obtaining data about the economic impact of effective agreements

through ad hoc negotiations during the initial review period has been a

flawed procedure. Carrier representatives have shown good will and

substantial cooperation, but both they and the Commission's staff are

inevitably hampered by the 1984 Act's strict time limits for agreement

processing. Once an agreement has gone into effect, the Commission can

always issue an order under section 15 of the 1984 Act to obtain

information from the member carriers,\13\ but that power is better

suited for special circumstances than for day-to-day regulation. In

sum, neither the current practice of negotiating ad hoc reports nor the

authority set forth in section 15 is an efficacious method of achieving

consistent and predictable oversight of significant carrier agreements

after they have gone into effect.

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\13\Section 15(a) states:

The Commission may require any common carrier, or any officer,

receiver, trustee, lessee, agent, or employee thereof, to file with

it any periodical or special report or any account, record, rate, or

charge, or memorandum of any facts and transactions appertaining to

the business of that common carrier. The report, account, record,

rate, charge, or memorandum shall be made under oath whenever the

Commission so requires, and shall be furnished in the form and

within the time prescribed by the Commission.

46 U.S.C. app. 1714(a).

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D. The Proposed Rule

The Commission addresses the concerns discussed above by proposing

new regulations that are designed to elicit more detailed and specific

information on ocean carrier agreements in a more structured and

comprehensive manner. The proposed rule formulates a sliding scale of

information demands for three classes of agreements, ``Class A,''

``Class B'' and ``Class C.'' Where an agreement fits on the scale

depends on the activities it authorizes and the parties' combined

market share. These criteria are discussed further below. An agreement

that does not authorize any of the specified activities would still be

required by law to be filed with the Commission (unless it qualifies

for one of the existing exemptions), but would not have any information

form or reporting obligations.

For an agreement fitting into one of the three covered classes, the

proposed rule has the following important features:

A revised information form that would accompany the

agreement when it is first filed, requiring the submission of specific

data on the agreement member lines' cargo carryings, revenue results

and port service patterns before they entered into the agreement.

If the agreement goes into effect, additional provisions

requiring the member lines to submit reports on their operations on a

regular and ongoing basis. Thus, the proposed rule would establish

reporting requirements as Commission regulations that would have the

status of agency public policy and could be enforced by Commission or

court sanctions if necessary.

Linkage between the information form and the subsequent

reports. Aside from some activities that are relevant only to effective

agreements (such as independent rate actions), the reporting

requirements track the subject areas of the information form. This

would enable the Commission to compare the carriers' operations and

economic results before and after their agreement went into effect.

1. Classification of Agreements: The Six ``Class A/B'' Activities

``Class A'' and ``Class B'' agreements permit the same kinds of

activities; the difference between them is market share. An agreement

is a ``Class A/B'' agreement if it authorizes any one of the following

six activities:

Ratemaking. This specifically includes not only

traditional conference agreements, under which a group of lines agree

upon fixed rates and practices and are bound to them under a common

tariff, but also agreements under which non-conference lines meet among

themselves or with a conference to discuss rates, or to discuss and

agree upon rates on a ``non-binding'' basis. The latter types of

agreements have become increasingly common, and their presence in a

trade raises serious concerns about the true level of competition since

they involve discussions and agreements about rates between non-

conference lines or between a conference and its non-conference

competitors. These concerns are not necessarily lessened by the fact

that any agreement reached with regard to a particular rate would not

bind the carriers to adhere to the rate; a shipper in the trade seeking

to negotiate a rate with a carrier would still be faced with an

arrangement that unilaterally brings outside carriers into the rate

negotiation process and potentially limits the shipper's ability to

negotiate the best possible rates for its cargo.

The ``ratemaking'' criterion is met if the agreement authorizes its

carrier members to (1) agree on a binding basis under a common tariff,

(2) agree on a non-binding basis, or (3) discuss any kind of basic

linehaul rate--including port-to-port rates, independent action rates,

overland rates, minilandbridge rates, interior point intermodal rates,

proportional rates, through rates, joint rates, minimum rates, volume

rates, joint time/volume rates, project rates, freight-all-kinds rates,

volume incentive programs, service contract rates, loyalty contract

rates, rates on commodities exempt from tariff filing, and so forth--or

any kind of ancillary charge or allowance that affects the total

transportation cost to the shipper. Those include surcharges,

arbitraries, currency adjustment factors, terminal handling charges,

pickup and delivery charges, demurrage, absorption and equalization

allowances, and so forth.

On the other hand, in the interest of balance and restraint, the

proposed rule does not treat as ``ratemaking'' agreements those

agreements that concern how rates are collected from shippers--for

example, credit conditions and the handling of delinquent accounts--but

do not concern the level of the rates themselves, or those agreements

that concern charges or payments to persons other than shippers, e.g.,

inland divisions of through rates, brokerage, freight forwarder

compensation, employment of neutral bodies for self-policing purposes,

or development of electronic cargo information systems.

Discussion or exchange of vessel-operating cost data. The

Commission has received a number of agreements that do not authorize

rate discussions or agreements of any kind, but do authorize discussion

of or exchange of cost data among the member carriers. The antitrust

laws have been applied against such arrangements in other industries,

on the theory that the sharing of pricing information can have a

significant impact on price competition.\14\ The most significant costs

for ocean common carriers are vessel-operating costs, which the

proposed rule defines to include wages of officers and crew, fringe

benefits, consumable stores, supplies and equipment, maintenance and

repair, insurance, vessel fuel, and bareboat charter hire.\15\ The 1984

Act allows carriers to enter into agreements to discuss and exchange

information about these costs, but the Commission believes that they

should be subjected to the same degree of scrutiny as their close

cousins, rate discussion agreements. On the other hand, again in the

interest of balance and restraint, the ``costs'' criterion does not

apply to discussion of other types of expense that are less important

for setting rates (for example, terminal costs). In order to make this

distinction effective, agreements seeking to authorize discussion or

exchange of cost data must specify whether that authority includes any

of the vessel-operating costs.

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\14\E.g., Sugar Institute, Inc. v. United States, 297 U.S. 553

(1936); American Column & Lumber Co. v. United States, 257 U.S. 377

(1921).

\15\See 46 CFR 232.5(E)(1)(ii).

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Joint service, which is defined by the Commission's

regulations as * * *

* * * an agreement between ocean common carriers operating as a

joint venture whereby a separate service is established which: (1)

Holds itself out in its own distinct operating name; (2)

independently fixes its own rates, charges, practices and conditions

of service or chooses to participate in its operating name in

another agreement which is duly authorized to determine and

implement such activities; (3) independently publishes its own

tariff or chooses to participate in its operating name in an

otherwise established tariff; (4) issues its own bills of lading;

and (5) acts generally as a single carrier. The common use of

facilities may occur and there is no competition between members for

traffic in the agreement trade; but they otherwise maintain their

separate identities.

46 CFR 572.104(n). While the introduction of a joint service into a

trade by outside lines may increase the level of competition and the

range of services available for shippers, there can be negative effects

on competition and service if the joint service is formed by lines that

up to that point had been competing in the trade, and especially if the

new entity would have substantial market power.

``Capacity management'' or ``capacity regulation''. This

relatively new technique for dealing with overtonnaging and depressed

rates limits the availability of vessel space to shippers but does not

reduce the real capacity of the carriers. Therefore, such programs have

the potential to perpetuate economic inefficiencies and unnecessary

costs for shippers, particularly if they remain in place beyond short-

term cargo declines or surges in capacity. Agreements authorizing such

programs have sufficiently serious ramifications under the 1984 Act to

warrant thorough monitoring.

Regulation or discussion of service contracts. Most

agreements engaging in this activity are conference agreements, which

would already be covered by the ``ratemaking'' criterion discussed

above. However, agreements among non-conference lines may include

authority to confer and to reach ``non-binding'' agreements on service

contract terms, and such authority may well diminish price and service

competition.

Pooling, which is defined by the Commission's regulations

as * * *

* * * an agreement between ocean common carriers which provides

for the division of cargo carryings, earnings, or revenue and/or

losses between the members in accordance with an established formula

or scheme.

46 CFR 572.104(w). While such agreements are not as common as they once

were, they are severely anticompetitive by nature and must be closely

regulated when they do appear.

2. Classification of Agreements: the Importance of Market Share

The proposed rule requires any agreement that authorizes one or

more of the six ``Class A/B'' activities to be accompanied, upon its

initial filing, with an information form showing its parties' market

shares both for the entire agreement and also in each of the sub-trades

within the overall scope of the agreement, during the most recent

calendar quarter for which complete data are available. ``Sub-trade''

is defined as all liner movements between each U.S. port range

(Atlantic, Gulf and Pacific) and each foreign country within the

overall scope of the agreement. For example, an agreement with an

overall scope of U.S. Pacific Coast to the Far East would have sub-

trades of U.S. Pacific Coast to Japan, U.S. Pacific Coast to Taiwan,

and so forth.

An agreement that authorizes at least one of the six ``Class A/B''

activities and holds market shares of 50 percent or more in half or

more of its sub-trades is classified as a ``Class A'' agreement under

the proposed rule.\16\ The parties to such an agreement are required to

submit extensive historical data on the initial information form and,

if the agreement goes into effect, to submit detailed quarterly reports

on their operations under the agreement. These requirements are

discussed in detail below. An agreement that authorizes at least one of

the six activities, but did not hold market shares of 50 percent or

more in at least half of its sub-trades, is classified as a ``Class B''

agreement. It would file the same information form as a ``Class A''

agreement but, if it went into effect, would have significantly lighter

reporting obligations, as also discussed below. It should be noted that

the classification of an agreement as ``Class A'' would not be

permanent; the agreement's ongoing reporting obligations would include

market share data, and at the beginning of each calendar year, the

agreement's sub-trade market shares during the most recent calendar

quarter for which complete data are available would determine whether

it would remain under ``Class A'' reporting obligations for the

upcoming year.

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\16\For example, if an agreement with ten sub-trades reported

that it had market shares of 50 percent or more in five or more sub-

trades, it would be a ``Class A'' agreement. By using that

methodology rather than average market share, the proposed rule

seeks to focus on those agreements with significant market power

spread through at least half of their total geographic scope.

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Market share measures an agreement's potential for abuse of

economic power and unreasonable or discriminatory price and service

practices. The break point of 50 percent in at least half of the sub-

trades was chosen in the belief that an agreement that is a relatively

minor presence in a majority of its sub-trades--that is, a ``Class B''

agreement--is unlikely to be able to impose unreasonable or unfair

rates or practices regardless of what it authorizes its parties to do,

and does not require extensive gathering of information about its

operation. While commenters on the proposed rule are free to argue for

a different break point, it should be noted that an important feature

of the proposed rule is that the market share calculation for rate

discussion agreements and ``non-binding'' rate agreements adds the

market shares held by the non-conference lines to those held by the

conference lines for purposes of determining whether such an agreement

should be classified as ``Class A'' or ``Class B''.

The new focus on sub-trades results from the Commission's belief,

resulting from the agency's experience over the ten years since passage

of the 1984 Act, that economic analysis of an agreement is facilitated

and acquires depth of understanding if it is done according to the

agreement's smaller components. This is particularly true since, as

noted above, the Commission is now seeing more and more agreements that

have multi-coast or even multi-continent geographic ranges. Further, in

some of the more geographically fragmented parts of the world, such as

the Far East and the South Pacific, sub-trades can constitute separate

and cloistered markets. Agreements that serve a comparatively unified

landmass, such as Europe, might still implement practices that differ

from area to area within the general market. These factors all argue

for information-gathering systems that acquire data relevant to an

agreement's sub-trades, rather than only the market defined by the

agreement's total scope.\17\ Accordingly, the information (besides

market share) sought by the proposed rule for ``Class A'' and ``Class

B'' agreements is, for the most part, concerned with the agreements'

sub-trades.

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\17\This approach also allows for the possibility that

Commission or court sanctions against an agreement could prevent an

agreement only from operating in a particular sub-trade, rather than

from operating at all.

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It should be stated at this juncture that the proposed rule

includes a procedure whereby the Commission may grant a waiver from

full compliance with the rule's requirements, if a group of carriers

applies for and justifies such relief. A waiver could apply to any part

of the rule, including the requirement that data be reported by

individual country sub-trades. For example, an agreement might be

permitted to report by a multi-country region rather than by individual

countries, if it could show that the major moving commodities moving

into or out of a particular group of countries did not vary much

country by country, and so regional data would provide a reasonably

accurate and complete description of the trades with those countries.

The waiver procedure could also be used to allow conferences made up of

relatively small carriers serving a relatively small trade to submit

post-implementation monitoring reports at wider intervals (for example,

once a year). The waiver provisions specifically state that the

Commission will take into account the presence or absence of shipper

complaints in considering an application for a waiver.

3. ``Class A'' Agreements Under the Proposed Rule

The information form for a ``Class A'' agreement begins by

requiring a listing of all effective agreements covering all or part of

the geographic scope of the proposed agreement, whose parties include

one or more of the parties to the proposed agreement. This provision is

designed to ensure that the Commission has accurate information

regarding the recent trend toward networks of agreements connected by

common parties. Next, the form requires an identification of all

``Class A/B'' activities that the agreement seeks to authorize.

After obtaining the market share data discussed above, the

information form then inquires into the recent agreement-wide cargo

carryings and revenue results of each of the carriers that would now

join together into the agreement. Otherwise, the information form

focuses primarily on the state of affairs in each of the agreement's

sub-trades before the agreement was filed. This is done by reference to

the major commodities moving to and from the United States in each sub-

trade.

Using the actual commodities moving under an agreement as the chief

frame of regulatory reference is an important feature of the proposed

rule, and represents a significant departure from current practice. At

present, the information obtained by the Commission on carrier rate and

service practices via the monitoring reports submitted for certain

major agreements does not describe the cargo being transported, and is

stated in the aggregate (for example, total number of service contracts

executed) or as broad averages (for example, average revenue per TEU of

all cargoes). In contrast, the proposed information form, while

continuing to require the submission of aggregate data in certain

areas, mainly requires carriers to identify the commodities that have

made up the bulk of their cargo in each sub-trade and then to submit

data on the price and service practices they have applied to each of

those commodities. With this information in hand, the Commission will

have a reasonably comprehensive summary of pre-agreement rate and

service practices in each sub-trade covered by the new agreement, as

well as in the agreement's entire geographic scope. If the agreement is

permitted to go into effect, that summary will serve as a baseline for

analyzing the corresponding information later obtained through the

post-implementation reports.

In sum, the proposed rule both changes the orientation of agreement

review to that of the cargo being affected, and also calls for more

refined and differentiated data from the carriers. These reforms should

provide the Commission with improved and more useful indicators of the

potential or actual impact of an agreement on the needs of shippers for

good service at reasonable rates, and in particular whether the

agreement might cause or has caused unfair or unreasonable conditions

for specific commodities, classes of shippers, or geographic areas. It

should be noted that, while the proposed rule is constructed around the

major moving commodities in each sub-trade, nothing prevents the

Commission from taking appropriate action if it receives information

that an agreement is harming the fair and reasonable transportation of

a relatively minor commodity.

The information form also inquires into the effect of the agreement

on ports within its geographic range; it should be noted that it is

unnecessary to segregate data on port calls by sub- trades. In

addition, the information form imposes special requirements on any

``Class A'' agreement that authorizes ``capacity management'' or

``capacity regulation.'' Because such programs are designed to address

problems of excess capacity, the information form inquires into each

agreement member line's recent capacity utilization experience within

the geographic service area to be covered by the proposed program and

its initial capacity level under the program. These data are to be

provided within a ``geographic service area'' because a capacity

management or regulation program that is part of a larger agreement can

be designed to cover less than the entire geographic scope of the

agreement. This section of the form also requires the submission of any

reports or studies dealing with capacity utilization and related

topics, but only to the extent that such documents were both recently

prepared and shared among the agreement lines, and thus may have

influenced the formation of the capacity management program.

If the new agreement were permitted to go into effect, then the

reporting requirements for ``Class A'' agreements would become

applicable. Changes in membership in other agreements would be

reported, and the parties' market shares would continue to be tracked

by entire agreement geographic scope and by sub-trade. Otherwise, the

reporting requirements would mirror the information form in order to

provide ``before and after'' depictions of the trade, with some

additional provisions that can apply only to an effective agreement.

For example, the special provisions of the information form applicable

to a capacity management program would be expanded to carefully monitor

the actual operation of the program. In addition, a new section

entitled ``Independent Rate Actions'' would apply to ``Class A''

conference agreements and would require:

For each sub-trade within the scope of the agreement, and for

each of the leading commodities * * *, and for each party, state the

number of independent rate actions taken during the calendar quarter

that were applicable to that commodity moving in that sub-trade, and

the total number of TEUs of that commodity covered by the

independent actions. Also, state the name of each shipper for whom

an independent rate was taken on that commodity during the calendar

quarter, and state whether the shipper was a beneficial cargo owner,

a non-vessel-operating common carrier, or a shippers' association.

This provision would allow the Commission to monitor the level of

independent rate activity (or the lack of such activity) on specific

commodities, and to take appropriate action immediately if it appears

that certain commodities or types of shipper are receiving more rigid

rate treatment than others.

4. ``Class B'' agreements under the proposed rule

As already stated, the proposed rule prescribes the same

information form for ``Class B'' agreements as for ``Class A''

agreements. This establishes the same pre-agreement baseline as is done

for ``Class A'' agreements. However, assuming the ``Class B'' agreement

were allowed to go into effect, the reporting requirements are limited

to quarterly updates on market share, agreement-wide cargo and revenue

results, membership in other agreements, and changes in port service.

The agreement would be monitored by the Commission, particularly the

sub-trades where the agreement holds more than 50 percent of the

market, and if there were indications of possible rate or service

problems in a sub- trade, further information would be obtained--by

either informal negotiation or a section 15 order--and compared against

the original baseline data to determine whether further action was

necessary.

5. ``Class C'' Agreements Under the Proposed Rule

An agreement that authorizes service rationalization, such as space

charters, coordination of service frequency and port rotations, and

coordination of the size and capacity of vessels to be deployed by the

parties, but does not authorize ``capacity management'' or ``capacity

regulation'' (or any of the other five ``Class A/B'' activities), is a

``Class C'' agreement. Although such agreements have rarely presented

serious regulatory concerns, some oversight is necessitated by section

6(g)'s admonition against agreements that cause unreasonable reductions

in service. For a ``Class C'' agreement, the proposed rule provides for

information form and reporting requirements limited to membership in

other agreements and the level of service at the ports within the

agreement's overall scope. Those provisions should provide the

Commission with adequate warnings in case service rationalization

reaches the point where a port, and the shippers which use that port,

begin to suffer.

6. Other Amendments

The proposed rule contains a number of other amendments to the

Commission's existing regulations in 46 CFR part 572. For the most

part, these amendments are not substantive and are designed to make the

existing regulations consistent with the proposed rule, to eliminate

certain outdated regulations, or to reorganize certain subparts of the

existing regulations. They include the following:

In Sec. 572.104, new definitions are added for such terms

as ``capacity management or capacity regulation agreements,''

``monitoring report,'' ``rate'' and ``vessel-operating costs.'' In

addition, the present definition of a joint service is revised to

eliminate the reference to ``consortium,'' which is a term not defined

by the 1984 Act and could include a number of commercial relationships

besides joint services.

In subpart C, the exemptions of certain kinds of

agreements are revised to eliminate unnecessary references to

``Information Form'' requirements. These changes have no effect on the

exemptions themselves.

Subpart D is revised to include existing subpart E, so

that all regulations governing the content and organization of filed

agreements will be contained within one subpart. Also, proposed

Sec. 572.401(a)(2) states that five copies of the new Information Form

must be filed along with a new agreement; this is the minimum number of

copies that will be needed by the Commission in order to review and

process an agreement. Subparagraph (h) of present Sec. 572.402 is

deleted as no longer necessary. Also, the proposed rule eliminates the

requirements in current Sec. 572.403(a)(2)-(3) that Information Forms

must accompany ``significant modifications'' to effective agreements;

they will not longer be necessary since the agreements addressed by

those regulations will in all likelihood be subject to ongoing

reporting requirements. Also, the standards presently set forth in

Sec. 572.404 for granting a waiver are revised to remove the

requirement that the applicant show that ``beneficial results'' will

occur if the waiver is granted, and instead to require that the

applicant show that granting the waiver will not impair effective

regulation by the Commission, consistent with the language of section

16 of the 1984 Act, 46 U.S.C. app. 1715. Similar language is used in

the proposed rule's other waiver provisions in revised subparts E and

G.

Section 572.608(b)(2), which sets forth an exception to

the confidentiality of submitted material, is revised to more closely

reflect the language of section 6(j) of the 1984 Act, 46 U.S.C. app.

1705(j). Similar language is used in the proposed rule's provision on

confidentiality in revised subpart G.

7. Carrier Costs and Profits

The Commission's obligation under section 6(g) of the 1984 Act to

police against agreements that may cause, or have caused, unreasonable

increases in transportation rates, and the 1984 Act's purpose of

providing an efficient and economic transportation system in the ocean

commerce of the United States, 46 U.S.C. app. 1701(2), raise the

question whether these policies can or should be pursued by monitoring

the costs and/or profitability of the carriers to a particular

agreement. The proposed rule does not include provisions on carrier

costs or profitability, but the Commission wishes to solicit comments

on the lawfulness and feasibility of such provisions. Commenters should

address whether such provisions would be inconsistent with Congress's

directive that ``[t]he determination whether an agreement is likely to

produce an `unreasonable increase in the price of transportation' does

not authorize the FMC to engage in the type of ratemaking analysis

undertaken by regulators of public utilities or as applied in the

domestic offshore trades.'' H.R. Rep. No. 600, 98th Cong., 2d Sess. 35

(1984). That aside, commenters should also address how such provisions

might be structured, particularly given the proposed rule's focus on

individual country sub-trades; whether costs and/or profitability under

a particular agreement can be measured accurately, particularly if the

carriers to the agreement have other operations elsewhere; and whether

arguments that an agreement is necessary to control costs or to improve

profits are better explored in the context of an investigation of a

particular agreement, rather than made the subject of regulations

applicable to broad classes of agreements.

8. Effective Agreements Under the Proposed Rule

The Commission's present intentions regarding the treatment of

effective agreements under the regulations proposed in this proceeding

are as follows. Upon publication of a final rule, the regulations would

become effective immediately for new agreements, which thus would be

required to comply with the revised Information Form provisions.

However, the proper application of the new regulations to agreements

already in effect could not be determined immediately, because the

market share data necessary to separate Class A/B agreements into Class

A and Class B will not be readily available.

Accordingly, the Commission intends to stay application of the

final rule to effective agreements. The Commission then will direct all

existing Class A/B agreements to submit reports under section 15 of the

1984 Act that would include all the information demanded of new Class

A/B agreements under the Information Form regulations, including market

share data. Upon review of these reports, those agreements will be

appropriately classified into Class A or Class B, the stay of the final

rule will be lifted, and the orderly filing of the regular monitoring

reports (including those applicable to Class C agreements) will begin.

The initial section 15 reports will provide baselines (albeit not pre-

implementation baselines) against which the subsequent reports will be

compared as part of the continuous monitoring of each agreement. For

those agreements already in effect that are subject to reporting

requirements negotiated by the Commission's staff, those requirements

will be superseded by the final rule.

The Federal Maritime Commission certifies, pursuant to section

605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that this

rule will not have a significant economic impact on a substantial

number of small entities, including small businesses, small

organizational units and small government jurisdictions. The ocean

carriers affected by the rule are not ``small organizations'' or

``small governmental jurisdictions'' as defined by 5 U.S.C. 601 and, as

large and predominantly foreign-based enterprises, are not ``small

business concerns'' as defined by 15 U.S.C. 632 and regulations issued

thereunder.

The collection of information requirements contained in this

proposed rule have been submitted to the Office of Management and

Budget for review under the provisions of the Paperwork Reduction Act

of 1980 (Public Law 96-511), as amended. The incremental public

reporting burden for this collection of information is estimated to

range from an average of 46 hours to 144 hours per response, including

the time for reviewing instructions, searching existing data sources,

gathering and maintaining the data needed, and completing and reviewing

the collection of information. Send comments regarding this burden

estimate, including suggestions for reducing this burden, to Bruce A.

Dombrowski, Deputy Managing Director, Federal Maritime Commission,

Washington, DC 20573, and to the Office of Information and Regulatory

Affairs, Office of Management and Budget, Washington, DC 20503.

List of Subjects in 46 CFR Part 572

Administrative practice and procedure; maritime carriers; reporting

and recordkeeping requirements.

Therefore, pursuant to 5 U.S.C. 553 and sections 4, 5, 6, 10, 15

and 17 of the Shipping Act of 1984, 46 U.S.C. app. 1703, 1704, 1705,

1709, 1714 and 1716, Part 572 of Title 46, Code of Federal Regulations,

is proposed to be amended as follows:

PART 572--AGREEMENTS BY OCEAN COMMON CARRIERS AND OTHER PERSONS

SUBJECT TO THE SHIPPING ACT OF 1984

1. The authority citation for Part 572 continues to read as

follows:

Authority: 5 U.S.C. 553, 46 U.S.C. app. 1701-1707, 1709-1710,

1712 and 1714-1717.

2. In section 572.103, the first sentence of paragraph (a), the

first two sentences of paragraph (b), the first sentence of paragraph

(c), and the second sentence of paragraph (d) are revised; in paragraph

(e), the third sentence is revised, the last sentence is revised, and a

new sentence is added as follows:

Sec. 572.103 Policies.

(a) The Act requires that agreements be processed and reviewed,

upon their initial filing, according to strict statutory deadlines. * *

*

(b) The Act requires that agreements be reviewed, upon their

initial filing, to ensure compliance with all applicable provisions of

the Act and empowers the Commission to obtain information to conduct

that review. This part identifies those classes of agreements which

must be accompanied by information submissions when they are first

filed, and sets forth the kind of information for each class of

agreement which the Commission believes relevant to that review. * * *

(c) In order 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. * * *

(d) * * * In order to minimize delay in implementation of routine

agreements and to avoid the private and public cost of unnecessary

regulation, the Commission is exempting certain classes of agreements

from the filing requirements of this part.

(e) * * * This, however, requires greater monitoring of agreements

after they have become effective, to assure continued compliance with

all applicable provisions of the Act. * * * Only that information which

is necessary to assure that Commission monitoring responsibilities will

be fulfilled 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.

* * * * *

3. In section 572.104, paragraphs (e) through (r) are redesignated

(f) through (s); (s) through (x) are redesignated (u) through (z); (y)

is redesignated (cc); (z) through (cc) are redesignated (dd) through

(gg); (dd) is redesignated (hh); and (ee) and (ff) are redesignated

(ii) and (jj); new paragraphs (e), (t), (aa), (bb), and (kk) are added;

in newly redesignated (g), the last sentence is revised; newly

redesignated (j) is revised; the heading of newly redesignated (o) is

revised; newly redesignated (cc) is revised; and in newly redesignated

(hh), the last sentence is revised to read as follows:

Sec. 572.104 Definitions.

* * * * *

(e) Capacity management or capacity regulation agreement means an

agreement between two or more ocean common carriers which authorizes

withholding some part of the capacity of the parties' vessels from a

specified transportation market, without reducing the real capacity of

those vessels. The term does not include sailing agreements or space

charter agreements.

* * * * *

(g) Conference agreement * * * The term does not include joint

service, pooling, sailing, space charter, or transshipment agreements.

* * * * *

(j) Effective agreement means an agreement approved pursuant to the

Shipping Act, 1916, or effective pursuant to an exemption under that

act, or effective under the Act.

* * * * *

(o) Joint service agreement * * *

* * * * *

(t) Monitoring report means the report containing economic

information which must be filed at defined intervals with regard to

certain kinds of agreements that are effective under the Act.

* * * * *

(aa) 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.

(bb) Rate agreement means an agreement between ocean common

carriers which authorizes agreement upon, on either a binding basis

under a common tariff or on a non-binding basis, or discussion of, any

kind of rate.

(cc) Sailing agreement means an agreement between ocean common

carriers which provides for the rationalization of service by

establishing a schedule of ports which 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 management or

capacity regulation agreements.

* * * * *

(hh) Space charter agreement * * * The arrangement may include

arrangements for equipment interchange and receipt/delivery of cargo,

but may not include capacity management or capacity regulation as used

in this subpart.

* * * * *

(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 bareboat charter

hire expenses.

Sec. 572.30 [Amended]

4. In section 572.301, paragraph (b) is amended by removing the

words ``Information Form'' and the comma immediately thereafter.

Sec. 572.302 [Amended]

5. In section 572.302, paragraph (b) is amended by removing the

words ``Information Form'' and the comma immediately thereafter.

Sec. 572.303 [Amended]

6. In section 572.303, paragraph (b) is amended by removing the

words ``and Information Form.''

Sec. 572.304 [Amended]

7. In section 572.304, paragraph (b) is amended by removing the

words ``and Information Form.''

Sec. 572.305 [Amended]

8. In section 572.305, paragraph (b) is amended by removing the

words ``and Information Form.''

Sec. 572.306 [Amended]

9. In section 572.306, paragraph (b) is amended by removing the

words ``and Information Form.''

Sec. 572.308 [Amended]

10. In section 572.308, paragraph (b) is amended by removing the

words ``and Information Form.''

Sec. 572.309 [Amended]

11. In section 572.309, paragraph (a) introductory text, is amended

by removing the words ``Information Form'' and the comma immediately

thereafter.

12. In subpart D, the heading thereof is revised, as follows:

Subpart D--Filing of Agreements

13. In section 572.401, the heading thereof and paragraphs (a)(2),

(c), (d) and (e) are revised to read as follows:

Sec. 572.401 General requirements.

(a) * * *

(2) Where required by this part, an original and five copies of the

completed Information Form referenced at subpart E of this part; and

* * * * *

(c) Any agreement which does not meet the filing requirements of

this section, including any applicable Information Form requirements,

shall be rejected in accordance with Sec. 572.601.

(d) Assessment agreements shall be filed and shall be effective

upon filing.

(e) 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 waiting period

required under the Act.

14. In section 572.402, paragraph (e)(2) is amended by changing the

references to ``Secs. 572.501 and 572.502'' to ``Secs. 572.403 and

572.404,'' paragraph (f) is amended by changing the references to

``Secs. 572.501(b)(3), 572.501(b)(6) and 572.502(a)(1)'' to

``Secs. 572.403(b)(3), 572.403(b)(6) and 572.404(a)(1),'' and paragraph

(h) is removed.

15. Section 572.405 is removed and section 572.403 is redesignated

572.405 with paragraphs (a) and (g)(3) revised as follows, and section

572.501 of subpart E is redesignated 572.403 with paragraphs (a) and

(b) amended by changing the references to ``Sec. 572.502'' to

``Sec. 572.404'':

Sec. 572.405 Modifications of agreements.

* * * * *

(a) Agreement modifications shall be: filed in accordance with the

provisions of 572.401 and in the format specified in 572.402; with the

content and organization specified in 572.403 and 572.404 and in

accordance with this section.

* * * * *

(g) * * *

* * * * *

(3) The filing of a republished agreement, as described in

paragraph (g)(2) of this section, may be accomplished by filing only an

executed original true copy. No Information Form requirements apply to

the filing of a republished agreement.

16. Section 572.406 is redesignated 572.407 and section 572.404 is

redesignated 572.406 and revised as follows, and section 572.502 of

subpart E is redesignated 572.404 with paragraphs (a) and (b)(1)

amended by changing the reference to ``572.501'' to ``572.403'':

Sec. 572.406 Application for waiver.

(a) Upon a showing of good cause, the Commission may waive the

requirements of Secs. 572.401, 572.402, 572.403, 572.404 and 572.405.

(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 regulation of the agreement.

17. The heading of subpart E is removed and new subpart E is added,

as follows:

Subpart E--Information Form Requirements

Sec. 572.501 General requirements.

(a) Certain agreements must be accompanied, upon their initial

filing, with an Information Form setting forth information and data on

the agreement member lines' prior cargo carryings, revenue results and

port service patterns.

(b) The filing parties to an agreement subject to this subpart

shall complete and submit an original and five copies of the applicable

Information Form at the time the agreement is filed. Copies of the

applicable Form may be obtained at the Office of the Secretary or by

writing to the Secretary of the Commission.

(c) A complete response in accordance with the instructions on the

Information Form shall be supplied to each item. Whenever the party

answering a particular part 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) The Information Form for a particular agreement may be

supplemented with any other information or documentary material.

(e) The Information Form and any additional information submitted

in conjunction with the filing of a particular agreement shall not be

disclosed except as provided in Sec. 572.608.

Sec. 572.502 Subject agreements.

Agreements subject to this subpart are divided into two classes,

Class A/B and Class C. When used in this subpart:

(a) Class A/B agreement means an agreement that is one or more of

the following:

(1) A rate agreement as defined in Sec. 572.104(aa) and

Sec. 572.104(bb);

(2) A joint service agreement as defined in Sec. 572.104(o);

(3) A pooling agreement as defined in Sec. 572.104(y);

(4) A capacity management or capacity regulation agreement as

defined in Sec. 572.104(e);

(5) An agreement authorizing discussion or exchange of data on

vessel-operating costs as defined in Sec. 572.104(kk); or

(6) An agreement authorizing regulation or discussion of service

contracts as defined in Sec. 572.104(dd).

(b) Class C agreement means an agreement that is one or more of the

following:

(1) A sailing agreement as defined in Sec. 572.104(cc); or

(2) A space charter agreement as defined in Sec. 572.104(hh).

Sec. 572.503 Information form for Class A/B agreements.

This section sets forth the Information Form for Class A/B

agreements, with accompanying instructions that are intended to

facilitate the completion of the Form. The instructions should be read

in conjunction with the Shipping Act of 1984 and with this part 572.

Information Form for Class A/B Agreements

Instructions

All agreements between ocean common carriers that are Class A/B

agreements as defined in 46 CFR 572.502(a) must be accompanied by a

completed Information Form for such agreements. A complete response

must be supplied to each part of the Form. Where the party answering

a particular part 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. All sources must be identified.

Part I

Part I requires the filing party to state the full name of the

agreement as also provided under 46 CFR 572.403.

Part II

Part II requires the filing party to list all effective

agreements covering all or part of the geographic scope of the filed

agreement, whose parties include one or more of the parties to the

filed agreement.

Part III(A)

Part III(A) requires the filing party to indicate whether the

agreement authorizes the parties to collectively fix rates under a

common tariff, to agree upon rates on a non-binding basis, or to

discuss rates. Such rate activities may be authorized by a

conference agreement, an interconference agreement, an agreement

among one or more conferences and one or more non-conference ocean

common carriers, or an agreement among two or more non-conference

ocean common carriers.

Part III(B)

Part III(B) requires the filing party to indicate whether the

agreement authorizes the parties to establish a joint service.

Part III(C)

Part III(C) requires the filing party to indicate whether the

agreement authorizes the parties to pool cargo or revenues.

Part III(D)

Part III(D) requires the filing party to indicate whether the

agreement authorizes the parties to establish capacity management or

capacity regulation programs, whereby some part of the capacity of

the parties' vessels is withheld from a specified transportation

market.

Part III(E)

Part III(E) requires the filing party to indicate whether the

agreement authorizes the parties to discuss or exchange data on

vessel-operating costs, which include wages of officers and crew;

fringe benefits; consumable stores; supplies and equipment;

maintenance and repair; insurance; vessel fuel; and charter hire.

Part III(F)

Part III(F) requires the filing party to indicate whether the

agreement authorizes the parties to regulate or discuss service

contracts.

Part IV

Part IV requires the filing party to provide the market shares

of all liner operators within the entire geographic scope of the

agreement and in each sub-trade within the scope of the agreement,

during the most recent calendar quarter for which complete data are

available. 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 should be shown separately.

U.S. port ranges are defined as follows:

Atlantic--Includes ports along the eastern seaboard from the

northern boundary of Maine to, but not including, Key West, Florida.

Also includes all ports bordering upon the Great Lakes and their

connecting waterways as well as all ports in the State of New York

on the St. Lawrence River.

Gulf--Includes all ports along the Gulf of Mexico from Key West,

Florida, to Brownsville, Texas, inclusive. Also includes all ports

in Puerto Rico and the U.S. Virgin Islands.

Pacific--Includes all ports in the States of Alaska, Hawaii,

California, Oregon and Washington. Also includes all ports in Guam,

American Samoa and Saipan.

The formula for calculating market share (in either the entire

agreement scope or in a sub-trade) is as follows:

The total amount of cargo carried on each liner operator's liner

vessels (in either the entire agreement scope or in the particular

sub-trade) during the most recent calendar quarter for which

complete data are available, divided by the total amount of cargo

carried on all liner vessels (in either the entire agreement scope

or in the particular 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.

The amount of cargo is to be measured in TEUs. Liner movements

is the carriage of liner cargo by liner operators. Liner cargoes are

cargoes carried on liner vessels in a liner service. A liner

operator is a vessel-operating common carrier engaged in liner

service. Liner vessels are those vessels used in a liner service.

Liner service refers to a definite, advertised schedule of sailings

at regular intervals. All these definitions, terms and descriptions

apply only for purposes of the Information Form.

Part V

Part V requires the filing party to state, for each agreement

member line that served all or any part of the geographic area

covered by the agreement during all or any part of the most recent

12-month period for which complete data are available, each line's

total cargo carryings (measured in TEUs) within the geographic area,

total revenues within the geographic area, and average revenue per

TEU. The Information Form specifies the format in which the

information is to be reported. Where the agreement covers both U.S.

inbound and outbound liner movements, inbound and outbound data

should be stated separately.

Part VI

Part VI requires the filing party to identify, for each sub-

trade within the scope of the agreement, the top 10 commodities by

cumulative TEUs carried by all the parties during the same 12-month

period used in responding to Part V, or the commodities accounting

for 50 percent of the cumulative TEUs carried by all the parties

during the 12-month period, whichever is greater. Where the

agreement covers both U.S. inbound and outbound liner movements,

inbound and outbound sub-trades should be stated separately.

Part VII

Part VII addresses how each of the parties to the proposed

agreement has carried each major commodity in each sub-trade, and

the revenue results experienced by each party from its carriage of

each commodity. The Information Form specifies the format in which

the information is to be reported.

Part VIII

Part VIII is concerned with the levels of service at each port

within the entire geographic scope of the agreement. The filing

party is required to provide the number of calls at each port by

each of the agreement lines over the 12-month period used in

responding to Parts V, VI and VII, and also to indicate any change

in the nature or type of service to be effected immediately by the

agreement.

Part IX

Part IX is required to be completed only where the agreement

authorizes capacity management or capacity regulation as defined by

46 CFR 572.104(e). The filing party is required to state the total

TEU capacity provided by each party in the geographic service area

covered by the capacity management or capacity regulation program

during the same 12-month period used in responding to Parts V, VI,

VII and VIII, the number of those TEUs that were utilized, and each

party's initial capacity commitment or allocation under the program.

Where the capacity management or capacity regulation program covers

both U.S. inbound and outbound liner movements, inbound and outbound

data should be stated separately. Copies of specified kinds of

reports must also be provided.

Part X(A)

Part X(A) requires the filing party to provide the name, title,

address, telephone number and cable address of a person the

Commission may contact regarding the Information Form and any

information provided therein.

Part X(B)

Part X(B) requires the filing party to provide the name, title,

address, telephone number and cable address of a person the

Commission may contact regarding a request for additional

information or documents.

Part X(C)

Part X(C) requires that the filing party sign the Information

Form and certify that the information in the Form and all

attachments and appendices are, to the best of the filing party's

knowledge, true, correct and complete. The filing party is also

required to indicate his or her relationship with the parties to the

agreement.

Federal Maritime Commission

Information Form For Certain Agreements By Or Among Ocean Common

Carriers

Agreement Number-------------------------------------------------------

(Assigned by FMC)

Part I Agreement Name:-------------------------------------------------

Part II Other Agreements

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 III Agreement Type

(A) Rate Agreements

Does the agreement authorize the parties to collectively fix

rates on a binding basis under a common tariff, or to agree upon

rates on a non-binding basis, or to discuss rates?

Yes {time} No {time}

(B) Joint Service Agreements

Does the agreement authorize the parties to establish a joint

service?

Yes {time} No {time}

(C) Pooling Agreements

Does the agreement authorize the parties to pool cargoes or

revenues?

Yes {time} No {time}

(D) Capacity Management or Capacity Regulation

Does the agreement authorize the parties to establish capacity

management or capacity regulation programs?

Yes {time} No {time}

(E) Vessel-Operating Costs

Does the agreement authorize the parties to discuss or exchange

data on vessel-operating costs?

Yes {time} No {time}

(F) Service Contracts

Does the agreement authorize the parties to discuss or agree on

service contract terms and conditions, on either a binding or non-

binding basis?

Yes {time} No {time}

Parts IV, V, VI, VII, VIII and X must be completed for all

agreements. If Part III(D) is answered ``Yes,'' complete Part IX as

well.

Part IV Market Share Information

Provide the market shares of all liner operators within the

entire scope of the agreement and within each agreement sub-trade

during the most recent calendar quarter for which complete data are

available. The information should be provided in the format below:

Market Share Report for (Indicate Either Entire Agreement Scope, or Sub-

trade Name) Time Period

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

TEUs Percent

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

Agreement Market Share

Line A................................................ X,XXX XX

Line B................................................ X,XXX XX

Line C................................................ X,XXX XX

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

Total Agreement Market Share.................... X,XXX XX

Non-Agreement Market Share

Line X................................................ X,XXX XX

Line Y................................................ X,XXX XX

Line Z................................................ X,XXX XX

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

Total Non-Agreement Market Share................ X,XXX XX

=================

Total Market.................................... X,XXX 100

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

Part V Cargo and Revenue Results Agreement-Wide

For each party that served all or any part of the geographic

area covered by the entire agreement during all or any part of the

most recent 12-month period for which complete data are available,

state total cargo carryings in TEUs within the entire geographic

area, total revenues within the geographic area, and average revenue

per TEU. The same 12-month period must be used for each party. The

information should be provided in the format below:

Time Period

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

Avg.

Carrier Total Total revenue

TEUs revenues per TEU

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

A...................................... ....... $ $

B...................................... ....... $ $

C...................................... ....... $ $

Etc.................................... ....... $ $

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

Part VI Leading Commodities

For each sub-trade within the scope of the agreement, list the

top 10 commodities by cumulative TEUs carried by all the parties

during the same time period used in responding to Part V, or list

the commodities accounting for 50 percent of the cumulative TEUs

carried by all the parties during the same 12-month period,

whichever list is longer. The same 12-month period must be used in

reporting for each sub-trade. The information should be provided in

the format below:

Time Period (Same as That Used in Responding to Part V)

I. Sub-trade

A. First leading commodity

B. Second leading commodity

C. Third leading commodity etc.

II. Sub-trade

A. First leading commodity etc.

Part VII Cargo and Revenue Results by Sub-Trade

For the same time period used in responding to Parts V and VI,

and for each sub-trade within the scope of the agreement, and for

each of the leading commodities listed for each sub-trade in the

response to Part VI, and for each party, provide the following

information:

(1) Total TEUs carried port-to-port under tariff rates, and

average gross revenue per TEU.

(2) Total TEUs carried port-to-port under service contracts, and

average gross revenue per TEU.

(3) Total TEUs carried by intermodal service under tariff rates,

and average gross revenue per TEU.

(4) Total TEUs carried by intermodal service under service

contracts, and average gross revenue per TEU.

The information should be provided in the format below:

Time Period (Same as That Used in Responding to Part V)

I. Sub-trade A

A. First leading commodity

1.Carrier A

(a) Port-to-port service under tariff rates

(1) Total TEUs of first leading commodity carried

(2)Average gross revenue per TEU

(b) Port-to-port service under service contracts

(1) Total TEUs of first leading commodity carried

(2) Average gross revenue per TEU

(c) Intermodal service under tariff rates

(1) Total TEUs of first leading commodity carried

(2) Average gross revenue per TEU

(d) Intermodal service under service contracts

(1) Total TEUs of first leading commodity carried

(2) Average gross revenue per TEU

2. Carrier B

(a) etc.

3. etc.

B. Second leading commodity

1. Carrier A

(a) etc.

II. Sub-trade B

A. First leading commodity

1. etc.

Part VIII Port Service

For each port within the entire geographic scope of the

agreement, state the number of port calls by each of the parties

over the same time period used in responding to Parts V, VI and VII.

The information should be provided in the format below:

Time Period

[Same as that used in responding to Part V]

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

Port Port Port Port Port

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

Carrier A............................

Carrier B............................

Carrier C............................

Etc..................................

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

Also, for each port within the entire geographic scope of the

agreement, indicate any change in the nature or type of service to

be effected immediately by the agreement, including base port

designation and frequency of vessel calls.

Part IX Capacity Management or Regulation (if Applicable)

For each party that served the geographic service area to be

covered by the capacity management or capacity regulation program

during all or any part of the 12-month period used in responding to

Parts V, VI, VII and VIII, provide the information indicated in the

format below:

Time Period

[Same as that used in responding to Part V]

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

Total TEU

capacity

provided Total Initial TEU

in the TEUs capacity

geographic utilized commitment/

service allocation

area

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

Carrier A...........................

Carrier B...........................

Carrier C...........................

Etc.................................

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

In addition, provide copies of any reports or analyses dealing

with cargo space utilization, cargo level forecasts or new ship

buildings, which were prepared during the 12 months prior to the

filing of the agreement and circulated among at least two parties.

Part X

(A) Identification of Person(s) to Contact Regarding the

Information Form

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

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

(3) Firm Name and Business---------------------------------------------

(4) Business Telephone Number------------------------------------------

(5) Cable Address------------------------------------------------------

(B) Identification of an 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 572.606).

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

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

(3) Address------------------------------------------------------------

(4) Telephone----------------------------------------------------------

(5) Cable Address------------------------------------------------------

(C) Certification

This Information Form, together with any and all appendices and

attachments thereto, was prepared and assembled in accordance with

instructions issued by the Federal Maritime Commission. The

information is, to the best of my knowledge, true, correct, and

complete.

Name (please print or type)--------------------------------------------

Title------------------------------------------------------------------

Relationship with parties to agreement---------------------------------

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

Signature--------------------------------------------------------------

Date-------------------------------------------------------------------

Sec. 572.504 Information form for Class C agreements.

This section sets forth the Information Form for Class C

agreements, with accompanying instructions that are intended to

facilitate the completion of the Form. The explanation and instructions

should be read in conjunction with the Shipping Act of 1984 and 46 CFR

part 572.

Information Form for Class C Agreements

Instructions

All agreements between or among ocean common carriers that are

Class C agreements as defined in 46 CFR 572.502(b) must be

accompanied by a completed Information Form for such agreements. A

complete response must be supplied to the Form. Where the filing

party 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. All sources must be identified.

Part I

Part I requires the filing party to state the full name of the

agreement as also provided under 46 CFR 572.403.

Part II

Part II requires the filing party to list all effective

agreements covering all or part of the geographic scope of the filed

agreement, whose parties include one or more of the parties to the

filed agreement.

Part III

Part III is concerned with the level of service at each port

within the entire geographic scope of the agreement. The filing

party is required to state the number of calls at each port by each

of the parties over the most recent 12-month period for which

complete data are available, and also to indicate any change in the

nature or type of service to be effected immediately by the

agreement.

Part IV(A)

Part IV(A) requires the filing party to provide the name, title,

address, telephone number and cable address of a person the

Commission may contact regarding the Information Form and any

information provided therein.

Part IV(B)

Part IV(B) requires the filing party to provide the name, title,

address, telephone number and cable address of a person the

Commission may contact regarding a request for additional

information or documents.

Part IV(C)

Part IV(C) requires that the filing party sign the Information

Form and certify that the information in the Form and all

attachments and appendices are, to the best of the filing party's

knowledge, true, correct and complete. The filing party is also

required to indicate his or her relationship with the parties to the

agreement.

Federal Maritime Commission

Information Form For Certain Agreements By or Among Ocean Common

Carriers

Agreement Number-------------------------------------------------------

(Assigned by FMC)

Part I Agreement Name:-------------------------------------------------

Part II Other Agreements

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 III Port Service

For each port within the entire geographic scope of the

agreement, state the number of port calls by each of the parties

over the most recent 12-month period for which complete data are

available. The information should be provided in the format below.

Time Period

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

Port Port Port Port Port

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

Carrier A............................

Carrier B............................

Carrier C............................

Etc..................................

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

Also, for each port within the entire geographic scope of the

agreement, indicate any change in the nature or type of service to

be effected immediately by the agreement, including base port

designation and frequency of vessel calls.

Part IV

(A) Identification of Person(s) to Contact Regarding the

Information Form

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

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

(3) Firm Name and Business---------------------------------------------

(4) Business Telephone Number------------------------------------------

(5) Cable Address------------------------------------------------------

(B) Identification of an 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 572.606).

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

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

(3) Address------------------------------------------------------------

(4) Telephone----------------------------------------------------------

(5) Cable Address------------------------------------------------------

(C) Certification

This Information Form, together with any and all appendices and

attachments thereto, was prepared and assembled in accordance with

instructions issued by the Federal Maritime Commission. The

information is, to the best of my knowledge, true, correct, and

complete.

Name (please print or type)--------------------------------------------

Title------------------------------------------------------------------

Relationship with parties to agreement---------------------------------

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

Signature--------------------------------------------------------------

Date-------------------------------------------------------------------

Sec. 572.505 Application for waiver.

(a) Upon a showing of good cause, the Commission may waive any part

of the information form requirements of Secs. 572.503 or 572.504.

(b) Requests for such a waiver shall be submitted in advance of the

filing of the information form to which the requested waiver would

apply and shall state (1) the specific requirements 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 regulation of the agreement, either

during pre-implementation review or during post- implementation

monitoring. The Commission will take into account the presence or

absence of shipper complaints in considering an application for a

waiver.

18. In section 572.601, paragraph (a) and the first sentence of

paragraph (b)(1) are revised, as follows:

Sec. 572.601 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

filing 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. 572.505.

(b)(1) The Commission shall reject any agreement that otherwise

fails to comply with the filing and Information Form requirements of

the Act and this part.

* * * * *

19. In section 572.608, paragraph (b)(2) is revised, as follows:

Sec. 572.608 Confidentiality of submitted materials.

* * * * *

(b) * * *

(2) It is disclosed to either body of Congress or to a duly

authorized committee or subcommittee of Congress.

* * * * *

20. In section 572.701, paragraphs (b), (c) and (d) are removed,

paragraph (a)(1) is redesignated (b) and is revised, paragraph (a)(2)

is redesignated (c), a new paragraph (a) is added, paragraph (e) is

redesignated (d) and is revised, a new paragraph (e) is added,

paragraph (f) is redesignated (g) and is revised, and a new paragraph

(f) is added, as follows:

Sec. 572.701 General requirements.

(a) Certain agreements are required to submit quarterly Monitoring

Reports on an ongoing basis for as long as they remain in effect,

setting forth information and data on the agreement member lines' cargo

carryings, revenue results and port service patterns under the

agreement. In addition, certain agreements are required to submit

minutes of their meetings.

(b) Address. Monitoring Reports and minutes required by this

subpart should be addressed to the Commission as follows: Director,

Bureau of Trade Monitoring and Analysis, Federal Maritime Commission,

Washington, D.C. 20573-0001. Copies of the applicable Monitoring Report

form may be obtained from the Bureau of Trade Monitoring and Analysis.

The lower, left-hand corner of the envelope in which each Monitoring

Report or set of minutes is forwarded should indicate the nature of its

contents and the related agreement number. For example: ``Monitoring

Report, Agreement 5000'' or ``Minutes, Agreement 5000.''

* * * * *

(d) Time for filing. Monitoring Reports shall be filed within 30

days of the end of each calendar quarter. Minutes filed on an annual

(calendar) year basis shall be filed by February 15 of the following

year. Other documents shall be filed within 30 days of the end of a

quarter-year, a meeting, or the receipt of a request for documents.

(e) A complete response in accordance with the instructions on the

applicable Monitoring Report shall be supplied to each item. Whenever

the party answering a particular part 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.

(f) A Monitoring Report for a particular agreement may be

supplemented with any other information or documentary material.

(g) Confidentiality. The Monitoring Reports, minutes, and any other

additional information submitted for a particular agreement will be

exempt from disclosure under 5 U.S.C. 552, except 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.

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.

21. Section 572.702 is redesignated 572.706, the heading thereof is

revised, and a new paragraph (d) is added, as follows:

Sec. 572.706 Filing of minutes--including shippers' requests and

complaints, and consultations

* * * * *

(d) Serial numbers. (1) Each set of minutes filed with the

Commission should be assigned a number. For example, a conference

filing minutes of its first meeting upon the effective date of this

rule should assign Meeting No. 1 to its minutes, the next meeting will

be assigned Meeting No. 2, and so on.

(2) Any conference or rate agreement which, for its own internal

purposes, has a system for assigning sequential numbers to its minutes

in a manner which differs from that set forth in paragraph (d)(1) of

this section may continue to utilize its own system thereof.

572.703 [Redesignated]

22. Section 572.703 is redesignated 572.707, and the reference to

``Sec. 572.702'' in the introductory text is changed to

``Sec. 572.706,'' as follows:

Sec. 572.707 Other documents.

Each agreement required to file minutes pursuant to Sec. 572.706 *

* *.

* * * * *

23. Section 572.704 is redesignated 572.709 and is revised, as

follows:

Sec. 572.709 Application for waiver.

(a) Upon a showing of good cause, the Commission may waive any

requirement of this subpart.

(b) Requests for such a waiver shall be submitted in advance of the

filing of the Monitoring Report or minutes to which the requested

waiver would apply and shall state (1) the specific requirements 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 regulation of the agreement. The

Commission will take into account the presence or absence of shipper

complaints in considering an application for a waiver.

24. A new section 572.702 is added, as follows:

Sec. 572.702 Agreements subject to Monitoring Report requirements.

Agreements subject to the Monitoring Report requirements of this

subpart are divided into three classes, Class A, Class B and Class C.

When used in this subpart:

(a) Class A agreement means an agreement that is subject to the

definition set forth in Sec. 572.502(a) and has market shares of 50

percent or more in half or more of its sub-trades.

(b) Class B agreement means an agreement that is subject to the

definition set forth in Sec. 572.502(a) but does not have market shares

of 50 percent or more in half or more of its sub-trades.

Classification of an agreement as ``Class A'' or ``Class B'' for

purposes of its reporting obligations under this subpart shall be done

by the Bureau of Trade Monitoring and Analysis, based in the first

instance on the market share data reported on the agreement's

Information Form pursuant to Sec. 572.503, or on similar data otherwise

obtained. Thereafter, at the beginning of each calendar year, the

Bureau of Trade Monitoring and Analysis shall determine whether the

agreement should be classified as ``Class A'' or ``Class B'' for that

year, based on the market share data reported on the agreement's most

recent quarterly Monitoring Report.

(c) Class C agreement means an agreement that is subject to the

definition set forth in Sec. 572.502(b).

25. A new section 572.703 is added, as follows:

Sec. 572.703 Monitoring report for Class A agreements.

This section sets forth the Monitoring Report form for Class A

agreements, with accompanying instructions that are intended to

facilitate the completion of the Report. The instructions should be

read in conjunction with the Shipping Act of 1984 and with this part

572.

Monitoring Report for Class A Agreements

Instructions

A complete response must be supplied to each part of the Report.

Where the party answering a particular part 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. All sources must be identified.

Part by Part Explanation

Part I

Part I requires the filing party to state the full name of the

agreement, and the assigned FMC number.

Part II

Part II requires the filing party to indicate any change

occurring during the calendar quarter to the list of other

agreements set forth in Part II of the Information Form.

Part III(A)

Part III(A) requires the filing party to indicate whether the

agreement authorizes the parties to operate as a conference.

Part III(B)

Part III(B) requires the filing party to indicate whether the

agreement authorizes the parties to establish capacity management or

capacity regulation programs, as defined in Sec. 572.104(e), whereby

some part of the capacity of the parties' vessels is withheld from a

specified transportation market.

Part IV

Part IV requires the filing party to provide the market shares

of all liner operators within the entire geographic scope of the

agreement and in each sub-trade within the scope of the agreement

during the most recent calendar quarter. Sub-trade is defined as the

scope of all liner movements between each U.S. port range 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 should be shown separately.

U.S. port ranges are defined as follows:

Atlantic--Includes ports along the eastern seaboard from the

northern boundary of Maine to, but not including, Key West, Florida.

Also includes all ports bordering upon the Great Lakes and their

connecting waterways as well as all ports in the State of New York

on the St. Lawrence River.

Gulf--Includes all ports along the Gulf of Mexico from Key West,

Florida, to Brownsville, Texas, inclusive. Also includes all ports

in Puerto Rico and the U.S. Virgin Islands.

Pacific--Includes all ports in the States of Alaska, Hawaii,

California, Oregon and Washington. Also includes all ports in Guam,

American Samoa and Saipan.

The formula for calculating market share (in either the entire

agreement scope or in a sub-trade) is as follows:

The total amount of cargo carried on each liner operator's liner

vessels (in either the entire agreement scope or in the particular

sub-trade) during the calendar quarter, divided by the total amount

of cargo carried on all liner vessels (in either the entire

agreement scope or in the particular sub-trade) during the 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.

The amount of cargo is to be measured in TEUs. Liner movements

is the carriage of liner cargo by liner operators. Liner cargoes are

cargoes carried on liner vessels in a liner service. A liner

operator is a vessel-operating common carrier engaged in liner

service. Liner vessels are those vessels used in a liner service.

Liner service refers to a definite, advertised schedule of sailings

at regular intervals. All these definitions, terms and descriptions

apply only for purposes of the Monitoring Report.

Part V

Part V requires the filing party to state each agreement member

line's total cargo carryings (measured in TEUs) during the calendar

quarter within the entire geographic area covered by the agreement,

each line's total revenues within the geographic area during the

calendar quarter, and average revenue per TEU. The Monitoring Report

specifies the format in which the information is to be reported.

Where the agreement covers both U.S. inbound and outbound liner

movements, inbound and outbound data should be stated separately.

Part VI

Part VI requires the filing party to identify, for each sub-

trade within the scope of the agreement, the top 10 commodities by

cumulative TEUs carried by all the parties during the calendar

quarter, or the commodities accounting for 50 percent of the

cumulative TEUs carried by all the parties during the calendar

quarter, whichever is greater. Where the agreement covers both U.S.

inbound and outbound liner movements, inbound and outbound sub-

trades should be stated separately.

Part VII

Part VII addresses how each of the parties has carried each

major commodity in each sub-trade, and the revenue results

experienced by each party from its carriage of each commodity. The

Monitoring Report specifies the format in which the information is

to be reported.

Part VIII

Part VIII is required to be completed if Part III(A) is answered

``YES.'' The filing party is required to indicate the extent to

which each party has taken independent rate actions on each of the

leading commodities in each of the sub-trades. Part VIII also

inquires into the type of shipper--beneficial cargo owner, non-

vessel-operating common carrier, or shippers' association--for whom

independent rate actions have been taken. The Monitoring Report

specifies the format in which the information is to be reported.

Part IX

Part IX is concerned with the level of service at each port

within the entire geographic scope of the agreement. The filing

party is required to provide the number of calls at each port by

each of the parties during the calendar quarter, and also to

indicate any change in the nature or type of service effected during

the calendar quarter.

Part X

Part X is required to be completed if part III(B) is answered

``YES.'' The filing party is required to submit responses to a

number of inquiries into the operation of the capacity management or

capacity regulation program during the calendar quarter. Where the

program covers both U.S. inbound and outbound liner movements,

inbound and outbound data should be stated separately. Copies of

specified kinds of documents must also be provided.

Part XI(A)

Part XI(A) requires the filing party to provide the name, title,

address, telephone number and cable address of a person the

Commission may contact regarding the Monitoring Report and any

information provided therein.

Part XI(B)

Part XI(B) requires that the filing party sign the Monitoring

Report and certify that the information in the Report and all

attachments and appendices are, to the best of the filing party's

knowledge, true, correct and complete. The filing party is also

required to indicate his or her relationship with the parties to the

agreement.

Federal Maritime Commission

Monitoring Report For Class A Agreements Between or Among Ocean

Common Carriers

Agreement Number-------------------------------------------------------

(Assigned by FMC)

Part I Agreement Name:-------------------------------------------------

Part II Other Agreements

Indicate any change occurring during the calendar quarter to the

list of other agreements set forth in Part II of the Information

Form.

Part III Agreement Type

(A) Conferences

Does the agreement authorize the parties to operate as a

conference?

Yes {time} No {time}

(B) Capacity Management or Regulation

Does the agreement authorize the parties to establish capacity

management or capacity regulation programs?

Yes {time} No {time}

Part IV Market Share Information

Provide the market shares of all liner operators within the

entire geographic scope of the agreement and within each sub-trade

during the calendar quarter. The information should be provided in

the format below:

Market Share Report for Calendar Quarter

[Indicate either entire agreement scope, or sub-trade name]

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

TEUs Percent

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

Agreement market share:

Line A...................................... X,XXX XX

Line B...................................... X,XXX XX

Line C...................................... X,XXX XX

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

Total Agreement Market Share.............. X,XXX XX

Non-Agreement Market Share:...................

Line X........................................ X,XXXX XX

Line Y........................................ X,XXX XX

Line Z........................................ X,XXX XX

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

Total Non-Agreement Market Share.......... X,XXX XX

Total Market.............................. X,XXX 100

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

Part V Cargo and Revenue Results Agreement-Wide

For each agreement member line, provide total cargo carryings

(measured in TEUs) during the calendar quarter within the entire

geographic area covered by the agreement, total revenues within the

geographic area during the calendar quarter, and average revenue per

TEU. The information should be provided in the format below:

Calendar Quarter

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

Avg.

Carrier Total Total revenue

TEUs revenues per TEU

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

A.................................... $ $

B.................................... $ $

C.................................... $ $

Etc.................................. $ $

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

Part VI Leading Commodities

For each sub-trade within the scope of the agreement, list the

top 10 commodities by cumulative TEUs carried by all the parties

during the calendar quarter, or list the commodities accounting for

50 percent of the cumulative TEUs carried by all the parties during

the calendar quarter, whichever list is longer. The information

should be provided in the format below:

Calendar Quarter

I. Sub-trade

A. First leading commodity

B. Second leading commodity

C. Third leading commodity

etc.

II. Sub-trade

A. First leading commodity

etc.

Part VII Cargo and Revenue Results by Sub-Trade

For each sub-trade within the scope of the agreement, and for

each of the leading commodities listed for each sub-trade in the

response to Part VI, and for each party, provide the following

information:

(1) Total TEUs carried port-to-port under tariff rates, and

average gross revenue per TEU.

(2) Total TEUs carried port-to-port under service contracts, and

average gross revenue per TEU.

(3) Total TEUs carried by intermodal service under tariff rates,

and average gross revenue per TEU.

(4) Total TEUs carried by intermodal service under service

contracts, and average gross revenue per TEU.

The information should be provided in the format below:

Calendar Quarter

I. Sub-trade A

A. First leading commodity

1. Carrier A

(a) Port-to-port service under tariff rates

(1) Total TEUs of first leading commodity carried

(2) Average gross revenue per TEU

(b) Port-to-port service under service contracts

(1) Total TEUs of first leading commodity carried

(2) Average gross revenue per TEU

(c) Intermodal service under tariff rates

(1) Total TEUs of first leading commodity carried

(2) Average gross revenue per TEU

(d) Intermodal service under service contracts

(1) Total TEUs of first leading commodity carried

(2) Average gross revenue per TEU

2. Carrier B

(a) etc.

3. etc.

B. Second leading commodity

1. Carrier A

(a) etc.

II. Sub-trade B

A. First leading commodity

1. etc.

Part VIII Independent Rate Actions (if applicable)

For each sub-trade within the scope of the agreement, and for

each of the leading commodities listed for each sub-trade in the

response to Part VI, and for each party, state the number of

independent rate actions taken during the calendar quarter

applicable to that commodity moving in that sub-trade, and the total

number of TEUs of that commodity covered by the independent actions.

Also, state the name of each shipper for whom an independent rate

action was taken on that commodity during the calendar quarter, and

state whether the shipper was a beneficial cargo owner, a non-

vessel-operating common carrier, or a shippers' association. The

information should be provided in the format below:

Calendar Quarter

I. Sub-trade A

A. First leading commodity

1. Carrier A

(a) Number of IA rate actions

(b) Number of TEUs

(c) Shippers affected

(1) Shipper A--name and type

(2) Shipper B--name and type

etc.

2. Carrier B

(a) etc.

B. Second leading commodity

1. Carrier A

(a) etc.

II. Sub-trade B

A. First leading commodity

1. etc.

Part IX Port Service

For each port within the entire geographic scope of the

agreement, state the number of port calls by each of the agreement

member lines during the calendar quarter. The information should be

provided in the format below:

Calendar Quarter

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

Port Port Port Port Port

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

Carrier A............................

Carrier B............................

Carrier C............................

Etc..................................

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

Also, for each port within the entire geographic scope of the

agreement, indicate any change in the nature or type of service

effected during the calendar quarter, including base port

designation and frequency of vessel calls.

Part X Capacity Management or Regulation (if applicable)

For each party that served during the calendar quarter the

geographic service area covered by the capacity management or

capacity regulation program, provide the information indicated in

the format below:

Calendar Quarter

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

Total TEU

TEU capacity Total TEUs

capacity provided in TEUs of TEUs of non- utilized in

commitment the program program the

or geographic cargo cargo geographic

allocation service carried carried service

area area

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

Carrier A......................................

Carrier B......................................

Carrier C......................................

Etc............................................

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

Also, identify all member lines who declined to carry cargo on

the basis of their capacity commitments or allocations, and describe

the circumstance of each instance and the amounts of cargo involved.

Also, provide copies of any reports or analyses dealing with

cargo space utilization, cargo level forecasts or new ship

buildings, which were prepared during the calendar quarter and

circulated among at least two agreement members.

Part XI

(A) Identification of Person(s) to Contact Regarding the Monitoring

Report

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

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

(3) Firm Name and Business---------------------------------------------

(4) Business Telephone Number------------------------------------------

(5) Cable 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-------------------------------------------------------------------

26. A new section 572.704 is added, as follows:

Sec. 572.704 Monitoring report for Class B agreements.

This section sets forth the Monitoring Report form for Class B

agreements, with accompanying instructions that are intended to

facilitate the completion of the Report. The instructions should be

read in conjunction with the Shipping Act of 1984 and with this part

572.

MONITORING REPORT FOR CLASS B AGREEMENTS

Instructions

A complete response must be supplied to each part of the Report.

Where the party answering a particular part 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. All sources must be identified.

Part by Part Explanation

Part I

Part I requires the filing party to state the full name of the

agreement, and the assigned FMC number.

Part II

Part II requires the filing party to indicate any change

occurring during the calendar quarter to the list of other

agreements set forth in Part II of the Information Form.

Part III

Part III requires the filing party to provide the market shares

of all liner operators within the entire geographic scope of the

agreement and in each sub-trade within the scope of the agreement

during the most recent calendar quarter. Sub-trade is defined as the

scope of all liner movements between each U.S. port range 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 should be shown separately.

U.S. port ranges are defined as follows:

Atlantic--Includes ports along the eastern seaboard from the

northern boundary of Maine to, but not including, Key West, Florida.

Also includes all ports bordering upon the Great Lakes and their

connecting waterways as well as all ports in the State of New York

on the St. Lawrence River.

Gulf--Includes all ports along the Gulf of Mexico from Key West,

Florida, to Brownsville, Texas, inclusive. Also includes all ports

in Puerto Rico and the U.S. Virgin Islands.

Pacific--Includes all ports in the States of Alaska, Hawaii,

California, Oregon and Washington. Also includes all ports in Guam,

American Samoa and Saipan.

The formula for calculating market share (in either the entire

agreement scope or in a sub-trade) is as follows:

The total amount of cargo carried on each liner operator's liner

vessels (in either the entire agreement scope or in the particular

sub-trade) during the calendar quarter, divided by the total amount

of cargo carried on all liner vessels (in either the entire

agreement scope or in the particular sub-trade) during the 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.

The amount of cargo is to be measured in TEUs. Liner movements

is the carriage of liner cargo by liner operators. Liner cargoes are

cargoes carried on liner vessels in a liner service. A liner

operator is a vessel-operating common carrier engaged in liner

service. Liner vessels are those vessels used in a liner service.

Liner service refers to a definite, advertised schedule of sailings

at regular intervals. All these definitions, terms and descriptions

apply only for purposes of the Monitoring Report.

Part IV

Part IV requires the filing party to state each agreement member

line's total cargo carryings (measured in TEUs) during the calendar

quarter within the entire geographic area covered by the agreement,

each line's total revenues within the geographic area during the

calendar quarter, and average revenue per TEU. The Monitoring Report

specifies the format in which the information is to be reported.

Where the agreement covers both U.S. inbound and outbound liner

movements, inbound and outbound data should be stated separately.

Part V

Part V requires the filing party to identify any change in the

nature or type of service at any of the ports within the entire

geographic scope of the agreement.

Part VI(A)

Part VI(A) requires the filing party to provide the name, title,

address, telephone number and cable address of a person the

Commission may contact regarding the Monitoring Report and any

information provided therein.

Part VI(B)

Part VI(B) requires generally that the filing party sign the

Monitoring Report and certify that the information in the Report and

all attachments and appendices are, to the best of the filing

party's knowledge, true, correct and complete. The filing party is

also required to indicate his or her relationship with the parties

to the agreement.

Federal Maritime Commission

Monitoring Report For Class B Agreements Between or Among Ocean

Common Carriers

Agreement Number-------------------------------------------------------

(Assigned by FMC)

Part I Agreement Name:-------------------------------------------------

Part II Other Agreements

Indicate any change occurring during the calendar quarter to the

list of other agreements set forth in Part II of the Information

Form.

Part III Market Share Information

Provide the market shares of all liner operators within the

entire geographic scope of the agreement and within each sub-trade

during the calendar quarter. The information should be provided in

the format below:

Market Share Report for Calendar Quarter

[indicate either entire agreement scope, or sub-trade name]

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

TEUs Percent

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

Agreement Market Share:

Line A...................................... X,XXX XX

Line B...................................... X,XXX XX

Line C...................................... X,XXX XX

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

Total Agreement Market Share.............. X,XXX XX

Non-Agreement market share:...................

Line X...................................... X,XXX XX

Line Y...................................... X,XXX XX

Line Z...................................... X,XXX XX

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

Total Non-Agreement Market Share.......... X,XXX XX

Total Market.............................. X,XXX 100

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

Part IV Cargo and Revenue Results Agreement-Wide

For each agreement member line, provide total cargo carryings

(measured in TEUs) during the calendar quarter within the entire

geographic area covered by the agreement, total revenues within the

geographic area during the calendar quarter, and average revenue per

TEU. The information should be provided in the format below:

Calendar Quarter

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

Avg.

Carrier Total Total revenue

TEUs revenues per TEU

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

A.................................... ......... $ $

B.................................... ......... $ $

C.................................... ......... $ $

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

Part V Port Service

For each port within the entire geographic scope of the

agreement, indicate any change in the nature or type of service

effected during the calendar quarter, including base port

designation and frequency of vessel calls.

Part VI

(A) Identification of Person(s) to Contact Regarding the Monitoring

Report

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

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

(3) Firm Name and Business---------------------------------------------

(4) Business Telephone Number------------------------------------------

(5) Cable 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.Q

Name (please print or type)--------------------------------------------

Title------------------------------------------------------------------

Relationship with parties to agreement---------------------------------

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

Signature--------------------------------------------------------------

Date-------------------------------------------------------------------

27. A new section 572.705 is added, as follows:

Sec. 572.705 Monitoring report for Class C agreements.

This section sets forth the Monitoring Report form for Class C

agreements, with accompanying instructions that are intended to

facilitate the completion of the Report. The explanation and

instructions should be read in conjunction with the Shipping Act of

1984 and this part 572.

Monitoring Report for Class C Agreements

Instructions

A complete response must be supplied to the Report. Where the

filing party 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. All sources must be identified.

Part by Part Explanation

Part I

Part I requires the filing party to state the full name of the

agreement, and the assigned FMC number.

Part II

Part II requires the filing party to indicate any change

occurring during the calendar quarter to the list of other

agreements set forth in Part II of the Information Form.

Part III

Part III requires the filing party to identify any change in the

nature or type of service at any of the ports within the entire

geographic scope of the agreement.

Part IV(A)

Part IV(A) requires the filing party to provide the name, title,

address, telephone number and cable address of a person the

Commission may contact regarding the Monitoring Report and any

information provided therein.

Part IV(B)

Part IV(B) requires generally that the filing party sign the

Monitoring Report and certify that the information in the Report and

all attachments and appendices are, to the best of the filing

party's knowledge, true, correct and complete. The filing party is

also required to indicate his or her relationship with the parties

to the agreement.

Federal Maritime Commission

Monitoring Report For Class C Agreements Between or Among Ocean

Common Carriers

Agreement Number-------------------------------------------------------

(Assigned by FMC)

Part I Agreement Name:-------------------------------------------------

Part II Other Agreements

Indicate any change occurring during the calendar quarter to the

list of other agreements set forth in Part II of the Information

Form.

Part III Port Service

For each port within the entire geographic scope of the

agreement, indicate any change in the nature or type of service

effected during the calendar quarter, including base port

designation and frequency of vessel calls.

Part IV

(A) Identification of Person(s) to Contact Regarding the Monitoring

Report

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

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

(3) Firm Name and Business---------------------------------------------

(4) Business Telephone Number------------------------------------------

(5) Cable 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-------------------------------------------------------------------

28. A new section 572.708 is added, as follows:

Sec. 572.708 Retention of records.

Each agreement required to file minutes pursuant to this subpart

shall retain a copy of each document listed in said minutes for a

minimum period of 3 years after the date the document is distributed to

the members. Such documents may be requested by the Director, Bureau of

Trade Monitoring, in writing by reference to a specific minute, and

shall indicate that the documents will be received in confidence.

Requested documents shall be furnished by the parties within the time

specified.

29. Section 572.902 is revised, as follows:

Sec. 572.902 Falsification of reports.

Knowing falsification of any report required by the Act or this

part, including knowing falsification of any item in any applicable

Information Form or Monitoring Report, 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.

Appendix A [Removed]

30. Appendix A to Part 572 is removed.

By the Commission.

Joseph C. Polking,

Secretary.

[FR Doc. 94-29760 Filed 12-2-94; 8:45 am]

BILLING CODE 6730-0l-W