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: Final rule.

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SUMMARY: The Federal Maritime Commission is amending its regulations

governing the information submission requirements for agreements among

ocean common carriers subject to the Shipping Act of 1984. Certain

kinds of newly filed agreements are required to be accompanied by a new

information form, 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 member lines of certain kinds of effective agreements will be

required to submit reports on their operations on a regular and ongoing

basis, which will reflect the lines' cargo carryings, revenue results

and port service patterns after they entered into the agreement. The

application of this 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 rule must still be filed with the

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

exemptions, but does not have any information form or reporting

obligations. The intent of this 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.

EFFECTIVE DATE: April 19, 1996, except for 46 CFR 572.701(a) and 46 CFR

572.702, which are stayed until further notice.

FOR FURTHER INFORMATION CONTACT:

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

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

[[Page 11565]]

Austin L. Schmitt, Director, Bureau of Economics and Agreement

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 which 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 be 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 where a

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

protests were filed by other carriers, who effectively delayed or

blocked the approval of 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'' (``IA'') 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 IA rate in

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

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

common carriers that 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\

\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

forwarded compensation, all of which the Commission previously had

found violated section 15.\3\

\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\

\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. app. 1710(c).

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

[[Page 11566]]

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.

\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 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 authorize activities barred by 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

unjust discrimination 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.

C. The Proposed Rule

On December 5, 1994, the Commission published a Notice of Proposed

Rulemaking (``NPR'' or ``proposed rule'') (59 FR 62372), which proposed

significant amendments to the Commission's regulations governing the

submission of information by ocean carriers about their agreements. The

Commission explained that, while the existing regulations had served

their purpose adequately, the increasingly comprehensive and complex

agreements filed in recent years indicated a need for updating and

augmentation. The Commission pointed out that 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 networks of vessel and space charter agreements covering

a multitude of trade lanes have been established.

In response to these industry developments, the Commission proposed

new regulations designed to elicit more detailed and specific

information on ocean carrier agreements in a more structured and

comprehensive manner. The proposed rule formulated a sliding scale of

information demands for three classes of agreements that authorized

certain specific activities, ``Class A,'' ``Class B'' and ``Class C.''

An agreement that did not authorize any of the specified activities

would still be required by law to be filed with the Commission, unless

it qualified for one of the existing exemptions established by the

Commission,\8\ but would not have any information obligations.

\8\ See 46 CFR 572.302-11.

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

Under the proposed rule, Class A and Class B agreements permitted

the same kinds of activities; the difference between them was market

share. An agreement would be a Class A or a Class B agreement if it

authorized any one of the following six activities:

Ratemaking. This specifically included 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 less formal agreements which authorize discussion and

agreement upon rates on a ``non-binding'' basis. The Commission noted

that the latter types of agreements have become increasingly common,

and that their presence in a trade raises serious concerns about the

true level of competition since they can involve discussions and

agreements about rates between non-conference lines or between a

conference and its non-conference competitors.

Under the proposed rule, the ``ratemaking'' criterion would be 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. On the other hand, the

proposed rule specifically excluded those agreements that are limited

to practices that affect the manner in which 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, and

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 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 most

significant costs for ocean common carriers are vessel-operating costs,

which the proposed rule defined to include wages of officers and crew,

fringe benefits, consumable stores, supplies and equipment, maintenance

and repair, insurance, vessel fuel, and charter hire. The Commission

stated that it believed that agreements to discuss and exchange

information about these costs should be subjected to the same degree of

scrutiny as their close cousins, rate discussion agreements. On the

other hand, the proposed rule did not apply the ``costs'' criterion to

discussion of other types of expense that are less important for

setting rates. In order to make this distinction effective, the

proposed rule required agreements seeking to authorize discussion or

exchange of cost data to specify whether that authority includes any of

the vessel-operating costs.

Joint service. The Commission observed that, 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 device for dealing with overtonnaging had appeared in

two major agreements, the Trans-Atlantic Conference Agreement

(``TACA'') and

[[Page 11567]]

the Transpacific Stabilization Agreement (``TSA''). It limited the

availability of vessel space to shippers, but did not reduce the real

capacity of the carriers.

Regulation or discussion of service contracts. Most

agreements engaging in this activity are conference agreements, which

would already be covered by the ``ratemaking'' criterion. However,

agreements among non-conference lines may include authority to confer

and to reach ``non-binding'' agreements on service contract terms.

Cargo or revenue pooling. The Commission explained that

such agreements are severely anticompetitive by nature and must be

closely regulated.

2. Classification of Agreements: The Importance of Market Share

The proposed rule required any agreement that authorized 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 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''

was 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 authorized at least one of the six Class A/B

activities and whose parties held combined market shares of 50 percent

or more in half or more of its sub-trades would be classified as a

Class A agreement under the proposed rule.\9\ The parties to such an

agreement would be required to submit extensive historical data on the

initial information form and, if the agreement went into effect, to

submit detailed quarterly reports on their operations under the

agreement. An agreement that authorized at least one of the six

activities, but whose parties did not hold market shares of 50 percent

or more in at least half of its sub-trades, would be 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. Under the proposed rule, 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 parties' sub-trade market shares

during the third calendar quarter (July-September) of the previous

calendar year would determine whether it would remain under Class A

reporting obligations for the upcoming year.

\9\ 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 sought 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 is an important measure of an agreement's potential

for abuse of economic power and unreasonable or discriminatory price

and service practices. In the NPR, the Commission explained that 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.'' 59 FR

at 62377. The Commission also pointed out, however, that an important

feature of the proposed rule was that the market share calculation for

a rate discussion agreement or a ``non-binding'' rate agreement between

conference and non-conference lines would add the market shares held by

the non-conference lines to those held by the conference lines for

purposes of determining whether the agreement should be classified as

Class A or Class B.

The new focus on sub-trades resulted from the increasing number of

agreements with multi-coast or even multi-continent geographic ranges.

The Commission pointed out in the NPR that in some of the more

geographically fragmented parts of the world, such as the Far East and

the South Pacific, individual countries can constitute separate and

cloistered markets, and that agreements that serve a comparatively

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

differ from area to area within the general market. The Commission

concluded that these factors argued 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. Accordingly,

the information (besides market share) sought by the proposed rule for

Class A agreements was, for the most part, concerned with the

agreement's sub-trades.

3. Class A Agreements Under the Proposed Rule

The proposed rule's informtion form for a Class A agreement began

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 was designed to ensure that the Commission has accurate

information regarding the recent trend toward networks of agreements

connected by common parties. Next, the form required 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 inquired 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

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

sub-trades before the agreement was filed. This would be done by

reference to the major commodities carried by the carriers to and from

the United States in each sub-trade.

Using the actual commodities potentially affected by a new

agreement as the chief focus of analysis was a vital component of the

proposed rule. The proposed information form, while continuing to

require the submission of aggregate data in certain areas, mainly would

require each party to the new agreement to identify the commodities

that have made up the bulk of its cargo in each sub-trade and then to

submit data on the revenues it has realized from each of those

commodities. This information was intended to give the Commission a

reasonably thorough summary of pre-agreement activity in each sub-trade

covered by the new agreement, as well as in the agreement's entire

geographic scope. If the agreement should go into effect, that summary

would serve as a baseline for analyzing the corresponding information

later obtained through the post-implementation reports. In the NPR, the

Commission stated:

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.

[[Page 11568]]

59 FR at 62377.

Under the reporting requirements for effective Class A Agreements,

the parties' market shares would continue to be tracked by sub-trade.

In addition, 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, a new section entitled ``Independent Rate

Actions'' was proposed for Class A conference agreements, which would

require the submission of information designed to allow the Commission

to monitor the level of independent rate activity (or the lack of such

activity) on specific commodities.

4. Class B Agreements Under the Proposed Rule

As already stated, the proposed rule prescribed the same

information form for Class B agreements as for Class A agreements. This

would establish the same pre-agreement baseline. However, assuming the

Class B agreement was allowed to go into effect, the reporting

requirements would be limited to quarterly updates on market share,

agreement-wide (as opposed to sub-trade) cargo and revenue results,

membership in other agreements, and changes in port service.

5. Class C Agreements Under the Proposed Rule

An agreement that authorized 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 did not authorize ``capacity management'' (or any of the

other Class A/B activities), would be a Class C agreement under the

proposed rule. The Commission noted that, 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 provided for information form and reporting requirements

regarding membership in other agreements and service at the ports

within the agreement's overall scope.

6. Other Amendments

The proposed rule contained a number of other amendments to the

Commission's existing agreement regulations. For the most part, these

amendments were not substantive and were 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.

7. Carrier Costs and Profits

The Commission's obligation under section 6(g) 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), raised the question whether

these policies can or should be pursued by monitoring the costs or

profits of the carriers to a particular agreement. The proposed rule

did not include provisions on carrier costs or profits, but the

Commission solicited comments on the lawfulness and feasibility of such

provisions. Commenters were asked to address how such provisions might

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

individual country sub-trades; whether costs or profits under a

particular agreement can be measured accurately, particularly if the

carriers to the agreement also have 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 that

agreement, rather than made the subject of regulations applicable to

broad classes of agreements.

D. Summary of the Comments

The comments on the Proposed Rule were all filed by carriers or

carrier organizations. No shippers, shipper organizations, government

agencies or other maritime interests responded to the NPR. Comments

were filed by:

--TACA, the Asia North America Eastbound Rate Agreement, the

Transpacific Westbound Rate Agreement, the Inter-American Freight

Conference,and twenty-one other conferences and discussion agreements,

filing jointly (referred to below as the ``25 Agreements'');

--the Council of European & Japanese National Shipowners' Associations

(``CENSA'');

--TSA, which adopted the comments of the 25 Agreements and filed

additional comments on the special topic of capacity management

programs;

--the Trans-Pacific Freight Conference of Japan, the Japan-Atlantic and

Gulf Freight Conference, and their member lines (``Japan

Conferences'');

--the India, Pakistan, Bangladesh, Ceylon and Burma Outward Freight

Conference and the Calcutta, East Coast of India and Bangladesh/U.S.A.

Conference (the ``Associated India/Pakistan Conferences''); and

--Hanjin Shipping Co., Ltd.

1. Hanjin

Hanjin's comments attacked the lawfulness of the proposed rule. The

carrier made no counterproposals and suggested no alternatives, but

merely urged that the rule be withdrawn.

Hanjin's central objection was to the proposed rule's model of

generalized regulations that prescribe information requirements for

classes of agreements; the gist of its position was that the Commission

is restricted, as a matter of law, to requiring information only on an

``as needed'' basis for individual agreements. Hanjin contended that,

when an agreement is first filed, the FMC's only authority is to ensure

that the agreement complies with the content requirements of section 5

of the 1984 Act and does not transgress the standards of section 6(g),

and that to discharge those functions the FMC does not need the

information required under the proposed rule. Much of that information,

Hanjin argued, would be overly burdensome to produce and is not

sufficiently tied to the scope, size, or other specifics of a

particular agreement. Similarly, with respect to effective agreements,

Hanjin submitted that the Commission should act only through targeted

investigations where information demands can be properly focused and

limited.

Discussion Hanjin's arguments are incorrect. The Commission has

ample statutory authority to promulgate general regulations governing

the initial evaluation and subsequent surveillance of carrier

agreements. Section 5(a) of the 1984 Act states specifically that

``[t]he Commission may by regulation prescribe the form and manner in

which an agreement shall be filed and the additional information and

documents necessary to evaluate the agreement.'' 46 U.S.C. app. 1704(a)

(emphases added). In addition, the Commission has broad rulemaking

authority under section 17(a) of the Act, id. app. 1716(a), and there

is nothing in the language or legislative history of the Act that bars

the application of that authority to carrier agreements. Hanjin does

not acknowledge that the Commission has had in effect since 1984

extensive rulemaking-generated regulations governing the filing and

monitoring of agreements, including regulations prescribing the current

information form. It should also be pointed out that the Commission

could obtain the same information set forth in the proposed

[[Page 11569]]

rule--both the new information form data and the correlated monitoring

report data--by issuing a demand for a ``periodical or special report''

under section 15 of the 1984 Act, 46 U.S.C. app. 1714(a). However, the

Commission believes that, over the long run, regular and universally

applicable information gathering is less burdensome on the industry

than ad hoc section 15 orders or investigative subpoenas, because it

enhances predictable and consistent regulation and the information

obtained can persuade the agency that more formal and costly

investigations are not necessary.

2. Other Comments

Of the other commenters, none challenged the proposed rule's

central thesis that changes to the FMC's information-gathering

processes were required by the changes in the nature, scope and

complexity of carrier agreements since 1984. The Japan Conferences, for

example, said that they ``* * * do not oppose the concept embodied in

the Proposed Rule which would enable the Commission to become better

informed relative to newly filed agreement activity and their post-

effective implementation.'' (Comments at 3). None of these commenters

objected to the intensified treatment under the rule of rate discussion

agreements, ``non-binding'' rate agreements, and agreements to discuss

or exchange vessel-operating cost data. None argued against the rule's

proposal to distinguish between Class A and Class B agreements on the

basis of market share, and there were no objections to the rule's

proposed demarcation of a 50 percent market share. None argued against

the rule's intention to monitor the impact of effective agreements

according to the revenue realized from leading commodities. None took

issue with the rule's proposal to require by regulation--rather than by

negotiated consent--the submission of reports at regular intervals for

effective agreements, although issues were raised regarding the

frequency of such reports.

E. Specific Issues

The following analysis of the specific issues raised by the

comments is organized by subject matter. In general, the issues raised

by the comments apply both to the proposed rule's revised information

form and to the rule's new post-effective monitoring reports. Where an

issue raised special concerns for either the information form or for

the monitoring reports, that is indicated in the text.

1. Class A/B Activities

(a) Duplicative Filings

The members of the Japan Conferences are also members of three

inter-conference ``policy agreements'' (FMC Nos. 206-010838, 206-

008600, and 206-010707) that contain authority to discuss and agree on

rate and service contract issues of common interest. The Conferences

did not object to the fact that these agreements would be Class A/B

agreements under the proposed rule, but argued that they should not be

required to submit the same information for both the basic conference

agreements and the inter-conference agreements:

These supplementary agreements involve the identical Conference

parties, the same TPFCJ and JAGFC trades and subtrades, the same

vessels and services, and the same Conference rates and service

contracts. . . . [T]he Proposed Rule should be revised to permit the

information which is required to be submitted by the relevant

conference to qualify as the supplementary arrangement's economic

information submission.

(Comments at 6).

Discussion It is unnecessary to amend the rule to deal with this

concern. Complaints from the members of an agreement that they are

being asked to submit information that duplicates information submitted

in connection with another agreement can and will be handled on a case-

by-case basis, under the rule's waiver procedure.

(b) Non-binding Rate Authority That Can Only Be Implemented Through

Other Agreements

A related issue was also raised by the Japan Conference lines,

which stated that they ``also operate under space charter and sailing

agreements within the Conference trades, as well as in other trades and

beyond.'' (Comments at 2). Such agreements typically contain authority

to discuss and agree upon rates on a ``non-binding'' basis, a Class A/B

activity. The Japan Conferences argued, however, that under the terms

of these agreements, any rate agreements arrived under them can only be

implemented through the Conferences themselves, and so all relevant

information about the impact of the smaller agreements would be

provided to the Commission through the Conferences' submissions.

Discussion Again, such discrete, fact-specific situations will be

left for the rule's waiver procedure. A waiver may well be appropriate

for side agreements between two or more conference members that are

subject to reporting requirements through their membership in the

conference agreement itself. However, a different situation would be

presented by an agreement allowing ``non-binding'' rate discussions

between a conference line and non-conference line.

2. Information Form for Class A/B Agreements

(a) Scope of Requirement

The Japan Conferences raised a general objection to the proposed

rule's requirement that all new agreements authorizing any of the Class

A/B activities must file an information form, and to the Commission's

intention, as stated in the proposed rule, to require all effective

agreements that authorize any of the Class A/B activities to file

equivalents of information forms in order to establish baselines for

future monitoring. The Japan Conferences proposed instead that such

requirements be imposed only on agreements with a 35 percent market

share. This change, it was argued, would excuse ``smaller agreements

which are likely never to threaten dominance in the trade they serve or

ever to imperil the (section 6(g)) general standard * * *.'' (Comments

at 10).

Discussion This suggested modification is rejected. The information

form requirement for Class A/B agreements is triggered by the

anticompetitive activities that such agreements authorize, rather than

by market share. This is because the collusion on price or service that

a Class A/B agreement would introduce into a trade has sufficiently

serious implications for shippers and the foreign commerce of the

United States that extensive information on the parties' pre-agreement

prices and services is necessary. If the parties have a low market

share initially, that may ease the agreement's initial review under

section 6(g). However, the agreement's potential for unreasonable price

increases or service reductions would always be present, particularly

since the Commission cannot lawfully impose a term limit on an

agreement's effectiveness. 46 U.S.C. app. 1705(f). If the parties

should eventually obtain a high market share and if the agreement

became the subject of a section 6(g)-- investigation, comparisons with

the pre-agreement profile of the trade would clearly be relevant. In

addition, even a 35 percent market share may make the agreement parties

the price leaders in the trade if the remaining 65 percent is spread

out among many other carriers.

(b) Actual Versus Authorized Activity

The Associated India/Pakistan Conferences suggested that ``[a]s an

additional question or, in the

[[Page 11570]]

alternative, the information form could query whether the parties

actually do discuss or exchange data on operating costs, pool cargoes

or revenues, etc., as the case may be.'' (Comments at 1).

Discussion This suggested amendment is rejected. It would be

impractical to attempt to adjust the level of regulation according to

whether the parties were or were not using the authority contained in

the agreement. Agreements must be taken at face value, and permitted

activities must be assumed to be actual activities. With regard to the

information form, it should be noted that the parties would be

violating the Shipping Act and the antitrust laws if they were already

engaged in the activities that the newly filed agreement sought to

authorize.

3. Market Share

As stated above, no commenter objected to the proposed rule's

provision that an agreement that authorized at least one of the Class

A/B activities and held market shares of 50 percent or more in half or

more of its sub-trades would be classified as a Class A agreement for

purposes of the rule's monitoring report requirements. However, there

were some comments on how market share should be calculated.

(a) Definition of ``Sub-trade''

As stated above, the proposed rule defined ``sub-trade'' 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.

The 25 Agreements (joined by TSA) said that carriers ``do not

necessarily'' collect and maintain data on cargo movements according to

the proposed rule's definition, and that using that definition would

result in a ``huge'' amount of data for some conferences. (Comments at

4). They would narrow the definition in two ways.

First, the United States should be considered as one unit (i.e., no

port ranges). The same argument was made by CENSA.

Second, it was argued that the Commission should * * *

* * * recognize that agreements may cover a large number of

foreign countries, many of which are small and may be considered

together by the agreement as one market. In such a case, the

agreement should be allowed to provide data to the Commission

regarding this group of foreign countries, rather than having to

break down the data on a country-by-country basis. Accordingly, the

Conferences suggest that the Commission allow the members of an

agreement to provide the data in the manner in which they define

their markets. If, in a particular case, the Commission believes

more detailed data is required, it can request additional

information.

(Comments at 5-6). A similar, though less specific, argument was made

by the Japan Conferences, which contended that the Commission should

allow the substitution of ``broader geographic ranges of countries

wherever possible,'' in order to reduce the burden of complying with

the Rule. (Comment at 13).

Discussion The question of how to define an agreement's sub-trades

is extremely important, because much of the substantive information

required by the final rule--not just market share--is to be collected

and submitted by sub-trade.

Any deviation from the rule's definition of sub-trade, for either

the U.S. side or for the foreign side, will be allowed only through the

rule's waiver procedure. Further, the burden will be on the carriers to

show that their marketing and pricing are done by multi-country regions

rather than by individual countries, or, in the case of the United

States, by the United States as one unit rather than by separate port

ranges. If such a showing is made, then an appropriate adjustment from

the rule's requirements can and should be made. The rule is intended to

measure and monitor actual economic behavior, not to impose its own

model on the industry.

It should be noted, however, that waivers of the definition of

``sub-trade'' could involve difficult issues of fact. For example, in

the case of a newly filed agreement, the information form requires data

from the agreement signatory carriers on their operations in the

agreement trade and sub-trades before the agreement was filed, when the

carriers presumably were not coordinating their marketing and pricing.

Therefore, an attempt to construct a regional definition of ``sub-

trade'' that could be used by all carriers for their information from

data submissions will succeed only if it can be shown that the

carriers, though operating individually, were nevertheless applying

essentially similar regional marketing and pricing practices.

A somewhat easier situation may be presented by the monitoring

reports, which track the market shares, services and revenue results of

the agreement parties after the agreement has been implemented. For

conference agreements at least, this would allow the use of the

agreement common tariff as the indicator of the parties' marketing and

pricing practices, and it should not be difficult to define the

agreement's sub-trades according to the construction of the agreement

tariff. Similarly, a joint service operated by a single entity, see 46

U.S.C. app. 1709(e), would presumably be utilized only one tariff.

Because efforts to agree upon an alternative definition of ``sub-

trade'' for a particular agreement may be arduous and time-consuming,

the final rule provides that a waiver of the rule's definition must be

obtained in advance of the required information submission, whether

that be an information form or a monitoring report.

(b) Market Shares of Non-member Carriers

CENSA, the Japan Conferences and the Associated India/Pakistan

Conferences argued that they should not be required to produce market

share data for carriers not parties to their agreements.

Discussion This suggested modification is rejected. The current

information form already requires the parties to a new agreement to

provide ``estimates (or precise information where available) of non-

party liner operator market share (shown either for each individual

operator or for all operators collectively).'' 46 CFR part 572, at 314

(1994). The final rule is thus only an incremental refinement of an

existing requirement. The rule requires that non-party market shares be

stated by individual liner operator in order that the true extent of

non-party competition can be gauged accurately; as observed above, an

agreement with a market share of only 35 percent could nevertheless

have significant market power if the non-party carriers all have small

market shares.

(c) Cargo Not Measured in TEUs

The proposed rule required market share, cargo carrying and revenue

results to be measured by TEUs. The 25 Agreements and the Associated

India/Pakistan Conferences pointed out that data on breakbulk and

certain other types of cargo are not available in TEUs.

Discussion The final rule clarifies that the member lines of an

agreement should include only containerized cargo (stated in TEUs) in

their information submissions, if the cargo they carry in the agreement

trade--or sub-trade, if that is the focus of the particular report--is

predominantly containerized. If the cargo they carry is predominately

non-containerized, the carriers' reports of market share, cargo

carryings and revenue results should include only non-containerized

cargo. The rule does not impose a particular unit of measure of non-

containerized cargo, requiring

[[Page 11571]]

only that the unit employed be stated clearly and applied consistently.

4. Reports on Cargo Carryings

In response to a comment by the Associated India/Pakistan

Conferences, the final rule clarifies that reports on cargo carryings

should include cargo not subject to tariff filing.

5. Reports on Carrier Revenues

The comments on the proposed rule's provisions for the submission

of carrier revenue data focused on the commercial sensitivity of such

data. The commenters--the 25 Agreements, CENSA and the Japan

Conferences--were apparently concerned that reporting individual

carrier revenue data to the Commission, as the rule would require, will

result in exposure of confidential business information. Three

protective limitations were proposed:

--Conferences with four or more members would provide total revenue and

average-revenue-per-TEU but on an aggregated, agreement-wide basis

rather than on a line-by-line basis. It was argued that this would give

the Commission the necessary information on the agreement's impact,

while safeguarding the confidentiality of the revenue data.

--Conferences with three or fewer members should be exempt from

providing revenue data altogether. The 25 Agreements contended that

even the aggregate approach is not sufficiently protective for smaller

conferences ``***because even with an average, there are so few figures

contributing to the average, the average revenue per line is likely to

be fairly obvious.'' (Comments at 7). It was also submitted that small

conferences often do not have secretariats or other central staff who

can protect sensitive information, and that the demands of the proposed

rule would be especially burdensome for small conferences.

--Rate discussion agreements which do not have binding rate-making

authority should be exempt from providing revenue data if their

membership includes carriers who belong to a conference. The rationale

was that in such cases the Commission would obtain the carriers'

revenue data through the conference's reporting. It was also argued

that, like small conferences, discussion agreements generally do not

have a central staff to collect the data from the member lines and

maintain its confidentiality.

Discussion These limitations are rejected. By requiring individual

carrier revenue data, the rule recognizes that Shipping Act agreements,

unlike a merger, maintain the separate trade identities of their

parties (with the limited exception of joint services). Thorough and

accurate regulation of these ongoing price and service consortia

requires knowledge of the business results of the actual operating

entities. The rule's emphasis on sub-trades also requires individual

carrier data, since a particular agreement sub-trade may not be served

by all the parties to the agreement. Similarly, individual carrier data

will further appropriate oversight of multiple agreements that are

connected by common parties.

The comments would have the form and manner of appropriate

regulation determined, not by the carriers that are the regulated

entities under the Shipping Act, but by the form of organization that

the carrier choose for themselves. The requirement for individual

carrier data accommodates the apparent trend in ocean shipping away

from traditional conferences, which have featured relatively

independent chairmen and established central offices, and toward looser

discussion agreements administered in some cases by rotation among the

member lines. If this trend should continue, the excuse offered by the

comments as to why even aggregate data should not be required from some

agreements might eventually be raised for all agreements.

Taken on its own terms, the suggested distinction between

conference is flawed: A three-member conference serving a small trade

may well have a dominant market share, and therefore require careful

monitoring. More generally, small conferences do not necessarily mean

small member lines; a relatively small conference may have as members

large carriers with established and sophisticated information systems.

The proposal for rate discussion agreements would be workable only if

all of the members of a particular discussion agreement were also

members of a conference and if the discussion agreement and the

conference agreement had identical geographic scopes. In such a

situation, a waiver might be merited to avoid duplicative reporting as

discussed above, but a general exemption is unworkable and in

appropriate.

With regard to the carriers' concern about disclosure of their

revenue data, there is no reasonable ground for anticipating improper

public use of such data by the Commission. Once received by the

Commission, revenue data is protected under section 6(j) of the 1984

Act and is exempt from disclosure under the Freedom of Information

Act.\10\

\10\ 5 U.S.C. 552(b)(4); see, e.g., Gulf & Western Industries,

Inc. v. United States, 615 F.2d 527, 529 (D.C. Cir. 1979).

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

6. Carriage and Revenues Data by Leading Commodities in Each Sub-trade

The heart of the proposed rule can be found in parts VI and VII of

the information form for Class A/B agreements and the corresponding

parts VI and VII of the monitoring report for Class A agreements. These

provisions required each member line of such an agreement to submit

extensive data for each ``top 10'' commodity carried in each sub-trade.

The provisions triggered strong opposition from most of the

commenters, particularly the requirement in the two parts VII that each

carrier provide detailed information on how it carried each major

commodity in each sub-trade (i.e., TEUs carried port-to-port under

tariff rates; TEUs carried under intermodal tariff rates; TEUs carried

port-to-port under service contracts; and TEUs carried in intermodal

service under service contracts) and then the average revenue per TEU

realized by the carrier from each type of carriage. The 25 Agreements,

for example, contended:

Determining the method by which cargo moves, e.g., tariff vs.

service contract, port-to-port vs. intermodal, would likely require

a review of every bill of lading for every shipment in the trade.

The potential cost and burden of performing such a review is

staggering.

(Comments at 11).

Discussion Significant revisions to these sections of the proposed

rule are warranted in response to the concerns of the commenters.

Specifically, each member line will be required to provide total

carriage and average revenue data for each leading commodity in each

sub-trade, but will no longer be required to calculate such data

separately for port-to-port and intermodal services, or for tariff and

service contract services. This modification essentially adopts an

alternative offered by the 25 Agreements (except that the Agreement

urged limitations on reporting revenue data which were identical to

those already rejected above (i.e., aggregate instead of individual

line data, no reporting for small conferences, and so on)). As revised,

the new regulations will obtain cargo and revenue data most directly

relevant to review of an agreement under the section 6(g) general

standard, while eliminating the aspects of the

[[Page 11572]]

proposed rule that would have placed the greatest burden on the

industry.

The comments addressed the ``top 10'' scheme only in passing; in

response to a comment by the Associated India/Pakistan Conferences, the

final rule clarifies that individual commodities should be identified

at the 4-digit level of customarily used commodity coding schedules.

7. Port Service Data

Part VIII of the proposed information form required data on the

number of calls by each member-line during the most recent 12-month

period at each port covered by the agreement, and any change in the

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

agreement,'' including base port designations and frequency of vessel

calls. Similar data was required by the proposed monitoring report for

Class A agreements.

The 25 Agreements (joined by CENSA) suggested that ``port'' be

limited to U.S. ports, ``* * * since the FMC does not require

information regarding calls at foreign ports to fulfill its regulatory

responsibilities.'' (Comments at 12). Also, they proposed that changes

in service be clarified to mean only those changes ``* * * that are

required by the agreement, rather than any changes made by an

individual carrier for its own commercial reasons.'' (Id.).

Discussion The Commission disagrees that the impact of agreements

on liner service in U.S. foreign trades can be adequately monitored by

reference only to U.S. ports, but will make other modifications to this

part of the Rule. The phrase ``by the agreement'' will be deleted from

the information form, so that it is clear that each member line of a

new agreement should state whether it (rather than ``the agreement'')

will be making any changes in the nature or frequency of its service at

any port covered by the agreement, once the agreement goes into effect.

In the corresponding part of the monitoring report, the requirement

that each member line list the number of calls at each port during the

previous calendar quarter is deleted; instead, the lines are simply

asked to describe any changes in the nature of their services at each

agreement port, e.g., serving a port by substituted rather than direct

service.

8. Capacity Management Programs

The special provisions of the proposed rule that deal with

agreements authoring ``capacity management'' or ``capacity

regulation,'' including the identification of ``capacity management''

or ``capacity regulation'' as one of the Class A/B activities, are

deleted. There are now no agreements on file with the Commission

containing such programs, and accordingly there is no need at present

for specific regulations addressing this unusual and highly

controversial area of carrier activity. Any future capacity management

filings will be dealt with on a case-by-case basis. Through its

statutory authorities in section 6(d) and 15 of the 1984 Act, the

Commission will have sufficient means of analyzing any such agreements

by obtaining and reviewing all planning documents, trade reports,

capacity calculations, and any other relevant information that was used

to negotiate the capacity limits in the new agreement. If reporting is

necessary, that could be done through imposition of a permanent section

15 order.

9. Data on Independent Actions

For the monitoring reports filed by Class A conferences, the

proposed rule required each member line to state the number of IAs

taken on each leading commodity within each sub-trade, and the total

number of TEUs of that commodity covered by the IAs. The 25 Agreements

opposed this requirement on the ground of burdensomeness. The Japan

Conferences claimed that ``the Conferences'' do not maintain data on

the TEUs carried by their member lines under IA rates, and suggested

that many of their member lines do not maintain such data either.

The proposed rule also required identification of each shipper for

whom an IA was taken on a leading commodity during the calendar

quarter, and a statement as to whether the shipper was a beneficial

cargo owner, a non-vessel-operating common carrier, or a shipper's

association. The 25 Agreements responded that IAs are often not taken

for a specific shipper:

Instead, they may be taken to service a particular market so

that a carrier can break into that market or remain competitive in

it. In such instances, therefore, the carriers obviously cannot

provide any shipper information.

(Comments at 15-16). Similar objections were filed by the Japan

Conferences and CEMSA, although the Japan Conferences were willing to

provide data on the type of shipper for whom IAs had been taken.

Discussion The requirement for reporting the number of TEUs moving

under the IAs taken for each leading commodity has been deleted. The

final rule requires each member of a ``Class A'' conference to submit

data both on the number of IAs taken on each leading commodity in each

agreement sub-trade and, in part VII of the conference's monitoring

report, on the average revenue per TEU realized by the member line from

its carriage of each leading commodity in each sub-trade. The

Commission believes that it will be able to accurately monitor the true

level of IA activity within a conference by comparing and contrasting

these two sets of data.

Reductions have also been made in the amount of shipper-related IA

data. Rather than requiring the name of each shipper for whom an IA was

taken during the calendar quarter, the final rule instead requires each

member line to state how many of its total IA actions for each leading

commodity during the quarter were taken to service specific shipper

accounts (rather than for general commercial reasons) and of those, how

many were taken for NVO accounts and how many for shippers' association

accounts. These changes respond to observations of the commenters that

many IAs are taken to preserve market share or to penetrate new

markets, rather than for specific customers, and to the commenters'

concerns about protecting the identity of those shippers for whom IA

was taken.

10. Quarterly Reporting

Objections were raised to the proposed rule's requirements that

monitoring reports be submitted on a quarterly basis. The Japan

Conferences, for example, said that ``* * * economic trends in the

ocean shipping business do not ordinarily change to any significant

degree in the space of a three month period, or even over six months or

a year.'' (Comments at 4). They asked that reports be submitted

annually ``* * * or, certainly, with no greater frequency than semi-

annually.'' Id. at 5).

Discussion The final rule retains the requirement for quarterly

monitoring reports. The Commission specifically disagrees with the

Japan Conferences' characterization of the cycles of international

ocean shipping; the experience of the Pacific trades during 1995 was

certainly to the contrary. More important, given the significant

modifications and reductions made by the final rule to the information

demands of the proposed rule, there is no basis to conclude on this

record that quarterly reporting will be unduly burdensome or otherwise

unreasonable. It should be pointed out again, however, that an

individual waiver of the quarterly reporting requirement can be

obtained under the proper circumstances.

[[Page 11573]]

11. Miscellaneous

The proposed monitoring report for Class A agreements required a

statement as to whether the agreement is a conference or has capacity

management provisions. This was meant to facilitate checking of the

carriers' compliance with the special requirements for such agreements.

The 25 Agreements viewed this as ``duplicative information'' (Comments

at 15) that should be required only if there has been some change since

the last report. As discussed above, the proposed rule's provisions for

capacity management agreements have been deleted, but the requirement

that a conference identify itself as such in its monitoring reports is

retained to avoid any uncertainties from the fact that conference names

often do not include the word ``conference.''

In response to a suggestion from the Associated India/Pakistan

Conferences, the ``contact person'' provisions of the information forms

and monitoring reports have been updated to include fax and telex

numbers as well as cable addresses.

The number of copies required for an agreement filing by subpart

572.401 has been reduced from an original and ten copies to an original

and seven copies. In addition, subpart 572.701 and the instructions for

the Information Forms and Monitoring Reports have been clarified with

respect to joint services.

12. Carrier Costs and Profits

The 25 Agreements and CENSA argued that data on profits and/or

costs in the agreement trade are irrelevant to a section 6(g) analysis.

The Japan Conferences were also opposed, but took a less dogmatic

position:

The Conferences do not contend that there will never be a case

where it would be appropriate or necessary for the Commission to

review cost or profit information, or that in a proper case

involving a particular agreement, section 15 should not be used to

demand such information.

(Comments at 14). Rather, they argued that rulemaking is too broad a

procedure and is not tied to a specific need for such data. Also, they

pointed out that the proposed rule is based on sub-trade data, and that

cost and profit data by sub-trade would be very suspect.

Discussion: The Commission will not propose a further rulemaking at

this time to capture cost and profit data. However, we wish to stress

that the costs incurred and the profits realized by the carrier parties

to a particular agreement could well be relevant to a section 6(g)

analysis of that agreement, especially if purported revenue losses are

being used to justify the agreement.

For the most part, these amended regulations will become effective

thirty days after publication in the Federal Register. New agreements

then will be required to comply with the revised information form

provisions. However, the proper application of the new monitoring

report provisions in 46 CFR 572.701-705 to agreements already in effect

cannot be determined immediately, because the market share data

necessary to separate Class A/B agreements into Class A and Class B are

not readily available.

Accordingly, effectiveness of the monitoring report provisions of

the final rule is stayed until further notice. The Commission will

direct all existing Class A/B agreements to submit reports under

section 15 of the 1984 Act that will 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 monitoring report provisions will be lifted, and the

orderly filing of the regular monitoring reports (including those

applicable to Class C agreements) will begin.

For those agreements already in effect that are subject to

negotiated reporting requirements, those requirements will remain in

effect until the stay is lifted and the new reporting requirements

become applicable. Also, the stay does not apply to the pre-existing

obligation (now codified at 572.706-708) of certain agreements to

submit minutes of their meetings.

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 rule

has been approved by the Office of Management and Budget under the

provisions of the Paperwork Reduction Act of 1995, and has been

assigned OMB control number 3072-0045. Under the proposed rule, the

incremental public reporting burden was estimated to range from an

average of 46 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. With the modifications made to the proposed

rule, the incremental public reporting burden for preparing responses

to the collection of information requirements of the final rule is

estimated to range from an average of 36 to 97 hours per response. 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 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 Sec. 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

[[Page 11574]]

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 regulations to a minimum and at the same time obtain

information needed to fulfill its statutory responsibility.

* * * * *

3. In Sec. 572.104, paragraphs (ee) and (ff) are redesignated (ii)

and (jj); (dd) is redesignated (hh); (z) through (cc) are redesignated

(dd) through (gg); (y) is redesignated (cc); (s) through (x) are

redesignated (u) through (z); and (e) through (r) are redesignated (f)

through (s); 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 charter hire

expenses.

Sec. 572.301 [Amended]

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

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

Sec. 572.302 [Amended]

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

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

Sec. 572.303 [Amended]

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

``and Information Form.''

Sec. 572.304 [Amended]

7. In Sec. 572.304, paragraph (b) introductory text is amended by

removing the words ``and Information Form.''

Sec. 572.305 [Amended]

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

``and Information Form.''

Sec. 572.306 [Amended]

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

``and Information Form.''

Sec. 572.308 [Amended]

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

``and Information Form.''

Sec. 572.309 [Amended]

11. In Sec. 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 is revised to read as follows:

Subpart D--Filing of Agreements

13. In Sec. 572.401, the heading and paragraphs (a)(1), (a)(2),

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

Sec. 572.401 General requirements.

(a) * * *

(1) A true copy and 7 additional copies of the filed agreement;

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

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

* * * * *

(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

[[Page 11575]]

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.

* * * * *

Sec. 572.402 [Amended]

14. In Sec. 572.402, paragraph (e)(2) is amended by revising the

reference to ``Secs. 572.501 and 572.502'' to read ``Secs. 572.403 and

572.404,'' paragraph (f) is amended by revising the reference 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.

Sec. 572.403 [Redesignated as Sec. 572.405 and Amended]

15. Section 572.405 is removed and Sec. 572.403 is redesignated

Sec. 572.405 with paragraphs (a) and (g)(3) revised as follows:

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.

Sec. 572.501 [Redesignated as Sec. 572.403 and Amended]

16. Section 572.501 is redesignated 572.403 and paragraphs (a) and

(b) are amended by revising the references to ``Sec. 572.502'' to read

``Sec. 572.404.''

Sec. 572.406 [Redesignated as Sec. 572.407]

Sec. 572.404 [Redesignated as Sec. 572.406]

17. Section 572.406 is redesignated Sec. 572.407 and 572.404 is

redesignated Sec. 572.406 and revised to read as follows;

Sec. 572.406 Application for waiver.

(a) Upon 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.

Sec. 572.202 [Redesignated as Sec. 572.404 and Amended]

18. Section 572.502 of subpart E is redesignated Sec. 572.404 and

paragraphs (a) and (b)(1) are amended by revising the reference to

``Sec. 572.501'' to read ``Sec. 572.403.''

19. 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.

572.502 Subject agreements.

572.503 Information form for Class A/B agreements.

572.504 Information form for Class C agreements.

572.505 Application for waiver.

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 filing parties' 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) An agreement authorizing discussion or exchange of data on

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

(5) 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.

The Information Form for Class A/B agreements, with accompanying

instructions that are intended to facilitate the completion of the

Form, is set forth in appendix A of this part.

The instructions should be read in conjunction with the Shipping

Act of 1984 and with this part 572.

Sec. 572.504 Information form for Class C agreements.

The Information Form for Class C agreements, with accompanying

instructions that are intended to facilitate the completion of the

Form, is set forth in appendix B of this part. The explanation and

instructions should be read in conjunction with the Shipping Act of

1984 and 46 CFR part 572.

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 Sec. 572.503 or Sec. 572.504.

(b) A request for such a waiver must be approved in advance of the

filing of the information form to which the requested waiver would

apply. The Commission will take into account the presence or absence of

shipper complaints in considering an application for a waiver. Requests

for a waiver 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.

[[Page 11576]]

20. In Sec. 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. * * *

* * * * *

21. In Sec. 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.

* * * * *

22. In Sec. 572.701, paragraphs (b), (c) and (d) are removed,

paragraph (f) is redesignated (i) and is revised, paragraph (e) is

redesignated (f) and is revised, paragraph (a)(1) is redesignated (d)

and is revised, paragraph (a)(2) is redesignated (e) and the second

sentence thereof is revised, a new paragraph (a) is added, a new

paragraph (b) is added, a new paragraph (c) is added, a new paragraph

(g) is added, and a new paragraph (h) 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.

(b) Certain agreements are required to submit minutes of their

meetings for as long as they remain in effect.

(c) Joint Services. For purposes of the requirements of this

Subpart, a joint service filing its own Monitoring Report shall file as

one carrier. If a joint service is a party to another agreement that is

otherwise subject to the requirements of this Subpart, the joint

service shall be treated as one member of that agreement for purposes

of that agreement's Monitoring Reports.

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

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

Bureau of Economics and Agreement Analysis, Federal Maritime

Commission, Washington, DC 20573-0001. Copies of the applicable

Monitoring Report form may be obtained from the Bureau of Economics and

Agreement 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.''

(e) Electronic filing. * * * Detailed information on electronic

transmission is available from the Commission's Bureau of Economics and

Agreement Analysis.

* * * * *

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

days of the end of each calendar quarter. 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.

(g) 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.

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

supplemented with any other information or documentary material.

(i) Confidentiality. (1) 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:

(i) It is relevant to an administrative or judicial action or

proceeding; or

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

authorized committee or subcommittee of Congress.

(2) Parties may voluntarily disclose or make Monitoring Reports,

minutes or any other additional information publicly available. The

Commission must be promptly informed of any such voluntary disclosure.

Sec. 572.202 [Redesignated as Sec. 572.706 and Amended]

23. 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.

Sec. 572.703 [Redesignated as Sec. 572.707 and Amended]

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

``Sec. 572.702'' in the introductory text is revised to read

``Sec. 572.706.''

Sec. 572.704 [Redesignated as Sec. 572.909 and Revised]

25. 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) A request for such a waiver must be approved in advance of the

filing of the Monitoring Report or minutes to which the requested

waiver would apply. The Commission will take into account the presence

or absence of shipper complaints in considering an application for a

waiver. Requests for a waiver 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.

26. A new Sec. 572.702 is added to read as follows:

Sec. 572.702 Agreements subject to Monitoring Report requirements.

(a) 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:

[[Page 11577]]

(i) 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.

(2) 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.

(b) 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 Economics and Agreement 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 Economics and Agreement 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

quarterly Monitoring Report for the third quarter (July-September) of

the previous calendar year.

(c) Class C agreement means an agreement that is subject to the

definition set forth in Sec. 572.502(b).

27. A new Sec. 572.703 is added, as follows:

Sec. 572.703 Monitoring report for Class A agreements.

The Monitoring Report form for Class A agreements, with

accompanying instructions that are intended to facilitate the

completion of the Report, is set forth in appendix C of this part. The

instructions should be read in conjunction with the Shipping Act of

1984 and with 46 CFR part 572.

28. A new Sec. 572.704 is added, as follows:

Sec. 572.704 Monitoring report for Class B agreements.

The Monitoring Report form for Class B agreements, with

accompanying instructions that are intended to facilitate the

completion of the Report, is set forth in appendix D of this part. The

instructions should be read in conjunction with the Shipping Act of

1984 and with 46 CFR part 572.

29. A new Sec. 572.705 is added, as follows:

Sec. 572.705 Monitoring report for Class C agreements.

The Monitoring Report form for Class C agreements, with

accompanying instructions that are intended to facilitate the

completion of the Report, is set forth in appendix E of this part. The

explanation and instructions should be read in conjunction with the

Shipping Act of 1984 and 46 CFR part 572.

30. A new Sec. 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

Economics and Agreement Analysis, 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.

31. Section 572.902 is revised as follows:

Sec. 572.702 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.

Sec. 572.991 [Amended]

32. Section 572.991 is amended by revising the reference to ``the

Paperwork Reduction Act of 1980, Public Law 96-511'' to read ``the

Paperwork Reduction Act of 1995, Public Law 104-13'' and by revising

the reference to ``section 3507(f)'' to read ``section 3507(a)(3).''

33. Appendix A to Part 572 is revised to read as follows:

Appendix A to Part 572--Information Form for Class A/B Agreements and

Instructions

Instructions

All agreements between ocean common carriers that are Cass 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. For purposes of the requirements of this Form,

if one of the agreement signatories is a joint service operating

under an effective agreement, that signatory shall respond to the

Form as a single agreement party. All sources must be identified.

Part I

Part I requires a statement of the full name of the agreement as

also provided under 46 CFR 572.403.

Part II

Part II requires a list of 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 a statement as to 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, an agreement between two or more conference member lines,

an agreement between one or more conference member lines 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 a statement as to whether the agreement

authorizes the parties to establish a joint service.

Part III(C)

Part III(C) requires a statement as to whether the agreement

authorizes the parties to pool cargo or revenues.

Part III(D)

Part III(D) requires a statement as to whether the agreement

authorizes the parties to discuss or exchange data on vessel-

operating costs as defined in 46 CFR 572.104(kk).

Part III(E)

Part III(E) requires a statement as to whether the agreement

authorizes the parties to regulate or discuss service contracts.

Part IV

Part IV requires 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. A joint service shall

be treated as a single liner operator, whether it is an agreement

line or a non-agreement line. Sub-trade is defined as the scope of

all liner movements between each U.S. port range within the scope of

the agreement and each foreign country within the scope of the

agreement. Where the agreement covers both U.S. inbound and outbound

liner movements, inbound and outbound market shares 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

[[Page 11578]]

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, Northern Marianas, Johnston Island, Midway Island

and Wake Island.

An application may be filed for a waiver of the definition of

``sub-trade,'' under the procedure described in 46 CFR 572.505. In

any such application, the burden shall be on the filing carriers to

show that their marketing and pricing practices have been done by

ascertainable multi-country regions rather than by individual

countries or, in the case of the United States, by broader areas

than the port ranges defined herein. The carriers must further show

that, though operating individually, they were nevertheless applying

essentially similar regional practices.

The formula for calculating market share in the entire agreement

scope or in a sub-trade is as follows:

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

liner vessels in the entire agreement scope or in the sub-trade

during the most recent calendar quarter for which complete data are

available, divided by the total liner movements in the entire

agreement scope or in the sub-trade during the same calendar

quarter, which quotient is multiplied by 100. The calendar quarter

used must be clearly identified. The market shares held by non-

agreement lines as well as by agreement lines must be provided,

stated separately in the format indicated.

If 50 percent or more of the total liner cargo carried by the

agreement lines in the entire agreement scope or in the sub-trade

during the calendar quarter was containerized, only containerized

liner movements (measured in TEUs) must be used for determining

market share. If 50 percent or more of the total liner cargo carried

by the agreement lines was non-containerized, only non-containerized

liner movements must be used for determining market share. The unit

of measure used in calculating amounts of non-containerized cargo

must be specified clearly and applied consistently.

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, 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, a statement of each line's total liner

cargo carryings within the geographic area, total liner revenues

within the geographic area, and average revenue.

If 50 percent or more of the total liner cargo carried by all

the agreement member lines in the geographic area covered by the

agreement during the 12-month period was containerized, each

agreement member line should report only its total carryings of

containerized liner cargo (measured in TEUs) within the geographic

area, total revenues generated by its carriage of containerized

liner cargo, and average revenue per TEU. Conversely, if 50 percent

or more of the total liner cargo carried by all the agreement member

lines in the geographic area covered by the agreement during the 12-

month period was non-containerized, each line should report only its

total carryings of non-containerized liner cargo (specifying the

unit of measurement used), total revenues generated by its carriage

of non-containerized liner cargo, and average revenue per unit of

measurement.

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 a list, for each sub-trade within the scope of

the agreement, of the top 10 liner commodities (including

commodities not subject to tariff filing) carried by all the

agreement member lines during the same 12-month period used in

responding to Part V, or a list of the commodities accounting for 50

percent of the total liner cargo carried by all the agreement member

lines during the 12-month period, whichever list is longer. If 50

percent or more of the total liner cargo carried by all the

agreement member lines in the sub-trade during the 12-month period

was containerized, this list should include only containerized

commodities. If 50 percent or more of the total liner cargo carried

by all the agreement member lines in the sub-trade during the 12-

month period was non-containerized, this list should include only

non-containerized commodities. Commodities should be identified at

the 4-digit level of customarily used commodity coding schedules.

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 requires a statement of the cargo volume and revenue

results experienced by each of the parties to the proposed agreement

from each major commodity in each subtrade. 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. Each of the

agreement lines is required to provide the number of calls it made

at each port over the 12-month period used in responding to Parts V,

VI and VII, and also to indicate any immediate change it plans to

make in the nature or type of service at a particular port after the

agreement goes into effect.

Part IX(A)

Part IX(A) requires the name, title, address, telephone number

and cable address, telex or fax number of a person the Commission

may contact regarding the Information Form and any information

provided therein.

Part IX(B)

Part IX(B) requires the name, title, address, telephone number

and cable address, telex or fax number of a person the Commission

may contact regarding a request for additional information or

documents.

Part IX(C)

Part IX(C) requires that a representative of the agreement lines

sign the Information Form and certify that the information in the

Form and all attachments and appendices are, to the best of his or

her knowledge, true, correct and complete. The representative 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

Lists 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) Vessel-Operating Costs

Does the agreement authorize the parties to discuss or exchange

data on vessel-operating costs?

Yes {time} No {time}

(E) 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}

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

[[Page 11579]]

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 or

other unit

of Percent

measurement

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

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 carrying in TEUs or other unit of measurement

within the entire geographic area, total revenues within the

geographic area, and average revenue per TEU or other unit of

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

The information should be provided in the format below:

Time Period

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

Avg.

Total TEUs revenue per

or other Total TEU or

Carrier unit of revenues other unit

measurement of

measurement

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

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

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

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

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

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

Part VI Leading Commodities

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

top 10 commodities 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 total 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, state the total TEUs (or

other unit of measurement) carried and average gross revenue per TEU

(or other unit of measurement).

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) Total TEUs (or other unit of measurement) carried

(b) Average gross revenue per TEU (or other unit of measurement)

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 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 party, indicate any planned change in the nature

or type of service (such as base port designation, frequency of

vessel calls, use of indirect rather than direct service, etc.) to

be effected at any port within the entire geographic scope of the

agreement after the effective date of the agreement.

Part IX

(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, Telex or Fax Number

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

(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) Firm Name and Business

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

(4) Business Telephone Number

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

(5) Cable Address, Telex or Fax Number

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

(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-------------------------------------------------------------------

34. A new appendix B to part 572 is added to read as follows:

Appendix B to Part 572--Information Form for Class C Agreements and

Instructions.

Instructions

All agreements between or among ocean common carriers that are

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

[[Page 11580]]

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. For purposes of the requirements of this Form, if one

of the agreement signatories is a joint service operating under an

effective agreement, that signatory shall respond to the Form as a

single agreement party. All sources must be identified.

Part I

Part I requires a statement of the full name of the agreement as

also provided under 46 CFR 572.403.

Part II

Part II requires a list of 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. Each agreement

line is required to state the number of calls it made at each port

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

available, and also to indicate any immediate change it plans to

make in the nature or type of service at a particular port after the

agreement goes into effect.

Part IV(A)

Part IV(A) requires the name, title, address, telephone number

and cable address, telex or fax number of a person the Commission

may contact regarding the Information Form and any information

provided therein.

Part IV(B)

Part IV(B) requires the name, title, address, telephone number

and cable address, telex or fax number of a person the Commission

may contact regarding a request for additional information or

documents.

Part IV(C)

Part IV(C) requires that a representative of the agreement lines

sign the Information Form and certify that the information in the

Form and all attachments and appendices are, to the best of his or

her knowledge, true, correct and complete. The representative 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 party, indicate any planned change in the nature

or type of service (such as base port designation, frequency of

vessel calls, use of indirect rather than direct service, etc.) to

be effected at any port within the entire geographic scope of the

agreement after the effective date of the agreement.

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, Telex or Fax Number

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

(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) Firm Name and Business

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

(4) Business Telephone Number

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

(5) Cable Address, Telex or Fax Number

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

(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-------------------------------------------------------------------

36. A new appendix C to part 572 is added to read as follows:

Appendix C to Part 572--Monitoring Report for Class A Agreements and

Instructions

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 I

Part I requires a statement of the full name of the agreement,

and the assigned FMC number.

Part II

Part II requires a statement of 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 indicate whether the

agreement authorizes the parties to operate as a conference.

Part IV

Part IV requires 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 calendar quarter. A

joint service shall be treated as a single liner operator, whether

it is an agreement line or a non-agreement line.

Sub-trade is defined as the scope of all liner movements between

each U.S. port range within the scope of the agreement and each

foreign country within the scope of the agreement. Where the

agreement covers both U.S. inbound and outbound line 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

[[Page 11581]]

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, Northern Marinas, Johnston Island, Midway Island and

Wake Island.

An application may be filed for a waiver of the definition of

``sub-trade,'' under the provisions described in 46 CFR 572.709. In

any such application, the burden shall be on the agreement carriers

to show that their marketing and pricing practices are done by

ascertainable multi-country regions rather than by individual

countries or, in the case of the United States, by broader areas

than the port ranges defined herein. The Commission will also

consider whether the alternate definition of ``sub-trade'' requested

by the waiver application is reasonably consistent with the

definition of ``sub-trade'' applied in the original Information Form

filing for the agreement.

The formula for calculating market share in the entire agreement

scope or in a sub-trade is as follows:

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

liner vessels in the entire agreement scope or in the sub-trade

during the calendar quarter, divided by the total liner movements in

the entire agreement scope or in the 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.

If 50 percent or more of the total liner cargo carried by the

agreement lines in the entire agreement scope or in the sub-trade

during the calendar quarter was containerized, only containerized

liner movements (measured in TEUs) must be used for determining

market share. If 50 percent or more of the total liner cargo carried

by the agreement lines was non-containerized, only non-containerized

liner movements must be used for determining market share. The unit

of measure used in calculating amounts of non-containerized cargo

must be specified clearly and applied consistently.

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 each agreement member line's total liner cargo

carryings within the entire geographic area covered by the agreement

during the calendar quarter, each line's total liner revenues within

the geographic area during the calendar quarter, and average

revenue.

If 50 percent or more of the total liner cargo carried by all

the agreement member lines in the geographic area covered by the

agreement during the calendar quarter was containerized, each

agreement member line should report only its total carryings of

containerized liner cargo (measured in TEUs) during the calendar

quarter within the geographic area, total revenues generated by its

carriage of containerized liner cargo, and average revenue per TEU.

Conversely, if 50 percent or more of the total liner cargo carried

by all the agreement member lines in the geographic area covered by

the agreement during the calendar quarter was non-containerized,

each agreement member line should report only its total carryings of

non-containerized liner cargo during the calendar quarter

(specifying the unit of measurement used), total revenues generated

by its carriage of noncontainerized liner cargo, and average revenue

per unit of measurement.

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 a list, for each sub-trade within the scope of

the agreement, of the top 10 liner commodities (including

commodities not subject to tariff filing) carried by all the

agreement member lines during the calendar quarter, or a list of the

commodities accounting for 50 percent of the total liner cargo

carried by all the agreement member lines during the calendar

quarter, whichever list is longer. If 50 percent or more of the

total liner cargo carried by all the agreement member lines in the

sub-trade during the calendar quarter was containerized, this list

should include only containerized commodities. If 50 percent or more

of the total liner cargo carried by all the agreement member lines

in the sub-trade during the calendar quarter was noncontainerized,

this list should include only non-containerized commodities.

Commodities should be identified at the 4-digit level of customarily

used commodity coding schedules. 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 requires a statement of the cargo volume and revenue

results experience by each of the agreement lines from each major

commodity in each sub-trade during the calendar quarter. 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 is answered

``YES.'' Each conference line is required to indicate the extent to

which it 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 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 requires each of the agreement lines to indicate any

change in the nature or type of service it provided at any port

within the entire geographic range of the agreement during the

calendar quarter.

Part X(A)

Part X(A) requires the name, title, address, telephone number

and cable address, telex or fax number of a person the Commission

may contact regarding the Monitoring Report and any information

provided therein.

Part X(B)

Part X(B) requires that a representative of the agreement lines

sign the Monitoring Report and certify that the information in the

Report and all attachments and appendices are, to the best of his or

her knowledge, true, correct and complete. The representative 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 Conference Agreements

Does the agreement authorize the parties to operate as a

conference?

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 agreement

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 or

other unit

of Percent

measurement

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

Agreement Market Share:

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

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

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

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

[[Page 11582]]

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 agreement member line, provide total cargo carryings

(measured in TEUs or other unit of measurement) 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 or other unit of measurement.

The information should be provided in the format below:

Calendar Quarter

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

Acg.

Total TEUs Revenue per

or other Total TEU or

Carrier unit of revenues other unit

measurement of

measurement

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

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

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

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

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

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

Part VI Leading Commodities

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

top 10 commodities carried by all the parties during the calendar

quarter, or list the commodities accounting for 50 percent of the

total 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 VIII 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, state the total TEUs (or

other unit of measurement) carried and average gross revenue per TEU

(or other unit of measurement).

The information should be provided in the format below:

Calendar Quarter

I. Sub-trade A

A. First leading commodity

1. Carrier A

(a) Total TEUs (or other units of measurement) carried

(b) Average gross revenue per TEU (or other unit of measurement)

2. Carrier B)

(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 (a) the total number

of independent rate actions taken during the calendar quarter

applicable to that commodity moving in that sub-trade; (b) how many

of the total were independent rate actions taken to service specific

shipper accounts; (c) of those, how many were for non-vessel-

operating common carriers, and how many were for shippers'

associations. 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

(i) Number of IA rate actions taken to service specific shipper

accounts

(i)(a) Number taken to service non-vessel-operating common

carrier accounts

(1)(b) Number taken to service shippers' association accounts

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 party, state any change in the nature or type of

service (such as base port designation, frequency of vessel calls,

use of indirect rather than direct service, etc.) effected at any

port within the entire geographic scope of the agreement during the

calendar quarter.

Part X

(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, Telex or Fax Number

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

(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-------------------------------------------------------------------

37. A new appendix D to Part 572 is added to read as follows:

Appendix D to Part 572--Monitoring Report for Class B Agreements and

Instructions.

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 I

Part I requires a statement of the full name of the agreement,

and the assigned FMC number.

Part II

Part II requires a statement of 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 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 calendar quarter.

A joint service shall be treated as a single liner operator, whether

it is an agreement line or a non-agreement line.

Sub-trade is defined as the scope of all liner movements between

each U.S. port range within the scope of the agreement and each

foreign country within the scope of the agreement. Where the

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

inbound and outbound market shares 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

[[Page 11583]]

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 U.S. Virgin Islands.

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

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

American Samoa, Northern Marinas, Johnston Island, Midway Island and

Wake Island.

An application may be filed for a waiver of the definition of

``sub-trade,'' under the provisions described in 46 CFR 572.709. In

any such application, the burden shall be on the agreement carriers

to show that their marketing and pricing practices are done by

ascertainable multi-country regions rather than by individuals

countries or, in the case of the United States, by broader areas

than the port ranges defined herein. The Commission will also

consider whether the alternate definition of ``sub-trade'' requested

by the waiver application is reasonably consistent with the

definition of ``sub-trade'' applied in the original Information Form

filing for the agreement.

The formula for calculating market share in the entire agreement

scope or in a sub-trade is as follows:

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

liner vessels in the entire agreement scope or in the sub-trade

during the calendar quarter, divided by the total liner movement in

the entire agreement scope or in the sub-trade during the calendar

quarter, which quotient is multiplied by 100. The market shares held

by non-agreement lines as by agreement lines must be provided,

stated separately in the format indicated.

If 50 percent or more of the total liner cargo carried by the

agreement lines in the entire agreement scope or in the sub-trade

during the calendar quarter was containerized, only containerized

liner movements (measured in TEUs) must be used for determining

market share. If 50 percent or more of the total liner cargo carried

by the agreement lines was non-containerized cargo, only non-

containerized liner movements must be used for determining market

share. The unit of measure used in calculating amounts of non-

containerized cargo must be specified clearly and applied

consistently.

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 salings at regular intervals. All these definitions,

terms and descriptions apply only for purposes of the Monitoring

Report.

Part IV

Part IV requires each agreement member line's total liner cargo

carrying within the entire geographic area covered by the agreement

during the calendar quarter, each line's total liner revenues within

the geographic area during the calendar quarter, and average

revenue.

If 50 percent or more of the total liner cargo carried by all

the agreement member lines in the geographic area covered by the

agreement during the calendar quarter was containerized, each

agreement member line should report only its total carrying of

containerized liner cargo (measured in TEUs) during the calender

quarter within the geographic area, total revenues generated by its

carriage of containerized liner cargo, and average revenue per TEU.

Conversely, if 50 percent or more of the total liner cargo carried

by all the agreement member lines in the geographic area covered by

the agreement during the calendar quarter was non-containerized,

each agreement member line should report only its total carryings of

non-containerized liner cargo during the calendar quarter

(specifying the unit of measurement used), total revenues generated

by its carriage of non-containerized cargo, and average revenue per

unit of measurement.

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 each of the agreement member lines to indicate

any change in the nature or type of service it provided at any port

within the entire geographic scope of the agreement during the

calendar quarter.

Part VI(A)

Part VI(A) requires the name, title, address, telephone number

and cable address, telex or fax number of a person the Commission

may contact regarding the Monitoring Report and any information

provided therein.

Part VI(B)

Part VI(B) requires that a representative of the agreement lines

sign the Monitoring Report and certify that the information in the

Report and all attachments and appendices are, to the best of his or

her knowledge, true, correct and complete. The representative 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 or

other unit

of Percent

measurement

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

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 or other unit of measurement) 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 or other unit of measurement.

The information should be provided in the format below:

Calendar Quarter

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

Avg.

Total TEUs revenue per

or other Total TEU or

Carrier unit of revenues other unit

measurement of

measurement

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

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

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

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

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

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

Part V Port Service

For each party, state any change in the nature or type of

service (such as base port designation, frequency of vessel calls,

use of indirect rather direct service, etc.) effected at any port

within the entire geographic scope of the agreement during the

calendar quarter.

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

[[Page 11584]]

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

(5) Cable Address, Telex or Fax Number

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

(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-------------------------------------------------------------------

38. A new appendix E to part 572 is added to read as follows:

Appendix E to Part 572--Monitoring Report for Class C Agreements and

Instructions

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 I

Part I requires a statement of the full name of the agreement,

and the assigned FMC number.

Part II

Part II requires a statement of 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 a statement of 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 name, title, address, telephone number

and cable address, telex or fax number of a person the Commission

may contact regarding the Monitoring Report and any information

provided therein.

Part IV(B)

Part IV(B) requires that a representative of the agreement lines

sign the Monitoring Report and certify that the information in the

Report and all attachments and appendices are, to the best of his or

her knowledge, true, correct and complete. The representative 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 party, state any change in the nature or type of

service (such as base port designation, frequency of vessel calls,

use of indirect rather direct service, etc.) effected at any port

within the entire geographic scope of the agreement during the

calendar quarter.

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, Telex or Fax Number

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

(B) Certification

This Monitoring Report, together with any and all appendices and

attachments thereto, was prepared and assembled in accordance with

instruments issued by the Federal Maritime Commission. The

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

complete.

Name (please print or type)

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

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

Relationship with parties to agreement

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

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

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

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

By the Commission.

Joseph C. Polking,

Secretary.

[FR Doc. 96-6600 Filed 3-20-96; 8:45 am]

BILLING CODE 6730-01-M