Inquiry Into Automated Tariff Filing Systems as Proposed by the Pending Ocean Shipping Reform Act of 1998

FEDERAL MARITIME COMMISSION

46 CFR Part 514

[Docket No. 98-10]

Inquiry Into Automated Tariff Filing Systems as Proposed by the

Pending Ocean Shipping Reform Act of 1998

AGENCY: Federal Maritime Commission.

ACTION: Notice of Inquiry.

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SUMMARY: The purposes of this Inquiry are to determine an approach that

will produce automated tariff publication systems that best comport

with the directives of S. 414, the Ocean Shipping Reform Act of 1998,

and its legislative history, and to determine whether ocean common

carriers should be required to file service contracts electronically.

The proposed legislation would alter, among other things, the manner by

which ocean common carriers publish their tariffs under the Shipping

Act of 1984, 46 U.S.C. app. Sec. 1701 et seq., by requiring them to

publish their tariffs in private automated tariff systems. Comments are

solicited on the possible requirements for such tariff filing systems

and on the electronic filing of service contracts and publication of

essential terms.

DATES: Comments due on or before August 10, 1998.

ADDRESSES: Send comments (original and 20 copies) to: Joseph C.

Polking, Secretary, Federal Maritime Commission, 800 North Capitol

Street, NW, Washington, DC 20573-0001, (202) 523-5725.

FOR FURTHER INFORMATION CONTACT: Bryant L. VanBrakle, Director, Bureau

of Tariffs, Certification and Licensing, Federal Maritime Commission,

800 North Capitol Street, NW, Washington, DC 20573-0001, (202) 523-5796

and Thomas Panebianco, General Counsel, Federal Maritime Commission,

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

5740.

SUPPLEMENTARY INFORMATION: On April 21, 1998, the Senate passed S. 414,

a bill entitled the ``Ocean Shipping Reform Act of 1998'' (``Reform

Act''). The bill was subsequently referred to the House of

Representatives, where it is presently awaiting either referral to

appropriate committees or a vote by the full House. If the latter

occurs prior to adjournment in the fall, the Federal Maritime

Commission (``FMC'' or ``Commission'') will have the task of proposing

and adopting rules to implement the Reform Act in a very short time

period, since the Reform Act generally takes effect on May 1, 1999, and

the bill requires final implementing regulations to be promulgated by

March 1, 1999.

The Reform Act amends the Shipping Act of 1984 (46 U.S.C. app.

Sec. 1701 et seq.) (``1984 Act'') in several areas, altering the manner

by which the United States regulates international ocean shipping. One

of the most significant changes is in the treatment of common carrier

tariffs, the publications which contain the rates and charges for their

transportation services. Currently, common carriers and conferences

must file their tariffs with the commission's Automated Tariff Filing

and Information System (``ATFI''). Under the Reform Act, carriers no

longer will have to file with the Commission, but will be required to

publish their rates in private, automated tariff systems. These tariffs

will have to be made available electronically to any person, without

time, quantity, or other limitation, through appropriate access from

remote locations, and a reasonable charge may be assessed for such

access, except for Federal agencies. In addition, the Commission is

charged with prescribing the requirements for the ``accessibility and

accuracy'' of these automated tariff systems, unlike the ``form and

manner'' requirements under the current law. The Commission also can

prohibit the use of such systems, if they fail to meet the requirements

it establishes.

It is against this background that the Commission is initiating

this inquiry to solicit comments from the ocean transportation industry

and the general public on how best to establish requirements for

carriers' automated tariff systems. Such comments should assist the

Commission in formulating and proposing a rule in this area in the

event that the House passes S. 414 and it is signed into law by the

President.

The primary function of the publication of tariffs is to provide

the shipping public with reliable information on the price and service

options to move particular commodities from point A to point B. This

information would necessarily include all applicable assesorials,

additional charges, and surcharges, so that the shipper can obtain a

``bottom-line'' price for the service it seeks. Consistent with the

Reform Act's common carriage principles, shippers should be able to use

this information to compare competing carriers' offerings and to assess

whether they are being

[[Page 37089]]

unreasonably discriminated against vis-a-vis their competitors. In

addition, public tariff information enables carriers to monitor their

competitors and adjust their pricing and service structures

accordingly.

A perhaps no less important function of tariff publication is to

permit the Commission to monitor the rate activity of carriers and

conferences. In light of the fact that the Reform Act would continue to

grant antitrust immunity for collective ratemaking, the ability to

monitor collectively-established rates remains particularly important.

The Commission also needs to be able to monitor carrier rate activity

to ensure that the prohibited acts in section 10 of the Reform Act are

not violated. In this regard, the Commission will always need a

historical record of rate activity, perhaps commensurate with the five

year statute of limitations in the Reform Act. In addition, the ability

to monitor the rate activity of controlled carriers is crucial to the

Commission's enforcement of the controlled carrier provisions of the

Reform Act.

The problem facing the Commission and the industry is how to

reconcile these basic purposes of tariff publication with the relative

discretion Congress would grant carriers to develop their own automated

tariff systems. The report of the Senate Committee on Commerce,

Science, and Transportation, S. Rep. No. 61, 105th Cong., 1st Sess.

(1997) (``Committee Report''), is instructive in this regard. The

Committee noted that innovative private sector approaches, such as

World Wide Web pages, should be encouraged, stating that common

carriers should be free to develop their own means of tariff

publication. Committee Report at 23. Although the Committee reiterated

that there should be no government restraints on the design of a

private tariff publication system, it also stated that such systems

must assure the integrity of the common carrier's tariff and of the

tariff system as a whole and provide the appropriate level of public

access to tariff information. Id. The Committee also stated that tariff

information should be ``simplified and standardized.'' Id. The

Committee further noted that the Commission will retain its authority

to suspend or prohibit the use of tariffs found to violate the 1984 Act

or other U.S. shipping laws. Id. at 22-23.

As a point of reference, because ATFI uses uniform transaction sets

for tariff material,\1\ it presents tariff information uniformly, and

substantive tariff provisions are located identically within each

carrier's tariff. In addition, carriers are required to provide

electronic links within each tariff so that shippers can calculate a

bottom-line freight charge. Under ATFI, the Commission also validates,

among other things, specific ports and points listed to ensure

industry-wide uniformity and requires that equipment descriptions be

standardized.

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\1\ ATFI's transaction sets prescribe specific requirements as

to the data dictionary, field size, syntax, data elements, mandatory

and optional fields, format, and segment definitions.

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The question thus becomes how to meld the various Congressional

directives in the Reform Act and its legislative history to produce

tariff publication requirements that fully comport with the letter and

the spirit of the Reform Act. The Commission, therefore, is seeking

public comment on how best to achieve this goal. Commenters should feel

free to address any aspect of automated systems relevant to this

inquiry. However, we have proposed some questions that may focus

discussion in the proper direction:

1. What are the best methods for standardizing tariff information?

2. Should tariffs contain uniform rate/commodity/geographic scope

searching mechanisms?

3. Describe any available options for standardizing commodity

descriptions.

4. How can we ensure that the systems produce accurate bottom-line

freight charges for shippers?

5. Should carriers be required to use uniform transaction sets

(such as ATFI transaction sets) for the transmission of information in

automated tariff systems?

6. How long should systems be required to maintain historical

tariff information?

7. Describe how tariff systems can automatically block the

publication of unlawful rate actions (e.g., an increased cost to the

shipper published to become effective less than 30 calendar days after

publication; changes in a controlled carrier's tariff published to

become effective less than 30 days after publication)?

8. How can the systems give the Commission the ability to void

tariff material that contravenes the statute or its regulations?

9. How should tariff systems be structured to handle carrier

requests for Commission approval of deviations from its rules,

including increased costs to shippers to become effective less than 30

days after publication?

10. How can the Commission meet its responsibilities efficiently

under sections 5, 6, 9 and 10 of the Act if faced with nonuniform

tariff systems?

11. Could tariff systems be designed so that the Commission could

access certain functionalities that might not otherwise be available to

the general public (e.g., to generate ad hoc and recurring reports,

facilitate tariff review, and examines tariff's history)?

12. Could tariff systems be designed to automatically inform the

Commission when an amendment is made?

13. How can tariff systems be designed to facilitate the

Commission's suspension or prohibition of the use of tariffs or tariff

material found to violate the 1984 Act or other U.S. shipping laws?

14. What standards should the Commission apply to measure the

accuracy and accessibility of a carrier's automated tariff publication

system?

15. How can tariffs be simplified?

In a related matter, the Reform Act directs carriers to file their

service contracts with the Commission on a confidential basis. The

Reform Act does not specify that these filings be done electronically.

Service contracts under the 1984 Act are currently filed in paper form.

In FY 1997 the Commission received 10,500 new contracts and nearly

29,000 amendments. This compares with 9,400 contracts and 19,500

amendments in FY 1996. By all indications, the number of service

contract filings will continue to increase significantly, particularly

under a statutory scheme providing greater confidentiality in contract

terms. Accordingly, the Commission also is seeking comments in this

inquiry regarding the electronic filing of service contracts with the

Commission. Electronically filed service contracts, unlike the publicly

available essential terms, would be available only to the Commission

and its staff. Commenters favoring electronic filing may suggest

possible approaches for implementing such filing, including issues

regarding digitized signatures and text versus data format. Commenters

are also requested to address the issues as they relate to the

publication of certain essential terms in tariff format in private

automated systems.

Now therefore, It is ordered that this Notice of Inquiry be

published in the Federal Register.

By the Commission.

Ronald D. Murphy,

Assistant Secretary.

[FR Doc. 98-18160 Filed 7-8-98; 8:45 am]

BILLING CODE 6730-01-M