S E R V E D -  January 17, 2003 

HUDSON SHIPPING (HONG KONG), LTD. d/b/a HUDSON EXPRESS LINES -
POSSIBLE VIOLATIONS OF SECTION 10(a)(1) OF THE SHIPPING ACT OF 1984

ORDER GRANTING MOTION TO AMEND
ORDER OF INVESTIGATION

This matter is before the Commission upon a request by Administrative Law Judge Michael A. Rosas ("ALJ") for a determination whether to amend the current order of investigation to ascertain whether Hudson Shipping (Hong Kong) Ltd. d/b/a Hudson Express Lines ("Hudson" or "Respondent") has violated, and continues to violate, section 19(b)(1) of the Shipping Act of 1984, 46 U.S.C. app. § 1718(b)(1).

On April 5, 2002, the Commission issued an Order of Investigation and Hearing to determine whether Hudson violated section 10(a)(1) of the Shipping Act, 46 U.S.C. app. § 1709(a)(1)⁽¹⁾, and whether in the event violations are found, penalties should be assessed and a cease and desist order issued. The Bureau of Enforcement ("BOE") filed a Request to Amend the Order of Investigation and Hearing on December 6, 2002, to which Hudson did not reply. Thereafter, the ALJ referred the matter to the Commission for its consideration.

BOE's Motion

BOE contends that during the course of discovery in this proceeding, it has obtained evidence which appears to indicate that Hudson is operating as an ocean transportation intermediary/non-vessel-operating common carrier ("OTI/NVOCC") in violation of section 19(b)(1) of the Shipping Act. BOE Request at 1. That section provides that no person may act as an OTI without a bond, proof of insurance, or other surety as proscribed by the Commission. 46 U.S.C. app. § 1718(b)(1). See also 46 C.F.R. § 515.21.

In support of its position, BOE first points out that Hudson's surety bond was cancelled effective September 4, 2002, after it received notice of the pending cancellation from the Commission's Bureau of Consumer Complaints and Licensing and an opportunity to rectify that deficiency. In addition, BOE offers evidence in the form of bills of lading which appear to indicate that at least three ocean common carriers have transported cargo for Hudson since the cancellation of its bond.

Discussion

As with the issuance of an order of investigation in the first place, the decision whether to amend an order of investigation is an issue reserved for the Commission's discretion. See David P. Kelly and West Indies Shipping and Trading, Inc. -- Possible Violations of the Shipping Act of 1984, 28 S.R.R. 1476 (2000). In this case, BOE seeks to add section 19(b)(1) to the pending order of investigation, contending that it will demonstrate that the Respondent has violated, and continues to violate, the Shipping Act by acting as an NVOCC in the U.S. foreign commerce without the requisite financial responsibility.

The exhibits presented in support of BOE's request appear to indicate that Hudson has violated the Shipping Act. Although Hudson failed to respond to BOE's motion, it will have an opportunity to respond to the new charges. As a result, amending the existing order of investigation will not prejudice Respondent. The Shipping Act's requirement that OTIs secure financial responsibility in order to operate in the U.S. foreign commerce is designed to protect the shipping public. The surety bonds secured by NVOCCs are available to pay for any damages arising from an NVOCC's transportation-related activities. In this instance, because the evidence appears to indicate that Hudson has operated, and perhaps continues to operate, without the statutorily-mandated financial responsibility, we have determined to amend the existing order of investigation to ascertain whether the alleged violations have occurred and continue to occur.

NOW, THEREFORE IT IS ORDERED, That pursuant to sections 11, 13 and 19 of the Shipping Act, 46 U.S.C. app. §§ 1710, 1712 and 1718, the pending order of investigation in Docket No. 02-06 is amended to determine:

1. whether Hudson Shipping (Hong Kong) Ltd. d/b/a Hudson Express Lines violated section 19(b)(1) of the Shipping Act of 1984, 46 U.S.C. app. § 1718, by acting as an ocean transportation intermediary without furnishing to the Commission a bond, proof of insurance, or other surety to insure its financial responsibility;

2. whether, in the event violations of section 19(b)(1) of the Shipping Act of 1984 are found, civil penalties should be assessed against Hudson Shipping (Hong Kong) Ltd. d/b/a Hudson Express Lines, and in what amount; and

3. whether, in the event violations are found, an appropriate cease and desist order should be issued.

By the Commission.

ENDNOTES

1. Section 10(a)(1) provides that no person may knowingly and willfully, directly or indirectly, by means of false billing, false classification, false weighing, false report of weight, false measurement, or by any other unjust or unfair device or means obtain or attempt to obtain ocean transportation for property at less than the rates or charges that would otherwise be applicable.