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Commission Extends Fact Finding Investigation No. 25 and Issues Section 15 Orders

May 30, 2003


News

Federal

Maritime

Commission

Commission Extends Fact Finding Investigation No. 25 and Issues Section 15 Orders


NR 03-04

Washington, D.C. 20573


CONTACT: BRYANT L. VANBRAKLE, SECRETARY, (202) 523-5725


FOR RELEASE: May 30, 2003


            The Federal Maritime Commission announced today that it is extending Fact Finding Investigation No. 25 - Practices of Transpacific Stabilization Agreement Members Covering the 2002-2003 Service Contract Season. Continuation of the Fact Finding Investigation will enable the Commission to collect additional information with respect to possible violations of section 10 of the Shipping Act of 1984, 46 U.S.C. app. § 1709, by the Transpacific Stabilization Agreement (“TSA”) and its member lines, as well as to continue to pursue other issues revealed in connection with this Fact Finding Investigation.


            A cornerstone of the Shipping Act, as amended by the Ocean Shipping Reform Act of 1998, is to foster growth and competition in ocean transportation through a greater reliance on the marketplace. The Commission is mindful that the trade served by the TSA and related “bridging” agreements is the largest U.S. trade, of growing importance, and has a correspondingly significant impact on U.S. economic security. The TSA and related bridging agreements possess substantial market power, with the potential to affect both pricing of services and competition in these trades.  

            In light of information and issues which have emerged in the course of the Fact Finding Investigation, the Commission is requiring TSA and its member lines to furnish certain information and documents relating to their activities in the inbound transpacific trades, pursuant to section 15 of the Shipping Act, 46 U.S.C. app. § 1714. Information and documents are also being sought, pursuant to section 15, from TSA and related bridging agreements and their member lines on their activities in the inbound trades from Asia and the Indian subcontinent to the United States. The Commission is concerned that the agreements may be likely, by a reduction in competition, to produce an unreasonable reduction in transportation service or an unreasonable increase in transportation cost, and seeks the information in order to determine whether action is warranted to enjoin, in whole or in part, the operation of the agreements pursuant to sections 6(g) and (h) of the Shipping Act, 46 U.S.C. app. § 1705(g) and (h).


            In taking these actions, Chairman Steven R. Blust stated that “the Commission will be proactive with regard to enforcing the Shipping Act to assure that market forces prevail in the give and take of carrier/shipper relations in U.S. trades, providing the fairness, stability and balance necessary for trade growth.”