Notice of Inquiry; An Analysis of the European Union Repeal of the Liner Conference Block Exemption, 67970-67973 [2010-27891]
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Federal Register / Vol. 75, No. 213 / Thursday, November 4, 2010 / Notices
North Pearl Street, Dallas, Texas 75201–
2272:
1. Veritex Holdings, Inc., Dallas,
Texas; to acquire 100 percent of the
voting shares of Fidelity Resources
Company, and thereby indirectly
acquire voting shares of Fidelity Bank,
Plano, Texas.
2. WCM Holdings, Inc., and WCM–
Parkway, Ltd., both of Dallas, Texas; to
acquire at least 5 percent of the voting
shares of Veritex Holdings, Inc., and
thereby indirectly acquire voting shares
of Professional Bank, NA, both of Dallas,
Texas.
C. Federal Reserve Bank of San
Francisco (Kenneth Binning, Vice
President, Applications and
Enforcement) 101 Market Street, San
Francisco, California 94105–1579:
1. SKBHC Holdings, LLC, and SKBHC
Hawks Nest Acquisition Corp., both of
Corona del Mar, California; to acquire
100 percent of the voting shares of
AmericanWest Bank, Spokane,
Washington.
Board of Governors of the Federal Reserve
System, November 1, 2010.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. 2010–27867 Filed 11–3–10; 8:45 am]
BILLING CODE 6210–01–P
FEDERAL MARITIME COMMISSION
Notice of Inquiry; An Analysis of the
European Union Repeal of the Liner
Conference Block Exemption
Federal Maritime Commission.
Notice of Inquiry.
AGENCY:
ACTION:
The Federal Maritime
Commission (‘‘FMC’’ or ‘‘Commission’’)
is issuing this inquiry to solicit
information and comments concerning
the effects on international liner
shipping of the European Union’s
(‘‘E.U.’’) repeal of the liner block
exemption from competition laws that
took effect on October 18, 2008. This
information will assist the Commission
in its identification, analysis and
evaluation of any consequences of the
E.U.’s policy decision on U.S. trades,
and will be incorporated into the
Commission’s research for An Analysis
of the E.U. Repeal of the Liner
Conference Block Exemption (‘‘E.U.
Study’’) which is scheduled to be
completed in late 2011.
DATES: Responses are due on or before
January 18, 2011.
ADDRESSES: Submit all comments
concerning this Inquiry to: Karen V.
Gregory, Secretary, Federal Maritime
Commission, 800 North Capitol Street,
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SUMMARY:
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NW., Room 1046, Washington, DC
20573–0001.
Or e-mail non-confidential comments
to: secretary@fmc.gov. (e-mail comments
as attachments in Microsoft Word)
FOR FURTHER INFORMATION CONTACT: Dr.
Austin L. Schmitt, Director, Bureau of
Trade Analysis, Federal Maritime
Commission, 800 North Capitol Street,
NW., Washington, DC 20573–0001,
Telephone: (202) 523–5796, E-mail:
aschmitt@fmc.gov.
SUPPLEMENTARY INFORMATION:
Submit Comments: Non-confidential
filings may be submitted in hard copy
or by e-mail as an attachment (Microsoft
Word) addressed to secretary@fmc.gov
on or before January 18, 2011. Include
in the subject line: ‘‘FMC EU Study—
Response to NOI’’. Responses to this
inquiry that seek confidential treatment
must be submitted in hard copy by U.S.
mail or courier. Confidential filings
must be accompanied by a transmittal
letter that identifies the filing as
‘‘confidential,’’ describes the nature and
extent of the confidential treatment
requested, and states the reason for the
request (e.g., commercially sensitive
data). When submitting documents in
response to the NOI that contain
confidential information, the
confidential copy of the filing must
consist of the complete filing and be
marked by the filer as ‘‘ConfidentialRestricted,’’ with the confidential
material clearly marked on each page.
When a confidential filing is submitted,
an original and one additional copy of
the public version of the filing must be
submitted. The public version of the
filing should exclude confidential
materials, and be clearly marked on
each affected page, ‘‘confidential
materials excluded.’’ Questions
regarding filing or treatment of
confidential responses to this inquiry
should be directed to the Commission’s
Secretary, Karen V. Gregory, at the
telephone number or e-mail provided
above.
The Federal Maritime Commission is
seeking information and comments from
interested parties regarding the impacts
of the E.U. repeal of the liner conference
block exemption, Regulation (EEC) No.
4056/86,1 on the performance of liner
shipping in U.S. trades. The adoption by
the European Union of Regulation 1419/
2006 (‘‘Repeal’’), on September 25, 2006,
removed the previous block exemption
from E.U. competition laws as of
October 18, 2008. Under European
Background
As the expert agency responsible for
regulating liner shipping in U.S. trades,
the Commission has an on-going
responsibility to keep abreast of changes
in foreign laws and regulations that may
impact liner activities in U.S. trades.
The Commission developed the E.U.
Study as a means of meeting that
responsibility, and of determining
whether or not any impacts on U.S.
trades that could be related to the E.U.’s
Repeal warranted Commission action
with respect to its existing regulations
and oversight activities under the
Shipping Act of 1984 as amended by the
Ocean Shipping Reform Act of 1998.
In doing so, the Commission was
cognizant of recommendations made by
the National Industrial Transportation
League (‘‘NITL’’) to the Antitrust
Modernization Commission (‘‘AMC’’) in
their October 18, 2006 comments. NITL
told the AMC that, in light of the E.U.’s
repeal of the liner conference block
exemption, it would be appropriate for
the United States government to
undertake a review of the antitrust
immunity granted under the Shipping
Act. NITL stated, in particular, that such
a review should include an analysis of
the impact that the changes adopted in
Europe will have on the shipment of
goods in U.S. trades.2
On November 23, 2009, in a public
address to several industry groups, FMC
Chairman Richard A. Lidinsky, Jr.
announced the Commission’s intention
to undertake a comprehensive study of
the impact of the E.U.’s repeal of the
liner block exemption on U.S. trades. He
noted that the E.U. study would cover
a five-year period, from January 2006
through December 2010, and that it
would include an analysis of changes in
liner market structure, competition,
services offered, vessel capacity, rates
and surcharges. He also advised that the
Commission staff was consulting key
industry and customer groups
concerning the parameters of the study,
the proposed research methods, and the
possibility of future interviews with
industry representatives. Chairman
Lidinsky declared that the Commission
intended to publish a Notice of Inquiry
(‘‘NOI’’) in late 2010, and stressed the
importance he attached to participation
by the shipper community in both the
1 Regulation (EEC) No. 4056/86 included a block
exemption from E.U. competition laws for liner
shipping conferences, which allowed them, under
certain conditions, to fix prices and regulate
capacity.
2 See Comments Submitted on Behalf of the
National Industrial Transportation League, by
Attorneys Nicholas J. DiMichael and Karyn A.
Booth, Thompson Hine LLP, October 18, 2006, page
9.
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Commission Regulation No. 906/2009,
liner shipping consortia with market
shares up to 30% retain an exemption
for certain activities.
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Federal Register / Vol. 75, No. 213 / Thursday, November 4, 2010 / Notices
E.U. Study in general and the proposed
NOI in particular.
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NOI Participation
The Commission’s research efforts,
under the E.U. Study, are intended to
support a detailed analysis of the impact
of the E.U. repeal on U.S. trades. The
Commission is currently collecting, and
will be evaluating data and other
information on the three main East/West
trades during the pre- and post-repeal
periods. The E.U. Study analysis will
involve comparing changes in the E.U./
U.S. trade lane (North Europe/U.S.) 3
over time and, to the extent that useful
comparative data is available, across
two Asia-based trade lanes (Far East/
U.S. and Far East/Europe). The NOI
questions below—several of which
solicit information by specific trade
lane—are intended to help inform the
Commission of the experiences and
views of all industry sectors, groups and
individuals willing to participate. It is
anticipated that the comments provided
could prove useful in the Commission’s
evaluation of the data it is currently
collecting.
If participating respondents believe
that there is a topic related to the issue
of the impact of the E.U. repeal of the
liner conference block exemption on
U.S. liner trades that is not adequately
addressed in the NOI questions, they are
encouraged to identify and address that
topic in their comments to the NOI.
To promote maximum participation
by individual shippers, vessel-operating
common carriers, ocean transportation
intermediaries, public port authorities,
marine terminal operators, etc., the NOI
questions will be made available via the
Federal Register and on the
Commission’s Web site at https://
www.fmc.gov in a downloadable text
file. They can also be obtained by
contacting the Commission’s Secretary,
Karen V. Gregory, by telephone at (202)
523–5725 or by e-mail at
secretary@fmc.gov. Please indicate
whether you would prefer a hard copy
or an e-mail copy of the NOI questions.
Non-confidential comments may be sent
to secretary@fmc.gov as an attachment
to an e-mail submission. Such
attachments must be in Microsoft Word.
The Commission intends that the E.U.
Study be as thorough as possible, and
3 The Europe/U.S. trades are typically separated
into two sub-groups: (1) The North Atlantic trade,
and (2) the Mediterranean trade. There has been no
conference in the U.S./Mediterranean trade since
February 2006. Consequently there was no
conference for almost all of the 5-year test period
(January 2006–December 2010). Further, the U.S./
Mediterranean trade involved a good deal of transshipment. For those reasons, the Bureau has
decided to focus its U.S./Europe research on the
North Atlantic trade.
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therefore encourages prospective NOI
participants to address all relevant
questions with detailed comments.
There is, however, no requirement that
participants answer all the NOI
questions. Participants, if they wish, are
free to limit their responses to questions
where they have direct experience or
specific views. In addition, although
many of the NOI questions are designed
to elicit responses from a broad range of
industry participants, the eight final
questions are addressed specifically to
vessel-operating common carriers.
The Commission anticipates that most
filed NOI comments will be made
publicly available. The Commission
believes that public availability of NOI
comments is to be encouraged because
it could improve public awareness of
the issues being addressed in the E.U.
Study, and of the various perspectives
of all interested parties. Nevertheless,
some commenting parties may wish to
include commercially sensitive
information as relevant or necessary in
their responses by way of explaining
their liner shipping experiences or
detailing their responses in practical
terms. To help assure that all potential
respondents will provide usefully
detailed information in their
submissions, the Commission will
provide confidential treatment to the
extent allowed by law for those
submissions, or parts of submissions, for
which the parties request
confidentiality.
FMC E.U. Study Notice of Inquiry
Questions
Identifying Information (Please
provide the information requested
below with your NOI response.)
Name of Respondent: (individual)
Respondent’s Title/Position:
Contact Information: Telephone and
E-mail
Name and Address of Company or
Other Entity:
Type of Company or Other Entity:
Beneficial Cargo Owner (BCO)
Ocean Transportation Intermediary
(OTI)
Shippers’ Association
Vessel-Operating Ocean Carrier
(VOCC)
Public Port Authority
Other, please describe (e.g., marine
terminal operator, trade association,
government agency, etc.)
Section A: General Questions
1. Based on your experience since
September 2006 (when the European
Union announced its decision to
terminate the block exemption for liner
shipping conferences to take effect
October 2008), what impacts, if any,
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have you identified on your company’s
commercial activities, in any trade lane,
that you would attribute to the
termination of the E.U. conference block
exemption? Please explain. If you
believe there have been such impacts,
please indicate when that impact first
occurred.
2. Based on your experience since
October 2008 (when the E.U. exemption
for liner conferences was terminated)
has any class of shipper or class of
vessel-operating common carrier
received a competitive advantage or
been put at a competitive disadvantage
as a result of the E.U. decision to
terminate the exemption? If so, please
explain.
3. Based on your experience since
October 2008 (when the E.U. exemption
for liner conferences was terminated),
have differences between U.S. and E.U.
liner shipping competition regulations
created any problems for your
company? If so, please explain.
4. Does your company view
cooperation among ocean carriers in
operational agreements (e.g., vessel
sharing agreements, alliances, consortia,
etc.) as generally having a positive,
neutral or negative impact on the
availability or cost of liner shipping
services? Please explain. Does the E.U.
market share threshold of 30% for such
operational agreements have any effect
with respect to that impact? If so, please
explain.
Section B: Questions about the North
Atlantic Trade (North Europe/U.S.)
5. Approximately what percent of
your company’s freight earnings (lines,
OTIs) or shipping expenses (shippers)
involves international shipping in the
North Europe/U.S. trade? Does your
company’s business involve US imports
(westbound service) only, U.S. exports
(eastbound service) only, or both? Please
explain briefly.
6. How, and to what extent, did the
recent economic recession (2008–2009)
affect your company’s liner shippingrelated business in the North Europe/
U.S. trade? Please explain.
7. Based on your experience prior to
July 2008, when the Trans-Atlantic
Conference Agreement (TACA)
disbanded, did the existence of TACA
have any impact on your liner shippingrelated business in the North Europe/
U.S. trade? If so, please explain.
8. Based on your experience in the
period from October 2008 to the present
(i.e., since the E.U. block exemption was
terminated), has there been any
significant change(s) in liner services in
the North Europe/U.S. trade that you
attribute to the E.U. terminating the
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Federal Register / Vol. 75, No. 213 / Thursday, November 4, 2010 / Notices
jlentini on DSKJ8SOYB1PROD with NOTICES
block exemption? For example, changes
in:
a. the level of freight rates and
surcharges;
b. the frequency with which rates or
surcharges are adjusted upward or
downward (rate volatility);
c. the assessment of surcharges;
d. the level of competition among
ocean carriers;
e. the service contracting practices or
terms offered by ocean carriers;
f. the availability of vessel capacity
and container equipment; or
g. the level or quality of liner services
(including customer service, billing
accuracy, etc.)
If so, please identify and explain
those changes.
9. For CY 2010 to date, please
estimate the percentage of your annual
business (by volume) in the North
Europe/U.S. liner trade that moved
under (a) annual (or longer) service
contracts, (b) shorter-term freight
agreements, (c) spot rates, and (d) other
(please specify). Has that changed
significantly since October 2008? If so,
please explain.
10. Following repeal of the E.U. block
exemption, ocean carriers created a
global information system under
Container Trade Statistics, Ltd. (CTS) in
which a majority of ocean carriers
serving the North Europe/U.S. trade
participate. CTS provides certain data
free on its Web site, including indices
of the carriers’ aggregated average
revenue per TEU by month. CTS also
sells other data. To what extent, if at all,
does your company access and use CTS
Europe/U.S. trade data, and (if it does
so) for what purpose(s)?
Section C: Questions about the
Transpacific Trade (Far East/U.S.)
11. Approximately what percent of
your company’s freight earnings (lines,
OTIs) or shipping expenses (shippers)
involve international shipping in the
Far East/U.S. trade? Does your
company’s business involve U.S.
imports (eastbound service) only, U.S.
exports (westbound service) only, or
both? Please explain.
12. How, and to what extent, did the
recent economic recession (2008–2009)
affect your company’s liner shippingrelated business in the Far East/U.S.
trade? Please explain.
13. Based on your experience from
January 2006 to the present, have the
activities of the Trans-Pacific
Stabilization Agreement (TSA) or the
Westbound Trans-Pacific Stabilization
Agreement (WTSA) had any significant
impact on your company’s liner
shipping-related business in the Far
East/U.S. trades? If so, please explain.
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14. Based on your experience in the
period from October 2008 to the present,
have there been any significant
characteristics of liner services in Far
East/U.S. trades that you attribute to
actions taken by TSA or WTSA member
lines acting collectively? For example:
a. the level of freight rates and
surcharges;
b. the frequency with which rates or
surcharges are adjusted upward or
downward (rate volatility);
c. the assessment of surcharges;
d. the level of competition among
ocean carriers;
e. the service contracting practices or
terms offered by ocean carriers;
f. the availability of vessel capacity
and container equipment; and
g. the level or quality of liner services
(including customer service, billing
accuracy, etc.)
If so, please identify and explain
those characteristics.
15. For CY 2010 to date, please
estimate the percentage of your annual
business (by volume) in the Far East/
U.S. liner trade that moves under (a)
annual (or longer) service contracts, (b)
shorter-term freight agreements, (c) spot
rates, and (d) other (please specify)? Has
that changed significantly since October
2008? If so, please explain.
Section D: Questions About the
Europe—Asia Trade (Far East/Europe)
16. Approximately what percent of
your company’s freight earnings (lines,
OTIs) or shipping expenses (shippers)
involve international shipping in the
Far East/Europe trade? Does your
company’s business involve European
imports (westbound service) only,
European exports (eastbound service)
only, or both? Please explain briefly.
17. How, and to what extent, did the
recent economic recession (2008–2009)
affect your company’s liner shippingrelated business in the Far East/Europe
trade? Please explain.
18. Based on your experience prior to
October 2008 (i.e., before the Far East
Freight Conference (FEFC) disbanded),
did the existence of FEFC have any
impact on your liner shipping-related
business in the Far East/Europe trade?
Please explain.
19. Based on your experience in the
period from October 2008 to the present
(i.e., since the E.U. block exemption was
terminated), has there been any
significant change(s) in liner services in
the Far East/Europe trade that you
attribute to the E.U.’s ending of the
block exemption? For example, changes
in:
a. the level of freight rates and
surcharges;
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b. the frequency with which rates or
surcharges are adjusted upward or
downward (rate volatility);
c. the assessment of surcharges;
d. the level of competition among
ocean carriers;
e. the service contracting practices or
terms offered by ocean carriers;
f. the availability of vessel capacity
and container equipment: and
g. the level or quality of liner services
(including customer service, billing
accuracy, etc.)
If so, please identify and explain
those changes.
20. For CY 2010 to date, please
estimate the percentage of your annual
business (by volume) in the Far East/
Europe liner trade that moved under (a)
annual (or longer) service contracts, (b)
shorter-term freight agreements, (c) spot
rates, and (d) other (please specify)? Has
that changed significantly since October
2008? If so, please explain.
21. Following repeal of the E.U. block
exemption, ocean carriers created a
global information system under
Container Trade Statistics, Ltd. (CTS), in
which a majority of ocean carriers
serving the Far East/Europe trade
participate. CTS makes certain data free
on its Web site, including indices of the
carriers’ aggregated average revenue per
TEU by month. CTS also sells other
data. To what extent, if at all, does your
company access and use Far East/
Europe trade data, and (if it does so) for
what purpose(s)?
Section E: Comparisons Among Trades
22. Based on your experience since
October 2008 (since the E.U. block
exemption was terminated) are there
differences in the characteristics of the
Far East/U.S. trade versus the Far East/
Europe or North Europe/U.S. trades that
you attribute to differences between
U.S. and European liner competition
regulations? For example, differences in:
a. the level of freight rates and
surcharges;
b. the frequency with which rates or
surcharges are adjusted upward or
downward (rate volatility);
c. the assessment of surcharges;
d. the level of competition among
ocean carriers;
e. the service contracting practices or
terms offered by ocean carriers;
f. the availability of vessel capacity
and container equipment; and
g. the level or quality of liner services
(including customer service, billing
accuracy, etc.)
If so, please explain those differences.
23. Please identify any significant
similarities and dissimilarities (for
example, cargo volumes, scope or scale
of operations, shipper mix, geography,
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Federal Register / Vol. 75, No. 213 / Thursday, November 4, 2010 / Notices
market concentration levels, contracting
practices, legal requirements, etc.) that
existed in liner shipping markets in the
(1) Far East/U.S. trade and the (2) Far
East/Europe trade during the period
2006–2010. In your opinion, how (if at
all) would those similarities and
dissimilarities likely impact a
comparison of liner pricing and service
behavior across those two trades?
If those percentages changed
significantly during the 2006 through
2010 period, please describe and
explain the change.
25. In each of the three major EastWest trades, please estimate the percent
of cargo your company carried for
ll% beneficial cargo owners (BCO) accounts,
ll% (b) OTI accounts, (c) other accounts (if
ll%
ll% any, please explain) during CY 2010 to
100% date:
Section F: Additional Questions for
Vessel-Operating Common Carriers
FOR VOCCs ONLY:
24. Please estimate the percentage of
your liner revenues (globally) that were
earned in each of the following trade
lanes during CY 2010 to date:
a. North Europe/U.S. liner trade
b. Far East/U.S. liner trade
c. Far East/Europe liner trade
d. All other liner trades
e. Total (all liner trades combined)
BCO
f. North Europe/U.S. liner trade ...........................................................................................................................
g. Far East/U.S. liner trade ..................................................................................................................................
h. Far East/Europe liner trade .............................................................................................................................
Has the relative ranking of shipper
types in these trade lanes changed
significantly during the 2006 through
2010 period? If so, please describe and
explain the change.
26. In each of the three major EastWest trade lanes, please indicate which
lanes have tended to be the relatively
most profitable and which was the
relatively least profitable for each year
OTI
Other
ll%
ll%
ll%
ll%
ll%
ll%
ll%
ll%
ll%
between 2006 and 2010 (inclusive).
[Write M for most, and L for least.]
Far East/U.S.
jlentini on DSKJ8SOYB1PROD with NOTICES
a. 2006
b. 2007
c. 2008
d. 2009
e. 2010
.....................................................................................................
.....................................................................................................
.....................................................................................................
.....................................................................................................
.....................................................................................................
If those rankings changed
significantly during the 2006 through
2010 period, please explain the
reason(s) for the change.
27. Based on your experience during
the period from January 2006 to the
present, have there been any significant
changes in the nature of your business
in the North Europe/U.S. liner shipping
market related to changes in:
a. Seasonality of cargo movements;
b. Commodity values;
c. Directional cargo imbalances
(imports vs. exports);
d. Number of carriers serving the
trade; or
e. Minimum scale (# and size of
vessels) needed to serve the trade
efficiently
If so, please identify and explain
those changes.
28. Based on your company’s
experience in the North Europe/U.S.
trade, please identify any substantial
changes that occurred in your liner
business (operations, marketing, pricing,
etc.) in the two years following repeal of
the E.U. liner conference exemption (CY
2009 and 2010) as compared with the
two years preceding the repeal (2006–
2007)? If any, please explain.
29. Based on your experience during
the period from January 2006 to the
present, have there been any significant
changes in the nature of your business
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Far East/Europe
North Europe/U.S.
lll
lll
lll
lll
lll
lll
lll
lll
lll
lll
lll
lll
lll
lll
lll
in the Far East/U.S. liner shipping
market related to changes in:
a. Seasonality of cargo movements;
b. Commodity values;
c. Directional cargo imbalances
(imports vs. exports);
d. Number of carriers serving the
trade; or
e. Minimum scale (# and size of
vessels) needed to serve the trade
efficiently
If so, please identify and explain
those changes.
30. Based on your experience during
the period from January 2006 to the
present, have there been any significant
changes in the nature of your business
in the Far East/E.U. liner shipping
market related to changes in:
a. Seasonality of cargo movements;
b. Commodity values;
c. Directional cargo imbalances
(imports vs. exports);
d. Number of carriers serving the
trade; or
e. Minimum scale (# and size of
vessels) needed to serve the trade
efficiently
If so, please identify and explain
those changes.
Now Therefore, it is ordered that Notice of
this Inquiry be published in the Federal
Register.
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By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. 2010–27891 Filed 11–3–10; 8:45 am]
BILLING CODE 6730–01–P
FEDERAL MARITIME COMMISSION
Ocean Transportation Intermediary
License Applicants
Notice is hereby given that the
following applicants have filed with the
Federal Maritime Commission an
application for a license as a NonVessel-Operating Common Carrier
(NVO) and/or Ocean Freight Forwarder
(OFF)—Ocean Transportation
Intermediary (OTI) pursuant to section
19 of the Shipping Act of 1984 as
amended (46 U.S.C. Chapter 409 and 46
CFR 515). Notice is also hereby given of
the filing of applications to amend an
existing OTI license or the Qualifying
Individual (QI) for a license.
Interested persons may contact the
Office of Transportation Intermediaries,
Federal Maritime Commission,
Washington, DC 20573.
AAA Cargo, Inc. dba AAA Cargo
Express Inc. (OFF), 14536 Roscoe Blvd.,
Suite 99 & 101, Panorama City, CA
91402. Officers: Jake J. Son, President,
(Qualifying Individual), Belen Mercano,
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]]>Agencies
[Federal Register Volume 75, Number 213 (Thursday, November 4, 2010)]
[Notices]
[Pages 67970-67973]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-27891]
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FEDERAL MARITIME COMMISSION
Notice of Inquiry; An Analysis of the European Union Repeal of
the Liner Conference Block Exemption
AGENCY: Federal Maritime Commission.
ACTION: Notice of Inquiry.
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SUMMARY: The Federal Maritime Commission (``FMC'' or ``Commission'') is
issuing this inquiry to solicit information and comments concerning the
effects on international liner shipping of the European Union's
(``E.U.'') repeal of the liner block exemption from competition laws
that took effect on October 18, 2008. This information will assist the
Commission in its identification, analysis and evaluation of any
consequences of the E.U.'s policy decision on U.S. trades, and will be
incorporated into the Commission's research for An Analysis of the E.U.
Repeal of the Liner Conference Block Exemption (``E.U. Study'') which
is scheduled to be completed in late 2011.
DATES: Responses are due on or before January 18, 2011.
ADDRESSES: Submit all comments concerning this Inquiry to: Karen V.
Gregory, Secretary, Federal Maritime Commission, 800 North Capitol
Street, NW., Room 1046, Washington, DC 20573-0001.
Or e-mail non-confidential comments to: secretary@fmc.gov. (e-mail
comments as attachments in Microsoft Word)
FOR FURTHER INFORMATION CONTACT: Dr. Austin L. Schmitt, Director,
Bureau of Trade Analysis, Federal Maritime Commission, 800 North
Capitol Street, NW., Washington, DC 20573-0001, Telephone: (202) 523-
5796, E-mail: aschmitt@fmc.gov.
SUPPLEMENTARY INFORMATION:
Submit Comments: Non-confidential filings may be submitted in hard
copy or by e-mail as an attachment (Microsoft Word) addressed to
secretary@fmc.gov on or before January 18, 2011. Include in the subject
line: ``FMC EU Study--Response to NOI''. Responses to this inquiry that
seek confidential treatment must be submitted in hard copy by U.S. mail
or courier. Confidential filings must be accompanied by a transmittal
letter that identifies the filing as ``confidential,'' describes the
nature and extent of the confidential treatment requested, and states
the reason for the request (e.g., commercially sensitive data). When
submitting documents in response to the NOI that contain confidential
information, the confidential copy of the filing must consist of the
complete filing and be marked by the filer as ``Confidential-
Restricted,'' with the confidential material clearly marked on each
page. When a confidential filing is submitted, an original and one
additional copy of the public version of the filing must be submitted.
The public version of the filing should exclude confidential materials,
and be clearly marked on each affected page, ``confidential materials
excluded.'' Questions regarding filing or treatment of confidential
responses to this inquiry should be directed to the Commission's
Secretary, Karen V. Gregory, at the telephone number or e-mail provided
above.
The Federal Maritime Commission is seeking information and comments
from interested parties regarding the impacts of the E.U. repeal of the
liner conference block exemption, Regulation (EEC) No. 4056/86,\1\ on
the performance of liner shipping in U.S. trades. The adoption by the
European Union of Regulation 1419/2006 (``Repeal''), on September 25,
2006, removed the previous block exemption from E.U. competition laws
as of October 18, 2008. Under European Commission Regulation No. 906/
2009, liner shipping consortia with market shares up to 30% retain an
exemption for certain activities.
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\1\ Regulation (EEC) No. 4056/86 included a block exemption from
E.U. competition laws for liner shipping conferences, which allowed
them, under certain conditions, to fix prices and regulate capacity.
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Background
As the expert agency responsible for regulating liner shipping in
U.S. trades, the Commission has an on-going responsibility to keep
abreast of changes in foreign laws and regulations that may impact
liner activities in U.S. trades. The Commission developed the E.U.
Study as a means of meeting that responsibility, and of determining
whether or not any impacts on U.S. trades that could be related to the
E.U.'s Repeal warranted Commission action with respect to its existing
regulations and oversight activities under the Shipping Act of 1984 as
amended by the Ocean Shipping Reform Act of 1998.
In doing so, the Commission was cognizant of recommendations made
by the National Industrial Transportation League (``NITL'') to the
Antitrust Modernization Commission (``AMC'') in their October 18, 2006
comments. NITL told the AMC that, in light of the E.U.'s repeal of the
liner conference block exemption, it would be appropriate for the
United States government to undertake a review of the antitrust
immunity granted under the Shipping Act. NITL stated, in particular,
that such a review should include an analysis of the impact that the
changes adopted in Europe will have on the shipment of goods in U.S.
trades.\2\
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\2\ See Comments Submitted on Behalf of the National Industrial
Transportation League, by Attorneys Nicholas J. DiMichael and Karyn
A. Booth, Thompson Hine LLP, October 18, 2006, page 9.
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On November 23, 2009, in a public address to several industry
groups, FMC Chairman Richard A. Lidinsky, Jr. announced the
Commission's intention to undertake a comprehensive study of the impact
of the E.U.'s repeal of the liner block exemption on U.S. trades. He
noted that the E.U. study would cover a five-year period, from January
2006 through December 2010, and that it would include an analysis of
changes in liner market structure, competition, services offered,
vessel capacity, rates and surcharges. He also advised that the
Commission staff was consulting key industry and customer groups
concerning the parameters of the study, the proposed research methods,
and the possibility of future interviews with industry representatives.
Chairman Lidinsky declared that the Commission intended to publish a
Notice of Inquiry (``NOI'') in late 2010, and stressed the importance
he attached to participation by the shipper community in both the
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E.U. Study in general and the proposed NOI in particular.
NOI Participation
The Commission's research efforts, under the E.U. Study, are
intended to support a detailed analysis of the impact of the E.U.
repeal on U.S. trades. The Commission is currently collecting, and will
be evaluating data and other information on the three main East/West
trades during the pre- and post-repeal periods. The E.U. Study analysis
will involve comparing changes in the E.U./U.S. trade lane (North
Europe/U.S.) \3\ over time and, to the extent that useful comparative
data is available, across two Asia-based trade lanes (Far East/U.S. and
Far East/Europe). The NOI questions below--several of which solicit
information by specific trade lane--are intended to help inform the
Commission of the experiences and views of all industry sectors, groups
and individuals willing to participate. It is anticipated that the
comments provided could prove useful in the Commission's evaluation of
the data it is currently collecting.
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\3\ The Europe/U.S. trades are typically separated into two sub-
groups: (1) The North Atlantic trade, and (2) the Mediterranean
trade. There has been no conference in the U.S./Mediterranean trade
since February 2006. Consequently there was no conference for almost
all of the 5-year test period (January 2006-December 2010). Further,
the U.S./Mediterranean trade involved a good deal of trans-shipment.
For those reasons, the Bureau has decided to focus its U.S./Europe
research on the North Atlantic trade.
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If participating respondents believe that there is a topic related
to the issue of the impact of the E.U. repeal of the liner conference
block exemption on U.S. liner trades that is not adequately addressed
in the NOI questions, they are encouraged to identify and address that
topic in their comments to the NOI.
To promote maximum participation by individual shippers, vessel-
operating common carriers, ocean transportation intermediaries, public
port authorities, marine terminal operators, etc., the NOI questions
will be made available via the Federal Register and on the Commission's
Web site at https://www.fmc.gov in a downloadable text file. They can
also be obtained by contacting the Commission's Secretary, Karen V.
Gregory, by telephone at (202) 523-5725 or by e-mail at
secretary@fmc.gov. Please indicate whether you would prefer a hard copy
or an e-mail copy of the NOI questions. Non-confidential comments may
be sent to secretary@fmc.gov as an attachment to an e-mail submission.
Such attachments must be in Microsoft Word.
The Commission intends that the E.U. Study be as thorough as
possible, and therefore encourages prospective NOI participants to
address all relevant questions with detailed comments. There is,
however, no requirement that participants answer all the NOI questions.
Participants, if they wish, are free to limit their responses to
questions where they have direct experience or specific views. In
addition, although many of the NOI questions are designed to elicit
responses from a broad range of industry participants, the eight final
questions are addressed specifically to vessel-operating common
carriers.
The Commission anticipates that most filed NOI comments will be
made publicly available. The Commission believes that public
availability of NOI comments is to be encouraged because it could
improve public awareness of the issues being addressed in the E.U.
Study, and of the various perspectives of all interested parties.
Nevertheless, some commenting parties may wish to include commercially
sensitive information as relevant or necessary in their responses by
way of explaining their liner shipping experiences or detailing their
responses in practical terms. To help assure that all potential
respondents will provide usefully detailed information in their
submissions, the Commission will provide confidential treatment to the
extent allowed by law for those submissions, or parts of submissions,
for which the parties request confidentiality.
FMC E.U. Study Notice of Inquiry Questions
Identifying Information (Please provide the information requested
below with your NOI response.)
Name of Respondent: (individual)
Respondent's Title/Position:
Contact Information: Telephone and E-mail
Name and Address of Company or Other Entity:
Type of Company or Other Entity:
Beneficial Cargo Owner (BCO)
Ocean Transportation Intermediary (OTI)
Shippers' Association
Vessel-Operating Ocean Carrier (VOCC)
Public Port Authority
Other, please describe (e.g., marine terminal operator, trade
association, government agency, etc.)
Section A: General Questions
1. Based on your experience since September 2006 (when the European
Union announced its decision to terminate the block exemption for liner
shipping conferences to take effect October 2008), what impacts, if
any, have you identified on your company's commercial activities, in
any trade lane, that you would attribute to the termination of the E.U.
conference block exemption? Please explain. If you believe there have
been such impacts, please indicate when that impact first occurred.
2. Based on your experience since October 2008 (when the E.U.
exemption for liner conferences was terminated) has any class of
shipper or class of vessel-operating common carrier received a
competitive advantage or been put at a competitive disadvantage as a
result of the E.U. decision to terminate the exemption? If so, please
explain.
3. Based on your experience since October 2008 (when the E.U.
exemption for liner conferences was terminated), have differences
between U.S. and E.U. liner shipping competition regulations created
any problems for your company? If so, please explain.
4. Does your company view cooperation among ocean carriers in
operational agreements (e.g., vessel sharing agreements, alliances,
consortia, etc.) as generally having a positive, neutral or negative
impact on the availability or cost of liner shipping services? Please
explain. Does the E.U. market share threshold of 30% for such
operational agreements have any effect with respect to that impact? If
so, please explain.
Section B: Questions about the North Atlantic Trade (North Europe/U.S.)
5. Approximately what percent of your company's freight earnings
(lines, OTIs) or shipping expenses (shippers) involves international
shipping in the North Europe/U.S. trade? Does your company's business
involve US imports (westbound service) only, U.S. exports (eastbound
service) only, or both? Please explain briefly.
6. How, and to what extent, did the recent economic recession
(2008-2009) affect your company's liner shipping-related business in
the North Europe/U.S. trade? Please explain.
7. Based on your experience prior to July 2008, when the Trans-
Atlantic Conference Agreement (TACA) disbanded, did the existence of
TACA have any impact on your liner shipping-related business in the
North Europe/U.S. trade? If so, please explain.
8. Based on your experience in the period from October 2008 to the
present (i.e., since the E.U. block exemption was terminated), has
there been any significant change(s) in liner services in the North
Europe/U.S. trade that you attribute to the E.U. terminating the
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block exemption? For example, changes in:
a. the level of freight rates and surcharges;
b. the frequency with which rates or surcharges are adjusted upward
or downward (rate volatility);
c. the assessment of surcharges;
d. the level of competition among ocean carriers;
e. the service contracting practices or terms offered by ocean
carriers;
f. the availability of vessel capacity and container equipment; or
g. the level or quality of liner services (including customer
service, billing accuracy, etc.)
If so, please identify and explain those changes.
9. For CY 2010 to date, please estimate the percentage of your
annual business (by volume) in the North Europe/U.S. liner trade that
moved under (a) annual (or longer) service contracts, (b) shorter-term
freight agreements, (c) spot rates, and (d) other (please specify). Has
that changed significantly since October 2008? If so, please explain.
10. Following repeal of the E.U. block exemption, ocean carriers
created a global information system under Container Trade Statistics,
Ltd. (CTS) in which a majority of ocean carriers serving the North
Europe/U.S. trade participate. CTS provides certain data free on its
Web site, including indices of the carriers' aggregated average revenue
per TEU by month. CTS also sells other data. To what extent, if at all,
does your company access and use CTS Europe/U.S. trade data, and (if it
does so) for what purpose(s)?
Section C: Questions about the Transpacific Trade (Far East/U.S.)
11. Approximately what percent of your company's freight earnings
(lines, OTIs) or shipping expenses (shippers) involve international
shipping in the Far East/U.S. trade? Does your company's business
involve U.S. imports (eastbound service) only, U.S. exports (westbound
service) only, or both? Please explain.
12. How, and to what extent, did the recent economic recession
(2008-2009) affect your company's liner shipping-related business in
the Far East/U.S. trade? Please explain.
13. Based on your experience from January 2006 to the present, have
the activities of the Trans-Pacific Stabilization Agreement (TSA) or
the Westbound Trans-Pacific Stabilization Agreement (WTSA) had any
significant impact on your company's liner shipping-related business in
the Far East/U.S. trades? If so, please explain.
14. Based on your experience in the period from October 2008 to the
present, have there been any significant characteristics of liner
services in Far East/U.S. trades that you attribute to actions taken by
TSA or WTSA member lines acting collectively? For example:
a. the level of freight rates and surcharges;
b. the frequency with which rates or surcharges are adjusted upward
or downward (rate volatility);
c. the assessment of surcharges;
d. the level of competition among ocean carriers;
e. the service contracting practices or terms offered by ocean
carriers;
f. the availability of vessel capacity and container equipment; and
g. the level or quality of liner services (including customer
service, billing accuracy, etc.)
If so, please identify and explain those characteristics.
15. For CY 2010 to date, please estimate the percentage of your
annual business (by volume) in the Far East/U.S. liner trade that moves
under (a) annual (or longer) service contracts, (b) shorter-term
freight agreements, (c) spot rates, and (d) other (please specify)? Has
that changed significantly since October 2008? If so, please explain.
Section D: Questions About the Europe--Asia Trade (Far East/Europe)
16. Approximately what percent of your company's freight earnings
(lines, OTIs) or shipping expenses (shippers) involve international
shipping in the Far East/Europe trade? Does your company's business
involve European imports (westbound service) only, European exports
(eastbound service) only, or both? Please explain briefly.
17. How, and to what extent, did the recent economic recession
(2008-2009) affect your company's liner shipping-related business in
the Far East/Europe trade? Please explain.
18. Based on your experience prior to October 2008 (i.e., before
the Far East Freight Conference (FEFC) disbanded), did the existence of
FEFC have any impact on your liner shipping-related business in the Far
East/Europe trade? Please explain.
19. Based on your experience in the period from October 2008 to the
present (i.e., since the E.U. block exemption was terminated), has
there been any significant change(s) in liner services in the Far East/
Europe trade that you attribute to the E.U.'s ending of the block
exemption? For example, changes in:
a. the level of freight rates and surcharges;
b. the frequency with which rates or surcharges are adjusted upward
or downward (rate volatility);
c. the assessment of surcharges;
d. the level of competition among ocean carriers;
e. the service contracting practices or terms offered by ocean
carriers;
f. the availability of vessel capacity and container equipment: and
g. the level or quality of liner services (including customer
service, billing accuracy, etc.)
If so, please identify and explain those changes.
20. For CY 2010 to date, please estimate the percentage of your
annual business (by volume) in the Far East/Europe liner trade that
moved under (a) annual (or longer) service contracts, (b) shorter-term
freight agreements, (c) spot rates, and (d) other (please specify)? Has
that changed significantly since October 2008? If so, please explain.
21. Following repeal of the E.U. block exemption, ocean carriers
created a global information system under Container Trade Statistics,
Ltd. (CTS), in which a majority of ocean carriers serving the Far East/
Europe trade participate. CTS makes certain data free on its Web site,
including indices of the carriers' aggregated average revenue per TEU
by month. CTS also sells other data. To what extent, if at all, does
your company access and use Far East/Europe trade data, and (if it does
so) for what purpose(s)?
Section E: Comparisons Among Trades
22. Based on your experience since October 2008 (since the E.U.
block exemption was terminated) are there differences in the
characteristics of the Far East/U.S. trade versus the Far East/Europe
or North Europe/U.S. trades that you attribute to differences between
U.S. and European liner competition regulations? For example,
differences in:
a. the level of freight rates and surcharges;
b. the frequency with which rates or surcharges are adjusted upward
or downward (rate volatility);
c. the assessment of surcharges;
d. the level of competition among ocean carriers;
e. the service contracting practices or terms offered by ocean
carriers;
f. the availability of vessel capacity and container equipment; and
g. the level or quality of liner services (including customer
service, billing accuracy, etc.)
If so, please explain those differences.
23. Please identify any significant similarities and
dissimilarities (for example, cargo volumes, scope or scale of
operations, shipper mix, geography,
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market concentration levels, contracting practices, legal requirements,
etc.) that existed in liner shipping markets in the (1) Far East/U.S.
trade and the (2) Far East/Europe trade during the period 2006-2010. In
your opinion, how (if at all) would those similarities and
dissimilarities likely impact a comparison of liner pricing and service
behavior across those two trades?
Section F: Additional Questions for Vessel-Operating Common Carriers
FOR VOCCs ONLY:
24. Please estimate the percentage of your liner revenues
(globally) that were earned in each of the following trade lanes during
CY 2010 to date:
a. North Europe/U.S. liner trade ----%
b. Far East/U.S. liner trade ----%
c. Far East/Europe liner trade ----%
d. All other liner trades ----%
e. Total (all liner trades combined) 100%
If those percentages changed significantly during the 2006 through
2010 period, please describe and explain the change.
25. In each of the three major East-West trades, please estimate
the percent of cargo your company carried for beneficial cargo owners
(BCO) accounts, (b) OTI accounts, (c) other accounts (if any, please
explain) during CY 2010 to date:
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BCO OTI Other
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f. North Europe/U.S. liner trade.... ----% ----% ----%
g. Far East/U.S. liner trade........ ----% ----% ----%
h. Far East/Europe liner trade...... ----% ----% ----%
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Has the relative ranking of shipper types in these trade lanes
changed significantly during the 2006 through 2010 period? If so,
please describe and explain the change.
26. In each of the three major East-West trade lanes, please
indicate which lanes have tended to be the relatively most profitable
and which was the relatively least profitable for each year between
2006 and 2010 (inclusive). [Write M for most, and L for least.]
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Far East/U.S. Far East/Europe North Europe/U.S.
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a. 2006.................................... ------ ------ ------
b. 2007.................................... ------ ------ ------
c. 2008.................................... ------ ------ ------
d. 2009.................................... ------ ------ ------
e. 2010.................................... ------ ------ ------
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If those rankings changed significantly during the 2006 through
2010 period, please explain the reason(s) for the change.
27. Based on your experience during the period from January 2006 to
the present, have there been any significant changes in the nature of
your business in the North Europe/U.S. liner shipping market related to
changes in:
a. Seasonality of cargo movements;
b. Commodity values;
c. Directional cargo imbalances (imports vs. exports);
d. Number of carriers serving the trade; or
e. Minimum scale ( and size of vessels) needed to serve
the trade efficiently
If so, please identify and explain those changes.
28. Based on your company's experience in the North Europe/U.S.
trade, please identify any substantial changes that occurred in your
liner business (operations, marketing, pricing, etc.) in the two years
following repeal of the E.U. liner conference exemption (CY 2009 and
2010) as compared with the two years preceding the repeal (2006-2007)?
If any, please explain.
29. Based on your experience during the period from January 2006 to
the present, have there been any significant changes in the nature of
your business in the Far East/U.S. liner shipping market related to
changes in:
a. Seasonality of cargo movements;
b. Commodity values;
c. Directional cargo imbalances (imports vs. exports);
d. Number of carriers serving the trade; or
e. Minimum scale ( and size of vessels) needed to serve
the trade efficiently
If so, please identify and explain those changes.
30. Based on your experience during the period from January 2006 to
the present, have there been any significant changes in the nature of
your business in the Far East/E.U. liner shipping market related to
changes in:
a. Seasonality of cargo movements;
b. Commodity values;
c. Directional cargo imbalances (imports vs. exports);
d. Number of carriers serving the trade; or
e. Minimum scale ( and size of vessels) needed to serve
the trade efficiently
If so, please identify and explain those changes.
Now Therefore, it is ordered that Notice of this Inquiry be
published in the Federal Register.
By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. 2010-27891 Filed 11-3-10; 8:45 am]
BILLING CODE 6730-01-P
