FMC QUESTIONS SNL/HASCO SPACE CHARTER AND SAILING AGREEMENT

FMC QUESTIONS SNL/HASCO SPACE CHARTER AND SAILING AGREEMENT    The U.S. Federal Maritime Commission has initiated an investigation into the ocean carrier status of Shanghai Hai Hua Shipping Co. and the company’s proposed space charter agreement with Sinotrans Container Lines Co.
   On May 29, the FMC received space charter and sailing agreement from Hai Hua Shipping (HASCO) and Sinotrans Container Lines (SNL) (FMC Agreement No. 011807).
   Under the agreement, the companies propose to share space on five containerships in a weekly service between U.S. Pacific ports, such as Los Angeles/Long Beach, Calif. and ports in Asia, such as Shanghai and Hong Kong.
   Sinotrans also proposes in the agreement to time charter one vessel to HASCO. This is predicated, however, on HASCO establishing itself as a bona fide vessel-operating common carrier with the FMC. HASCO has yet to attain this status, the FMC said.
   HASCO was involved in a similar proposed agreement earlier this year with Great Western. A feature of the agreement was the provision that Great Western would time charter one of five vessels to HASCO. On Jan. 4, Great Western and HASCO cancelled the proposed agreement.
   Under section 11 of the 1984 Shipping Act, the FMC said it would determine whether HASCO is an ocean common carrier and whether the agency should reject the proposed SNL/HASCO agreement.
   The FMC said HASCO has until July 26 to show cause why it should not be ordered to “cease and desist” doing business as a common carrier until it provides proof to the FMC that it publishes and maintains a valid automated tariff and bonded as a non-vessel-operating common carrier.
   The FMC said it would issue a final decision on the investigation by Oct. 25.