TRANSPACIFIC CARRIERS PAY FINES TO SETTLE “OPT-OUT” CASE

TRANSPACIFIC CARRIERS PAY FINES TO SETTLE “OPT-OUT” CASE

TRANSPACIFIC CARRIERS PAY FINES TO SETTLE “OPT-OUT” CASE

   Shipping lines of the now extinct Asia North America Eastbound Rate Agreement have agreed to pay civil penalties of $110,000 in total to the U.S. Federal Maritime Commission concerning the long-running service contract “opt-out” controversy.
   The carriers have reached the compromise with the FMC but did not admit violations of the law.
   Following complaints by shippers, the FMC alleged that the Asia North America Eastbound Rate Agreement carriers were signatories to at least 105 service contracts containing “opt-out” provisions which were undisclosed in ANERA’s essential terms publication.
   The practice of opting out enabled carriers to end service contracts and charge higher tariff rates during the eastbound transpacific peak season in 1998.
   The carriers of ANERA, which has now suspended operations, were APL, Hapag-Lloyd, “K” Line, Maersk, Mitsui O.S.K. Lines, NYK, OOCL, P&O Nedlloyd and Sea-Land. ANERA was disbanded in May 1999.
   Last year, the FMC’s Bureau of Enforcement urged the commission to fine carriers of the Asia North America Eastbound Rate Agreement for opting out of service contracts during the pre-holiday capacity crunch.
   The bureau’s attorneys challenged carrier arguments that the opt-out terms were clearly spelled out in the service contracts shippers signed. At the time, the bureau charged that ANERA’s opt-out clause was “a phantom decision … which appears nowhere in conference minutes,” and that lines failed to place the opt-out provision in at least 92 contracts. Attorneys also accused ANERA and its lines of providing “seriously inaccurate statements and statistics to the commission.”