Trade Route Description

Principal Foreign Ports on Route

Auckland, Wellington, Lyttelton, Dunedin, Hobart,
Freemantle, Whyalla, Adelaide, Melbourne, Sydney,
Brisbane, Noumea, Tulagi, Port Moresby, Lae,
Salamaua, Madong, Rabaul.

STEAMSHIP FREIGHT RATES

It is the general practice for steamship conferences in foreign trades to quote contract and noncontract rates. Contract rates are granted to all shippers who sign period contracts agreeing to forward all shipments in the trade covered by the conference in vessels of carriers belonging to the conference. Slightly higher noncontract rates are assessed all shippers who do not avail themselves of the contract privilege. Time limits on such contracts differ with the individual conferences.

Ocean tariffs customarily quote rates for various commodities on weight, measurement, or advalorem basis, and freight charges are computed in whichever manner produces the greater revenue for the vessel. Ocean freight rates are dependent upon whether the shipment is made in accordance with the bill of lading limit of value. If the shipper elects to ship at a value in excess of the bill of lading limit of value, the rate is proportionately higher. Packages of miscellaneous articles generally are rated on the basis of the highest rated articles contained therein. The ocean carrier reserves the right to refuse cargo which may damage other cargo or the vessel or prove offensive to

passengers.

When allowed, brokerage usually does not exceed 13 percent of the total cargo booked, and brokerage bills usually contain the following clauses:

In compliance with Section 16 of the Shipping Act of 1916, payment by carrier and acceptance of freight brokerage by the broker are on the strict understanding that no part of the brokerage shall revert to the shipper or consignee, and that the business of the broker is in no sense subsidiary to that of the shipper or consignee.

Inasmuch as oversea freight rates, whether conference or non-conference, are subject to frequent variation, tables of current rates have not been included in this volume. Charter rates fluctuate in accordance with the demand for vessels. Information regarding rates may be obtained by application direct

to the steamship lines or to the rate conferences.

Conference rates are also on

file and available for public inspection in the offices of the Federal Maritime Board, Washington, D.C.

STEAMSHIP CONFERENCES

A conference is a voluntary association of oceangoing common carriers engaged in the transportation of waterborne commerce on regular schedules in well defined trade areas. Broadly speaking, its principal purpose is to fix and regulate ocean freight rates and other charges and conditions for or in connection with the transportation of cargo direct or by transshipment.

A conference which covers a trade to and from the United States is required to be approved by the Federal Maritime Board and is permitted to exist only as long as it does not operate in a manner which is unjustly discriminatory or unfair as between carriers, shippers or receivers of cargo, or ports or is detrimental to the commerce of the United States. This is set forth in section 15 of the Shipping Act of 1916.

There are slightly over 100 steamship conferences covering the foreign trades of the United States. These conferences, when properly functioning, promote stability of rates and uniformity of treatment of all shippers by all lines in the trade, factors which are deemed of great importance by merchants engaged in our foreign trade. In addition to these 100 conference agreements, there are some 400 supporting or related agreements covering transshipments of cargo, joint services, sailing schedules, and the pooling of revenues which are reviewed by the Federal Maritime Board.

Common carriers by water in the foreign trade are forbidden to use certain practices. In the main these are the use of deferred rebates, fighting ships, retaliation against shippers by refusing space because a shipper has patronized

another carrier or has filed a complaint with the Federal Maritime Board, the making of unfair or unjustly discriminatory contracts with shippers, or unjust discriminations in the matter of cargo space accommodations and the settlement of claims, all of which are prohibited by section 14 of the Shipping Act of 1916. Although the Board has no jurisdiction over foreign to foreign conferences, section 14 (2) of the Shipping Act of 1916 provides that if any such conferences refuse to admit United States-flag carriers on equal terms and conditions with foreign-flag members, then those foreign-flag members may be denied entry of their vessels into United States ports.

This has been an effective instrument to enable United States-flag lines to gain admittance to these conferences, admission is often necessary for successful operation of a line on an essential United States foreign-trade route since the foreign to foreign traffic controlled by those conferences frequently lies within the range of the United States foreign-trade route and is needed to augment revenues and to effect more complete and economic utilization of the United Statesflag ships. For example, a United States-flag ship running from New York to India may need to pick up cargo from Egypt to India to assure a profitable operation.

Common carriers by water in the foreign trade are also forbidden to grant undue preference or advantage to any person, locality, or description of traffic, to allow a person to obtain transportation at less than the established rate by the use of false billing or other unfair device or means, or to influence insurance companies to discriminate against competing water carriers; see section 16 of the shipping Act of 1916.

Section 17 of the Shipping Act of 1916 prohibits any rate or fare which is unjustly discriminatory between shippers or ports or is unjustly prejudicial to exporters of the United States as compared with their foreign competitors.

371817 O-56-16

This

section also prohibits unjust or unreasonable practices with respect to the receiving, handling, storing, or delivering of property.

Both sections 16 and 17 are further augmented by section 205 of the Merchant Marine Act of 1936 which makes it unlawful for a common carrier by water to prevent or attempt to prevent another carrier from serving a Federal Government aided United States port at the same rates which it charges at the nearest port already regularly served by it.

Section 20 of the Shipping Act of 1916 prohibits the disclosure of information by a common carrier to any unauthorized person if such information may be used to the detriment or prejudice of the shipper, consignee, or carrier.

These provisions of law are enforced to a large extent by directing the attention of carriers to apparent violations and seeking voluntary corrective action. If necessary or if a formal complaint is filed, the matter is adjudicated by the holding of a hearing before a hearing examiner, in which event a proposed report is issued, exceptions are received, oral argument is held before the Board if requested and a final report and order issued in accordance with applicable provisions of law.

Trades between the United States, its territories, and possessions are almost entirely reserved to United States-flag carriers. (Exceptions are the Virgin Islands and a special act which has been passed year to year authorizing Canadian vessels to engage in the United States-Alaskan trade on a limited basis.) For this reason a much more complete regulation of rates is provided than in the foreign trade. Common carriers by water in the domestic offshore trades are required to file their rates in advance, may make changes only upon 30 days advance notice unless, for good cause shown, the Board grants special permission to make them effective on less than 30 days notice. The Board may suspend and investigate any