Full Volume 19 - Federal Maritime Commission

664 FEDERAL MARITIME COMMISSION
Commission to reaffirmits holding in The Dual Rate Cases that ninety
days notice of rate increases is required by dual rate contracts NIT
League argues that its members do not agree that dual rates may be
the effectiveness of the original
increased within ninety days following
rate The Commission also received identical telegrams from 11 shippers 6
and a similar telegram from the Dupont Company
DISCUSSION
Section 14b of the Shipping Act 1916 in pertinent part provides that
the Commission shall permit the use ofadual rate contract if the contract
expressly 2 provides that whenever a tariff rate for the carriage of goods
under the contract becomes effective insofar as it is under the control of the carrier or
conference of carriers it shall not be increased before a reasonable period but in no
case less than ninety days and 6 permits the contract to shipper terminate at any
time without penalty upon ninety days notice
Section 14b of the Act was included in H R 4299 introduced in the
House of Representatives in February 1961 As originally introduced in
the House clause 2 of section 14b read fixes tariff rates for the
carriage of goods under such contract for a reasonable period subject to
approval by the Federal Maritime Board but in no case less than ninety
days
Some of the witnesses testifying before the House Committee consid
ering that bill interpreted the original language of section l4b 2 as
requiring ninety days notice of tate changes For example James A
Dennean testifying on behalf ofthe Far East Conference stated
Regarding the requirements of H R 4299 that the contracts provide for a minimum of
ninety days notice of rate changes our Far East Shipper s contract now provides for a
of stability
minimum of 90 days notice of rate increases which is a minimum period
which We have found have been most satisfactory to tile shipping public Hearings on
H R 4299 Before the Special Subcommittee on Steamship Conferences of the House
Committee on Merchant Marine and Fisheries 87th Congress First Sess at 270 1961
Hereafter House Hearings
Donald F Wierda of the American Steamship Committee on Confer
ence Studies was unsure as to the import of that provision He testified
The wording of this item suggests that the rates must be set without any change
whatsoever for a period of at least 90 days but very frequently in foreign commerce
market conditions require exporters and importers to come to the conference for
assistance in maintaining the market by reducing their rates durina the contract period
and very frequently such reductions are effected our position should not be made
inflexible by a law of the United States On the other hand if this item 2 is intended to
prevent any increases in rates unless adequate advance notice is given then it is entirely
reasonable We feel that any shipper under a contract should be given adequate advance
notice of any changes in the contract which might increase his landed cost and to permit
him to revalue his position and to redetermine the advisability of maintaining his
contract provision House Heatings at page 70
6 These shippers took the following positions
We endorse the position of the FMC in Docket No 75 13 It is essential that wecontinue to have the pratte ion
available under the FMC interpretation in this docket if we are to meet our commercial obliaatlons as American
Shippers
19 F M C