Agreements IC Supporting Statement FINAL

SUPPORTING STATEMENT FOR
PAPERWORK REDUCTION ACT SUBMISSION
46 CFR 535 - OCEAN COMMON CARRIER
AND MARINE TERMINAL OPERATOR AGREEMENTS
SUBJECT TO THE SHIPPING ACT OF 1984
Part A - Justification
1.
Explain the circumstances that make the collection of information necessary. Identify
any legal or administrative requirements that necessitate the collection. Attach a copy of the
appropriate section of each statute and regulation mandating or authorizing the information
collection.
The Shipping Act of 1984 (Shipping Act or Act), 46 U.S.C. 40101 et seq., establishes an
alternative antitrust regime that grants limited antitrust immunity to regulated entities and requires
that they file their commercial agreements with the Federal Maritime Commission (FMC or
Commission). Section 40301 identifies which agreements between ocean common carriers and/or
marine terminal operators (MTOs) fall within the jurisdiction of the Act. Section 40302 requires
that carriers and MTOs file those agreements with the Commission. Section 40304 provides the
authority for Commission action on filed agreements, including the authority to require
information from parties to an agreement. Section 40104 provides the authority for the
Commission to require periodic or special reports from carriers and other related persons. These
requests for additional information and the filing of reports assist the Commission in its statutory
responsibility to analyze the activities of parties to agreements. Such information aids the
Commission in monitoring the activities of agreement parties to determine whether any
Commission action is required in response to adverse market conditions resulting from the
agreement.

2.
Indicate how, by whom, and for what purpose the information is to be used. Except
for a new collection, indicate the actual use the agency has made of the information received
from the current collection.
The Commission uses the information filed by agreement parties to monitor their activities as
required by the Act and as discussed in response to Question 1 above. Under 46 U.S.C. § 41307,
the Commission must determine whether an agreement will have, or has resulted in, a substantial
reduction in competition within the prevailing market leading to an unreasonable reduction in
transportation service or an unreasonable increase in transportation costs “or to substantially lessen
competition in the purchasing of certain covered services.” In such cases, the Commission would
take action to seek to enjoin the agreement in the U.S. District Court for the District of Columbia.
Information collected from agreement parties (aside from the agreement itself) is not publicly
disclosed, and is used for the internal decision process of the Commission and any administrative
or judicial proceeding.

3.
Describe whether, and to what extent, the collection of information involves the use of
automated, electronic, mechanical, or other technological collection techniques or other
forms of information technology, e.g., permitting electronic submission of responses.
The regulations in 46 CFR part 535 were amended on June 13, 2016, to provide parties to
agreements with the option to file their agreements and periodic reports electronically with the
FMC. The purpose of allowing electronic filing was to reduce filing burdens and costs, streamline
the Commission’s internal agreement review process, and expedite public access to agreements.
Although the rules do not currently require that pertinent information be collected through
automated or electronic means, the Commission has deployed a software application, the
eAgreements system, that optionally allows for the electronic filing of new agreements and
agreement amendments for Commission review along with related information. Another
application, the eMonitoring system, optionally allows the electronic filing of information relating
to the monitoring of existing agreements. Both of these applications have achieved widespread
adoption within the industry, with over 95 percent of all agreements and amendments now being
filed electronically, and approximately 98 percent of monitoring information being filed
electronically. Both applications have significantly improved the Commission’s efficiency and
reduced the burden on respondents.

4.

Describe efforts to identify duplication.

No duplication of effort is involved because similar information is not available from outside
sources or elsewhere in the Commission.

5.
If the collection of information impacts small businesses or other small entities,
describe any methods used to minimize burden.
The collection of information does not have a significant impact on a substantial number of small
businesses or other small entities.

6.
Describe the consequence to Federal program or policy activities if the collection is
not conducted or is conducted less frequently, as well as any technical or legal obstacles to
reducing burden.
Failure to collect this information or to collect the information less frequently would hinder the
Commission’s efforts in reviewing the likely competitive impact of new agreements and
amendments to existing agreements, as well as monitoring agreement activities. An anticipated
result would be the Commission’s inability to respond in a timely manner to deteriorating trade
conditions that adversely affect the shipping public. The Commission’s regulations do provide for
a waiver from certain reporting requirements for good cause. For example, where agreement

parties have such a small market share that they would not be in a position to affect rate or service
levels adversely, they may qualify for a waiver of some of the reporting requirements.

7.
Explain any special circumstances that require the collection to be conducted in a
manner inconsistent with OMB guidelines. (a) requiring respondents to report information
to the agency more often than quarterly; (b) requiring respondents to prepare a written
response to a collection of information in fewer than 30 days after receipt of it; (c) requiring
respondents to submit more than an original and two copies of any document; (d) requiring
respondents to retain records, other than health, medical government contract, grant-in-aid,
or tax records, for more than three years; (e) in connection with a statistical survey, that is
not designed to product valid and reliable results that can be generalized to the universe of
study; (f) requiring the use of statistical data classification that has not been reviewed and
approved by OMB; (g) that includes a pledge of confidentially that is not supported by
authority established in stature of regulation, that is not supported by disclosure and data
security policies that are consistent with the pledge, or which unnecessarily impedes sharing
of data with other agencies for compatible confidential use; (h) requiring respondents to
submit proprietary trade secrets, or other confidential information unless the agency can
demonstrate that it has instituted procedures to protect the information’s confidentiality to
the extent permitted by law.
Except as noted below, Commission requirements do not (1) provide for the submission of special
reports more frequently than on a quarterly basis, (2) require written responses in fewer than 30
days, (3) require the retention of records for more than three years, (4) request information that is
connected to a statistical survey not designed to produce valid and reliable results, (5) require the
use of statistical data classification that has not been reviewed and approved by OMB, (6) include
confidentiality pledges that are not supported by established statutory or regulatory authority, or
(7) require respondents to submit proprietary information without protecting such information to
the full extent of the law.
As was stated in item 3 above, the vast majority of filings are submitted electronically, eliminating
the need for multiple copies of any document. However, for the occasional agreement filing that is
provided in hard copy, consistent with 46 C.F.R. § 535.401(a)(1), seven copies of an agreement or
agreement modification must be provided. Where required, five copies of an Information Form
(Form FMC-150) must also be filed for certain classes of new agreements and modifications to
agreements. Only one copy of any Monitoring Report (Form FMC-151) or any specific report is
required to be filed.
The Commission requires that copies of minutes be submitted within 21 days of the parties’
meeting and that special capacity reports be submitted within 15 days of agreement on capacity
changes. It is critical to its effective monitoring program to have these reports as soon as
practicable so that the Commission may react appropriately before commercial harm occurs.

8.
If applicable, provide a copy and identify the date and page number of publication in
the Federal Register of the agency’s notice, required by 5 CFR 1320.8(d), soliciting
comments on the information collection prior to submission to OMB. Summarize public
comments received in response to that notice and describe actions taken in response to the
comments. Specifically address comments received on cost and hour burden. Describe efforts
to consult with persons outside FMC to obtain their views on the availability of data,
frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting
format (if any), and on the data elements to be recorded, disclosed, or report.
The 60-day Federal Register notice regarding this extension was published May 31, 2019, at 84
FR 25275. Respondents had 60 days to respond with their views regarding collection of
information; no comments were received. In an effort to develop better burden estimates for
preparing reports under the regulation, Commission staff consulted with industry counsel. These
sources assisted with estimates regarding the number of hours and level of employment involved
in preparing submissions required by the regulation.

9.
Explain any decision to provide any payment or gift to respondents, other than
remuneration of contractors or grantees.
Not applicable--the Commission does not provide any payment or gift to respondents.

10.
Describe any assurance of confidentiality provided to respondents and the basis for
the assurance in statute, regulation, or agency policy.
Except for the agreements filed under section 40302 of the Act, all information submitted to the
Commission by filing parties under this rule is exempt from disclosure under 5 U.S.C. 552.
Included in this disclosure exemption is information provided in the Information Form, voluntary
submission of additional information, reasons for noncompliance, replies to requests for additional
information, monitoring reports, and other special reports requested from agreement parties.
However, information that is confidential pursuant to the foregoing may be disclosed to the extent
it is relevant to an administrative or judicial action or proceeding, to Congress, or if parties
voluntarily disclose or make information publicly available. Third party comments are rendered
confidential under section 40306 of the Act.
11.
Provide additional justification for any questions of a sensitive nature, such as sexual
behavior and attitudes, religious beliefs, and other matters that are commonly considered
private. This justification should include the reasons why FMC considers the questions
necessary, the specific uses to be made of the information, the explanation to be given to
persons from whom the information is requested, and any steps to be taken to obtain their
consent.

Not applicable -- no questions of a sensitive nature.
12.
Provide estimates of the hour burden of the collection of information. The statement
should indicate the number of respondents, frequency of response, annual hour burden, and
an explanation of how the burden was estimated. Unless directed to do so, FMC should not
conduct special surveys to obtain information on which to base hour burden estimates.
Consultation with a sample fewer than 10 potential respondents is desirable.
As previously reported, counsel advised that, while some agreements had received partial waivers
of certain reporting requirements, the Federal Maritime Commission itself had imposed alternative
periodic reporting requirements on certain carrier and marine terminal operator (MTO) agreements
through alternative periodic reporting requirements in lieu of the reporting requirements prescribed
in the Commission’s regulations In some cases, these alternative periodic reporting requirements
were substantially more burdensome to prepare. The Commission had placed such alternative
periodic reporting requirements on these agreements, carriers and MTOs pursuant to investigations
regarding potential anti-competitive conduct of the agreement parties in a number of major U.S.
trades, and in response to anti-competitive concerns identified during the initial review of an
agreement.
The continuing evolution in the nature of cooperation among carriers and MTOs over the past
several years has resulted in changes in the Commission’s monitoring of agreements to address
these various forms of cooperation. A notable development in the past few years has been the
decline of carrier rate discussion agreements in the U.S. trades, reducing the burden associated
with monitoring requirements on that class of agreement. In contrast, during the past several years,
the major global ocean carriers have restructured their alliance agreements to expand their
cooperation under those agreements. A further development with respect to agreements requiring
monitoring has been emergence over the past several years of novel forms of cooperation among
ports and MTOs in filed agreements. The Commission has deemed it necessary to impose
alternative periodic reporting requirements to ascertain the impact of these novel MTO agreements
on transportation price, transportation service, and competition under the Shipping Act. As these
unique agreements have become a more considerable portion of overall agreement filings, they
have therefore, concomitantly increased agreement monitoring, despite the decline of traditional
rate discussion agreements. Thus, the overall regulatory burden associated with the information
collection has increased since 2013.
It is estimated that the time to compile data for monitoring report submissions from agreements
ranged from about 7 to 50 person hours per report for agreement staff with an additional 3 to 12
person hours spent by the individual carriers per report. This translates into an estimated hour
burden for alliance and rate discussion monitoring ranging between 71 and 155 hours. This
includes time spent on obtaining data, assembling forms, compiling information, and sending it to
the Commission. According to counsel, the less burdensome reports tend to be from agreements
with fewer parties and cover a smaller geographic scope. Thus, the amount of time in preparing

required reports for such agreements would be less. We have accounted for this wide range of
potential burdens with the estimated averages provided in the table below.
The table below provides the number of annual responses, estimated hours per response, and the
overall total annual hours. The categories of agreements have been adjusted to reflect the changes
in agreement filings discussed above. The data reflects a larger number of filings for some
categories as a result of more frequent reporting pursuant to alternative periodic reporting
requirements rather than the standard reporting requirements under the Commission’s rules. Thus,
as noted, the estimated time burden has increased.
Item

Annual
Responses

Hours per
response

Est. Annual
Hours

17

50

850

60
116

6
0.25

360
29

Meeting Minutes

1240

2

2,480

Monitoring Reports:
VOCC Rate Discussion Agreements
Alliance Agreements
Other Reporting Requirements

40
12
556

80
145
12

3,200
1,740
6,672

0.25

324

Agreements and Modifications:
With Information Form (Form FMC150)
Without Information Form
Terminations of Agreements

Recordkeeping (46 CFR 535.301(d)) 1 1,295
Total Annual Burden

15,655
Current Reported Burden:

13,629

Net change:

2,026

The recordkeeping items pursuant to the regulations in 46 C.F.R. § 535.301(d) are estimated, but
were substantially increased from the previous estimate submitted in the 2013 submission.
Commission staff believes that the number of recordkeeping items were underestimated in the
2013 submission.

1

For cost estimates to respondents, agreement counsel indicated that mid-level management
employees collect, compile, and submit the information to the Commission. A suitable mid-level
occupation was identified from the Occupational Employment and Wages, May 2018 report
prepared by the U.S. Bureau of Labor Statistics (11-3071 Transportation, Storage, Distribution
Managers, Deep Sea, Coastal, and Great Lakes Water Transportation). The salary for this
occupation was used to calculate a wage cost of $59.98 per hour for respondents. This cost was
multiplied by 114.89% to estimate benefits and overhead. 2
The foregoing identified professional salary was used in calculating respondents’ hourly costs.
The hourly cost was multiplied by a percentage to account for benefits and an additional cost
factor for overhead was added to obtain an inclusive hourly rate.
After compiling the costs associated with wages, benefits, and overhead, the total annual cost to
respondents for this information collection is estimated at $2,017,789.

13.
Provide an estimate for the total annual cost burden to respondents or record keepers
resulting from the collection of information. (Do not include the cost of any hour burden
already reflected on the burden worksheet).
* The cost estimate should be split into two components: (a) a total capital and start-up cost
component (annualized over its expected useful life) and (b) a total operation and
maintenance and purchase of services component. The estimates should take into account
costs associated with generating, maintaining, and disclosing or providing the information.
Include descriptions of methods used to estimate major cost factors including system and
technology acquisition, expected useful life of capital equipment, the discount rate(s), and the
time period over which costs will be incurred. Capital and start-up costs include, among
other items, preparations for collecting information such as purchasing computers and
software; monitoring, sampling, drilling and testing equipment; and record storage facilities.
* If cost estimates are expected to vary widely, agencies should present ranges of cost
burdens and explain the reasons for the variance. The cost of purchasing or contracting out
information collections services should be a part of this cost burden estimate. In developing
cost burden estimates, agencies may consult with a sample of respondents (fewer than 10),
utilize the 60-day pre-OMB submission public comment process and use existing economic or
regulatory impact analysis associated with the rulemaking containing the information
collection, as appropriate.
* Generally, estimates should not include purchases of equipment or services, or portions
thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory compliance with
2

The percentage estimate of employee benefits and overhead for respondents is based on the
estimate derived for Commission staff for fiscal year 2018, in accordance with OMB
Memorandum M-08-13, OMB Circular No. A-76, and OMB Circular A-25.

requirements not associated with the information collection, (3) for reasons other than to
provide information or keep records for the government, or (4) as part of customary and
usual business or private practices.
There are no capital/start-up or ongoing operation/maintenance costs associated with this
information collection.
14.

Provide estimates of annualized cost to the Federal government.

The cost to the Federal Government for this collection of information is estimated to be
$2,073,301. This includes wages, overhead, and benefits.
15.
Explain the reasons for any program changes or adjustments reported in Items 13 (or
14) of OMB Form 83-I.
The net increase in burden hours for respondents from the current reported burden of 13,629 3
hours to 15,655 hours, as reflected in Item 12 above, is accounted for by a number of factors.
However, those factors can generally be summarized in that, the nature of agreements received
since the previous Paperwork Reduction Act submission has significantly increased in complexity.
These increasingly complicated agreements with a wider range of potentially anti-competitive
outcomes require a greater level of initial burden (given that more extensive review is required for
unique agreements) and more detailed oversight through special monitoring requirements.
Regarding the government burden, any increased government burden was mitigated due to a
Commission automation initiative. More specifically, in FY 2017, the Commission launched the
eAgreements system which provided for the electronic filing of agreements in lieu of paper filings,
streamlined the Commission’s internal review of agreements, and automated the manual online
publication process for filed agreements. These efforts reduced staff resources needed to process,
review, publish and manage the Commission’s filed agreements. While electronic filing is
optional, external users were quick to adopt it. Currently, over 99 percent of agreements are filed
electronically through the eAgreements system. Thus, automation has resulted in less resources
being devoted to internal business processes, thereby allowing staff to focus efforts on analysis of
the impact of filed agreements.
16.
For collections whose results will be published, outline the plans for tabulation and
publication.
The Commission does not intend to publish any information collected under this regulation.

3

The current burden estimates for part 535 were submitted in September 2013 and amounted to an
annual estimate of 13,629 hours.

17.
If seeking approval to not display the expiration date for OMB approval of the
information collection, explain the reasons why display would be inappropriate.
The Commission is not seeking approval to exclude the display of the expiration date for OMB
approval of this information collection.

18.
Explain each exception to the certification statement identified in Item 19 of OMB
Form 83-I.
Not applicable – there are no exceptions to the certification statement.

PART B - Collection of Information Employing Statistical Methods
Information collected or reported under this regulation employs no statistical methodology. By
statute, all respondents are required to file their agreements with the Commission. Sampling of the
total population is inconsistent with the requirements of the underlying statute.

Submitted to ROCIS: January 15, 2020

PART 535 IC REINSTATEMENT CALCULATIONS - GOVERNMENT/INDUSTRY BURDEN
Government Burden

Employee

GS level

BTA Director (FC)
BTA Deputy (TF)

SES
15/7

Hourly base
Overhead
rate (from
OPM 2018 pay (114.89%)
table)
$ 82.56
$94.85
$ 77.50
$89.04

OAGR
Director (JG)
Industry Analyst (KD)
Industry Analyst (SJ)

14/5
12/7
12/3

$ 62.23
$ 46.89
$ 41.68

OECA
Director (AH)
Industry Economist (JJ)
Industry Economist (DR)
Industry Economist (SW)
Industry Economist (SB)
Industry Economist (HB)
Program Support Specialist
(SU)
Grand Total

Rev. 9/5/19

Adjusted
Total Cost
2013 Hours
Hourly Salary Number of
Reported
(base +
Employee
overhead)
Hours
$ 177.41
525
93,141.92
416
$ 166.54
650
108,250.84
624

$71.50 $ 133.73
$53.87 $ 100.76
$47.89 $ 89.57

15/10
14/7
13/2
13/1
12/7
13/4

$78.68
$ 65.89
$ 48.01
$ 46.46
$ 46.89
$ 51.11

$90.40
$75.70
$55.16
$53.38
$53.87
$58.72

$ 169.08
$ 141.59
$ 103.17
$ 99.84
$ 100.76
$ 109.83

11/8

$ 40.21

$46.20 $ 86.41

1560
2025
2025

208,612.63
204,042.89
181,371.46
prgm support position
eliminated

1560
1768
1768

1350
1320
1760
1760
1760
1760

228,251.86
186,900.15
181,576.89
175,714.69
177,340.98
193,301.29

1352
1312
1760
1760
1760
1760

1560

134,795.34

1560

18055 $ 2,073,300.95

504

17904

PART 535 IC REINSTATEMENT CALCULATIONS - GOVERNMENT/INDUSTRY BURDEN
Industry Burden

Employee

BLS 11-3071 Transportation,
Storage and Distribution
Managers

Base rate (BLS
Overhead
May 2018
Hourly Mean (114.89%)
Wage)
$ 59.98

Adjusted
Hourly Salary Number of
(base +
Employee
overhead)
Hours

$68.91 $ 128.89

https://data.bls.gov/cgi-bin/print.pl/oes/current/oes113071.htm

Rev. 9/5/19

Total Cost

15,655 $ 2,017,789