Feds: Ocean carriers
overcharged Guam

By Michael Tighe
Associated Press

Two major ocean carriers that supply Guam with everything from cereal to automobiles blatantly overcharged shippers -- and thus consumers -- by more than $23 million from 1988 to 1990, the Federal Maritime Commission has ruled.

Those overcharges by Sea-Land Service Inc. and American President Lines Ltd. fueled earnings that were three times higher than what the federal government allowed for the West Coast-Guam route, the FMC said.

They also forced Guamanians and U.S. soldiers on the island to pay higher prices for food, clothing, appliances, furniture and cars. Virtually everything used on the island 3,700 miles southwest of Hawaii is shipped in.

"The FMC ruling vindicates Guam's long-standing position that the ocean carriers serving Guam have been profiteering at our expense for decades," Gov. Carl Gutierrez said. "The people of Guam paid a hidden tax."

But the FMC's decision only requires Sea-Land and APL to reimburse the government of Guam and four private shippers a fraction of those overcharges. Plus, the reimbursements are to be made only to those shippers who filed the complaint in 1989.

So the government of Guam, which is a U.S. territory, will ask a federal appeals court in Washington to order a full refund to all 146,000 Guamanians, much like a class-action lawsuit.

The FMC ruling applies only to the three years covered in the original claim. Guam now is considering whether to file a complaint for the ensuing years.

"All their costs went down but, guess what, their rates didn't," said Washington lawyer Roger Berliner, who represented the Guam government. "Your entire economic structure of the island was affected."

Both Sea-Land and APL are among the largest cargo container carriers in the world.

Sea-Land, based in Charlotte, N.C., overcharged Guam by nearly $6.3 million in 1988 and 1989, the FMC said.

That came from a nearly 36 percent rate of return in 1988 and 25 percent in 1989, even though the federally allowable rate was 11 and 5.8 percent, respectively.

The company did not return a telephone call seeking comment.

The Oakland, Calif.-based APL overcharged Guam by more than $16.7 million in 1988-90, the FMC said. The company's actual rate of return for those years was between 25 and 37 percent, although its allowable rate was between 11 and 12 percent.