358 
continuing to add new vessels to an already alleged overcapacity situa- 
tion in the face of a shortage of available cargoes. 
The Soviets have established rate levels substantially below con- 
ference rates. They have endeavored, however, to avoid the position 
of being the lowest nonconference carrier. The fact that another non- 
conference carrier may operate with very limited capacity appears 
to have no appreciable effect on the Soviet position. Another practice 
employed by the Soviets, as well as other nonconference carriers, 
is the use of the “per container,” “freight all kinds,’ or ‘““consumer 
mixed commodity” rates. While all carriers have the privilege to quote 
and file rates on this basis, it has not as yet become general practice 
in the conference trades since many vessel operators hold to the 
concept that the higher valued commodities should—to some 
degree—subsidize the rates on lower valued commodities. As con- 
tainerization continues to expand and become a major force, it is 
possible that per container rates will become more generally accepted. 
By employing these container load rates the Soviets, and other inde- 
pendents, are able to attract cargoes with rates that are effectively 
far below those of the conference carriers. 
At the present time, the inbound Hong Kong/U.S. Pacific coast 
trade, and to a lesser extent the inbound Japan/West Coast trade 
are experiencing a short supply of available cargoes; thereby heighten- 
ing the difficulties of an already dismal competititve situation. The 
Commission has been informed that over 50 percent of the Hong 
Kong cargo is moving on nonconference lines. In some instances in 
the Japan trade, space utilization has fallen below the 30-percent 
level. Should these conditions continue over an extended period of 
time, vessel layups are to be expected. As the Soviets continue to 
add to their capacity, it will become increasingly apparent that 
something will have to be done to restore stability to the trades. 
In a trade area where the Soviets are particularly active—the U.S. 
Pacific Coast/Japan trade—FESCO accounted for 10 percent of the 
total outbound liner trade tonnage of 2 million long tons for the 
period of January-September, 1974. Inbound in the same trade area, 
the Soviet-flag share totaled 11 percent of the total liner traffic of 
1.4 million long tons for the same period.!! Prior to 1973, U.S.S.R. 
participation was negligible. 
In the U.S. Atlantic coast/European trades, Baltic Steamship Co. 
filed its first tariff with the Commission to become effective on Janu- 
ary 22, 1973. Since that time, the Soviets have evidenced a steadily 
increasing presence in these trades. Recently, Balt-Atlantic introduced 
an interim full trans-Atlantic container service. The new service offers 
368 TEU at a sailing frequency of 10 days in each direction on 
the North Atlantic. Prior to this, Baltic only operated ships with 
a 131 TEU capacity. A significant new phase will be the addition 
of two roll-on/roll-off containerships of up to 1,100 TEU capacity 
by late 1975, which will add considerably to the Soviet capability 
in these trades.!2 Another important area where the Soviets have suc- 
cessfully penetrated the market is in the U.S. North Atlantic/West 
German liner trades where their share totaled 13 percent of the 
~™ Department of Commerce, Maritime Administration. 
 Containerization International, April 1975, p. 27. TEU refers to 20-foot equivalent container. 
units. | 
