FMC to Issue Proposed Rule to Allow NVOCC Service Arrangements That Are Exempt from Tariff Publication
The Federal Maritime Commission (FMC) has issued a press release announcing that at an October 27, 2004 meeting, among other things, it voted to issue a proposed rule that would allow non-vessel-operating common carriers (NVOCCs) to offer NVOCC Service Arrangements (NSAs), which would be individually-negotiated contracts between NVOCCs and their shipper-customers. NVOCCs that utilize these arrangements would be exempt from the tariff publication requirements of the Shipping Act of 1984 (Act).
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According to the FMC, NVOCCs that do not wish to take advantage of this exemption would continue to be able to offer their services under published tariffs.
Proposed Rule Was Developed in Response to Petitions, Joint Proposal
According to the FMC, the proposed rule was developed in response to numerous petitions that have been filed with the FMC over the past year. In particular, the FMC states that it was assisted in this process by the filing of a joint proposal drafted by many of the petitioners, which presented a unified approach acceptable to much of the shipping industry.
The petitions and the joint proposal asked the FMC to grant to NVOCCs the authority to offer service contracts or similar individualized arrangements to their customers. (The FMC notes that currently, only vessel-operating common carriers (VOCCs) are permitted to offer service contracts.)
NVOCCs Would File Service Arrangements with FMC via SERVCON
The FMC states that NVOCCs who avail themselves of the opportunity to enter into NSAs will face a similar requirement to that currently met by VOCCs who use the FMC's internet-based Service Contract Filing System (SERVCON) to file their service contracts, which first requires obtaining a password and user identification number.
In order to effectuate this requirement as soon as possible, the FMC Chairman intends to request expedited approval from the Office of Management and Budget (OMB) to collect the information necessary to allow the FMC to issue passwords and user identification numbers to interested NVOCCs.
(The FMC indicates that the proposed rule would exempt NVOCCs from various provisions of Sections 8 and 10 of the Act. According to the FMC, it may grant such an exemption if the exemption will not result in substantial reduction in competition or be detrimental to commerce.)
Eight petitions were filed on various dates from July 2003 through March 2004 by United Parcel Service, Inc. (UPS) (P3-03); the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA) (P5-03); Ocean World Lines, Inc. (OWL) (P7-03); BAX Global Inc. (P8-03); C.H. Robinson Worldwide, Inc. (CHRW) (P9-03); Danzas Corporation dba Danmar Lines Ltd., Danzas AEI Ocean Services, and DHL Danzas Air and Ocean (P1-04); BDP International, Inc. (P2-04); and FedEx Trade Networks Transport & Brokerage, Inc. (FedEx) (P4-04).
The joint proposal was submitted by the National Industrial Transportation League; the Transportation Intermediaries Association; UPS; CHRW; BAX Global Inc.; BDP International, Inc.; and FedEx. (See ITT's Online Archives or 09/07/04 news, 04090700, for BP summary of the FMC's request for comments on the joint proposal.)
(See ITT's Online Archives or 10/18/04 news, 04101810, for BP summary of the FMC's notice announcing the October 27, 2004 meeting.)
FMC press release (NR 04-14, dated 10/27/04) available at http://www.fmc.gov/Pressreleases/NR%2004-14%20Results%20of%2010-27-04%20Commission%20Meeting.htm