FMC Repeals Marine Terminal Agreements Exemption

The final rule also transfers an existing definition of the marine terminal conference agreement to another section of the FMC's regulations.

FMC No Longer Deprived of Opportunity to Review Agreement Prior to Its Effect

FMC's final rule removes 46 CFR 535.308. Previously, 46 CFR 535.308 allowed marine terminal agreements to become effective upon filing, depriving the FMC of a pre-effectiveness opportunity to review the agreements and to seek access to additional information from the agreement parties during the statutory 45-day waiting period.

Definition of Marine Terminal Conference Agreement Added

In addition, FMC is amending 46 CFR 535.309(b)(1) to add the definition of "marine terminal conference agreement," which was previously found in 46 CFR 535.308. 46 CFR 535.309(b)(1) has been amended to read as follows (added text is denoted by , deleted text is denoted by <->):

They do not include rates, charges, rules, and regulations that are determined through a marine terminal conference agreement, <as defined in 535.308(b)>. Marine terminal conference agreement means an agreement between or among two or more marine terminal operators and/or ocean common carriers for the conduct or facilitation of marine terminal operations that provides for the fixing of and adherence to uniform maritime terminal rates, charges, practices and conditions of service relating to the receipt, handling, and/or delivery of passengers or cargo for all members; and

NCBFAA, NITL Had Support Repeal, Ports of LA/LB Had Opposed It

FMC states that it received three comments in response to its proposed rule to repeal the marine terminal agreements exemption.

Both the National Customs Brokers and Forwarders Association of America (NCBFAA) and the National Industrial Transportation League (NITL) filed comments in support of the FMC repealing the maritime terminal agreements exemption.

The Ports of Los Angeles and Long Beach submitted a comment objecting to the elimination of the 45-day waiting period exemption for marine terminal agreements. Among other things, the Ports allege that the FMC's efforts to eliminate the waiting period exemption arise largely out of the efforts to delay and block the implementation of agreements the Ports filed in connection with their environmental programs. The Ports state that the exemption does not impede FMC oversight. The Ports argue that elimination of the 46 CFR 535.308 exemption will cause them "to interrupt and delay operational matters" to accommodate the 45-day waiting period.

FMC states that contrary to the Ports' allegation, the Shipping Act permits the FMC to continue the exemption from the Act's requirements only "if it finds that the exemption will not result in substantial reduction in competition or be detrimental to commerce." When the FMC finds that the section 535.308 exemption may lead to substantial reduction in competition or be detrimental to commerce, the FMC is required under the Shipping Act to repeal the exemption.

(Under section 16 of the Shipping Act, the FMC may exempt any class of agreements from the requirements of the Act if the FMC finds that the exemption will not result in substantial reduction in competition or be detrimental to commerce.

In Docket No. 85-10, the FMC determined that it would exempt certain marine terminal agreements from the 45-day waiting period requirement (from time of filing) based upon its finding that such exemption would not substantially impair effective regulation by the FMC, be unjustly discriminatory or detrimental to commerce, nor result in a substantial reduction in competition within the meaning of Section 16 of the Shipping Act. As port agreements have evolved beyond simple landlord-tenant issues, such agreements increasingly have the potential to incur the anticompetitive consequences that the FMC deemed unlikely when it first adopted the exemption.)

(See ITT's Online Archives or 08/18/09 news, 09081820, for BP summary of the proposed rule.)

FMC contact- Peter King (202) 523-5740 or generalcounsel@fmc.gov

FMC final rule (D/N 09-02, FR Pub 12/09/09) available at http://edocket.access.gpo.gov/2009/pdf/E9-29369.pdf