Blust: NVO contracts are “significant” changes since OSRA

Blust: NVO contracts are “significant” changes since OSRA

Blust: NVO contracts are “significant” changes since OSRA

   Steven R. Blust, U.S. Federal Maritime Commission chairman, said the introduction of the future non-vessel-operating common carriers service arrangements amount to one of the biggest tasks faced by his agency since the U.S. Ocean Shipping Reform Act of 1998.
   “The commission recently issued a notice of proposed rulemaking to permit NVOCCs to enter into NVOCC Service Arrangements, or ‘NSAs,’ with their shipper-customers,” Blust told the Propeller Club of Washington Wednesday. “This rule is perhaps one of the most significant items faced by the commission since the passage of OSRA.”
   The proposed change was spurred by petitions from ocean transportation intermediaries, and culminated in a joint proposal by OTIs and shippers that was acceptable to ocean carriers, Blust noted.
   As published, the rule would permit parties to agree, on a confidential basis, on rates and conditions of service for the transportation of cargo.
   “The commission is relying on the exemption authority in Section 16 of the Shipping Act in issuing the rulemaking,” Blust said. Section 16 allows the agency to exempt any activity from the requirements of the Shipping Act if it finds the exemption will not result in a substantial reduction in competition or be detrimental to commerce.
   “In order to satisfy the conditions in section 16, and to allow the commission to monitor NSAs, the NSA must be executed and filed with the commission,” Blust added. Without the filing requirement, “a detriment to commerce could arise” if the FMC is unable to fulfill its statutory mandate to ensure that NVOs are abiding by their common carrier responsibilities, he said.
   “The proposed conditional exemption will promote a competitive and efficient ocean transportation system and lead to greater reliance on the marketplace,” Blust said.