Attorney reports difficulties for U.S. firms as China moves from national to provincial registration of non-vessel operating common carriers.
A Washington, D.C., attorney heavily involved in transportation and trade matters is raising concerns about the ability of NVOCCs to obtain new registrations or renew existing registrations in China.
Carlos Rodriguez, a partner at Husch Blackwell, said, “I wouldn’t call it a story of the sky is falling, but I would say that it’s caused some concern because we’ve hit a wall where the process that has taken place since 2010 — nine years — is no longer available.”
Rodriguez (pictured above) said before March, an approval from China’s Ministry of Transport (MOT) was required for the NVOCC registration in China and that registrations must be renewed every five years. China is moving to provincial regulation and he has several clients that have experienced problems getting or renewing registrations in recent months. He said he has raised his concerns with the FMC.
While Rodriguez said there have been rumors those problems may be rectified next month, some industry observers have warned of informal retaliation against U.S. businesses because of higher tariffs.
As reported earlier this week in American Shipper, Erin Ennis, senior vice president of the U.S.-China Business Council, said China has indicated it is “willing to retaliate both quantitatively and qualitatively,” with quantitative retaliation being tariffs and qualitative retaliation taking the form of increased inspections, difficulty in getting licenses and “inexplicable” delays and investigations for environmental compliance.
However, one observer said “China has always been a hard place to do business. … It is going to be difficult to sort out what is just standard Chinese bureaucratic inefficiency from tension being ratcheted up” because of the U.S.-China trade war.
Ed Greenberg, the general counsel of the National Customs Brokers & Forwarders Association of America, which includes NVOCCs as members, has not received complaints from members about the issue. His organization is sponsoring an NVOCC Summit meeting on June 24 at which FMC Chairman Michael Khouri and other commissioners will discuss issues facing the industry.
Rodriguez said on Feb. 27, China’s State Council issued a notice that provides that approval is no longer required and instead a filing procedure shall be followed in the future for the NVOCC registration. Since then, he said, the MOT has stopped accepting NVOCC registrations and on March 28 the MOT issued a notice stating that the Commission of Transport at the provincial level shall be in charge of filing on NVOCC registrations.
“Up to now, as far as we know, only the Commission of Transport in Guangdong province has provided an online portal for NVOCC filings and NVOCCs. It seems only applicable to domestic NVOCCs (Chinese) because we cannot find a portal for overseas NVOCCs to do the filing. That is still the case,” Rodriguez said.
There also has been a pilot program in Shanghai where the MOT deferred NVOCC approval authority to the Shanghai Transport Authority.
“A lot or most of the cargo from China is consignee controlled,” Rodriguez told American Shipper. “U.S. NVOCCs are losing the battle to keep their documentation in front of their customers since their bills of lading cannot be used (if they cannot renew their registration) in either the export or import China/U.S. trade lanes.”
Rodriquez said he has several NVOCC clients whose registrations he has been trying to obtain or renew since March.
“It hasn’t hit mass numbers yet, but it is hitting new ones,” he said.