FMC CLARIFIES OCEAN COMMON CARRIER-NVOCC DEFINITIONS

FMC CLARIFIES OCEAN COMMON CARRIER-NVOCC DEFINITIONS    The Federal Maritime Commission has issued a final rule clarifying the definition of ocean common carrier. the rule will become effective in 90 days.
   The rule defines ocean common carrier as a vessel operator between at least one U.S. trade, or between the U.S. and a foreign port.
   In addition, a vessel operator defined as a common carrier in one U.S. trade is an ocean common carrier in all U.S. trades, according to the rule.
   Some had questioned this approach, claiming that an entity need only to utilize a vessel to qualify as an ocean common carrier.
   The FMC said that when Congress passed the 1984 Shipping Act, the legislative branch intended that ocean common carriers “actually operate, not merely utilize, vessels.”
   The rule is consistent with Congress’ intent to delineate between ocean common carriers and non-vessel-operating common carriers. “Congress clearly wanted to distinguish between those common carriers that operate vessels and those that do not,” the FMC said.
   The distinction is important because ocean common carriers receive antitrust immunity and can enter into service contracts with shippers, the FMC said. “An NVOCC can do neither.”
   The FMC turned down a request by the ocean carrier industry and the National Industrial Transportation League to extend the ocean common carrier definition to shipping lines belonging to vessel sharing agreements that serve U.S. ports, even though a VSA member line may not call at U.S. ports.
   “The inclusion of VSA participants in the ocean common carrier definition would effectively confer antitrust immunity to carriers who do not make a commitment to serve the U.S. trades by operating their own vessels,” the FMC said.