FMC denies request for ruling on “split deliveries”

FMC denies request for ruling on “split deliveries”

FMC denies request for ruling on “split deliveries”

   The U.S. Federal Maritime Commission has turned down a request from investment companies Olympus Growth Fund and Olympus Executive Fund that sought a declaratory order or rulemaking relating to the practice of non-vessel-operating common carriers rerouting the domestic inland transportation leg of “through” intermodal shipments, sometimes called “split deliveries.”
   The Olympus funds are the former owners of Global Link Logistics, a Tucker, Ga.-based NVO, which they sold to a company called Golden Gate LLC back in 2006.
   Golden Gate discovered that Global Link had been engaging in a practice called “split deliveries” after it purchased the company and voluntarily reported what it felt was an improper practice to the FMC. Separately, the two companies went into arbitration, with Golden Gate contending it had paid an inflated price for Global Link because its past use of split routing was hidden.
   The Olympus companies wanted the FMC to rule on the propriety of split routing.
   But on Monday, the FMC said it would not issue a declaratory order, saying the petitioners were private equity funds that were not subject to its jurisdiction or regulated by the FMC.
   It said it would not initiate a rulemaking, saying the Olympus funds had not shown that the “split delivery” practice previously engaged in by Global Link was commonly used by NVOs or that there was industry-wide confusion regarding use of the practice.

Saphir

   It noted that the only party to respond to its request for comments on the issue, Albert Saphir of ABS Consulting in Marietta, Ga., had written to give his opinion that such rerouting was “by no means a ‘common practice’ or legal under the Shipping Act of 1984.”
   It said a rulemaking was “an inappropriate proceeding to resolve a private dispute or enforcement matter.”
   The FMC also declined to let Olympus intervene in informal proceedings between the new owners of Global Link at the FMC’s Bureau of Enforcement, saying it would go against precedent adopted by the FMC. But it said the Olympus funds have submitted information to the Bureau of Enforcement and thus had an opportunity to participate to the extent appropriate.”
   In May, MOL filed a complaint with the FMC saying Global Link and Olympus and various officers of the companies had engaged in “a deliberate scheme to obtain ocean transportation of property at rates lower than the applicable service contract or tariff rates,” and claimed it suffered damages of no less than $4.5 million. ' Chris Dupin