FMC publishes final rule on NRAs

FMC publishes final rule on NRAs    U.S. The Federal Maritime Commission said its final rule on non-vessel-operating common carrier negotiated rate arrangements was published in the Federal Register Wednesday, as controversy swirls around the treatment of foreign NVOs.
   The new rule goes into effect on April 18.
   FMC said the rule relieves 3,300 NVOs from the costs and burdens of publishing in tariffs the rates they charge for cargo shipments. Licensed NVOs who enter into new instruments called negotiated rate arrangements (NRAs) with their customers will be exempted from the requirement of publishing their rates in tariffs if they continue to publish rules tariffs containing terms and conditions governing shipments and provide those rules to the public free of charge. Rates charged by the NVOs must be agreed to and memorialized in writing by the date cargo is received for shipment and the NVO must retain documentation of the agreed rate for a period of five years, make the documentation available promptly to the FMC upon request.
   The National Customs Brokers and Forwarders Association of America said that during the FMC’s meeting to adopt the exemption, “it was clear that the most controversial topic was the refusal to extend the exemption to foreign-based NVOCCs. The commissioners clearly understand the sensitivity of this issue and the possibility that foreign governments may retaliate against United States NVOCCs.”
   Commissioners were unwilling to overrule concerns by the FMC’s staff that the FMC has little information or regulatory control over foreign NVOs because they do not have to go through the licensing process, and that the FMC has traditionally had trouble obtaining documents from foreign countries, the NCBFAA said.
   Chairman Richard A. Lidinsky Jr. and commissioner Rebecca F. Dye and Michael A. Khouri voted to issue the final rule. Commissioner Joseph E. Brennan dissented.
   The commissioners voting in favor of the change said they would commence proceedings to receive public input on potential future modifications, including the possibility of extending the exemption to foreign, unlicensed NVOs.
   In the meantime, the NCBFAA suggested foreign-based NVOs that wish to take advantage of the exemption have several options including opening a licensed U.S. office or licensing an existing office as a U.S.-based NVO, or purchasing a U.S.-licensed NVO.

Saphir

   Albert Saphir of ABS Consulting in Weston, Fla., said there are about 1,100 foreign NVOs and he thinks the FMC decision “is creating a considerable competitive disadvantage for foreign NVOCCs,” noting they already post double the bond of U.S.-licensed NVOCCs and yet are “not afforded the same benefits and thus I see this as the FMC interfering in marketplace competitiveness.
   “Any U.S. importer and exporter (and all the forwarders who represent them) using a foreign NVO will be stuck with the additional cost of tariff filing,” Saphir said. “It's just not right.
   “Further, it opens the door for foreign countries to further restrict activities of U.S.-based NVOs as a retaliation against the unfair decision made by the FMC.”
   He called it “absolutely the wrong direction anyone would want to go. I sincerely hope that the FMC will reconsider this ASAP. It makes no commercial sense and I see no regulatory reason either — a NVO is a NVO under the regulations.” ' Chris Dupin