FMC repeals terminal agreement exemption

FMC repeals terminal agreement exemption    The U.S. Federal Maritime Commission has repealed the marine terminal agreements (MTAs) exemption, which exempted such agreements from the Shipping Act’s 45-day statutory waiting period.
   In 1987 the FMC had decided to exempt certain MTAs from the waiting period, “based upon its finding that such exemption would not substantially impair effective regulation by the commission, be unjustly discriminatory or detrimental to commerce, nor result in a substantial reduction in competition.”
   But the FMC said since the Sept. 11, 2001 terrorist attacks, “agreements filed with the commission by marine terminal operators (MTOs) reveal the greater complexity of subject matter and the wider range of operational issues that the marine terminal industry seeks to address.” These include port security, but also traffic congestion, noise issues and pollution abatement.
   “As port agreements have evolved beyond simple landlord-tenant issues, such agreements increasingly have the potential to incur the anticompetitive consequences that the commission deemed unlikely when it first adopted the exemption,” the FMC said.
   FMC said it received three comments on the proposal, two supporting the repeal, one objecting to it.
   The National Customs Brokers and Forwarders Association of America said while it did not challenge continued antitrust immunity under the Shipping Act, it believed MTAs that could have anticompetitive consequences should no longer be exempted from the 45-day waiting period.
   The National Industrial Transportation League also supported the repeal noting the MTAs have an impact on the shipments of its members because many of them are U.S. importers and exporters. MTAs have become 'more complex and broader in scope” the NIT League said, and there are legitimate concerns as to whether agreements should be granted antitrust immunity immediately upon filing with the FMC.
   The Ports of Los Angeles and Long Beach objected to eliminating the exemption for MTAs, alleging the FMC’s effort to eliminate the waiting period exemption arise largely out of the efforts to delay and block the implementation of agreements the ports filed in connection with their environmental programs. They argued the exemption does not impede FMC oversight and will cause them 'to interrupt and delay operational matters' to accommodate the 45-day waiting period.
   The FMC said it was repealing the exemption because increasingly MTAs have the potential to cause the anticompetitive consequences that the commission deemed unlikely when it first adopted the exemption.
   “The absence of any waiting period requirement for MTAs may frustrate the commission’s function of advance review and analysis of filed agreements to prevent a reduction in competition,” it said.
   The FMC’s final rule repealing the exemption can be found here.