In remarks last week to a metals trade conference, U.S. Federal Maritime Commissioner Rebecca F. Dye said she believes the FMC “should eliminate all unnecessary regulatory requirements, including tariff publication, for all non-vessel-operating common carriers and ocean carriers, alike.”
In an interview with American Shipper, Dye confirmed it was the first time she publicly called for the elimination of tariff publications by vessel-operating companies as well as NVOs.
Dye said since leading the FMC’s Fact Finding Investigation 26 into problems importers and exporters experienced in obtaining vessel space and containers in late 2009 and early 2010, she has continued to look for ways to “help all of stakeholders get their costs down and become more competitive.”
“The savings and efficiency enhancements from eliminating the unnecessary regulatory requirements such as tariff publication would make our international supply chain more flexible and reliable,” she said in her speech.
“Regardless of future developments concerning ocean carrier and ocean transportation intermediary capacity and rates, the international ocean transportation system will be improved by eliminating unnecessary requirements and allowing carriers to cut costs and become more competitive,” she added.
“A leaner supply chain will be to everybody’s benefit,” Dye said in an interview. “Certainly all the shippers would benefit from a more efficient and reliable supply chain. Where could we start? We could start by eliminating the unnecessary regulation.”
Dye said it was appropriate to lay out her position while speaking on a conference panel about scrap metal shippers’ shipments, sponsored by American Metal Market magazine, since under the 1984 Shipping Act, carriers do not have to publish tariffs nor file service contracts for so-called “exempt” commodities, including metal scrap. Other exempt commodities include bulk cargo, forest products, new cars, waste paper, mail in foreign commerce, Defense Department cargo, and household goods for other federal workers.
She noted shippers of exempt commodities are still protected from misconduct by carriers, intermediaries or terminals by prohibitions spelled out in Chapter 411 of the U.S. Code’s Title 46.
It was the second year in a row that Dye had spoken to the scrap metal exporters and she noted “as I talked to folks there, they certainly do business quite efficiently without tariff filing, so that is why I chose that forum to begin to discuss this.”
She said as a first step she would like to see the elimination of publishing requirements for cargo that moves under tariffs, though she added she was not opposed to the idea of eliminating service contract filing too.
Chris Koch, chief executive officer for the World Shipping Council, the major trade organization for liner companies, said contract filing is a more burdensome requirement for liner companies than tariff filing.
Carriers, he explained, are always going to have tariffs, but “filing of every service contract and every amendment to every service contract” creates even more administrative work and cost.
Dye does not believe eliminating requirements for tariff publishing or contract filing would require legislation, saying the FMC has authority to grant exemptions under Section 16 of the Shipping Act.
She’s also in favor of easing other regulations, saying she was pleased with the commission’s decision last week to once again take up the issue of whether unaffiliated NVOs should be able to enter into NVOCC Service Arrangements (NSAs).
In addition, Dye was pleased about FMC Chairman Richard A. Lidinsky Jr.’s agreement to look at whether foreign, unlicensed NVOs should be allowed to offer negotiated rate arrangements (NRAs).
The commission started allowing licensed NVOs to begin entering into NRAs earlier this year, but Dye noted “not as many people are using those rate agreements as hoped, so I think now would be the time to eliminate that requirement.”
Peter Gatti, executive vice president for the National Industrial Transportation League, said contracts and tariff rates are not routinely audited by the FMC and are “quite frankly an unnecessary expense.”
“Confidental contracting has largely been very successful since the 1998 Act,” he said.
But he said when it came to tariff publishing, he thought there was an important distinction to be made between price and rules tariffs that are published by both NVOs and vessel-operating common carriers.
“Those rules do provide protections for the customers,” he said. So while the NIT League supported the elimination of tariff publication, “we were specifically talking about the prices, and we were not talking about doing away with publication of the rules that go with those prices. The rule tariffs need to be maintained.”
Dye said she believes there are private sector solutions for maintaining rules tariffs. – Chris Dupin