The U.S. Federal Maritime Commission will take steps to begin the process of modernizing regulations for non-vessel-operating common carrier and ocean freight forwarder licensing, registration, and proof of financial responsibility when it meets next month, FMC Chairman Richard A. Lidinsky Jr. said Tuesday at the National Customs Brokers & Forwarders Association of America’s conference in Hollywood, Fla.
“I want to hear from you because right now we are at a key moment for regulation of NVOCCs. In the coming months, the FMC will be working to modernize the rules for NVOCCs, from top to bottom,” he said. “Procedurally, my goal is for the commission to issue an advance notice of rulemaking that seeks your input and feedback on a wide range of issues this summer.”
Lidinsky noted last week the FMC issued a Notice of Inquiry seeking comments on ways to improve its 2005 rules for NVO Service Arrangements (NSAs). The comment period runs through June 18.
FMC took a first step to give NVOs some relief from tariff requirements in December 2004, by allowing them to enter NSAs – similar to confidential service contracts arranged between vessel-operating common carriers and shippers – with their customers, which they have to file with the FMC and publish the essential terms.
In the seven years since NSAs began, Lidinsky said “179 NVOCCs have used NSAs, some quite successfully. But that’s a small portion of our more than 3,500 licensed NVOCCs and 1,100 foreign unlicensed NVOCCs.”
Lidinksy said in the FMC’s request for comments, the agency “flagged an issue that was a subject of debate back in 2005 – whether to allow NVOCCs to jointly enter into NSAs. But I also would like input on other ideas, such as whether to keep or drop such requirements as publishing essential terms of NSAs.”
He also said last week, the FMC “began the process of improving our tariff rate publication exemption for Negotiated Rate Arrangements (NRAs).”
The FMC asked for comments on changing NRAs and nearly two dozen were submitted earlier this year.
Lidinsky has outlined a plan to approach the NRA improvement process in two stages, first tackling technical requirements that NVOs say cause problems without adding much value.
“I instructed FMC staff to prepare a draft final rule to change them if a majority of the commission agrees,” he said.
These include dropping requirements that an NVO must include notice of invocation of the NRA in its bill of lading, and that NRA documentation includes titles, addresses, or affiliates of the shipper representative who accepts the rate. It would also tighten or drop what Lidinsky said was a vague requirement that NVOs retain “all associated records” with their NRA documents.
He told the NCBFAA conference attendees he is also asking the FMC staff to assess options to address “deeper changes” raised in comments to the FMC.
These include whether to:
- Expand the NRA exemption to foreign, unlicensed NVOs, with proposed conditions or procedural changes that ensure that they respond in a full and timely manner to any commission process, document requests, or orders.
- Expand beyond a “rate” in NRAs to possibly include things such as surcharges and credit terms.
- Trim the NRA rule’s current prohibition on amendments so that it only applies to a particular shipment that has already been received by the NVO.