NCBFAA supports NVO contract parity, rejects financial conditions

NCBFAA supports NVO contract parity, rejects financial conditions    Having recently petitioned the U.S. Federal Maritime Commission to request the end of tariff-filing for NVOCCs, the National Customs Brokers and Forwarders Association of America, Inc. said that it has now expressed its support for petitions of United Parcel Service, BAX Global and C.H. Robinson Worldwide asking permission to enter into ocean service contracts with their customers.
   The FMC had requested industry comments to help it make a decision on the various petitions, each of which seeks an exemption from provisions of the U.S. Shipping Reform Act of 1998.
   The NCBFAA said that it still believes that the relief sought under its petition (to have NVOCCs exempted from the rate tariff provisions of OSRA) provides “a preferable and more efficient method for relief for most NVOCCs.”
   However, responding to the UPS, BAX and Robinson petitions, the NCBFAA agreed that NVOCCs should be able to enter into service contracts with their customers “if these parties mutually believe that to be appropriate.” The NCBFAA noted that the industry “had evolved from common carriage to contract carriage due to the enactment of OSRA.”
   The NCBFAA disagreed with one aspect of the petitions which suggested that the right to enter into service contracts “should be limited to large NVOCCs or NVOCCs that are affiliated with steamship lines.”
   “The commission should not impose any financial prerequisites for eligibility to enter into service contracts,” the association of
intermediaries said.
   Ed Greenberg, legal counsel to the NCBFAA, said that the association is opposed to conditions based on the size of the NVOCC to determine whether it is entitled to enter into private service contracts. “We don’t think that is relevant,” Greenberg told American Shipper.
   The NCBFAA believes that there is no need for NVOCCs to have to file service contracts with the FMC, as is the case for vessel operators. Greenberg said that ocean carriers have to file their service contracts with the agency to allow the oversight of their collective pricing antitrust immunity. Without this obligation, the FMC would not have been able to investigate the alleged service contract malpractices of last year in the transpacific trade, he said.
   In its comment to the FMC, the NCBFAA also rejected an approach by Ocean World Lines that NVOCCs be treated like forwarders and be permitted to enter into a confidential “special contract” with their customers.
   With headquarters in Washington, D.C., the NCBFAA represents about 700 freight forwarders, customs brokers, ocean transportation intermediaries and air cargo agents.