NIT League examines new Chinese shipping regulation

NIT League examines new Chinese shipping regulation    The National Industrial Transportation League, a key group representing U.S. shippers, said it is closely following a new regulation by the Chinese government that requires liner carriers to file their tariff rates and negotiated freight rates with the Shanghai Shipping Exchange.
   Writing in its weekly newsletter, the NIT League said while it has not had an opportunity to review all of the documents connected with the new regulation, The Implementing Rules on Filing Freight Rate by International Container Liner Service, but said, “it appears that a carrier must file both tariffs and negotiated rates with the SSE that includes both minimum and maximum rates quoted to the public.”
   A translation of the regulation said it was created in part to maintain the order of China’s international container liner service market and “protect fair competition, to safeguard the lawful rights and interests of the parties involved in maritime transportation, and to promote the healthy development of the shipping industry.”
   It adds that “freight rates for international liner services are subject to market regulation and fixed by the liner operators independently and voluntarily. The liner operators shall conduct business lawfully and in good faith, and improve the quality and efficiency of service and cut down the operating costs. They shall provide transport service at a normal and reasonable price in terms of the operating costs and the supply-and-demand situation of the shipping market, and are forbidden to canvass for cargo at ‘zero freight rate’ or ‘minus freight rate.’ “

Gatti

   Peter Gatti, executive vice president of the NIT League, expressed concern about the language in the regulation, saying the league believes “the market should determine what rates should be rather than the government saying what is 'fair and reasonable.'
   The NIT League said it is looking at the Chinese law “with a particular emphasis on examining the degree of rate transparency and how this may impact contracts. Under the Ocean Shipping Reform Act of 1998 rates are among the contract terms that are confidential from public scrutiny and are only known to the parties to the contract and filed with the U.S. Federal Maritime Commission.”
   The NIT League is studying what its next steps should be, but Gatti said it could ask the FMC to consult with the Department of Transportation or State Department to investigate the effect of the new law.
   The rules were introduced June 15 and went into effect Aug. 1 and apparently replace Implementing Rules on Filing Freight Rate System by International Container Liner Service promulgated by China’s Ministry of Communication in 1996.
   In 1996, China’s Ministry of Communications issued regulations requiring carriers to file rates. At that time, U.S. carriers expressed concern about providing rate information to the Chinese government because of its involvement in Chinese shipping companies.