NIT League to FMC: Give NVOCC service contract parity
The U.S. National Industrial Transportation League has written to the Federal Maritime Commission to express its support for requests made by major non-vessel-operating common carriers that they be allowed to enter into confidential service contracts with their customers.
Under U.S. shipping laws, only entities which own and/or operate vessels in the U.S. trades are permitted to enter into such arrangements today. Recently, United Parcel Service, the National Customs Brokers and Forwarders Association of America, BAX Global and others
have petitioned the FMC to grant them the right to enter into confidential service contracts without having to disclose all tariff rates with their customers.
“The League told the FMC that it strongly supports contracting between NVOCCs and their customers on a broad basis,” the Arlington, Va.-based association said. While it did not endorse any particular petition of the NVOCCs and NCBFAA, the NIT League said it believes the FMC has authority under the Ocean Shipping Reform Act of 1998 to grant a “class exemption” to offer service contracts.
“Rather than grant relief on an ad hoc, case-by-case basis to individual NVOCCs, the League believes that the FMC should initiate a rulemaking to establish financial standards of qualification as a class exemption,” the NIT League said in its comment to the FMC.
The association argued that the benefits shippers and vessel-operating carriers get from contracting — more flexible and customized arrangements — could also be accomplished in contracts between shippers and NVOCCs if the FMC granted the latter an exemption.
The NIT League gave several reasons for the FMC to act, citing multiple examples of changes in the shipping industry over the past five years since OSRA came into effect. It said that NVOCCs cannot currently compete on a level playing field with vessel-operating carriers on service contracts.
“Broadening the ability of parties to enter into service contracts is clearly the correct response to the changing needs of a globally competitive transportation environment,” said Peter J. Gatti, executive vice president of the NIT League.
The League’s filing is posted at http://www.nitl.org/FMC1010.pdf.