NVOCC rules 15 years in the making

Commentary from NCBFAA’s Megan Montgomery: Landmark move cumulation of 30 years of trade modernization support from FMC.    The Federal Maritime Commission’s recent announcement via a Final Rule offering deregulatory flexibilities for Non-Vessel-Operating Common Carrier (NVOCC) Negotiated Rate Arrangements (NRAs) and NVOCC Service Arrangements (NSAs) is a huge success for the agency.
   With the one final step to publish the rule in the Federal Register, the National Customs Brokers and Forwarders Association of America’s (NCBFAA) general and transportation counsel Ed Greenberg has seen 15 years of effort come to fruition.
   “Obtaining this relief has been the number one deregulatory priority for OTIs (ocean transport intermediaries) since the enactment of OSRA,” said Greenberg. “Being freed from archaic and costly tariff filing should be a huge benefit to NVOCCs, and I am gratified that our efforts have now borne fruit.”
   As it stands, the final rule significantly reduces the previously burdensome NRA/NSA process by adopting many of the suggestions the association had proposed. For NSAs, there is now (1) no need to file them with the agency and (2) no need to publish essential terms. As for NRAs, (1) they can be amended, (2) they can include essential terms and (3) they are deemed to be accepted by the shipper if it signs the proposed rate or just tenders cargo.
   Commenting on the decision, Acting FMC Chairman Michael Khouri said, “These regulation amendments for NSAs and NRAs will benefit American consumers and the carrier industry — both vessel operators and NVOCCs — by expanding choices for shippers, reducing regulatory requirements, and increasing efficiencies in contracting for ocean shipping services. The National Customs Brokers and Forwarders Association of America petition has had a long road here and they must be commended for their work. The time and effort from all industry participants has been welcomed and worthwhile.
   “I remain committed to proactively considering stakeholder requests to address outdated, unnecessary, or unduly burdensome regulations,” he added. “I also welcome such comments on statute requirements that may be addressed by the commission via Section 16 exemption processes”
    FMC Commissioner Rebecca Dye called the rule “one of the first pieces of major deregulation accomplished by the commission,” adding that she is “anxious to build upon this momentum.”
   The landmark announcement and final rule is in some ways a cumulation of 30 years of trade modernization support that the FMC has provided to the trade.
   For the past few decades, the NCBFAA has had the privilege of enjoying mutual respect with and support for and of the FMC. The FMC has listened when the trade needed governmental intervention, they have investigated when circumstances warranted and they have made rulings with reason and fairness and a balanced view of what makes trade tick.
   For that the whole agency should be applauded. And Dye and Khouri in particular get a standing ovation from the NCBFAA for their tireless support and dedication to the operability of the current trading system.
   From Dye’s current investigations on unjust demurrage and detention charges to the commission’s stepping into the SOLAS regulations to support the ports’ management of their cargo shippers, and stop the unnecessary and burdensome regulation of requiring an additional weight report.
   These steps may seem small when distilled down into a single sentence, but they were instrumental in helping to keep trade moving in a rational and predictable manner when the initiatives were originally undertaken.
   Finally, the FMC should be lauded for its commitment to the Trump administration’s “one-in, two-out” initiative. At a time when new regulations seem to come at an ever increasing pace, it’s commendable to see an agency commit to and succeed in reducing unnecessary and overly burdensome regulation to allow private industry to flourish.
   The FMC is a model agency for balancing the needs of all parties involved in trade with the government’s need for appropriate oversight, ebbing and flowing as circumstances and trading norms dictate. The NCBFAA has been a proud supporter of the FMC and we continue to salute a wonderful agency for a job well done.

   Megan Montgomery is executive vice president of the NCBFAA. She may be reached at mmontgomery@ncbfaa.org.