FMC to Issue Proposed Rule to Streamline NVOCC Service and Rate Arrangement Filing Regulations
The Federal Maritime Commission is issuing a proposed rule to lift non-vessel-operating common carrier service arrangement (NSA) filing and “essential terms” publication requirements, and to allow NVOCC negotiated rate arrangements (NRAs) to be modified at any time. Under the proposal, an NVOCC would be able to provide for shippers’ acceptance of an NRA by booking a shipment thereunder if the NVOCC incorporates a “prominent written notice” in each NRA or amendment, the FMC said. Specifically for NSAs, the FMC is proposing to exempt them from a requirement to file them in its Service Contract Filing System (SERVCON), and is proposing to except NVOCCs from the requirement to publish, in tariff format, the essential terms of any NSA.
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The commission is also accepting public comments on how allowing inclusion of non-rate economic terms in NRAs might impact commercial business operations, particularly of shippers currently using NRAs. Those terms might include service amendments; per-package liability limits; provision of free time; detention or demurrage charges; arbitration, dispute resolution or forum selection provisions; minimum volumes or time/volume rates; liquidated damages; credit terms and late payment interest; service guarantees and/or service benchmarks, measurements and penalties; surcharges, general rate increases or other pass-through charges from carriers or ports; rate amendment processes; and electronic data interchange services, the FMC said.
The National Customs Brokers & Forwarders Association of America petitioned for the discontinuation of the NSA filing and essential terms publication requirements as well as for the allowance of modification of NRAs upon the time of agreement between NVOCCs and customers, including anytime after the receipt of cargo. “In initially creating NRAs, the accelerating need for parties to have greater flexibility to more quickly respond to fast-paced market rate fluctuations does not appear to have been fully anticipated,” the proposed rule says. “The NVOCC and its customer should not be compelled to create a new NRA in every instance simply because the rules do not currently provide for amendment.”
Going beyond what NCBFAA’s petition called for, the FMC is proposing to end a requirement for shipper NRA acceptance to be “memorialized” through a formal writing or email, and proposes to allow NRAs to be “more flexibly created, or be amended,” upon shippers’ acceptance of an NVOCC’s request for shipment booking. But NVOCCs seeking to “recognize shipper acceptance of an NRA” through the act of booking must “incorporate a prominent written notice to that effect on each such NRA or amendment,” the FMC said. Otherwise, a shipper’s agreement to an NRA will still be required in writing or by email. The FMC is accepting comments on the “desirability” of allowing NRA acceptance by booking, and whether the commission should require particular wording to “more prominently” give notice as to the NVOCC’s NRA practice with respect to booking, the commission said. The FMC is accepting comments on the proposed rule through Jan. 28.
(Federal Register 11/30/17)