Tag Archives: federal maritime commission

The OSCARs: Creating Greater Efficiency in Transpacific Agricultural Shipping

The United States Department of Agriculture has teamed up with members of the Westbound Transpacific Stabilization Agreement[1] to enhance shipping and exports in the agricultural market by creating weekly projected equipment and container availability reports designed to increase efficiency and transparency of containers flows.

Current carriers including data for the initiative are APL, COSCO, Evergreen, Hanjin Shipping, Hapag Lloyd, Yang Ming Transportation Corporation, OOCL, NYK Line, K Line, and Hyundai Merchant Marine.[2]  The data is compiled each week to offer from information provided by these carriers from each of 18 intermodal locations regarding estimated container availability and supplies and is “based on up-to date bookings or reservation information in the westbound transpacific trade lane.”[3]

Weekly data on container availability as well as overview data for up to 6 prior months is available from these lines in the following 18 locations:

  • Charleston, SC
  • Chicago, IL
  • Cincinnati, OH
  • Columbus, OH
  • Dallas, TX
  • Denver, CO
  • Houston, TX
  • Kansas City, MO
  • Los Angeles and Long Beach, CA
  • Memphis, TN
  • Minneapolis, MN
  • New Orleans, LA
  • New York, NY
  • Norfolk, VA
  • Oakland, CA
  • Savannah, GA
  • Seattle and Tacoma, WA

Shippers can find the weekly reports, which also container more information on the initiative and how to read the reports, by visiting http://www.ams.usda.gov/AMSv1.0/ATContainerReport.

The Federal Maritime has also weighed in on the new initiative, applauding the efforts of the USDA and the WTSA and urging full shipper participation.  More information here:  http://www.fmc.gov/chairman_lidinsky_applauds_new_usda_container_availability_report_and_urges_full_shipper_participation/.


[1] The “Westbound Transpacific Stabilization Agreement (WTSA) is a research and discussion forum of container shipping lines operating in the trade lane from the U.S. to Asia.”  http://www.wtsacarriers.org/home_nf.html

[3] Id.

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FMC Simplifies Negotiated Rate Arrangements

The Federal Maritime Commission revised its Negotiated Rate Arrangement (NRA) regulations to reduce recordkeeping requirements.   With immediate effect, the FMC is

a) eliminating the requirement for the shipper’s title and address in their written assent to rates,

b) eliminating the requirement that the bill of lading include a notice that a shipment is moving pursuant to an NRA; and

c) eliminating the requirement that an NVOCC retain all associated records and written communications pertaining to an NRA. List of Subjects in 46 CFR Part 532

 

Accordingly, the Federal Maritime Commission amends 46 CFR Part 532 as follows:

PART 532 – NVOCC NEGOTIATED RATE ARRANGEMENTS

  1. The authority citation for Part 532 continues to read as follows:

AUTHORITY: 46 U.S.C. 40103.

  1. In § 532.5, revise paragraph (b) to read as follows:

§ 532.5 Requirements for NVOCC negotiated rate agreements.

* * * * *

(b) Contain the names of the parties and the names of the representatives agreeing to the NRA;

* * * * *

  1. Revise § 532.6 to read as follows:

§ 532.6 Notices.

An NVOCC wishing to invoke an exemption pursuant to this part must indicate that intention to the Commission and the public by a prominent notice in its rules tariff.

4. Revise § 532.7 to read as follows:

§ 532.7 Recordkeeping and audit.

(a)        An NVOCC invoking an exemption pursuant to this part must maintain original NRAs in an organized, readily accessible or retrievable manner for 5 years from the completion date of performance of the NRA by an NVOCC, in a format easily produced to the Commission.

(b)        NRAs are subject to inspection and reproduction requests under § 515.31(g) of this chapter. An NVOCC shall produce the requested NRAs promptly in response to a Commission request. All records produced must be in English or be accompanied by a certified English translation.

(c)        Failure to keep or timely produce original NRAs will disqualify an NVOCC from the operation of the exemption provided pursuant to this part, regardless of whether it has been invoked by notice as set forth above, and may result in a Commission finding of a violation of 46 U.S.C. 41104(1), 41104(2)(A) or other acts prohibited by the Shipping Act.

* * * * *

For more information on NRA’s you can contact us via email at nmooney@customscourt.com or smorrison@customscourt.com or by phone at (850) 893-0670 or toll free at (800) 583-0250.

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Inside FMC Licensing: References

Becoming an ocean transportation intermediary (“OTI”), a freight forwarder (“OFF”) or a non-vessel operating common carrier (NVOCC), is a great way to get involved in the international trade industry.  OFFs and NVOCCs facilitate the movement of goods overseas (via ocean carrier) from the original shipper, individuals or corporations, to their final point of distribution.  While the U.S. has regulations for each category of OTI, both OFFs and NVOCCs require a license granted by the Federal Maritime Commission (“FMC”) in order to begin operating as an OTI.  One of the many requirements for obtaining an FMC license is that OTI’s qualifying individual (“QI”) must have at least three (3) years’ experience in conducting OTI activities in the United States.  Foreign NVOCCs may also obtain an FMC license (not foreign OFFs) by demonstrating its QI has at least three (3) years’ experience as well, though not necessarily in the U.S.

To prove the minimum experience requirement, a QI must provide the FMC with information on the jobs she has held or currently holds in which she obtained the experience as well as three (3) non-related references who have firsthand knowledge of the QI’s OTI experience.  After having worked with the FMC on licensing for clients for many years, our firm has found that the FMC is very specific about the references it will accept.  The following are a few tips for those of you who are hoping to obtain your license:

  • The FMC will not accept more than one reference from a single company.
  • Each reference should ideally be from a different source type; i.e. Vessel Operating Common Carrier (“VOCC”), NVOCC, Shipper, Client, Customs House Broker, Ex-Supervisor, Ex-Coworker, etc.
  • Each reference is not required to have known the QI for three years.  The cumulative time period for all references’ knowledge of the QI’s experience is three years.  For example:
    • Reference 1 can attest to six months of the QI’s experience, and Reference 2 can attest to one year of the QI’s experience; therefore, Reference 3 must be able to attest to one and a half years of the QI’s experience.
  • If references do not respond, the FMC will close the OTI application and another application will have to be started with duplicate fees.  Make sure you contact your references and let them know the FMC will be contacting them, most likely via email, with a questionnaire about your, or your company’s QI’s, experience as an OTI.  If you think one of your references might be out of the country for a while or unable to answer the questions choose another reference as back up.  This can save you a lot of time, money, and hassle.  You should also confirm the emails addresses of your references by exchanging messages before submitting the application, as changed or erroneous email accounts are a primary reason for lack of responses.

For more information on FMC licensing, visit www.fmc.gov or contact our offices for more information.  We are able to provide both FMC licensing consulting services as well as prepare, file, and conduct all follow up on your application for you.

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Federal Maritime Commission Begins Rulemaking Process to Amend Regulations to Eliminate Filing of Rate Tariffs By Licensed NVOCCs

On April 29, 2010, the Federal Maritime Commission published a proposed rulemaking to implement its February 18, 2010, decision to relieve licensed NVOCCs from the costs and burdens of tariff rate publication. The April 29 rulemaking promulgated new and amended regulations that, when given effect, will establish the criteria that must be adhered to by NVOCCs that seek to be exempt from the tariff rate publishing requirement. Publication of rules tariffs would still be required under the regulations.

The proposed FMC regulations would recognize “negotiated rate agreements,” or NRAs, as a new type of instrument that, in function, would serve to set individualized rates as between a shipper and NVOCC. An NRA is defined in the regulations as a “written and binding arrangement between a shipper and an eligible NVOCC to provide specific transportation service for a stated cargo quantity, from origin to destination, on or after the receipt of the cargo by the carrier or its agent (or the originating carrier in the case of through transportation).”

For an NVOCC to avail itself the FMC’s newly-relaxed tariff rate publication requirement, it must follow certain rules outlined in the new regulations, namely:

  • The NVOCC must give notice to the public that it is opting out of rate publication by publishing that fact in a prominent place in its filed rules tariff. An NVOCC can also elect to invoke the exemption by filing with the FMC a Form FMC-1, which would then be reflected on the FMC website along with the NVOCC’s tariff location.
  • The rules tariff must be available to the public free of charge, or it must be provided with each of the NVOCC’s proposed NRAs or rate quotes.
  • NRAs must be (1) be agreed to by both parties; (2) be memorialized in writing; (3) include the applicable rate for each shipment; (4) be agreed and memorialized on or before the date on which the cargo is received by the common carrier or its agent (including originating carrier in the case of through transportation rates); and (5) include prominent notice of the existence and location of the NVOCC’s rules tariff.
  • NRAs and associated records must be retained for five years and are subject to the records availability requirements of the Commission’s regulations at 46 CFR § 515.31(g).

When these criteria are met, a NVOCC will be exempted from the requirement that rates tariffs be published in an automated tariff system. Associated tariff rate regulations, such as those governing the timing of rate increases and decreases, which would then be inapplicable insofar as there would be no published rate to adjust.

An NVOCC who fails to maintain its bond or license or has had its tariff suspended or cancelled by the FMC is ineligible to avail itself of the new exemption.

Interestingly, the new proposed regulations would only exempt licensed NVOCCs from the tariff rate publication requirement. Registered but unlicensed NVOCCs, which are those that have no physical U.S. location and are incorporated abroad, would not be exempt from rate publication even if the proposed regulations go into effect. The FMC has stated that it will consider whether to expand the exemption to cover registered, unlicensed entities. Already there have been some cries of discrimination from foreign NVOCCs due to this disparate treatment.

The deadline for interested parties to file comments concerning the new proposed regulations with the FMC is June 4, 2010.

The proposed regulations can be found on the FMC’s website at http://www.fmc.gov/userfiles/pages/file/NVOCC%20Tariff%20Exemption%20NPRM.pdf

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