DOT supports NVO confidential service contracts
U.S. Transportation Department’s top administrator said non-vessel-operating common carriers should be allowed to enter into confidential service contracts with their customers.
Under the 1998 Ocean Shipping Reform Act, NVOs were excluded from developing confidential service contracts with shippers, while this privilege was extended to vessel-operating common carriers.
Transportation Secretary Norman Y. Mineta told shippers at the National Industrial Transportation League’s 2004 Policy Forum in Washington Monday that NVO exclusion in confidential service contracting is an impediment to the nation’s overall goal to improve the efficiency of intermodal and maritime transportation.
NIT League members generally approve of NVOs entering confidential service contracts as a way to continue competition among transportation providers in the liner shipping industry.
“We as a shipper consider government sponsorship of this as a positive offering for the industry, because a lot of NVOs could adequately compete in this market,” said David Fisher, manager of global transportation purchasing for Goodyear Tire & Rubber Co., which ships about 100,000 TEUs each year.
The Federal Maritime Commission received a handful of petitions from the country’s largest NVOs, including UPS, FedEx Trade Networks, BAX Global, Ocean World Lines, C. H. Robinson Worldwide and DHL Danzas, seeking the ability to enter confidential service contracts. The commission, which also received hundreds of comments from Capitol Hill lawmakers and industry members supporting the NVO petitions, said it would weigh the merits of the petitions soon.
The DOT’s comments follow those filed last year by the Justice Department, which voiced support for the UPS petition and the concept of confidential service contracts for NVOs.