NVOCC-GAC, New York forwarders group backs “range rate” tariff
NVOCC-GAC, New York forwarders group backs “range rate” tariff
Two of the largest U.S. non-vessel-operating common carrier groups told the Federal Maritime Commission they support a proposed alternative to tariff publishing if the agency cannot eliminate the procedure altogether.
The NVOCC-Government Affairs Conference and the New York/New Jersey Foreign Freight Forwarders and Brokers Association filed joint comments to the FMC Dec. 19 in response to a petition filed by the National Customs Brokers and Forwarders Association of America this summer.
The NCBFAA asked the FMC in its petition to use its exemption authority under the 1998 Ocean Shipping Reform Act to exempt NVOs from publishing tariffs, a costly exercise the industry says provides no value to shippers. If that was not possible, the NCBFAA proposed that the FMC permit NVOs to publish simpler “range rates.”
“A range rate would consist of establishing two levels of rates for any particular service, which would be a maximum and the other to be a minimum rate,” the NCBFAA petition said. “The participating NVOCC could then price its traffic for a given customer, based upon the appropriate market conditions and the agreement negotiated with its customers, anywhere within that range without having to separately establish a specific rate or charge for that service in its tariff.”
The World Shipping Council, a group that represents the liner carriers, told the FMC in its comments that it would “not object to the commission undertaking such an initiative as a way to consider the issue and its appropriateness as a mechanism to reduce the alleged burdens and costs of tariff publication and penalties for minor tariff infractions about which NVOCCs complain.”
The NVOCC-GAC and the New York forwarders association said a range rate system should:
* Provide shippers greater freedom in structuring “non-public” commercial relationships with NVOCCs as to both pricing and services.
* Eliminate or lessen the expense burden of tariff publishing.
* Eliminate or lessen regulatory exposure to technical violations associated with tariff publishing.
* Contain elements that the FMC would find acceptable to perform its congressional mandate as a regulatory agency.
The two groups also further defined range rates to “a price state in a tariff for providing a specified level of transportation service for a stated cargo quantity, from origin to destination, on and after a stated effective date or within a definite time frame, which prices are to be stated in terms of minimum and maximum rates and charges.
“Minimum rates and charges shall not be less than 50 percent of the maximum rates and charges,” the groups added. “Range rates may include or exclude surcharges, and may define applicable cargo in generic terms defining which commodities shall be included or excluded from the range.”