FMC ends NVO tariff-filing requirement
The Federal Maritime Commission has ended the tariff publication requirement for non-vessel-operating common carriers.
The commission voted 3-1 on Wednesday to issue a final rule that will relieve more than 3,300 licensed NVOs from publishing in tariffs the rates they charge for cargo shipments.
FMC Commissioners Rebecca F. Dye and Michael A. Khouri joined Chairman Richard A. Lidinsky Jr. in voting for the final rule, while Joseph E. Brennan dissented.
The Shipping Act gives the commission authority to grant exemptions from its requirements if doing so would not result in substantial reduction in competition or be a detriment to commerce.
The final rule will be issued by Feb. 23, and NVOs that follow its conditions will be relieved of rate publication requirements 45 days after the rule is published in the Federal Register, an action the FMC said will “reduce regulatory burdens and bring cost savings and flexibility to the shipping industry and the customers they serve.”
According to comments filed with the FMC, the action could save some businesses up to $200,000 per year.
The final rule establishes an instrument called a negotiated rate arrangement. Licensed NVOs who enter into negotiated rate arrangements with customers will be exempted from publishing their rates in tariffs if they:
' Continue to publish rules tariffs containing terms and conditions governing shipments.
' Provide those rules to the public free of charge.
' Memorialize in writing rates agreed to in writing by the date cargo is received for shipment.
' Retain documentation of the agreed rate for a period of five years, and make documentation available promptly to the FMC upon request.
The final rule approved by the commission limited the exemption to U.S.-licensed NVOs, but the three commissioners voting in favor of the change said they would commence proceedings to receive public input on potential future modifications, including extending the exemption to foreign, unlicensed NVOs.
“After a year of work and many years of debate, the commission has provided thousands of dollars per year in cost savings to these critical U.S. supply chain businesses and the hundreds of thousands of exporters and importers they serve,” Lidinsky said. “When we began this process last year, I supported it because it would help the Obama administration's efforts to give small American businesses tools to create American jobs, and to double exports in the coming years. The FMC is making these unprecedented reforms to help our ongoing recovery.”
Dye said, “The action will simplify the business processes of American companies, put cash back into businesses, and generate additional American jobs. I also strongly support responding to the needs of the entire U.S. international supply chain by extending the exemption to all lawful non-vessel-operating common carriers doing business in the United States.”
Khouri said the change provides regulatory relief to 75 percent of all NVOs, and said he also was interested in seeing if the exemption can be “promptly extended to the remaining NVOCC community.”
In his dissent, Brennan said the FMC “lacks the authority to rewrite the Shipping Act by making tariff publication optional for licensed NVOCCs. Congress clearly took up the tariff issue with the 1998 Ocean Shipping Reform Act and determined to maintain tariff requirements for all common carriers. Three commissioners of the Federal Maritime Commission should not, and cannot, trump the judgment made by a previous Congress and president on this issue.” A 14-page explanation of Brennan’s views can be found here.
In other action the FMC said commissioners voted unanimously to update its filing requirements and clarify its procedures for informal proceedings for small claims. Those change would “reduce filing burdens on the public, are eco-friendly, and enhance privacy protections for parties to FMC proceedings. The rule change approved today is the first step in the commission's ongoing project to make its procedural rules more clear, modern, efficient and environmentally friendly,” the agency said.
The FMC also said it would prepare a plan to apply President Obama’s Jan. 18 executive order on improving regulation and regulatory review. The plan will systematically review the FMC’s rules to make them more effective or less burdensome in achieving the agency's regulatory objectives. Although the executive order does not apply to independent agencies such as the FMC, the White House has encouraged independent agencies to voluntarily follow its guidance. ' Chris Dupin