The U.S. Federal Maritime Commission (FMC) has issued a proposed rulemaking that the agency says “expands flexibility and deregulates” Non-Vessel-Operating Common Carrier Service Arrangements (NSAs) and Negotiated Rate Arrangements (NRAs).
The U.S. Federal Maritime Commission has issued a proposed rulemaking that the agency says “expands flexibility and deregulates” Non-Vessel-Operating Common Carrier Service Arrangements (NSAs) and Negotiated Rate Arrangements (NRAs).
An NSA is a written contract between shipper and NVO that contains minimum quantities, rates and defined service levels, similar to a service contract between a vessel-operating common carrier and a shipper, while an NRA is an agreement between a shipper and an NVOCC on the rate to be paid for particular shipments.
The most significant changes in the FMC’s proposed rulemaking include ending the requirement for NSAs to be filed with the commission, allowing NVOs and shippers to amend NRAs, and permit the act of booking cargo as acceptance of a rate under the NRA terms.
“Through this NPRM, the commission is seeking to ease regulatory burdens, simplify business transactions that move international trade, and as a result, reduce the cost of transportation services to the ultimate benefit of the American consumer,” Acting FMC Chairman Michael Khouri said. “I very much welcome hearing directly from the BCO community how creating more flexibility in the allowed non-rate terms that may be negotiated and included in NRAs might further facilitate the contracting process. The marketplace needs to be the focus of the commission’s rule making decision in this matter.”
The National Customs Brokers and Forwarders Association of America (NCBFAA), which petitioned for the amendments to the NSA and NRA filing procedures, praised the FMC for moving forward with the proposed rulemaking.
“The NCBFAA submitted a petition a number of years ago to ease NRA and NSA requirements filings with the FMC that we believe undermine the competitive shipping environment we are in,” Geoffrey Powell, the association’s president, told American Shipper. “We are very much appreciate Acting Chairman Khouri’s and Commissioner [Rebecca] Dye’s actions in this regard.”
The NCBFAA petitioned the FMC on April 16, 2015, to initiate a rulemaking to eliminate the NSA provisions in their entirety, or alternatively, eliminate the filing and essential terms publication requirements for NSAs. Consolidated with that request, the NCBFAA also asked the commission to expand the NRA exemption to include economic terms beyond rates, and delete 46 CFR 532.5(e) that precludes any amendment or modification of an NRA. On April 28, 2015, the FMC published a notice of filing and request for comments. A majority of the ocean transportation intermediaries’ comments supported the NCBFAA petition.
On Aug. 2, 2016, the FMC granted NCBFAA’s petition to “initiate a rulemaking with respect to the revisions discussed in the petition.” However, because the commission was in the process of a separate rulemaking to amend portions of Part 531 related to NSAs (Docket No. 16-05, Service Contracts and NVOCC Service Arrangements), it delayed initiating the rulemaking request until after the rulemaking in Docket No. 16-05 was concluded.
The deadline for filing comments with the agency related to the latest proposed rulemaking is Jan. 29, 2018.
FMC proposes rule to ease NSA, NRA burdens
