OMNI SHIPPING SERVICES INC. FOUND TO VIOLATE PRE-OSRA RULES
The U.S. Federal Maritime Commission has ruled that OMNI Shipping Services Inc., a non-vessel-operating common carrier owned by a group of moving companies, to be a “sham corporation” and must cease obtaining rates at less than otherwise charged by the ocean carriers.
The case was started against Overseas Moving Network International, a London-based household goods freight forwarder network, and its NVO, OMNI Shipping Services Inc. (OSSI), in 1994 by Rose International, a New Jersey-based NVO.
Rose accused the network of operating OSSI as “an unfair device or means to circumvent the tariff bonding requirements of the (former) Shipping Act of 1984.”
An administrative law judge found in 1999 that Rose’s case had no merit, but the FMC’s review determined that OSSI did violate the law. The FMC's decision affected as many as 12 OSSI shareholders.
However, the FMC said “Rose failed to prove that it suffered actual injuries” and is not entitled to “reparations for lost profits, lost growth opportunity or liquidated damages imposed by TACA (Trans-Atlantic Conference Agreement).”
It’s uncertain whether OMNI will appeal the decision. However, with the ruling in hand, the FMC may review the legality of other forwarder network-based NVOs, using the Rose vs. OMNI decision as standard.