Support builds for NVO contracting proposal
A consensus proposal filed at the Federal Maritime Commission Monday seeking confidential contracting freedom for non-vessel-operating common carriers already is gaining support.
Danzas Corp. was expected Tuesday to file comments strongly supportive of the NVO contracting submission, said Carlos Rodriguez, counsel to the company. Danzas, which does business as DHL Danzas Air and Ocean, is a large NVO and integrated ocean logistics service provider owned by Deutsche Post.
Rodriguez's disclosure came Tuesday at a press conference called by leading NVOs and the National Industrial Transportation League to provide information about their joint submission to the FMC on confidential contracting reform. Supporters of the unified proposal include UPS, FedEx Trade Networks Transport & Brokerage, BAX Global, BDP International, C.H. Robinson Worldwide, the Transportation Intermediaries Association and the NIT League.
The group has called on the FMC to swiftly adapt regulations to allow NVOs to enter confidential rate and service agreements with shippers, a private business arrangement that the 1998 Ocean Shipping Reform Act reserved exclusively for vessel operators. The confidential agreements between NVOs and shippers would have to be filed with the FMC, just as vessel operators file service contracts with the agency.
The joint submission calls for the agency to grant all NVOs a conditional exemption from tariff publication for cargo that an NVO moves under a customized written agreement with a shipper.
Ed Greenberg, counsel to the National Customs Brokers and Forwarders Association of America, said Tuesday the association applauds NVOs and the NIT League for going forward on the joint submission to the FMC but has not signed on because the proposal 'doesn't go far enough' in the reforms it seeks. He said his association is not giving up its insistence on a broader tariff exemption, sought in a December 2003 FMC petition, that is more important to rank and file NVOs.
Acting as lead spokesman at Tuesday's NVO-shipper press conference, NIT League Executive Vice President Peter Gatti said the joint submission to the FMC is an 'unprecedented display' of unity among a broad cross-section of the ocean transportation industry in support of reform. Not since the passage of OSRA has this occurred, he said.
BAX Global Vice President Gary Osterbach, reflecting sentiments expressed by other NVO representatives, said NVOs banded together in Monday's submission because they 'feel strongly the time for action is now, for the good of the industry.'
Osterbach said BAX Global is acting 'on behalf of our customers who are requesting confidentiality.' The joint proposal is the best way to achieve contracting reform, he said. The reform sought in the consensus submission is 'a major, fundamental change for our customers,' he said.
Mike Gargaro, UPS ocean services manager, said, 'Our customers would like to have a single agreement covering all our services throughout the supply chain, end-to-end. This would enable that. It's a big deal to our customers.'
Despite repeated references, in the FMC filing and at the press conference, to the need for prompt action by the FMC, Gatti on Tuesday declined to set a timetable for the unified group's next move.
'There is a need for the FMC to act as quickly as possible. That's as clear and concise as we can state it,' Gatti said.
Gatti said 'legislative recourse' — taking the issue to Congress — is one of the few options available to the unified group if the FMC fails to act or rejects its proposal.
He said NVOs and shippers chose to act Monday because the FMC has been silent on the NVO contracting issue since January and has had a year to consider the issue.
Asked if NVO's are frustrated with the FMC, BAX Global's Osterbach said, 'Yes, inaction is the reason' for confronting the agency.
In a press release Tuesday, TIA President Bob Voltmann said, “The job of an independent agency like the FMC is to be closer to the market than Congress can be. That is why Congress granted the FMC broad powers to grant exemptions to further deregulation without having to go back to Congress.” He added, “It is time for the FMC to act.”
Petitions seeking NVO contracting liberalization and relief from tariff filing requirements have been filed individually at the FMC in 2003 and 2004 by UPS, FedEx Trade Networks Transport & Brokerage, C.H. Robinson, Danzas, BDP, Ocean World Lines and the National Customs Brokers and Forwarders Association of America.