U.S. FMC DENIES FORWARDERS’ REQUEST FOR SHIPPER STATUS RULING
The Federal Maritime Commission has rejected a petition by the National
Customs Brokers and Forwarders Association of America to legally define
forwarders as shippers so that they could sign service contracts with ocean
carriers.
The NCBFAA argued that a clear-cut definition would remove years of
ambiguity over forwarders’ status. The association also sought the ruling
to allow forwarders to form shippers associations without becoming
non-vessel-operating common carriers.
The petition drew support from the National Industrial Transportation
League, but was opposed by the major transatlantic and transpacific ocean
carriers. The petition was also opposed by European and Japanese shipowners belonging to
the Council of European and Japanese Shipowners Association.
The FMC said it will not overrule Congress, which chose to maintain the
status of freight forwarders when it passed the Ocean Shipping Reform Act.
Under FMC’s case law, forwarders can qualify as shippers when ocean
carriers delegate to them "sufficient control over the transportation of a
stream of cargo."
"Whether a forwarder exercises control over the movement of its
principal’s cargo and whether it has a direct or indirect beneficial
interest in that cargo are questions … to be determined on a case by case
basis, as the necessity arises," the FMC said.
FMC commissioner John Moran did not vote to approve the petition, but
called for a formal agency proceeding to decide whether the commission
could give "some guidance and certainty" in cases when a forwarder may act
as a shipper.