United Arab Shipping Co.will be exempt from the Federal Maritime Commission’s “controlled carrier” requirement that it provide 30 days’ notice of any reduction in its published tariff rates.
The U.S. Federal Maritime Commission on Wednesday unanimously approved a petition from United Arab Shipping Co. that it be exempt from the “controlled carrier” requirement that it provide 30 days’ notice of any reduction in its published tariff rates.
Controlled carriers are defined by U.S. regulation as having substantial foreign government control. In the case of UASC, which was founded in 1976 by the governments of United Arab Emirates, Bahrain, Saudi Arabia, Iraq, Qatar and Kuwait, the majority shareholder of the company today, at 51.27 percent ownership, is Qatar.
With the exception of service contracts, UASC, as a controlled carrier, must wait 30 days before it can reduce its tariff rates, while non-controlled carriers are allowed to reduce their tariff rates effective immediately upon publication.
“Though much of UASC’s cargo moves [are] subject to service contracts, a portion is nonetheless subject to tariff rates,” wrote the carrier’s Washington-based attorneys Wayne Rohde and Jawaria Gilani in their June 18, 2014 petition to the FMC. “Granting UASC an exemption from the notice requirement for its tariff rates would neither reduce competition nor be detrimental to commerce.
“If UASC had the ability to reduce rates on publication, rather than wait 30 days, that ability would actually increase competition. The exemption would permit UASC to react quickly to market conditions and be more competitive,” the attorneys added.
Non-vessel-operating common carriers Shipco Transport and Apex Maritime Co. each submitted letters earlier this year in support of UASC’s petition.
“Granting UASC’s petition will increase competition and be beneficial to us, a U.S. exporter,” wrote Klaus Jepson, Shipco’s group chief executive officer. “We foresee no negative impact if the petition is granted, and urge the Federal Maritime Commission to grant the petition promptly.”
“Granting UASC this ability to compete on the same terms as other carriers will have no detrimental impact on commerce, and will be pro-competitive,” stated Kevin Bulger, chief operating officer at Apex Maritime.
During the FMC’s meeting, Commissioner William P. Doyle said, “I’m increasingly impressed with [UASC’s] transparent communications that informs the shipping public of changes to their sailing schedule and their environmental stewardship.”
The exemption granted by the FMC will become effective upon its publication in the Federal Register, which is expected soon.
UASC granted exemption from ‘controlled carrier’ tariff provision
