Commission Eases Regulatory Burdens to Maritime Supply Chain Users

Contact: John K. DeCrosta, (202) 523-5911

The Federal Maritime Commission today voted unanimously to amend its rules involving Service Contracts and NVOCC Service Arrangements (NSAs) in order to ease regulatory burdens and make the agency’s rules more consistent with how the ocean shipping business is now practiced.

“The Commission examined regulatory requirements for service contracts and NVOCC Service Arrangements in light of current commercial practice and has eliminated a number of burdensome regulatory requirements that served as obstacles to efficient ocean transportation arrangements, added unnecessary transactional costs, and served no regulatory purpose,” stated Acting Chairman Michael Khouri. “Today’s action is consistent with recent executive orders highlighting the benefits of reducing unnecessary and costly regulations. I am committed to continuing to identify rules that are outdated, or impede the efficient operation of business, and eliminating them whenever possible.”

Other Commissioners joined Acting Chairman Khouri in applauding the Commission’s action.

“I strongly support President Trump’s Executive Order on Reducing Regulation and Controlling Regulatory Costs,” said Commissioner Rebecca Dye.  “In the spirit of the Executive Order, this Final Rule is an important first step toward eliminating unnecessary regulatory compliance costs from our international supply chain. Of equal importance, the rule will increase commercial flexibility in freight transportation for American exporters and importers.”

“This regulatory adjustment will help expedite commerce through streamlining the contractual relationship between carriers, NVOCCs, and shippers,” observed Commissioner William Doyle.

Today’s rulemaking (Docket No. 16-05) is the first comprehensive review of the Commission’s service contract regulations in part 530 since promulgating the implementing rules pursuant to the 1998 Ocean Shipping Reform Act. Additionally, this is the first substantive revision to NVOCC Service Arrangements since being introduced in 2005.

From the start, the Commission’s goals in this undertaking were to identify areas of possible regulatory relief and to establish ways to streamline FMC and industry business practices. Over the course of the past 13 months, the Commission repeatedly engaged its stakeholders to benefit from their views and to craft a final rule that best addresses contemporary market conditions. The Commission first initiated action in this matter in February 2016 with the publication of an Advance Notice of Proposed Rulemaking. A Notice of Proposed Rulemaking (NPRM) was issued in August 2016. Certain proposed changes in the NPRM were not adopted by the Commission today as they would not necessarily have decreased business burdens.

The Rulemaking approved today (Docket No. 16-05) makes the following key changes to Commission regulations:

• It allows the filing of sequential service contract amendments with the FMC within 30 days of the effective date of an agreement between shipper and carrier.
• It allows up to 30 days for filing NVOCC Service Arrangement Agreements with the FMC after their effective date.
• It allows additional time to correct technical data transmission errors from 48 hours to 30 days; and,
• It extends the period in which one can file a service contract correction request from 45 days to 180 days.

The text of the final rule should be available on the Commission’s website soon.

The Federal Maritime Commission is responsible for regulating the Nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The Commission’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.