Final Rules to be Published Implementing Shipping Act Amendments and Revising Procedures

The Federal Maritime Commission today held its first meeting of 2020, publicly welcoming its newest member, voting to publish two final rules, and receiving in closed session a briefing on developments in the U.S. liner trades.

The Commission voted to issue a Final Rule implementing the Frank LoBiondo Coast Guard Authorization Act of 2018. The rule updates Commission regulations to:

• Clarify that persons that advertise or hold themselves out as Ocean Transportation Intermediaries (OTIs) must be licensed as OTIs and meet associated financial responsibility requirements
• Expand the prohibition on common carriers knowingly and willfully accepting or transporting cargo for OTIs that do not have a tariff or do not meet financial responsibility requirements
• Make clear that OTI licensing and financial responsibility requirements do not apply to a person performing OTI services on behalf of an OTI for which it is a disclosed agent
• Make comments submitted to the Commission regarding filed ocean common carrier and marine terminal operator agreements confidential
• Include provisions on “nonpublic collaborative discussions” between Commissioners

The above rule permits the Commission to consider policy issues more efficiently, more effectively address deceptive business practices of unlicensed OTIs, and creates an atmosphere that encourages even more candid comments from the public in response to filed confidential agreements.

The Commission also voted to issue a final rule that modifies hearing procedures governing the denial, revocation, or suspension of an ocean transportation intermediary license. More specifically, it designates that the Commission’s Administrative Law Judge will preside over such hearings and sets out clear procedures for the hearings. The changes in these rules will streamline the OTI hearing process and is another example of the commitment of the Federal Maritime Commission to continually seek ways to ease the regulatory compliance burden while continuing to protect the interests of the public and the integrity of the marketplace.

The rule modifying OTI hearing procedures will be published next week in the Federal Register and will become effective 30 days following publication. The rule implementing provisions of the Frank LoBiondo Coast Guard Authorization Act of 2018 must be reviewed by the Office of Information and Regulatory Affairs before it can be published in the Federal Register.

During closed session, Commissioners were briefed on global and domestic economic outlooks; developments and risks in the container shipping industry; and what challenges the industry faces in the coming year. The Commission was informed that US-China trade volumes were down by more than 5% during the first half of 2019 and that simultaneously, Southeast Asian nations have realized significant growth in export volumes to the United States. Monitoring if and how trade volumes and carrier service shift in response to developments in global trade policy will be a key part of the ongoing work of the Federal Maritime Commission in 2020.

Finally, Commissioner Carl W. Bentzel participated in his first Commission meeting since being sworn-in on December 9, 2019.