FMC Votes on Rulemakings, Provides Briefings on Global Shipping Issues

The Federal Maritime Commission voted yesterday to seek public comments on two proposed rules aimed at clarifying and streamlining FMC regulations as well as leveraging technology to relieve regulatory burdens and increase efficiency. Commissioners also provided briefings related to recent developments in international shipping and efforts to address supply chain congestion. At yesterday’s meeting, the Commission welcomed Daniel Maffei who was sworn in on Monday as a Commissioner.

Proposed Rules – Agreements and Service Contracts/NVOCC Service Arrangements

The following proposed rules were developed after industry comment was received in response to advanced notices of proposed rulemaking published in February of this year.

Docket No. 16-04

Public comment is sought on a proposal that would revise rules applicable to ocean common carrier and marine terminal operator agreements, proposing a number of key changes to existing regulations. For example, the rule would revise the definition of “capacity rationalization” to include agreement authority that allows carriers to discuss or agree on the amount of vessel capacity supplied in a service or trade, and subject such agreements to the standard 45-day review period. The rule would also simplify the current low market share exemption to the agreement filing requirements and exempt simple space charter or slot exchange agreements between just two parties from the 45-day waiting period. The proposed rule would maintain the filing exemption for marine terminal services agreements but strengthen the requirement to provide such agreements upon request of the Commission. The rule would also provide additional clarity on the definition of “complete and definite” agreements.

Docket No. 16-05

Comment is also sought on proposed revisions to the rules on service contracts and non-vessel-operating common carrier (NVOCC) service arrangements (NSAs). The proposed rule, would reduce regulatory burdens in several areas and provide for increased flexibility by leveraging technology. For example, under the rule revisions service contract and NSA amendments could be filed 30 days after the effective date of any amendment. The rule would also encourage increased use of the automated web services for filing to increase efficiency and reduce filing costs.

To submit comments:

Once published in the Federal Register and on the Commission’s website, the public will have 60 days to submit comments in Docket No. 16-04, and 30 days to submit comments in Docket No. 16-05.

Briefings by Commissioners on Recent Developments

U.S.-China Bilateral Maritime Agreement Consultations & 8th U.S.-China Transportation Forum

Chairman Mario Cordero updated his colleagues on the 2016 U.S.-China Bilateral Maritime Agreement Consultations which took place in Los Angeles in early June. The consultations are government-to-government exchanges between relevant agencies from the United States and China with jurisdiction over shipping issues. Cordero co-lead the delegation and engaged his Chinese counterparts on matters related to the consolidation of Chinese shipping lines; changes in the alliance structures; the status of China COSCO Shipping as a “Controlled Carrier”; and NVOCC bond recognition.

Taking place concurrently to the Bilateral Maritime Consultations was the 8th U.S.-China Transportation Forum, a ministerial level bilateral meeting that covers policy issues related to all modes of transportation. Cordero engaged in sessions that addressed congestion, port productivity, environmental initiatives, and technology.

U.S.-Korea Bilateral Maritime Consultation

Commissioner Michael Khouri was a member of the U.S. delegation that traveled to the Republic of Korea June 13-17 for consultations with officials from the Ministry of Oceans & Fisheries. He briefed the Commission on the delegation’s activities while in Korea which included government-to-government exchanges and a tour of a key port facility in that country. The delegation conducted discussions with the Vice Minister and other senior officials from the Ministry of Oceans & Fisheries where a number of issues of reciprocal interest were addressed, including matters related to carrier alliances, which are the jurisdiction of the Federal Maritime Commission. These discussions were held in Sejong City. The delegation also had a meeting with U.S. Ambassador Mark Lippert in Seoul, and visited marine terminal facilities in Incheon where they had the opportunity to inspect the Sun Kwang Newport container terminal.

Panama Canal Expansion Dedication

Chairman Cordero and Commissioner William Doyle were both members of the official U.S. delegation that visited Panama to witness the opening of the newly expanded Canal that took place on June 26. Cordero and Doyle each provided a report on their participation in that event.

Supply Chain Innovation Teams Initiative

Commissioner Rebecca Dye reported on the status of the Supply Chain Innovation Teams Initiative that she is leading. In her update, Dye noted that at their launch meetings in early May, the three teams identified improving supply chain visibility as be most effective way to increase the reliability and effectiveness of supply chains. The teams also agreed, at the May meeting, to pursue the development of a national supply chain information portal that could be adopted for use by any port in the country. Since then, the Commissioner advised, the teams have been meeting regularly to discuss and refine the critical information needs that, when met, would maximum supply chain coordination and efficiency. The approach, she said, would provide no “quick fix,” but reported that the project was making great progress.

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.