Ocean cargo: Freight middlemen ask FMC for tariff exemption

Patrick Burnson, Executive Editor -- Logistics Management, 8/6/2008

SAN FRANCISCO—In an effort to level the playing field for smaller shippers, The National Customs Brokers and Forwarders Association of America Inc. (NCBFAA) is asking the Federal Maritime Commission (FMC) to give non-vessel operators of common carriage exemption from tariff filing.

 If granted, non-vessel-operating common carriers (or NVOCCs) would not be required to publish in tariff form any rates negotiated with individual shippers as long as those agreed upon rates were somehow memorialized in written form that could range from a formal contract to a simple exchange of emails.

“This would be a break for shippers who can’t move the volume of a Wal-Mart or Target,” said NCBFAA’s general counsel, Ed Greenberg. “It means one less step for them when they’re trying to book freight and expedite shipping.”

Greenberg told LM in an interview that the exemption would be voluntary, and that shippers or NVOCCs that preferred to continue to use published rate tariffs could continue to do so.

“The exemption would not be construed so as to convey antitrust immunity on NVOCCs,” he said.

Furthermore, the exemption would relate only to rate tariffs; rules tariffs would still need to be published and maintained. If approved, negotiated NVOCC rates would from this point forward be governed solely by contract law considerations. Meanwhile, service agreements would continue to file those with the FMC.

 “One aspect of current FMC regulatory policy that carries undue and totally unnecessary burdens is the requirement that NVOCCs publish and maintain rate tariffs,” NCBFAA president Mary Jo Muoio said in a statement.

Describing them as “anachronistic regulatory requirements,” she maintained that these published rate tariffs “are almost never reviewed or used by customers, that NVOCC rates are almost uniformly negotiated individually with individual customers and only later published in tariff form, and that the cost of tariff publication needlessly increases NVOCC costs, reducing their flexibility and competitiveness.”

To qualify, these negotiated rates would need to be documented, and the FMC’s staff would continue to have access to these negotiated agreements and the files of NVOCCs.

Finally, the exemption would be applicable only for licensed or registered NVOCCs, and companies unlawfully providing NVOCC services would not be able to properly engage in these activities.