A free market victory

The Federal Maritime Commission took several steps yesterday to reduce regulatory burdens and bring cost savings and flexibility to the shipping industry and the customers they serve.

By ·

The Federal Maritime Commission took several steps yesterday to reduce regulatory burdens and bring cost savings and flexibility to the shipping industry and the customers they serve.

Chief among the achievements, though, was the lifting of rate-tariff publication requirements for Non-Vessel-Operating Common Carriers:


The Commission voted 3-1 to issue a final rule that will relieve more than 3,300 licensed Non-Vessel-Operating Common Carriers (NVOCCs) from the costs and burdens of publishing in tariffs the rates they charge for cargo shipments.

As we have noted in this column before, the Shipping Act gives the Commission authority to grant exemptions from its requirements if doing so will not result in substantial reduction in competition or detriment to commerce.

The final rule will be issued by February 23, and NVOCCs who follow its conditions will be relieved of rate publication requirements 45 days after the rule is published in the Federal Register. According to comments filed with the Commission, this action could save each of these businesses up to $200,000 per year.

The final rule establishes an instrument called a negotiated rate arrangement. Licensed NVOCCs who enter into negotiated rate arrangements with their customers will be exempted from the requirement of publishing their rates in tariffs if they meet conditions that include:

• NVOCCs would continue to publish rules tariffs containing terms and conditions governing shipments;
• NVOCCs would be required to provide those rules to the public free of charge;
• Rates charged by NVOCCs must be agreed to and memorialized in writing by the date cargo is received for shipment; and
• NVOCCs must retain documentation of the agreed rate for a period of five years, and must make that documentation available promptly to the Commission upon request.

“After a year of work and many years of debate, the Commission has provided thousands of dollars per year in cost savings to these critical U.S. supply chain businesses and the hundreds of thousands of exporters and importers they serve,” said FMC Chairman Richard A. Lidinsky, Jr.

We could not agree more.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Digital Issue: The Current State of Third-Party Logistics Services
It has become quite clear that logistics professionals are now facing an unprecedented set of challenges. From tightening capacity, to ongoing regulation hurdles, to the complexity brought on by e-commerce, today’s shippers are transforming the way they manage their logistics operations.
Download Today!
From the June 2017 Issue
Here are five trends that every shipper­—and potential shipper—must watch as the demand for experienced logistics and supply chain professionals soars.
2017 Rail/Intermodal Roundtable: Volume stable, business steady
Cross-Border Logistics: NAFTA tune-up time
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Women in Logistics: Breaking Gender Roles to Win the War for Talent
In this session you'll hear from a panel of women who are now leading top-level logistics and supply chain operations. The panel will share their success stories as well as advice for women who are now making their way up the ladder.
Register Today!
EDITORS' PICKS
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...
The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...

2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...