FMC's Proposed Rule on NVOCC Service Arrangements (Part III)

This is Part III of a multi-part series of summaries on this proposed rule regarding NVOCC service arrangements (NSAs), and covers the proposed regulatory text of 46 CFR 531.4 - 531.6, as follows:

Confidentiality - 531.4

According to the FMC, proposed 46 CFR 531.4(a) would state that all NSAs and amendments to NSAs filed with the FMC would, to the fullest extent permitted by law, be held in confidence by the FMC.

Proposed 46 CFR 531.4(b) would state that nothing contained in proposed Part 531 would preclude the FMC from providing certain information from or access to NSAs to another agency of the U.S. federal government.

Proposed 46 CFR 531.4(c) would state that parties to a filed NSA could agree to disclose information contained in it. Breach of any confidentiality agreement contained in an NSA by either party would not, on its own, be considered a violation of these rules.

Duty to File - 531.5

Proposed 46 CFR 531.5(a) would state that the duty under Part 531 to file NSAs, amendments and notices, and to publish statements of essential terms, would be upon the NVOCC party to the NSA.

Proposed 46 CFR 531.5(b) would provide that the FMC could not order any person to pay the difference between the amount billed and agreed upon in writing with a common carrier or its agent and the amount set forth in an NSA by that common carrier for the transportation service provided.

Proposed 46 CFR 531.5(c) would state that filing would be accomplished by any duly agreed-upon agent, as the parties to the NSA may designate, and subject to conditions as the parties may agree.

Registration. Proposed 46 CFR 531.5(d) would state that authority to file or delegate the authority to file must be requested by a responsible official of the NVOCC in writing by submitting to the Bureau of Trade Analysis (BTA), either by mail to 800 N. Capitol Street, N.W., Washington, D.C. 20573 or by facsimile to (202) 523-5767, a completed NSA Registration Form (FMC-78).

The Office of Information Technology (OIT) would provide approved Registrants a log-on identification number (I.D.) and password for filing and amending NSAs, and would notify Registrants of such approval via U.S. mail.

NVOCC Service Arrangements - 531.6

Proposed 46 CFR 531.6 would provide for the following (partial list):

Authorized persons would file. Proposed 531.6(a) would state that authorized persons would file with BTA, in the manner set forth in proposed Appendix A of Part 531, a true and complete copy of every NSA or amendment before any cargo moves pursuant to that NSA or amendment.

NSA terms. Proposed 531.6(b) would provide that every NSA filed with the FMC would include the complete terms of the NSA including, but not limited to, the following:

the origin port ranges in the case of port-to-port movements and geographic areas in the case of through intermodal movements;

the destination port ranges in the case of port-to-port movements and geographic areas in the case of through intermodal movements;

the commodity or commodities involved;

the minimum volume or portion;

the service commitments;

the line-haul rate;

liquidated damages for non-performance (if any);

duration, including the effective and expiration date;

the legal names and business addresses of the NSA parties; the names, titles and addresses of the representatives signing the NSA for the parties; and the date upon which the NSA was signed. Subsequent references in the NSA to the signatory parties would be consistent with the first reference.

a description of the shipment records which would be maintained to support the NSA and the address, telephone number, and title of the person who would respond to a request by making shipment records available to the FMC for inspection under proposed 46 CFR 531.12; and

all other provisions of the NSA.

Other requirements. Proposed 531.6(d) would provide for other requirements regarding NSA filing, as follows:

For service pursuant to an NSA, no NVOCC could, either alone or in conjunction with any other person, directly or indirectly, provide service in the liner trade that is not in accordance with the rates, charges, classifications, rules and practices contained in a filed NSA.

For service pursuant to an NSA, no NVOCC could, either alone or in conjunction with any other person, directly or indirectly, engage in any unfair or unjustly discriminatory practice in the matter of rates or charges with respect to any port; and

For service under an NSA, no NVOCC could, either alone or in conjunction with any other person, directly or indirectly, give any undue or unreasonable preference or advantage or impose any undue or unreasonable prejudice or disadvantage with respect to any port.

(See future issues of ITT for additional summaries.See ITT's Online Archives or 11/01/04 and 11/02/04 news, 04110105 and 04110215, for Parts I and II.)

- written comments must be submitted no later than November 19, 2004

FMC proposed rule (D/N 04-12, served 10/28/04) available at http://www.fmc.gov/Dockets/04-12%20Proposed%20Rule.htm