FMC Issues Proposed Rule to Grant Economic Relief to NVOCCs

The Federal Maritime Commission has issued a proposed rule that would relieve nearly 3,300 FMC-licensed non-vessel-operating common carriers (NVOCCs) from the costs and burdens of publishing in tariffs the rates they charge for cargo shipments.

Comments on the proposed rule are due by June 4, 2010. If an interested party requests an opportunity to present oral comments to the FMC by May 14, 2010, it will also hold a public meeting to receive those comments on May 24, 2010.

FMC Proposes Relief in the Form of Negotiated Rate Arrangements

The proposed rule, when final, would establish an instrument called a "negotiated rate arrangement." Licensed NVOCCs who enter into negotiated rate arrangements with their customers would be exempted from the requirement of publishing their rates in tariffs if certain conditions were met, including:

• 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 and terms for each shipment for a period of five years, and must make that documentation available promptly to the FMC on request.

(Chairman Lidinsky and Commissioners Dye and Khouri voted to issue the proposed rulemaking. Commissioner Brennan dissented.)

(See future issue of ITT for details of proposed rule.)

FMC press release on proposed rule (dated 04/29/10) available at http://www.fmc.gov/speeches/newsrelease.asp?SPEECH_ID=315

FMC proposed rule (D/N 10-03, issued 04/29/10) available at http://www.fmc.gov/userfiles/pages/file/NVOCC%20Tariff%20Exemption%20NPRM.pdf