FMC Issues "Notice of Inquiry" On Possible Changes to Allow NSAs to be Jointly Offered By Unaffiliated NVOCCs
The Federal Maritime Commission (FMC) has posted to its Web site a Notice of Inquiry (NOI) requesting comments by October 6, 2005 on possible changes to its tariff publication exemption provided to non-vessel operating common carriers (NVOCCs) in NVOCC Service Arrangements (NSAs).
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In December 2004, the FMC issued a final rule that exempted NVOCCs from certain tariff publication requirements of the Shipping Act of 1984 and allowed NVOCCs to issue NSAs, subject to certain conditions and limitations. The limitations in the final rule included two that were controversial - that NVOCCs are precluded from entering into NSAs with other NVOCCs or with shippers' associations that have NVOCCs as members, and that two or more NVOCCs cannot offer joint NSAs unless they are corporate affiliates.
In August 2005, the FMC published a proposed rule to allow NVOCCs and shippers' associations with NVOCC members to act as shippers in NSAs. (See ITT's Online Archives or 08/05/05 news, 05080505, for BP summary of FMC's proposed rule.)
The FMC is now addressing the other controversial limitation in the FMC's December 2004 final rule by requesting comments on whether it should further expand the tariff publication exemption to permit NSAs to be jointly offered by unaffialiated NVOCCs.
FMC Seeks Comments on Specific Questions
Specifically, the FMC is seeking comments on the following list of questions (partial list):
In what manner could two or more unaffiliated NVOCCs jointly offer NSAs? Would two or more NVOCCs use a single document to offer their services as carriers to other NVOCCs acting as shippers? Would two or more NVOCCs offer identical services or rates in separately-filed NSAs? Are there other possibilities?
How would rates and defined service levels for such jointly offered NSAs be determined?
Would unaffiliated NVOCCs jointly offering NSAs keep the terms of such NSAs confidential from non-participating NVOCCs? From other shippers (including NVOCCs)?
How would such an exemption meet the statutory requirements of section 16 of the Shipping Act of 1984? Would such an exemption cause a substantial reduction in:
- Competition among NVOCCs;
- Competition between NVOCCS and vessel-operating common carriers (VOCCs);
- Competition among beneficial cargo owners; and
- Other competition?
Would such an exemption cause detriment to commerce by any general or specific adverse economic impacts on the carriage of cargo in the U.S.-foreign trade or U.S. commerce generally?
What might be the benefits or harm to beneficial cargo owners of jointly-offered NSAs?
Do any issues with regard to NVOCC financial responsibility arise stemming from jointly-offered NSAs? For example, should a joint bond or higher individual bond be required for NVOCCs that jointly offer NSAs? If so, how should the amount be determined?
Should the contract details which must be made publicly available ("essential terms") be more extensive for jointly offered NSAs than for other NSAs? For example, should the Commission require that the identities of each of the NVOCC carrier parties to the jointly offered NSA be made public?
Are there any additional procedures (e.g. registration, reporting, monitoring, measuring) that should be considered to ensure that each jointly-offered NSA does not result in a substantial reduction in competition or detriment to commerce?
The FMC states that in order to best facilitate its consideration of the issues raised in the NOI, commenters should provide detailed responses, and should supply examples whenever feasible.
- written comments due by October 6, 2005
FMC contact - Amy Larson (202) 523-5740
FMC NOI (D/N 05-06) available at http://www.fmc.gov/file.asp?F=DBB4154AEB6946EDB69BF299A8B34D00%2Ehtm&N=05%2D06NoticeofInquiry%2Ehtm&C=docket_activity.