FMC’s New Rule Exempts Licensed NVOCCs from Tariff Publication Requirements

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On February 16, 2011, the Federal Maritime Commission (“FMC” or “Commission”) adopted new regulations which provide non-vessel operating common carriers (“NVOCCs”) with an exemption from tariff publication requirements of the Shipping Act of 1984.1 Under the new regulations, to be codified at 46 C.F.R. Part 532, NVOCCs may enter into Negotiated Rate Arrangements (“NRAs”) with individual shippers without publishing and/or adhering to rate tariffs for ocean transportation. According to the Commission record, the exemption could save each of 3,300 licensed NVOCCs up to $200,000 per year.

The new regulations also provide additional flexibility to qualifying NVOCCs. To begin with, NVOCCs may decide whether or when to use NRAs. In other words, NVOCCs may use NRAs for all of their services or some of their services (while providing other services pursuant to their published tariffs). The final rule also allows NVOCCs to enter into NRAs with other NVOCCs, and permits affiliates of “NRA shippers” (which is defined to include NVOCCs) to use NRAs so long as their names are included. A single NRA can cover more than one shipment and may include all of the components or just base rates. Nevertheless, NVOCCs using NRAs are still subject to the Shipping Act Sections 10(b)(4) (which prohibits common carriers from unfair or unjustly discriminatory practices in services pursuant to a tariff) and 10(b)(8) (which prohibits common carriers from undue or unreasonable preference or advantage or undue or unreasonable prejudice or disadvantage for tariff service).

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Published In: Administrative Agency Updates, General Business Updates, Maritime Updates, Transportation Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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