On October 13, the FMC issued a proposed rule that would clarify and ease Agency regulation of service contracts and NVOCC service arrangements (“NSA”). Under the current regime, the terms of such contracts or NSAs either must be explicitly stated or must be “contained in a publication widely available to the public and well known within the industry.”1
The proposed rule reflects a developing derivatives model for the international liner shipping industry. While derivatives have been used for many business sectors, including the purchase of bunker fuels by carriers, utilization of this financial instrument specifically for the containerized cargo industry is still in a nascent state. The FMC’s action with respect to the proposed rule demonstrates the agency’s interest in the use of derivates and indices related to the purchase of cargo space by shippers (including NVO’s) from carriers.
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