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FMC Considers Updating Regulations on Carrier/MTO Agreements

Tuesday, March 01, 2016
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission is seeking comments through April 4 on possible modifications to its rules governing agreements by or among ocean common carriers and/or marine terminal operators as well as possible modifications to its rules on the delegation of authority to and redelegation of authority by the director of the Bureau of Trade Analysis.

The modifications under consideration include the following.

- The definition of “capacity rationalization” would be revised to mean the authority in an agreement by or among ocean common carriers to discuss, or agree on, the amount of vessel capacity supplied by the parties in any service or trade within the geographic scope of the agreement. This would exclude all vessel sharing arrangements from qualifying for a low market share exemption from the provision that agreements and modifications may not become effective until after a 45-day review period.

- A new exemption from this 45-day waiting period would be established for agreements among ocean common carriers that contain non-exclusive authority to charter or exchange vessel space between two individual carriers and do not contain specified authorities, such as rate or capacity rationalization authority.

- The lower market share threshold of 30 percent when the parties to the agreement are members of another agreement in the same trade or sub-trade containing forms of rate, pooling, service contract or capacity rationalization authorities would be eliminated. The threshold would instead be set at 35 percent regardless of whether the parties participate in any other agreements in the same trade or sub-trade.

- All marine terminal operators participating in any conference or discussion agreement on file and in effect at the FMC would have to submit to the FMC all of their effective terminal services agreements, which implement programs addressing issues such as security and safety measures, environmental standards, and port operations and congestion, and any amendments thereto.

- The filing exemption for further agreements addressing stevedoring, terminal and related services would be eliminated and replaced with a list of more narrowly defined, specific services that are suitable for an exemption in conformity with the limits originally intended by the FMC.

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