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Brokers and Forwarders Want FMC to Further Aid NVOCC Use of Negotiated Arrangements

Tuesday, April 28, 2015
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission is inviting through June 8 public comments on a petition seeking further regulatory changes regarding the use of negotiated rate arrangements and negotiated service arrangements by non-vessel-operating common carriers. The National Customs Brokers and Forwarders Association of America Inc. is requesting that the FMC initiate a rulemaking to revise its regulations in 46 CFR Part 532 to allow the inclusion of economic terms beyond rates in NRAs and permit NRAs to be modified at any time upon mutual agreement between an NVOCC and a shipper. The NCBFAA also wants this rulemaking to revise 46 CFR Part 531 to either eliminate the filing and essential terms publication requirement of NSAs or eliminate these regulations in their entirety.

In April 2011 the FMC exempted licensed NVOCCs who enter into NRAs with their customers from the requirement to publish in tariffs the rates they charge for cargo shipments. To qualify for this exemption such NVOCCs must meet certain conditions, including continuing to publish rules tariffs containing contractual terms and conditions governing shipments and providing those rules to the public free of charge, ensuring that the rates they charge are agreed to and memorialized in writing by the date cargo is received for shipment, and retaining documentation confirming the agreed rate and terms for five years and making that documentation available promptly to the FMC upon request. Such NVOCCs are also exempt from regulatory requirements regarding time volume rates, 30 days’ notice of tariff rate increases, carrier refunds due to a tariff error and adherence to published tariff rates. In July 2013 the FMC extended this regulatory relief to foreign-based unlicensed NVOCCs, provided they are properly registered with the FMC.

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