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FMC Regulations on Carrier/Marine Terminal Operator Agreements to be Updated

Monday, August 15, 2016
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission is proposing to modify its rules governing agreements by or among ocean common carriers and/or marine terminal operators as well as its rules on the delegation of authority to and redelegation of authority by the director of the FMC’s Bureau of Trade Analysis. Comments on this proposed rule are due no later than Oct. 17.

The modifications being proposed 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.

- 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.

The FMC has decided not to propose to require all MTOs participating in any conference or discussion agreement on file and in effect at the FMC 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. Such a requirement may be unnecessarily broad, the FMC states, because the most imminent need for terminal services agreement information pertains to particular MTO discussion agreements whose actions are more likely to affect competition in the terminal services market. The FMC believes it can use its existing authority to acquire such agreements but is proposing to add a provision requiring exempted agreements to be submitted within 15 days of a written request.

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