Marine Link
Friday, December 14, 2018

New Rule Creates Flexibilities for NVOCC Agreements

Maritime Activity Reports, Inc.

July 19, 2018

© Jelle van der Wolf / Adobe Stock

© Jelle van der Wolf / Adobe Stock

A Final Rule published today by the U.S. Federal Maritime Commission (FMC) offering deregulatory flexibilities for non-vessel-operating common carrier (NVOCC) negotiated rate arrangements (NRAs) and NVOCC service arrangements (NSAs) will go into force on August 22, 2018.

The key changes to NRAs allow them to be amended at any time; allow the inclusion of non-rate economic terms; and, allow an NVOCC to provide for shipper’s acceptance of the NRA by booking a shipment. NSAs will become easier and more attractive to use by removing filing and essential terms requirements.

"These regulation amendments for NSAs and NRAs will benefit American consumers and the carrier industry – both vessel operators and NVOCCs – by expanding choices for shippers, reducing regulatory requirements, and increasing efficiencies in contracting for ocean shipping services. The National Customs Brokers & Forwarders Association of America petition has had a long road here and they must be commended for their work. The time and effort from all industry participants has been welcomed and worthwhile. I remain committed to proactively considering stakeholder requests to address outdated, unnecessary, or unduly burdensome regulations. I also welcome such comments on statute requirements that may be addressed by the Commission via Section 16 exemption processes," said Acting Chairman Michael A. Khouri.

Commissioner Rebecca Dye noted that "This is one of the first pieces of major deregulation accomplished by the Commission and I am anxious to build upon this momentum."

NSAs and NRAs are instruments created by the FMC, at the request of shipper and carrier stakeholders, respectively in 2004 and 2010. They provide shippers and OTIs with a more efficient way to comply with Shipping Act reporting requirements while relieving them from the tariff filing process.

The FMC voted on June 6, 2018 in favor of moving forward with a proposed draft Final Rule in Docket 17-10, "Amendments to Regulations Governing NVOCC Negotiated Rate Agreements and NVOCC Service Arrangements".

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