No Service Contracts for Non-Compliant OTIs

Non-Vessel-Operating Common Carriers (NVOCCs) and Ocean Freight Forwarders (OFFs) must meet compliance obligations before they can do business with Common Carriers, including Vessel-Operating Common Carriers (VOCCs).

The Federal Maritime Commission (FMC) reminded Common Carriers to verify that NVOCCs and OFFs are fully compliant with all applicable regulatory and statutory requirements before accepting or transporting cargo for their accounts. This includes meticulous checks regarding licensing, registration, tariffs, and financial responsibility. Failure to adhere to these obligations may result in serious consequences, including fines and penalties.

To ensure fair and responsible practices, VOCCs are also urged to verify the compliance status of NVOCCs before entering into any Service Contract with them. The FMC directs industry players to refer to specific guidelines provided in 46 C.F.R. § 530.6 for a comprehensive understanding.

Additionally, the FMC strongly prohibits NVOCCs from knowingly and willfully engaging in an NVOCC Service Arrangement with another NVOCC that does not meet all the necessary statutory and regulatory requirements. Violations of this prohibition, as stated in 46 C.F.R. § 531.6(c), will be taken seriously.

The FMC maintains comprehensive lists of licensed NVOCCs and OFFs, including foreign-based unlicensed NVOCCs that have registered, along with records of each NVOCC's tariff location. This information serves to facilitate compliance and ensure transparency within the sector.

FMC Reminds VOCCs to File Timely & Accurate Contracts

The Federal Maritime Commission (FMC) is issuing a reminder to all vessel-operating common carriers (VOCCs) regarding the mandatory filing of service contracts and amendments in the Commission's SERVCON system. It is crucial that VOCCs adhere to the stipulated guidelines by submitting these documents no later than thirty (30) days after the effective date. Failure to comply with the service contract filing requirements as outlined in 46 CFR Part §530 may lead to fines or other penalties. To ensure compliance, filers must accurately input the effective date of the contract in the SERVCON system. Additionally, it is essential that any amendments made to contracts have prospective effect. Under no circumstances should contracts make reference to terms that are not explicitly included in the service contract, unless those terms are readily accessible to all parties involved and the Commission, as per 46 CFR §530.8. For any queries or further information concerning service contracts, please refer to the comprehensive guide on How to File Service Contracts or get in touch with tradeanalysis@fmc.gov.

FMC Proposes Way to Deal With Unreasonable Refusal

The Federal Maritime Commission (FMC) has issued a Supplemental Notice of Proposed Rulemaking (SNPRM) outlining its approach to implementing regulations that prohibit common carriers from unreasonably denying available cargo space to shippers.

This SNPRM is a continuation of the rulemaking process mandated by the Ocean Shipping Reform Act of 2022 (PL 117-146). In September 2022, the Commission released a Notice of Proposed Rulemaking (NPRM) titled "Definition of Unreasonable Refusal to Deal or Negotiate with Respect to Vessel Space" (Docket No. FMC-2023-0010).

To address the concerns raised during the public comment period for the NPRM, the Commission announced in January its decision to pursue an SNPRM, allowing for an additional public comment period instead of proceeding with a Final Rule.

The SNPRM introduces significant changes compared to the previous NPRM issued last year. These changes include:

1. Adding specific language to establish the criteria for a claim regarding refusal of cargo space accommodations.

2. Revising the definition of transportation factors to focus on considerations related to vessel operations.

3. Expanding the definition of the term "unreasonable" to provide a general definition and a non-exhaustive list of scenarios that constitute unreasonable conduct.

4. Clarifying that vessel space services are encompassed within the definition of vessel space accommodations.

5. Proposing a mandatory requirement for export policy documentation as an alternative to the previously suggested voluntary export strategy.

6. Removing the voluntary certification provision.

The public will have a 45-day period to submit comments in response to the proposals presented in the SNPRM. Detailed instructions on how to provide comments to the Commission will be included within the SNPRM document.

The Federal Maritime Commission encourages stakeholders and the public to actively engage in this rulemaking process, as their input is vital to shaping fair and effective regulations in the maritime industry.