FMC to Revisit Co-Loading Regulations

The Federal Maritime Commission has set up a cross-bureau working group to review and refine co-loading rules.

FMC Chairman Michael Khouri said this is a ‘must-do’ project and part of the agency’s regulatory reform initiative. While he cannot predict the final result, he looks forward to its completion and to discuss with his colleagues at FMC the co-loading regulations.

“Differences of the definition of co-loading between the commission and other [federal] agencies, such as Customs and Border Protection (CBP), and even within the commission, has created confusion among stakeholders,” Khouri said to online attendees of the National Customs Brokers and Forwarders Association of America (NCBFAA) Government Affairs Conference on Sept. 14.

The last time the FMC considered its co-loading requirements was way back in 2004 and no further action was taken regarding that matter.

“It is time for the commission to revisit the co-loading rules in light of the continuing evolution of the competitive container shipping industry and changes in commission regulations over the last 16 years, including the important effects that NRAs (negotiated rate arrangements) and NSAs (NVOCC service arrangements) have had in bringing greater rate flexibility to the NVO (non-vessel-operating common carrier) market,” Khouri told the NCBFAA.

Other enforcement policy reviews included the commission’s response to unauthorized access to service contracts.

Khouri said the FMC is looking into a concern from the NCBFAA that some ocean carriers are inserting a clause into their standard bill of lading that lumps forwarders, consolidators and customs brokers among “shippers” who are responsible for paying freight and related accessorial charges.

FMC Increasing Enforcement Against Erring Forwarders & Consolidators

Forwarders and consolidators engaged in wrongdoing such as operating without the required license or bond and offering ocean carriers misdeclared hazardous cargoes should watch out.

Michael Khouri, Chairman of the Federal Maritime Commission, said his agency has increased its enforcement over these violators.

The FMC enhanced its oversight of agency enforcement actions in December by revising its delegations of authority to the Bureau of Enforcement and revising procedures for initiating and settling enforcement actions.

Under the new procedure, commissioners are required to vote to approve the initiation of compromise negotiations by the FMC’s Bureau of Enforcement. Commissioners must also approve any compromise agreements by the bureau before the agreement becomes final.

Khouri, who attended the National Customs Brokers and Forwarders Association of America (NCBFAA) Government Affairs Conference on Sept. 14, told NCBFAA members that this seemingly modest change is actually important for them.

“I’m confident that, in the end, these changes will achieve a better result for both the commission and its stakeholders,” he said.

The FMC’s new enforcement procedure is modeled after the decades-old process used by the U.S. Security and Exchange Commission. 

Company Pays $40,000 Penalty for Operating Without OTI/NVOCC License

The Federal Maritime Commission ordered International Global Logistics, Inc., to pay $40,000 in compromise of all civil penalties for knowingly and willfully performed the services of an ocean transportation intermediary/non-vessel operating common carrier without having obtained a license to perform such services from the FMC.

The FMC also alleged that IGL did not file a surety bond or other evidence of financial responsibility, and did not publish a tariff, in violation of the Shipping Act of 1984. IGL, located in San Leandro, Calif., entered into a compromise agreement with the FMC in March 2019.