Current bills (HR 2593, S. 1119) authorizing appropriations for the Federal Maritime Commission contain substantive terms which seem to forecast the path the regulatory agency is taking with respect to both tariff requirements and regulation of ocean transportation intermediaries.
The bills address some meaningful changes to the current antiquated tariff system. Combined with the FMC’s new Regulatory Reform Task Force, and the corresponding Notice of Inquiry issued by the FMC seeking specifics from the shipping public for deregulation, it appears the FMC may be taking a clear stance on tariffs. Acting Chairman of the Federal Maritime Commission, Michael Khouri, has made several public statements which confirm the conclusion that tariffs have no place in the current ocean transportation marketplace.
On the non-vessel operating common carrier side, there is a provision in the bills to remove the requirement that carriers must accept cargo only from OTI’s who have both appropriate tariffs and bonds. Under the proposed House and Senate versions of the bill, the only remaining requirement is that an OTI have appropriate bonds. The tariff requirement is specifically removed. When taken in context with the NOI, it appears that at least for NVOCCs, tariff requirements may be removed altogether. Interestingly, the House bill does not remove tariff requirements for OTIs when contracting with an ocean carrier. This may be an oversight that will be addressed in the FMC’s NOI proceedings, given the inconsistency it creates.
OTI License Requirements
A person in the U.S. may not currently act as an OTI unless that person is licensed. This prohibition has now been extended to include parties that “hold out by solicitation, advertisement or otherwise.” In other words, the prohibition is not restricted to just those performing OTI services without a license; it now includes how a company or person advertises itself. This aligns with the current focus of both the FMC and the Federal Motor Carrier Safety Administration, on household-goods movers and their practices. These types of companies are frequently found to advertise international moves even though they are not FMC licensed OTIs and there now appear to be greater scrutiny on them.
Ocean Common Carriers
Ocean common carriers will receive greater anti-trust scrutiny which will regulate their commercial negotiations in obtaining port services.
We are closely following these issues, the progress of both authorization bills as they move through Congress and the FMC’s Notice of Inquiry proceedings. Comments for the FMC NOI proceedings are due by July 5, 2017.