New Articles
  March 7th, 2017 | Written by

FMC Eases Ocean Shipping Regulations

[shareaholic app="share_buttons" id="13106399"]


  • New FMC rule is a step toward eliminating unnecessary compliance costs from international supply chains.
  • New FMC rule increases freight transportation flexibility for American exporters and importers.
  • New FMC rule streamlines contractual relationship between carriers, NVOCCs, and shippers.

The Federal Maritime Commission today voted unanimously yesterday to amend its rules involving service contracts and NVOCC service arrangements (NSAs) in order to ease regulatory burdens and make the agency’s rules more consistent with how the ocean shipping business is now practiced.

The rulemaking is the first comprehensive review of the commission’s service contract regulations since promulgating the rules under the Ocean Shipping Reform Act of 1998. This is also the first substantive revision to NVOCC service arrangements since they were introduced in 2005.

“Today’s action is consistent with recent executive orders highlighting the benefits of reducing unnecessary and costly regulations,” said Acting Chairman Michael Khouri. “The commission examined regulatory requirements for service contracts and NVOCC service arrangements in light of current commercial practice and has eliminated a number of burdensome regulatory requirements that served as obstacles to efficient ocean transportation arrangements, added unnecessary transactional costs, and served no regulatory purpose.”

The new rule makes the following changes to commission regulations:

• It allows the filing of sequential service contract amendments with the FMC within 30 days of the effective date of an agreement between shipper and carrier.
• It allows up to 30 days for filing NVOCC Service Arrangement Agreements with the FMC after their effective date.
• It allows additional time to correct technical data transmission errors from 48 hours to 30 days. • It extends the period for filing a service contract correction request from 45 days to 180 days.

Other commissioners joined Khouri in applauding the action. “I strongly support President Trump’s Executive Order on Reducing Regulation and Controlling Regulatory Costs,” said Commissioner Rebecca Dye. “In the spirit of the Executive Order, this Final Rule is an important first step toward eliminating unnecessary regulatory or compliance costs from our international supply chain. Of equal importance, the rule will increase commercial flexibility in freight transportation for American exporters and importers.”

“This regulatory adjustment will help expedite commerce through streamlining the contractual relationship between carriers, NVOCCs, and shippers,” added Commissioner William Doyle.

The commission first initiated action in this matter in February 2016 with the publication of an Advance Notice of Proposed Rulemaking. A Notice of Proposed Rulemaking (NPRM) was issued in August 2016. Certain proposed changes in the NPRM were not adopted by the Commission today as they would not necessarily have decreased business burdens.