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  April 15th, 2016 | Written by

NCBFAA: FMC Not Going Far Enough with Service Contract Rulemaking

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  • NCBFAA: Proposed FMC rule would reduce unnecessary regulatory burdens.
  • NCBFAA: Proposed FMC rule is not far reaching enough to provide meaningful regulatory relief.
  • NCBFAA has been urging FMC to eliminate the NSA publication and filing requirements since their inception.

The National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) has submitted comments in response to an advance notice of proposed rulemaking recently published by the Federal Maritime Commission.

The rulemaking proposes several changes to the regulations pertaining to the timing within which amendments or corrections to service contracts and negotiated service agreements (NSAs) may be filed, and alerts industry participants to a more convenient way of filing NSAs and amendments or corrections via a web-based process.

In its letter, the NCBFAA expressed support for the proposed amendments because they reduce unnecessary regulatory burdens and ease the process of complying with filing and publication requirements.

But the NCBFAA does not believe that the proposals are far reaching enough to provide meaningful relief for the non-vessel operating common carrier (NVOCC) industry from costly, and, in the NCBFAA’s view, unnecessary regulatory burdens associated with NSA filings and reporting. On the contrary, the association requested that the commission consider a fundamental change to the regulation of NSAs by completely removing filing and essential terms publication requirements, instead of trying to make compliance with those requirements less cumbersome.

The NCBFAA has been urging the FMC to eliminate the NSA publication and filing requirements since their inception. According to the NCBFAA, NSA filing requirements have been introduced only to maintain a superficial parity in the way vessel operating common carriers (VOCCs) and NVOCCs are regulated. The association believes that this purported parity is not warranted because VOCCs and NVOCCs are not similarly situated, and their activities in the shipping industry are quite different.

The NCBFAA urged the commission to determine that given the inherent differences between NVOCCs and VOCCs, the identical regulation of agreements entered into by those two different classes of industry participants and their customers is not required. Instead, the agency should expand the proposed rulemaking to seek comments relating to a possible elimination of the filing and publication requirements for NSAs in their entirety.