FMC Chairman and Commissioner Discuss NVOCC Use of NSAs, Etc.
Federal Maritime Commission (FMC) Commissioner Harold Creel and FMC Chairman Steven Blust recently spoke1 on the status of the FMC's efforts to allow non-vessel operating common carriers (NVOCCs) to offer confidential service contracts to their shipper customers, the FMC's enforcement and oversight functions, etc.
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Highlights of their remarks are as follows:
Growth of NSA use has been slow. Commissioner Creel notes that in 2005 the FMC adopted a final rule that permits NVOCCs to enter into NVOCC Service Arrangements (NSAs) with other NVOCCs and with shippers' associations with NVOCC members. As a result, Creel opines that NVOCCs are now as unfettered to offer NSAs as ocean carriers are service contracts.
Creel observes that the first NSA was filed with the FMC on January 31, 2005, giving the FMC a full year of experience with NSAs. According to Creel, out of 3,398 NVOCCs operating in the U.S. foreign commerce, only 351 have registered with the FMC to become NSA filers. Of that group, only 53 NVOCCs have actually filed NSAs with the FMC. As of February 14, 2006, the FMC had received 222 original NSAs and 144 amendments to those contracts. According to Creel, three NVOCCs are responsible for almost half of those contracts.
Use of NSAs expected to significantly increase this year. Creel opines that the slow growth in the NSAs may be attributable to several factors, including the newness of the concept, NVOCCs may be waiting until they complete their negotiations with ocean carriers for service contracts for the 2006 season, etc. Creel also states that he expects the number of NSAs to have increased significantly by this time next year.
FMC is evaluating comments on authorizing joint NSAs by multiple NVOCCs. In his remarks, Chairman Blust noted that the FMC has requested industry comments on potential ways to authorize joint NSAs by multiple NVOCCs and that the FMC is currently evaluating the numerous comments it received.
(See ITT's Online Archives or 12/23/04 news, 04122320, for BP summary of FMC's final rule exempting NVOCCs from the tariff publication requirements of the Shipping Act , subject to conditional filing requirements. See ITT's Online Archives or 09/29/05 news, 05092910, for BP summary of FMC final rule that allowed NVOCCs and shippers associations with NVOCC members to act as shippers in NSAs. See ITT's Online Archives or 09/02/05 news, 05090220, for BP summary of FMC's notice of inquiry on possible changes to allow NSAs to be jointly offered by unaffiliated NVOCCs.)
FMC proceeding against numerous household goods moving companies. Blust also noted the FMC's enforcement and ocean transportation intermediary (OTI) oversight functions, by pointing out that in January 2006, the FMC's motion for a preliminary injunction against four companies and three individuals in its household goods proceedings which will prevent the respondents from operating in violation of the Shipping Act. According to Blust, this preliminary injunction will remain in effect pending the completion of the FMC's investigation.
(See ITT's Online Archives or 01/24/06 news, 06012415, for BP summary on the FMC's investigation of nine household goods moving companies to determine whether they violated the Shipping Act and FMC regulations by operating as NVOCCs in the U.S. trades without obtaining licenses, etc. and the FMC's injunction obtained by the FMC.)
1FMC Commissioner Harold Creel spoke on February 27, 2006 before the International Transportation Management Conference and FMC Chairman Steven Blust testified on March 1, 2006 before the House Transportation and Infrastructure Committee's Coast Guard Subcommittee.
Remarks of Commissioner Harold Creel (dated 02/27/06) available at http://www.fmc.gov/speeches/newsrelease.asp?SPEECH_ID=217.
Congressional testimony of FMC Chairman Steven Blust (dated 03/01/06) available at