R.G. Edmonson | Sep 09, 2011 4:12PM EDT
Shippers and carriers will have greater latitude in negotiating index-based service contracts if the Federal Maritime Commission approves regulation allowing more indices to be used.
The commission voted Thursday to draft regulation allowing service contract parties to use freight rate indices or other terms as long as they are “readily available the parties and the commission.” The commission currently only allows the use of the Shanghai Containerized Freight Index and the World Container Index.
A commission official said that the rule will cover any outside reference or term, including a revenue index and the Trans-Pacific Revenue Index, which was released by the Transpacific Stabilization Agreement two week ago.
The FMC said so far it has more than 50 freight index-based contracts on file. Commission staff are expected to complete a draft of the new regulation in time for the FMC’s Oct. 5 meeting.
-- Contact R.G. Edmonson at bedmonson@joc.com.