R.G. Edmonson | Apr 18, 2011 4:55PM EDT
April 18 is the first day on which shippers may enter into binding agreements for transporting their cargo under rates negotiated with non-vessel-operating common carriers.
Under a Federal Maritime Commission rule that was approved Feb. 16, "Negotiated Rate Agreements" free an NVO from the need to maintain rate tariffs.
The rule only applies to FMC-licensed NVOs, which can use NRAs as an alternative to traditional tariff rates. The NVO must file an NRA before it receives the cargo and maintain records for five years. They also must post notice of NRAs in their tariff schedules, and remove any tariff access charges.
The exemption is something that non-asset carriers have been lobbying for since 1991. While there is wide support, others complain that the FMC did not extend the rule to foreign NVOs, putting them at a competitive disadvantage.
The National Customs Brokers and Forwarders Association of America on April 12 noted the exclusion of foreign NVOs as one of the reasons for immediately re-opening the proceedings that it started in 2003 that eventually led to the tariff exemption rule.
"The association believes - as does the commission itself - that there is more work to be done," wrote Edward Greenberg, general and transportation counsel for the NCBFAA. "The association is concerned that the passage of time will … further delay the elimination of barriers to efficient operations …"
NCBFAA noted that NRAs could not be amended to compensate for ocean carriers' general rate increases, nor could they be modified to reflect rapid rate changes in the marketplace. In addition, the Shipping Act's prohibitions against favoring one shipper over another remained in effect.
The NCBFAA also said that some FMC staff members assumed an "advocacy role" in the development of the rule. The association questioned if it was permissible under the Administrative Procedures Act. The letter said that staff positions ought to be publicly available for public inspection the same as comments from industry are public record.
-- Contact R.G. Edmonson at bedmonson@joc.com.
