The Federal Maritime Commission has agreed to give shippers and carriers more ability to manage rate risk in service contracts through a new rule allowing contracting parties to agree to rates based on freight rate indices or other terms.
The rule, which takes effect March 7, gives parties a wider range of market data on which they can base contracts. Previously, if carriers and shippers wanted to refer to terms not explicitly written into their contracts, they were limited to those “in a publication widely available to the public and well-known within the industry.”
Allowing parties greater flexibility in contracting services shows an ongoing trend by the commission to keep regulation aligned with changes in the ocean shipping marketplace.
“In today’s marketplace, we can’t control the winds,” said FMC Chairman Richard A. Lidinsky Jr., “but we want shippers and carriers to have a range of options in how they set their sails.”
The rule may be found online at: http://www.fmc.gov/assets/1/Documents/Docket_11-17_Final_Rule.pdf.