The Federal Maritime Commission has published proposed rules that would represent the first substantive revision of regulations for forwarders and non-vessel-operating common carriers since the Ocean Shipping Reform Act of 1998.
The FMC is accepting comments on the proposal through July 31.
The proposed rules would affect ocean transportation intermediaries’ licenses, financial responsibility of OTIs, and activities of foreign-based NVOs. Several of the changes would increase OTIs’ compliance costs.
Ocean transportation intermediaries would have to renew their licenses every two years. The FMC is seeking comments on the process for renewing the approximately 4,500 existing OTI licenses that have no expiration dates.
The proposed rules would add circumstances under which an OTI license may be revoked or suspended.
OTIs will no longer be required to procure and maintain additional financial responsibility to cover unincorporated branch offices. Licensed foreign-based NVOs would have to establish a U.S. office qualified to do business in the state and operated by a bona fide employee.
Financial responsibility levels would increase by $25,000 for freight forwarders and licensed NVOs and $50,000 for foreign-based registered NVOs. Bonds, insurance or surety would have to be restored to the required amount within 60 days after paying a claim from the instrument.
A new three-tiered payment priority scheme for claims against the financial responsibility instrument would give shipper and consignee claims priority over common carriers, ports, terminals, and others.
The proposed regulations would eliminate full evidentiary hearings to appeal FMC decisions and instead require OTIs to submit written arguments to a hearing officer.