You’d hardly know, from all the talk around the transportation world in recent weeks, that we’re living in an era of deregulation.
That was certainly the case last week in Washington, where the Federal Maritime Commission was hearing arguments over whether to exempt licensed non-vessel-operating common carriers from certain tariff publishing requirements. In a sense, the case itself is a victory for those who have advocated for more than a decade that deregulation in transportation, which has come so slowly to the ocean shipping world, should be extended.
But the reality is this is not about whether the FMC should be taking this step but whether the agency is reaching far enough. That is, why stop with this rule-making, with its careful fences around which operators must publish tariffs and which must not. The real question here is why any form of tariff publishing must remain at all for the broad NVO industry and, to take the idea to its logical conclusion, for the carriers that operate the ships.
Extending the exemption to carriers would, in fact, eliminate one of the arguments some of the few opponents of the rule make for saving tariff publishing requirements — that it would give NVOs unfair advantage over the vessel operators that are still required to publicly post their rates. In practical terms, that’s not a particularly serious concern. Vessel operators, after all, are free to charge whatever they like, to make money or, as they did last year, lose money based on market conditions and marketing acumen.
Although carriers have taken no formal stance for or against the proposed exemption on NVOs, they offered the FMC only minor points about the substance, suggesting there’s no serious opposition among carriers generally to dropping rate publishing for their customers.
The toughest opposition came as no surprise at all: It was from two tariff publishers, DPI and GMTS, that stand to lose businesses when NVOs no longer have to update published rates with the kind of timely intensity that marks today’s shipping markets. Their argument is that eliminating filed rate tariffs would harm commerce. Reducing costs and complexity for the market that moves goods, of course, would harm the commerce of those companies that benefit from the bloated inefficiencies spawned by outdated regulations.
When we talk about commerce, we’re talking about shippers, and there is no hesitation from shippers when it comes to tariff filing.
“The substantial costs associated with maintaining tariffs imposes a substantial regulatory burden on NVOCCs,” Peter J. Gatti, executive vice president of the National Industrial Transportation League, wrote to the FMC. “The continued imposition of such unnecessary costs . . . stifles potential industry growth and development.”
The NITL believes the FMC could go further by allowing non-U.S. freight forwarders to get licenses so they can gain the exemption.
The group, which represents shippers but whose membership includes carriers, hasn’t decided yet whether to support exempting carriers from rate publishing. But then, market reality may already have taken care of that.
“How many people in the ocean shipping business,” Gatti asks, “are paying strictly the published tariff rate?