Letters: UPS move will open door to reform

Letters: UPS move will open door to reform

UPS move will open door to reform

I am somewhat surprised that the JOC did not completely investigate the facts on the United Parcel Service article ("UPS asks confidential NVO contracts," July 28).

Your article states that UPS took this action "without the knowledge of the NVOCC-GAC (NVO-Government Affairs Conference)". A simple call to me would have proven this false. Also, you mention that the NVOCC-GAC was "making noises" about seeking confidential contracting rights. The NVOCC-GAC has in fact set out the blueprint for this and other actions which mark a huge shift in the industry. UPS's action opens the door for most of the members of the NVO-GAC such as Emery, Airborne, DHL-Danzas, and most other members of the NVOCC-GAC with substantial assets involved in intermodal logistics arrangements with shippers.

UPS continues actively on the Board of the NVOCC-GAC as a Director and also as an important member of the Managing Committee of the GAC. The NVOCC-GAC believes that this is the beginning of a multi-faceted approach urgently needed to adjust currently antiquated regulations to substantial commercial changes which came about after OSRA. The Congressional scheme of regulation, in fact, provides for this type of regulatory relief in its "Exemption" provisions of OSRA. Congress, in fact, simplified the standards necessary for this type of relief after OSRA.

These industry changes since OSRA involve:

a) The participation in logistics activities by large firms such as UPS,

FedEx, DHL-Danzas and others through acquisitions;

b) The proliferation of ocean carrier-owned logistics companies, and

c) A desire by shippers to enjoy comprehensive logistics contracts with their logistic providers.

The NVOCC-GAC applauds this first volley of reform by UPS, and those who will follow suit. This should be the first of many petitions from many different directions. These changes are industry mandated, not special interest-driven. Tariff reform, that antiquated form of doing business, will soon see its day of reform as well.

Carlos Rodriguez

General Counsel

NVOCC-GAC

An " utterly senseless tariff filing requirement"

Monday's report on JoC Online that UPS seeks to challenge the FMC on the right of NVO's to sign confidential contracts meshed nicely with Bill Mongelluzzo's report of the differences in practice between trans-Pacific and Asia-European trade lanes. If we're lucky, a resolution of UPS's problem could create more uniformity worldwide, and at the same time open the door for more simplicity here.

As Annu Mangat wrote, the FMC is in a tight spot, and if history is any guideline, will probably not differentiate between asset-based and non- asset-based NVOs. Nor will it change its mind about NVOs in general. It's to be hoped that the buck will be passed back to Congress, and that it would lead to a reexamination of anti-trust immunity, and the utterly senseless tariff filing requirement.

Whatever results from a reevaluation of the current Shipping Act will certainly have an effect on trans-Pacific and Asia-Europe procedures.

We owe UPS a debt of gratitude.

M. Sigmund Shapiro

Chairman

Samuel Shapiro & Co., Inc.