FMC Grants Exemption for NVOCC Tariff Relief

The National Customs Brokers & Forwarders Association of America Inc. (NCBFAA)’s petition for a limited exemption from certain tariff requirements of the Shipping Act of 1984 was granted by a recent vote of the Federal Maritime Commission (FMC). In a 3-1 decision, the FMC voted to issue a Notice of Proposed Rulemaking (NPRM) to provide non-vessel operating common carriers (NVOCCs) with an exemption from the requirement and associated cost of publishing rates under the Shipping Act of 1984.

The NCBFAA was able to generate broad public support from a wide range of other interests, including the shipper community (through the National Industrial Transportation League), government agencies (the Department of Transportation and the Department of Justice), other trade associations (including the New York/New Jersey Forwarder Broker Association) and the carriers themselves.

The exemption sought by the NCBFAA, and approved by the FMC, has the following parameters:

● The exemption is voluntary, so that NVOCCs may choose whether they wish to utilize the exemption.
● The exemption is limited to rates, so that rules tariffs are still required.
● The exemption would technically excuse NVOCCs from having to either publish rate tariffs or adhere to the rate tariffs that are published.
● Any NVOCC utilizing the exemption would need to publish a notice in its rules tariff that it has chosen to operate under the exemption.
● Public access to the NVOCC’s rules tariff must be granted free of charge.
● The unpublished, negotiated rates must be agreed to and memorialized in writing in a clear way in which there is no confusion about the applicable rate.
● The negotiated rate documentation must include “prominent notice of the existence and location of the rules tariff.”
● The documentation memorializing the rates must be retained for five years and made available for public inspection.

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