May 14, 2012 Non-Vessel Operating Common Carriers Due for a Facelift The Federal Maritime Commission (FMC) has its sight set on a “top-to-bottom” makeover of the rules governing non-vessel operating common carriers (NVOCC). That was the message from the FMC’s Chairman, Richard Lidinsky, Jr., at the annual meeting of the National Customs Brokers & Forwarders Association of America. The chairman explained the FMC is planning updates to licensing and financial responsibility regulations for NVOs and freight forwarders. The FMC plans to modernize the rules in the coming months. A History Lesson In his speech, Ledinsky shared a history lesson on the FMC and its handling of intermediaries. The birth of NVOCCs occurred in 1961 when the Federal Maritime Board ruled that consolidators who tool possession of cargo and acted as shippers should be considered common carriers. That ruling meant that even though NVOCCs were subject to tariffs, they were not licensed. Congress added a license requirement in 1998. Later, a debate over exempting NVOCCs from the required filing of tariffs resulted in the relaxing of tariff requirements. The FMC allowed NVOCCs to enter confidential service contracts. However, that was not the end of the debate. Fast forward to 2011, and the FMC exempted licensed NVOCCs from publishing rates in tariffs, provided NVOCCs used a Negotiated Rate Agreement (NRA). Time for Reform The FMC Chairman outlined two steps for reform. The first focuses on simplifying documentation and other requirements that do not add much value. The second step reviews the following three options. Expanding the NRA exemption to foreign, unlicensed NVOCCs Adding non-rate terms to NRAs Trimming the current prohibition on amendments to NRAs John Nikolich, Director Global Marine, expressed Odyssey Logistics & Technology’s support. “As a member of the NVO community, OL&T supports the efforts of the FMC and the Trade to bring about meaningful change which can reduce regulatory setbacks and facilitate the safe and secure movement of international cargo across the globe.” A copy of Chairman Lidinsky’s speech is available at the FMC site.