US FMC Eases Ocean Transportation Rules

The US Federal Maritime Commission (FMC) has voted to amend its rules involving Service Contracts and NVOCC Service Arrangements (NSAs) in order to ease regulatory burdens and make the agency’s rules more consistent with how the ocean shipping business is now practiced.

“The Commission examined regulatory requirements for service contracts and NVOCC Service Arrangements in light of current commercial practice and has eliminated a number of burdensome regulatory requirements that served as obstacles to efficient ocean transportation arrangements, added unnecessary transactional costs, and served no regulatory purpose,” Michael Khouri, FMC Acting Chairman, explained, adding that the action is in line with recent executive orders on reducing unnecessary and costly regulations.

Other commissioners joined Khouri in applauding the commission’s action.

“This final rule is an important first step toward eliminating unnecessary regulatory of compliance costs from our international supply chain. Of equal importance, the rule will increase commercial flexibility in freight transportation for American exporters and importers,” Rebecca Dye, FMC Commissioner, said.

“This regulatory adjustment will help expedite commerce through streamlining the contractual relationship between carriers, NVOCCs, and shippers,” William Doyle, FMC Commissioner, observed.

The rulemaking is the first comprehensive review of the commission’s service contract regulations in part 530 since promulgating the implementing rules pursuant to the 1998 Ocean Shipping Reform Act, according to the FMC.

Additionally, this is the first substantive revision to NVOCC Service Arrangements since being introduced in 2005.

The approved rulemaking allows the filing of sequential service contract amendments with the FMC within 30 days of the effective date of an agreement between shipper and carrier.

In addition, it allows up to 30 days for filing NVOCC Service Arrangement Agreements with the FMC after their effective date as well as additional time to correct technical data transmission errors from 48 hours to 30 days.

Finally, the rulemaking extends the period in which one can file a service contract correction request from 45 days to 180 days.

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