FIATA demands level playing field for forwarders in US

At the recent FIATA Headquarters Session 2011 (17 – 20 March in Zurich) members discussed the discrimination against non-US based NVOCCs in the United States. President Jean-Claude Delen calls for a new plan of action to force further amendments to the relevant legislation.

Zurich, April 2011. „The 2011 Headquarters Session was the most successful in the history of the International Federation of Freight Forwarders’ Associations (FIATA). We were able to drive many industry issues forcefully forward. However, we had to conclude that unfortunately little progress has been made in the issue of NVOCC tariff publication* over the past 20 years. We have long protested the discrimination against NVOCCs in the USA, especially with respect to tariff publication and bond posting requirements. We also continue to be concerned over the issue of data confidentiality in dealings with the USA”, says FIATA President Jean-Claude Delen. “The new FMC ruling to exempt NVOCCs in the USA with a license from the FMC, but not NVOCCs outside the USA has deeply disappointed us. The FIATA Work Group Sea Transport will discuss how to proceed further at its next meeting on 16–17 June, 2011.”

In 1991, FIATA first requested the Federal Maritime Commission (FMC) to exempt NVOCC from the tariff filing required under the 1984 Shipping Act. This led to changes in the law in the Ocean Shipping Reform Act of 1998 that expanded the FMC’s exemption powers. After many hearings the FMC published a final rule on February 25, 2011 which will become effective April 18, 2011. The FMC is exempting licensed NVOCC that enter into negotiated rate arrangements (NRA)* from the tariff rate publication requirements of the Shipping Act of 1984. This means that the agreed rate would be confidential, and not disclosed to other shippers or NVOCCs. The use of NRAs would be subject to several conditions, including (1) NVOCCs which use NRAs are required to continue publishing standard rules tariffs containing contractual terms and conditions governing shipments, including any accessorial charges and surcharges, and are required to make their rules tariffs available to shippers free of charge; (2) NRA rates charged by NVOCC must be mutually agreed and memorialized in writing by the date cargo is received for the first shipment covered by the NRA; and (3) NVOCCs who use NRAs must retain documentation confirming the agreed rate and terms for each shipment for a period of five years, and must make such documentation promptly upon request available to the Commission pursuant to the Commission's regulations.

New option for US companies only 

The FMC rule creates a new pricing option that NVOCCs licensed by the FMC may utilize instead of tariffs or NVOCC Service Arrangements (NSA). The rule does not cancel the existing FMC tariff regulations. It modifies these regulations to establish a new NRA option. NRAs will allow NVOCC to quickly adjust service offerings and rates in accordance with changing rates and surcharges imposed by ocean carriers.

Non-US based NVOCCs which are registered with the FMC, but not licensed, are not eligible to utilize the new NRA option and must continue to move all shipments to/from the USA under publicly available tariff rates, or they may utilize NVOCC Service Arrangements (NSA).

Discrimination persists 

"Whilst this new regulation constitutes some progress for USA based NVOCCs, FIATA is disappointed that it creates a competitive disadvantage for non-USA based NVOCCs. In general, shippers do not use NVOCC tariffs. The maintenance of such tariffs serves no purpose and imposes additional costs on NVOCCs. Foreign NVOCCs are also disadvantaged by more stringent bond posting requirements than US license holders”, says Christopher J. Gillespie, Chairman of the Multimodal Transport Institute (MTI) of FIATA.

FIATA’s Association members in the USA, the Transportation Intermediaries Association (TIA) and the National Customs Brokers and Freight Forwarders Association (NCBFFA), have protested against the new ruling and the competition distortion.

14 April 2011

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