Abolition of NVOCC service contract prohibition

During its recent Moscow World Congress the FIATA Multimodal Transport Institute and the FIATA Working Group Sea Transport took notice and applauded the Federal Maritime Commission’s (FMC) intention to amend a prior FMC rule, thus authorizing shippers associations with NVOCC-members to offer and enter into NVOCC-service arrangements with NVOCCs. This decision will allow NVOs for the first time to engage in contracting practices similar to those already used for the past five years by NVOCCs under the 1998 Ocean Shipping Reform Act.

Although the actual move is only in the benefit of Shippers’ Associations, this change permits a shippers association with NVOCC members to enter into confidential service arrangements (NSAs), or to allow a single NVOCC acting as a shipper (without membership in a shippers association) to enter into a NSA as well. In other words, NSAs with NVOCCs as shippers (one or many) will no longer be prohibited.

FIATA also acknowledged the decision of the FMC to do away with the NVOCC service contract prohibition. FIATA see this as a step in the right direction that will benefit the freight forwarding industry. It will be also of significant value to small NVOs and enhance competition.

FIATA will support all further initiatives of the FMC to eliminate all restrictions for NVOs to enter into service arrangements, in order to come to a full liberalisation and non-discrimination.

20 September 2005

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