NCBFAA Files Tariff Exemption Petition With FMC

Washington, DC: In a long awaited move, the National Customs Brokers & Forwarders Association of America, Inc., (NCBFAA) filed a Petition with the Federal Maritime Commission (FMC) requesting that NVOCCs no longer be required to establish, maintain, publish or adhere to rate tariffs for ocean transportation. Those NVOCCs who wish to continue to establish rate tariffs will be free to do so, in which case those publications would remain fully subject to the various provisions of the Shipping Act.
        As an alternative in the event the FMC cannot authorize such an exemption, the NCBFAA suggested that the FMC establish rules permitting NVOCCs to establish and maintain "range rates" in lieu of having to establish specific rates covering their rates and charges. A range rate consists of establishing a maximum and minimum rate that an NVOCC provides for a particular service. The NVOCC would then be able to price its traffic for a given customer anywhere within that range without having to separately establish a specific rate or charge.
        To support its filing, the NCBFAA detailed how the Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998 (OSRA) have dramatically changed the shipping industry. Since OSRA, the entire ocean shipping industry has evolved from one of primarily common carriage to one of primarily contract carriage. Since NVOCCs do not have the statutory authority to enter into service contracts, the existence of tariffs has become an outmoded and inflexible system that serves only to unnecessarily increase costs and reduce the ability NVOCCs would otherwise have to compete in the marketplace. 
        The NCBFAA pointed out that there are no longer any public benefits flowing from imposing rate tariff obligations on NVOCCs. Based on surveys over the past several years, it is plain that shippers do not use tariffs to develop competitive price information. Indeed, tariffs no longer have any benefits, since the need to establish tariffs increases NVOCC costs, thus keeping their customers’ rates artificially higher than necessary and frustrating the ability to keep this information confidential.
        Finally, the NCBFAA pointed out that Congress liberalized the FMC’s authority to grant exemptions from the requirements of the Act when it enacted OSRA. In that statute, Congress removed the requirements that a party seeking an exemption had to demonstrate that the result would either substantially impair effective regulation by the FMC and would not be unjustly discriminatory. Now, a proponent of the exemption must only show that there will not be a substantial reduction in competition and that it will not detrimental to commerce. Consequently, as it is clear that the proposal satisfies those criteria, the requested exemption is appropriate.
        With headquarters in Washington, DC, the NCBFAA (members.ncbfaa.org) represents nearly 700 member companies - the nation's leading freight forwarders, customs brokers, ocean transportation intermediaries (OTIs) and air cargo agents. Established in 1897 in New York, NCBFAA is the strong, effective national voice of the industry. Through its various committees, counsel and representatives, the Association maintains a close watch over legislative and regulatory issues that affect its members. It keeps them informed of these and other related issues through its weekly Monday Morning eBriefing, Quarterly NCBFAA Bulletin, and various meetings and conferences throughout the year.