NCBFAA Asks FMC to Review NRA, NSA, and OTI Regs

NCBFAA has sent a November 2011 letter to the Federal Maritime Commission asking it to reconsider three of its approaches to regulating ocean transportation intermediaries - NVOCC Rate Arrangements, NVOCC Service Arrangements, and OTI licensing.

The National Customs Brokers & Forwarders Association of America, Inc. states that its letter is in response to an FMC notice issued on November 4, 2011, seeking comments from the shipping public on how to improve the Commission’s existing regulations. (See ITT's Online Archives 11110736 for summary of FMC's notice on its retrospective review.)

NRAs Should Include Foreign-Based, Registered NVOCCs, Etc.

First, the NCBFAA notes that relatively few NVOCCs have taken advantage of the Commission’s recent decision to exempt NVOCCs from rate tariff publication. In the Association’s view, the exemption, which is referred to as NVOCC Rate Arrangements (or NRAs), should be expanded to all NVOCCs -- both US-domiciled licensed companies and foreign-domiciled, registered companies. The failure to include legitimate foreign-based NVOCCs unfairly discriminates against those companies. Moreover, the NCBFAA is concerned that China or other countries might retaliate and take action that adversely affects U.S. NVOCCs due to this discrimination against their nationals.

NCBFAA believes that the shipping industry would benefit by revisiting the NRA regulations to both make them available to all appropriately licensed and registered NVOCCs and by simplifying and modifying the existing regulations. With these modifications, the NRA exemption would become a significantly more useful tool for establishing the applicable rates and services provided by NVOCCs to their shipper customers.

Eliminate Need for NSAs to be Filed

Second, in a similar vein, the NCBFAA indicates that the regulations pertaining to NVOCC Service Arrangements (or NSAs) are so burdensome that they are also of little use to the NVOCC industry. The Association suggested that the Commission eliminate the need for NVOs to file these contracts with the agency or to publish the so-called “essential terms” of these agreements. By doing so, NCBFAA said that the Commission would make this contract tool more useful.

Adopt Competency Standards for OTIs, Etc.

Third, the NCBFAA proposes that the Commission both streamline the existing licensing process and emphasize the competence and expertise of applicants as part of the review process. The NCBFAA has been suggesting, for some time, that the Commission adopt some form of competency standards, something akin to the NCBFAA’s Certified Export Specialist Program, as it believes this would improve the professionalism and the image of the industry. NCBFAA said it was available to assist the Commission in developing an OTI education program.

(See ITT's Online Archives 11030233 and 11040819 for summary of NRA final rule and FMC correction to it. Also see 11042023 for summary of NCBFAA urging FMC to amend the NRA final rule.

See ITT's Online Archives 05092910 for summary of NSA final rule and 11101315 for summary of FMC proposed rule for freight rate indices for contracts and NSAs.

See ITT's Online Archives 11092604 for summary of FMC Commissioner Khouri's discussion of the need to streamline OTI license renewal, and his hopes that the FMC considers expanding NRAs by February 2012.)