NCBFAA Comments Say Proposed OTI Rule Changes are Unnecessary, Burdensome

The Federal Maritime Commission’s (FMC) proposed changes to ocean transport intermediary (OTI) rules fall outside the agency's regulatory duties, the National Customs Brokers and Forwarders Association of America (NCBFAA) said in comments responding to the proposed rulemaking. Those changes are “not truly relevant to the Commission’s oversight responsibilities” and should not go forward, the association said. The agency released the proposal earlier this year, saying it would lessen regulatory burdens and improve processing (see 13053031).

The NCBFAA said the proposed changes would impose added requirements for license and registration renewal every two years on OTIs engaged in the trade of individual household goods and personal effects, instead of periodic updates. Such requirements “will complicate rather than “streamline” the agency’s internal processes” and “create thousands of new regulatory filings each year,” subsequently creating burdens like barriers to entry and potentially driving some OTIs out of business, NCBFAA said.

The proposed changes are also inconsistent with Executive Order 13563 and the Ocean Shipping Reform Act “as they impose, rather than reduce, unnecessary regulatory requirements and costs,” such as filing fees or manpower. NCBFAA added that FMC staff is already “hard pressed to keep up with existing workloads” and that there are “less obtrusive” options for the FMC to obtain necessary information regarding the companies they regulate. The need for license renewals does not even “appear to be a problem that needs to be addressed on an industry-wide basis,” since FMC already has regulations requiring OTIs to provide immediate notice of any changes in their business structure, NCBFAA said.

According to the comments, the FMC is relying on the Federal Motor Carrier Safety Administration’s (FMCSA) requirements that domestic surface freight forwarders and property brokers periodically renew their registrations. However, the NCBFAA said this reliance “appears to be misplaced” since neither the FMCSA nor its predecessor required such renewals prior to provisions under the recently enacted “Moving Ahead for Progress in the 21st Century Act.” NCBFAA said the Shipping Act “contains no analogous provision.” The proposed changes cannot be based off CBP practices either, since the agency does not require formal applications seeking renewals of licenses,” NCBFAA said.

NCBFAA also raised concerns over the FMC’s proposal that the Commission would no longer accept “any OTI experience acquired by the applicant while working for an unlicensed, unbonded or unregistered OTI,” as qualification for approval as the qualifying individual (QI). NCBFAA said that previous applicants for QI positions were not automatically disqualified for such criteria, and that it was not clear why the denial, revocation or suspension of credentials or a customs broker license was relevant to QI qualifications. Another FMC proposal would require OTIs to report changes such as the death of a QI and to provide a replacement within 15 instead of 30 business days. NCBFAA recommended that the existing 30-day period for such filings “be retained, if not lengthened.”

NCBFAA recommended several other changes that would help “alleviate unnecessary regulation” without compromising any FMC responsibilities. These suggestions include eliminating procedural requirements for Negotiated Rate Agreements, and eliminating the need for non-vessel operating common carriers (NVOCCs) to file NVOCC service agreements to publish their essential terms.