FMC Looking Into More 'Business-Friendly' OTI Proposal, Says Chairman

LAS VEGAS -- The Federal Maritime Commission is looking at softening changes to its regulations on Ocean Transport Intermediaries (OTIs), said FMC Chairman Mario Cordero in remarks at the National Customs Broker & Freight Forwarder Association annual conference. A May 2013 request for comments had prompted industry to decry the FMC's regulatory changes as too burdensome. Cordero said FMC staff is currently considering ways to make any new regulations more “business-friendly,” although he wouldn't say what specific changes were in the pipeline.

“I can confirm to you that there is in fact a staff recommendation ... before the commission seeking guidance on further instructions toward proceeding to a more business friendly set of OTI rules,” Cordero told NCBFAA members during a conference session. “I won't be specific as to what that is in fairness to the process. I will say that hopefully in a few weeks some of your serious concerns will have been mitigated.”

The FMC's “advance notice of proposed rulemaking” proposed setting tougher licensing and bonding requirements for OTIs, which include freight forwarders and non-vessel operating common carriers (NVOCCs) (see 13053031). In comments, the NCBFAA opposed making OTIs renew their licenses every two years and creating stricter requirements for qualified individuals (see 13082122). It also criticized the FMC's proposal to set higher minimum bond amounts, saying the increase would unnecessarily increase premiums for forwarders and NVOCCs.

In response to feedback from industry, Cordero now says he thinks “a number of issues seen to have substantive economic impact upon OTIs and the surety industry” won't make it into any formal proposed rule. “Others will be modified in ways that will be more business friendly so as to reduce the concerns of the burden to the industry, or reduce or remove these financial burdens associated with licensing and OTI registration,” said Cordero.

Cordero noted that the regulatory changes had only been issued in “advance notice” form, and were not issued with the intention of quickly making them final. “This was designed as an advance notice. The process by definition is a 'heads up, here's what we're thinking about, let's get your input.' And we certainly did,” said the FMC chairman.

The FMC isn't in any hurry to issue its formal proposed rule, said Cordero. “There's been no rush to expedite this process … in fact its been quite to the contrary.” he said. “Since our action last year, you've seen its taken several months to get to this point. Let's digest this. Let's have as much dialog as we can. Let's get to a point where we feel comfortable as to what the next step should be.” Instead of rushing to judgment or to complete the process, the goal should be “for parties to try to seriously consider what we have as common ground, what we can do together as much as possible,” said Cordero.