Continue to Exclude NVOCCs From 'Unreasonable' Carrier Conduct Rule, NCBFAA Tells FMC

The Federal Maritime Commission should exclude non-vessel-operating common carriers (NVOCC) from the scope of a rule that could define a set of factors the commission will consider when determining whether a carrier is violating certain shipping regulations, the National Customs Brokers & Forwarders Association of America said. The group stressed that it supports the rule if it helps to hold ocean common carriers accountable, including in situations in which they unfairly refuse space to U.S. exporters.

The NCBFAA’s comments come about a month after the FMC released a notice of proposed rulemaking seeking comments on how it should define certain unreasonable conduct by ocean carriers, including when those carriers refuse vessel space to shippers (see 2209130040). The NPRM includes a “rebuttable presumption of unreasonableness” for situations in which a carrier “categorically excludes U.S. exports from its backhaul trips from the U.S.”

In its comments to the FMC, the NCBFAA said ocean common carriers have rejected export containers “in favor of sending empty containers to China,” leaving “hundreds of thousands of containers with American products to rot at U.S. ports.” NVOCCs, however, don’t own or operate the vessels, the association said, and instead act as the shipper in their relationships with ocean common carriers.

“Ocean common carriers determine how vessel space should be prioritized and hold a considerable amount of control over such commercial decisions,” the NCBFAA said, adding NVOCCs help customers “navigate the complex ocean shipping industry by securing competitive pricing and favorable” shipping routes. “As such, NVOCCs lack the authority to control vessel space accommodations” and should be excluded from this rule, the group said.

Aside from vessel space, the association said ocean common carriers also “refuse to deal or negotiate” with NVOCCs surrounding “hazardous materials shipments and refrigerated container shipments.” The NCBFAA said its members encountered instances in which ocean common carriers failed to, “in good faith,” consider “requests for negotiation or proposed dealings with respect to these shipment types.”

“By categorically refusing to deal or negotiate in these types of shipments,” the NCBFAA said, “ocean common carriers impact the business operations of importers and exporters.”

The NCBFAA noted the FMC “carefully and meaningfully” used the term “ocean common carrier” throughout the rule “rather than the overly broad term 'common carrier,'" which would include NVOCCs. The association said it hopes that language continues into any potential proposed or final rules. The group “respectfully requests that the Commission ensures that the final rule does not unintentionally bring NVOCCs within its scope.”

The World Shipping Council, which represents many of the world's major ocean common carriers, didn’t comment.

In another set of comments, New Jersey-based Lanca Sales said it also has struggled at times to secure export bookings from ocean carriers. But the exporter said it isn't sure the problem can be solved.

“I applaud the FMC for their proactive actions but I am afraid that there is not a way to prove that export bookings are being denied without internal communications,” Lanca's Tim Avanzato said. “The one piece of evidence that does prove this is happening is the amount of empty containers that are being ‘exported’ that could have been laden with exports.”

Several trade associations, including the Agriculture Transportation Coalition, asked the FMC to extend the public comment period. The groups called the rulemaking “one of the most important” under the Ocean Shipping Reform Act, saying it “warrants the additional time to assure collection of our member companies’ experiences and document them in a manner that will be most helpful to the FMC.” The groups asked the FMC to extend the deadline until Nov. 7.

The comment deadline is Oct. 21 (see 2209200011). FMC Chair Daniel Maffei last month said the agency is facing time pressure and that an extension was unlikely (see 2209210063).