Title 46—Shipping--Volume 1
PART 530—SERVICE CONTRACTS
§ 530.1   Purpose.
The purpose of this part is to facilitate the filing of service contracts as required by section 8(c) of the Shipping Act of 1984 (“the Act”) (46 U.S.C. 40502). This part enables the Commission to review service contracts to ensure that these contracts and the parties to them comport with the requirements of the Act. This part also implements electronic filing provisions for service contracts to facilitate compliance and minimize the filing burdens on the oceanborne commerce of the United States.
§ 530.2   Scope and applicability.
An individual ocean common carrier or an agreement between or among ocean common carriers may enter into a service contract with one or more shippers subject to the requirements of the Act.
§ 530.3   Definitions.
When used in this part:
(a) Act means the Shipping Act of 1984 as amended by the Ocean Shipping Reform Act of 1998.
(b) Agreement means an understanding, arrangement, or association (written or oral) and any modification or cancellation thereof which has been filed and effective under part 535 of this chapter with the Commission. The term does not include a maritime labor agreement.
(c) Authorized person means a carrier or a duly appointed agent who is authorized to file service contracts on behalf of the carrier party to a service contract and is registered by the Commission to file under § 530.5(c) and appendix A to this part.
(d) BTA means the Commission's Bureau of Trade Analysis or its successor bureau.
(e) Commission means the Federal Maritime Commission.
(f) Common carrier means a person holding itself out to the general public to provide transportation by water of passengers or cargo between the United States and a foreign country for compensation that:
(1) Assumes responsibility for the transportation from the port or point of receipt to the port or point of destination; and
(2) Utilizes, for all or part of that transportation, a vessel operating on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, except that the term does not include a common carrier engaged in ocean transportation by ferry boat, ocean tramp, or chemical parcel tanker, or by a vessel when primarily engaged in the carriage of perishable agricultural commodities:
(i) If the common carrier and the owner of those commodities are wholly owned, directly or indirectly, by a person primarily engaged in the marketing and distribution of those commodities and
(ii) Only with respect to those commodities.
(g) Conference means an agreement between or among two or more ocean common carriers which provides for the fixing of and adherence to uniform rates, charges, practices and conditions of service relating to the receipt, carriage, handling and/or delivery of passengers or cargo for all members. The term does not include joint service, pooling, sailing, space charter, or transshipment agreements.
(h) Controlled carrier means an ocean common carrier that is, or whose operating assets are, directly or indirectly owned or controlled by a government. Ownership or control by a government shall be deemed to exist with respect to any ocean common carrier if:
(1) A majority portion of the interest in the carrier is owned or controlled in any manner by that government, by any agency thereof, or by any public or private person controlled by that government; or
(2) That government has the right to appoint or disapprove the appointment of a majority of the directors, the chief operating officer or the chief executive officer of the carrier.
(i) Effective date means the date upon which a service contract or amendment is scheduled to go into effect by the parties to the contract. A service contract or amendment becomes effective at 12:01 a.m. Eastern Standard Time (Coordinated Universal Time (UTC)-05:00) on the effective date. The effective date may not be earlier than the date on which all parties have signed the service contract or amendment.
(j) Expiration date means the last day after which the entire service contract is no longer in effect.
(k) File or filing (of service contracts or amendments thereto) means the use of the Commission's electronic filing system for receipt of a service contract or an amendment thereto by the Commission, consistent with the method set forth in appendix A of this part, and the recording of its receipt by the Commission.
(l) Labor agreement means a collective-bargaining agreement between an employer subject to the Act, or group of such employers, and a labor organization or an agreement preparatory to such a collective-bargaining agreement among members of a multi-employer bargaining group, or an agreement specifically implementing provisions of such a collective-bargaining agreement or providing for the formation, financing, or administration of a multi-employer bargaining group, but the term does not include an assessment agreement.
(m) Motor vehicle means a wheeled vehicle whose primary purpose is ordinarily the non-commercial transportation of passengers, including an automobile, pickup truck, minivan or sport utility vehicle.
(n) Ocean common carrier means a common carrier that operates, for all or part of its common carrier service, a vessel on the high seas or the Great Lakes between a port in the United States and a port in a foreign country, except that the term does not include a common carrier engaged in ocean transportation by ferry boat, ocean tramp, or chemical parcel-tanker.
(o) OIT means the Commission's Office of Information Technology.
(p) Non-vessel-operating common carrier (“NVOCC”) means an ocean transportation intermediary as defined by section 3(17)(B) of the Act (46 U.S.C. 40102(16)).
(q) Service contract means a written contract, other than a bill of lading or receipt, between one or more shippers and an individual ocean common carrier or an agreement between or among ocean common carriers in which the shipper makes a commitment to provide a certain minimum quantity or portion of its cargo or freight revenue over a fixed time period, and the individual ocean common carrier or the agreement commits to a certain rate or rate schedule and a defined service level, such as, assured space, transit time, port rotation, or similar service features. The contract may also specify provisions in the event of nonperformance on the part of any party.
(r) Shipper means a cargo owner; the person for whose account the ocean transportation is provided; the person to whom delivery is to be made; a shippers' association; or an NVOCC that accepts responsibility for payment of all applicable charges under the service contract.
§ 530.4   Confidentiality.
All service contracts and amendments to service contracts filed with the Commission shall, to the full extent permitted by law, be held in confidence. Nothing contained in this part shall preclude the Commission from providing certain information from or access to service contracts to another agency of the Federal government of the United States.
§ 530.5   Duty to file.
(a) The duty under this part to file service contracts, amendments, and notices shall be upon the individual carrier party or parties participating or eligible to participate in the service contract.
(b) Filing may be accomplished by any duly agreed-upon agent, as the parties to the service contract may designate, and subject to conditions as the parties may agree.
(c) Registration —(1) Application. Authority to file or delegate the authority to file must be requested by a responsible official of the service contract carrier in writing by submitting to BTA the Registration Form (FMC-83) in Exhibit 1 to this part.
(2) Approved registrations. OIT shall provide approved Registrants a log-on ID and password for filing and amending service contracts and notify Registrants of such approval.
§ 530.6   Certification of shipper status.
(a) Certification. The shipper contract party shall sign and certify on the signature page of the service contract its shipper status (e.g., owner of the cargo, shippers' association, NVOCC, or specified other designation), and the status of every affiliate of such contract party or member of a shippers' association entitled to receive service under the contract.
(b) Proof of tariff and financial responsibility. If the certification completed by the contract party under paragraph (a) of this section identifies the contract party or an affiliate or member of a shippers' association as an NVOCC, the ocean common carrier, conference or agreement shall obtain proof that such NVOCC has a published tariff and proof of financial responsibility as required under sections 8 (46 U.S.C. 40501-40503) and 19 (46 U.S.C. 40901-40904) of the Act before signing the service contract. An ocean common carrier, conference or agreement can obtain such proof by the same methods prescribed in § 515.27 of this chapter.
(c) Joining shippers' association during term of contract. If an NVOCC joins a shippers' association during the term of a service contract and is thereby entitled to receive service under the contract, the NVOCC shall provide to the ocean common carrier, agreement or conference the proof of compliance required by paragraph (b) of this section prior to making any shipments under the contract.
(d) Reliance on NVOCC proof; independent knowledge. An ocean common carrier, agreement or conference executing a service contract shall be deemed to have complied with 46 U.S.C. 41104(a)(12) upon meeting the requirements of paragraphs (a) and (b) of this section, unless the carrier party had reason to know such certification or documentation of NVOCC tariff and bonding was false.
§ 530.7   Duty to labor organizations.
(a) Terms. When used in this section, the following terms will have these meanings:
(1) Dock area and within the port area shall have the same meaning and scope as defined in the applicable collective bargaining agreement.
(2) Reasonable period of time ordinarily means:
(i) If the cargo in question is due to arrive in less than five (5) days from the date of receipt of the request as defined in paragraph (b) of this section, two (2) days from the date of receipt of the request; but
(ii) If cargo in question is due to arrive in more than five (5) days from the date of receipt of the request as defined in paragraph (b) of this section, four (4) days from the date of receipt of the request.
(3) Movement includes, but is not necessarily limited to, the normal and usual aspects of the loading and discharging of cargo in containers; placement, positioning and re-positioning of cargo or of containers; the insertion and removal of cargo into and from containers; and the storage and warehousing of cargo.
(4) Assignment includes, but is not limited to, the carrier's direct or indirect control over the parties which, the manner by which, or the means by which the shipper's cargo is moved, regardless of whether such movement is completed within or outside of containers.
(5) Transmit means communication by first-class mail, facsimile, telegram, hand-delivery, or electronic mail (“e-mail”).
(b) Procedure. In response to a written request transmitted from a labor organization with which it is a party or is subject to the provisions of a collective bargaining agreement with a labor organization, an ocean common carrier shall state, within a reasonable period of time, whether it is responsible for the following work at dock areas and within port areas in the United States with respect to cargo transported under a service contract:
(1) The movement of the shipper's cargo on a dock area or within the port area or to or from railroad cars on a dock area or within a port area;
(2) The assignment of intraport carriage of the shipper's cargo between areas on a dock or within the port area;
(3) The assignment of the carriage of the shipper's cargo between a container yard on a dock area or within the port area and a rail yard adjacent to such container yard; or
(4) The assignment of container freight station work and maintenance and repair work performed at a dock area or within the port area.
(c) Applicability. This section requires the disclosure of information by an ocean common carrier only if there exists an applicable and otherwise lawful collective bargaining agreement which pertains to that carrier.
(d) Disclosure not deemed admission or agreement. No disclosure made by an ocean common carrier shall be deemed to be an admission or agreement that any work is covered by a collective bargaining agreement.
(e) Dispute resolution. Any dispute regarding whether any work is covered by a collective bargaining agreement and the responsibility of the ocean common carrier under such agreement shall be resolved solely in accordance with the dispute resolution procedures contained in the collective bargaining agreement and the National Labor Relations Act, and without reference to this section.
(f) Jurisdiction and lawfulness. Nothing in this section has any effect on the lawfulness or unlawfulness under the Shipping Act of 1984, the National Labor Relations Act, the Taft-Hartley Act, the Federal Trade Commission Act, the antitrust laws, or any other federal or state law, or any revisions or amendments thereto, of any collective bargaining agreement or element thereof, including any element that constitutes an essential term of a service contract under section 8(c) of the Act (46 U.S.C. 40502).
§ 530.8   Service Contracts.
(a) Filing. (1) Authorized persons shall file with BTA, in the manner set forth in appendix A of this part, a true and complete copy of every service contract and every amendment to a service contract no later than thirty (30) days after the effective date.
(2) Failure to file a service contract or amendment in accordance with paragraph (a)(1) of this section does not affect the applicability of the service contract or amendment to cargo received on or after the effective date by the ocean common carrier or its agent.
(b) Required terms. Every service contract filed with the Commission shall include the complete terms of the service contract including, but not limited to, the following:
(1) The origin port ranges in the case of port-to-port movements and geographic areas in the case of through intermodal movements;
(2) The destination port ranges in the case of port-to-port movements and geographic areas in the case of through intermodal movements;
(3) The commodity or commodities involved;
(4) The minimum volume or portion;
(5) The service commitments;
(6) The line-haul rate;
(7) Liquidated damages for non-performance (if any);
(8) Duration, including the
(i) Effective date; and
(ii) Expiration date;
(9) The legal names and business addresses of the contract parties; the legal names of affiliates entitled to access the contract; the names, titles and addresses of the representatives signing the contract for the parties; and the date upon which the service contract was signed, except that in the case of a contract entered under the authority of an agreement or by a shippers' association, individual members need not be named unless the contract includes or excludes specific members. Subsequent references in the contract to the contract parties shall be consistent with the first reference (e.g., (exact name), “carrier,” “shipper,” or “association,” etc.). Carrier parties which enter into contracts that include affiliates must either:
(i) List the affiliates' business addresses; or
(ii) Certify that this information will be provided to the Commission upon request within ten (10) business days of such request. However, the requirements of this section do not apply to amendments to contracts that have been filed in accordance with the requirements of this section unless the amendment adds new parties or affiliates;
(10) A certification of shipper status;
(11) A description of the shipment records which will be maintained to support the service contract and the address, telephone number, and title of the person who will respond to a request by making shipment records available to the Commission for inspection under § 530.15 of this part; and
(12) All other provisions of the contract.
(c) Certainty of terms. The terms described in paragraph (b) of this section may not:
(1) Be uncertain, vague or ambiguous; or
(2) Make reference to terms not explicitly contained in the service contract itself unless those terms are readily available to the parties and the Commission.
(3) Pursuant to § 530.15(c), the carrier party to the service contract must, upon written request by the Commission, provide the Commission with the associated records of the referenced terms. For the purpose of paragraph (c)(2) of this section, the referenced terms will be deemed readily available to the Commission if the carrier party to the service contract provides the Commission with the associated records of the terms within thirty (30) days of the Commission's written request.
(d) Other requirements. Every service contract filed with BTA shall include, as set forth in appendix A to this part:
(1) A unique service contract number of more than one (1) but less than ten (10) alphanumeric characters in length (“SC Number”); and
(2) A consecutively numbered amendment number no more than three digits in length, with initial service contracts using “0”(“Amendment number”);
(3) The filed FMC Agreement Number(s) assigned by the Commission under 46 CFR part 535 (if applicable); and
(e) Exception in case of malfunction of Commission filing system. In the event that the Commission's filing systems are not functioning and cannot receive service contract filings for twenty-four (24) continuous hours or more, an original service contract or amendment that must be filed during that period in accordance with paragraph (a)(1) of this section will be considered timely filed so long as the service contract or amendment is filed no later than twenty-four (24) hours after the Commission's filing systems return to service.
§ 530.9   Notices.
Within thirty (30) days of the occurrence of any event listed below, there shall be filed with the Commission, pursuant to the same procedures as those followed for the filing of an amendment pursuant to § 530.10 and appendix A to this part, a detailed notice of:
(a) Correction (clerical or administrative errors);
(b) Cancellation (as defined in § 530.10(a)(3));
(c) Adjustment of accounts, by re-rating, liquidated damages, or otherwise;
(d) Final settlement of any account adjusted as described in paragraph (c) of this section; and
(e) Any change to:
(1) The name of a basic contract party; or
(2) The list of affiliates under § 530.8(b)(9), including changes to legal names and business addresses, of any contract party entitled to receive or authorized to offer services under the contract.
§ 530.10   Amendment, correction, cancellation, and electronic transmission errors.
(a) Terms. When used in this section, the following terms will have these meanings:
(1) Amendment means any change to a service contract which has prospective effect and which is mutually agreed upon by the service contract parties.
(2) Correction means any change to a service contract which has retroactive effect.
(3) Cancellation means an event which is unanticipated by the service contract, in liquidated damages or otherwise, and is due to the failure of the shipper party to tender minimum cargo as set forth in the contract, unless such tender was made impossible by an action of the carrier party.
(b) Amendment. Service contracts may be amended by mutual agreement of the parties to the contract. Amendments shall be filed electronically with the Commission in the manner set forth in § 530.8 and appendix A to this part.
(1) Where feasible, service contracts should be amended by amending only the affected specific term(s) or subterms.
(2) Each time any part of a service contract is amended, the filer shall assign a consecutive amendment number (up to three digits), beginning with the number “1.”
(3) Each time any part of the service contract is amended, the “Filing Date” will be the date of filing of the amendment.
(c) Corrections. Requests shall be filed, in duplicate, with the Commission's Office of the Secretary within one-hundred eighty (180) days of the contract's filing with the Commission, accompanied by remittance of a $0 service fee, and must include:
(1) A letter of transmittal explaining the purpose of the submission, and providing specific information to identify the initial or amended service contract to be corrected;
(2) A paper copy of the proposed correct terms. Corrections shall be indicated as follows:
(i) Matter being deleted shall be struck through; and
(ii) Matter to be added shall immediately follow the language being deleted and be underscored;
(3) An affidavit from the filing party attesting with specificity to the factual circumstances surrounding the clerical or administrative error, with reference to any supporting documentation;
(4) Documents supporting the clerical or administrative error; and
(5) A brief statement from the other party to the contract concurring in the request for correction.
(6) If the request for correction is granted, the carrier, agreement or conference shall file the corrected contract provisions using a special case number as described in appendix A to this part.
(d) Electronic transmission errors. An authorized person who experiences a purely technical electronic transmission error or a data conversion error in transmitting a service contract filing or amendment thereto is permitted to file a Corrected Transmission (“CT”) of that filing within 30 days of the date and time of receipt recorded in SERVCON. This time-limited permission to correct an initial defective service contract filing is not to be used to make changes in the original service contract rates, terms or conditions that are otherwise provided for in paragraphs 530.10(b) and (c) of this section. The CT tab box in SERVCON must be checked at the time of resubmitting a previously filed service contract, and a description of the corrections made must be stated at the beginning of the corrected service contract in a comment box. Failure to check the CT box and enter a description of the correction will result in the rejection of a file with the same name, since documents with duplicate file names or service contract and amendment numbers are not accepted by SERVCON.
(e) Cancellation. (1) An account may be adjusted for events and damages covered by the service contract. This shall include adjustment necessitated by either liability for liquidated damages appearing in the service contract as filed with the Commission under § 530.8(b)(7), or the occurrence of an event described below in paragraph (d)(2) of this section.
(2) In the event of cancellation as defined in § 530.10(a)(3):
(i) Further or continued implementation of the service contract is prohibited; and
(ii) The cargo previously carried under the contract shall be re-rated according to the otherwise applicable tariff provisions.
§ 530.11   [Reserved]
§ 530.12   Rules and notices.
(a) Location —(1) Generally. A statement of service contract rules and notices may be published as a separate part of the individual ocean common carrier's automated tariff system.
(2) Multi-party service contracts. For service contracts in which more than one carrier participates or is eligible to participate, a statement of service contract rules and notices may be published:
(i) If the service contract is entered into under the authority of a conference agreement, then in that conference's automated tariff system;
(ii) If the service contract is entered into under the authority of a non-conference agreement, then in each of the participating or eligible-to-participate carriers' individual automated tariff systems, clearly indicating the relevant FMC-assigned agreement number.
(b) Certainty of terms. A statement of service contract rules and notices described in paragraph (a) of this section may not:
(1) Be uncertain, vague, or ambiguous; or
(2) Make reference to terms not explicitly detailed in the statement of service contract rules and notices, unless those terms are contained in a publication widely available to the public and well known within the industry.
(c) Agents. Common carriers, conferences, or agreements may use agents to meet their publication requirements under this part.
(d) Commission listing. The Commission will publish on its website, www.fmc.gov, a listing of the locations of all service contract rules and notices.
§ 530.13   Exceptions and exemptions.
(a) Statutory exceptions. Service contracts for the movement of the following, as defined in section 3 of the Act (46 U.S.C. 40102), § 530.3 or § 520.2 of this chapter, are excepted by section 8(c) of the Act (46 U.S.C. 40502) from the requirements of that section, and are therefore not subject to the requirements of this part:
(1) Bulk cargo;
(2) Forest products;
(3) Recycled metal scrap;
(4) New assembled motor vehicles; and
(5) Waste paper or paper waste.
(b) Commission exemptions. Exemptions from the requirements of this part are governed by 46 U.S.C. 40103(a) and §§ 502.10 and 502.92 of this chapter. The following commodities and/or services are exempt from the requirements of this part:
(1) Mail in foreign commerce. Transportation of mail between the United States and foreign countries.
(2) Department of Defense cargo. Transportation of U.S. Department of Defense cargo moving in foreign commerce under terms and conditions negotiated and approved by the Surface Deployment and Distribution Command and published in a universal service contract. An exact copy of the universal service contract, including any amendments thereto, shall be filed with the Commission as soon as it becomes available.
(c) Inclusion of excepted or exempted matter. (1) The Commission will not accept for filing service contracts which exclusively concern the commodities or services listed in paragraph (a) or (b) of this section.
(2) Service contracts filed with the Commission may include the commodities or services listed in paragraph (a) or (b) of this section only if:
(i) There is a tariff of general applicability for the transportation, which contains a specific commodity rate for the commodity or service in question; or
(ii) The service contract itself sets forth a rate or charge which will be applied if the contract is canceled, as defined in § 530.10(a)(3).
(d) Waiver. Upon filing a service contract pursuant to paragraph (c) of this section, the service contract shall be subject to the same requirements as those for service contracts generally.
(e) Essential terms publication exemption. Ocean common carriers are exempt from the requirement in 46 U.S.C. 40502(d) to publish and make available to the general public in tariff format a concise statement of certain essential terms when a service contract is filed with the Commission.
§ 530.14   Implementation.
(a) Generally. Performance under an original service contract or amendment may not begin until the effective date. An original service contract or amendment may apply only to cargo received on or after the effective date by the ocean common carrier or its agent, including originating carriers in the case of through transportation.
(b) Prohibition or suspension. When the filing parties receive notice that an initial or amended service contract has been prohibited under section 9(d) (46 U.S.C. 40704) or suspended under section 11 of the Act (46 U.S.C. 41301-41302, 41305-41307(a)):
(1) Further or continued implementation of the service contract is prohibited;
(2) All services performed under the contract shall be re-rated in accordance with the otherwise applicable tariff provisions for such services with notice to the shipper within five (5) days of the date of prohibition or suspension; and
(3) Detailed notice shall be given to the Commission under § 530.9 within thirty (30) days of:
(i) The re-rating or other account adjustment resulting from prohibition or suspension under paragraph (b)(2) of this section; or
(ii) Final settlement of the account adjusted under § 530.10.
(c) Agreements. If the prohibited or suspended service contract was that of an agreement with no common tariff, the re-rating shall be in accordance with the published tariff rates of the carrier which transported the cargo in effect at the time.
§ 530.15   Recordkeeping and audit.
(a) Records retention for five years. Every common carrier, conference or agreement shall maintain original signed service contracts, amendments, and their associated records in an organized, readily accessible or retrievable manner for a period of five (5) years from the termination of each contract.
(b) (paragraph (b) is stayed until further notice.) Where maintained. (1) Service contract records shall be maintained in the United States, except that service contract records may be maintained outside the United States if the Chairman or Secretary of an agreement or President or Chief Executive Officer of the carrier certifies annually by January 1, on a form to be supplied by the Commission, that service contract records will be made available as provided in paragraph (c) of this section.
(2) Penalty. If service contract records are not made available to the Commission as provided in paragraph (c) of this section, the Commission may cancel any carrier's or agreement's right to maintain records outside the United States pursuant to the certification procedure of paragraph (b) of this section.
(c) Production for audit within 30 days of request. Every carrier or agreement shall, upon written request of the FMC's Director, Bureau of Enforcement, any Area Representative or the Director, Bureau of Trade Analysis, submit copies of requested original service contracts or their associated records within thirty (30) days of the date of the request.
(d) Agreement service contracts. In the case of service contracts made by agreements, the penalties for a failure to maintain records pursuant to this section shall attach jointly and severally on all of the agreement members participating in the service contract in question.
§ 530.91   OMB control numbers assigned pursuant to the Paperwork Reduction Act.
The Commission has received OMB approval for this collection of information pursuant to the Paperwork Reduction Act of 1995, as amended. In accordance with that Act, agencies are required to display a currently valid control number. The valid control number for this collection of information is 3072-0065.