13508 Federal Register / Vol. 77, No. 45 / Wednesday, March 7, 2012 / Rules and Regulations 

it does not contain a Federal mandate 

that may result in expenditures of $100 

million or more for State, local, and 

tribal governments, in the aggregate, or 

for the private sector in any 1 year. In 

addition, this action does not 

significantly or uniquely affect small 

governments or impose a significant 

intergovernmental mandate, as 

described in UMRA sections 203 and 

204. For the same reasons, EPA has 

determined that this action does not 

have ‘‘federalism implications’’ as 

specified in Executive Order 13132, 

entitled Federalism (64 FR 43255, 

August 10, 1999), because it would not 

have substantial direct effects on the 

States, on the relationship between the 

national government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government, as specified in the 

order. Thus, Executive Order 13132 

does not apply to this action. Nor does 

it have ‘‘tribal implications’’ as specified 

in Executive Order 13175, entitled 

Consultation and Coordination with 

Indian Tribal Governments (65 FR 

22951, November 9, 2000). Thus, 

Executive Order 13175 does not apply 

to this action. 

Since this action is not economically 

significant under Executive Order 

12866, it is not subject to Executive 

Order 13045, entitled Protection of 

Children from Environmental Health 

Risks and Safety Risks (62 FR 19885, 

April 23, 1997) and Executive Order 

13211, entitled Actions Concerning 

Regulations that Significantly Affect 

Energy Supply, Distribution, or Use (66 

FR 28355, May 22, 2001). In addition, 

EPA interprets Executive Order 13045 

as applying only to those regulatory 

actions that concern health or safety 

risks, which is not the case in this 

action. 

This action does not involve technical 

standards that would require the 

consideration of voluntary consensus 

standards pursuant to section 12(d) of 

the National Technology Transfer and 

Advancement Act (NTTAA) (15 U.S.C. 

272). 

This action does not have an adverse 

impact on the environmental and health 

conditions in low-income and minority 

communities. Therefore, this action 

does not involve special consideration 

of environmental justice related issues 

as specified in Executive Order 12898, 

entitled Federal Actions to Address 

Environmental Justice in Minority 

Populations and Low-Income 

Populations (59 FR 7629, February 16, 

1994). 

V. Congressional Review Act 

The Congressional Review Act, 5 

U.S.C. 801 et seq., generally provides 

that before a rule may take effect, the 

Agency promulgating the rule must 

submit a rule report to each House of 

the Congress and to the Comptroller 

General of the United States. EPA will 

submit a report containing this rule and 

other required information to the U.S. 

Senate, the U.S. House of 

Representatives, and the Comptroller 

General of the United States prior to 

publication of this final rule in the 

Federal Register. This final rule is not 

a ‘‘major rule’’ as defined by 5 U.S.C. 

804(2). 

List of Subjects in 40 CFR Part 721 

Environmental protection, Chemicals, 

Hazardous substances, Reporting and 

recordkeeping requirements. 

Dated: February 24, 2012. 

Maria J. Doa, 

Director, Chemical Control Division, Office 

of Pollution Prevention and Toxics. 

[FR Doc. 2012–5392 Filed 3–6–12; 8:45 am] 

BILLING CODE 6560–50–P 

FEDERAL MARITIME COMMISSION 

46 CFR Parts 530 and 531 

[Docket No. 11–17] 

RIN 3072–AC47 

Certainty of Terms of Service 

Contracts and NVOCC Service 

Arrangements 

AGENCY: Federal Maritime Commission. 

ACTION: Final rule. 

SUMMARY: The Federal Maritime 

Commission amends its rules regarding 

certainty of terms of service contracts 

and non-vessel-operating common 

carrier service arrangements. The rule 

provides common carriers and shippers 

with certainty and flexibility by 

facilitating their use of long-term 

contracts that adjust based upon an 

index reflecting changes in market 

conditions. 

DATES: The Final Rule is effective March 

7, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Karen V. Gregory, Secretary, Federal 

Maritime Commission, 800 North 

Capitol Street NW., Washington, DC 

20573–0001, Phone: (202) 523–5725. 

SUPPLEMENTARY INFORMATION: 

Background 

By Notice of Proposed Rulemaking 

(NPR) published on October 13, 2011, 

76 FR 63581, the Federal Maritime 

Commission (FMC or Commission) 

proposed to amend its rules for terms of 

service contracts and Non-VesselOperating Common Carrier service 

arrangements (NSA). The NPR was 

intended to remove uncertainty in the 

use of freight rate or other indices in 

service contracts and NSAs, while also 

assisting common carriers and shippers 

in pursuing stability and flexibility 

through long-term contracts. 

The Commission found that an 

increasing number of service contracts 

filed with the Commission reference 

indices. The ocean freight rates in those 

service contracts adjust in increments 

based upon the changes in the 

referenced index levels or their annual 

or quarterly averages. The Commission 

believes that this trend has started to 

appear because carriers and shippers in 

the ocean transportation industry are 

seeking stability through long-term 

contracts, while trying to preserve 

flexibility to adjust contract rates 

reflecting changes in market conditions. 

The Commission’s current regulation 

with respect to terms of service 

contracts and NSAs require that the 

terms, if they are not explicitly 

contained in the contracts, must be 

‘‘contained in a publication widely 

available to the public and well known 

within the industry.’’ 46 CFR 

530.8(c)(2), 531.6(c)(2). The Commission 

has received inquiries from the industry 

as to whether certain freight rate indices 

meet the Commission’s requirement. For 

example, until August 2011, the 

Transpacific Stabilization Agreement 

(TSA) index was not available to the 

public, even though some service 

contracts referenced the TSA index 

before its publication. In addition, 

although many index publishers’ 

current index levels are available to the 

public mostly without charge, access to 

their historical data often requires 

payment of subscription fees that can 

reach up to several thousand dollars per 

year. 

While the Commission began to 

consider whether the service contracts 

referencing indices comport with its 

regulation, the Commission also sought 

to revise its regulations so that they are 

not unnecessarily burdensome and do 

not impede innovation and flexibility in 

commercial arrangements between 

common carriers and shippers. 

The final rule would facilitate 

references to indices in service contracts 

and NSAs so that contracting parties can 

pursue long-term contracts with rates 

that adjust through an agreed and 

ascertainable manner. 


srobinson on DSK4SPTVN1PROD with RULES
Federal Register / Vol. 77, No. 45 / Wednesday, March 7, 2012 / Rules and Regulations 13509 

1The Commission determined to accept TSC’s 

late-filed comment. 

2Section 530.15(c) of the Commission’s 

regulation provides that every carrier or agreement 

shall, upon written request of the FMC’s Director, 

Bureau of Enforcement, any Area Representative or 

the Director, Bureau of Economics and Agreements 

Analysis [now BTA], submit copies of requested 

original service contracts or their associated records 

within thirty (30) days of the date of the request. 

Comments 

The Commission received five public 

comments responding to the NPR. The 

comments were submitted by TSA, 

Westbound Transpacific Stabilization 

Agreement (WTSA), World Shipping 

Counsel (WSC), carrier parties to the 

World Liner Data Agreement (WLDA), 

and TSC Container Freight (TSC).1 TSA, 

WTSA, WSC, and TSC support the 

Commission’s proposed change. 

Although not explicitly stated, WLDA 

does not oppose the proposed change. 

TSA and WTSA support ‘‘the 

Commission’s effort to expand 

flexibility in service contracting and 

welcome[s] the Commission’s support of 

the option to use rate indices.’’ TSA and 

WTSA believe that the ability to 

reference a price index in service 

contracts will not only enable the 

parties to a service contract to allocate 

risks, but also relieve the parties of the 

administrative burden of preparing and 

filing numerous contract amendments 

in response to changes in market 

conditions. Eliminating contentious 

negotiations over numerous contract 

amendments may help improve 

relations between shippers and carriers. 

TSA and WTSA stated that the 

Commission’s rule change ‘‘may also 

contribute to greater stability and 

predictability in ocean freight rates, a 

benefit consistently sought by carriers 

and shippers alike,’’ and welcome and 

applaud the Commission’s clarification 

of its regulations for service contracts 

and NSAs. Stating that the parties 

should be able to refer to the index of 

their choosing, TSA and WTSA 

indicated that the Commission’s 

regulation should promote maximum 

flexibility, including by not favoring or 

promoting any particular index. 

Responding to the Commission’s 

request for comments on the means to 

ensure that the referenced indices are 

readily available to the Commission, 

TSA and WTSA recommend that the 

Commission require such indices to be 

made available to the Commission by 

the carrier party to the contract within 

thirty (30) days of a written request by 

the Commission. TSA and WTSA stated 

that such a requirement, which is based 

on the Commission’s existing 

requirement at 46 CFR 530.15,2 would 

provide the Commission with adequate 

assurance that it would have access to 

such indices. 

Finally, with respect to the 

Commission’s concerns about how to 

reduce any impediments to small 

shippers having the option of indexlinked contracts, TSA and WTSA stated 

that they are not aware of any 

impediments to a small shipper using 

such an index in a service contract with 

a carrier, although their experience with 

such index-linked contracts is still 

relatively limited. 

WSC supports the proposed changes. 

WSC stated that the change will 

facilitate flexibility and freedom of 

contract by carriers and shippers. 

Regarding the Commission’s question 

about how to ensure that the 

information referenced in service 

contracts is readily available to the 

Commission, WSC suggests that the 

Commission require in the regulations 

that either the carrier or the shipper 

provide the rate index information upon 

request by the Commission. 

WLDA has contracted with Container 

Trade Statistics Ltd. (CTS) to aggregate 

and publish certain data, and through 

CTS publishes a price index for 

containerized dry and reefer cargo. 

WLDA argues that the Commission’s 

NPR created a misperception by 

identifying four freight rate indices by 

name, but not the CTS index. WLDA 

submitted its comments to correct a 

possible misperception that it would not 

be lawful to use the CTS index in 

service contracts, or that the CTS index 

or other data published by CTS are 

somewhat less reliable or valuable than 

the named indices. WLDA asks that the 

Commission include in the 

supplementary information of the final 

rule a statement that the CTS rate index 

is compliant with the revised regulation. 

TSC supports index linked contracts 

because they will ‘‘provide more 

contracting options for shippers large 

and small.’’ 

Discussion 

Contrary to WLDA’s comments, the 

NPR named four indices only as 

examples of freight indices referenced 

in service contracts that had been 

submitted to the Commission at the time 

of the publication of the NPR. The 

Commission, however, did not intend to 

imply that those were the only freight 

indices or that it had any concerns 

regarding the CTS index. The proposed 

change was to facilitate, not to limit or 

impede, long-term contracts between 

shippers and carriers, while ensuring 

their compliance with the Shipping Act. 

As long as the referenced terms comply 

with the revised regulations, the 

shippers and carriers are free to use not 

only any freight indices, but also other 

indices such as the Bureau of Labor 

Statistics’s Consumer Price Index that 

was already referred to in certain service 

contracts. 

With respect to the question about 

possible methods to ensure that the 

information referred to in service 

contracts is readily available to the 

Commission, the Commission adopts 

TSA’s and WTSA’s suggestions. As 

some index publishers require annual 

payment of up to several thousand 

dollars for historical data, requiring 

small shippers to provide that data to 

the Commission may impede their 

utilization of long-term contracts. 

Further, many small shippers may enter 

into a service contract only once a year, 

whereas common carriers may enter 

into service contracts with numerous 

shippers. Requiring those small 

shippers to provide the historical data 

appears to be not only prohibitive, but 

also unfair because the substantial 

annual subscription fee may 

disproportionately negate the benefit of 

long-term contracts with respect to 

those small shippers. Therefore, the 

Commission adopts TSA’s and WTSA’s 

recommendations that associated 

records of such indices, including any 

historical data used to adjust contract 

rates, must be made available to the 

Commission by the carrier party to the 

contract within thirty (30) days of a 

written request by the Commission. 

TSA and WTSA stated that they are 

not aware of any impediment to a small 

shipper using a freight index in a 

service contract with a carrier who is 

willing to do so. By requiring carrier 

parties to service contracts to provide 

the ‘‘associated records,’’ the final rule 

will further minimize possible 

impediments to small shippers in 

entering into long-term contracts. 

Finally, as already proposed in the 

NPR, this final rule also makes the same 

change to the rule for NSAs, which are 

NVOCCs’ contracts with their shippers 

and analogous to ocean common 

carriers’ service contracts with their 

shippers. 

Regulatory Findings 

The Regulatory Flexibility Act (RFA) 

allows the head of an agency after a 

threshold analysis, in lieu of preparing 

an analysis required by 5 U.S.C. 603 and 

604, to certify that ‘‘the rule will not, if 

promulgated, have a significant 

economic impact on a substantial 

number of small entities.’’ 5 U.S.C. 

605(b). Such certification may be 

published in the Federal Register either 

at the time of publication of notice of 

proposed rulemaking or at the time of 

publication of the final rule. Id. 


srobinson on DSK4SPTVN1PROD with RULES
13510 Federal Register / Vol. 77, No. 45 / Wednesday, March 7, 2012 / Rules and Regulations 

This Final Rule is intended to 

enhance the flexibility of regulated 

entities concluding contractual 

relationships subject to the Shipping 

Act and the Commission’s regulations. 

There are two types of regulated entities 

that this Final Rule may affect: vesseloperating common carriers (VOCCs) and 

non-vessel-operating common carriers 

(NVOCCs). The Commission currently 

has on file registrations (Form FMC–1) 

for 294 VOCCs. VOCCs are generally not 

small entities, as defined by North 

American Industry Classification 

System’s size standards identified by 

Small Business Administration. 13 CFR 

121.201. While some are large, multinational corporations, most NVOCCs 

licensed by the Commission have fewer 

than 500 employees and are therefore 

small entities. There are currently 4,652 

NVOCCs licensed by or registered with 

the Commission. 

The Commission believes that there 

are approximately 46,962 effective 

service contracts on file with the 

Commission between May 1, 2011 

through February 9, 2012. Of those, the 

Commission has identified 62 service 

contracts referencing indices, 

approximately 0.13% of the total, that 

would become subject to the Final Rule. 

Complying with the Final Rule with 

respect to 0.13% of the total service 

contracts would not appear to result in 

a ‘‘significant economic impact’’ on 

VOCCs. Specifically, only VOCCs whose 

service contracts refer to indices will be 

subject to the requirements of 46 CFR 

530.8(c)(3) of the Final Rule, and based 

upon the number of contracts currently 

on file with the Commission, that 

number is very small. 

Nor will this Final Rule have a 

‘‘significant economic impact’’ on 

NVOCCs. The rule simply provides 

parties to service contracts and NSAs 

more freedom and flexibility in their 

commercial arrangements and will not 

adversely affect small NVOCCs. Unlike 

VOCC service contracts, there are no 

NSAs currently on file with the 

Commission that reference indices, and, 

therefore, no NSAs would be impacted 

by the Final Rule. 

In view of the above, the Chairman of 

the Commission hereby certifies, 

pursuant to 46 U.S.C. 605(b) of the 

Regulatory Flexibility Act that the rule 

will not, if promulgated, have a 

significant economic impact on a 

substantial number of small entities. 

This rule is not a ‘‘major rule’’ under 

5 U.S.C. 804(2). 

As VOCC parties to service contracts 

and NVOCC parties to NSAs are already 

required to provide ‘‘associated records’’ 

to the Commission pursuant to the 

Commission’s regulations at 46 CFR 

530.15(c) and 531.12(b), this Final Rule 

does not impose any new recordkeeping 

or reporting requirements on VOCCs or 

NVOCCs that would be ‘‘collection of 

information’’ requiring approval under 

the Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. 

List of Subjects in 46 CFR Parts 530 and 

531 

Freight, Maritime carriers, Reporting 

and recordkeeping requirements. 

For the reasons stated in the 

supplementary information, the Federal 

Maritime Commission amends 46 CFR 

parts 530 and 531 as follows. 

PART 530—SERVICE CONTRACTS 

■ 1. The authority citation for part 530 

continues to read as follows: 

Authority: 5 U.S.C. 553; 46 U.S.C. 305, 

40301–40306, 40501–40503, 41307. 

■ 2. Revise § 530.8(c) to read as follows: 

§ 530.8 Service Contracts. 

* * * * * 

(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. 

* * * * * 

PART 531—NVOCC SERVICE 

ARRANGEMENTS 

■ 3. The authority citation for Part 531 

continues to read as follows: 

Authority: 46 U.S.C. 40103. 

■ 4. Revise § 531.6(c) to read as follows: 

§ 531.6 NVOCC Service Arrangements. 

* * * * * 

(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 NSA itself 

unless those terms are readily available 

to the parties and the Commission. 

Reference may not be made to a tariff of 

a common carrier other than the NVOCC 

acting as carrier party to the NSA. 

(3) Pursuant to § 531.12(b), the carrier 

party to the NSA 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 NSA provides the 

Commission with the associated records 

of the terms within thirty (30) days of 

the Commission’s written request. 

* * * * * 

By the Commission. 

Karen V. Gregory, 

Secretary. 

[FR Doc. 2012–5461 Filed 3–6–12; 8:45 am] 

BILLING CODE 6730–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 679 

[Docket No. 101126522–0640–2] 

RIN 0648–XB062 

Pacific Cod by Catcher Vessels Less 

Than 50 Feet (15.2 Meters) Length 

Overall Using Hook-and-Line Gear in 

the Central Regulatory Area of the Gulf 

of Alaska 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Temporary rule; closure. 

SUMMARY: NMFS is prohibiting directed 

fishing for Pacific cod by catcher vessels 

(CVs) less than 50 feet (15.2 meters (m)) 

in length overall (LOA) using hook-andline gear in the Central Regulatory Area 

of the Gulf of Alaska (GOA). This action 

is necessary to prevent exceeding the A 

season allowance of the 2012 Pacific 

cod total allowable catch apportioned to 

CVs less than 50 feet (15.2 m) LOA 

using hook-and-line gear in the Central 

Regulatory Area of the GOA. 

DATES: Effective 1200 hrs, Alaska local 

time (A.l.t.), March 4, 2012, through 

1200 hrs, A.l.t., September 1, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Obren Davis, 907–586–7228. 

SUPPLEMENTARY INFORMATION: NMFS 

manages the groundfish fishery in the 


srobinson on DSK4SPTVN1PROD with RULES