25150 Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Proposed Rules 

manufacturer identification code as 

required by paragraph (a) of this section. 

The request must indicate the importer’s 

name and U.S. address along with a list 

of the manufacturers, their addresses, 

and the general types and sizes of boats 

that will be imported. If a nation has a 

hull identification number system 

which has been accepted by the Coast 

Guard for the purpose of importing 

boats, it may be used by the importer 

instead of the one specified within this 

subpart. To request a list of those 

nations having such a numbering 

system, write to the Commandant (CG– 

54223), 2100 Second Street, SW., Stop 

7581, Washington, DC 20593–7581. 

PART 187—VESSEL IDENTIFICATION 

SYSTEM 

32. The authority citation for part 187 

is revised to read as follows: 

Authority: 46 U.S.C. 2103, 12501; 

Department of Homeland Security Delegation 

No. 0170.1 (92). 

33. Revise § 187.11 to read as follows: 

§ 187.11 What are the procedures to 

participate in VIS? 

(a) A State wanting to participate in 

VIS must inform the Commandant, in 

writing, describing its willingness and 

ability to comply with each requirement 

of 33 CFR 187.201. If the Commandant 

is satisfied that the State will comply 

fully with 33 CFR 187.201, the State 

will be allowed to participate in VIS and 

will be listed in Appendix A to this 

part, for so long as the Commandant 

determines that the State complies fully 

with 33 CFR 187.201. 

(b) A State wanting to participate in 

VIS, but unable to comply with one or 

more requirements of 33 CFR 187.201, 

may participate in VIS under one or 

more waivers, for good cause shown. 

For purposes of this section, ‘‘good 

cause’’ includes the existence of State 

law prohibiting full compliance. A State 

wanting to participate in VIS under one 

or more waivers: 

(1) So informs the Commandant, in 

writing; 

(2) Describes the requirement or 

requirements for which waiver is 

sought, and the good cause for 

noncompliance; and 

(3) Describes the steps the State 

intends to take to remove the good cause 

and the anticipated time needed to do 

so. 

(c) The Commandant may allow a 

State to participate in VIS under one or 

more waivers, pursuant to a 

memorandum of agreement between the 

Coast Guard and the State. 

(1) The memorandum of agreement 

recites the information provided by the 

State under paragraph (b) of this section, 

and is valid for not more than three 

years, during which time the State will 

be deemed to participate in VIS and be 

listed in Appendix A to this part. 

(2) The State may withdraw from the 

memorandum of agreement and 

participation in VIS upon written notice 

to the Commandant. The Commandant 

may terminate the memorandum of 

agreement and the State’s participation 

in VIS for noncompliance with the 

terms of the memorandum. 

(3) Participation in VIS under one or 

more waivers beyond the term of the 

initial memorandum of agreement 

requires a new memorandum. 

(4) If the good cause for waivers is 

eliminated within the term of the 

memorandum of agreement, the State 

may so inform the Commandant in 

writing. The Commandant may then 

consider the State to participate in VIS 

under paragraph (a) of this section. 

34. Revise § 187.103 to read as 

follows: 

§ 187.103 What information must be 

collected to identify a vessel? 

A participating State must collect the 

following information on a vessel it has 

numbered or titled and make it available 

to VIS: 

(a) Manufacturer’s hull identification 

number, if any; 

(b) Official number, if any, assigned 

by the Coast Guard or its predecessor; 

(c) Number on certificate of number 

assigned by the issuing authority of the 

State; 

(d) Expiration date of certificate of 

number; 

(e) Number previously issued by an 

issuing authority; 

(f) Make and model of vessel; 

(g) Model year: Includes model year, 

manufacture year, or year built; 

(h) Overall length; 

(i) Vessel type: Authorized terms are 

‘‘open motorboat’’, ‘‘cabin motorboat’’, 

‘‘air boat’’, ‘‘inflatable boat’’, ‘‘auxiliary 

sail’’, ‘‘sail only’’, ‘‘paddlecraft’’, 

‘‘personal watercraft’’, ‘‘pontoon boat’’, 

‘‘houseboat’’, ‘‘rowboat’’, or ‘‘other’’; 

(j) Hull material: Authorized terms are 

‘‘wood’’, ‘‘aluminum’’, ‘‘steel’’, 

‘‘fiberglass’’, ‘‘plastic’’, ‘‘rubber/vinyl/ 

canvas’’, or ‘‘other’’; 

(k) Propulsion type: Authorized terms 

are ‘‘propeller’’, ‘‘sail’’, ‘‘water jet’’, ‘‘air 

thrust’’, ‘‘manual’’, or ‘‘other’’; 

(l) Engine drive type: Authorized 

terms are ‘‘inboard’’, ‘‘outboard’’, ‘‘pod 

drive’’, ‘‘sterndrive’’, or ‘‘other’’; 

(m) Fuel: Authorized terms are ‘‘gas’’, 

‘‘diesel’’, ‘‘electric’’, or ‘‘other’’; and 

(n) Primary use: Authorized terms are 

‘‘pleasure’’, ‘‘rent or lease’’, ‘‘dealer or 

manufacturer demonstration’’, ‘‘charter 

fishing’’, ‘‘commercial fishing’’, 

‘‘commercial passenger carrying’’, or 

‘‘other commercial operation’’. 

Dated: May 3, 2010. 

Kevin S. Cook, 

Rear Admiral, U.S. Coast Guard, Director of 

Prevention Policy. 

[FR Doc. 2010–10723 Filed 5–6–10; 8:45 am] 

BILLING CODE 9110–04–P 

FEDERAL MARITIME COMMISSION 

46 CFR Parts 520 and 532 

[Docket No. 10–03] 

RIN 3072–AC38 

NVOCC Negotiated Rate Arrangements 

AGENCY: Federal Maritime Commission. 

ACTION: Notice of Proposed Rulemaking. 

SUMMARY: The Federal Maritime 

Commission proposes a new exemption 

for non-vessel-operating common 

carriers agreeing to negotiated rate 

arrangements from certain provisions 

and requirements of the Shipping Act of 

1984 and certain provisions and 

requirements of the Commission’s 

regulations. 

DATES: Written comments are due by 

June 4, 2010. If an interested party 

requests an opportunity to present oral 

comments to the Commission 

concerning the proposed regulatory 

changes by May 14, 2010, the FMC will 

hold a public meeting on May 24, 2010. 

ADDRESSES: Submit all comments 

concerning this proposed rule to: Karen 

V. Gregory, Secretary, Federal Maritime 

Commission, 800 North Capitol Street, 

NW., Room 1046, Washington, DC 

20573–0001. secretary@fmc.gov. 

FOR FURTHER INFORMATION CONTACT: 

Rebecca A. Fenneman, Deputy General 

Counsel, Federal Maritime Commission, 

800 North Capitol Street, NW., Room 

1018, Washington, DC 20573–0001. 

(202) 523–5740. 

generalcounsel@fmc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Submit Comments: Submit an original 

and fifteen copies of written comments 

in paper form, and submit a copy in 

electronic form (Microsoft Word 2007 or 

2003) by e-mail to secretary@fmc.gov on 

or before June 4, 2010. Include in the 

subject line: ‘‘Docket No. 10–03 

Comments on NVOCC Negotiated Rate 

Arrangements’’. Interested parties may 

also request an opportunity to present 

oral comments to the Commission at a 

public meeting to take place on May 24, 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
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1The Department of Justice moved to file 

comments on February 5, 2010 and the Commission 

determined to accept these late-filed comments on 

February 17, 2010. 

2010, at the Commission’s Main Hearing 

Room, Room 100, 800 North Capitol 

Street, NW., Washington, DC 20573. 

Requests to present oral comments must 

be received by the Commission on or 

before May 14, 2010. The Commission 

will announce the time of the meeting, 

the order of presentation, and time 

allotment via its Web site and service on 

interested presenters. 

On July 31, 2008, the National 

Customs Brokers and Forwarders 

Association of America, Inc. (NCBFAA) 

filed a petition with the Federal 

Maritime Commission (FMC or 

Commission), requesting the 

Commission exercise its authority under 

46 U.S.C. 40103 to issue an exemption 

from provisions of the Shipping Act of 

1984 (the Act) requiring non-vesseloperating common carriers (NVOCCs) to 

publish and/or adhere to rate tariffs for 

ocean transportation in those instances 

where they have individually negotiated 

rates with their shipping customers and 

memorialized those rates in writing. 

Petition No. P1–08, Petition of the 

National Customs Brokers and Freight 

Forwarders Association of America, Inc. 

for Exemption from Mandatory Rate 

Tariff Publication at 10 (‘‘Petition’’). 

Notice of the Petition was published on 

August 11, 2008 and comments on it 

were due by September 26, 2008. 73 FR 

46625–02 (August 11, 2008). 

On December 24, 2009, NCBFAA filed 

a motion for leave to supplement the 

record and submit a verified statement 

on behalf of DJR Logistics, Inc. By order 

served January 5, 2010, the Commission 

granted NCBFAA’s motion, accepted the 

verified statement, and reopened the 

record for the limited purpose of 

receiving updated tariff cost 

information, and any replies thereto, 

from previous commenting parties of 

record by January 21, 2010. 

A. The Petition 

NCBFAA included as an attachment 

to its Petition a ‘‘Statement of Common 

Principles Concerning a Section 16 

Exemption for NVOCCs,’’ issued in 2004 

and agreed to by the National Industrial 

Transportation League (NITL), 

NCBFAA, and the Transportation 

Intermediaries Association (TIA). 

NCBFAA also attached to the Petition 

supporting verified statements on behalf 

of eight ocean transportation 

intermediaries (OTIs) (Econocaribe 

Consolidators, Inc.; Kuehne + Nagel, 

Agent of Blue Anchor Line, Division of 

Transpac Container System, Ltd.; John 

S. Connor, Inc.; Panalpina, Inc.; 

American International Cargo Service, 

Inc.; Barthco Transportation Services, 

Inc.; DHL Global Forwarding; and C.H. 

Powell Company). 

NCBFAA’s proposal incorporated the 

following principles: the exemption is 

voluntary; the exemption would relate 

only to rates tariffs, not to rules tariffs; 

disputes relating to exempt contracts 

would be settled only under contract 

law; NVOCC Service Arrangements 

(NSAs), to the extent used, would 

continue to be filed with the 

Commission and NSA essential terms 

will continue to be published; exempt 

contracts would be memorialized in 

writing; the Commission would have 

access to documentation relating to 

exempt contracts; the exemption would 

not be construed to extend antitrust 

immunity to NVOCCs; and only 

NVOCCs that are licensed or registered 

ocean transportation intermediaries 

would be eligible to use the exemption. 

B. Comments in Response to the Petition 

Comments in response to the Petition 

were filed by members of Congress; two 

Federal government agencies; OTIs; 

associations; consultants; tariff 

publishers; and vessel-operating 

common carriers (VOCCs). Comments 

from members of Congress were 

received from Senator Bernard Sanders 

(Vermont); Representative Peter Welch 

(at-Large Vermont); and Representative 

Jerry Weller (11th District, Illinois). 

Comments were received from the 

following OTIs: A Customs Brokerage, 

Inc. (ABC); All Freight Transportation, 

Inc.; Alpha Sun International, Inc.; 

American International Forwarding; 

A.N. Deringer, Inc.; Balguerie; Camelot 

Company; Cargo-Link International, 

Inc.; CJ International, Inc.; CV 

International, Inc.; D.J. Powers 

Company, Inc.; DJR Logistics, Inc.; DJS 

International Services, Inc.; DT Gruelle 

Company; Diplomat Global Logistics; 

EMO Trans, Inc.; FedEx Trade Networks 

Transport & Brokerage; Fracht FWO; 

Global Fairways, Inc.; Global Link 

Logistics; Independent Brokerage, LLC; 

JAS Forwarding Worldwide; Logistics 

Worldwide USA, Inc.; Mid-America 

Overseas, Inc./Hanseatic Container Line 

Ltd.; Multimodal International 

Shipping; NACA Logistics (USA); New 

Direx; New England Groupage; Norman 

G. Jensen, Inc.; North American 

Logistics, Inc.; O.T.S. Astracon LLC; 

ProTrans International; RIM Logistics; 

R.S. Express, Inc.; Schenker, Inc.; 

SeaSchott; Serra International; Shipco 

Transport, Inc.; Superior Brokerage 

Services, Inc.; Trans-Border Global 

Freight Systems, Inc.; and USA 

Shipping, LLC. 

The following associations filed 

comments in response to the Petition: 

Household Goods Forwarders 

Association of America, Inc.; National 

Industrial Transportation League 

(NITL); New York/New Jersey Foreign 

Freight Forwarders & Brokers 

Association, Inc.; Transportation 

Intermediaries Association; WorldWide 

Alliance; Florida Shipowners’ Group, 

Inc. and World Shipping Council. 

Comments were received from the U.S. 

Department of Transportation (DOT) 

and the U.S. Department of Justice 

(DOJ).1 Two consultants filed 

comments: ABS Consulting and Stan 

Levy Consulting, LLC (Levy). Comments 

were also filed by two tariff publishers: 

Distribution Publications, Inc. (DPI), 

and Global Maritime Transportation 

Services, Inc. (GMTS). 

Supplemental comments were 

received from the following OTIs: 

Balguerie; DHL Global Forwarding; 

Global Fairways International 

Transportation & Logistics; Kuehne + 

Nagel, Inc.; North American Logistics, 

Inc.; O.T.S. Astracon LLC; Panalpina, 

Inc.; RIM Logistics, Ltd.; and TransBorder Global Freight Systems, Inc. 

Supplemental comments were also 

received from NITL, Levy, and DPI. 

II. Summary of the Comments 

A. Initial Comments in Support of the 

Petition 

Two members of Congress who filed 

comments in response to the Petition 

support granting the Petition on the 

grounds that tariff publication is 

expensive, adds little value to the 

shipping public, and is out of step with 

the modern ocean transportation 

environment (Welch at 1; Weller at 1). 

Senator Sanders noted that tariff 

publishing requirements have not been 

updated for a number of years and cost 

freight forwarders time and resources 

(Sanders at 1). The Department of 

Transportation states that it has 

supported exemption of NVOCCs from 

tariff filing since such relief was first 

sought (DOT at 2–3); the Commission’s 

exemption for NSAs do not go far 

enough and impose unnecessary 

burdens and costs (Id. at 5–6); the 1998 

Ocean Shipping Reform Act (OSRA) had 

made the requirements for exemption 

more flexible; and that other agencies 

have used their exemption authority to 

relieve regulatory burdens (Id. at 7–8). 

The Department of Justice also states 

that it has long supported an exemption 

for NVOCCs from all tariff publication 

requirements in order to produce the 

greatest competitive benefits. (DOJ at 1). 

OTIs state that complying with tariff 

publication requirements is expensive, 

with estimates of annual expenditures 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
25152 Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Proposed Rules 

for compliance ranging from 

approximately $450 plus additional 

charges per rate item filed (Independent 

Brokerage, LLC at 2), to $200,000 

(Global Link Logistics at 2; RIM at 2). 

They also state that NVOCCs’ customers 

do not request tariff information and do 

not rely on tariffs, as rates are negotiated 

individually (American International 

Forwarding at 2; DT Gruelle Company at 

1). In addition, they maintain that there 

are generally no rate disputes with 

shippers (Camelot Company at 2; 

Diplomat Global Logistics at 2). OTIs 

state that NSAs have not provided 

adequate relief from tariff publication 

requirements, and, as NSAs are required 

to be filed with the FMC and their 

essential terms published in a tariff, 

they do not provide cost savings. In 

addition, OTIs state that shippers balk at 

the contractual commitments required 

by NSAs (American International 

Forwarding at 2; DJR Logistics, Inc. at 

2). 

A number of OTIs state that since 

2001, they have added costs associated 

with security requirements such as 

Customs-Trade Partnership Against 

Terrorism (C–TPAT) certification and 

the 24-hour advance manifest reporting 

requirement; and that, as small 

businesses, they need ‘‘regulatory 

offsets’’ so that their limited resources 

can be invested in programs that benefit 

the shipping public and contribute to 

the nation’s security (New Direx, Inc. at 

2–3; Superior Brokerage Services, Inc. at 

2–3). Finally, several OTIs take the 

position that the proposed exemption 

should include charges as well as rates 

(Schenker, Inc. at 4–6; Shipco at 3–4), 

and Schenker, Inc. argues that rules 

should be exempt as well as rates and 

charges (Schenker, Inc. at 6). 

The Household Goods Forwarders 

Association of America, Inc. (HGFAA) 

states that the publication of NVOCC 

rates for household goods movements is 

particularly burdensome, because these 

rates are door-to-door rates from inland 

point to inland point and are 

determined on an individual basis for 

each shipment through negotiations 

between competing NVOCCs and a 

shipper (HGFAA at 2). HGFAA states 

that tariff publication is of no benefit to 

household goods shippers, as published 

rates are limited in duration and 

geographic application and shippers of 

household goods do not use NVOCC 

tariffs to compare rates of various 

NVOCCs (Id. at 2–3). 

NITL states that tariffs are rarely 

reviewed or consulted by shippers to 

determine ocean transportation pricing, 

and that they function more as a costly 

regulatory afterthought (NITL at 1). 

NITL argues that the proposed 

exemption meets statutory exemption 

standards and is likely to promote 

competition by reducing regulatory 

costs for NVOCCs, increasing their 

potential to offer competitive ocean 

rates to shippers (Id. at 5). With regard 

to detriment to commerce, NITL argues 

that the exemption would not be 

detrimental to commerce as it would 

allow NVOCCs to respond more 

efficiently to changing market 

conditions; establish a regime for 

NVOCC pricing that is consistent with 

regulation of intermediaries in other 

U.S.-based transportation industries; 

and would promote the growth of U.S. 

exports by placing a greater reliance on 

the marketplace (Id. at 6–7). 

The New York/New Jersey Foreign 

Freight Forwarders & Brokers 

Association, Inc. (NYNJFFF&BA) argues 

that the tariff publication requirement 

inhibits the beneficial effects of 

competition for shippers (NYNJFFF&BA 

at 3); that the tariff publication 

requirement is costly and unnecessary 

in the contract carriage system that 

exists (Id. at 4); and that NSAs are not 

a viable option for most NVOCC 

movements (Id.). 

The Transportation Intermediaries 

Association (TIA) states that FMC 

regulations require NVOCCs to keep 

complete accounting records for every 

shipment, and tariff publication 

requirements duplicate that requirement 

(TIA at 6). TIA states that intermediaries 

often act as both forwarder and NVOCC 

on different segments of a movement, 

and the way that these arrangements are 

expressed in tariff language can cause 

confusion (Id. at 8–9). The WorldWide 

Alliance (WWA) states that tariff 

publishing does not exist in any trade 

lanes other than those involving the 

U.S., and this puts U.S. traffic at a 

disadvantage as NVOCCs cannot 

respond as quickly to rate and charge 

fluctuations as they can in other nonU.S. trades (WWA at 2). ABS Consulting 

(ABS) states that NVOCC rate tariffs 

have become obsolete and no longer 

serve their original purpose (ABS at 1). 

In addition, ABS states that the current 

tariff publication process adds 

unnecessary costs to NVOCCs, and thus 

increases shipping rates (Id. at 2). 

B. Initial Comments Opposing the 

Petition 

Levy, DPI, and GMTS oppose granting 

the relief sought by the Petition. Levy 

argues that the Petition does not 

substantiate with facts that the 

requested exemption would not result 

in substantial reduction in competition 

or be detrimental to commerce, as based 

on Levy’s assertion that NCBFAA has 

offered no new facts or information 

since its previous petition seeking the 

same relief was filed in 2003 (Levy at 4). 

Levy states that tariffs may not be used 

on a daily basis by shippers, but they 

provide a framework governing 

shipments so that when there is a cost 

or service issue, there is a legal tariff 

binding on all parties (Id. at 5). Levy 

states that if the exemption is granted, 

NVOCC shippers would lose the ability 

to use the FMC as a forum for 

complaints, contrary to the intent of the 

Act (Id. at 6). Finally, Levy argues that 

it is more appropriate for Congress to 

revise the Act and that the Petition 

should be denied, but that the FMC 

should initiate a proceeding to review 

and reform tariff regulations for both 

NVOCCs and VOCCs, to make tariff 

compliance less burdensome, tariffs 

more accessible, and tariff information 

more useful (Id. at 5, 7). 

Tariff publishers DPI and GMTS state 

that tariffs published on their Web site 

are frequently used to verify rates in 

order to settle disputes (DPI at 13; 

GMTS at 7). FMC access to tariffs, the 

tariff publishers argue, is essential for 

the agency to monitor NVOCC activities 

and protect the public from violations of 

Section 10 of the Shipping Act (DPI at 

13; GMTS at 10; DPI at 14), and the 

exemption would shift the cost and 

burden of enforcement away from the 

industry to the FMC and the public 

(GMTS at 10). DPI argues that granting 

the Petition would cause detriment to 

commerce because elimination of the 

30-day notice requirement for tariff rates 

would produce rate quotations that 

would be valid for short periods of time. 

GMTS urges the Commission to clarify 

its regulations so that carriers reduce the 

number of published tariff items to 

those rates that actually move the cargo 

(Id. at 9). 

Florida Shipowners’ Group Inc. (FSG) 

(on behalf of Bernuth Lines, Ltd.; CMA 

CGM SA; Crowley Caribbean Services, 

LLC; Seaboard Marine, Ltd.; Sea Freight 

Line, Ltd.; and Tropical Shipping USA, 

LLC) states that NVOCCs compete with 

VOCCs in reselling VOCC transportation 

services to beneficial cargo owners, and 

eliminating tariff publication 

requirements for NVOCCs while leaving 

them in place for VOCCs will affect the 

competitive balance between them (FSG 

at 2). With regard to tariff costs, FSG 

states that the costs borne by VOCCs to 

develop and maintain vessels, 

equipment, and infrastructure needed to 

move international trade, dwarfs the 

costs borne by NVOCCs to comply with 

tariff requirements (Id. at 3). FSG states 

that Congress chose to retain the tariff 

publication requirement on both 

NVOCCs and VOCCs, and the FMC 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
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2Commissioner Joseph E. Brennan dissented. 

should not remove that requirement 

from one class of competitors (Id.). 

C. Other Comments 

The World Shipping Council (WSC), 

a trade association of over 25 

international liner shipping ocean 

carriers, takes no position on the 

Petition but offers corrections to 

inaccurate statements in the Petition. 

WSC states that neither vessel capacity 

nor container availability is connected 

with tariff publication (WSC at 2). WSC 

argues that claims of short-notice VOCC 

rate changes are inaccurate, as most 

NVOCCs structure their dealings with 

VOCCs through service contracts so that 

any rate changes would be mutually 

agreed (Id.). WSC states that the 

generalization that NVOCCs have 

greater numbers of customers than 

VOCCs is misleading, as some VOCCs 

deal with thousands of beneficial cargo 

owners and NVOCC customers, and this 

should be taken into consideration in 

connection with relative tariff filing 

burdens (Id. at 2–3). 

D. Supplemental Comments Supporting 

the Petition 

NCBFAA submitted a verified 

supporting statement from DJR Logistics 

(DJR), to supplement the record. DJR 

states that virtually every rate change by 

ocean carriers requires it to make 

multiple changes in its tariff rates, at a 

cost of between $3.25 and $13 per 

change (DJR at 2). DJR estimates its 

annual tariff publishing bill will be 

between $25,000 and $30,000 (Id.). DJR 

states that none of its customers review 

its tariffs. Instead, DJR memorializes rate 

changes via e-mails or other written 

communications (Id. at 3). 

The OTIs submitting supplemental 

comments generally state that they have 

increased their tariff filings due to 

changes in VOCC rates and surcharges. 

Their average annual tariff publication 

costs are estimated to be from $2,000 

(O.T.S. Astracon at 2), to $240,000 (DHL 

Global Forwarding at 2, based on stated 

average monthly costs of $20,000). Some 

of the OTIs state that a written quotation 

is the accepted practice in rate 

negotiation, and therefore there is 

always written communication that can 

be used by the FMC (See, e.g., Kuehne 

+ Nagel at 2; Panalpina at 1). Kuehne + 

Nagel and O.T.S. Astracon state that 

NSAs have not provided the relief 

needed from the burden and expense of 

tariff publication (Kuehne + Nagel at 1; 

O.T.S. Astracon at 2). 

NITL states that the primary purpose 

of tariff publication, to prevent 

discriminatory pricing among shippers, 

is no longer a protection that is required 

or desired by shippers (NITL at 1). NITL 

states that the great majority of 

international ocean shipments move 

under service contracts, and therefore, 

tariffs are rarely reviewed by shippers to 

determine pricing (Id. at 1–2). NITL 

states that there are substantial costs 

associated with maintaining tariffs and 

these costs must either be passed on to 

shippers or absorbed by the NVOCC (Id. 

at 2). NITL argues that the proposed 

exemption would allow for a regulatory 

system that is more closely aligned with 

real time business practices (Id.). 

E. Supplemental Comments Opposing 

the Petition 

Levy states that when Congress 

decided to keep tariffs in 1984, it was 

mindful that it was continuing to 

impose a regulatory cost on carriers 

(Levy at 2). DPI also states that it 

publishes and maintains FMC tariffs for 

1,019 NVOCCs, and in 2009, annual 

tariff costs for its NVOCC clients ranged 

from $400 to $75,000 (DPI at 4). 

Levy states that tariffs are required to 

assist shippers and enable the FMC to 

fulfill its statutory duties (Id. at 3). DPI 

states that shippers can rely on tariff 

rates to be accurate, complete and in 

effect for 30 days; in the event of a 

dispute, the tariff can be easily accessed 

and reviewed (DPI at 5). DPI states that 

tariffs maintained at its Web site have 

been used thousands of times to verify 

rates in order to settle disputes (Id.). DPI 

states that tariffs help protect the public 

from violations by carriers of Section 10 

of the Shipping Act, and enable the 

Commission to assist in resolving 

disputes (Id.). DPI argues that granting 

an exemption will produce an increase 

in disputes between shippers and 

NVOCCs over applicable rates and 

charges (Id. at 6). Levy also argues that 

exempting carriers from tariff 

compliance could be detrimental to 

commerce because there would be 

higher legal costs associated with 

settling disputes in court instead of at 

the FMC (Id.). Levy states that the issues 

of overly burdensome regulations, 

access to tariffs and their usefulness 

should not be ignored, and the FMC 

should consider reforming its tariff 

regulations so that it can perform its 

duty and maintain the regulatory 

framework envisioned by Congress, 

rather than exempting NVOCCs from the 

Act’s requirements (Id). Levy strongly 

supports having the FMC initiate a 

proceeding to review and reform tariff 

regulations for both NVOCCs and 

VOCCs, to make tariff compliance less 

burdensome, tariffs more accessible and 

tariff information more useful (Id.). 

III. Commission Action 

After consideration of the Petition and 

all comments at a meeting on February 

18, 2010, the Commission determined to 

initiate a rulemaking to relieve licensed 

NVOCCs from the costs and burdens of 

tariff rate publication.2 The Commission 

specifically found that it was within its 

statutory authority and discretion under 

Section 16 of the Shipping Act to grant 

such an exemption with certain 

conditions, after having considered all 

the comments filed in support and in 

opposition to the Petition, as doing so 

would not result in substantial 

reduction in competition or be 

detrimental to commerce, consistent 

with the Act. See 46 U.S.C. 40103(a). 

Section 16 of the Act, as recodified, 

reads: 

40103. Administrative exemptions: 

(a) In General.—The Federal Maritime 

Commission, on application or on its own 

motion, may by order or regulation exempt 

for the future any * * * specified activity of 

[persons subject to this part] from any 

requirement of this part if the Commission 

finds that the exemption will not result in 

substantial reduction in competition or be 

detrimental to commerce. The Commission 

may attach conditions to an exemption and 

may, by order, revoke an exemption. 

(b) Opportunity for Hearing.—An order or 

regulation of exemption may be issued only 

if the Commission has provided an 

opportunity for a hearing to interested 

persons and departments and agencies of the 

United States Government. 

The Commission determined to issue 

this notice of proposed rulemaking, 

providing the licensed NVOCCs relief 

from tariff rate publication requirements 

and imposing several conditions, 

including the following: NVOCCs would 

continue to publish standard rules 

tariffs containing contractual terms and 

conditions governing shipments, and 

would be required to provide these rules 

free of charge; rates charged by NVOCCs 

must be agreed to and memorialized in 

writing by the date cargo is received for 

shipment by the common carrier; and 

NVOCCs must retain documentation of 

the agreed rate and terms for each 

shipment for a period of five years, and 

must make this documentation available 

promptly to the Commission on request 

pursuant to the Commission’s 

regulations at 46 CFR 515.31(g). 

IV. Discussion 

As described above, the Commission 

voted at its meeting of February 18, 

2010, exercising its discretion under 

Section 16 of the Act, codified at 46 

U.S.C. 40103, to exempt licensed 

NVOCCs by regulation from these 


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25154 Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Proposed Rules 

requirements of the Act: The 

requirement in Section 8(a), codified at 

46 U.S.C. 40501(a)–(c) that each 

common carrier keep open to public 

inspection in an automated tariff system 

tariffs showing all its rates; Section 8(b), 

codified at 46 U.S.C. 40501(d) (time 

volume rates); Section 8(d), codified at 

46 U.S.C. 40501(e) (tariff rate increase 

may not be effective on less than 30 

days’ notice but decrease effective 

immediately); Section 8(e), codified at 

46 U.S.C. 40503 (carrier application to 

grant refunds); and Section 10(b)(2)(A)’s 

requirement of adhering to the 

published tariff rate, codified at 46 

U.S.C. 41104(2)(A). The Commission 

also determined to seek public comment 

on whether the regulation should also 

extend the exemption to the 

prohibitions of Section 10(b)(4), 

codified at 46 U.S.C. 41104(4) 

(prohibiting common carriers from 

unfair or unjustly discriminatory 

practices in services pursuant to a 

tariff), and Section 10(b)(8), codified at 

46 U.S.C. 41104(8) (prohibiting common 

carriers from undue or unreasonable 

preference or advantage or undue or 

unreasonable prejudice or disadvantage 

for tariff service). The Commission 

voted to make this exemption subject to 

several conditions, as described below. 

The Commission now publishes a 

proposed regulation and seeks comment 

from the public on the proposal. 

The regulation, as proposed, would 

exempt licensed NVOCCs from certain 

provisions of the Act, specified as 

follows. The Petition also requests that 

the exemption be applicable for 

NVOCCs unlicensed but registered 

pursuant to 46 CFR 515.21(a)(3). The 

Commission will consider comments on 

whether the exemption should be 

extended to such NVOCCs. The 

proposed regulation would recognize 

NVOCC negotiated rate arrangements 

(NRAs) and proposes defining that 

instrument as ‘‘a written and binding 

arrangement between a shipper and an 

eligible NVOCC to provide specific 

transportation service for a stated cargo 

quantity, from origin to destination, on 

and after the receipt of the cargo by the 

carrier or its agent (or the originating 

carrier in the case of through 

transportation).’’ 

For the exemption rule to apply to an 

NVOCC, the NVOCC must meet the 

following conditions: 

• Notice that the NVOCC is invoking 

the exemption and opting out of 

rate publication must be published 

in a prominent place in a rules 

tariff; 

• Public access to the rules tariff must 

be free of charge or the rules tariff 

must be provided with each of the 

NVOCC’s proposed NRAs or rate 

quotes; 

• NRAs must: 

Æ Be agreed to by both parties; 

Æ Be memorialized in writing; 

Æ Include the applicable rate for each 

shipment; 

Æ Be agreed and memorialized on or 

before the date on which the cargo 

is received by the common carrier 

or its agent (including originating 

carrier in the case of through 

transportation rates); 

Æ Include prominent notice of the 

existence and location of the 

NVOCC’s rules tariff; and 

• NRAs and associated records must be 

retained for five years and are 

subject to the records availability 

requirements of the Commission’s 

regulations at 46 CFR 515.31(g). 

When these conditions have been 

met, the regulation as proposed would 

exempt the NVOCC from the following 

requirements of the Act and the 

Commission’s related regulations: 

1. The requirement in Section 

8(a)(1)(codified at 46 U.S.C. 40501(a)), 

(requirement that a tariff containing the 

applicable rate be published in an 

automated tariff system); 

2. Section 8(b) (codified at 46 U.S.C. 

40501(d)) (a rate under which a tariff 

may vary with the volume of cargo over 

a specified period of time); 

3. Section 8(d), (codified at 46 U.S.C. 

40501(e)) (tariff rate increase may not be 

effective on less than 30 days’ notice but 

may decrease effective on publication); 

4. Section 8(e), (codified at 46 U.S.C. 

40503) (common carrier may apply for 

Commission authority to grant refunds); 

and from 

5. Section 10(b)(2)(a)’s requirement to 

adhere to a published tariff rate 

(codified at 46 U.S.C. 41104(2)(A)). 

Other than the specific provisions of 

the Act and the Commission’s related 

regulations referenced above, eligible 

NVOCCs will be subject to the 

requirements of the Act and all 

applicable antitrust laws under the 

proposed regulation. 

The Commission seeks comment on 

whether the regulation should 

additionally specifically exempt eligible 

NVOCCs from the prohibitions of 

Section 10(b)(4), codified at 46 U.S.C. 

41104(4) (prohibiting common carriers 

from unfair or unjustly discriminatory 

practices in service pursuant to a tariff), 

and Section 10(b)(8), codified at 46 

U.S.C. 41104(8) (prohibiting common 

carriers from undue or unreasonable 

preference or advantage or undue or 

unreasonable prejudice or disadvantage 

for tariff service). 

The Commission also requests 

comment on additional terms to be 

required in the NRA documentation. In 

addition, the Commission requests 

comments on which elements should be 

required to qualify the NRA for a ‘‘safe 

harbor’’ status that affords a 

presumption that the corresponding 

shipment is not subject to the tariff rate 

publication requirement. 

Finally, the Commission proposes to 

add 46 CFR 520.13(e) to its current tariff 

regulations indicating the interaction of 

NRAs and otherwise applicable tariff 

publication requirements of that section. 

V. Section-by-Section Analysis 

A. Section 532.1—Purpose 

The NPRM proposes an exemption 

from certain provisions of the Act. 

Section 532.1 sets forth the purpose for 

the exemption and its conditions. 

B. Section 532.2—Scope and 

Applicability 

This provision describes the scope 

and applicability of the proposed 

exemption. Notably, the Commission 

has proposed that the exemption be 

limited to NVOCCs that are licensed 

pursuant to 46 CFR Part 515. Further, it 

states that any NVOCC who fails to 

maintain its bond or license or has had 

its tariff suspended or cancelled by the 

Commission is ineligible to avail itself 

of the exemption. 

The Commission has proposed that, 

as the exemption as proposed will only 

apply to rates, but not the other terms 

of the agreement between shipper and 

carrier, standard terms (‘‘tariff rules’’) 

will continue to be required to be made 

public in the NVOCC’s tariff 

publication. 

C. Section 532.3—Definitions 

This provision defines the terms used 

in the exemption regulation. 

Specifically, the Commission introduces 

a new term, ‘‘NVOCC Negotiated Rate 

Arrangement’’ (NRA). The Commission 

notes that it does not propose to remove 

or revise the exemption regulations for 

NVOCC Service Arrangements (NSAs), 

46 CFR Part 531. 

The rule as proposed would define an 

NRA as, ‘‘a written and binding 

arrangement between a shipper and an 

eligible NVOCC to provide specific 

transportation service for a stated cargo 

quantity, from origin to destination, on 

and after the receipt of the cargo by the 

carrier or its agent (or the originating 

carrier in the case of through 

transportation).’’ This definition is based 

on that of ‘‘rate’’ as it appears in the 

Commission’s rules at 46 CFR 520.2. 

The proposed exemption regulation 

would also define the term ‘‘rules tariff.’’ 


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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Proposed Rules 25155 

D. Section 532.4—Duties 

This proposed provision imposes the 

duty to provide all terms of an NRA 

upon the offering NVOCC and is 

intended for the protection of the 

shipper. The proposed rule requires that 

an NVOCC invoking the exemption 

either (1) provide the public electronic 

access to its rules tariff free of charge or 

(2) provide a copy of its rules tariff with 

each of its proposed NRAs. 

E. Section 532.5—Requirements for 

NVOCC Negotiated Rate Arrangements 

This provision details the 

requirements for the timing, contents 

and documentation of NRAs. NRAs 

must be agreed to and memorialized in 

writing. Specifically, the Commission 

wishes commenters to take notice of the 

timing requirements of the exemption 

regulation. NRAs must be concluded 

and in place prior to the date the cargo 

is received by the common carrier or its 

agent (including originating carriers in 

the case of through transportation). 

These requirements are based on the 

applicable rate provision of the 

Commission’s tariff regulations found at 

46 CFR 520.7(c). The Commission 

wishes to note that the regulation as 

proposed does not allow for any 

modification to the NRA after the cargo 

is received by the carrier or its agent (or 

the originating carrier in the case of 

through transportation). 

F. Section 532.6—Notices 

This section provides details of the 

required notices that an NVOCC 

invoking the exemption must provide to 

the Commission and to potential 

customers. The proposed regulation 

requires NVOCCs invoking the 

exemption to continue to publish a rules 

tariff, which contains terms and 

conditions for shipments, but not the 

agreed rate for a particular shipment. 

The proposed rule requires that the 

published rules tariff include prominent 

notice that the NVOCC has chosen to 

operate under the exemption and opt 

out of publishing rates in its tariffs. 

Alternatively, if an NVOCC seeks to 

invoke the exemption for all of its 

dealings with shippers, it may be 

simpler to provide an indication of this 

election to the Commission on the 

NVOCC’s Form FMC–1 filing, which 

would then be reflected on the 

Commission’s Web site along with the 

NVOCC’s tariff location. The 

Commission seeks comment on whether 

the regulation should also specify that, 

when a tariff rate and a duly-executed 

NRA appear to address the same 

shipment, the lower rate shall prevail. 

G. Section 532.7—Recordkeeping and 

Audit 

This provision would require an 

NVOCC invoking the exemption to 

maintain original NRAs and associated 

records for 5 years in a format easily 

produced to Commission. An NVOCC 

would be required to make the NRAs 

and associated records available to the 

Commission promptly in response to a 

request pursuant to 46 CFR 515.31(g). 

Failure to keep records would remove 

the operation of the exemption (even if 

it had been invoked by a notice as set 

forth in foregoing sections) and 

therefore would make the NVOCC 

subject to penalties for violations of the 

Act including, for example, 46 U.S.C. 

41104(1) (prohibition against a common 

carrier allowing a person to obtain 

transportation at less than applicable 

tariff rates by an unjust or unfair means 

or device), and 41104(2)(A) (prohibition 

against a common carrier providing 

service not in accordance with a tariff). 

VI. Statutory Reviews and Request for 

Comment 

In accordance with the Regulatory 

Flexibility Act, 5 U.S.C. 601 et seq., the 

Chairman of the Federal Maritime 

Commission certifies that the proposed 

rule, if promulgated, would not have a 

significant economic impact on a 

substantial number of small entities. 

The Commission recognizes that the 

majority of businesses affected by this 

rule qualify as small entities under the 

guidelines of the Small Business 

Administration. The rule, however, 

would establish an optional method for 

NVOCCs to carry cargo for their 

customers to be used at their discretion. 

The rule would pose no economic 

detriment to small business entities. 

Rather, it exempts NVOCCs from the 

otherwise applicable requirements of 

the Act when such entities comply with 

the rules set forth herein. 

This regulatory action is not a ‘‘major 

rule’’ under 5 U.S.C. 804(2). 

The collection of information 

requirements contained in this proposed 

46 CFR Part 532 have been submitted to 

the Office of Management and Budget 

for review under section 3504(h) of the 

Paperwork Reduction Act of 1980, as 

amended. Send comments regarding the 

burden estimate or any other aspect of 

this collection of information, including 

suggestions for reducing this burden, to 

Ronald D. Murphy, Managing Director, 

Federal Maritime Commission, 800 

North Capitol Street, NW., Washington, 

DC 20573, e-mail: OMD@fmc.gov, or fax: 

(202) 523–3646; and to the Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, 

Attention: Desk Officer for Federal 

Maritime Commission, 17th Street and 

Pennsylvania Avenue, NW., 

Washington, DC 20503, e-mail: 

OIRASubmission@OMB.EOP.GOV, or 

fax: (202) 395–5806. 

List of Subjects 

46 CFR Part 520 

Common carrier, Freight, Intermodal 

transportation, Maritime carrier, 

Reporting and recordkeeping 

requirements. 

46 CFR Part 532 

Exports, Non-vessel-operating 

common carriers, ocean transportation 

intermediaries. 

Accordingly, the Federal Maritime 

Commission proposes to amend 46 CFR 

Part 520 and add 46 CFR Part 532 as 

follows: 

PART 520—CARRIER AUTOMATED 

TARIFFS 

1. The authority for Part 520 

continues to read as follows: 

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

40101–40102, 40501–40503, 40701–40706, 

41101–41109. 

§ 520.13 [Amended] 

2. In § 520.13, add a new paragraph 

(e) to read as follows: 

§ 520.13 Exemptions and exceptions. 

* * * * * 

(e) NVOCC Negotiated Rate 

Arrangements. A licensed NVOCC that 

satisfies the requirements of part 532 of 

this chapter is exempt from the 

requirement in this part that it include 

rates in a tariff open to public 

inspection in an automated tariff 

system. 

3. Add part 532 to read as follows: 

PART 532—NVOCC NEGOTIATED 

RATE ARRANGEMENTS 

Subpart A—General Provisions 

Sec. 

532.1 Purpose. 

532.2 Scope and applicability. 

532.3 Definitions. 

Subpart B—Procedures Related to NVOCC 

Negotiated Rate Arrangements 

532.4 Duties of the NVOCC. 

532.5 Requirements for NVOCC Negotiated 

Rate Arrangements. 

532.6 Notices. 

Subpart C—Recordkeeping Requirements 

532.7 Recordkeeping and audit. 

532.91 OMB control number assigned 

pursuant to the Paperwork Reduction 

Act. 

Authority: 46 U.S.C. 40103. 


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25156 Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Proposed Rules 

Subpart A—General Provisions 

§ 532.1 Purpose. 

The purpose of this Part, pursuant to 

the Commission’s statutory authority, is 

to exempt licensed and bonded nonvessel-operating common carriers 

(NVOCCs) from the tariff rate 

publication and adherence requirements 

of the Shipping Act of 1984, as 

enumerated herein. 

§ 532.2 Scope and applicability. 

This Part exempts NVOCCs duly 

licensed pursuant to 46 CFR 515.3, 

holding adequate proof of financial 

responsibility pursuant to 46 CFR 

515.21; and meeting the requirements of 

46 CFR 532.4 through 532.7; from the 

following requirements and prohibitions 

of the Shipping Act and the 

Commission’s regulations: 

(a) The requirement in 46 U.S.C. 

40501(a)–(c) that the NVOCC include its 

rates in a tariff open to public 

inspection in an automated tariff 

system; 

(b) 46 U.S.C. 40501(d); 

(c) 46 U.S.C. 40501(e); 

(d) 46 U.S.C. 40503; 

(e) The prohibition in 46 U.S.C. 

41104(2)(A); and 

(f) The Commission’s corresponding 

regulation at 46 CFR 520.3(a) that the 

NVOCC include its rates in a tariff open 

for public inspection in an automated 

tariff system; 

(g) The Commission’s corresponding 

regulations at 46 CFR 520.4(a)(4), 

520.4(f), 520.6(e), 520.7(c), (d), 520.8(a), 

520.12, and 520.14. Any NVOCC failing 

to maintain its bond or license as set 

forth above, or who has had its tariff 

suspended by the Commission, shall not 

be eligible to invoke this exemption. 

§ 532.3 Definitions. 

When used in this part, 

(a) ‘‘NVOCC Negotiated Rate 

Arrangement’’ means a written and 

binding arrangement between a shipper 

and an eligible NVOCC to provide 

specific transportation service for a 

stated cargo quantity, from origin to 

destination, on and after receipt of the 

cargo by the carrier or its agent (or the 

originating carrier in the case of through 

transportation). 

(b) ‘‘Rate’’ means a price stated for 

providing a specified level of 

transportation service for a stated cargo 

quantity, from origin to destination, on 

and after a stated date or within a 

defined time frame. 

(c) ‘‘Rules tariff’’ means the portion of 

a tariff, as defined by 46 CFR 520.2, 

containing the terms and conditions 

governing the charges, classifications, 

rules, regulations and practices of an 

NVOCC, but does not include a rate. 

Subpart B—Procedures Related to 

NVOCC Negotiated Rate Arrangements 

§ 532.4 Duties of the NVOCC. 

Before entering into an NRA under 

this Part, the NVOCC must: 

(a) For each NRA, provide the 

prospective shipper all the applicable 

terms as set forth in its rules tariff; or 

(b) Provide electronic access to its 

rules tariffs to the public free of charge. 

§ 532.5 Requirements for NVOCC 

Negotiated Rate Arrangements 

In order to qualify for the exemptions 

to the general rate publication 

requirement as set forth in section 

532.2, an NRA must: 

(a) Be in writing; 

(b) Be agreed to by both shipper and 

NVOCC prior to the date on which the 

cargo is received by the common carrier 

or its agent (including originating 

carriers in the case of through 

transportation); 

(c) Clearly specify the rate and to 

which shipment or shipments such rate 

will apply; and 

(d) may not be modified after the time 

the shipment is received by the carrier 

or its agent (including originating 

carriers in the case of through 

transportation). 

§ 532.6 Notices. 

(a) An NVOCC wishing to invoke an 

exemption pursuant to this part must 

indicate that intention to the 

Commission and to the public by one or 

more of the following: 

(1) A prominent notice on its rules 

tariff; or 

(2) By so indicating on its Form FMC– 

1 on file with the Commission. 

(b) [Reserved] 

Subpart C—Recordkeeping 

Requirements 

§ 532.7 Recordkeeping and audit. 

(a) An NVOCC invoking an exemption 

pursuant to this part must maintain 

original NRAs and all associated records 

including written communications for 5 

years in a format easily produced to 

Commission. 

(b) NRAs and all associated records 

and written communications are subject 

to inspection and reproduction requests 

under section 515.31(g) of this chapter. 

An NVOCC shall produce the requested 

NRAs and associated records, including 

written communications, promptly in 

response to a Commission request. 

(c) Failure to keep or timely produce 

original NRAs and associated records 

and written communications will 

disqualify an NVOCC from the 

operation of the exemption provided 

pursuant to this part, regardless of 

whether it has been invoked by notice 

as set forth above, and may result in a 

Commission finding of a violation of 46 

U.S.C. 41104(1), 41104(2)(A) or other 

acts prohibited by the Shipping Act. 

§ 532.91 OMB control number issued 

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–XXX]. 

By the Commission. 

Karen V. Gregory, 

Secretary. 

[FR Doc. 2010–10476 Filed 5–6–10; 8:45 am] 

BILLING CODE P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 54 

[WC Docket No. 05–337, CC Docket No. 96– 

45, WC Docket No. 03–109; FCC 10–57] 

High-Cost Universal Service Support, 

Federal-State Joint Board on Universal 

Service, Lifeline and Link-Up 

AGENCY: Federal Communications 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: In this document, the 

Commission proposes targeted rule 

changes to help eligible consumers in 

Puerto Rico take better advantage of 

existing universal service low-income 

support programs. Specifically, the 

Commission asks whether it should 

provide additional Link-Up support to 

help offset special construction charges 

incurred by consumers when facilities 

must be built to provide them with 

access to voice telephone service. By 

removing a remaining impediment to 

affordable voice telephone service, the 

Commission would hope to further 

close the gap in telephone 

subscribership between the 

Commonwealth and non-insular areas. 

DATES: Comments on the proposed rules 

are due on or before June 7, 2010 and 

reply comments are due on or before 

June 21, 2010. 

ADDRESSES: You may submit comments, 

identified by WC Docket No. 05–337, CC 

Docket No. 96–45, WC Docket No. 03– 

109, by any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 


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