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Statement on Review of NVOCC Negotiated Rate 

Arrangements

Commissioner Rebecca Dye

April 18, 2012

• If the Commission identifies regulatory relief that would 

not substantially reduce competition or be detrimental to 

commerce, I believe that we should provide this relief.

• Especially under today’s economic conditions, we should 

grant reasonable regulatory exemptions to simplify 

businesses processes, put cash back into companies, and 

generate additional jobs.

• Exemptions from unnecessary regulations would make 

the entire international ocean transportation supply 

chain more flexible and efficient.

• I strongly supported the Commission’s final rule that 

became effective last April to relieve non-vessel 

operating common carriers (NVOCCs) from the costs and 

burdens associated with publishing tariffs.
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• Unfortunately, NVOCCs have failed to realize the benefits 

we anticipated from the tariff publication exemption.

• Only about six percent of licensed NVOCC’s are using the 

new NVOCC negotiated rate agreements (NRAs). 

• Many of the intermediaries that responded to the 

Commission’s recent notice of inquiry (NOI) reported that 

they find it easier to continue to publish tariffs rather 

than negotiate an NRA with their customers.

• There is no incentive for an NVOCC to use our new NRAs, 

because they are overly regulated and basically tariffs 

under another name.

• In fact, the majority of comments the Commission 

received in our current NOI are the same suggestions the 

Commission rejected in our NRA final rule. 

• The individual intermediaries along with trade 

associations representing thousands of intermediaries 

and shippers report fundamental problems with NRAs. 

They say the exemption procedure in confusing, overly 

regulatory, expensive and burdensome. 
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• NRAs are inflexible and may not include economic terms 

such as credit and payment terms, minimum quantities, 

penalties or incentives. 

• A substantial problem is created because NRAs may not 

be amended by the parties once the subject cargo has 

been received by the NVOCC. This creates enormous 

problems for NVOCCs and ocean carriers carrying cargo 

under NRAs, NVOCC Service Arrangements (NSAs) and 

service contracts.

• Shippers, especially exporters, are unable to make 

commodity or destination changes without delays or 

higher prices.

• Finally, foreign legally operating NVOCCs are not allowed 

to enter into NRAs with their customers.

• Of course, I would support changes that would make 

NRAs more flexible and useful. However, I do not believe

this would provide the most benefit to the shipping 

public.

• I strongly supported extending the exemption to foreign 

NVOCCs, who are operating lawfully in the U.S., in the 
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final rule last year, and I continue to support this 

extension.

• Foreign legally operating NVOCCs must carry double the 

amount of bond as licensed NVOCCs. It is unnecessary to 

continue to require these foreign NVOCCs to publish 

tariffs when their U.S. counterparts are exempted.

 

• I am also concerned that our failure to extend the 

exemption to foreign NVOCCs operating legally in the 

United States could possibly be in violation of certain 

international treaties to which the U.S. is a party or give 

rise to negative retaliatory actions by our important 

trading parties.

• I believe that to significantly improve the international 

ocean shipping system, the Commission should eliminate 

all unnecessary regulatory requirements, including tariff 

publication and enforcement, for American and foreign 

NVOCCs as well as ocean carriers.
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• The Commission has been petitioned to exempt NVOCCs 

from tariff publication at least three times over the past 

twenty years. 

• NVOCCs that have responded to our NOI are trying to get 

us to incorporate their actual business practices in our 

regulatory regime.

 

• The only way to accomplish this goal is to exempt 

NVOCC’s and ocean carriers from the tariff publication 

and enforcement of the Shipping Act and extend this 

exemption to our lawfully operating foreign NVOCCs.

• Liberalizing NRAs will never entirely eliminate the 

inherent inefficiencies of our tariff regulations. 

• Each time we refuse to acknowledge the business 

realities in the international ocean transportation 

system, along with the fact that published tariff rates are 

no longer used by shippers for price information, the 

Commission loses more credibility from the shipping 

public.
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• I believe the most responsible and economically efficient 

way for the Commission to handle this issue is to exempt 

NVOCCs and ocean carriers completely from the tariff 

publication requirements of the Shipping Act. 

• I also want to take this opportunity to thank my 

colleagues for their support of the recent NOI concerning 

joint NSAs. Mr. Chairman, I look forward to working with 

you on future changes to our NRA and NSA regulations.

• Thank you, Mr. Chairman.