FMC Eases Some Publication Requirements For Ocean Container Carriers

The U.S. Federal Maritime Commission (FMC) on Thursday adopted a final rule that eases certain publication requirements for ocean container carriers, providing partial relief sought by the World Shipping Council in a 2018 petition to the agency.

The FMC's approval of the rule follows a Feb. 14 notice of proposed rulemaking, in which the agency received two public comments.

John Butler, president and CEO of the World Shipping Council (Photo: Courtesy)

The new rule amends the FMC's regulations that govern service contracts by eliminating the requirement that ocean carriers publish "essential terms" for individual service contracts in a tariff format.

The World Shipping Council said it is pleased with the finalized rule.

"Since the ‘me-too' contract practice was eliminated by the Ocean Shipping Reform Act of 1998, this requirement has been a functional dead letter," John Butler, the council's president and CEO, told American Shipper. "Removing this requirement that has ceased to have a purpose will eliminate an unnecessary regulatory burden and contribute to more efficient contracting processes."

Essential terms include the origin and destination port ranges, commodities involved, minimum volumes, and the service contract duration.

In the World Shipping Council's original petition (P3-18), it also sought to end the requirements for filing service contracts with the FMC.

However, on Dec. 20, the commission issued an order only granting approval to relieve the industry of the essential terms publication requirement.

The rule will become effective upon its publication in the Federal Register, the FMC said.

"We look forward to continuing to work with the commission to find additional ways to align the FMC's regulations with global commercial practices in the liner shipping industry," Butler said.

The FMC has authority under the Shipping Act to make certain regulatory adjustments.

On April 27, the agency said it would temporarily allow service contracts to be filed up to 30 days after they take effect to provide relief to shippers and ocean container carriers impacted by the coronavirus pandemic.

According to the FMC order, the relief lasts through Dec. 31, 2020.

The relief measure was identified by the Fact Finding 29 Supply Chain Innovation Teams, which include more than 50 industry representatives who hold regular telephone meetings with FMC Commissioner Rebecca Dye to identify pain points in container shipping due to the COVID-19 pandemic. The spring is the period when most annual service contracts are concluded between ocean carriers and shippers.

(Click to read more American Shipper/FreightWaves articles by Chris Gillis.)