FMC issues Final Rule on "pass-through" charges, Co-Loading and fees for Tariff Access

The Federal Maritime Commission (FMC) issued a Final Rule - effective February 1, 2024 - which addresses various regulations governing Tariff Access, the application of VOCC surcharges and GRIs and clarifying Co-Load relationship between NVOCCs. The Final Rule can be viewed here.

In regard to Tariff Access, the ability to assess fees for access to tariffed material has been eliminated for reasons of industry transparency. The general public will now have access to any and all published tariff data without limitation. This is not a new rule as tariff data has always been available to the public since the closure of the FMC's ATFI system, but fees for access can no longer be charged or collected.

For "pass-through" charges, NVOCCs can now invoice for VOCC surcharges and GRIs without publishing the exact charge in their tariffs first, as long as: • the charge is referenced in the tariff • the charge is not "marked up" Under current rules, if a Surcharge or GRI was assessed against the cargo, the NVOCC would have to publish the charge(s) in their respective tariff on 30days notice to legally collect. The new amendment to the regulations removes the 30day requirement and allows the NVOCC to invoice for same as long as the charge(s) being collected in referenced in the tariff and there is no "mark-up" of the charges. See the excerpt below:

"(iv) An NVOCC may cross-reference an ocean common carrier tariff for the purpose of charging its shipper the ocean common carrier's published and effective surcharges, assessorial charges, and general rate increases, but the NVOCC must clearly list the named charges or categories of charges in the NVOCC's tariff, and must not mark them up above cost. Any fee associated with services provided by the NVOCC to its shipper should be separate and distinguished from the vessel-operating common carrier's surcharges, assessorial charges, and general rate increases, and specify the service for which the shipper is being charged." (h) , ...NVOCCs may pass through charges received from ocean common carriers for terminal services, canal tolls, additional charges, or other provisions which are not under the control of the ocean common carrier or conferences and for which the NVOCC merely acts as a collection agent. The charges or categories of charges must be clearly listed in the NVOCC's tariffs and not marked up above cost.

Finally, there has been a slight clarification to the act of "co-loading" between NVOCCs:

"(1) If two or more NVOCCs enter into an agreement which establishes a carrier-to-carrier relationship for the co-loading of cargo, then the existence of such agreement must be noted in the tariff. Carrier-to-carrier relationships apply to the co-loading of less than container loads of cargo only. (2) If two NVOCCs enter into a co-loading arrangement which results in a shipper-to-carrier relationship, the tendering NVOCC must describe its co-loading practices and specify its responsibility to pay any charges for the transportation of the cargo. A shipper-to-carrier relationship is presumed to exist where the receiving NVOCC issues a bill of lading to the tendering NVOCC for carriage of the co-loaded cargo. Shipper-to-carrier relationships may apply to the co-loading of full container loads or less than container loads of cargo. (3) An NVOCC which tenders cargo to another NVOCC for co-loading, whether under a shipper-to-carrier or carrier-to-carrier relationship, shall annotate each applicable bill of lading with the identity of any other NVOCC to which the shipment has been tendered for co-loading. Such annotation shall be shown on the face of the bill of lading in a clear and legible manner."

FMC Updates Rules for Service Contract and NVOCC Service Arrangements

A final rule adopted by the Federal Maritime Commission (FMC) will update the requirements for amendments to service contracts (SC) and NVOCC service arrangements (NSAs). This final rule in FMC Docket No. 16-05 makes a key change to FMC's filing and implementation regulations for amendments to service contracts and NSAs; effective May 5, 2017 the regulation as provided in Chapter 46 of the U.S. Code of Federal Regulations (46 CFR) will be revised to read:

46 CFR Part 530.14 Implementation
(a) Generally. Performance under an original service contract may not begin before the day it is effective and filed with the Commission. Performance under a service contract amendment may not begin until the day it is effective, provided that the amendment is filed with the Commission no later than thirty (30) calendar days after the effective date.

This revised wording, as shown here in italics, is limited to amendments to service contracts. It does not apply to original (initial) service contracts. This update to FMC's regulation will allow carriers and shippers to agree in writing to amendments to existing service contracts, and implement these upon agreement, and then file the amendment with FMC within 30 days. This will enable carries to streamline the current process for SC amendments. However, this does not change the filing and implementation requirements for original (initial) service contracts, which must continue to be signed by carriers and shippers and filed with FMC prior to any cargo movement. For NVOCC service arrangements (NSAs), an identical update to the regulations, as provided in 46 CFR Part 531.11, will also be effective May 5, 2017.

The final rule in Docket 16-05 will also revise the regulations that govern the correction of service contracts and NSAs by extending the time limits allowed for these. Under FMC's current regulations, requests for corrections to SCs and NSAs which have a retroactive effect must be submitted within forty-five (45) of filing with the Commission; this will be revised to one-hundred eighty (180) days. Correction requests will continue to require a USD 95 service fee and detailed documentation from both the carrier and shipper. The current regulations also allow for the correction of electronic transmission errors with forty-eight (48) hours of the SC or NSA filing. This option will be revised to allow for filing of corrected transmissions within thirty (30) days of the date and time of receipt recorded in FMC's SERVCON database. This "corrected transmission" or "CT" option is allowed only for purely technical electronic transmission errors or data conversion errors, which occur in transmitting service contracts or NSAs.

Under Docket 16-05, FMC considered other changes to its regulation of service contracts and NSAs, but decided not to proceed with these at this time. Changes that were not adopted include the addition of a definition of "affiliate" to the regulations, and a change to requirement for the publication of the essential terms of service contracts and NSAs, and an expansion of the list of commodities that are exempt from the FMC tariff publication and service contract filing requirements. The Commission concluded "opening a dialogue on whether to expand the exempt commodity list could significantly delay this rulemaking." Docket No. 16-05 is the first comprehensive review of the FMC's service contract regulations since May 1999.