As we enter the peak shipping and Service Contracting season, just a few quick reminders on activities to monitor and avoid:

FOR OUR VOCC CLIENTS

• Do not offer or provide services or Service Contracts to UNREGISTERED entities (NVOCCs) in the U.S. trade
• Check FMC website for current registration status
• Request a copy of the Tariff Title Page and/or NVOCC Bond for new or unknown entities (optional).
• Do NOT offer services or book cargo under a Service Contract for "affiliate" companies that are NOT signatories

FOR OUR NVOCC CLIENTS

• Issuance of your HOUSE BILL OF LADING is required under U.S. common carriage law, whether import or export
• "Sell Rate" documentation is required, whether by Tariff Filing or NRA and determined by how you cut your HBL
• Booking cargo with another NVOCC is now subject to updated Co-Loading Rules mentioned in our earlier Newsletter
• Service Contracts cannot be shared with any company that is NOT an actual signatory to your contract
• 3rd Party services can NOT be "marked up" unless you purchase and cover under your HBL.
• 3rd Party charges can be a "pass through" IF properly identified.
• NRAs, if used, must have their own unique number, start/stop dates and identity of customer and be in effect at time of receipt of cargo by you or your agent.
• Do not accept cargo from UNREGISTERED NVOCCs. True agents MUST issue your HBL or be separately registered and Bonded.
• U.S. Customs and Border Protection has a data sharing agreement with the FMC and will look to match AMS and House Bill of Lading data with the VOCC Master. If your SCAC code and FMC Organization number is used on an AMS submission, it needs to be backed up by issuance of your HBL and related VOCC Booking

Be aware of some of these common mistakes to avoid any potential problems and see the reminder articles regarding FMC enforcement activities below! Please review your internal practices for areas of non-compliance, especially in areas of sharing access to Service Contracts to which the other company is NOT a signatory, offering Service Contracts to illegal entities and working with unlicensed, non-bonded or otherwise unregistered OTIs. Your Bill of Lading is required to be issued for all shipments moving in the U.S. trade and the "sell rate" documentation responsibilities follow the Bill of Lading. Alternatively, if another company is issuing their Bill of Lading, they must be licensed or registered with the FMC for any shipments entering or leaving U.S. ports.

The FMC updated the regulations regarding any "co-load" arrangement between two (2) or more NVOCCs as detailed here:

"(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."

Our customer's tariffs have always contained a "co-load" rule which reserved the option to co-load if you so choose. If you are currently coloading with other NVOCCs or plan to in the future, this standard wording will need to be updated to reflect the re-defined relationships. Since we do not know if you actually coload or not, we will need formal instructions if you want this updated. Please contact us so we can follow-up with you.

Source: (https://www.federalregister.gov/documents/2024/01/02/2023-27783/carrier-automated-tariffs)

The FMC defined the application and use of 3rd party charges outside the control of the NVOCC: 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 previous 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 update to the regulations removes the 30day requirement and allows the NVOCC to invoice for same as long as the charge(s) being collected is referenced in the tariff and there is no "mark-up" of the charges.

The exact citation reads, ... "(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.

Source: (https://www.federalregister.gov/documents/2024/01/02/2023-27783/carrier-automated-tariffs)