September 30, 2019

FMC Proposes Eliminating Requirement for Vessel Operators to Publish Essential Terms

Holland & Knight Alert
J. Michael Cavanaugh | Jameson B. Rice

The Federal Maritime Commission (FMC) voted on Sept. 26, 2019, to eliminate the requirement for vessel operators to publish essential terms of their service contracts. The decision is a response to a petition from the World Shipping Council (WSC) to eliminate this requirement. The WSC had also sought to eliminate the requirement to file service contracts with the FMC, but the Commission rejected that request.

FMC Commissioner Rebecca Dye dissented, stating that she would have granted the petition in its entirety. According to American Shipper, Commissioner Dye stated that "we [the FMC] don't rely on filed contracts in our competition enforcement program" and that the decision to continue the contract filing requirement "ignores the comments and strong support of the petition by the nation's oldest and most reliable transportation shippers' association, the National Industrial Transportation League." She further added that she would submit a more extensive written dissent. Commissioner Daniel Maffei said he thought that the FMC would be revisiting the issue in the future.

A notice of proposed rulemaking to effectuate the FMC's decision will be published and available for comment.

The proposed rule will follow on the heels of last summer's Final Rule eliminating the essential terms publication and service contract filing requirements from the Commission's Non-Vessel Operating Common Carriers (NVOCC) regulations. (See Holland & Knight's previous alert, "FMC Issues Final Rules for NVOCC Service and Rate Agreements," July 25, 2018).

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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