[Federal Register Volume 60, Number 166 (Monday, August 28, 1995)]
[Rules and Regulations]
[Pages 44436-44438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20949]



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FEDERAL MARITIME COMMISSION

46 CFR Parts 514 and 583

[Docket No. P2-95]


Household Goods Forwarders Association of America, Inc., Petition 
for Exemption

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

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SUMMARY: The Federal Maritime Commission (``Commission'' or ``FMC'') is 
amending its regulations to exempt non-vessel-operating common carriers 
by water from the tariff filing requirement of Part 514 and the bonding 
requirement of Part 583, to the extent that they transport used 
household goods and personal effects of federal civilian employees 
pursuant to a solicitation issued and administered by the General 
Services Administration. These carriers are already subject to a GSA 
requirement that they post a performance bond in excess of the 
Commission's bonding requirement, and the rates for such services will 
be filed with GSA. The exemption will remove duplicative requirements 
and result in lower costs.

EFFECTIVE DATE: Effective August 28, 1995.

FOR FURTHER INFORMATION CONTACT: 

Robert D. Bourgoin, General Counsel, Federal Maritime Commission, 800 
North Capitol Street NW., Washington, DC 20573, (202) 523-5740;
      and
Bryant L. VanBrakle, Director, Bureau of Tariffs, Certification and 
Licensing, Federal Maritime Commission, 800 North Capitol Street NW., 
Washington, DC 20573, (202) 523-5796.

SUPPLEMENTARY INFORMATION: The Household Goods Forwarders Association 
of America, Inc. (``HHGFAA'' or ``Petitioner'') has filed a Petition 
for Exemption (``Petition'') pursuant to section 16 of the Shipping Act 
of 1984 (``1984 Act''), 46 U.S.C. app. 1715, and section 35 of the 
Shipping Act, 1916 (``1916 Act''), 46 U.S.C. app. 833a, and Rule 69 of 
the Commission's Rules of Practice and Procedure, 46 CFR 502.69. The 
Petition seeks an exemption for non-vessel-operating common carriers 
(``NVOCCs'') from the tariff filing requirement of 46 CFR Part 514 and 
the bonding requirement of 46 CFR Part 583, to the extent they engage 
in the transportation of used household goods and personal effects of 
employees of federal civilian executive agencies in the domestic and 
foreign commerce of the United States, pursuant to a solicitation 
issued and administered by the General Services Administration 
(``GSA'').
    Notice of filing of the Petition was published in the Federal 
Register, 60 FR 20494 (April 26, 1995), and interested persons were 
invited to submit their views. Comments in support of the Petition were 
submitted by North American Van Lines, Inc., the American Movers 
Conference (``AMC''), the United States Atlantic and Gulf Ports/Eastern 
Mediterranean and North African Freight Conference \1\ 
(``Conference''), and Mr. William P. Hobson, Manager of the Centralized 
Household Goods Traffic Management Program of GSA. No comments were 
filed in opposition to the Petition.

    \1\ Farrell Lines, Inc. and Lykes Bros. Steamship Co. 
disassociated themselves from these comments.
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The Petition

    Petitioner points out that the Commission has previously exempted 
NVOCCs engaged in the transportation of military used household goods 
and personal effects from the NVOCC tariff filing and bonding 
requirements, citing 46 CFR 550.1(a)(6), 580.1(c)(7), and 583.3(c). It 
contends that the same reasons for granting that exemption warrant the 
tariff and bonding exemption requested herein for used household goods 
and personal effects of federal civilian employees pursuant to a GSA 
solicitation.
    HHGFAA advises that GSA issued an International Tender of Service 
(``GSA Tender'') on January 2, 1995, soliciting bids from carriers for 
the transportation of used household goods and personal effects of 
federal civilian employees between points in the United States and 
foreign points. This procurement will commence on October 1, 1995. 
HHGFAA members intend to participate in this solicitation.
    The GSA Tender sets forth the terms and conditions for 
participation, including the services to be provided and how rates are 
to be quoted, and requires each participant to file a performance bond 
with GSA. GSA ensures that each carrier has the requisite experience, 
financial responsibility, a quality control program, and the ability to 
perform the service. Each participant must provide a performance bond 
in the minimum amount of $75,000 or 2.5 percent of the carrier's gross 
annual revenue derived from the GSA international program for the 
previous year, whichever is greater, and also must maintain cargo 
liability insurance in an aggregate minimum of $150,000.
    GSA will establish baseline rates for certain traffic channels. 
Each qualified NVOCC can then file door-to-door through rates which are 
a percentage of the GSA baseline rates. The shipments will move on a 
through Government Bill of Lading (``GBL'').
    HHGFAA contends that filing tariffs with the FMC covering these GSA 
international shipments would duplicate the rate-filing requirements of 
the GSA Tender and would result in unnecessary additional costs. It 
further submits that the filing of through rates as a percentage of a 
GSA baseline cannot presently be accomplished under the Commission's 
tariff rules or ATFI.
    HHGFAA further argues that NVOCC bonds would duplicate the GSA 
bonding requirement, and result in additional, unnecessary costs. 
Moreover, it claims that the reasons which caused the Commission to 
exempt used military household goods from tariff filing apply in this 
case. HHGFAA likewise maintains that the reasons for exempting NVOCCs 
engaged in the transportation of used household goods exclusively for 
the Department of Defense from filing bonds warrant a similar exemption 
here. In this regard, it points out that GSA's bonding requirement is 
significantly greater than the Commission's.
Comments on Petition

    The Conference anticipates substantial GSA program oversight, and 
therefore has no objection to elimination of the bonding requirement. 
However, it also argues that an exemption from tariff filing should be 
conditioned on making such rates publicly available through GSA or 
another organization.
    AMC believes that GSA's Tender would be greatly enhanced by an FMC 
exemption from tariff filing and bonding. In light of the GSA's 
stringent standards, AMC submits that there is no need for a separate 
bonding requirement or tariff filing requirement. AMC further notes 
that military household goods have been exempt from FMC tariff filing 
for several years and that this exemption has had no detrimental 
effects. It believes that the instant GSA rate 

[[Page 44437]]
solicitation will operate in a similar manner.
    GSA's Mr. Hobson notes that the GSA Tender covers service to be 
provided under Government bills of lading at through rates solicited by 
GSA on a competitive basis. In order to ensure a competitive 
environment, GSA has established uniform rules and charges governing 
accessorial charges. In addition, GSA will establish baseline rates, 
and qualified carriers will submit bids below, above, or at the 
baseline rates for the traffic channels they wish to serve. The 
carriers' through rates will be effective for twelve months and 
available for use by all federal executive agencies. Each carrier must 
certify that its rates were established independently. Mr. Hobson 
claims that tariff filing with the Commission would not benefit GSA 
since all bid rates will be filed with GSA and maintained in its 
computer. He likewise maintains that an FMC bond is of no benefit since 
the GSA bond is higher. He argues that the tariff exemption will reduce 
carriers' costs by relieving them of the expense of filing rates with 
the FMC, as will the bonding exemption. This, in turn, allegedly should 
allow carriers to submit lower rates to GSA.

Discussion

    Section 16 of the 1984 Act states in pertinent part:

    The Commission, upon application or on its own motion, may by 
order or rule exempt for the future any class of agreements between 
persons subject to this Act or any specified activity of those 
persons from any requirement of this Act if it finds that the 
exemption will not substantially impair effective regulation by the 
Commission, be unjustly discriminatory, result in a substantial 
reduction in competition, or be detrimental to commerce.

    The exemption sought here meets the standards of section 16. It 
will provide relief from the tariff filing and bonding requirements for 
NVOCCs who transport federal civilian household goods pursuant to a GSA 
monitored program and is virtually identical to an exemption that 
already exists for the transportation of military household goods.
    The exemption should not substantially impair effective regulation 
by the Commission. Although the rates under which this transportation 
will be provided will not be filed with the Commission, they will be 
available through GSA. Moreover, these rates only apply to a single 
shipper, GSA, or the federal civilian agency participating in its 
program. Accordingly, there should be little or no cause for concern 
about potential discrimination. The competitive nature of GSA's program 
will remain unchanged in that carriers seeking to participate in 
certain trade lanes will have to competitively bid for the cargo. 
Lastly, the exemption should be beneficial to commerce. It will remove 
certain duplicative activities which serve no useful purpose, and 
should reduce the overall costs for all involved in the GSA program.
    Bonds and other forms of surety issued after the effective date of 
this exemption will contain express language indicating that they do 
not apply to civilian household goods carried under the GSA program. 
If, after this date, NVOCCs desire to have this exemption apply to 
their existing bonds, they can request that the bonding companies 
reissue their bonds with the appropriate language included.
    The Federal Maritime Commission certifies, pursuant to section 
605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that this 
rule will not have a significant economic impact on a substantial 
number of small entities, including small businesses, small 
organizational units and small government jurisdictions. The exemption 
will permit NVOCCs who are engaged in the GSA civilian household goods 
program to reduce their costs by removing duplicative or unnecessary 
requirements.
    This final rule does not contain any collections of information as 
defined by the Paperwork Reduction Act of 1980, as amended. Therefore, 
OMB review is not required.

List of Subjects

46 CFR Part 514

    Freight, Harbors, Maritime carriers, Reporting and recordkeeping 
requirements.

46 CFR Part 583

    Freight, Maritime carriers, Reporting and recordkeeping 
requirements, Surety bonds.

    Therefore, pursuant to 5 U.S.C. 553, section 43 of the Shipping 
Act, 1916, 46 U.S.C. app. 841a, and section 17 of the Shipping Act of 
1984, 46 U.S.C. app. 1716, Parts 514 and 583 of Title 46, Code of 
Federal Regulations, are amended as follows:

PART 514--[AMENDED]

    1. The authority citation for Part 514 continues to read as 
follows:

    Authority: 5 U.S.C. 552 and 553; 31 U.S.C. 9701; 46 U.S.C. app. 
804, 812, 814-817(a), 820, 833a, 841a, 843, 844, 845, 845a, 845b, 
847, 1702-1712, 1714-1716, 1718, 1721 and 1722; and sec. 2(b) of 
Pub. L. 101-92, 103 Stat. 601.

    2. Section 514.3 is amended by adding a new paragraph (b)(5) 
reading as follows:


Sec. 514.3  Exemptions and exclusions.

* * * * *
    (b) * * *
    (5) Used household goods--General Services Administration. 
Transportation of used household goods and personal effects by non-
vessel-operating common carriers shipped by federal civilian executive 
agencies under the International Household Goods Program administered 
by the General Services Administration is exempt from the filing 
requirements of the 1916 and 1984 Acts and the rules of this part.
* * * * *

PART 583--[AMENDED]

    3. The authority citation for Part 583 continues to read as 
follows:

    Authority: 5 U.S.C. 553; 31 U.S.C. 9701; 46 U.S.C. App. 1702, 
1707, 1709, 1710-1712, 1716, and 1721.

    4. Paragraph (c) of Sec. 583.3 is revised to read as follows:


Sec. 583.3  Proof of financial responsibility, when required.

* * * * *
    (c) Any person which exclusively transports used household goods 
and personal effects for the account of the Department of Defense, or 
for the account of the federal civilian executive agencies shipping 
under the International Household Goods Program administered by the 
General Services Administration, or both, is not subject to the 
requirements of this part, but may be subject to other requirements, 
such as alternative surety bonding, imposed by the Department of 
Defense or the General Services Administration.
    5. Appendix A to Part 583 is amended by revising the last sentence 
in the fourth paragraph to read as follows:

Appendix A to part 583--Non-Vessel-Operating Common Carrier (NVOCC) 
Band Form

* * * * *
    * * * However, the bond shall not apply to shipments of used 
household goods and personal effects for the account of the 
Department of Defense or the account of federal civilian executive 
agencies shipping under the International Household Goods Program 
administered by the General Services Administration.
* * * * *
    6. Appendix D to Part 583 (Form FMC-69) is amended by revising the 
last sentence in the fourth paragraph to read as follows: 

[[Page 44438]]


Appendix D to part 583--Non-Vessel-Operating Common Carrier (NVOCC) 
Group Bank Form [FMC-69]

* * * * *
    * * * However, the bond shall not apply to shipments of used 
household goods and personal effects for the account of the 
Department of Defense or the account of federal civilian executive 
agencies shipping under the International Household Goods Program 
administered by the General Services Administration.
* * * * *
    By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 95-20949 Filed 8-25-95; 8:45 am]
BILLING CODE 6730-01-M