[Federal Register Volume 61, Number 225 (Wednesday, November 20, 1996)]
[Proposed Rules]
[Pages 59075-59076]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29554]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Part 1319

[STB Ex Parte No. 598]


Exemption of Freight Forwarders in the Noncontiguous Domestic 
Trade From Rate Reasonableness and Tariff Filing Requirements

AGENCY: Surface Transportation Board.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: The Board is considering whether it should exempt freight 
forwarders in the noncontiguous domestic trade from rate reasonableness 
and tariff filing requirements.

DATES: Comments are due on December 20, 1996.

ADDRESSES: Send comments (an original and 10 copies) referring to STB 
Ex Parte No. 598 to: Surface Transportation Board, Office of the 
Secretary, Case Control Branch, 1201 Constitution Ave., NW., 
Washington, DC 20423-0001.

FOR FURTHER INFORMATION CONTACT: James W. Greene, (202) 927-5612. [TDD 
for the hearing impaired: (202) 927-5721.]

SUPPLEMENTARY INFORMATION: The ICC Termination Act of 1995, Pub. L. No. 
104-88, 109 Stat. 803 (1995) (ICCTA), abolished the Interstate Commerce 
Commission (ICC) and transferred certain of its responsibilities, 
including the responsibility for regulating intermodal surface 
transportation in the noncontiguous domestic trade, to the Surface 
Transportation Board (Board). Additionally, the ICCTA transferred the 
responsibility for regulating port-to-port water carrier transportation 
in the noncontiguous domestic trade from the Federal Maritime 
Commission (FMC) to the Board.
    Under the FMC's regulations, both vessel operating common carriers 
(VOCCs) and non vessel operating common carriers (NVOCCs) were required 
to file tariffs for their transportation services in the noncontiguous 
domestic trade. Under the ICCTA, VOCCs are classified as water carriers 
and NVOCCs are classified as freight forwarders.
    The ICCTA significantly reduced economic regulation over surface 
transportation. Nevertheless, the provisions of 49 U.S.C. 13701 and 
13702 continue to impose rate reasonableness and tariff filing 
requirements on certain property transportation in the noncontiguous 
domestic trade. While these requirements are related primarily to the 
services of water carriers, and joint intermodal services with water 
carriers, they also appear to encompass freight forwarder services.\1\
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    \1\ See, for example, 49 U.S.C. 13702(b)(2)(C).
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    Pursuant to the provisions of 49 U.S.C. 13541, the Board is to 
exempt a class of persons from an otherwise applicable statutory 
provision if it finds that the application of that provision (1) is not 
necessary to carry out the transportation policy of section 13101; (2) 
is not needed to protect shippers from the abuse of market power or 
that the transaction or service is of limited scope; and (3) when an 
exemption is in the public interest.\2\ Pursuant to this statutory 
requirement, we are considering whether we should relieve freight 
forwarders in the noncontiguous domestic trade from rate reasonableness 
and tariff filing requirements.
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    \2\ We note that the statute, as written, directs us to exempt 
when ``(3) (regulation) is in the public interest.'' We presume that 
Congress, in drafting the ICCTA, intended to direct us to exempt 
when ``an exemption is in the public interest.''
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    Freight forwarders assume responsibility for transportation from 
the place of receipt to the place of destination, and frequently 
provide consolidation, assembly, break-bulk, distribution and other 
services of value to their customers. The freight forwarder industry is 
highly competitive, and any person meeting basic fitness and financial 
responsibility requirements can become a freight forwarder and provide 
service to the public. Additionally, noncontiguous domestic trade 
transportation services are available from the underlying water 
carriers, which must file tariffs and charge rates that are subject to 
challenge on reasonableness grounds.
    Given the availability of transportation services from the 
underlying carriers, as well as the highly competitive environment for 
freight forwarder services, we seek comment on whether the rate 
reasonableness and tariff filing requirements for freight forwarders in 
the noncontiguous domestic trade are necessary to carry out the 
transportation policy of 49 U.S.C. 13101 or protect shippers from the 
abuse of market power, and whether the elimination of such requirements 
may be in the public interest. We note in this connection that freight 
forwarders subject to the former ICC's jurisdiction were relieved of 
tariff filing requirements in 1986,\3\ even though motor carriers 
continued to be subject to such requirements until 1994.\4\ Although 
Congress, in the ICCTA, recently reenacted the tariff filing and rate 
reasonableness requirements for water carriers themselves, we seek 
comment on whether these requirements are necessary as to freight 
forwarders in the noncontiguous domestic trade.
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    \3\ Freight forwarder tariff filing requirements were eliminated 
by the Surface Freight Forwarder Deregulation Act of 1986.
    \4\ Motor carrier tariff filing requirements for individually 
determined rates for the transportation of property (other than 
household goods) were eliminated by the Trucking Industry Regulatory 
Reform Act of 1994, with respect to transportation other than in the 
noncontiguous domestic trade.
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Request for Comments

    We invite comments on all aspects of the proposed exemption. We 
encourage

[[Page 59076]]

any commenter that has the necessary technical wherewithal to submit 
its comments as computer data on a 3.5-inch floppy diskette formatted 
for WordPerfect 5.1, or formatted so that it can be readily converted 
into WordPerfect 5.1. Any such diskette submission (one diskette will 
be sufficient) should be in addition to the written submission (an 
original and 10 copies).

Small Entities

    The Board preliminarily concludes that this rule, if adopted, would 
not have a significant economic effect on a substantial number of small 
entities. The Board, nevertheless, seeks comment on whether there would 
be effects on small entities that should be considered, so that the 
Board can determine whether to prepare a regulatory flexibility 
analysis at the final rule stage.

Environment

    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.

List of Subjects in 49 CFR Part 1319

    Exemptions, Freight forwarders, Tariffs.

    Decided: November 6, 1996.

    By the Board, Chairman Morgan, Vice Chairman Simmons and 
Commissioner Owen.
Vernon A. Williams,
Secretary.

    For the reasons set forth in the preamble, the Board proposes to 
add a new part 1319 to title 49, Chapter X, of the Code of Federal 
Regulations to read as follows:

PART 1319--EXEMPTIONS

Sec.
1319.1  Exemption of freight forwarders in the noncontiguous 
domestic trade from rate reasonableness and tariff filing 
requirements.

    Authority: 49 U.S.C. 721(a) and 13541.


Sec. 1319.1   Exemption of freight forwarders in the noncontiguous 
domestic trade from rate reasonableness and tariff filing requirements.

    Freight forwarders subject to the Board's jurisdiction under 49 
U.S.C. 13531 are exempted from the rate reasonableness and tariff 
filing requirements of 49 U.S.C. 13701 and 13702.

[FR Doc. 96-29554 Filed 11-19-96; 8:45 am]
BILLING CODE 4915-00-P