[Federal Register Volume 77, Number 75 (Wednesday, April 18, 2012)]
[Proposed Rules]
[Pages 23202-23203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9270]


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FEDERAL MARITIME COMMISSION

46 CFR Part 531

[Docket No. 12-05]


Non-Vessel-Operating Common Carrier Service Arrangements

AGENCY: Federal Maritime Commission.

ACTION: Notice of Inquiry.

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SUMMARY: The Federal Maritime Commission is issuing this Notice of 
Inquiry seeking comments on its rules which exempt non-vessel-operating 
common carriers who enter into service arrangements from certain tariff 
filing requirements of the Shipping Act of 1984.

DATES: Comments are due on or before June 18, 2012.

ADDRESSES: Submit comments to: Karen V. Gregory, Secretary, Federal 
Maritime Commission, 800 North Capitol Street NW., Washington, DC 
20573-0001; or email non-confidential comments to: [email protected] 
(email comments as attachments preferably in Microsoft Word or PDF).

FOR FURTHER INFORMATION CONTACT: Karen V. Gregory, Secretary, Federal 
Maritime Commission, 800 N. Capitol Street NW., Washington, DC 20573-
0001, Phone: (202) 523-5725, Fax: (202) 523-0014, Email: 
[email protected].
    Rebecca A. Fenneman, General Counsel, Federal Maritime Commission, 
800 N. Capitol Street NW., Washington, DC 20573-0001, (202) 523-5740, 
Fax (202) 523-5738, Email: [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    In December 2004, the Commission issued a final rule exempting \1\ 
non-vessel-operating common carriers (NVOCCs) who enter into NVOCC 
service arrangements (NSAs) from certain tariff requirements of the 
Shipping Act of 1984 (Act).\2\ The rule allows NVOCCs to enter into 
NSAs with their customers in lieu of publishing those arrangements in a 
publicly-available tariff, as otherwise would be required by Sections 
8(a) and 10 of the Shipping Act. In the preamble to the final rule, the 
Commission stated that it would continue to consider how it could 
remove limitations on shipper participation while ensuring that the 
criteria of Section 16 were met. 69 FR 75850, 75852 (December 20, 
2004).
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    \1\ Section 16 of the Shipping Act grants the Commission the 
authority to make rules exempting regulated entities from the 
requirements of the Shipping Act if it finds such an exemption will 
not result in substantial reduction in competition or detriment to 
commerce. 46 U.S.C. 40103. The Commission must make an affirmative 
finding, based on information gathered in a public record, that 
these adverse consequences will not result from any exemption it may 
grant.
    \2\ 46 CFR part 531. The Commission's rules provide that an NSA 
means a written contract, other than a bill of lading or receipt, 
between one or more NSA shippers and an individual NVOCC or two or 
more affiliated NVOCCs, in which the NSA shipper makes a commitment 
to provide a certain minimum quantity or portion of its cargo or 
freight revenue over a fixed time period, and the NVOCC commits to a 
certain rate or rate schedule and a defined service level. 46 CFR 
531.3(p). An NSA shipper is a cargo owner, the person for whose 
account the ocean transportation is provided, the person to whom 
delivery is to be made, a shippers' association, or a non-vessel-
operating common carrier. 46 CFR 531.3(o). Specifically, the 
exemption allows individual NVOCCs (including corporately affiliated 
NVOCCs), who are compliant with the other requirements of the 
Shipping Act and the FMC's regulations at 46 CFR part 515 and 46 CFR 
part 520, to enter into an NSA with one or more NSA shippers. 46 CFR 
531.2.
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    The ability of two or more unaffiliated NVOCCs to jointly offer 
NSAs was not included in part 531, in part due to ongoing litigation 
that included arguments on whether two or more NVOCCs acting 
concertedly in NSAs were immune from the prohibitions of the antitrust 
laws. See United States v. Gosselin World Wide Moving, N.V., 411 F.3d 
502 (4th Cir. 2005), cert. denied, 547 U.S. 1002 (2006).\3\ The ruling 
in the Gosselin case alleviated the Commission's concerns that NVOCCs 
acting jointly through NSAs would create a potential for reduction in 
competition through immunity from the antitrust laws. In August 2005, 
the Commission issued a notice of inquiry to consider expanding the 
exemption provided for in 46 CFR part 531 to enable two or more 
unaffiliated NVOCCs to jointly offer NSAs.\4\ Commenters were given 
until October 20, 2005, to address a set of questions designed to 
provide information and perspectives on the likely impact of joint NSA 
authority.\5\
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    \3\ Gosselin World Wide Moving, N.V. and The Pasha Group, 
involved in the shipping of household goods of American military 
personnel to and from Europe, were accused of bid rigging in 
violation of the Sherman Act. They argued, and the district court 
agreed, that they had antitrust immunity based on three provisions 
of the Shipping Act: (1) 46 U.S.C. app. Sec.  1706(a)(4), now 46 
U.S.C. 40307(a)(5); (2) 46 U.S.C. app. Sec.  1706(a)(2), now 46 
U.S.C. 40307(a)(3); and (3) 46 U.S.C. app. Sec.  1706(c)(1), now 46 
U.S.C. 40307(c). On cross appeals, the Fourth Circuit rejected the 
district court's findings and the companies' arguments. First, the 
court found that the parties' behavior did not solely concern a 
foreign inland segment as required by 46 U.S.C. 40307(a)(5). The 
court rejected the argument that United States v. Tucor Int'l, Inc., 
involving shipments of household goods belonging to military 
personnel from U.S. military bases in the Philippines to Filipino 
seaports, was analogous. See United States v. Tucor Int'l, Inc., 35 
F. Supp. 2d 1172 (N.D. Cal. 1998), aff'd, 189 F.3d 834 (9th Cir. 
1999). Second, the court found it was not reasonable for the 
companies to rely on 46 CFR 520.13(c) to believe their collusive 
behavior was exempt from the antitrust laws. Finally, the court 
rejected the argument that an adverse determination on the two 
grounds for statutory immunity discussed above constituted a denial 
or removal such that any penalty could only be imposed 
prospectively. The court also stated that exceptions to federal 
antitrust laws should be construed narrowly. See also In re 
Household Goods Movers Antitrust Litigation, 2009 WL 8234043 (D.S.C. 
Sep. 10, 2009); U.S. v. Daily Gazette, 567 F. Supp 2d 859, 871 
(S.D.W.Va. 2008) (following Gosselin).
    \4\ Docket No. 05-06, 70 FR 52345 (September 2, 2005).
    \5\ The Commission received comments from: The United States 
Department of Justice (``DOJ''); the United States Department of 
Transportation (``DOT''); the World Shipping Council (``WSC''); the 
International Trade Surety Association (``ITSA''); and Joint 
Comments of the National Industrial Transportation League, United 
Parcel Service, Inc., FEDEX Trade Networks Transport & Brokerage, 
Inc., Transportation Intermediaries Association, North Atlantic 
Alliance Association, Inc., and the Agriculture Ocean Transportation 
Coalition (``Joint commenters''). All comments were supportive of 
expanding the exemption to enable two or more unaffiliated NVOCCs to 
jointly offer NSAs.
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    In its Plan for Retrospective Review of Existing Rules, published 
on November 4, 2011, the Commission announced its intention to conduct 
a full review of part 531, governing NSAs, no later than 2013. The 
purpose of the review is to determine whether the NSA regulations 
should be modified, streamlined, expanded, or repealed to make them

[[Page 23203]]

more effective or less burdensome. The Commission considered action on 
Docket No. 05-06 at its December 8, 2011 meeting. On April 12, 2012, 
the Commission issued an order discontinuing Docket No. 05-06, citing 
its intention to conduct a full review of its regulations contained in 
part 531 governing NSAs, in accordance with its Plan for Retrospective 
Review of Existing Rules.
    Accordingly, the Commission now invites comment and information 
from all members of the interested public (whether they be located in 
the United States or elsewhere), including ocean common carriers, ocean 
transportation intermediaries, exporters, and beneficial cargo owners, 
on ways to improve or change part 531. The Commission specifically 
requests comments and current information on (1) extending the 
exemption to allow two or more unaffiliated NVOCCs to jointly offer 
NSAs, and (2) how to make the NSA rules less burdensome and more 
effective in achieving the objectives of the Shipping Act. Comments 
that are specific and provide supporting data are most helpful.

Submit Comments

    Non-confidential filings may be submitted in hard copy or by email 
as an attachment (preferably in Microsoft Word or PDF) addressed to 
[email protected] on or before June 18, 2012. Include in the subject 
line: ``NSAs--Response to NOI.'' Confidential filings must be submitted 
in the traditional manner on paper, rather than by email. Comments 
submitted that seek confidential treatment must be submitted in hard 
copy by U.S. mail or courier. Confidential filings must be accompanied 
by a transmittal letter that identifies the filing as ``confidential'' 
and describes the nature and extent of the confidential treatment 
requested. When submitting comments in response to the Notice of 
Inquiry that contain confidential information, the confidential copy of 
the filing must consist of the complete filing and be marked by the 
filer as ``Confidential-Restricted,'' with the confidential material 
clearly marked on each page. When a confidential filing is submitted, 
an original and one additional copy of the public version of the filing 
must be submitted. The public version of the filing should exclude 
confidential materials, and be clearly marked on each affected page, 
``confidential materials excluded.'' The Commission will provide 
confidential treatment to the extent allowed by law for those 
submissions, or parts of submissions, for which confidential treatment 
is requested. Questions regarding filing or treatment of confidential 
responses to this Notice of Inquiry should be directed to the 
Commission's Secretary, Karen V. Gregory, at the telephone number or 
email provided above.

    By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. 2012-9270 Filed 4-17-12; 8:45 am]
BILLING CODE 6730-01-P