[Federal Register Volume 83, Number 141 (Monday, July 23, 2018)]
[Rules and Regulations]
[Pages 34780-34793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-15496]


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FEDERAL MARITIME COMMISSION

46 CFR Parts 531 and 532

[Docket No. 17-10]
RIN 3072-AC68


Amendments to Regulations Governing NVOCC Negotiated Rate 
Arrangements and NVOCC Service Arrangements

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

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SUMMARY: The Federal Maritime Commission (FMC or Commission) amends its 
rules governing Non-Vessel-Operating Common Carrier (NVOCC) Negotiated 
Rate Arrangements and NVOCC Service Arrangements. The regulatory 
changes modernize, update, and reduce regulatory burdens.

DATES: This final rule is effective August 22, 2018.

FOR FURTHER INFORMATION CONTACT: Rachel E. Dickon, Secretary. Phone: 
(202) 523-5725. Email: [email protected]. For technical questions, 
contact Florence A. Carr, Director, Bureau of Trade Analysis. Phone: 
(202) 523-5796. Email: [email protected]. For legal questions, 
contact Tyler J. Wood, General Counsel. Phone: (202) 523-5740. Email: 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. Background
    A. NVOCC Service Arrangements (NSAs)
    B. NVOCC Negotiated Rate Arrangements (NRAs)
    C. Pre-Rulemaking Differences Between Tariffs; NSAs; NRAs
    D. NCBFAA Petition for Rulemaking and Overview of Comments
    E. Summary of November 29, 2017, Notice of Proposed Rulemaking

[[Page 34781]]

    1. Removal of NSA Filing and Publication Requirements
    2. Allowance of Non-Rate Economic Terms in NRAs
    3. Authorize Amendments of NRAs and Shipper Acceptance Upon 
Booking
III. Overview of Comments
IV. Final Rule and Response to Comments
    A. Remove the NSA Filing and Publication Requirements
    1. Comments
    2. Discussion
    B. Allow Non-Rate Economic Terms in NRAs
    1. Comments
    2. Discussion
    C. Third-Party Pass-Through Assessorial Charges
    1. Comments
    2. Discussion
    D. Authorize Amendments and Shipper Acceptance Upon Booking
    1. Comments
    2. Discussion
    E. Elimination of All Tariff Publishing Requirements
    1. Comments
    2. Discussion
    F. Summary of Post Final Rule NSA/NRA Differences
V. Rulemaking Analyses and Notices

I. Executive Summary

    The Commission is amending its rules at 46 CFR part 531 governing 
NVOCC Service Arrangements (NSA) to remove the NSA filing and 
publication requirements. The Commission also is amending its rules at 
46 CFR part 532 to permit NVOCC Negotiated Rate Arrangements (NRA) to 
be amended at any time and to allow the inclusion of non-rate economic 
terms. In addition, an NVOCC may provide for the shipper's acceptance 
of the NRA by booking a shipment thereunder, subject to the NVOCC 
incorporating a prominent written notice to such effect in each NRA or 
amendment. In addition, the Commission is including clarifying language 
in part 532 to reflect the current treatment of third-party, pass-
through assessorial charges and the enforceability of NRAs.

II. Background

    The Shipping Act of 1984 (the Shipping Act or the Act) expanded the 
options for pricing liner services by introducing the concept of 
carriage under service contracts filed with the Commission. Public Law 
98-237, section 8(c). Liner services could be priced via negotiated 
contracts between ocean common carriers and their shipper customers, 
rather than solely by public tariffs. Per the Shipping Act and FMC 
regulations, ocean freight rates, surcharges, and assessorial charges 
had to be published in tariffs or agreed to via service contracts filed 
with the Commission. Contemporaneous with the filing of service 
contracts, ocean carriers were required to make publicly available 
statements of essential terms in tariff format.
    The Ocean Shipping Reform Act of 1998 (OSRA) amended the Shipping 
Act of 1984 as it related to service contracts. Public Law 105-258, 
section 106. No longer did contract rates need to be published in the 
tariff publication, and the essential terms publication was limited to: 
origin and destination port ranges, commodities, minimum volume or 
portion, and duration. Nevertheless, though the Shipping Act and its 
amendments provided for more efficiency and flexibility for ocean 
common carriers through the use of service contracts, similar relief 
was not extended to NVOCCs, which were still required to publish 
tariffs and adhere to those tariffs when transporting cargo.

A. NVOCC Service Arrangements (NSAs)

    In 2003, NCBFAA filed a petition seeking exemption from some of the 
tariff requirements of the Shipping Act of 1984. See Docket No. P5-03, 
Petition of the National Customs Brokers and Forwarders Association of 
America. Inc. for Limited Exemption of Certain Tariff Requirements of 
the Shipping Act of 1984. In response, the Commission issued a notice 
of proposed rulemaking (NPRM) to exempt NVOCCs from the tariff 
provisions of the Shipping Act and permit them to enter into contracts 
with shippers similar to ocean common carrier service contracts. NPRM: 
Non-Vessel Operating Service Arrangements, 69 FR 63981 (Nov. 3, 2004). 
The Commission determined that in order to ensure there was no 
substantial reduction in competition among NVOCCs, the exemption had to 
be available to all NVOCCs compliant with both section 19 of the 
Shipping Act and the conditions of the exemption. Id. The Commission 
proposed that ``the exemption be conditioned on the same statutory and 
regulatory requirements and protections applicable to VOCCs' service 
contracts: namely, filing of executed agreements; publication of 
essential terms of those agreements; and confidential treatment, 
similar to that set forth in 46 CFR part 530.'' Id. at 63986. The 
Commission also proposed the required publication of the essential 
terms of all NSAs in automated systems and the confidential filing of 
the text of those NSAs with the Commission. Id. at 63987. The 
Commission further proposed ``making applicable to carriage under an 
NSA, those provisions of the Shipping Act that would be applicable to 
service contracts.'' Id. The Commission's final rule provided a limited 
exemption and permitted NSAs, similar to service contracts, subject to 
filing and publication requirements in 46 CFR part 531. Final Rule: 
Non-Vessel-Operating Common Carrier Service Arrangements, 69 FR 75850 
(Dec. 20, 2004). To ensure that the exemption as proposed would not 
result in a substantial reduction in competition, the Commission 
limited the exemption to individual NVOCCs acting in their capacity as 
carriers. Id. at 75851. The Commission also decided to allow affiliated 
NVOCCs to jointly offer NSAs. Id. at 75852.

B. NVOCC Negotiated Rate Arrangements (NRAs)

    In 2008, the NCBFAA filed another petition with the Commission. 
This petition sought an exemption from mandatory rate tariff 
publication. See Docket No. P1-08, Petition of the National Customs 
Brokers and Forwarders Association of America. Inc. for Exemption from 
Mandatory Rate Tariff Publication (filed July 31, 2008). The proposal 
sought to exempt NVOCCs from the provisions of the Shipping Act of 1984 
requiring them to publish and/or adhere to rate tariffs ``in those 
instances where they have individually negotiated rates with their 
shipping customers and memorialized those rates in writing.'' NCBFAA 
Pet. in Docket No. P1-08, at 10.
    By NPRM issued May 7, 2010, the Commission proposed to permit the 
use of NRAs in lieu of publishing rates in tariffs, subject to 
conditions, including (1) a requirement for NVOCCs to continue 
publishing standard rules tariffs with contractual terms and conditions 
governing shipments, including any assessorial charges and surcharges, 
(2) a requirement to make available NVOCC rules tariffs to shippers 
free of charge; (3) a requirement that NRA rates be mutually agreed to 
and memorialized in writing by the date the cargo is received for 
shipment; and (4) a requirement that NVOCCs who use NRAs must retain, 
and make available upon request to the Commission, documentation 
confirming the terms, and agreed rate, for each shipment for a period 
of five years. NPRM: NVOCC Negotiated Rate Arrangements, 75 FR 25150, 
25154 (May 7, 2010). In the NPRM, the Commission also determined that 
under 46 U.S.C. 40103, the exemption could be granted as doing so would 
not result in a substantial reduction in competition or be detrimental 
to commerce. 75 FR at 25153.
    The Commission subsequently granted the exemption, relieving NVOCCs 
from the burden and costs of

[[Page 34782]]

tariff rate publication when using this new class of carrier rate 
arrangements. Final Rule: NVOCC Negotiated Rate Arrangements, 76 FR 
11351 (Mar. 2, 2011). In determining whether to grant the exemption the 
Commission considered: Competition among NVOCCs; competition between 
NVOCCs and VOCCs; competition among vessel-operating common carriers 
(VOCCs); as well as competition among shippers. Id. at 11352. The 
Commission determined that granting the exemption would not result in a 
substantial reduction in competition in any of the above categories. 
Id. at 11352-11353. Analyzing whether granting the exemption would be 
detrimental to commerce, the Commission determined that such NRAs would 
be beneficial to commerce because the exemption would ``reduce NVOCC 
operating costs and increase competition in the U.S. trades.'' Id. at 
11353. The Commission also determined that ``NVOCCs entering into NRAs 
continue to be subject to the applicable requirements and strictures of 
the Shipping Act, including oversight by the Commission.'' Id. at 
11354.
    As a condition to offering NRAs, NVOCCs were required to provide 
their rules tariffs to the public free of charge. 76 FR at 11358. The 
Commission also determined not to allow for amendment of an NRA after 
receipt of the cargo by the carrier or its agent. Id. Consistent with 
the Petition's focus upon negotiated rates only, the Commission 
determined not to permit NRAs to include non-rate economic terms, such 
as rate methodology, credit and payment terms, forum selection or 
arbitration clauses, or minimum quantities. Id. at 11355.

C. Pre-Rulemaking Differences Between Tariffs, NSAs, and NRAs

    The primary differences between NRAs and NSAs are the formality of 
the arrangement and the scope of terms covered. Currently, NRAs must be 
in writing, and shipper acceptance must be in writing, such as by 
email. See NPRM: Amendments to Regulations Governing NVOCC Negotiated 
Rate Arrangements and NVOCC Service Arrangements, 82 FR 56781, 56786 
(Nov. 30, 2017). NRAs have a ``stated cargo quantity,'' with no minimum 
volume or quantity commitment. See 46 CFR 532.3(a). NRAs cover specific 
points of origin and destination and include rates effective on and 
after a stated date or within a defined time frame. See Sec.  532.3(a)-
(b). The rates and applicable shipments must be specified as well as 
the names of the parties. Sec.  532.5(b). Non-rate economic terms, 
including liquidated damages, are not currently permitted in NRAs. See 
76 FR at 11355. Instead, such terms are included in the NVOCC's ``rules 
tariff,'' which must be made available electronically and free of 
charge. See Sec. Sec.  532.3(c) and 532.4. In addition, NRAs may not be 
modified after the time the initial shipment is received by the carrier 
or its agent (including originating carriers in the case of through 
transportation). Sec.  532.5(e). NRAs are not required to be filed with 
the FMC, but they must be maintained for a 5-year period and made 
available to the Commission upon request. See Sec.  532.7(a)-(b).
    NSAs, on the other hand, must be signed by the parties. 46 CFR 
531.6(b)(9). Unlike NRAs, NSAs contain a minimum volume or quantity 
commitment, as well as defined service level and a certain rate or rate 
schedule over a fixed period of time. Sec.  531.3(p). NSAs also include 
port ranges (port to port) or geographic areas (intermodal) as opposed 
to specific points of origin and destination. See Sec.  531.6(b)(1)-
(2). NSAs are also broader in scope than NRAs, and may include non-rate 
economic terms, including liquidated damages in the event of 
nonperformance. See Sec.  531.6(b)(7). In addition, NSAs may be 
modified at any time. See Sec.  531.3(c).
    The filing requirements for NSAs and NRAs also currently differ. 
NSAs and amendments must be filed with the Commission in SERVCON. See 
Sec.  531.6(a). Like NRAs, however, NSAs and associated records must be 
maintained for a 5-year period and must be made available to the 
Commission upon request. Sec.  531.12. Liquidated damages by way of 
``provisions in the event of nonperformance'' may also be provided for. 
See 46 CFR part 531.
    In comparison, carrier tariffs provide for port ranges (port to 
port) or geographic areas (intermodal), but also Tariff Rate Items 
(TRIs). See 46 CFR 520.4. A TRI is a single freight rate in effect on 
and after a specific date or for a specific time period, for the 
transportation of a stated cargo quantity, which may move from origin 
to destination under a single specified set of transportation 
conditions. Sec.  520.4(f). TRIs have no minimum volume or quantity 
commitment like NSAs, and rate reductions can take effect immediately; 
however, rate increases must be published at least 30 days in advance. 
See Sec.  520.8(a). There is no provision for liquidated damages for 
goods moving under tariffs, and unlike NSAs and NRAs, tariffs are 
available and applicable to all shippers. See Sec.  520.12(e). No 
written signature is required. Tariff publication data is required to 
be maintained by carriers and conferences for 5 years and accessible 
on-line for 2 years. Sec.  520.10. Tariffs must be made available to 
the public at a reasonable fee. See id.

D. NCBFAA Petition for Rulemaking and Overview of Comments

    NCBFAA petitioned the FMC on April 16, 2015, to initiate a 
rulemaking to eliminate the NSA provisions in 46 CFR part 531 in their 
entirety, or alternatively, eliminate the filing and essential terms 
publication requirements for NSAs. Consolidated with that request, 
NCBFAA also asked the Commission to expand the NRA exemption in 46 CFR 
part 532 to include economic terms beyond rates, and to delete 46 CFR 
532.5(e), which precludes any amendment or modification of an NRA after 
the initial shipment is received by the NVOCC or its agent. NCBFAA 
proposed expanding the NRA exemption in 46 CFR part 532 to allow 
modification of NRAs at any time upon mutual agreement between NVOCCs 
and their customers. NCBFAA Petition at 14.
    NCBFAA argued that shippers and NVOCCs do not benefit from the 
current preclusion of amendments. NCBFAA Pet. at 10. NCBFAA also argued 
that shippers and NVOCCs regularly seek to negotiate on a broad range 
of service terms and that ``each of these terms are relevant to some 
extent to every rate and service negotiation between an NVOCC and an 
existing or prospective customer. Yet, none of the items . . . can 
properly be included in an NRA.'' See id. at 8-9. NCBFAA furthermore 
contended that as NSAs must be filed with the Commission, and essential 
terms of NSAs also need to be published in tariffs, NSAs are more 
burdensome than regular rate tariffs. See id. at 7-8. NCBFAA also 
argued that continuing the filing requirement for NSAs does not appear 
to provide any regulatory benefit. See id. at 12-13.
    On April 28, 2015, the Commission published a Notice of Filing and 
Request for Comments on NCBFAA's petition. 80 FR 23549 (Apr. 28, 2015). 
Sixteen sets of comments were received from a broad cross-section of 
industry stakeholders, including licensed NVOCCs and freight 
forwarders, a major trade association representing beneficial cargo 
owners, and VOCCs.
    The majority of the ocean transportation intermediary (OTI) 
comments expressed general support for the petition. Commenters 
supported either the elimination of 46 CFR Part 531 in its entirety, or 
eliminating the filing and essential terms publication requirements for 
NSAs. Many supported allowing economic terms beyond rates in NRAs, as 
well as the modification of

[[Page 34783]]

NRAs at any time, upon mutual agreement.
    The World Shipping Counsel, whose comments were supported by 
Crowley, urged even-handed regulatory relief with respect to VOCCs as 
well. WSC cited prior requests that VOCCs have made for changes to the 
Commission's regulations governing service contract amendment filings. 
WSC proposed ``that service contract amendments be permitted to be 
filed within 90 days of the filing of the underlying commercial 
agreement.'' See WSC at 1.
    The National Industrial Transportation League (NITL) did not 
support the elimination of Part 531 in its entirety. UPS also opposed 
any restrictions upon, or the elimination of, Part 531, expressing 
support for the continued use of NSAs.
    DGR Logistics noted the potential for logistical and regulatory 
challenges to NVOCCs caused by the requirement at 46 CFR 532.5(c) that 
an NRA ``be agreed to'' by the shipper prior to receipt of cargo by the 
common carrier or its agent. See DGR at 2.
    On August 2, 2016, the Commission granted NCBFAA's petition to 
``initiate a rulemaking with respect to the revisions discussed in the 
petition.'' Because the Commission was in the process of a separate 
rulemaking to amend portions of Part 531 related to NSAs,\1\ however, 
the Commission delayed initiating the requested rulemaking until after 
the rulemaking in Docket No. 16-05 was concluded.
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    \1\ Docket No. 16-05, Service Contracts and NVOCC Service 
Arrangements.
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E. Summary of November 29, 2017, Notice of Proposed Rulemaking

1. Removal of NSA Filing and Publication Requirements
    The Commission noted in the NPRM that the majority of the NVOCC 
commenters supported the NCBFAA position on eliminating the NSA filing 
and publication requirements. See 82 FR at 56785. Furthermore, the NPRM 
stated that OTI commenters had made a substantial case that continuing 
the filing requirement for NSAs did not appear to offer any regulatory 
benefit. Id. The Commission therefore proposed to remove the 
requirement that NSAs be filed in SERVCON and the requirement that an 
NVOCC publish the essential terms of an NSA. Id. The Commission also 
explained that shippers, whom the Commission originally identified as 
the group to benefit from the requirement of essential terms 
publication in the original 2003 NSA rulemaking, had not since 
commented on the continuing utility of essential terms publications, 
and thus maintaining the requirement appeared to provide little 
regulatory benefit. Id. By way of removing the essential terms and NSA 
filing requirements, but keeping NSAs as an option, the Commission 
stated that it was seeking to preserve choice, but reduce costs. Id. 
The Commission noted that containing both service and rate provisions 
may be less than ideal for shippers or NVOCCs with low shipment 
volumes; however, considerable volumes of cargo are currently 
transported under the current contract model. Id. The NPRM stated that 
NVOCC members of NCBFAA would prefer the flexibility of including both 
service and rate-related items in their contract offerings if relieved 
of the filing and publication burdens of same. Id. at 56786.
    The NPRM also addressed WSC's concerns regarding regulatory relief 
regarding service contracts by noting that the relief granted by the 
Commission in Docket 16-05 allowed amendments to service contracts, 
including multiple service contract amendments, to become effective 
during a 30-day period prior to being filed with the Commission. Id. at 
56785. Furthermore, the Commission stated that further relief to VOCCs 
for service contracts may be undertaken by the Commission after it has 
had an opportunity to analyze the impact of the 30-day filing period on 
VOCC operations and shipper feedback. Id.
    In order to readily determine which NVOCCs are using NSAs in the 
absence of the filing and publication requirements, the NPRM also 
proposed requiring NVOCCs to include a prominent notice in their rules 
tariffs indicating their intention to use NSAs, mirroring the 
requirement in Sec.  532.6 for NVOCCs using NRAs. In addition, the 
Commission proposed requiring NVOCCs using NSAs to provide electronic 
access to their rules tariffs to the public free of charge, mirroring 
the requirement in Sec.  532.4 for NVOCCs using NRAs.
2. Allowance of Non-Rate Economic Terms in NRAs
    In the NPRM, the Commission addressed the allowance of non-rate 
economic terms in NRAs by reaffirming its intention to provide a new 
business model for NVOCCs who cannot use NSAs and inviting further 
comment, ``particularly from shippers currently using NRAs, on how 
expanding the NRA exemption to allow inclusion in NRAs of non-rate 
economic terms may impact their commercial business operations.'' See 
82 FR at 56785.
3. Authorize Amendments of NRAs and Shipper Acceptance Upon Booking
    In the NPRM, the Commission noted the need for NRAs to respond to 
an ever-changing marketplace. 82 FR at 56786. The Commission also noted 
that the smaller cargo volume and commenters' statements demonstrate 
that NRAs tend to be short-term and transactional in nature. Id. The 
Commission expressed its desire to limit regulatory burden, and noted 
that NVOCCs and their customers should not be compelled to create a new 
NRA in every instance simply because the rules do not currently provide 
for amendment. Id. The Commission, furthermore, acknowledged that it 
was appropriate to permit NRAs to be extended or amended upon 
acceptance or agreement by the shipper customer. Id.
    The Commission, noting DGR Logistics' comment on the potential for 
logistical and regulatory challenges to the NVOCC caused by the 
requirement at 46 CFR 532.5(c), also proposed to allow NRAs to be more 
flexibly created, or be amended, upon the shipper's acceptance in the 
form of a request for booking pursuant to the NRA. Id. The Commission 
noted that this practice would more closely correlate to the manner in 
which a shipper accepts a written rate quote under standard tariff 
rates and rules, i.e., by communicating its agreement solely in terms 
of instructing the NVOCC to book the cargo for shipment thereunder. Id. 
In light of this new practice, the Commission proposed that each NVOCC 
seeking to allow recognition of shipper acceptance of an NRA through 
booking incorporate a prominent written notice on each NRA or 
amendment. Id.
    The NPRM also pointed out that as this new practice was meant to be 
optional, the Commission would not eliminate the requirement that a 
shipper's agreement to an NRA should otherwise be in writing or by 
email. Id. The NPRM invited public comment on allowing NRA acceptance 
through booking, as well as on whether to require specific wording on 
the practice in NRAs and amendments in order to provide prominent 
notice to shippers, as the NPRM proposed. Id.

III. Overview of Comments

    Thirty-nine sets of comments were received in response to the 
November 29, 2017, Notice of Proposed Rulemaking, which may be found at 
the Electronic Reading Room on the Commission's website at https://www.fmc.gov/17-10/. Comments were received from NCBFAA; ABS

[[Page 34784]]

Consulting (ABS); Mohawk Global Statistics (Mohawk); DJR Logistics, 
Inc. (DJR); New York New Jersey Foreign Freight Forwarders and Brokers 
Association, Inc. (NYNJFFF&BA); NITL; CaroTrans International, Inc., 
(CaroTrans); Vanguard Logistics Services (USA), Inc., (Vanguard); Serra 
International, Inc., (Serra); FedEx Trade Networks Transport & 
Brokerage, Inc. (FedEx); Florida Customs Brokers and Freight Forwarders 
Association (FCBF); Kelly Global Logistics, Inc.; North Atlantic 
International Ocean Carrier; ECU Worldwide; Mabel Olivera, Vice 
President of Operations for Clover Systems, LLC; IContainers (USA); A 
Customs Brokerage (ACB), Inc.; Omara Valles, Operations Manager of 
Clover Internacional, LLC; Hemisphere Cargo, Corp.; KCarlton 
International (dba KCI Shipping Line); Express Logistics Services, LLC; 
Geodis Freight Forwarding; Yusen Logistics (Yusen); Asia Shipping USA, 
Inc. (Asia); Parker & Company Worldwide (Parker); Quadrant Magnetics 
(Quadrant); Crescent Products USA LLC (Crescent); Geek Net Inc. (Geek 
Net); Connor Corporation (Connor); Bonney Forge Corporation (Bonney 
Forge); RBH Sound (RBH); Dart Maritime Service, Inc. (Dart); CJ 
International, Inc. (CJ International); Sefco Export Management 
Company, Inc. (Sefco); Eastman Chemical Company; Thunderbolt Global 
Logistics (Thunderbolt); Shipco Transport Inc. (Shipco); John S. Connor 
Global Logistics (Connor Global); Livingston International, Inc. 
(Livingston).
    The comments represent a broad group of industry stakeholders, 
including licensed NVOCCs and freight forwarders, a tariff publishing 
vendor, and shippers.
    No commenters, except Dart and NITL, were opposed to allowing 
acceptance of an NRA to be demonstrated by booking (some even supported 
allowing receipt of cargo prior to acceptance/booking). No commenters 
were expressly against allowing economic terms beyond rates in NRAs, 
the modification of NRAs at any time upon mutual agreement, or the 
elimination of the filing and essential terms publication requirements 
for NSAs. Some commenters also noted the benefits of NSAs, but sought 
more flexibility in the application of NSAs. Commenters also sought 
clarification on the role of pass-through and assessorial charges.
    Regarding the Commission's requirement for prominent written notice 
in order to recognize acceptance of an NRA through booking, some 
commenters were in favor of the written notice along with specific 
wording for the notice, whereas some commenters were against any such 
requirement, as well as against any specific wording.

IV. Final Rule and Response to Comments

A. Remove the NSA Filing and Publication Requirements

1. Comments
    NCBFAA favors exempting NSAs from both the filing and essential 
terms publication requirements and supports the Commission's proposal. 
NCBFAA at 3. A significant number of individual NCBFAA/FCBF members \2\ 
also stated that ``[t]he FMC should repeal its existing requirement for 
NVOCCs to file negotiated service arrangements (NSAs) or to publish 
essential terms of NSAs in their tariffs as this process is extremely 
cumbersome and is not used by the trade in day-to-day business as it 
does not reflect the realities of international trade and commerce.'' 
NCBFAA/FBCF Member Comments. Yusen Logistics, an NVOCC, also ``agree[d] 
with the Commission's proposal to eliminate the necessity for NVOCCs to 
file NSAs.'' Yusen at 3. Connor Global, Mohawk, and Thunderbolt support 
eliminating the necessity for NVOCCs to file NSAs. Connor Global at 2; 
Mohawk at 2; Thunderbolt at 3. Serra supports eliminating the NSA 
filing requirement and publication requirement for essential terms and 
notes the reduction in administrative costs and the lack of any benefit 
provided by filing and publication. Serra at 2. ``Shipco [an NVOCC] 
agrees with the Commission's position that the NSA filing and essential 
terms publication requirements should be eliminated.'' Shipco at 4. 
Thunderbolt, another OTI, also agrees that the NSA filing requirement 
for NVOCCs should be eliminated. Thunderbolt at 3. Sefco, also an OTI, 
favors ending the requirement to file NSAs with the Commission and 
eliminating 46 CFR part 531 in its entirety. Sefco at 2-3. NITL agrees 
with the elimination of the NSA filing and essential terms publication 
requirements. NITL at 4. NYNJFFF&BA are also ``in favor of eliminating 
the NSA filing and publication requirements.'' NYNJFFF&BA at 4.
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    \2\ The Florida Customs Brokers and Freight Forwarders 
Association (FCBF), along with a number of individual NCBFAA and 
FCBF members submitted identical comments. See Comments of FCBF, 
Kelly Global Logistics, Inc., North Atlantic International Ocean 
Carrier, ECU Worldwide (NVOCC) and Mabel Olivera, Vice President 
Operations for Clover Systems, LLC, IContainers (USA), A Customs 
Brokerage (ACB), Inc. Omara Valles, Operations Manager, of Clover 
International, LLC., Hemisphere Cargo, Corp., KCarlton International 
dba KCI Shipping Line, Geodis Freight Forwarding. One commenter, 
Express Logistics Services, LLC., submitted nearly identical 
comments but did not identify itself as a member of NCBFAA or FCBF. 
For ease of reference, we refer to these as ``NCBFAA/FCBF Member 
Comments'' throughout the final rule.
---------------------------------------------------------------------------

    CJ International, customs broker/freight forwarder agrees with the 
Commission's proposal to remove the requirement to file NSAs with the 
Commission and publish essential terms in tariffs, stating that ``NSAs, 
like tariff rate filings, are burdensome and costly to file and 
maintain, yet it is unclear what the purpose is and who benefits from 
either of these items. Neither tariffs or NSAs are ever reviewed by 
clients.'' CJ International at 2. FedEx states that ``essential terms 
serve no purpose'' and supports removing the requirement to publish 
them as well as the definition of essential terms in Sec.  531.3(q). 
FedEx at 2.
    CaroTrans, an NVOCC, supports eliminating the NSA filing and 
publication of essential terms requirement, which it contends render 
NSAs unnecessarily burdensome and time consuming to use. Carotrans at 
4-5. CaroTrans, however, still recognizes that NSAs can be a useful 
tool. Id. at 4. CaroTrans asserts that the Commission should ``amend 
the regulations authorizing and governing NSAs in order to make them 
more flexible. This would ensure that NSAs continue to be an option for 
NVOCCs and their customers that under some circumstances prefer the 
increased formality of the NSA.'' Id. at 5. CaroTrans states that ``the 
proposed reform would substantially improve the NSA process without 
compromising any protections intended by the regulations for 
shippers.'' Id. at 5.
    Livingston International, Inc., an NVOCC, noted the benefits of 
NSAs, but asked the Commission ``to amend the regulations authorizing 
and governing NSAs in order to make them more flexible.'' Livingston at 
5. Livingston contends that ``the filing and publication requirements 
in Part 531 should be eliminated, as they pose an unnecessary burden on 
NVOCCs and shippers. Nevertheless, it is Livingston's position that an 
NSA can serve as a useful tool to facilitate ocean transportation 
services for certain customers.'' Id. at 4. Livingston states, ``an NSA 
can provide a meaningful commitment of cargo from a shipper over a 
longer and specified period of time, and can be amended repeatedly to 
provide some ability to adjust to market conditions. Furthermore, an 
NSA can be made subject to charges published by an NVOCC in its 
tariff.'' Id. Livingston asserts that amending the regulations to

[[Page 34785]]

make them more flexible ``would ensure that NSAs continue to be an 
option for shippers and NVOCCs but with reduced regulatory burden.'' 
Id. at 5. NITL also ``believes that NSAs should remain an option for 
shippers and NVOCCs that prefer the increased formality of the NSA 
requirements.'' NITL at 4. ``The League also agrees with the Commission 
that the agency can remove any unnecessary or burdensome regulatory 
requirements without eliminating the NSA option entirely.'' Id.
    Dart, a tariff publishing vendor, advised against removing NSA 
filing requirement. See Dart at 2. ``While many are calling for the 
removal of the NSA regulations, I agreed with the comments for its 
continued inclusion and usage, while pointing out the obvious that this 
instrument is OPTIONAL. It only effects the shippers and OTIs that 
choose to utilize them.'' Id. Dart advised that the Commission should 
not end the SERVCON system or stop requiring submission of Service 
Contracts and NSAs. Id. In particular, Dart asserted that the filing 
requirement is critical to the FMC's role as a neutral ``referee'' in 
trade disputes and assures independence from protective commercial 
interests. Dart also argued that the compliance costs of the 
requirement are no more than the cost of sending an email and that the 
requirement poses no economic burden. Id.
2. Discussion
    Commenters overwhelmingly support the Commission's proposal to 
eliminate the requirement that NSAs be filed with the Commission in 
SERVCON, as well as to eliminate the requirement that an NVOCC publish 
the essential terms of an NSA. The majority, nevertheless, did not call 
for the complete removal of NSAs and part 531. Dart, arguing that the 
Commission should not end the filing requirement, was the only 
commenter who submitted any opposition to the Commission's proposal to 
maintain part 531--but to eliminate the filing and essential terms 
publication requirements. There was also clear support for the 
continued use of NSAs.
    The Commission concurs with the statement from Livingston that 
amending the regulations to make them more flexible ``would ensure that 
NSAs continue to be an option for shippers and NVOCCs but with reduced 
regulatory burden.'' See Livingston at 5. As the Commission has noted 
previously, there does not appear to be any regulatory benefit from 
continuing the filing requirement for NSAs, and the group intended to 
benefit from the original 2003 NSA rulemaking, shippers, have not 
argued for maintaining the requirement.
    In response to Dart's concerns about the need for filed NSAs to 
permit the FMC to address commercial disputes, we believe that the 
recordkeeping requirements in Sec.  531.12 will ensure adequate 
Commission oversight. NVOCCs must continue to retain NSAs, amendments, 
and associated records for five years from the termination of the NSA 
and must provide them Commission staff within 30 days of a request. 
These requirements will permit the Commission to investigate any 
disputes or issues with respect to particular NSAs. We also 
respectfully disagree with Dart's contention that the requirement 
imposes little to no regulatory burden. As discussed below in the 
Rulemaking Analysis section and in the Commission's information 
collection request filed with the Office of Management and Budget, 
removing the filing requirement will reduce the burden hours for NVOCCs 
by 162 hours, or approximately $10,728.37.\3\ Eliminating these burdens 
will provide regulatory relief to NVOCCs.
---------------------------------------------------------------------------

    \3\ Specifically, following the promulgation of the 2017 final 
rule in Docket No. 16-05, the Commission estimated that the NSA 
filing requirement resulted in 162 burden hours to NVOCCs. See 
Narrative Supporting Statement for 46 CFR part 531 (Mar. 17, 2017), 
available at https://www.reginfo.gov/public/do/DownloadDocument?objectID=72337101. And as described below, this 
final rule eliminates those burden hours. The Commission estimates 
the cost of the NSA requirements based on assumptions regarding the 
percentage of burden hours attributable to various respondent 
employees and annual salary estimates for those employees. Using 
those estimates, the cost associated with the NSA filing 
requirements is $10,728.37.
---------------------------------------------------------------------------

    By way of removing the essential terms and NSA filing requirements, 
but still allowing NSAs as an option, the Commission can reduce costs 
and preserve choice while allowing a vehicle, NSAs, to continue to 
serve those members of the industry that prefer the extra formality and 
options allowed by NSAs. The Commission believes that while rate and 
service provisions in NSAs may not be ideal for NVOCCs and shippers 
with lower shipment volumes, a considerable amount of cargo is 
currently transported under NSAs, and they have proven to be a valued 
contract model. As stated by CaroTrans, the Commission believes this 
rule will ``substantially improve the NSA process without compromising 
any protections intended by the regulations for shippers.'' See 
CaroTrans at 5.
    Finally, we agree with FedEx that the definition of ``statement of 
essential terms'' in Sec.  531.3 is unnecessary given the elimination 
of the publication requirement. Accordingly, this final rule deletes 
that definition.\4\
---------------------------------------------------------------------------

    \4\ This final rule also clarifies the revised regulatory text 
in Sec.  531.8. The proposed revisions to Sec.  531.8 in the NPRM 
would have included the following provision, ``Each time any part of 
an NSA is amended, the `Effective Date' will be the date of the 
amendment.'' By providing that the effective date for amendments 
would be the date of the amendment, however, this proposed change 
could have been misinterpreted as prohibiting parties from setting 
future effective dates for amendments. Accordingly, the final rule 
makes clear that the effective date of an amendment will be either 
the date of the amendment or a future date agreed to by the parties.
---------------------------------------------------------------------------

B. Allow Non-Rate Economic Terms in NRAs

1. Comments
    NCBFAA has urged the Commission to ``specifically authorize NRAs to 
include non-rate economic terms.'' NCBFAA at 11. A number of individual 
NCBFAA/FCBF members provided support for ``including economic terms 
such as credit, minimum quantities, liquidated damages, etc.'' 
Commenters at 1. Yusen Logistics requests to include non-rate economic 
terms. Yusen at 2-3. Mohawk, an NVOCC, has called for the inclusion of 
``economic terms, such as surcharges, credit terms, minimum volume 
commitments, demurrage, detention, per diem, free time, waiting time, 
penalties and/or incentives, service standards.'' Mohawk states: ``We 
often find that our clients are looking to incorporate more into our 
NRAs than the current regulations allow, therefore we are hopeful that 
these broader economic terms can be approved. In many cases these same 
clients do not want to ship under [an] NSA.'' Id. at 2. Connor Global, 
another NVOCC, would like to see the inclusion of credit terms, 
surcharges, free time, waiting time, demurrage, detention, and per 
diem, minimum volume commitments, and service standards. Connor Global 
at 2. Serra, an NVOCC, requests inclusion of ``any non-economic terms 
important to both the NVOCC and the shipper in the movement of the 
freight.'' Serra at 1. Parker & Company Worldwide, a Freight Forwarder, 
states that it would like to see the same terms allowed as stated 
above, and remarked that looking up terms online in tariffs is 
burdensome. Parker at 1.
    A significant number of shipper commenters submitted nearly 
identical comments \5\ that support allowing non-rate economic terms:
---------------------------------------------------------------------------

    \5\ See Comments of Quadrant, Crescent, Geek Net, Connor Corp. 
(a different entity than Connor Global), and Bonney Forge. We refer 
to these comments as ``Shipper Comments'' throughout the document.

    We do not rely on published tariffs when deciding which NVOCC or 
freight forwarder

[[Page 34786]]

to use. Furthermore, it is our preference to be able to negotiate 
these services, not just the rates, without being required to have a 
formal written contract that needs to be filed with the Federal 
Maritime Commission (FMC.) . . . filing negotiated contracts/rates 
are a regulatory requirement that serves no real purpose but simply 
---------------------------------------------------------------------------
adds time and administrative costs to process.

Shipper Comments.
    In addition to the types of terms specified above, Vanguard, an 
NVOCC, asks that the following terms be permitted: EDI services, Time 
Volume Rates, Liquidated Damages, Freight Forwarder Compensation, 
General Rate Increases (GRIs) or other pass-through charges from 
Carriers or Ports, Dispute Resolution, Rate or Service Amendments, 
Service Guarantees and/or Service Benchmarks, Rate Amendment Processes; 
etc. Vanguard at 2.
    NITL also supports expanding NRAs to include non-rate economic 
terms. NITL at 5. NITL states, ``allowing NVOCCs and shippers to 
negotiate terms different than those set forth in the NVOCC's rules 
tariff will likely lead to more competitive and efficient shipping 
arrangements that meet the shipper's commercial requirements and the 
demands of the market.'' Id. NYNJFFF&BA is also in favor of ``allowing 
NRAs to include non-rate economic terms.'' NYNJFFF&BA at 3-4.
    Dart, a tariff publishing vendor, stated that there should be a 
clear distinction between what additional terms could be included in an 
NRA compared to an NSA. Dart at 3. ``There is no need to cross into 
this area by making the terms and conditions conflicting. Both can 
equally coexist and should be allowed to remain as viable instruments 
for use by the OTI in support of the shipping needs of its customer.'' 
Id. FedEx, an NVOCC and freight forwarder, calls for the rescission of 
the prohibition against NRAs being allowed to include non-rate economic 
terms, and noted the importance of the ability to include other terms 
such as credit terms. FedEx at 2.
2. Discussion
    The Commission agrees with the many commenters, shippers and NVOCCs 
alike, who are calling for the expansion of NRAs to include non-rate 
economic terms. While the Commission recognizes the argument made by 
Dart for a clear distinction between what additional terms may be 
included in an NRA compared to an NSA, the Commission nevertheless 
believes that giving more choice to parties, as the majority of 
commenters support, will lead to greater efficiency and more 
competitive shipping arrangements. Dart at 3.
    As stated above, commenters have called for a variety of new terms 
to be allowed in NRAs: Surcharges, credit terms, minimum volume 
commitments, demurrage, detention, per diem, free time, waiting time, 
penalties and/or incentives, service standards, EDI services, freight 
forwarder compensation, GRIs or other pass-through charges from 
Carriers or Ports, Dispute Resolution, and Rate Amendment Processes. 
The Commission recognizes the reduced administrative burden, greater 
efficiency, and increased competition that can be achieved by 
permitting the inclusion of such terms. While the Commission 
acknowledges the concern that allowing non-rate economic terms might 
increase the complexity of some NRAs, the Commission nevertheless 
favors removing outdated, unnecessary, or unduly burdensome regulations 
and restrictions to make way for more choice and options for NVOCCs and 
shippers. The Commission also believes that this increased flexibility 
for NRAs does not warrant a bright line distinction between NSAs and 
NRAs. Allowing the full range of non-rate economic terms in NRAs will 
clearly provide a benefit to members of the industry, and, therefore, 
the Commission is in favor of allowing for the inclusion of such terms 
in NRAs.\6\ Moreover, the broadening of the terms allowed in NRAs will 
not diminish the ability of NVOCCs and shippers that wish to form more 
complex agreements through an NSA. NSAs will remain a viable commercial 
pricing instrument for shippers and NVOCCs alike.
---------------------------------------------------------------------------

    \6\ We discuss surcharges and pass-through assessorial charges 
in the next section.
---------------------------------------------------------------------------

C. Third-Party Pass-Through Assessorial Charges

1. Comments
    As discussed above, a number of commenters requested that the 
Commission permit NVOCCs to include GRIs and other pass through charges 
from carriers and ports in NRAs. In addition, FedEx requested the 
Commission to clarify the role of third-party pass-through assessorial 
charges. FedEx at 2. FedEx requests ``that text clarifying the role of 
third-party pass-through assessorials, such as GRIs (General Rate 
Increases) be included in the regulations.'' Id. FedEx states that 
``NVOCCs' ability to keep up with assessorial fees passed down by 
carriers is especially challenging. These rates sometimes change weekly 
in the most common lanes. Often ocean carriers announce the 
establishment and amount of an assessorial 30 days in advance, but the 
amount decreases over the 30 days, and is only finalized the day before 
the effective date.'' Id. FedEx notes that ``NVOCCs have very limited 
control over this process . . . assessorial costs are generally passed 
on to the shipper . . . [t]he NVOCC's process is labor-intensive.'' Id. 
FedEx proposes that NRAs be allowed ``to contain a clause stating that 
assessorial charges by third parties will be passed through to the 
customer'' without mark up or being discounted. Id. FedEx also proposes 
``that NRAs also be permitted to contain a clause referring the user to 
the NVOCC's tariff, or other website location if/when tariffs are 
eliminated, for the assessorial amounts charged by third parties.'' Id.
    Serra also requests allowance for ``pass through charges to be 
referenced in an NRA and applied with full shipper knowledge and 
understanding.'' Serra at 2. Serra states:

    Surcharges, notably GRls have become a wild card factor in final 
rate costs. Since regulations require ocean carriers to announce 
increases in surcharges 30 days in advance, the industry routinely 
files and provides notice. Then when the market cannot sustain all 
or some of the increase, the surcharges are cancelled or rolled to a 
future date. This is destabilizing for all industry participants and 
particularly difficult for NVOCCs to manage.

Id.

2. Discussion
    The Commission already permits NVOCCs to pass along third-party 
assessorial charges to shippers under NRAs when certain conditions are 
met. Specifically, assessorial charges and other surcharges must be 
applied in accordance with the rules tariff and the NRA must inform the 
shipper of their applicability.\7\ The Commission has not, however, 
traditionally allowed NRA rates to be increased via GRIs. Although part 
532 does not expressly discuss assessorial charges, the preamble to the 
2011 final rule establishing NRAs states:
---------------------------------------------------------------------------

    \7\ A rules tariff is defined as ``a tariff or the portion of a 
tariff . . . containing the terms and conditions governing the 
charges, classifications, rules, regulations and practices of an 
NVOCC, but does not include a rate.'' 46 CFR 532.3(c).

    As is the case with respect to tariff rates, the rate stated in 
an NRA may specify the inclusion of all charges (an ``all-in'' rate) 
or specify the inclusion of only certain accessorials or surcharges. 
Without specifying otherwise, the NRA would only replace the base 
ocean freight rate or published tariff rate. If the rate contained 
in an NRA is not an all-in rate, the NRA must

[[Page 34787]]

specify which surcharges and accessorials from the rules tariff will 
apply. To the extent surcharges or accessorials published in the 
NVOCC's rules tariff will apply, the NRA must state that the amount 
of such surcharges and accessorials is fixed once the first shipment 
has been received by the NVOCC, until the last shipment is 
---------------------------------------------------------------------------
delivered. Rates stated in an NRA may not be increased via a GRI.

76 FR at 11354.
    Since issuance of the 2011 final rule, however, the Commission has 
clarified through case law the treatment of pass-through assessorial 
charges for which no specific amount is fixed in either the NRA or the 
rules tariff. Specifically, in Gruenberg-Reisner v. Overseas Moving 
Specialists, Inc., 34 S.R.R. 613, 622-623 (FMC 2016), the Commission 
found that an NVOCC was entitled to collect pass-through assessorial 
charges without any markup, which it substantiated with invoices. The 
NVOCC described in its rules tariff the types of charges that were not 
included in the rate and provided that any of those charges assessed 
against the cargo would be for the account of the cargo, even if the 
NVOCC was responsible for the collection thereof. Id. The Commission 
found that Respondent was ``entitled to payment for . . . destination 
terminal handling charges and the additional floor fee, and . . . local 
port fees, customs fees, parking permit, and elevator fee because these 
were reasonable accessorial charges that Respondent passed through to 
the Claimants without any markup.'' Id. at 623. The Commission also 
stated that ``assessing pass-through charges with no markup is a just 
and reasonable practice, in accordance with [section] 41102(c).'' Id at 
622.
    The Commission has determined to incorporate the interpretations in 
Gruenberg-Reisner, subject to a few clarifications, into part 532. 
Specifically, pass-through assessorial charges need not be fixed at the 
time of receipt of the first shipment, in light of the Commission's 
decision in Gruenberg-Reisner, which found it permissible for an NVOCC 
to collect pass-through assessorial charges that were not fixed upon 
receipt.
    In summary, the final rule adopts the following requirements. If 
the NRA rate is not an ``all-in rate'' the NRA must specify which 
surcharges or assessorial charges will apply by either including the 
specific additional charges in the NRA itself or referencing in the NRA 
the specific charges contained in the rules tariff. For applicable 
charges contained in the rules tariff, the charges and amounts for 
those charges (if the amounts are specified in the tariff) are fixed 
once the first shipment has been received by the NVOCC until the last 
shipment is delivered, subject to further amendment of the NRA by 
mutual agreement of the NVOCC and shipper. For pass-through charges and 
ocean carrier GRIs for which the NRA or rules tariff does not include a 
specified amount, the NVOCC may invoice the shipper for only those 
charges the NVOCC actually incurs, with no markup. The Commission is 
removing the prohibition on the pass-through of ocean carrier GRIs in 
order to increase efficiency and flexibility within the NRA framework.

D. Authorize Amendments and Shipper Acceptance Upon Booking

1. Comments
    A number of individual NCBFAA/FCBF members proposed that the 
Commission authorize amendments to NRAs and allow acceptance and 
booking of cargo ``to suffice as acceptance of the rate, in lieu of a 
written agreement.'' NCBFAA/FCBF Member Comments at 1. Yusen also 
favors authorizing amendments and believes that ``acceptance of the NRA 
rate quote by either signing the document or otherwise having a written 
agreement'' is ``an irrelevant and repetitive requirement'' Yusen at 2. 
Connor Global asks for flexibility in amending NRAs and acceptance upon 
booking. Connor Global at 2. Mohawk supports allowing amendments and 
acceptance upon booking. Mohawk at 2. Serra argues that allowing NRAs 
``to be amended would cut down on the re-issuance of new NRAs 
necessitated by the dynamic shipping environment.'' Serra at 2. Serra 
believes that ``this should extend even to freight that has been 
received.'' Id. Serra asks the Commission ``to recognize that tendering 
or booking of cargo constitutes acceptance of the rate and terms quoted 
in an NRA.'' Id. Thunderbolt also believes tender of the cargo by the 
shipper to the OTI should constitute acceptance of an NRA. Thunderbolt 
at 2. Sefco favors ``allowing the act of booking cargo to be considered 
acceptance of a rate under the terms of an NRA.'' Sefco at 3. Sefco 
argues that allowing modification and acceptance by booking ``is more 
in tune with market conditions and best business practices.'' Sefco at 
2. NCBFAA states that ``modification of NRAs eliminates an unnecessary 
restriction, provides flexibility in a fluid marketplace, and allows 
[NVOCCs] to be responsive to their customers.'' NCBFAA at 7.
    Livingston supports the proposal ``to eliminate [Sec.  532.5(e)] 
and to expand the NRA exemption in 46 CFR part 532 to allow for 
modification of NRAs at any time upon mutual agreement between an NVOCC 
and a shipper.'' Livingston at 3. ``Livingston also supports the 
further change proposed by the Commission to modify [Sec.  532.5(c)] to 
allow a booking request made pursuant to an NRA to constitute the 
required shipper acceptance of such NRA.'' Id. CaroTrans concurs. 
CaroTrans at 3. Shipco also concurs. Shipco at 2-3.
    Several commenters disagreed, however, with the Commission's 
proposal to provide specific language for the notice to shippers that 
booking would constitute acceptance of the NRA terms. Livingston argues 
that ``requiring particular wording on an NRA regarding whether booking 
constitutes acceptance adds regulatory burden instead of removing it.'' 
Id. Shipco states that ``requiring specific wording would merely raise 
the risk of noncompliance for NVOCCs without providing any real benefit 
to shippers.'' Shipco at 2-3.
    NYNJFFF&BA goes even further, arguing that ``the requirement for a 
`prominent written notice' be removed and the wording of any such 
notice be left to the NVOCC to determine what works best for their 
system of communication.'' NYNJFFF&BA at 2. NYNJFFF&BA states that ``it 
is an excessive formulaic governmental requirement with no real 
business/regulatory/legal purpose to insist that an NRA rate offer is 
not accepted unless there is a prominent notice that a booking is an 
acceptance of the NRA.'' Id. at 3. NYNJFFF&BA are also in ``favor of 
allowing NRAs to be amended after the receipt of the initial 
shipment.'' Id. In addition, they favor allowing the shipper to agree 
in writing ``to accept a change in the NRA terms after the carrier or 
its agent has received the cargo.'' Id.
    CJ International, a freight forwarder and customs broker, states:

    We believe that the Commission should eliminate the requirement 
that the shipper must indicate acceptance of the NRA rate by signing 
the document or memorializing acceptance in some other written 
format. Though we do request our clients indicate their approval by 
either signing our rate quote or by sending confirmation back via 
email, in many cases they simply tender cargo as acceptance of the 
NRA rate with the understanding that the agreed NRA rate will apply.

CJ International at 1.

    Dart cautions that NRA amendments should be denoted with a date and 
time stamp, an amendment number, and a written response before the 
cargo is accepted.'' Dart at 3. Specifically, Dart states:


[[Page 34788]]


    At the very least, a booking would have to be supported by a 
written acceptance of the NRA, contain the NRA number and 
specifically refer to the appropriate amendment number. If not, 
issues will arise with parties working on different ``versions'', 
only to find out later the final costs were not all specifically 
agreed to as supported by the many comments who noted the fluid and 
changing conditions of ocean shipments. Things can change hourly in 
some cases and the requirement of written acceptance and specific 
language compelling the NRA number and subsequent amendment number 
should be included to avoid confusion and needless disputes that 
could end up in court.

Id.

    NITL supports allowing amendments to NRAs and shipper acceptance 
upon booking, but with reservations. NITL at 6-7. ``NITL supports 
providing parties an ability to amend an NRA at any time but only to 
the extent that the amendment is based on a mutual agreement between 
the parties that is not in the form of the NVOCC's tariff, bill of 
lading or other shipping document not subject to mutual negotiation.'' 
NITL at 6. NITL believes ``[t]he mutual agreement could be in the form 
of an informal writing such as an email or other electronic exchange 
which reflects the mutuality of the agreement.'' Id. at 6.
    NITL believes that the proposal to allow acceptance of an NRA 
through the act of booking in addition to the current method of 
acceptance which allows acceptance through memorialization in an email 
or writing, has the potential to create confusion over the 
enforceability of an NRA. Id. at 6. NITL believes this could also cause 
confusion with ``the ability of a shipper to cancel a booking if 
commercial circumstances change prior to the tender of the cargo.'' Id. 
NITL, therefore, ``with respect to a shipper's ``acceptance'' of an 
NRA, the League prefers the current regulations which require a 
``meeting of the minds'' between the parties to be reflected in a 
formal or informal writing, such as an email.'' Id. at 6. Nevertheless, 
NITL recommends that ``if the FMC were still to decide to provide 
greater flexibility for ``acceptance'' of NRAs,'' then ``acceptance of 
the NRA should be tied to the shipper's tender of the cargo,'' as 
acceptance through tendering of cargo ``is more consistent with 
existing transportation practices and broader commercial contract 
principles.'' Id. at 7. ``NITL strongly supports the Commission's 
proposed requirement that each NVOCC seeking to recognize the alternate 
form of acceptance must incorporate a prominent written notice to that 
effect on each applicable NRA or amendment to avoid any risk of 
surprise and potential disputes.'' Id. at 7. RBH, a shipper, states 
that all that should be necessary for acceptance of an NRA is ``the 
preparation of a good quotation and acceptance of the charges 
associated with a shipment.'' RBH at 1.
    Vanguard, who favors requiring prominent written notice, suggested 
the following language: ``Your booking and/or tendering of cargo is 
considered acceptance of the NRA rates and terms that were negotiated 
with you for the shipment of the cargo.'' Vanguard at 2. Vanguard also 
believes that NRAs should be allowed ``to be amended at any time 
before, upon or after cargo receipt,'' as well as ``extended, expired, 
or cancelled.'' Id. at 2. Shipco, however, ``does not believe that the 
Commission should require any particular wording on an NRA regarding 
whether booking constitutes acceptance.'' Shipco at 3. CaroTrans also 
does not believe any specific wording should be required to constitute 
acceptance. CaroTrans at 3. ``Requiring specific wording would merely 
raise the risk of noncompliance for NVOCCs without providing any real 
benefit to shippers.'' Id. at 4. Serra is not of the opinion ``that it 
is necessary for an NVOCC to have a prominent notice that booking is 
considered an acceptance of the NRA.'' Serra at 2. Serra also does not 
``believe that the form and wording of such a notice should be a matter 
worthy of government interest and regulation.'' Id.
    ABS Consulting stated: ``Further providing the shippers['] 
acceptance by making a booking with the NVOCC also aligns nicely with 
other shipping modes and how shippers and forwarders (carriers) 
interact today.'' ABS at 1. ``I would recommend that the FMC go even 
one step further, to allowing the NVOCC to receive the cargo prior to 
the acceptance (booking) of the cargo by the customer.'' Id. Asia 
Shipping also states that they ``would recommend that the FMC allow[] 
the NVOCC to receive the cargo prior to the acceptance (booking) of the 
cargo by the customer.'' Asia at 2.
    FedEx states that ``[a]llowing acceptance to be demonstrated by the 
shipper's booking with the NVOCC after receipt of the NRA (with 
explanatory text) conforms with the current shipping environment.'' 
FedEx at 2. FedEx, moreover, states that ``[a]llowing NVOCCs and 
shippers to modify existing NRAs with mutual agreement, instead of 
establishing a new NRA, reduces bureaucracy.'' Id.
    DJR Logistics states that ``the lifting of the requirement of 
having our customers formally agree to the NRA and allow for the 
acceptance of a booking of cargo to confirm their agreement to be in 
the interest of the shipping public.'' DJR at 1. DJR also believes NRAs 
should be allowed to be amended ``as market conditions change.'' Id. 
``The ability to adjust the NRA as the market conditions change would 
eliminate[] hours of work and would benefit the Shipping Public by 
allowing us to reduce the rate being offered earlier than when the NRA 
expires under the current system.'' Id.
2. Discussion
    The Commission recognized in the NPRM that NVOCCs and their 
customers ``should not be compelled to create a new NRA in every 
instance simply because the rules do not currently provide for 
amendment.'' 82 FR at 56786. The Commission has also acknowledged that 
it is appropriate to ``permit NRAs to be extended or amended upon 
acceptance or agreement by the shipper customer.'' Id. Acknowledging 
the utility of acceptance by booking, the Commission, furthermore, 
requested input on the practice--as well as whether prominent written 
notice should be required. The Commission also sought input on whether 
or not specific wording should be required. Id.
    There were no commenters who opposed allowing amendments. The 
Commission recognizes that the smaller cargo volume of NRAs as well as 
the short term and transactional nature of NRAs merit greater 
flexibility and the benefits of allowing amendments to NRAs are 
recognized by the industry and the Commission alike. Some commenters, 
like Serra and NYNJFFF&BA, disagreed with the proposal to limit the 
applicability of NRA amendments to prospective shipments and urged the 
Commission to allow for ``a change in the NRA terms after the carrier 
or its agent has received the cargo.'' NYNJFFF&BA at 3. The Commission 
is denying this request and moving forward with the proposed language 
limiting amendments to prospective shipments. Allowing such 
``retroactive'' amendments would be a drastic departure from the 
current regulatory regime governing the ocean transportation of goods. 
No matter the specific means of contracting for such services, i.e., 
tariff, service contract, NSA, or NRA, the Commission has consistently 
limited the applicability of amendments to prospective shipments, and 
the commenters have not presented a compelling reason to make such a 
dramatic change. NRAs, in particular, may be established and amended 
with little formality. Thus, retroactive amendments in the NRA context 
present an increased risk of error and disagreement over the applicable 
terms. In addition, the Commission believes

[[Page 34789]]

that if the NVOCC already has the cargo at the time of the amendment, 
there would be an imbalance in bargaining power between the NVOCC and 
shipper and an increased possibility that a shipper would feel 
pressured to submit to amended terms with which they might not 
otherwise agree. In order to avoid this situation and ensure that any 
amendments truly reflect mutual agreement by the parties, the 
applicability of amendments is limited to prospective shipments.
    The process for the parties reaching agreement for NRAs and 
amendments presents another area of disagreement. The majority of 
commenters support acceptance upon booking with no writing required. 
NITL and Dart both argue, however, that having a formal writing will 
help to avoid confusion.
    The Commission does not share NITL's concerns and, under the final 
rule, an NRA may become binding and enforceable when the terms of an 
NRA are agreed to by both NRA shipper and NVOCC. The Commission is 
adding language to Sec.  532.5 to clarify this point. The shipper is 
considered to have agreed to the terms of the NRA when: (1) The shipper 
provides the NVOCC with a signed agreement; (2) sends the NVOCC written 
communication indicating agreement to the NRA terms; or (3) books a 
shipment after receiving prominent notice that booking constitutes 
acceptance.
    The Commission believes that prominent written notice, with fixed 
language stating that a booking constitutes acceptance, will negate the 
potential confusion about which Dart is concerned. The requirement that 
Dart calls for, specifically that a booking would need written 
acceptance, with the NRA number and an amendment number, would be 
overly burdensome for both shippers and NVOCCs.
    The Commission also recognizes the request of ABS Consulting and 
Asia to allow ``the NVOCC to receive the cargo prior to the acceptance 
(booking) of the cargo by the customer.'' The Commission believes, 
however, that to allow tender prior to agreement would create the 
potential for an unfair environment for shippers and an increase in 
transactional confusion. In a situation where an NVOCC is sending 
multiple rate quotes during a short period of time, allowing tender to 
constitute shipper acceptance would substantially increase the 
likelihood of disagreement over which quoted terms constitute the NRA. 
In order to avoid such disputes, the Commission is retaining the 
requirement that the NRA be agreed to by both the shipper and NVOCC 
prior to the receipt of cargo by the NVOCC and including ``prior to the 
receipt of cargo'' in the text of Sec.  532.5(c).
    Prominent written notice will alert shippers that booking will 
constitute acceptance of the NRA and avoid confusion between shippers 
and NVOCCs. Though Serra and NYNJFFF&BA argue against the requirement 
of prominent written notice, the Commission believes without such 
notice the potential for confusion and disputes is too high. A number 
of commenters, including Serra, CaroTrans, NYNJFFF&BA, and Shipco also 
argue against requiring specific fixed language in the prominent 
written notice. The requirement for specific language, they argue, 
serves no purpose and raises the risk of noncompliance. The Commission 
disagrees with these contentions. Without specific language, the burden 
and risk of noncompliance for NVOCCs would increase, as they would be 
required to craft statements that qualify as ``prominent written 
notice'' an arguably ambiguous standard. In contrast, specific fixed 
language provides necessary clarity and certainty.
    As discussed, above, Vanguard suggested the following alternative 
language for the prominent written notice: ``Your booking and/or 
tendering of cargo is considered acceptance of the NRA rates and terms 
that were negotiated with you for the shipment of the cargo.'' The 
Commission believes that revising the proposed notice language to 
incorporate certain aspects of Vanguard's suggested language will 
improve the language. In particular, the Commission's proposed language 
noted that the shipper may agree to the NRA by booking. This could be 
read as allowing the shipper to determine whether booking constitutes 
acceptance and lead to confusion. Vanguard's suggested language, on the 
other hand, makes clear the booking will be considered acceptance of 
the NRA. Accordingly, this final rule adopts the following notice 
language: ``THE SHIPPER'S BOOKING OF CARGO AFTER RECEIVING THE TERMS OF 
THIS NRA OR NRA AMENDMENT CONSTITUTES ACCEPTANCE OF THE RATES AND TERMS 
OF THIS NRA OR NRA AMENDMENT.'' \8\ We also view the language 
``acceptance of the NRA rates and terms that were negotiated with you 
for the shipment of the cargo,'' as suggesting that the required 
language be included somewhere other than the NRA terms transmitted to 
the shipper. To ensure that the shipper is aware of this notice, the 
final rule retains the proposed rule's requirement that the notice be 
included in the NRA terms, and includes clarifying language to that 
effect.
---------------------------------------------------------------------------

    \8\ The proposed rule required that this notice be in bold or 
uppercase letters. To help ensure that shippers see the notice, the 
final rule requires that the notice be in bold and uppercase 
letters.
---------------------------------------------------------------------------

E. Elimination of all Tariff Publishing Requirements

1. Comments
    A number of individual NCBFAA/FCBF members submitted the same 
request that the Commission ``entirely exempt NVOCCs from publishing 
negotiated rate arrangements (NRAs) and filing requirements.'' NCBFAA/
FCBF Member Comments at 1. Parker, a freight forwarder, argues that 
tariff filing has become outdated. Parker at 1. Parker states that ``as 
a customer we never look at the tariffs we rely on the written 
quotations.'' Id. Mohawk ``strongly urge[s] the Commission to eliminate 
the need for NVOCCs to file Rate Tariffs.'' Mohawk at 3. Mohawk states 
that ``no shippers ever shop for rates in any of the remaining Rate 
Tariffs. Instead they ask for quotes via email or through web-based 
rate sourcing that have long ago stopped the need to look elsewhere. 
Tariffs are an archaic throwback to a time long gone . . . .'' Id.
    Thunderbolt supports the ``elimination of the need for NVOCC's to 
file Rate Tariffs.'' Thunderbolt at 3. RBH states ``the publishing of 
tariffs is an outdated way of providing information that is no longer 
used and adds to additional expenses for our carriers that could be 
better served by offering more competitive rates without this clerical 
burden.'' RBH at 1. Vanguard states that ``tariffs are not used by 
shippers,'' and requests that the Commission, ``remove the requirement 
to provide public access to shippers to NVOCC Rules tariff.'' Vanguard 
at 2. Serra has asked the Commission to ``seriously study the 
possibility of using its exemption authority to remove the tariff 
publishing requirements for NVOCCs.'' Serra at 2. Serra states that 
``the removal of the requirement to publish tariffs will not be 
detrimental to the shipping public and actually lead to a reduction in 
costs that will assist economic growth.'' Id. Serra supports ``the 
elimination of tariff publishing regulations both for OTI NVOCCs and 
ocean common carriers as they are simply not used and thus provide no 
benefit to the shipping public.'' Id. at 3. NYNJFFF&BA supports 
``removal of OTI NVOCCs Tariff and Tariff Publishing Requirements.'' 
NYNJFFF&BA at 5.
    Lastly, Connor Global also ``urges the Commission to eliminate the 
requirement for NVOCCs to file rate

[[Page 34790]]

tariffs.'' Connor Global at 3. Connor Global argues that ``they are an 
archaic method of pursuing rates when in today's market rates are 
requested by email or accessed via web portals.'' Id. at 3. Connor 
Global also argues that it is a burden to file tariffs, nobody accesses 
them, and they provide no benefit. Id. at 3.
2. Discussion
    The Commission has considered the request to eliminate all tariff 
publishing requirements. Clearly a number of commenters have argued 
that rate tariffs are archaic and not utilized.
    As an initial matter, the Commission did not propose or consider 
the elimination of all tariff filing requirements for NVOCCs in the 
NPRM and such a change is outside the scope of this rulemaking. 
Moreover, data from the Commission's Bureau of Trade and Analysis 
demonstrates that 71 percent of NVOCCs still publish tariff rates 
exclusively. With such widespread use, the Commission does not believe 
that rate tariffs are outdated, not used, or of no benefit. Rate 
tariffs provide shippers access to ocean freight shipping in a non-
discriminatory way. Rate tariffs are a useful tool for the shipping 
public and their demise would not be consistent with the Commission's 
approach to enhancing flexibility and choice.

F. Summary of Post Final Rule NSA/NRA Differences

    To summarize the key differences between NSAs and NRAs in light of 
the changes made by this final rule, the Commission has prepared the 
following table:

------------------------------------------------------------------------
                                       NSA                  NRA
------------------------------------------------------------------------
Rates and Terms...............   Must       Must include
                                 include terms      the rate and any
                                 listed in 46 CFR   applicable non-rate
                                 531.6(a).          economic terms.
                                 May        Must include
                                 include any        any applicable
                                 other terms..      surcharges and
                                                    assessorial charges
                                                    not included in the
                                                    rate, including pass-
                                                    through charges.
Acceptance....................   Must be   Shipper may accept
                                 signed by NVOCC    terms by:
                                 and shipper.       Signing
                                                    agreement.
                                                   
                                                    Communicating
                                                    acceptance by
                                                    writing, including
                                                    by email.
                                                    Booking a
                                                    shipment after
                                                    receipt of NRA
                                                    terms, if NVOCC has
                                                    included required
                                                    notice.
Enforceability................   Binding    Binding upon
                                 upon signature     shipper: (1)
                                 of the parties.    Providing NVOCC with
                                                    signed agreement;
                                                    (2) sending written
                                                    communication
                                                    accepting NRA terms;
                                                    or (3) booking
                                                    shipment after
                                                    receiving prominent
                                                    notice.
Filing........................   No         No filing
                                 filing             requirement.
                                 requirement.
Publication...................   No         No
                                 publication        publication
                                 requirement.       requirement.
------------------------------------------------------------------------

V. Rulemaking Analyses and Notices

Congressional Review Act

    The rule is not a ``major rule'' as defined by the Congressional 
Review Act, codified at 5 U.S.C. 801 et seq. The rule will not result 
in: (1) An annual effect on the economy of $100,000,000 or more; (2) a 
major increase in costs or prices; or (3) significant adverse effects 
on competition, employment, investment, productivity, innovation, or 
the ability of United States-based companies to compete with foreign-
based companies. 5 U.S.C. 804(2).

Regulatory Flexibility Act

    The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 
601-612) provides that whenever an agency promulgates a final rule 
after being required to publish a proposed rulemaking under the 
Administrative Procedure Act (APA) (5 U.S.C. 553), the agency must 
prepare and make available a final regulatory flexibility analysis 
(FRFA) describing the impact of the rule on small entities, unless the 
head of the agency certifies that the rulemaking will not have a 
significant economic impact on a substantial number of small entities. 
5 U.S.C. 604-605. The Chairman of the Federal Maritime Commission 
certifies that this final rule will not have a significant economic 
impact on a substantial number of small entities.
    The Commission recognizes that the majority of businesses affected 
by these rules qualify as small entities under the guidelines of the 
Small Business Administration. The rule as to part 531 (NSAs) poses no 
economic detriment to small businesses. In this regard, the rule 
pertains to an NSA entered into between a NVOCC and a shipper, which is 
an optional pricing arrangement that benefits the shipping public and 
relieves NVOCCs from the burden of the statutory tariff filing 
requirements in 46 U.S.C. 40501. In that the rule eliminates the 
requirements that NVOCCs file NSAs with the Commission and publish 
essential terms of such NSAs, the regulatory burden on NVOCCs utilizing 
NSAs is reduced. The rule as to part 532 (NRAs) establishes an optional 
method for NVOCCs to amend an NRA, permits additional terms to be 
included in NRAs, and expands the ways a shipper may accept the terms 
of an NRA or amendment thereto, to be used at the NVOCC's discretion. 
In that the rule eliminates the prohibition on amendments to NRAs after 
an initial shipment is received by the carrier and permits NVOCCs to 
more flexibly create and amend such NRAs, the regulatory burden on 
NVOCCs utilizing NRAs is reduced.

National Environmental Policy Act

    Upon completion of an environmental assessment, the Commission 
issued a Finding of No Significant Impact (FONSI) in conjunction with 
the NPRM, determining that this rulemaking would not constitute a major 
Federal action significantly affecting the quality of the human 
environment within the meaning of the National Environmental Policy Act 
of 1969, 42 U.S.C. 4321 et seq., and that preparation of an 
environmental impact statement was not required. No petitions for 
review were filed, and the FONSI became final on December 10, 2017. The 
FONSI and environmental assessment are available for inspection at the 
Commission's Electronic Reading Room at: http://www.fmc.gov/17-10, and 
at the Docket Activity Library at 800 North Capitol Street NW, 
Washington, DC 20573, between 9 a.m. to 5 p.m., Monday through Friday, 
except Federal holidays. Telephone: (202) 523-5725.

Executive Order 12988 (Civil Justice Reform)

    This final rule meets the applicable standards in E.O. 12988 
titled, ``Civil Justice Reform,'' to minimize litigation, eliminate 
ambiguity, and reduce burden.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) requires 
an agency to seek and receive approval from the Office of Management 
and Budget (OMB) before collecting information from the public. 44 
U.S.C.

[[Page 34791]]

3507. The agency must submit collections of information in rules to OMB 
in conjunction with the publication of the notice of proposed 
rulemaking. 5 CFR 1320.11. The information collection requirements for 
part 531, NVOCC Service Arrangements, and Part 532 NVOCC Negotiated 
Rate Arrangements are currently authorized under OMB Control Numbers 
3072-0070: 46 CFR part 531, NVOCC Service Arrangements, and 3072-0071: 
46 CFR part 532--NVOCC Negotiated Rate Arrangements, respectively. In 
compliance with the PRA, the Commission submitted the proposed revised 
information collections to the Office of Management and Budget. Notice 
of the revised information collections was published in the NRPM and 
public comments were invited. 82 FR at 56781, 56787. Comments received 
regarding the proposed changes, as well as the Commission's responses, 
are addressed above. No comments specifically addressed the revised 
information collections in parts 531 and 532.
    As discussed above, the final rule eliminates the requirement that 
NVOCCs file NSAs with the Commission and the requirement that NVOCCs 
publish the essential terms of NSAs. Public burden for the collection 
of information pursuant to part 531, NVOCC Service Arrangements, as 
revised, would comprise 79 likely respondents and an estimated 3,328 
annual instances. The final rule will significantly reduce the burden 
estimate from 831 hours to 127 hours, a difference of 704 hours.
    The final rule also: (1) Permits NRAs to be modified after the 
receipt of the initial shipment by the NVOCC; (2) permits NVOCCs to 
incorporate non-rate economic terms; (3) permits shipper acceptance of 
the NRA or amendment by booking a shipment thereunder, subject to the 
NVOCC incorporating in each NRA or amendment a prominent written notice 
that booking constitutes acceptance, the text of which is specified in 
part 532. Accordingly, the final rule will result in no changes to the 
information collection for part 532, NVOCC Negotiated Rate 
Arrangements.

Regulation Identifier Number

    The Commission assigns a regulation identifier number (RIN) to each 
regulatory action listed in the Unified Agenda of Federal Regulatory 
and Deregulatory Actions (Unified Agenda). The Regulatory Information 
Service Center publishes the Unified Agenda in April and October of 
each year. You may use the RIN contained in the heading at the 
beginning of this document to find this action in the Unified Agenda, 
available at http://www.reginfo.gov/public/do/eAgendaMain.

List of Subjects

46 CFR Part 531

    Freight, Maritime carriers, Report and recordkeeping requirements.

46 CFR Part 532

    Exports, Non-vessel-operating common carriers, Ocean transportation 
intermediaries.

    For the reasons stated in the supplementary information, the 
Federal Maritime Commission amends 46 CFR parts 531 and 532 as follows:

PART 531--NVOCC SERVICE ARRANGEMENTS

0
1. The authority citation for part 531 continues to read as:

    Authority: 46 U.S.C. 40103.


0
2. Revise Sec.  531.1 to read as follows:


Sec.  531.1  Purpose.

    The purpose of this part is to facilitate NVOCC Service 
Arrangements (``NSAs'') as they are exempt from the otherwise 
applicable provisions of the Shipping Act of 1984 (``the Act'').

0
3. Revise Sec.  531.3 to read as follows:


Sec.  531.3  Definitions.

    When used in this part:
    (a) Act means the Shipping Act of 1984 as amended by the Ocean 
Shipping Reform Act of 1998;
    (b) Affiliate means two or more entities which are under common 
ownership or control by reason of being parent and subsidiary or 
entities associated with, under common control with, or otherwise 
related to each other through common stock ownership or common 
directors or officers.
    (c) Amendment means any change to an NSA which has prospective 
effect and which is mutually agreed upon by all parties to the NSA.
    (d) Commission or FMC means the Federal Maritime Commission.
    (e) Common carrier means a person holding itself out to the general 
public to provide transportation by water of passengers or cargo 
between the United States and a foreign country for compensation that:
    (1) Assumes responsibility for the transportation from the port or 
point of receipt to the port or point of destination; and
    (2) Utilizes, for all or part of that transportation, a vessel 
operating on the high seas or the Great Lakes between a port in the 
United States and a port in a foreign country, except that the term 
does not include a common carrier engaged in ocean transportation by 
ferry boat, ocean tramp, or chemical parcel tanker, or by a vessel when 
primarily engaged in the carriage of perishable agricultural 
commodities:
    (i) If the common carrier and the owner of those commodities are 
wholly owned, directly or indirectly, by a person primarily engaged in 
the marketing and distribution of those commodities and
    (ii) Only with respect to those commodities.
    (f) Effective date means the date upon which an NSA or amendment is 
scheduled to go into effect by the parties to the NSA. An NSA or 
amendment becomes effective at 12:01 a.m. Eastern Standard Time on the 
beginning of the effective date. The effective date cannot be prior to 
the date of the NSA or amendment.
    (g) Expiration date means the last day after which the entire NSA 
is no longer in effect.
    (h) NSA shipper means 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 an ocean transportation 
intermediary, as defined in section 3(17)(B) of the Act (46 U.S.C. 
40102(16)), that accepts responsibility for payment of all applicable 
charges under the NSA.
    (i) NVOCC Service Arrangement (``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. The NSA may also specify provisions in the event 
of nonperformance on the part of any party.
    (j) Rules tariff means a tariff or the portion of a tariff, as 
defined by 46 CFR 520.2, containing the terms and conditions governing 
the charges, classifications, rules, regulations and practices of an 
NVOCC, but does not include a rate.

0
4. Revise Sec.  531.4 to read as follows:


Sec.  531.4  NVOCC rules tariff.

    (a) Before entering into NSAs under this part, an NVOCC must 
provide electronic access to its rules tariffs to the public free of 
charge.
    (b) An NVOCC wishing to invoke an exemption pursuant to this part 
must indicate that intention to the

[[Page 34792]]

Commission and the public by a prominent notice in its rules tariff.


Sec.  531.5  [Removed and Reserved]

0
5. Remove and reserve Sec.  531.5

Subpart B--Requirements

0
6. Revise the subpart B heading to read as set forth above.

0
7. Amend Sec.  531.6 by:
0
a. Removing paragraphs (a), (f), and (g):
0
b. Redesignating paragraphs (b) through (e) as paragraphs (a) through 
(d), respectively;
0
c. Revising the introductory text of newly redesignated paragraph (a);
0
d. Revising newly redesignated paragraph (c)(1) and adding paragraph 
(c)(5);
0
e. Revising newly redesignated paragraph (d).
    The revisions read as follows:


Sec.  531.6  NVOCC Service Arrangements.

    (a) Every NSA shall include the complete terms of the NSA 
including, but not limited to, the following:
* * * * *
    (c) * * *
    (1) For service pursuant to an NSA, no NVOCC may, either alone or 
in conjunction with any other person, directly or indirectly, provide 
service in the liner trade that is not in accordance with the rates, 
charges, classifications, rules and practices contained in an NSA.
* * * * *
    (5) Except for the carrier party's rules tariff, the requirement in 
46 U.S.C. 40501(a)-(c) that the NVOCC include its rates in a tariff 
open to public inspection in an automated tariff system and the 
Commission's corresponding regulations at 46 CFR part 520 shall not 
apply.
    (d) Format requirements. Every NSA shall include:
    (1) A unique NSA number of more than one (1) but less than ten (10) 
alphanumeric characters in length (``NSA Number''); and
    (2) A consecutively numbered amendment number no more than three 
digits in length, with initial NSAs using ``0'' (``Amendment number'').


Sec.  531.7  [Removed and Reserved]

0
8. Remove and reserve Sec.  531.7

0
9. Revise Sec.  531.8 to read as follows:


Sec.  531.8  Amendment.

    (a) NSAs may be amended by mutual agreement of the parties.
    (b) Where feasible, NSAs should be amended by amending only the 
affected specific term(s) or subterms.
    (c) Each time any part of an NSA is amended, a consecutive 
amendment number (up to three digits), beginning with the number ``1'' 
shall be assigned.
    (d) Each time any part of an NSA is amended, the ``Effective Date'' 
will be the date of the amendment or a future date agreed to by the 
parties.

Subpart C--[Removed and Reserved]

0
10. Remove and reserve subpart C, consisting of Sec.  531.9.


Sec.  531.10  [Amended].

0
11. Amend Sec.  531.10 by removing paragraphs (c) and (d).

0
12. Revise Sec.  531.11 to read as follows:


Sec.  531.11  Implementation.

    Generally. Performance under an NSA or amendment thereto may not 
begin before the day it is effective.

0
13. Revise Sec.  531.99 to read as follows:


Sec.  531.99  OMB control numbers assigned pursuant to the Paperwork 
Reduction Act.

    The Commission has received OMB approval for this collection of 
information pursuant to the Paperwork Reduction Act of 1995, as 
amended. In accordance with that Act, agencies are required to display 
a currently valid control number. The valid control number for this 
collection of information is 3072-0070.

Appendix A to Part 531 [Removed]

0
14. Remove Appendix A to part 531.

PART 532--NVOCC NEGOTIATED RATE ARRANGEMENTS

0
15. The authority citation for part 532 continues to read as:

    Authority:  46 U.S.C. 40103.


0
16. Amend Sec.  532.3 by revising paragraph (a) to read as follows:


Sec.  532.3  Definitions.

    (a) ``NVOCC Negotiated Rate Arrangement'' or ``NRA'' means a 
written and binding arrangement between an NRA shipper and an eligible 
NVOCC to provide specific transportation service for a stated cargo 
quantity, from origin to destination, on and after receipt of the cargo 
by the NVOCC. For purposes of this part, ``receipt of cargo by the 
NVOCC'' includes receipt by the NVOCC's agent, or the originating 
carrier in the case of through transportation.
* * * * *

0
17. Revise Sec.  532.5 to read as follows:


Sec.  532.5  Requirements for NVOCC negotiated rate arrangements.

    In order to qualify for the exemptions to the general rate 
publication requirement as set forth in Sec.  532.2, an NRA must meet 
the following requirements:
    (a) Writing. The NRA must be in writing.
    (b) Parties. The NRA must contain the names of the parties and the 
names of the representatives agreeing to the NRA.
    (c) Agreement. The terms of the NRA must be agreed to by both NRA 
shipper and NVOCC, prior to receipt of cargo by the NVOCC. The shipper 
is considered to have agreed to the terms of the NRA if the shipper:
    (1) Provides the NVOCC with a signed agreement;
    (2) Sends the NVOCC a written communication, including an email, 
indicating acceptance of the NRA terms; or
    (3) Books a shipment after receiving the NRA terms from the NVOCC, 
if the NVOCC incorporates in the NRA terms the following text in bold 
font and all uppercase letters: ``THE SHIPPER'S BOOKING OF CARGO AFTER 
RECEIVING THE TERMS OF THIS NRA OR NRA AMENDMENT CONSTITUTES ACCEPTANCE 
OF THE RATES AND TERMS OF THIS NRA OR NRA AMENDMENT.''
    (d) Rates and terms--(1) General. The NRA must clearly specify the 
rate and terms, as well as the shipment or shipments to which such rate 
will apply.
    (2) Surcharges, assessorial charges, and GRIs. (i) If the rate is 
not an ``all-in rate,'' the NRA must specify whether additional 
surcharges, additional assessorial charges, or ocean common carrier 
general rate increases (``GRIs'') will apply.
    (ii) The NRA may list the additional surcharges or assessorial 
charges, including pass-through charges, or reference specific 
surcharges or assessorial charges in the NVOCC's rules tariff.
    (iii) If the additional surcharges or assessorial charges are 
included in the NVOCC's rules tariff, those additional surcharges or 
assessorial charges and the corresponding amounts specified in the 
rules tariff must be fixed once the first shipment has been received by 
the NVOCC until the last shipment is delivered, subject to an amendment 
of the NRA.
    (iv) For any pass-through charge for which a specific amount is not 
included in the NRA or the rules tariff, the NVOCC may only invoice the 
shipper for charges the NVOCC incurs, with no markup.
    (3) Non-rate economic terms. The NRA may include non-rate economic 
terms.

[[Page 34793]]

    (e) Amendment. The NRA may be amended after the time the initial 
shipment is received by the NVOCC, but such changes may only apply 
prospectively to shipments not yet received by the NVOCC.

    By the Commission.
Rachel E. Dickon,
Secretary.
[FR Doc. 2018-15496 Filed 7-20-18; 8:45 am]
BILLING CODE 6731-AA-P