[Federal Register Volume 86, Number 11 (Tuesday, January 19, 2021)]
[Proposed Rules]
[Pages 5106-5112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-29173]


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FEDERAL MARITIME COMMISSION

46 CFR Part 530

[Docket No. 20-22]
RIN 3072-AC84


Service Contracts

AGENCY: Federal Maritime Commission.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: The Federal Maritime Commission proposes to amend its service 
contract filing requirements to permit ocean common carriers to file 
original service contracts up to 30 days after the contract goes into 
effect.

DATES: Submit comments on or before March 5, 2021.
    In compliance with the Paperwork Reduction Act (PRA), the 
Commission is also seeking comment on revisions to an information 
collection. See the Paperwork Reduction Act section under Rulemaking 
Analyses and Notices below. Please submit all comments relating to the 
revised information collection requirements to the FMC and to the 
Office of Management and Budget (OMB) at the address listed below under 
ADDRESSES on or before March 22, 2021. Comments to OMB are most useful 
if submitted within 30 days after publication.

ADDRESSES: You may submit comments, identified by Docket No. 20-22, by 
the following methods:
     Email: [email protected]. For comments, include in the 
subject line: ``Docket No. 20-22, Comments on Service Contract 
Rulemaking.'' Comments should be attached to the email as a Microsoft 
Word or text-searchable PDF document.
    Comments regarding the proposed revisions to the relevant 
information collection should be submitted to the FMC through one of 
the preceding methods and a copy should also be sent to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Attention: Desk Officer for Federal Maritime Commission, 725 17th 
Street NW, Washington, DC 20503; by Fax: (202) 395-5167; or by email: 
[email protected].
    Instructions: For detailed instructions on submitting comments, 
including requesting confidential treatment of comments, and additional 
information on the rulemaking process, see the Public Participation 
heading of the Supplementary Information section of this document. Note 
that all comments received will be posted without change to the 
Commission's website, unless the commenter has requested confidential 
treatment.
    Docket: For access to the docket to read background documents or 
comments received, go to the Commission's Electronic Reading Room at: 
https://www2.fmc.gov/readingroom/proceeding/20-22/.

FOR FURTHER INFORMATION CONTACT: Rachel E. Dickon, Secretary; Phone: 
(202) 523-5725; Email: [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. Background
    A. Service Contract Requirements
    B. 2016-2018 Rulemakings
    C. 2018 World Shipping Council Petition for Exemption
    D. 2020 Exemptions
III. Proposed Changes
    A. Delayed Filing for Original Service Contracts
    1. Definition of ``Effective Date'' (Sec.  530.3)
    2. Service Contract Filing Requirements (Sec.  530.8)
    3. Service Contract Implementation Requirements (Sec.  530.14)
    B. Technical Amendments
    1. Definition of ``Authorized Person'' (Sec.  530.3)
    2. Exceptions and Exemptions (Sec.  530.13)
IV. Public Participation
V. Rulemaking Analyses and Notices

I. Executive Summary

    The Shipping Act of 1984, as amended (46 U.S.C. 40101-41309) 
(Shipping Act or Act) permits ocean common carriers and shippers to 
enter into individual, confidential service contracts for the 
international transportation of cargo, and requires that these 
contracts be filed with the Federal Maritime Commission. Under the 
current regulations in 46 CFR part 530, original service contracts must 
be filed on or before their effective date, while service contract 
amendments must be filed within 30 days after they go into effect. The 
disparate treatment of original service contracts versus amendments was 
the result of a 2016-2017 rulemaking in which the Commission determined 
to allow delayed filing for amendments while retaining the requirement 
that original service contracts be filed on or before their effective 
date.
    In response to the COVID-19 pandemic and its impact on service 
contract negotiation and filing, the Commission recently granted a 
temporary exemption permitting original service contracts, like 
amendments, to be filed up to 30 days after their effective date. Based 
on the Commission's experience during the exemption period and the 
perceived benefits of allowing delayed filing for original service 
contracts, the Commission has tentatively determined to make the status 
quo permanent. Accordingly, the Commission is proposing to revise its 
service contract regulations in part 530 to allow original service 
contracts, like amendments, to be filed up to 30 days after they go 
into effect. The Commission is also proposing several technical 
amendments to the service contract regulations.
    The Commission requests comments on these proposed amendments and 
any other amendments necessary to implement delayed filing for original 
service contracts.

II. Background

A. Service Contract Requirements

    The Shipping Act permits ocean common carriers and shippers to 
enter into individual, confidential service contracts for the 
international transportation of cargo, and requires that these 
contracts be filed with the Federal Maritime Commission.\1\ For many 
years, the Commission's implementing regulations required that ocean 
common carriers file all service contracts and amendments with the 
Commission before the contract or amendment could go into effect.\2\
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    \1\ See 46 U.S.C. 40502.
    \2\ See, e.g., 46 CFR 530.8(a) (2016).
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B. 2016-2018 Rulemakings

    In 2016, the Commission published an advanced notice of proposed 
rulemaking (ANPRM) to revise its regulations governing service 
contracts and non-vessel-operating common carrier (NVOCC) negotiated 
service arrangements (NSAs).\3\ The rulemaking was based on the 
Commission's retrospective review of its regulations and feedback from 
the industry and shippers. One suggestion from ocean common carriers 
was to allow service contract amendments to go into effect

[[Page 5107]]

before filing with the Commission, provided that the amendment was 
filed within 30 days after the earlier of: (1) The date the parties 
agreed to the amendment; or (2) the date the carrier received cargo to 
which the amendment applied.\4\ Beneficial cargo owners and NVOCCs that 
provided feedback to the Commission, however, indicated that filing 
amendments prior to the acceptance of cargo protected rate and contract 
commitments, and these shippers were confident ocean common carriers 
would honor the rates and contract commitments knowing that the 
contracts were filed with the Commission.\5\ Notwithstanding these 
concerns, the Commission requested comment on the carriers' 
proposal.\6\
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    \3\ ANPRM: Service Contracts and NVOCC Service Arrangements, 81 
FR 10198 (Feb. 29, 2016).
    \4\ Id. at 10201.
    \5\ Id.
    \6\ Id.
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    The Commission subsequently published an NPRM in 2016 that 
proposed, among other things, to allow service contract amendments to 
be filed up to 30 days after the effective date.\7\ The Commission 
noted that the majority of commenters to the ANPRM supported the change 
and some advocated extending the same relief to the filing of original 
service contracts.\8\ Responding to the these comments, the Commission 
initially discussed how the existing requirements protected shipper 
interests by demonstrating agreement among the parties prior to the 
movement of cargo, and that shippers had expressed confidence in this 
process knowing that both the shipper and carrier would honor the 
commitment of their service contract filed with the Commission.\9\ The 
Commission moved on to distinguish original service contracts from 
service contract amendments, describing an original service contract as 
``a comprehensive agreement between the parties that encompasses the 
commodities that are to be shipped, the origins and destinations 
between which cargo is to move, the rates for the transportation of 
that cargo, as well as terms and conditions governing the 
transportation of goods for the shipper.'' \10\ The Commission 
described service contract amendments, on the other hand, as ``more 
limited in scope, generally adding new commodities and/or rates.'' \11\ 
The Commission therefore proposed to allow filing of service contract 
amendments up to 30 days after going into effect, but declined to 
propose extending the same treatment to original service contracts 
``given their nature and the Commission's belief that doing so would 
diminish its oversight abilities.'' \12\
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    \7\ NPRM: Amendments to Regulations Governing Service Contracts 
NVOCC Service Arrangements, 81 FR 56559 (Aug. 22, 2016).
    \8\ Id. at 56562.
    \9\ Id.
    \10\ Id.
    \11\ Id.
    \12\ Id.
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    The Commission published a final rule in 2017 adopting, among other 
changes, the proposed change to permit filing of service contract 
amendments up to 30 days after the effective date.\13\ Carriers and 
shippers had asserted in their comments that the service contract 
effective date requirement was overly restrictive, particularly with 
respect to service contract amendments, and stated that the majority of 
amendments were for minor revisions to commercial terms, such as a 
revised rate or the addition of a new origin/destination or 
commodity.\14\ The Commission also cited carrier claims that, in 
certain instances, parties had agreed to amend a service contract, but 
the cargo was received before the carrier filed the amendment with the 
Commission, meaning that the rates and terms in the amendment could not 
be applied to the cargo under the Commission's regulations.\15\ The 
Commission concluded that permitting delayed filing was warranted 
because: (1) It would reduce the filing burdens on the industry by 
allowing carriers to file multiple amendments made within a 30-day 
period at the same time rather than on a piecemeal basis; (2) it would 
avoid the commercial harm associated with failing to timely file an 
amendment and allow the parties to apply the agreed rates and terms to 
the intended shipments; and (3) the Commission would maintain the 
ability to protect the shipping public.\16\
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    \13\ Final Rule: Amendments to Regulations Governing Service 
Contracts NVOCC Service Arrangements, 82 FR 16288 (Apr. 4, 2017).
    \14\ Id. at 16290.
    \15\ Id.
    \16\ Id.
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    In discussing a related proposal that the service contract 
correction process be amended to permit carriers to submit 
inadvertently unfiled original service contracts and amendments to the 
Commission within 180 days, the Commission determined that ``[i]n the 
case of original service contracts, shipper protections at the time of 
contracting and for the ensuing contract term are best assured by 
requiring that the agreement be contemporaneously filed as the best 
evidence of the actual agreement between the parties when first 
reached.'' \17\ The Commission expressed concern that delayed filing of 
service contracts could negatively affect its ability to investigate 
and enforce the Shipping Act because ``[u]nlike those limited and 
modest revisions to accommodate industry needs for correction of 
contract amendments, failure to file the original contract may conceal 
the very existence of a contractual arrangement in a given trade lane 
or lanes, avoiding early detection of market-distorting practices by 
individual carriers.'' \18\
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    \17\ Id. at 16293.
    \18\ Id.
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    Following publication of the 2017 service contract/NSA final rule, 
the Commission initiated a separate rulemaking in 2017 to address 
regulatory revisions proposed by the National Customs Brokers and 
Forwarders Association of America in a 2015 petition.\19\ Although this 
rulemaking focused on NSAs and NVOCC Negotiated Rate Arrangements 
(NRAs), the Commission discussed the World Shipping Council's (WSC) 
comments on the 2015 petition regarding the implementation of similar 
changes to the service contract requirements.\20\ The Commission noted 
that these comments predated the 2016-2017 service contract/NSA 
rulemaking, and with the publication of the final rule in that 
proceeding, the Commission had substantially met the WSC's request for 
regulatory relief for ocean common carriers.\21\ The Commission stated 
that any further relief related to service contracts could be 
undertaken after the Commission had an opportunity to analyze the 
impact of the recent changes on carrier operations and shippers.\22\
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    \19\ NPRM: Amendments to Regulations Governing NVOCC Negotiated 
Rate Arrangements and NVOCC Service Arrangements, 82 FR 56781 (Nov. 
30, 2017).
    \20\ Id. at 56785.
    \21\ Id.
    \22\ Id.
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C. 2018 World Shipping Council Petition for Exemption

    In 2018, the WSC petitioned the Commission for an exemption from 
the service contract filing and essential terms publication 
requirements.\23\ The Commission denied the request for exemption from 
the service contract filing requirements but granted the request for 
exemption from the essential terms publication requirements.\24\ 
Although the petition and subsequent Commission decision were focused 
on eliminating the service contract filing requirement entirely, 
delayed filing was discussed. For example, as part of the Commission's 
analysis of the potential economic harm that could result from

[[Page 5108]]

eliminating the filing requirement, the Commission pointed to the 
shipper comments discussed in the 2016-2017 service contract/NSA 
rulemaking indicating that the filing requirement encouraged ocean 
common carriers to adhere to contract terms and deterred them from 
introducing unreasonable terms into service contract boilerplate 
language.\25\ The Commission also stated that delayed filing for 
service contract amendments addressed a number of the issues raised by 
commenters.\26\ Finally, in response to WSC's argument that maintaining 
the filing requirement would negatively impact the ability of NVOCCs to 
use the expedited contract acceptance and effective date provisions 
implemented by the Commission in the recent 2017-2018 NSA/NRA 
rulemaking, the Commission pointed out that WSC's assertion was based 
on the premise that service contract filing delays the effectiveness of 
service contracts.\27\ The Commission noted that WSC had not alleged 
that such a delay existed nor had Commission experience shown such a 
delay, and in the absence of such a showing, the Commission did not 
believe that granting WSC's petition was necessary to give full effect 
to the changes made in the 2018 NSA/NRA final rule.\28\
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    \23\ See Pet. of World Shipping Council for an Exemption from 
Certain Provisions of the Shipping Act of 1984, as amended, for a 
Rulemaking Proceeding, 1 F.M.C.2d 504 (FMC 2019).
    \24\ Id.
    \25\ Id. at 510 (citing ANPRM: Service Contracts and NVOCC 
Service Arrangements, 81 FR 10198, 10201 (Feb. 29, 2016).
    \26\ Id. at 513.
    \27\ Id. at 514-515 (referring to Final Rule: Amendments to 
Regulations Governing NVOCC Negotiated Rate Arrangements and NVOCC 
Service Arrangements, 83 FR 34780 (July 23, 2018)).
    \28\ Id. at 515.
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D. 2020 Exemptions

    The spread of coronavirus disease 2019 (COVID-19) in 2020 had a 
significant effect on the global freight delivery system, including 
service contract negotiation and implementation.\29\ Many businesses 
began working remotely because of social distancing guidance and stay-
at-home orders.\30\ For some entities, this situation, combined with 
other COVID-19-related disruptions to commercial operations, made 
complying with service contract filing requirements difficult.
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    \29\ Temporary Exemption from Certain Service Contract 
Requirements, 2 F.M.C.2d 65 (FMC 2020).
    \30\ Id. at 65.
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    To allow parties time to adapt to the increased pressures from 
COVID-19 and minimize disruptions to the contracting process, the 
Commission issued a temporary blanket exemption on April 27, 2020, 
extending the filing flexibilities for service contract amendments to 
original service contracts.\31\ The exemption is conditioned on 
carriers continuing to file original service contracts, subject to the 
same delayed filing requirements as service contract amendments (i.e., 
original service contracts must be filed within 30 days after the 
effective date). The exemption was originally set to expire December 
31, 2020, but the Commission recently extended it until June 1, 
2021.\32\
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    \31\ Id. at 65-67.
    \32\ Temporary Exemption from Certain Service Contract 
Requirements, Docket No. 20-06, 2020 FMC LEXIS 206 (FMC Oct. 1, 
2020).
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    On October 7, 2020, CMA CGM, S.A. and its corporate affiliates 
petitioned the Commission for an exemption from the service contract 
filing and tariff publishing requirements to mitigate the effects of a 
cyberattack on their information systems.\33\ While the carriers stated 
that they appreciated the flexibility afforded by the temporary 
exemption, they requested further exemption from the filing 
requirements with respect to original service contracts and amendments 
to permit them to be filed more than 30 days after they went into 
effect. The Commission granted the exemption on October 20, 2020, and 
the exemption expired on November 26, 2020.
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    \33\ Pet. of CMA CGM, S.A., Pet. No. P2-20, slip op. (Oct. 20, 
2020).
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III. Proposed Changes

    As discussed above, the Commission expressed concern during the 
2016-2017 rulemaking about permitting original service contracts to be 
filed after their effective date, and decided to limit delayed filing 
to amendments. But the Commission did not permanently foreclose future 
changes to the service contract requirements, stating in the 2017 NSA/
NRA NPRM that further relief related to service contracts could be 
undertaken after the Commission had an opportunity to analyze the 
impact of the 2017 final rule on carriers and shippers.\34\ In line 
with this statement, the Commission has reexamined the issue of 
allowing delayed filing for original service contracts after 
considering both the agency's experience over the last three years with 
delayed filing of amendments and the recent experience with delayed 
filing of original service contracts under the current temporary 
exemption.
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    \34\ 82 FR at 56785.
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    The Commission has tentatively concluded that permanently allowing 
delayed filing of original service contracts will provide the same type 
of benefits as delayed filing of service contract amendments, namely 
avoiding the commercial harm associated with situations in which cargo 
is received after the parties have agreed to a service contract but 
before the service contract is filed with the Commission. The need for 
this flexibility has been amply demonstrated by recent events, 
including the commercial disruption, social distancing, and stay-at-
home orders stemming from COVID-19, which has impacted carriers' 
ability to file service contracts and prompted the Commission to grant 
a temporary exemption. And in CMA CGM's recent exemption petition in 
response to a cyberattack, the carrier cited with appreciation the 
flexibility afforded by the ability to file service contracts and 
amendments after their effective date. These recent events demonstrate 
that, in certain circumstances, requiring that service contracts be 
filed before they go into effect can potentially delay performance 
under the contract to the detriment of shippers.
    The Commission has also tentatively concluded that allowing 
original service contracts to be filed up to 30 days after the 
effective date will not materially impact the agency's ability to 
provide oversight and protect the shipping public. Of particular 
importance, the Commission has not received any shipper complaints 
regarding delayed filing of amendments or the recent exemption allowing 
delayed filing of original service contracts. The Commission believes 
that the service contract filing requirement will continue to ensure 
adherence to service contract terms and deter the introduction of 
unreasonable terms, regardless of whether original service contracts 
are filed before, on, or after the effective date.\35\ And the proposed 
amendments make clear that original service contracts and amendments 
will continue to be prospective in nature, ensuring that the parties 
have reached agreement before cargo moves under the contract.
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    \35\ As discussed above, the Commission recently reaffirmed its 
commitment to retaining the service contract filing requirement in 
its decision to deny WSC's exemption request. Pet. of World Shipping 
Council, 1 F.M.C.2d 504.
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    Although the Commission continues to recognize that original 
service contracts are more comprehensive in scope than amendments, the 
Commission has tentatively concluded that this difference does not 
support different filing requirements. Under the proposed rule, the 
Commission would continue to monitor filed service contracts, and 
delayed filing would not negatively impact the Commission's ability to 
investigate potential Shipping Act violations given the relatively 
short

[[Page 5109]]

filing period being proposed (30 days after the effective date).\36\
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    \36\ The Commission's stated concerns in the 2017 service 
contract/NSA final rule regarding the impact of delayed filing on 
enforcement were made in response to comments stating that the 
correction process should allow carriers to submit inadvertently 
unfiled service contracts with the Commission within a much longer 
period (180 days).
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    Based on the foregoing, the Commission is proposing to revise its 
service contract regulations in part 530 to allow original service 
contracts, like amendments, to be filed up to 30 days after the 
effective date. The proposed revisions are also intended to clarify 
that the trigger for the 30-day filing period is the effective date of 
the service contract or amendment.
    In addition, the Commission is proposing technical amendments to 
the service contract regulations following the Commission order and 
subsequent rulemaking to exempt ocean common carriers from the 
requirement to publish service contract essential terms.\37\ These 
amendments would: (1) Remove a reference to essential terms publication 
that was inadvertently retained; and (2) add language describing the 
exemption to ensure that ocean common carriers and other stakeholders 
that may not know the history of the matter are aware of the exemption.
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    \37\ Pet. of World Shipping Council, 1 F.M.C.2d at 515-516. See 
Final Rule: Service Contracts, 85 FR 38086 (June 25, 2020).
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    The Commission requests comments on these proposed amendments and 
any other amendments necessary to implement delayed filing for original 
service contracts.

A. Delayed Filing for Original Service Contracts

1. Definition of ``Effective Date'' (Sec.  530.3)
    The current definition of ``Effective date'' describes: (1) What an 
effective date is; (2) the relationship between the effective date and 
the filing date for both original service contracts and amendments 
(i.e., the effective date may not be before the filing date for 
original service contracts or more than 30 days prior to the filing 
date for amendments); and (3) the specific time on the effective date 
when an original service contract or amendment is effective (12:01 a.m. 
Eastern Standard Time).
    The Commission is proposing to amend the definition of ``Effective 
date'' by removing the language tying the effective date to the filing 
date. As described above, the Commission is proposing to extend delayed 
filing to original service contracts and is therefore deleting the 
sentence stating that the effective date for original service contracts 
cannot be prior to the filing date. The Commission is also proposing to 
delete the sentence stating that the effective date of an amendment can 
be no more than 30 days prior to the filing date. This sentence, in 
essence, simply repeats the filing requirement in Sec.  530.8(a)(2). As 
described below, Sec.  530.8(a), as amended by the proposed revisions, 
would adequately describe the filing requirement and the deadline for 
filing, and repeating the requirement in Sec.  530.3(i) is therefore 
unnecessary.
    The Commission is also proposing to clarify the time on the 
effective date when a service contract or amendment goes into effect. 
Currently, Sec.  530.3(i) provides that a service contract or amendment 
is effective at 12:01 a.m. Eastern Standard Time. The proposed revision 
would add the equivalent time zone relative to Coordinated Universal 
Time (UTC) for added clarity (i.e., UTC-05:00).
    Finally, the Commission is proposing to add language to the 
definition to clarify that although service contracts and amendments 
may be filed after the effective date, the Commission is retaining the 
requirement that service contracts and amendments must be prospective 
in nature and cannot have retroactive effect. Under the current 
regulations, service contract amendments may only have prospective 
effect.\38\ And, prior to the recent temporary exemption, original 
service contracts could not become effective prior to being filed with 
the Commission and were therefore also limited to having prospective 
effect. Because the Commission is proposing to allow original service 
contracts to be filed after they go into effect, the Commission is also 
adding language to the definition of ``Effective date'' to reflect the 
continuing requirement that service contracts and amendments may only 
have prospective effect. The added language specifies that the 
effective date cannot be earlier than the date on which all the parties 
have signed the service contract or amendment.
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    \38\ Sec.  530.10(a)(1).
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2. Service Contract Filing Requirements (Sec.  530.8)
    Section 530.8 sets forth the filing requirements for service 
contracts and amendments. Under the current regulations, amendments 
must be filed no later than 30 days after cargo moves pursuant to the 
amendment, and, prior to the temporary exemption, original service 
contracts had to be filed before any cargo moved pursuant to the 
service contract.\39\ The Commission is proposing to allow a 30-day 
filing period for both original service contracts and amendments and is 
therefore combining Sec.  530.8(a)(1) and (2) into a single provision 
at Sec.  530.8(a). The revised Sec.  530.8(a) would require that ocean 
common carriers file service contracts and amendments no later than 30 
days after the effective date.
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    \39\ Sec.  530.8(a)(1), (2).
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    The trigger for the filing period under the proposed revisions thus 
differs from the current requirement for service contract amendments in 
Sec.  530.8(a)(2). The current regulations include two trigger events. 
Current Sec.  530.3(i) requires that the effective date for the 
amendment be no more than 30 days prior to the filing date, while 
current Sec.  530.8(a)(2) requires that an amendment be filed no later 
than 30 days after cargo moves pursuant to the amendment. In accordance 
with Sec.  530.14(a), performance under an original service contract or 
amendment may not begin until the effective date, and therefore the 
effective date will always be earlier than the date cargo moves under 
the contract or amendment. Accordingly, in order to comply with both 
Sec. Sec.  530.3(i) and 530.8(a)(2), ocean common carriers must file 
service contract amendments no later than 30 days after the effective 
date. Based on this interpretation, the Commission published guidance 
on its website shortly after the 2017 final rule was issued to make 
clear that service contract amendments must be filed no later than 30 
days after their effective date.\40\ The Commission is thus proposing a 
single trigger (effective date) for the 30-day filing period for both 
original service contract and amendments. This will make clear when 
service contracts must be filed and allow the Commission to readily 
assess compliance.
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    \40\ https://web.archive.org/web/20190321030253/https://www.fmc.gov/resources/amended_service_contract_nsas_rule.aspx (last 
visited Nov. 24, 2020).
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    The Commission is also proposing amendments to Sec.  530.8(e) to 
reflect the 30-day filing period for original service contracts. 
Section 530.8(e) currently provides that if the Commission's service 
contract filing system is unable to receive filings for 24 hours or 
more, affected parties are not subject to the requirements in 
Sec. Sec.  530.8(a) and 530.14(a) that a service contract must be filed 
before cargo is shipped under the contract. This exception is 
conditioned on the affected service contracts being filed within 24 
hours after the Commission filing system returns to service.

[[Page 5110]]

    The proposed amendments to Sec. Sec.  530.8(a) and 530.14(a) 
require corresponding changes to Sec.  530.8(e). The proposed changes 
to Sec.  530.8(e) would provide that if the Commission's service 
contract filing system is down for 24 hours or more, any service 
contract or amendment that must be filed during that period (i.e., 
because the 30-day filing period concludes while the system is down) 
will be considered timely filed so long as the contract or amendment is 
filed no later than 24 hours after the Commission filing system returns 
to service. As explained below, the Commission is proposing to remove 
references to the filing date in Sec.  530.14(a), and therefore the 
proposed revisions to Sec.  530.8(e) also delete the reference to Sec.  
530.14(a).
3. Service Contract Implementation Requirements (Sec.  530.14)
    Section 530.14 provides that performance under a service contract 
or amendment may not begin until the effective date and conditions 
performance on compliance with the relevant filing requirements, i.e., 
performance under an original service contract may not begin until the 
contract is filed while performance under an amendment may begin on the 
effective date provided that the amendment is filed no later than 30 
days after the effective date.
    Given the proposed changes to Sec.  530.8(a) would prescribe the 
same filing period for original service contracts and amendments (30 
days after the effective date), the Commission is proposing to replace 
the separate requirements for original service contracts and amendments 
in Sec.  530.14(a) with a single requirement that performance under 
either may not begin until the effective date. The Commission is also 
proposing to remove the language tying performance to the filing date 
as it simply repeats the filing requirement in Sec.  530.8(a). As 
described above, Sec.  530.8(a), as amended by the proposed revisions, 
would adequately describe the filing requirement and the deadline for 
filing, and repeating the requirement in Sec.  530.14(a) is therefore 
unnecessary.
    The Commission is also proposing to add an additional sentence to 
Sec.  530.14(a) to clarify that original service contracts and 
amendments may apply only to cargo received by the carrier on or after 
the effective date. This is implied by the current language of 
Sec. Sec.  530.8(a) (describing when a service contract or amendment 
must be filed in relation to when cargo moves under the contract) and 
530.14(a) (prohibiting performance under a service contract or 
amendment until the effective date) and has been stated in previous 
rulemakings.\41\ Because the Commission is proposing to amend Sec.  
530.8(a) so that the filing period is tied to the effective date rather 
than the date cargo moves, the Commission is proposing to include 
language in Sec.  530.14(a) clearly stating that service contracts and 
amendments may only apply to cargo received on or after the effective 
date.
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    \41\ See, e.g., 82 FR at 16290 (noting that because of the 
previous requirement that amendments had to filed before cargo could 
move under the terms of the amendment, ``[c]arriers have cited 
instances in which the parties have agreed to amend the contract, 
however, due to unavoidable circumstances, the cargo was received 
before the carrier filed the amendment with the Commission'' and 
``[i]n such cases, the amendment's rates and terms may not be 
applied to that cargo pursuant to the Commission's rules.'').
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B. Technical Amendments

    In order to implement the Commission's December 2019 decision to 
grant in part WSC's petition and exempt ocean common carriers from the 
essential terms publication requirements,\42\ the Commission recently 
issued a final rule removing those requirements from part 530.\43\ 
Since then, the Commission has tentatively determined that additional 
minor technical amendments are warranted.
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    \42\ Pet. of World Shipping Council, 1 F.M.C.2d at 515-516.
    \43\ See Final Rule: Service Contracts, 85 FR 38086 (June 25, 
2020).
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1. Definition of ``Authorized Person'' (Sec.  530.3)
    The definition of ``Authorized person'' in Sec.  530.3(c) includes 
a reference to publishing statements of essential terms. The definition 
also cross-references a nonexistent paragraph (Sec.  530.5(d)) when 
referring to the registration requirements for filing service 
contracts. The Commission is proposing to amend the definition by 
removing the reference to essential terms publication and including the 
correct citation for the registration requirements (Sec.  530.5(c)).
2. Exceptions and Exemptions (Sec.  530.13)
    The Commission is proposing to add a new paragraph (e) to Sec.  
530.13 to reflect the exemption granted by the Commission from the 
essential terms publication requirements. Although the Commission 
recently eliminated the essential terms publication requirements in 
part 530, ocean common carriers that are not aware of the exemption may 
be confused as to whether the statutory requirement in 46 U.S.C. 
40502(d) continues to apply. Accordingly, the Commission has 
tentatively determined to include a new provision reflecting the 
exemption from section 40502(d).

IV. Public Participation

How do I prepare and submit comments?

    Your comments must be written and in English. To ensure that your 
comments are correctly filed in the docket, please include the docket 
number of this document in your comments.
    You may submit your comments via email to the email address listed 
above under ADDRESSES. Please include the docket number associated with 
this document and the subject matter in the subject line of the email. 
Comments should be attached to the email as a Microsoft Word or text-
searchable PDF document.

How do I submit confidential business information?

    The Commission will provide confidential treatment for identified 
confidential information to the extent allowed by law. If your comments 
contain confidential information, you must submit the following by 
email to the address listed above under ADDRESSES:
     A transmittal letter requesting confidential treatment 
that identifies the specific information in the comments for which 
protection is sought and demonstrates that the information is a trade 
secret or other confidential research, development, or commercial 
information.
     A confidential copy of your comments, consisting of the 
complete filing with a cover page marked ``Confidential-Restricted,'' 
and the confidential material clearly marked on each page.
     A public version of your comments with the confidential 
information excluded. The public version must state ``Public Version--
confidential materials excluded'' on the cover page and on each 
affected page, and must clearly indicate any information withheld.

Will the Commission consider late comments?

    The Commission will consider all comments received before the close 
of business on the comment closing date indicated above under DATES. To 
the extent possible, we will also consider comments received after that 
date.

How can I read comments submitted by other people?

    You may read the comments received by the Commission at the 
Commission's Electronic Reading Room at the

[[Page 5111]]

addresses listed above under ADDRESSES.

V. Rulemaking Analyses and Notices

Regulatory Flexibility Act

    The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 
601-612) provides that whenever an agency is required to publish a 
notice of proposed rulemaking under the Administrative Procedure Act 
(APA) (5 U.S.C. 553), the agency must prepare and make available for 
public comment an initial regulatory flexibility analysis (IRFA) 
describing the impact of the proposed 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. 603, 605. Based on the analysis below, the Chairman of the 
Federal Maritime Commission certifies that this proposed rule will not 
have a significant economic impact on a substantial number of small 
entities. The regulated business entities that would be impacted by the 
rule are ocean common carriers (i.e., vessel-operating common 
carriers). The Commission has determined that ocean common carriers 
generally do not qualify as small entities under the guidelines of the 
Small Business Administration (SBA). See FMC Policy and Procedures 
Regarding Proper Consideration of Small Entities in Rulemakings (Feb. 
7, 2003), available at https://www.fmc.gov/wp-content/uploads/2018/10/SBREFA_Guidelines_2003.pdf.

National Environmental Policy Act

    The Commission's regulations categorically exclude certain 
rulemakings from any requirement to prepare an environmental assessment 
or an environmental impact statement because they do not increase or 
decrease air, water or noise pollution or the use of fossil fuels, 
recyclables, or energy. 46 CFR 504.4. The proposed rule would allow 
ocean common carriers to file original service contracts up to 30 days 
after their effective date. This rulemaking thus falls within the 
categorical exclusion for actions related to the receipt of service 
contracts (Sec.  540.4(a)(5)). Therefore, no environmental assessment 
or environmental impact statement is required.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) 
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. 3507. The agency must submit collections of 
information in proposed rules to OMB in conjunction with the 
publication of the notice of proposed rulemaking. 5 CFR 1320.11.
    The information collection requirements associated with the service 
contract filing requirements in part 530 are currently authorized under 
OMB Control Number 3072-0065. In compliance with the PRA, the 
Commission has submitted the proposed revised information collection to 
the Office of Management and Budget and is requesting comment on the 
proposed revision.
    Title: 46 CFR part 530--Service Contracts and Related Form FMC-83.
    OMB Control Number: 3072-0065.
    Abstract: 46 U.S.C. 40502 and 46 CFR part 530 require ocean common 
carriers to file certain service contracts confidentially with the 
Commission.
    Current Action: The proposed rule would amend the service contract 
filing requirements and allow ocean common carriers to file original 
service contracts up to 30 days after the effective date. Currently, 
part 530 requires that ocean common carriers file original service 
contracts on or before the effective date, while amendments must be 
filed within 30 days after the effective date.
    Type of Request: Revision of a previously approved collection.
    Needs and Uses: The Commission monitors service contract filings to 
ensure compliance with the Shipping Act of 1984.
    Frequency: Frequency of filings is determined by the ocean common 
carrier and its customers. When parties enter into a service contract 
or amend the contract, the service contract or amendment must be filed 
with the Commission.
    Type of Respondents: Ocean common carriers or their duly appointed 
agents are required to file service contracts and amendments with the 
Commission.
    Number of Annual Respondents: The Commission does not anticipate 
that the proposed revisions would affect the number of respondents. As 
a general matter, however, the number of respondents has decreased 
since the last revision to the information collection. The Commission 
estimates an annual respondent universe of 86 ocean common carriers.
    Estimated Time per Response: The Commission does not anticipate 
that the proposed revisions would affect the estimated time per 
response, which would continue to range from 0.0166 to 1 person-hours 
for reporting and recordkeeping requirements contained in the 
regulations, and 0.1 person-hours for completing Form FMC-83.
    Total Annual Burden: The Commission does not anticipate that the 
proposed revisions would affect the number of service contracts filed 
or the burden associated with each filing and, therefore, would not 
affect the total annual burden. Due to the decrease in the number of 
respondents since the last revision, however, the Commission expects 
that the total annual burden will decrease. The Commission estimates 
the total person-hour burden at 30,448 person-hours.
    Comments are invited on:
     Whether the collection of information is necessary for the 
proper performance of the functions of the Commission, including 
whether the information will have practical utility;
     Whether the Commission's estimate for the burden of the 
information collection is accurate;
     Ways to enhance the quality, utility, and clarity of the 
information to be collected;
     Ways to minimize the burden of the collection of 
information on respondents, including the use of automated collection 
techniques or other forms of information technology.
    Please submit any comments, identified by the docket number in the 
heading of this document, by the methods described in the ADDRESSES 
section of this document.

Executive Order 12988 (Civil Justice Reform)

    This proposed rule meets the applicable standards in E.O. 12988 
titled, ``Civil Justice Reform,'' to minimize litigation, eliminate 
ambiguity, and reduce burden. Section 3(b) of E.O. 12988 requires 
agencies to make every reasonable effort to ensure that each new 
regulation: (1) Clearly specifies the preemptive effect; (2) clearly 
specifies the effect on existing Federal law or regulation; (3) 
provides a clear legal standard for affected conduct, while promoting 
simplification and burden reduction; (4) clearly specifies the 
retroactive effect, if any; (5) adequately defines key terms; and (6) 
addresses other important issues affecting clarity and general 
draftsmanship under any guidelines issued by the Attorney General. This 
document is consistent with that requirement.

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).

[[Page 5112]]

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 in 46 CFR Part 530

    Freight, Maritime carriers, Report and recordkeeping requirements.

    For the reasons set forth above, the Federal Maritime Commission is 
proposing to amend 46 CFR part 530 as follows:

PART 530-SERVICE CONTRACTS

0
1. The authority citation for part 530 continues to read as follows:

    Authority: 5 U.S.C. 553; 46 U.S.C. 305, 40301-40306, 40501-
40503, 41307.

0
2. Amend Sec.  530.3 by revising paragraphs (c) and (i) to read as 
follows:


Sec.  530.3  Definitions.

* * * * *
    (c) Authorized person means a carrier or a duly appointed agent who 
is authorized to file service contracts on behalf of the carrier party 
to a service contract and is registered by the Commission to file under 
Sec.  530.5(c) and appendix A to this part.
* * * * *
    (i) Effective date means the date upon which a service contract or 
amendment is scheduled to go into effect by the parties to the 
contract. A service contract or amendment becomes effective at 12:01 
a.m. Eastern Standard Time (Coordinated Universal Time (UTC)-05:00) on 
the effective date. The effective date may not be earlier than the date 
on which all parties have signed the service contract or amendment.
* * * * *
0
3. Amend Sec.  530.8 by:
0
a. Revising paragraph (a);
0
b. Adding a subject heading to paragraph (b); and
0
c. Revising paragraph (e).
    The revisions and addition read as follows:


Sec.  530.8  Service Contracts.

    (a) Filing. Authorized persons shall file with BTA, in the manner 
set forth in appendix A of this part, a true and complete copy of every 
service contract and every amendment to a service contract no later 
than thirty (30) days after the effective date.
    (b) Required terms. * * *
* * * * *
    (e) Exception in case of malfunction of Commission filing system. 
In the event that the Commission's filing systems are not functioning 
and cannot receive service contract filings for twenty-four (24) 
continuous hours or more, an original service contract or amendment 
that must be filed during that period in accordance with paragraph (a) 
of this section will be considered timely filed so long as the service 
contract or amendment is filed no later than twenty-four (24) hours 
after the Commission's filing systems return to service.
0
4. Amend Sec.  530.13 by adding paragraph (e) to read as follows:


Sec.  530.13  Exceptions and exemptions.

* * * * *
    (e) Essential terms publication exemption. Ocean common carriers 
are exempt from the requirement in 46 U.S.C. 40502(d) to publish and 
make available to the general public in tariff format a concise 
statement of certain essential terms when a service contract is filed 
with the Commission.
0
5. Amend Sec.  530.14 by revising paragraph (a) to read as follows:


Sec.  530.14  Implementation.

    (a) Generally. Performance under an original service contract or 
amendment may not begin until the effective date. An original service 
contract or amendment may apply only to cargo received on or after the 
effective date by the ocean common carrier or its agent, including 
originating carriers in the case of through transportation.
* * * * *

    By the Commission.
Rachel E. Dickon,
Secretary.
[FR Doc. 2020-29173 Filed 1-15-21; 8:45 am]
BILLING CODE P