GISTnet T25u—FMC Regulatory Compliance for U.S. Ocean Forwarders and NVOs Serving U.S. Ports

T25u—FMC Regulatory Compliance for U.S. Ocean Forwarders and NVOs Serving U.S. Ports

Non-subscriber price: $195.00, Subscriber price: $150.00
Estimated total study time: 12 hours 17 minutes

This course provides initial training in the various regulatory requirements imposed by the U.S. Federal Maritime Commission on ocean freight forwarders and NVOCCs providing services via U.S. ports. It is designed for compliance training of personnel employed by or representing FMC-regulated ocean transportation intermediaries ("OTIs"), including supervisory, sales, customer service and documentation staff involved in providing and marketing these services, including those performing services in the U.S. as agents of foreign-based NVOs.

Important: On April 29, 2010, the U.S. FMC published a proposed rule under which an NVOCC would have the option of documenting their freight rates with shippers instead of publishing a rate tariff as is currently required. This proposed rule will likely become final and effective some time in Fall or early Winter, 2010. This will significantly change information in several lessons of this course dealing with NVO tariff filing requirements. GISTnet will provide updated lessons without charge to all students who complete this course during 2010.

FMC Regulatory Mission and Primary Methods

The U.S. Federal Maritime Commission exists to protect shippers and consignees, particularly small ones, from unfair practices by ocean common carriers, and to protect U.S. flag common carriers and U.S.-based NVOs from discriminatory practices by foreign carriers or nations. In this lesson we will address how the FMC performs these regulatory mandates given to it by the U.S. Congress.

(Estimated study time: 54 minutes)

Introduction
Purpose
Preservation of Common Carriage
- General
- FMC Regulation of Common Carriage vs. Contract Carriage
FMC Carrier Oversight Methods/Requirements
- Publication of Ocean Carrier Tariffs
- Additional NVOCC Requirements
- Filing of Carrier-to-Carrier and Carrier-to-Terminal Agreements
FMC Enforcement of Tariffs, Agreements and Shipping Law
- FMC Enforcement—General
- FMC Complaint, Claim and Dispute Resolution Procedures
  - Formal Complaints
  - Informal Procedures/Formal Small Claims Procedures
  - Alternative Dispute Resolution (Mediation)
- Anti-Rebate Enforcement

FMC Tariff Filing and Service Contract Requirements

This lesson covers the two alternative mechanisms by which scheduled ocean carriers communicate and/or establish their shipping rates, other charges and conditions of service.

(Estimated study time: 1 hour 17 minutes)

Introduction
FMC Tariff Publication
- Notice and Authority to Publish Tariffs
- Tariff Regulations; Format & Procedure
- Application of Tariff Rates
- Shipper Requests/Complaints/Rate Negotiations
- Shipping Conference Rate Requests
U.S. Ocean Carrier Service Contracts
- General
- Benefiting From Service Contracts
- Parties to Service Contracts
- Service Contract Filing with FMC
- Publication of Essential Terms

Regulation of Ocean Transportation Intermediaries (OTIs)

This lesson covers the FMC regulations with respect to:

definition of an "ocean freight forwarder"
services performed by forwarders
when an FMC OTI license is required
OTI licensing requirements, and,
FMC procedures for shipper complaints against forwarders.

(Estimated study time: 1 hour 3 minutes)

Introduction
"Ocean Freight Forwarder" Defined
"Freight Forwarding Services" Defined (46 CFR 515.2(i))
- Basic Regulatory Scope/Criteria
- Regulatory Vagueness as to What Services Constitute Freight Forwarding
FMC Regulation of Ocean Freight Forwarders
FMC OTI License, "When Required" (46 CFR 515.3)
"License, When Not Required" (46 CFR 515.4)
Summary
General—The "Qualifying Individual"
OTI License Application
Ocean Forwarder Surety Bond
FMC Complaints & Investigations

Shipper-Forwarder Relationship

In this lesson we address the relationship between shipper and forwarder as being that of agent to principal, a forwarder's responsibilities a agent, and operational concerns when working with foreign forwarders in obtaining routed shipments.

(Estimated study time: 1 hour 2 minutes)

Introduction
Forwarder Represents Shipper as an Agent
Responsibility as Agent
- General
- Conflicts of Interest
- Confidentiality of Information
- FMC Regulatory Prohibitions
Confidentiality of Information Received from Principals
Shipments Quoted/Handled on Behalf of Foreign Agents
- Quotations Requested by Agents—General
- Potential FMC Compliance Concerns
- Competitive and Operational Concerns
- Solution
  - Forwarding Fees
  - Ocean Freight Charges

Forwarder-Carrier Relationship; Selecting NVOs and Forwarder Acting as NVO

This lesson focuses on the relationship between an ocean forwarder and the ocean carrier, particularly an NVO. We pay special attention to the frequent case in which a forwarder concurrently acts as an NVO for its's shipper's cargo.

(Estimated study time: 1 hour 13 minutes)

Introduction
General—Selecting an Ocean Carrier
Relationship with Non-Related NVOCCs (Arms Length)
- NVOCC Forwarder Compensation
- NVOCC Rate Negotiation
Prudence in Selecting and Dealing with Independent NVOCCs
- Diligence Checklist
- Obtain Written Information from NVOs Concerning Co-loading
- Destination Charges
- Avoid Negligence Claims over NVO Routings
Forwarder Concurrently Acting as NVOCC
- General
- Competing Interests
- Addressing Competing Interests
- Focus on Benefits to Shipper of Joint Forwarder-NVO Service
- Rate/Service Guidelines
- Confirm Services To be Performed and Rates Prior to Routing Cargo
- A Principal's Access to Underlying Costs

Key Points Every Ocean Forwarder Employee Should Know about FMC Regulations

This lesson serves as a summary of issues already learned, plus a number of additional compliance issues, with links to more information for those learners who which to expand their understanding.

(Estimated study time: 51 minutes)

Introduction
Key Points Every Ocean Forwarder Employee Should Know about FMC Regulations

NVO Regulation & Tariff Filing

This lesson addresses the requirement for all NVOs providing service via U.S. ports to become an OTI with the FMC and publish a tariff. Also, tariff strategy.

(Estimated study time: 1 hour 12 minutes)

Introduction
Ocean Freight Fowarding & NVO/Groupage
- U.S. NVOCC Regulation and Operations
  - FMC Regulation of NVOs Serving U.S. Ports
    - NVOCC as Ocean Transportation Intermediary (OTI)
      - Licensing
      - Surety Bond
    - General—FMC Regulation and Jurisdiction over NVOs
    - NVOCCs Are Regulated as Common Carriers
      - Public Tariff an Essential Characteristic of Common Carriage
      - NVOs Operate De Facto as Contract Carriers
    - NVOCC Tariff Publication and Maintenance
      - NVO Tariff Publication Requirements
      - Tariffs vs. NVOCC Service Arrangements (NSAs)
      - Treatment of Destination Charges
      - Tariff Strategy

NVOCC Service Arrangements

This lesson addresses confidential "NSAs" between an NVOCC and a shipper.

(Estimated study time: 57 minutes)

Introduction
NVOCC Service Arrangements (NSAs)
- Deciding upon Use of an NSA vs. Tariff Rates
- General Requirements for an NSA
- Required NSA Information
- Additional NSA Requirements
- Publication of Essential Terms
- NSA Document Format & Uploading
- NSAs Used in Conjunction with VOCC Service Contracts

Forwarder-Based NVOCC Operations & Co-loading

This lesson covers FMC licensing and tariff filing requirements, which NVO's must comply with. Also covered are NVO operational issues, such as B/L issuance, carrier liability and NVO co-loading.

(Estimated study time: 1 hour 24 minutes)

Introduction
General—FMC Regulation and Jurisdiction over NVOs
NVOCC Bills of Lading
- B/L Document Format
- General Terms and Conditions
- NVO Carrier Liability Terms
- Preparation and Issuance of NVO/MTO Bills of Lading
- U.S. FMC Requirements Affecting NVO Bills of Lading
  - Publication of Freight Rates and B/L Terms, or FMC-filed NSA
  - Qualifying Language on B/L
U.S. NVO Co-Loading Basics
- As Indirect Carriers, NVOs Sub-Contract All or Most Transportation
- Co-Loading Benefits
- FMC Rules on NVOCC Co-Loading
Shipper-to Carrier Co-loading

FMC Regulatory Issues: NVO Carrier-to-Carrier Co-Loading

This lesson addresses the prevailing type of relationship under which NVOs co-load with each other, together with the requirements and benefits of this arrangement.

(Estimated study time: 1 hour 2 minutes)

Introduction
Carrier-to-Carrier Co-loading
- FMC Regulatory Position
  - FMC Rules on Carrier-to-Carrier Co-loading
  - FMC Regulatory Position & Enforcement of Carrier-to-Carrier Co-loading
- Carrier-to-Carrier Agreements
  - Two Key Requirements
  - Terms and Conditions of Agreements
Allocation of Underlying VOCC Transportation Charges
Carrier-to-Carrier Co-loading: Pros vs. Cons

NVO Co-Loading Using Service Contracts; Risks of Co-loading

Much of the FCL and LCL cargo handled by NVOs today moves under service contracts between VOCCs and "neutral" NVOs, NVO shipper's associations and larger forwarder-based NVO operations.

(Estimated study time: 53 minutes)

Introduction
FMC Requirements when Co-loaded NVO Cargo Moves under a Service Contract
- Shipper-to-Carrier Co-loading
- Carrier-to-Carrier Co-loading
  - General
  - Becoming an Additional Signatory to a Service Contract
  - Financial Arrangements between Master Co-loader and NVOs
Co-loading Risks to Shipper/Consignee
- Non-tariffed Destination Costs
- Tracing & Communicating with Breakbulk Agent
Co-loading Risks to Freight Forwarder; Non-tariffed Destination Costs
- Regulatory Concerns
- Competitive Pressure against Excessive Destination Charges

NVO Regulatory Compliance Summary & Checklist

In this final lesson, key FMC compliance and operational issues are reviewed in checklist format.

(Estimated study time: 28 minutes)

Introduction
U.S. NVO Operations and Compliance Summary—Key "Do's" and "Don'ts"
- General
- U.S. NVOCC Regulatory Compliance Checklist