Non-Vessel-Operating Common Carrier Service Arrangements, 56577-56580 [05-19369]
Download as PDF
<![CDATA[
Federal Register / Vol. 70, No. 187 / Wednesday, September 28, 2005 / Rules and Regulations
has become out of date since the
previously published final rule. The
address to submit applications found in
40 CFR 310.15, How do I apply for
reimbursement? and some of the
telephone numbers listed in Appendix
II to part 310 have changed since the
February 18, 1998, publication of the
final rule. EPA finds that this
constitutes good cause under 5 U.S.C.
553(b)(B).
IV. Do Any of the Statutory and
Executive Order Reviews Apply to This
Action?
submit a rule report, which includes a
copy of the rule, to each House of the
Congress and to the Comptroller General
of the United States. EPA will submit a
report containing this rule and other
required information to the U.S. Senate,
the U.S. House of Representatives, and
the Comptroller General of the United
States prior to publication of this final
rule in the Federal Register. This final
rule is not a ‘‘major rule’’ as defined by
5 U.S.C. 804(2).
List of Subjects in 40 CFR Part 310
The applicable statutory and
Executive Order reviews were included
in the February 18, 1998 Federal
Register document. This document is a
technical correction and as such no new
review requirements are applicable.
V. Congressional Review Act
The Congressional Review Act, 5
U.S.C. 801 et seq., as added by the Small
Business Regulatory Enforcement
Fairness Act of 1996, generally provides
that before a rule may take effect, the
agency promulgating the rule must
Environmental protection,
Administrative practice and procedure,
Hazardous substances,
Intergovernmental relations, Local
governments, Reporting and
recordkeeping requirements, Superfund.
Dated: September 22, 2005.
Thomas P. Dunne,
Acting Assistant Administator, Office of Solid
Waste and Emergency Response.
For the reasons set out in the
preamble, it is to amend title 40, chapter
I of the Code of Federal Regulations as
follows:
I
PART 310—REIMBURSEMENT TO
LOCAL GOVERNMENTS FOR
EMERGENCY REPONSE TO
HAZARDOUS SUBSTANCE RELEASES
1. The authority citation for part 310
continues to read as follows:
I
Authority: 42 U.S.C. 9611(c)(11), 9623.
Subpart B—[Amended]
2. Section 310.15 is amended by
revising paragraph (d) to read as
follows:
I
§ 310.15 How do I apply for
reimbursement?
*
*
*
*
*
(d) Mail your completed application
and supporting data to the LGR Project
Officer, (5401A), Office of Emergency
Management, Office of Solid Waste and
Emergency Response, Environmental
Protection Agency, 1200 Pennsylvania
Ave., NW., Washington, DC 20460.
I 3. Appendix II to Part 310 is revised
to read as follows:
Appendix—II to Part 310—EPA Regions
and NRC Telephone Lines
National Response Center ............................................................................................................................................................
EPA Regional Phone Numbers:
Region I (ME, NH, VT, MA, RI, CT) .......................................................................................................................................
Region II (NJ, NY, PR, VI) .....................................................................................................................................................
Region III (PA, DE, MD, DC, VA, WV) ..................................................................................................................................
Region IV (NC, SC, TN, MS, AL, GA, FL, KY) ......................................................................................................................
Region V (OH, IN, IL, WI, MN, MI) ........................................................................................................................................
Region VI (AR, LA, TX, OK, NM) ...........................................................................................................................................
Region VII (IA, MO, KS, NE) ..................................................................................................................................................
Region VIII (CO, UT, WY, MT, ND, SD) ................................................................................................................................
Region IX (AZ, CA, NV, AS, HI, GU, TT) ..............................................................................................................................
Region X (ID, OR, WA, AK) ...................................................................................................................................................
October 28, 2005.
[FR Doc. 05–19354 Filed 9–27–05; 8:45 am]
EFFECTIVE DATE:
BILLING CODE 6560–50–P
FOR FURTHER INFORMATION CONTACT:
FEDERAL MARITIME COMMISSION
Amy W. Larson, General Counsel,
Federal Maritime Commission, 800 N.
Capitol St., NW., Washington, DC
20573–0001, (202) 523–5740,
generalcounsel@fmc.gov.
46 CFR Part 531
[Docket No. 05–05]
SUPPLEMENTARY INFORMATION:
RIN 3072–AC31
I. Background
Non-Vessel-Operating Common Carrier
Service Arrangements
On August 3, 2005, the Federal
Maritime Commission (‘‘FMC’’ or
‘‘Commission’’) proposed a revision to
its regulations at 46 CFR part 531, NonVessel-Operating Common Carrier
Service Arrangements. 70 FR 456267
(August 8, 2005) (‘‘NPR’’). The NPR
proposed revisions to 46 CFR sections
531.3(o), 531.5(a), 531.6(c)(2), and
531.6(d) that would have the effect of
allowing non-vessel-operating common
carriers (‘‘NVOCCs’’) to act as either
shippers or carriers in an NVOCC
Service Arrangement (‘‘NSA’’). Id.
Federal Maritime Commission.
Final rule.
AGENCY:
ACTION:
SUMMARY: The Federal Maritime
Commission has revised its exemption
for non-vessel-operating common
carriers (NVOCCs) from certain tariff
requirements of the Shipping Act of
1984 to allow NVOCCs and shippers’
associations with NVOCC members to
act as shipper parties in NVOCC Service
Arrangements.
VerDate Aug<31>2005
15:14 Sep 27, 2005
Jkt 205001
PO 00000
Frm 00017
Fmt 4700
Sfmt 4700
56577
(800) 424–8802
(617)
(800)
(215)
(404)
(312)
(866)
(913)
(303)
(800)
(206)
723–8928
424–8802
814–3255
562–8700
353–2318
372–7745
281–0991
293–1788
300–2193
553–1263
On January 19, 2005, 46 CFR part 531
became effective, exempting NVOCCs
from certain tariff publication
requirements of the Shipping Act of
1984, 46 U.S.C. app. 1701 et seq.
(‘‘Shipping Act’’). 69 FR 75850
(December 20, 2004) (final rule) (‘‘NSA
Rule’’). The NSA Rule was issued
pursuant to the Commission’s authority
under section 16 of the Shipping Act, 46
U.S.C. app. 1715 (‘‘Section 16’’). The
exemption relieved NVOCCs from
certain tariff requirements of the
Shipping Act, provided the carriage in
question was done pursuant to an NSA
filed with the Commission and the
essential terms are published in the
NVOCC’s tariff. Id.
The NSA Rule defined an ‘‘NSA
shipper’’ as a cargo owner, the person
for whose account the ocean
transportation is provided, the person to
whom delivery is to be made, or a
shippers’ association. 46 CFR 531.3(o).
This definition specifically excluded
E:\FR\FM\28SER1.SGM
28SER1
56578
Federal Register / Vol. 70, No. 187 / Wednesday, September 28, 2005 / Rules and Regulations
NVOCCs and shippers’ associations
with NVOCC members. As discussed
below, this Final Rule now removes the
limitation from the NSA Rule to allow
NVOCCs and shippers’ associations
with NVOCC members to act as ‘‘NSA
shippers.’’
II. Summary of the Comments
The Commission received eight
comments in response to the NPR from:
United States Department of
Transportation (‘‘DOT’’); American
Institute for Shippers’’ Associations,
Inc. (‘‘AISA’’); International Shippers’’
Association (‘‘ISA’’); Fashion
Accessories Shippers’’ Association
(‘‘FASA’’); BDP International, Inc.
(‘‘BDP’’); Agriculture Ocean
Transportation Coalition, BAX Global,
Inc., FedEx Trade Networks Transport &
Brokerage, Inc., the National Industrial
Transportation League, North Atlantic
Alliance Association, Inc.,
Transportation Intermediaries
Association, and United Parcel Service
(collectively, ‘‘Joint Commenters’’);
Carotrans International, Inc.
(‘‘Carotrans’’); and the World Shipping
Council (‘‘WSC’’).
A. Comments in Support
Comments supporting the adoption of
the NPR were received from NVOCCs,
shippers’ associations with NVOCC
members and the U.S. Department of
Transportation. The overwhelming
majority of the commenters support the
revision as proposed in the NPR. DOT
at 1; ISA at 1; AISA at 2; BDP at 1; Joint
Commenters at 1; Carotrans at 6.
1. Commission Has Adequate Statutory
Authority
Carotrans, BDP and the Joint
Commenters assert the Commission has
sufficiently broad authority to adopt the
changes proposed in the NPR and that
the proposal meets the criteria of
Section 16. Carotrans at 2; BDP at 1–2;
Joint Commenters at 2, 4. The Joint
Commenters attest that the voluminous
record developed in the proceeding
leading to the adoption of the NSA Rule
also adequately supports this proposal.
Joint Comments at 4.
2. Section 16 Criteria Are Met
DOT, Carotrans, BDP and the Joint
Commenters assert that the proposed
revisions meet the two-part test of
Section 16 inasmuch as the proposal
would neither cause substantial
reduction in competition nor be
detrimental to commerce. DOT believes
that shippers’ associations are unlikely
to effectively coordinate resale of space
obtained via an NSA. DOT at 3. DOT
asserts the revision will ‘‘predictably
VerDate Aug<31>2005
15:14 Sep 27, 2005
Jkt 205001
enhance competition without detriment
to commerce.’’ DOT at 3.
a. No Substantial Reduction in
Competition
Carotrans and BDP further argue that
the proposal will not result in a
substantial reduction in competition.
Carotrans at 4; BDP at 4. Rather, these
commenters assert, competition at many
levels of the international transportation
industry will be stimulated by it.
Carotrans at 4–5; BDP at 4–5. ‘‘The
carrier-to-shipper NVO[CC]
relationships which have naturally
proliferated in the marketplace will now
evolve into more competitive
relationships in a confidential NSA
environment’’ due to the greater
flexibility NSAs afford over tariff-based
structures. Carotrans at 5; BDP at 5.
These commenters believe that much of
this is due to the confidential aspects of
NSAs and predict that ‘‘competition
will flourish based on real commercial
factors and not on the basis of
transparencies of the tariff mechanism.’’
Id.
The Joint Commenters assert that
‘‘removal of the restrictions * * * will
foster greater competition in the
industry by permitting NVOCCs to
compete against vessel-operating
common carriers (‘‘VOCCs’’) in securing
the business of both individual NVOCCs
(acting as shippers) and shippers’
associations with NVOCC members.’’
Joint Commenters at 2. Without the
adoption of the proposed changes, the
Joint Commenters argue, VOCCs will
continue to ‘‘enjoy a distinct
commercial advantage’’ over NVOCCs.
Joint Commenters at 2–3.
b. No Detriment To Commerce
Carotrans and BDP argue adoption of
the NPR will not be detrimental to
commerce because the Commission’s
regulations already provide that
NVOCCs may deal with each other in
co-loading arrangements rated under
tariffs. Carotrans at 3; BDP at 3. These
NVOCCs assert that the NPR’s extension
of co-loading practices into more formal
contractual arrangements will stabilize
those practices, and ultimately result in
better pricing opportunities for shippers
because NVOCCs will be better able to
aggregate cargo to negotiate more
favorable rates and terms with VOCCs.
Id. Carotrans and BDP believe the
Commission’s rationale expressed with
respect to VOCC service contracts is
equally applicable to NSAs between
NVOCCs and therefore ‘‘patently not
detrimental to commerce at any level.’’
Carotrans at 3–4; BDP at 3–4.
PO 00000
Frm 00018
Fmt 4700
Sfmt 4700
B. Comment in Opposition
FASA is the sole commenter that
opposes adoption of the NPR. FASA at
2. FASA argues the Commission lacks
the statutory authority under Section 16
to have adopted 46 CFR part 531
originally. Id. at 1–2. FASA re-submits
the comments it had made on the NSA
Rule. FASA at 1.
In comments dated September 29,
2004, FASA urged the Commission to
either reject an industry proposal for a
conditional exemption or initiate a new
proceeding and re-open the record to
‘‘afford the further opportunity to
develop a record specifically addressed
to the proposed conditional
exemption.’’ FASA comments of
September 29, 2004 at 2. FASA
observed that ‘‘diverse segments of the
ocean transportation industry’’ had
‘‘repeatedly stressed’’ that the petitions,
and the joint comments, involved
fundamental issues of the Commission’s
statutory exemption authority. Id. FASA
urged that the ‘‘Commission’s
deliberation should not be compromised
by the premature adoption now of the
conditional exemption.’’ Id.
FASA also expressed its belief that
the arguments it had raised had not
been addressed. Id. Specifically, FASA
argued that the (then-proposed) NSA
Rule was inconsistent with the statutory
scheme of the Shipping Act, as revised
by the Ocean Shipping Reform Act of
1998 (‘‘OSRA’’) because (1) it might free
NVOCCs from the requirement that they
publish tariffs; (2) it might lead to the
result of shippers’ associations being
required to seek redress of grievances
outside the FMC; and (3) it might enable
NVOCCs to undertake otherwise
prohibited actions under section 10 of
the Shipping Act. Id. at 4–5. Finally,
FASA argued a conditional exemption
would put shipper/customers at risk of
‘‘dead freight’’ for not meeting a
minimum volume commitment to an
NVOCC under an NSA, although the
NVOCC might have already met its
volume commitment to the VOCC by
aggregating other cargo. Id. at 5.
In comments filed in response to the
Commission’s October 31, 2004 Notice
of Proposed Rulemaking, 69 FR 63981
(November 3, 2004), FASA asserted that
exemption from the tariff publication
requirements of the Shipping Act,
whether or not conditional upon filing
of an NSA, was not appropriate under
Section 16. FASA comments of
November 19, 2004 at 2. FASA,
however, suggested several additions
and revisions to that proposal.1 Id. at 5.
1 FASA had suggested that the Commission adopt
additional prohibitions in the NSA Rule mirroring
section 10(c)(8), 46 U.S.C. app. 1709(c)(8), to
E:\FR\FM\28SER1.SGM
28SER1
Federal Register / Vol. 70, No. 187 / Wednesday, September 28, 2005 / Rules and Regulations
C. Comments of the World Shipping
Council
WSC takes no position as to whether
the proposed amendments would be
consistent with Section 16. WSC at 1.
WSC is concerned, however, that the
proposed rule may enable NVOCCs to
avoid the obligations they have as
common carriers under the regulations
of U.S. Customs and Border Protection
(‘‘CBP’’), specifically 19 CFR 4.7(b)(2)
(‘‘24-Hour Rule’’) (requiring carriers to
submit vessel manifests to CBP at least
24 hours prior to lading at the foreign
port). Id. WSC therefore recommends
that the Commission clarify that nothing
in this rule may be interpreted to release
NVOCCs from their duties as ‘‘carriers’’
under the 24-Hour Rule, even when
acting as ‘‘shippers’’ with respect to
other NVOCCs. Id. at 3.
III. Discussion
Section 16 authorizes the
Commission, ‘‘upon application or on
its own motion * * * to exempt for the
future any * * * specified activity of
[persons subject to the requirements of
the Shipping Act] from any requirement
of this Act if it finds that the exemption
will not result in substantial reduction
in competition or be detrimental to
commerce.’’ 46 U.S.C. app. 1715.
Section 16 also authorizes the
Commission to ‘‘attach any conditions
to any exemption.’’ Id. As it did when
originally proposing the NSA Rule in
late October, 2004, the Commission
again notes that Section 16 authorizes
the Commission to exempt by rule or
order matters it regulates under the
Shipping Act. See 69 FR 63981, 63985
(November 3, 2004) (matter concerns
‘‘specified activity’’ subject to a
‘‘requirement’’ of the Shipping Act as
those terms are used in Section 16). The
Commission continues to believe that
the NSA Rule falls within its exemption
authority and comports with the goals of
the Shipping Act and Congress’s
legislative intent as expressed most
recently by OSRA. We note that 46 CFR
part 531 does not completely exempt
NVOCCs from the tariff publication
requirements of the Shipping Act, as
some commenters in the original
prohibit NOVCCs offering NSAs from
discriminating against shippers’ associations or
ocean transportation intermediaries based on status.
The Commission did not adopt this
recommendation because, with the exception of
affiliates, the NSA rule neither contemplates nor
sanctions any concerted NSA activity. See NSA
Rule, 69 FR at 75851–75852. See also Docket No.
04–12, Non-Vessel-Operating Common Carrier
Service Arrangements, 70 FR. See Docket No. 05–
06, Non-Vessel-Operating Common Carrier Service
Arrangements (August 30, 2005) (Notice of Inquiry)
(requesting public comment on joint unaffiliated
NVOCC-offered NSAs).
VerDate Aug<31>2005
15:14 Sep 27, 2005
Jkt 205001
proceeding had urged. We again
disagree with FASA’s assertion that the
exemption is beyond the Commission’s
authority to exercise. See 69 FR at
63985.
The Commission is mindful that the
authority of Section 16 can be exercised
only when the Commission finds that
such action will result neither in
substantial reduction in competition nor
be detrimental to commerce. 46 U.S.C.
app. 1715. The Commission has now,
through publication and request for
comment, sought information to help it
determine whether the proposed
revision to 46 CFR part 531 would cause
either of these untoward effects. As
explained more fully below, the
Commission finds the proposed revision
would cause neither substantial
reduction in competition nor be
detrimental to commerce.
A. Section 16 Criteria
1. Substantial Reduction in Competition
The Commission has evaluated the
possible impact of its proposal on
competition between NVOCCs, between
NVOCCs and VOCCs, and between
shippers’ associations. Most
commenters suggest that the NPR,
which would allow NVOCCs and
shippers’ associations with NVOCC
members to act as NSA shippers, will
not result in a substantial reduction in
competition among any of these groups.
As Carotrans points out, NVOCCs may
already deal with each other
commercially in shipper-to-carrier coloading arrangements subject to the
Commission’s tariff rules. Indeed, rather
than reducing competition, NSAs
among NVOCCs may lead to a more
competitive environment for NVOCCs
who serve other NVOCCs.
Similarly, the Commission finds
persuasive the assertions of AISA, ISA
and DOT that allowing shippers’
associations with NVOCC members to
act as NSA shippers will not result in
substantial reduction in competition
among shippers’ associations, nor will it
have an effect on the resale of space that
NVOCCs may obtain as members of a
shippers’ association. We are persuaded
that, as DOT phrases it, this ‘‘leveling of
the playing field’’ for all shippers’
associations will enhance competition.
Furthermore, recent case law gives us
some assurance that courts are not likely
to find that NVOCCs acting concertedly
in NSAs to be immune from the
prohibitions of the antitrust laws.
United States v. Gosselin World Wide
Moving, N.V., 411 F.3d. 502 (4th Cir
2005). Therefore, the Commission’s
previous concerns, that allowing
NVOCCs to act as both shipper and
PO 00000
Frm 00019
Fmt 4700
Sfmt 4700
56579
carrier parties in an NSA would create
a potential for reduction in competition
through immunity from the antitrust
laws, have been largely alleviated.
Moreover, as Carotrans and BDP
assert, the Commission’s regulations
have recognized and provided for the
sale of ocean transportation services by
one NVOCC acting as carrier to another
acting as shipper under tariff
regulations. See 46 CFR 520.11(c)(iii)
(co-loading). Although this Final Rule
addresses basically the same
commercial relationship, it should, as
the commenters suggest, provide greater
flexibility over such transactions done
under a tariff.
2. Detriment to Commerce
We find that the Final Rule will not
be detrimental to commerce. See 69 FR
63987 (discussion of criterion). Neither
the original rulemaking nor this Final
Rule eliminates the requirement that
common carriers publish tariffs and
adhere to rates that are either published
in tariffs or filed in NSAs. Principles of
common carriage inherent in the
Shipping Act are preserved by the
continuing application of all of the
prohibitions contained in section 10 of
the Shipping Act, 46 U.S.C. app. 1709,
e.g., against retaliation, deferred rebates,
unreasonable refusals to deal, etc.
Accordingly, the protections provided
to the shipping public will be preserved
and detriment to commerce will not
occur.
The Joint Comments assert that the
proposal will promote commerce by
expanding the opportunity for NVOCCs
acting as shippers to choose their
service provider and will ultimately
lead to greater commercial efficiencies.
We are persuaded by the comments that
no detriment to ocean commerce will
arise from extending the exemption of
46 CFR part 531 to enable NVOCCs to
provide all their customers, whether
they be other NVOCCs or beneficial
cargo owners or shippers’ associations,
with NSAs tailored to meet the
individual needs of those customers. We
believe that not only will the exemption
not be detrimental to commerce as
required by Section 16, but there may
also be merit to the assertion that the
expansion of the exemption will prove
beneficial to commerce.
In summary, the Commission finds
the proposed revision meets the criteria
of Section 16 as it will cause neither
substantial reduction in competition nor
detriment to commerce. Further, this
Final Rule in no way relieves NVOCCs
of any other requirements of the
Shipping Act, Commission regulations,
or the requirements of other statutes and
E:\FR\FM\28SER1.SGM
28SER1
56580
Federal Register / Vol. 70, No. 187 / Wednesday, September 28, 2005 / Rules and Regulations
§ 531.5
regulations (e.g., the 24-hour Rule) to
which they are subject.
IV. Statutory Reviews
In accordance with the Paperwork
Reduction Act, 44 U.S.C. 3507, the
collection of information requirements
contained in this Final Rule have been
submitted to the Office of Management
and Budget (‘‘OMB’’) for review. The
estimated total annual burden for the
estimated 635 annual respondents is
190,252 person-hours. No comments
were received on this estimate.
In accordance with the Regulatory
Flexibility Act, 5 U.S.C. 605, the
Chairman of the Federal Maritime
Commission has certified to the Chief
Counsel for Advocacy, Small Business
Administration, that the Final Rule will
not have a significant impact on a
substantial number of small entities.
Although NVOCCs as an industry
include small entities, the Final Rule
provides, but does not require, an
alternative for NVOCCs from certain
tariff requirements of the Shipping Act
and the Commission’s regulations. It
potentially relieves a burden. Therefore,
the Commission has found that the
Final Rule will have no significant
economic impact on a substantial
number of small entities.
List of Subjects for 46 CFR Part 531
Exports, Non-vessel-operating
common carriers, Ocean transportation
intermediaries.
For the reasons set forth in the
preamble, the Federal Maritime
Commission amends 46 CFR part 531 as
follows:
Duty to file.
(a) The duty under this part to file
NSAs, amendments and notices, and to
publish statements of essential terms,
shall be upon the NVOCC acting as
carrier party to the NSA.
*
*
*
*
*
I 4. Revise paragraph (c)(2) and add
paragraph (d)(4) to § 531.6 to read as
follows:
§ 531.6
NVOCC Service Arrangements.
*
*
*
*
*
(c) * * *
(2) Make reference to terms not
explicitly contained in the NSA itself
unless those terms are contained in a
publication widely available to the
public and well known within the
industry. Reference may not be made to
a tariff of a common carrier other than
the NVOCC acting as carrier party to the
NSA.
*
*
*
*
*
(d) * * *
(4) No NVOCC may knowingly and
willfully enter into an NSA with an
ocean transportation intermediary that
does not have a tariff and a bond,
insurance, or other surety as required by
sections 8 and 19 of the Act.
*
*
*
*
*
By the Commission.
Karen V. Gregory,
Assistant Secretary.
[FR Doc. 05–19369 Filed 9–27–05; 8:45 am]
BILLING CODE 6730–01–P
I
47 CFR Part 23
PART 531—NVOCC SERVICE
ARRANGEMENTS
[IB Docket No. 00–248; FCC 05–130]
Revisions of the Commission’s Rules
and Spectrum Usage by Satellite
Network Earth Stations and Space
Stations
1. The authority citation for part 531
continues to read as follows:
I
Authority: 46 U.S.C. app. 1715.
2. Revise paragraph (o) of § 531.3 to
read as follows:
I
§ 531.3
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
Definitions.
*
*
*
*
*
(o) 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, that
accepts responsibility for payment of all
applicable charges under the NSA.
*
*
*
*
*
3. Revise paragraph (a) of § 531.5 to
read as follows:
I
VerDate Aug<31>2005
15:14 Sep 27, 2005
Jkt 205001
FEDERAL COMMUNICATIONS
COMMISSION
SUMMARY: In this document, the Federal
Communication Commission (FCC)
invited commenters to propose
revisions to part 23 of the Commission’s
rules, governing International Fixed
Public Radiocommunication Services
(IFRS). Because no one proposed any
revisions to part 23, we terminate our
consideration of part 23 issues in this
context of IB Docket 00–248.
DATES: Effective October 28, 2005.
FOR FURTHER INFORMATION CONTACT:
Steven Spaeth (202)418–1539, Satellite
PO 00000
Frm 00020
Fmt 4700
Sfmt 4700
Division, International Bureau, Federal
Communications Commission,
Washington, DC 20554.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Seventh
Report and Order in IB Docket 00–248,
adopted June 20, 2005 and released June
24, 2005. The full text of the Seventh
Report and Order is available for public
inspection and copying during regular
business hours at the FCC Reference
Information Center, Portals II, 445 12th
Street, SW., Room CY–A257,
Washington, DC 20054. This document
may also be purchased from the
Commission’s duplicating contractor,
Best Copy and Printing, Inc., Portals II,
445 12th Street, SW., Room CY–B402,
Washington, DC 20554, telephone 202–
488–5300, facsimile 202–488–5563, or
via e-mail FCC@BCPIWEB.com.
Summary of Notice of Proposed
Rulemaking
No one proposed revising or
eliminating any provisions in part 23 of
the Commission’s rules in response to
the NPRM published elsewhere in this
issue. As a result, we find that the
record before us at this time does not
provide any basis for revising part 23 of
the Commission’s rules. Accordingly,
we will not revise part 23 of the
Commission’s rules at this time. This
terminates our consideration of part 23
of the Commission’s rules issues in the
context of IB Docket No. 00–248.
Final Regulatory Flexibility
Certification. The Regulatory Flexibility
Act of 1980, as amended (RFA) requires
that a regulatory flexibility analysis be
prepared for rulemaking proceedings,
unless the agency certifies that ‘‘the rule
will not have a significant economic
impact on a substantial number of small
entities.’’ The RFA generally defines
‘‘small entity’’ having the same meaning
as the terms ‘‘small business,’’ ‘‘small
organization,’’ and ‘‘small governmental
jurisdiction.’’ In addition, the term
‘‘small business’’ has the same meaning
as the term ‘‘small business concern’’
under the Small Business Act. A small
business concern is one which: (1) Is
independently owned and operated; (2)
is not dominant in its field of operation;
and (3) satisfies any additional criteria
established by the Small Business
Administration (SBA). No FRFA is
necessary for the Seventh Report and
Order because we have decided not to
make any changes to the Commission’s
rules at this time.
Ordering Clauses
Accordingly, it is ordered, pursuant to
section 4(i), 7(a), 11, 303(c), 303(f),
303(g), and 303(r), of the
Communication Act of 1934, as
E:\FR\FM\28SER1.SGM
28SER1
]]>Agencies
[Federal Register Volume 70, Number 187 (Wednesday, September 28, 2005)]
[Rules and Regulations]
[Pages 56577-56580]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-19369]
=======================================================================
-----------------------------------------------------------------------
FEDERAL MARITIME COMMISSION
46 CFR Part 531
[Docket No. 05-05]
RIN 3072-AC31
Non-Vessel-Operating Common Carrier Service Arrangements
AGENCY: Federal Maritime Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Maritime Commission has revised its exemption for
non-vessel-operating common carriers (NVOCCs) from certain tariff
requirements of the Shipping Act of 1984 to allow NVOCCs and shippers'
associations with NVOCC members to act as shipper parties in NVOCC
Service Arrangements.
EFFECTIVE DATE: October 28, 2005.
FOR FURTHER INFORMATION CONTACT: Amy W. Larson, General Counsel,
Federal Maritime Commission, 800 N. Capitol St., NW., Washington, DC
20573-0001, (202) 523-5740, generalcounsel@fmc.gov.
SUPPLEMENTARY INFORMATION:
I. Background
On August 3, 2005, the Federal Maritime Commission (``FMC'' or
``Commission'') proposed a revision to its regulations at 46 CFR part
531, Non-Vessel-Operating Common Carrier Service Arrangements. 70 FR
456267 (August 8, 2005) (``NPR''). The NPR proposed revisions to 46 CFR
sections 531.3(o), 531.5(a), 531.6(c)(2), and 531.6(d) that would have
the effect of allowing non-vessel-operating common carriers
(``NVOCCs'') to act as either shippers or carriers in an NVOCC Service
Arrangement (``NSA''). Id.
On January 19, 2005, 46 CFR part 531 became effective, exempting
NVOCCs from certain tariff publication requirements of the Shipping Act
of 1984, 46 U.S.C. app. 1701 et seq. (``Shipping Act''). 69 FR 75850
(December 20, 2004) (final rule) (``NSA Rule''). The NSA Rule was
issued pursuant to the Commission's authority under section 16 of the
Shipping Act, 46 U.S.C. app. 1715 (``Section 16''). The exemption
relieved NVOCCs from certain tariff requirements of the Shipping Act,
provided the carriage in question was done pursuant to an NSA filed
with the Commission and the essential terms are published in the
NVOCC's tariff. Id.
The NSA Rule defined an ``NSA shipper'' as a cargo owner, the
person for whose account the ocean transportation is provided, the
person to whom delivery is to be made, or a shippers' association. 46
CFR 531.3(o). This definition specifically excluded
[[Page 56578]]
NVOCCs and shippers' associations with NVOCC members. As discussed
below, this Final Rule now removes the limitation from the NSA Rule to
allow NVOCCs and shippers' associations with NVOCC members to act as
``NSA shippers.''
II. Summary of the Comments
The Commission received eight comments in response to the NPR from:
United States Department of Transportation (``DOT''); American
Institute for Shippers'' Associations, Inc. (``AISA''); International
Shippers'' Association (``ISA''); Fashion Accessories Shippers''
Association (``FASA''); BDP International, Inc. (``BDP''); Agriculture
Ocean Transportation Coalition, BAX Global, Inc., FedEx Trade Networks
Transport & Brokerage, Inc., the National Industrial Transportation
League, North Atlantic Alliance Association, Inc., Transportation
Intermediaries Association, and United Parcel Service (collectively,
``Joint Commenters''); Carotrans International, Inc. (``Carotrans'');
and the World Shipping Council (``WSC'').
A. Comments in Support
Comments supporting the adoption of the NPR were received from
NVOCCs, shippers' associations with NVOCC members and the U.S.
Department of Transportation. The overwhelming majority of the
commenters support the revision as proposed in the NPR. DOT at 1; ISA
at 1; AISA at 2; BDP at 1; Joint Commenters at 1; Carotrans at 6.
1. Commission Has Adequate Statutory Authority
Carotrans, BDP and the Joint Commenters assert the Commission has
sufficiently broad authority to adopt the changes proposed in the NPR
and that the proposal meets the criteria of Section 16. Carotrans at 2;
BDP at 1-2; Joint Commenters at 2, 4. The Joint Commenters attest that
the voluminous record developed in the proceeding leading to the
adoption of the NSA Rule also adequately supports this proposal. Joint
Comments at 4.
2. Section 16 Criteria Are Met
DOT, Carotrans, BDP and the Joint Commenters assert that the
proposed revisions meet the two-part test of Section 16 inasmuch as the
proposal would neither cause substantial reduction in competition nor
be detrimental to commerce. DOT believes that shippers' associations
are unlikely to effectively coordinate resale of space obtained via an
NSA. DOT at 3. DOT asserts the revision will ``predictably enhance
competition without detriment to commerce.'' DOT at 3.
a. No Substantial Reduction in Competition
Carotrans and BDP further argue that the proposal will not result
in a substantial reduction in competition. Carotrans at 4; BDP at 4.
Rather, these commenters assert, competition at many levels of the
international transportation industry will be stimulated by it.
Carotrans at 4-5; BDP at 4-5. ``The carrier-to-shipper NVO[CC]
relationships which have naturally proliferated in the marketplace will
now evolve into more competitive relationships in a confidential NSA
environment'' due to the greater flexibility NSAs afford over tariff-
based structures. Carotrans at 5; BDP at 5. These commenters believe
that much of this is due to the confidential aspects of NSAs and
predict that ``competition will flourish based on real commercial
factors and not on the basis of transparencies of the tariff
mechanism.'' Id.
The Joint Commenters assert that ``removal of the restrictions * *
* will foster greater competition in the industry by permitting NVOCCs
to compete against vessel-operating common carriers (``VOCCs'') in
securing the business of both individual NVOCCs (acting as shippers)
and shippers' associations with NVOCC members.'' Joint Commenters at 2.
Without the adoption of the proposed changes, the Joint Commenters
argue, VOCCs will continue to ``enjoy a distinct commercial advantage''
over NVOCCs. Joint Commenters at 2-3.
b. No Detriment To Commerce
Carotrans and BDP argue adoption of the NPR will not be detrimental
to commerce because the Commission's regulations already provide that
NVOCCs may deal with each other in co-loading arrangements rated under
tariffs. Carotrans at 3; BDP at 3. These NVOCCs assert that the NPR's
extension of co-loading practices into more formal contractual
arrangements will stabilize those practices, and ultimately result in
better pricing opportunities for shippers because NVOCCs will be better
able to aggregate cargo to negotiate more favorable rates and terms
with VOCCs. Id. Carotrans and BDP believe the Commission's rationale
expressed with respect to VOCC service contracts is equally applicable
to NSAs between NVOCCs and therefore ``patently not detrimental to
commerce at any level.'' Carotrans at 3-4; BDP at 3-4.
B. Comment in Opposition
FASA is the sole commenter that opposes adoption of the NPR. FASA
at 2. FASA argues the Commission lacks the statutory authority under
Section 16 to have adopted 46 CFR part 531 originally. Id. at 1-2. FASA
re-submits the comments it had made on the NSA Rule. FASA at 1.
In comments dated September 29, 2004, FASA urged the Commission to
either reject an industry proposal for a conditional exemption or
initiate a new proceeding and re-open the record to ``afford the
further opportunity to develop a record specifically addressed to the
proposed conditional exemption.'' FASA comments of September 29, 2004
at 2. FASA observed that ``diverse segments of the ocean transportation
industry'' had ``repeatedly stressed'' that the petitions, and the
joint comments, involved fundamental issues of the Commission's
statutory exemption authority. Id. FASA urged that the ``Commission's
deliberation should not be compromised by the premature adoption now of
the conditional exemption.'' Id.
FASA also expressed its belief that the arguments it had raised had
not been addressed. Id. Specifically, FASA argued that the (then-
proposed) NSA Rule was inconsistent with the statutory scheme of the
Shipping Act, as revised by the Ocean Shipping Reform Act of 1998
(``OSRA'') because (1) it might free NVOCCs from the requirement that
they publish tariffs; (2) it might lead to the result of shippers'
associations being required to seek redress of grievances outside the
FMC; and (3) it might enable NVOCCs to undertake otherwise prohibited
actions under section 10 of the Shipping Act. Id. at 4-5. Finally, FASA
argued a conditional exemption would put shipper/customers at risk of
``dead freight'' for not meeting a minimum volume commitment to an
NVOCC under an NSA, although the NVOCC might have already met its
volume commitment to the VOCC by aggregating other cargo. Id. at 5.
In comments filed in response to the Commission's October 31, 2004
Notice of Proposed Rulemaking, 69 FR 63981 (November 3, 2004), FASA
asserted that exemption from the tariff publication requirements of the
Shipping Act, whether or not conditional upon filing of an NSA, was not
appropriate under Section 16. FASA comments of November 19, 2004 at 2.
FASA, however, suggested several additions and revisions to that
proposal.\1\ Id. at 5.
---------------------------------------------------------------------------
\1\ FASA had suggested that the Commission adopt additional
prohibitions in the NSA Rule mirroring section 10(c)(8), 46 U.S.C.
app. 1709(c)(8), to prohibit NOVCCs offering NSAs from
discriminating against shippers' associations or ocean
transportation intermediaries based on status. The Commission did
not adopt this recommendation because, with the exception of
affiliates, the NSA rule neither contemplates nor sanctions any
concerted NSA activity. See NSA Rule, 69 FR at 75851-75852. See also
Docket No. 04-12, Non-Vessel-Operating Common Carrier Service
Arrangements, 70 FR. See Docket No. 05-06, Non-Vessel-Operating
Common Carrier Service Arrangements (August 30, 2005) (Notice of
Inquiry) (requesting public comment on joint unaffiliated NVOCC-
offered NSAs).
---------------------------------------------------------------------------
[[Page 56579]]
C. Comments of the World Shipping Council
WSC takes no position as to whether the proposed amendments would
be consistent with Section 16. WSC at 1. WSC is concerned, however,
that the proposed rule may enable NVOCCs to avoid the obligations they
have as common carriers under the regulations of U.S. Customs and
Border Protection (``CBP''), specifically 19 CFR 4.7(b)(2) (``24-Hour
Rule'') (requiring carriers to submit vessel manifests to CBP at least
24 hours prior to lading at the foreign port). Id. WSC therefore
recommends that the Commission clarify that nothing in this rule may be
interpreted to release NVOCCs from their duties as ``carriers'' under
the 24-Hour Rule, even when acting as ``shippers'' with respect to
other NVOCCs. Id. at 3.
III. Discussion
Section 16 authorizes the Commission, ``upon application or on its
own motion * * * to exempt for the future any * * * specified activity
of [persons subject to the requirements of the Shipping Act] from any
requirement of this Act if it finds that the exemption will not result
in substantial reduction in competition or be detrimental to
commerce.'' 46 U.S.C. app. 1715. Section 16 also authorizes the
Commission to ``attach any conditions to any exemption.'' Id. As it did
when originally proposing the NSA Rule in late October, 2004, the
Commission again notes that Section 16 authorizes the Commission to
exempt by rule or order matters it regulates under the Shipping Act.
See 69 FR 63981, 63985 (November 3, 2004) (matter concerns ``specified
activity'' subject to a ``requirement'' of the Shipping Act as those
terms are used in Section 16). The Commission continues to believe that
the NSA Rule falls within its exemption authority and comports with the
goals of the Shipping Act and Congress's legislative intent as
expressed most recently by OSRA. We note that 46 CFR part 531 does not
completely exempt NVOCCs from the tariff publication requirements of
the Shipping Act, as some commenters in the original proceeding had
urged. We again disagree with FASA's assertion that the exemption is
beyond the Commission's authority to exercise. See 69 FR at 63985.
The Commission is mindful that the authority of Section 16 can be
exercised only when the Commission finds that such action will result
neither in substantial reduction in competition nor be detrimental to
commerce. 46 U.S.C. app. 1715. The Commission has now, through
publication and request for comment, sought information to help it
determine whether the proposed revision to 46 CFR part 531 would cause
either of these untoward effects. As explained more fully below, the
Commission finds the proposed revision would cause neither substantial
reduction in competition nor be detrimental to commerce.
A. Section 16 Criteria
1. Substantial Reduction in Competition
The Commission has evaluated the possible impact of its proposal on
competition between NVOCCs, between NVOCCs and VOCCs, and between
shippers' associations. Most commenters suggest that the NPR, which
would allow NVOCCs and shippers' associations with NVOCC members to act
as NSA shippers, will not result in a substantial reduction in
competition among any of these groups. As Carotrans points out, NVOCCs
may already deal with each other commercially in shipper-to-carrier co-
loading arrangements subject to the Commission's tariff rules. Indeed,
rather than reducing competition, NSAs among NVOCCs may lead to a more
competitive environment for NVOCCs who serve other NVOCCs.
Similarly, the Commission finds persuasive the assertions of AISA,
ISA and DOT that allowing shippers' associations with NVOCC members to
act as NSA shippers will not result in substantial reduction in
competition among shippers' associations, nor will it have an effect on
the resale of space that NVOCCs may obtain as members of a shippers'
association. We are persuaded that, as DOT phrases it, this ``leveling
of the playing field'' for all shippers' associations will enhance
competition.
Furthermore, recent case law gives us some assurance that courts
are not likely to find that NVOCCs acting concertedly in NSAs to be
immune from the prohibitions of the antitrust laws. United States v.
Gosselin World Wide Moving, N.V., 411 F.3d. 502 (4th Cir 2005).
Therefore, the Commission's previous concerns, that allowing NVOCCs to
act as both shipper and carrier parties in an NSA would create a
potential for reduction in competition through immunity from the
antitrust laws, have been largely alleviated.
Moreover, as Carotrans and BDP assert, the Commission's regulations
have recognized and provided for the sale of ocean transportation
services by one NVOCC acting as carrier to another acting as shipper
under tariff regulations. See 46 CFR 520.11(c)(iii) (co-loading).
Although this Final Rule addresses basically the same commercial
relationship, it should, as the commenters suggest, provide greater
flexibility over such transactions done under a tariff.
2. Detriment to Commerce
We find that the Final Rule will not be detrimental to commerce.
See 69 FR 63987 (discussion of criterion). Neither the original
rulemaking nor this Final Rule eliminates the requirement that common
carriers publish tariffs and adhere to rates that are either published
in tariffs or filed in NSAs. Principles of common carriage inherent in
the Shipping Act are preserved by the continuing application of all of
the prohibitions contained in section 10 of the Shipping Act, 46 U.S.C.
app. 1709, e.g., against retaliation, deferred rebates, unreasonable
refusals to deal, etc. Accordingly, the protections provided to the
shipping public will be preserved and detriment to commerce will not
occur.
The Joint Comments assert that the proposal will promote commerce
by expanding the opportunity for NVOCCs acting as shippers to choose
their service provider and will ultimately lead to greater commercial
efficiencies. We are persuaded by the comments that no detriment to
ocean commerce will arise from extending the exemption of 46 CFR part
531 to enable NVOCCs to provide all their customers, whether they be
other NVOCCs or beneficial cargo owners or shippers' associations, with
NSAs tailored to meet the individual needs of those customers. We
believe that not only will the exemption not be detrimental to commerce
as required by Section 16, but there may also be merit to the assertion
that the expansion of the exemption will prove beneficial to commerce.
In summary, the Commission finds the proposed revision meets the
criteria of Section 16 as it will cause neither substantial reduction
in competition nor detriment to commerce. Further, this Final Rule in
no way relieves NVOCCs of any other requirements of the Shipping Act,
Commission regulations, or the requirements of other statutes and
[[Page 56580]]
regulations (e.g., the 24-hour Rule) to which they are subject.
IV. Statutory Reviews
In accordance with the Paperwork Reduction Act, 44 U.S.C. 3507, the
collection of information requirements contained in this Final Rule
have been submitted to the Office of Management and Budget (``OMB'')
for review. The estimated total annual burden for the estimated 635
annual respondents is 190,252 person-hours. No comments were received
on this estimate.
In accordance with the Regulatory Flexibility Act, 5 U.S.C. 605,
the Chairman of the Federal Maritime Commission has certified to the
Chief Counsel for Advocacy, Small Business Administration, that the
Final Rule will not have a significant impact on a substantial number
of small entities. Although NVOCCs as an industry include small
entities, the Final Rule provides, but does not require, an alternative
for NVOCCs from certain tariff requirements of the Shipping Act and the
Commission's regulations. It potentially relieves a burden. Therefore,
the Commission has found that the Final Rule will have no significant
economic impact on a substantial number of small entities.
List of Subjects for 46 CFR Part 531
Exports, Non-vessel-operating common carriers, Ocean transportation
intermediaries.
0
For the reasons set forth in the preamble, the Federal Maritime
Commission amends 46 CFR part 531 as follows:
PART 531--NVOCC SERVICE ARRANGEMENTS
0
1. The authority citation for part 531 continues to read as follows:
Authority: 46 U.S.C. app. 1715.
0
2. Revise paragraph (o) of Sec. 531.3 to read as follows:
Sec. 531.3 Definitions.
* * * * *
(o) 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, that accepts
responsibility for payment of all applicable charges under the NSA.
* * * * *
0
3. Revise paragraph (a) of Sec. 531.5 to read as follows:
Sec. 531.5 Duty to file.
(a) The duty under this part to file NSAs, amendments and notices,
and to publish statements of essential terms, shall be upon the NVOCC
acting as carrier party to the NSA.
* * * * *
0
4. Revise paragraph (c)(2) and add paragraph (d)(4) to Sec. 531.6 to
read as follows:
Sec. 531.6 NVOCC Service Arrangements.
* * * * *
(c) * * *
(2) Make reference to terms not explicitly contained in the NSA
itself unless those terms are contained in a publication widely
available to the public and well known within the industry. Reference
may not be made to a tariff of a common carrier other than the NVOCC
acting as carrier party to the NSA.
* * * * *
(d) * * *
(4) No NVOCC may knowingly and willfully enter into an NSA with an
ocean transportation intermediary that does not have a tariff and a
bond, insurance, or other surety as required by sections 8 and 19 of
the Act.
* * * * *
By the Commission.
Karen V. Gregory,
Assistant Secretary.
[FR Doc. 05-19369 Filed 9-27-05; 8:45 am]
BILLING CODE 6730-01-P
