Service Contracts, 38086-38089 [2020-13045]
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38086
Federal Register / Vol. 85, No. 123 / Thursday, June 25, 2020 / Rules and Regulations
reference, Intergovernmental relations,
Nitrogen dioxide, Ozone, Reporting and
recordkeeping requirements, Volatile
organic compounds.
Authority: 42 U.S.C. 7401 et seq.
Dated: May 27, 2020.
John Busterud,
Regional Administrator, Region IX.
[FR Doc. 2020–11931 Filed 6–24–20; 8:45 am]
BILLING CODE 6560–50–P
Chapter I, title 40 of the Code of
Federal Regulations is amended as
follows:
FEDERAL MARITIME COMMISSION
46 CFR Part 530
PART 52—APPROVAL AND
PROMULGATION OF
IMPLEMENTATION PLANS
[Docket No. 20–02]
RIN 3072–AC80
1. The authority citation for part 52
continues to read as follows:
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Service Contracts
ACTION:
Subpart F—California
2. Section 52.220 is amended by
adding paragraphs (c)(514)(ii)(A)(6) and
(c)(532)(ii)(A)(2) to read as follows:
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Identification of plan—in part.
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(c) * * *
(514) * * *
(ii) * * *
(A) * * *
(6) 2018 Updates to the California
State Implementation Plan, adopted on
October 25, 2018, chapter III (‘‘SIP
Elements for Ventura County’’), section
III.C (‘‘Contingency Measures’’); only.
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(532) * * *
(ii) * * *
(A) * * *
(2) Final 2016 Ventura County Air
Quality Management Plan, adopted
February 14, 2017, chapter 7
(‘‘Contingency Measures’’), only.
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3. Section 52.248 is amended by
adding paragraph (j) to read as follows:
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§ 52.248 Identification of plan—conditional
approval.
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(j) The EPA is conditionally
approving the California State
Implementation Plan (SIP) for Ventura
County for the 2008 ozone NAAQS with
respect to the contingency measures
requirements of CAA sections 172(c)(9)
and 182(c)(9). The conditional approval
is based on a commitment from the
Ventura County Air Pollution Control
District (District) in a letter dated
August 16, 2019, to adopt a specific rule
revision, and a commitment from the
California Air Resources Board (CARB)
dated August 30, 2019, to submit the
amended District rule to the EPA within
12 months of the effective date of the
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Federal Maritime Commission.
Final rule.
AGENCY:
Authority: 42 U.S.C. 7401 et seq.
§ 52.220
final conditional approval. If the District
or CARB fail to meet their commitments
within one year of the effective date of
the final conditional approval, the
conditional approval is treated as a
disapproval.
The Federal Maritime
Commission (FMC or Commission)
amends its regulations governing service
contracts to eliminate the requirement
that ocean carriers publish a concise
statement of essential terms with each
service contract. The rule will reduce
regulatory burden.
DATES: Effective June 25, 2020.
FOR FURTHER INFORMATION CONTACT: For
technical questions, contact Florence A.
Carr, Director, Bureau of Trade
Analysis, Federal Maritime
Commission, 800 North Capitol Street
NW, Washington, DC 20573–0001.
Phone: (202) 523–5796. Email:
TradeAnalysis@fmc.gov. For legal
questions, contact William Shakely,
Acting General Counsel, Federal
Maritime Commission, 800 North
Capitol Street NW, Washington, DC
20573–0001. Phone: (202) 523–5740.
Email: GeneralCounsel@fmc.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Introduction
This rulemaking was initiated
pursuant to the Commission’s December
20, 2019 Order in FMC Docket No. P3–
18, which granted in part and denied in
part, a petition by the World Shipping
Council (WSC) for regulatory relief.
Pet’n of the World Shipping Council for
an Exemption from Certain Provisions
of the Shipping Act of 1984, as
amended, and for a Rulemaking
Proceeding, Pet. No. P3–18, 1 F.M.C.2d
504 (FMC Dec. 20, 2019). Specifically,
the Commission granted WSC’s request
for an exemption from the requirement
in 46 U.S.C. 40502(d) that carriers
publish a concise Statement of Essential
Terms (ETs) with each service contract,
determining that an exemption from
section 40502(d) would not result in a
substantial reduction in competition or
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be detrimental to commerce, and further
determined to initiate a rulemaking to
implement the ET publication
exemption.
On February 14, 2020, the
Commission issued a Notice of
Proposed Rulemaking (NPRM) to obtain
public comments regarding its proposal
to implement the exemption by
removing the ET publication
requirements in 46 CFR part 530. 85 FR
8527 (Feb. 14, 2020). The Commission
calculated that the proposed rule would
reduce the regulatory burden associated
with these requirements. The comment
period for the NPRM expired April 14,
2020. Two comments were received,
from the National Industrial
Transportation League (NITL) and the
World Shipping Council.
II. Discussion
As described in more detail below,
the final rule adopts much of the
proposed regulatory text without
substantive change. The final rule
eliminates the requirement in § 530.12
that carriers publish ETs for individual
service contracts. Although the NPRM
proposed replacing this requirement
with a requirement that carriers publish
general service contract rules and
notices as a separate part of the
individual carrier’s automated tariff
system, the Commission has determined
to make this provision optional rather
than mandatory. The final rule also
adopts the following regulatory changes
proposed in the NPRM: (1) Changes to
other sections in Part 530 to reflect the
elimination of the ET publication
requirements; (2) the correction of
outdated references to FMC bureaus and
offices in Part 530; and (3) the
correction of an outdated reference to a
Department of Defense Command.
A. Removal of ET Publication
Requirements
Commenters in the subject
rulemaking did not identify a use for the
publication of ETs corresponding to
individual service contracts, and
therefore, supported their elimination.
NITL strongly supports the
Commission’s NPRM. Agreeing with the
Commission’s assessment that ‘‘the
publication of Statements of Essential
Terms corresponding to individual
service contracts is of questionable
value,’’ NITL believes that the current
ET publication requirements ‘‘impose
significant regulatory costs and burdens
on ocean carriers, without providing
any meaningful benefits to shippers that
outweigh the costs.’’ WSC supports the
NPRM to the extent it would eliminate
the requirement to publish service
contract essential terms.
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Federal Register / Vol. 85, No. 123 / Thursday, June 25, 2020 / Rules and Regulations
Therefore, the Commission has
determined to implement the exemption
from section 40502(d) by revising the
Commission’s regulations at 46 CFR
530.12, which currently require ocean
carriers to publish ETs corresponding to
their individual service contracts in
tariff format.
Consistent with the purpose of the
NPRM, WSC also recommends that the
Commission change the heading of 46
CFR part 530 subpart C in the final rule
to read ‘‘Publication of service contract
rules and notices.’’ The Commission
agrees that it is appropriate to revise the
heading of part 530 subpart C to reflect
the elimination of the publication
requirements for ETs and to reflect and
clarify the ongoing purpose of § 530.12
related to the optional publication of
service contract rules and notices as a
separate part of the individual carrier’s
automated tariff system. The
Commission has therefore made this
change in the final rule.
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B. Publication of Service Contract Rules
and Notices
As the Commission noted in the
NPRM, in addition to the required
Statements of Essential Terms, most, if
not all, ocean carriers include in their
ET publications, the rules and notices
that generally apply to all service
contracts or to a particular subset of
service contracts. Thus, an ocean
carrier’s ET publication may be
comprised of two components: (1) The
rules and notices that generally apply to
all service contracts; and (2) the
required ETs corresponding to
individual service contracts.
As explained in the NPRM, in the
Commission’s experience, there can be
substantial benefits to both ocean
carriers and shippers by publishing a
‘‘blanket’’ rule or notice in the carrier’s
ET tariff publication that applies to
most, or all, service contracts, thereby
eliminating the potential need to
periodically amend hundreds of
individual service contracts.
Consequently, the Commission seeks to
facilitate the ocean carriers’ current
practice of publishing generally
applicable service contract tariff rules
and notices in their ET tariff
publications. The Commission therefore
proposed to amend the existing
requirement in § 530.12 that ocean
carriers must publish ETs corresponding
to individual service contracts and
replace it with a requirement that ocean
carriers publish general service contract
rules and notices as a separate part of
the individual ocean carrier’s automated
tariff system, thereby codifying existing
ocean carrier practice.
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NITL indicated its support for ocean
carriers publishing general service
contract rules and notices in their
carrier automated tariff systems, as this
latter requirement ‘‘will simply
implement a current practice followed
by most ocean carriers.’’ NITL, at 2. As
reflected in NITL’s comments, the
ability to publish such rules and notices
benefits ocean carriers and shippers
alike, by obviating the need to amend
hundreds of service contracts, should
unusual circumstances arise. NITL also
cites with approval the Commission’s
estimate that the proposed amendments
‘‘will significantly reduce
administrative burdens’’ and ‘‘will
benefit all industry stakeholders.’’ Id. at
3.
WSC’s comments suggest, however,
that an ocean carrier’s service contract
rules and notices can be published
under the tariff regulations in 46 CFR
part 520 and that any requirement to
publish service contract rules and
notices in a separate publication under
46 CFR part 530 reflects a new
regulatory burden. The Commission’s
intent in the NPRM was to retain the
existing practice, favored by most ocean
carriers, of allowing service contract
rules and notices to be published in a
separate document under 46 CFR part
530. The Commission has determined
that this can be accomplished by
making carrier publication of such rules
and notices under 46 CFR 530.12
optional rather than mandatory, thereby
eliminating any risk of additional
regulatory burden on carriers. At the
carrier’s discretion, such publication
may be accomplished under the tariff
regulations in part 520 or in a separate
publication under 46 CFR 530.12.
The final rule therefore relieves ocean
carriers of the regulatory burden of ET
publication by eliminating individual
Statements of Essential Terms, while
retaining the ability of ocean carriers to
publish service contract rules and
notices in their ET tariff publications,
should they wish to do so.
III. Regulatory Notices and Analysis
Effective Date
The Administrative Procedure Act
generally requires a minimum of 30
days before a final rule can go into
effect, but excepts from this
requirement: (1) Substantive rules
which grant or recognize an exemption
or relieve a restriction; (2) interpretive
rules and statements of policy; and (3)
when an agency finds good cause for a
shorter period of time and includes
those findings with the rule. 5 U.S.C.
553(d).
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The final rule implements the
Commission’s determination to exempt
ocean carriers from the requirement that
they publish ETs with each service
contract. The final rule also allows, but
does not require, carriers to publish
general service contract rules and
notices as a separate part of the
individual carrier’s automated tariff
system. The remaining amendments are
technical amendments to update the
names of Commission bureaus and
offices as well as those of other
government entities. Because the final
rule grants or recognizes an exemption,
the Commission has determined to
make the rule effective upon
publication.
Congressional Review Act
The rule is not a ‘‘major rule’’ as
defined by the Congressional Review
Act, codified at 5 U.S.C. 801 et seq. The
rule will not result in: (1) An annual
effect on the economy of $100,000,000
or more; (2) a major increase in costs or
prices; or (3) significant adverse effects
on competition, employment,
investment, productivity, innovation, or
the ability of United States-based
companies to compete with foreignbased companies. 5 U.S.C. 804(2).
Regulatory Flexibility Act
The Regulatory Flexibility Act, 5
U.S.C. 601–612, provides that whenever
an agency promulgates a final rule after
being 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 a
final regulatory flexibility analysis
describing the impact of the rule on
small entities, unless the head of the
agency certifies that the rulemaking will
not have a significant economic impact
on a substantial number of small
entities. 5 U.S.C. 604, 605. Accordingly,
the Chairman of the Federal Maritime
Commission certifies that the final rule
will not have a significant impact on a
substantial number of small entities.
The regulated business entities that
would be impacted by the rule are
vessel-operating common carriers. The
Commission has determined that
VOCCs 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.
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38088
Federal Register / Vol. 85, No. 123 / Thursday, June 25, 2020 / Rules and Regulations
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 in Part 530, Service
Contracts, are currently authorized
under OMB Control Number 3072–0065.
In compliance with the PRA, the
Commission submitted the proposed
revised information collections to the
Office of Management and Budget.
Notice of the revised information
collections was published in the
Federal Register and public comments
were invited. See 85 FR 8527 (February
14, 2020). Comments received regarding
the proposed changes, as well as the
Commission’s responses, are discussed
above. No comments specifically
addressed the revised information
collection in Part 530, with the
exception of a reference by one
commenter to the cost savings cited in
the NPRM as a basis for its strong
support.
As noted above, this final rule will
eliminate a substantial and unnecessary
regulatory burden on ocean carriers by
removing the requirement to publish
Statements of Essential Terms
corresponding to individual service
contract filings. The final rule also
includes an option allowing, but not
requiring, carriers to publish general
service contract rules and notices,
which most VOCCs currently include in
their ET tariffs, thereby avoiding the
need to amend hundreds of individual
service contracts, should circumstances
so warrant. As background, of the 147
VOCCs currently serving the U.S. trades,
71 do not file service contracts with the
Commission, and thus would not be
impacted by this rulemaking. Of the 76
VOCC that file service contracts, 25 filed
less than ten original contracts thus far
in FY 2020, with seven of those only
filing one contract this fiscal year.
Among VOCCs that utilize service
contracts more extensively as a pricing
mechanism, only 20 filed over 100
original contracts thus far in FY 2020.
With respect to the cost savings
associated with eliminating the
publication of Statements of Essential
Terms corresponding to original service
contracts and amendments, the
Commission estimates the savings to
VOCCs as roughly 41,048 man-hours,
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for an approximate savings of
$1,987,133 annually.1 Service contract
rules and notices in carrier automated
tariff systems, on the other hand, are
rarely published or revised, inasmuch as
they govern a broad swath of carrier
contracts, and many times are intended
to quickly and efficiently address an ad
hoc industry situation.2 Thus, in any
given year, there may be no new service
contract rules or notices published in a
carrier’s automated tariff system. The
Commission observes that there are
potential benefits associated with
ensuring that carriers have the option to
continue to publish these rules and
notices as a separate part of the
individual carrier’s automated tariff
system, thereby allowing a carrier to
avoid revising hundreds of service
contracts.
Regarding the burden associated with
the filing of service contracts with the
Commission, a substantial majority of
filers, 74 percent, have recognized
greater efficiencies by automating their
service contract filing processes using
the Commission’s ‘‘web services’’
automated filing system. Using FY 2018
figures, the Commission estimates the
remaining burden associated with
service contract filing to be roughly
3,542 man-hours, or $402,088
annually.3 Inclusive of the burden
associated with the optional publication
1 The
Commission’s previous service contract
rulemaking in Docket No. 16–05 estimated the time
associated with preparation of an individual ET
publication as 3 minutes. No commenters opposed
that estimate. More recently, the Commission
informally interviewed two major tariff publishers
that file service contracts and publish ETs for
multiple VOCCs. These tariff publishers estimated
the time required to prepare an ETs to be 3 to 6
minutes. The larger of the two tariff publishers
reported that their 3-minute preparation time was
due to its proprietary technological efficiencies. The
above-referenced savings are based on the 3-minute
preparation time estimate, using the Commission’s
most recent fiscal year’s filing statistics for new
contracts and amendments. In FY 2018, 47,962 new
service contracts and 772,803 amendments were
filed.
2 As one example, a major ocean carrier published
a blanket notice in its ET tariff applying to
hundreds of its service contracts when it deployed
an extra loader vessel to meet unexpected shipper
demand. This notice allowed existing contract rates
applying to a specifically named service string to
also apply to cargo moving on the extra loader
vessel, thereby eliminating the VOCC’s burden of
amending hundreds of service contracts.
3 In the Commission’s previous service contract
rulemaking in Docket No. 16–05, each service
contract filing (new or amendment) was estimated
to take 3 minutes. Since that rulemaking, carriers
and tariff publishers comprising the highest volume
service contract filers have continued automating
their filing processes. Filers that implemented the
Commission’s ‘‘web services’’ automated filing
process have advised that minimal software
programming was required to facilitate the
automated upload of service contracts and
amendments. Once automated, contract data can be
transmitted into SERVCON in a matter of seconds,
without need for human intervention.
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of service contract rules under
§ 530.12,4 the entire burden associated
with this information collection is
calculated as $3,482,351 for contract
filers, a substantial reduction.
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 amends
the requirements related to the
publication of Essential Terms
associated with service contracts. This
rulemaking thus falls within the
categorical exclusion for actions related
to the receipt service contracts
(§ 504.4(a)(5)). Therefore, no
environmental assessment or
environmental impact statement is
required.
Executive Order 12988 (Civil Justice
Reform)
This rule meets the applicable
standards in E.O. 12988 titled, ‘‘Civil
Justice Reform,’’ to minimize litigation,
eliminate ambiguity, and reduce
burden.
Regulation Identifier Number
The Commission assigns a regulation
identifier number (RIN) to each
regulatory action listed in the Unified
Agenda of Federal Regulatory and
Deregulatory Actions (Unified Agenda).
The Regulatory Information Service
Center publishes the Unified Agenda in
April and October of each year. You
may use the RIN contained in the
heading at the beginning of this
document to find this action in the
Unified Agenda, at https://
www.reginfo.gov/public/do/
eAgendaMain.
List of Subjects in 46 CFR Part 530
Freight, Maritime carriers, Report and
recordkeeping requirements.
For the reasons stated in the
preamble, the Federal Maritime
Commission amends 46 CFR part 530 as
follows:
PART 530—SERVICE CONTRACTS
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.
4 In our OMB filing related to this Information
Collection, the burden of maintaining service
contract rules and notices is estimated at 87 hours.
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Federal Register / Vol. 85, No. 123 / Thursday, June 25, 2020 / Rules and Regulations
2. Amend § 530.1 by revising the first
sentence to read as follows:
■
§ 530.1
Purpose.
The purpose of this part is to facilitate
the filing of service contracts as required
by section 8(c) of the Shipping Act of
1984 (‘‘the Act’’) (46 U.S.C. 40502).
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■ 3. Amend § 530.3 by revising
paragraphs (d) and (o) and removing
paragraph (s) to read as follows:
§ 530.3
Definitions.
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(d) BTA means the Commission’s
Bureau of Trade Analysis or its
successor bureau.
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(o) OIT means the Commission’s
Office of Information Technology.
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■ 4. Amend § 530.5 by revising
paragraphs (a) and (c)(1) to read as
follows:
§ 530.5
Duty to file.
(a) The duty under this part to file
service contracts, amendments, and
notices shall be upon the individual
carrier party or parties participating or
eligible to participate in the service
contract.
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(c) * * *
(1) Application. Authority to file or
delegate the authority to file must be
requested by a responsible official of the
service contract carrier in writing by
submitting to BTA the Registration
Form (FMC–83) in Exhibit 1 to this part.
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■ 5. Amend § 530.8 by revising
paragraph (d) introductory text and
removing paragraph (d)(4) to read as
follows:
§ 530.8
Service contracts.
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(d) Other requirements. Every service
contract filed with BTA shall include, as
set forth in appendix A to this part:
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§ 530.10
[Amended]
6. Amend § 530.10 by removing
paragraph (f).
■ 7. Revise subpart C heading to read as
follows:
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Subpart C—Publication of service
contract rules and notices.
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8. Revise § 530.12 to read as follows:
§ 530.12
Exceptions and exemptions.
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(b) * * *
(2) Department of Defense cargo.
Transportation of U.S. Department of
Defense cargo moving in foreign
commerce under terms and conditions
negotiated and approved by the Surface
Deployment and Distribution Command
and published in a universal service
contract. An exact copy of the universal
service contract, including any
amendments thereto, shall be filed with
the Commission as soon as it becomes
available.
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■ 10. Amend § 530.15 by revising
paragraph (c) to read as follows:
Recordkeeping and audit.
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(a) Location—(1) Generally. A
statement of service contract rules and
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§ 530.13
§ 530.15
Rules and notices.
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notices may be published as a separate
part of the individual ocean common
carrier’s automated tariff system.
(2) Multi-party service contracts. For
service contracts in which more than
one carrier participates or is eligible to
participate, a statement of service
contract rules and notices may be
published:
(i) If the service contract is entered
into under the authority of a conference
agreement, then in that conference’s
automated tariff system;
(ii) If the service contract is entered
into under the authority of a nonconference agreement, then in each of
the participating or eligible-toparticipate carriers’ individual
automated tariff systems, clearly
indicating the relevant FMC-assigned
agreement number.
(b) Certainty of terms. A statement of
service contract rules and notices
described in paragraph (a) of this
section may not:
(1) Be uncertain, vague, or ambiguous;
or
(2) Make reference to terms not
explicitly detailed in the statement of
service contract rules and notices,
unless those terms are contained in a
publication widely available to the
public and well known within the
industry.
(c) Agents. Common carriers,
conferences, or agreements may use
agents to meet their publication
requirements under this part.
(d) Commission listing. The
Commission will publish on its website,
www.fmc.gov, a listing of the locations
of all service contract rules and notices.
■ 9. Amend § 530.13 by revising
paragraph (b)(2) to read as follows:
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(c) Production for audit within 30
days of request. Every carrier or
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38089
agreement shall, upon written request of
the FMC’s Director, Bureau of
Enforcement, any Area Representative
or the Director, Bureau of Trade
Analysis, submit copies of requested
original service contracts or their
associated records within thirty (30)
days of the date of the request.
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Appendix A to Part 530 [Amended]
11. In Appendix A revise all
references to ‘‘BTCL’’ to read ‘‘BTA’’
and revise all references to ‘‘OIRM’’ to
read ‘‘OIT’’.
■
By the Commission.
Rachel E. Dickon,
Secretary.
[FR Doc. 2020–13045 Filed 6–24–20; 8:45 am]
BILLING CODE P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 27
[GN Docket No. 18–122; FCC 20–22; FRS
16812]
Expanding Flexible Use of the 3.7 to
4.2 GHz Band; Correction
Federal Communications
Commission.
ACTION: Final rule; announcement of
compliance date; correction.
AGENCY:
The Federal Communications
Commission (Commission) is correcting
the compliance date announced in a
document that appeared in the Federal
Register on May 27, 2020. The
document announced that the Office of
Management and Budget (OMB) had
approved the information collection
requirements associated with the
eligible space station operator
accelerated relocation election, eligible
space station operator transition plan,
and incumbent earth station lump sum
payment election rules adopted in the
Commission’s 3.7 GHz Report and
Order, FCC 20–22, and that compliance
with the new rules is now required.
This document corrects the effective
and compliance dates for these new
information collection requirements.
DATES: June 25, 2020.
FOR FURTHER INFORMATION CONTACT:
Anna Gentry, Mobility Division,
Wireless Telecommunications Bureau,
at (202) 418–7769 or Anna.Gentry@
fcc.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Correction
In FR Doc. 2020–10167 appearing on
page 31704 in the Federal Register of
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[Federal Register Volume 85, Number 123 (Thursday, June 25, 2020)]
[Rules and Regulations]
[Pages 38086-38089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13045]
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FEDERAL MARITIME COMMISSION
46 CFR Part 530
[Docket No. 20-02]
RIN 3072-AC80
Service Contracts
AGENCY: Federal Maritime Commission.
ACTION: Final rule.
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SUMMARY: The Federal Maritime Commission (FMC or Commission) amends its
regulations governing service contracts to eliminate the requirement
that ocean carriers publish a concise statement of essential terms with
each service contract. The rule will reduce regulatory burden.
DATES: Effective June 25, 2020.
FOR FURTHER INFORMATION CONTACT: For technical questions, contact
Florence A. Carr, Director, Bureau of Trade Analysis, Federal Maritime
Commission, 800 North Capitol Street NW, Washington, DC 20573-0001.
Phone: (202) 523-5796. Email: [email protected]. For legal
questions, contact William Shakely, Acting General Counsel, Federal
Maritime Commission, 800 North Capitol Street NW, Washington, DC 20573-
0001. Phone: (202) 523-5740. Email: [email protected].
SUPPLEMENTARY INFORMATION:
I. Introduction
This rulemaking was initiated pursuant to the Commission's December
20, 2019 Order in FMC Docket No. P3-18, which granted in part and
denied in part, a petition by the World Shipping Council (WSC) for
regulatory relief. Pet'n of the World Shipping Council for an Exemption
from Certain Provisions of the Shipping Act of 1984, as amended, and
for a Rulemaking Proceeding, Pet. No. P3-18, 1 F.M.C.2d 504 (FMC Dec.
20, 2019). Specifically, the Commission granted WSC's request for an
exemption from the requirement in 46 U.S.C. 40502(d) that carriers
publish a concise Statement of Essential Terms (ETs) with each service
contract, determining that an exemption from section 40502(d) would not
result in a substantial reduction in competition or be detrimental to
commerce, and further determined to initiate a rulemaking to implement
the ET publication exemption.
On February 14, 2020, the Commission issued a Notice of Proposed
Rulemaking (NPRM) to obtain public comments regarding its proposal to
implement the exemption by removing the ET publication requirements in
46 CFR part 530. 85 FR 8527 (Feb. 14, 2020). The Commission calculated
that the proposed rule would reduce the regulatory burden associated
with these requirements. The comment period for the NPRM expired April
14, 2020. Two comments were received, from the National Industrial
Transportation League (NITL) and the World Shipping Council.
II. Discussion
As described in more detail below, the final rule adopts much of
the proposed regulatory text without substantive change. The final rule
eliminates the requirement in Sec. 530.12 that carriers publish ETs
for individual service contracts. Although the NPRM proposed replacing
this requirement with a requirement that carriers publish general
service contract rules and notices as a separate part of the individual
carrier's automated tariff system, the Commission has determined to
make this provision optional rather than mandatory. The final rule also
adopts the following regulatory changes proposed in the NPRM: (1)
Changes to other sections in Part 530 to reflect the elimination of the
ET publication requirements; (2) the correction of outdated references
to FMC bureaus and offices in Part 530; and (3) the correction of an
outdated reference to a Department of Defense Command.
A. Removal of ET Publication Requirements
Commenters in the subject rulemaking did not identify a use for the
publication of ETs corresponding to individual service contracts, and
therefore, supported their elimination. NITL strongly supports the
Commission's NPRM. Agreeing with the Commission's assessment that ``the
publication of Statements of Essential Terms corresponding to
individual service contracts is of questionable value,'' NITL believes
that the current ET publication requirements ``impose significant
regulatory costs and burdens on ocean carriers, without providing any
meaningful benefits to shippers that outweigh the costs.'' WSC supports
the NPRM to the extent it would eliminate the requirement to publish
service contract essential terms.
[[Page 38087]]
Therefore, the Commission has determined to implement the exemption
from section 40502(d) by revising the Commission's regulations at 46
CFR 530.12, which currently require ocean carriers to publish ETs
corresponding to their individual service contracts in tariff format.
Consistent with the purpose of the NPRM, WSC also recommends that
the Commission change the heading of 46 CFR part 530 subpart C in the
final rule to read ``Publication of service contract rules and
notices.'' The Commission agrees that it is appropriate to revise the
heading of part 530 subpart C to reflect the elimination of the
publication requirements for ETs and to reflect and clarify the ongoing
purpose of Sec. 530.12 related to the optional publication of service
contract rules and notices as a separate part of the individual
carrier's automated tariff system. The Commission has therefore made
this change in the final rule.
B. Publication of Service Contract Rules and Notices
As the Commission noted in the NPRM, in addition to the required
Statements of Essential Terms, most, if not all, ocean carriers include
in their ET publications, the rules and notices that generally apply to
all service contracts or to a particular subset of service contracts.
Thus, an ocean carrier's ET publication may be comprised of two
components: (1) The rules and notices that generally apply to all
service contracts; and (2) the required ETs corresponding to individual
service contracts.
As explained in the NPRM, in the Commission's experience, there can
be substantial benefits to both ocean carriers and shippers by
publishing a ``blanket'' rule or notice in the carrier's ET tariff
publication that applies to most, or all, service contracts, thereby
eliminating the potential need to periodically amend hundreds of
individual service contracts. Consequently, the Commission seeks to
facilitate the ocean carriers' current practice of publishing generally
applicable service contract tariff rules and notices in their ET tariff
publications. The Commission therefore proposed to amend the existing
requirement in Sec. 530.12 that ocean carriers must publish ETs
corresponding to individual service contracts and replace it with a
requirement that ocean carriers publish general service contract rules
and notices as a separate part of the individual ocean carrier's
automated tariff system, thereby codifying existing ocean carrier
practice.
NITL indicated its support for ocean carriers publishing general
service contract rules and notices in their carrier automated tariff
systems, as this latter requirement ``will simply implement a current
practice followed by most ocean carriers.'' NITL, at 2. As reflected in
NITL's comments, the ability to publish such rules and notices benefits
ocean carriers and shippers alike, by obviating the need to amend
hundreds of service contracts, should unusual circumstances arise. NITL
also cites with approval the Commission's estimate that the proposed
amendments ``will significantly reduce administrative burdens'' and
``will benefit all industry stakeholders.'' Id. at 3.
WSC's comments suggest, however, that an ocean carrier's service
contract rules and notices can be published under the tariff
regulations in 46 CFR part 520 and that any requirement to publish
service contract rules and notices in a separate publication under 46
CFR part 530 reflects a new regulatory burden. The Commission's intent
in the NPRM was to retain the existing practice, favored by most ocean
carriers, of allowing service contract rules and notices to be
published in a separate document under 46 CFR part 530. The Commission
has determined that this can be accomplished by making carrier
publication of such rules and notices under 46 CFR 530.12 optional
rather than mandatory, thereby eliminating any risk of additional
regulatory burden on carriers. At the carrier's discretion, such
publication may be accomplished under the tariff regulations in part
520 or in a separate publication under 46 CFR 530.12.
The final rule therefore relieves ocean carriers of the regulatory
burden of ET publication by eliminating individual Statements of
Essential Terms, while retaining the ability of ocean carriers to
publish service contract rules and notices in their ET tariff
publications, should they wish to do so.
III. Regulatory Notices and Analysis
Effective Date
The Administrative Procedure Act generally requires a minimum of 30
days before a final rule can go into effect, but excepts from this
requirement: (1) Substantive rules which grant or recognize an
exemption or relieve a restriction; (2) interpretive rules and
statements of policy; and (3) when an agency finds good cause for a
shorter period of time and includes those findings with the rule. 5
U.S.C. 553(d).
The final rule implements the Commission's determination to exempt
ocean carriers from the requirement that they publish ETs with each
service contract. The final rule also allows, but does not require,
carriers to publish general service contract rules and notices as a
separate part of the individual carrier's automated tariff system. The
remaining amendments are technical amendments to update the names of
Commission bureaus and offices as well as those of other government
entities. Because the final rule grants or recognizes an exemption, the
Commission has determined to make the rule effective upon publication.
Congressional Review Act
The rule is not a ``major rule'' as defined by the Congressional
Review Act, codified at 5 U.S.C. 801 et seq. The rule will not result
in: (1) An annual effect on the economy of $100,000,000 or more; (2) a
major increase in costs or prices; or (3) significant adverse effects
on competition, employment, investment, productivity, innovation, or
the ability of United States-based companies to compete with foreign-
based companies. 5 U.S.C. 804(2).
Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601-612, provides that
whenever an agency promulgates a final rule after being 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 a final regulatory flexibility analysis
describing the impact of the rule on small entities, unless the head of
the agency certifies that the rulemaking will not have a significant
economic impact on a substantial number of small entities. 5 U.S.C.
604, 605. Accordingly, the Chairman of the Federal Maritime Commission
certifies that the final rule will not have a significant impact on a
substantial number of small entities. The regulated business entities
that would be impacted by the rule are vessel-operating common
carriers. The Commission has determined that VOCCs 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.
[[Page 38088]]
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 in Part 530, Service
Contracts, are currently authorized under OMB Control Number 3072-0065.
In compliance with the PRA, the Commission submitted the proposed
revised information collections to the Office of Management and Budget.
Notice of the revised information collections was published in the
Federal Register and public comments were invited. See 85 FR 8527
(February 14, 2020). Comments received regarding the proposed changes,
as well as the Commission's responses, are discussed above. No comments
specifically addressed the revised information collection in Part 530,
with the exception of a reference by one commenter to the cost savings
cited in the NPRM as a basis for its strong support.
As noted above, this final rule will eliminate a substantial and
unnecessary regulatory burden on ocean carriers by removing the
requirement to publish Statements of Essential Terms corresponding to
individual service contract filings. The final rule also includes an
option allowing, but not requiring, carriers to publish general service
contract rules and notices, which most VOCCs currently include in their
ET tariffs, thereby avoiding the need to amend hundreds of individual
service contracts, should circumstances so warrant. As background, of
the 147 VOCCs currently serving the U.S. trades, 71 do not file service
contracts with the Commission, and thus would not be impacted by this
rulemaking. Of the 76 VOCC that file service contracts, 25 filed less
than ten original contracts thus far in FY 2020, with seven of those
only filing one contract this fiscal year. Among VOCCs that utilize
service contracts more extensively as a pricing mechanism, only 20
filed over 100 original contracts thus far in FY 2020.
With respect to the cost savings associated with eliminating the
publication of Statements of Essential Terms corresponding to original
service contracts and amendments, the Commission estimates the savings
to VOCCs as roughly 41,048 man-hours, for an approximate savings of
$1,987,133 annually.\1\ Service contract rules and notices in carrier
automated tariff systems, on the other hand, are rarely published or
revised, inasmuch as they govern a broad swath of carrier contracts,
and many times are intended to quickly and efficiently address an ad
hoc industry situation.\2\ Thus, in any given year, there may be no new
service contract rules or notices published in a carrier's automated
tariff system. The Commission observes that there are potential
benefits associated with ensuring that carriers have the option to
continue to publish these rules and notices as a separate part of the
individual carrier's automated tariff system, thereby allowing a
carrier to avoid revising hundreds of service contracts.
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\1\ The Commission's previous service contract rulemaking in
Docket No. 16-05 estimated the time associated with preparation of
an individual ET publication as 3 minutes. No commenters opposed
that estimate. More recently, the Commission informally interviewed
two major tariff publishers that file service contracts and publish
ETs for multiple VOCCs. These tariff publishers estimated the time
required to prepare an ETs to be 3 to 6 minutes. The larger of the
two tariff publishers reported that their 3-minute preparation time
was due to its proprietary technological efficiencies. The above-
referenced savings are based on the 3-minute preparation time
estimate, using the Commission's most recent fiscal year's filing
statistics for new contracts and amendments. In FY 2018, 47,962 new
service contracts and 772,803 amendments were filed.
\2\ As one example, a major ocean carrier published a blanket
notice in its ET tariff applying to hundreds of its service
contracts when it deployed an extra loader vessel to meet unexpected
shipper demand. This notice allowed existing contract rates applying
to a specifically named service string to also apply to cargo moving
on the extra loader vessel, thereby eliminating the VOCC's burden of
amending hundreds of service contracts.
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Regarding the burden associated with the filing of service
contracts with the Commission, a substantial majority of filers, 74
percent, have recognized greater efficiencies by automating their
service contract filing processes using the Commission's ``web
services'' automated filing system. Using FY 2018 figures, the
Commission estimates the remaining burden associated with service
contract filing to be roughly 3,542 man-hours, or $402,088 annually.\3\
Inclusive of the burden associated with the optional publication of
service contract rules under Sec. 530.12,\4\ the entire burden
associated with this information collection is calculated as $3,482,351
for contract filers, a substantial reduction.
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\3\ In the Commission's previous service contract rulemaking in
Docket No. 16-05, each service contract filing (new or amendment)
was estimated to take 3 minutes. Since that rulemaking, carriers and
tariff publishers comprising the highest volume service contract
filers have continued automating their filing processes. Filers that
implemented the Commission's ``web services'' automated filing
process have advised that minimal software programming was required
to facilitate the automated upload of service contracts and
amendments. Once automated, contract data can be transmitted into
SERVCON in a matter of seconds, without need for human intervention.
\4\ In our OMB filing related to this Information Collection,
the burden of maintaining service contract rules and notices is
estimated at 87 hours.
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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 amends the
requirements related to the publication of Essential Terms associated
with service contracts. This rulemaking thus falls within the
categorical exclusion for actions related to the receipt service
contracts (Sec. 504.4(a)(5)). Therefore, no environmental assessment
or environmental impact statement is required.
Executive Order 12988 (Civil Justice Reform)
This rule meets the applicable standards in E.O. 12988 titled,
``Civil Justice Reform,'' to minimize litigation, eliminate ambiguity,
and reduce burden.
Regulation Identifier Number
The Commission assigns a regulation identifier number (RIN) to each
regulatory action listed in the Unified Agenda of Federal Regulatory
and Deregulatory Actions (Unified Agenda). The Regulatory Information
Service Center publishes the Unified Agenda in April and October of
each year. You may use the RIN contained in the heading at the
beginning of this document to find this action in the Unified Agenda,
at https://www.reginfo.gov/public/do/eAgendaMain.
List of Subjects in 46 CFR Part 530
Freight, Maritime carriers, Report and recordkeeping requirements.
For the reasons stated in the preamble, the Federal Maritime
Commission amends 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.
[[Page 38089]]
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2. Amend Sec. 530.1 by revising the first sentence to read as follows:
Sec. 530.1 Purpose.
The purpose of this part is to facilitate the filing of service
contracts as required by section 8(c) of the Shipping Act of 1984
(``the Act'') (46 U.S.C. 40502). * * *
0
3. Amend Sec. 530.3 by revising paragraphs (d) and (o) and removing
paragraph (s) to read as follows:
Sec. 530.3 Definitions.
* * * * *
(d) BTA means the Commission's Bureau of Trade Analysis or its
successor bureau.
* * * * *
(o) OIT means the Commission's Office of Information Technology.
* * * * *
0
4. Amend Sec. 530.5 by revising paragraphs (a) and (c)(1) to read as
follows:
Sec. 530.5 Duty to file.
(a) The duty under this part to file service contracts, amendments,
and notices shall be upon the individual carrier party or parties
participating or eligible to participate in the service contract.
* * * * *
(c) * * *
(1) Application. Authority to file or delegate the authority to
file must be requested by a responsible official of the service
contract carrier in writing by submitting to BTA the Registration Form
(FMC-83) in Exhibit 1 to this part.
* * * * *
0
5. Amend Sec. 530.8 by revising paragraph (d) introductory text and
removing paragraph (d)(4) to read as follows:
Sec. 530.8 Service contracts.
* * * * *
(d) Other requirements. Every service contract filed with BTA shall
include, as set forth in appendix A to this part:
* * * * *
Sec. 530.10 [Amended]
0
6. Amend Sec. 530.10 by removing paragraph (f).
0
7. Revise subpart C heading to read as follows:
Subpart C--Publication of service contract rules and notices.
0
8. Revise Sec. 530.12 to read as follows:
Sec. 530.12 Rules and notices.
(a) Location--(1) Generally. A statement of service contract rules
and notices may be published as a separate part of the individual ocean
common carrier's automated tariff system.
(2) Multi-party service contracts. For service contracts in which
more than one carrier participates or is eligible to participate, a
statement of service contract rules and notices may be published:
(i) If the service contract is entered into under the authority of
a conference agreement, then in that conference's automated tariff
system;
(ii) If the service contract is entered into under the authority of
a non-conference agreement, then in each of the participating or
eligible-to-participate carriers' individual automated tariff systems,
clearly indicating the relevant FMC-assigned agreement number.
(b) Certainty of terms. A statement of service contract rules and
notices described in paragraph (a) of this section may not:
(1) Be uncertain, vague, or ambiguous; or
(2) Make reference to terms not explicitly detailed in the
statement of service contract rules and notices, unless those terms are
contained in a publication widely available to the public and well
known within the industry.
(c) Agents. Common carriers, conferences, or agreements may use
agents to meet their publication requirements under this part.
(d) Commission listing. The Commission will publish on its website,
www.fmc.gov, a listing of the locations of all service contract rules
and notices.
0
9. Amend Sec. 530.13 by revising paragraph (b)(2) to read as follows:
Sec. 530.13 Exceptions and exemptions.
* * * * *
(b) * * *
(2) Department of Defense cargo. Transportation of U.S. Department
of Defense cargo moving in foreign commerce under terms and conditions
negotiated and approved by the Surface Deployment and Distribution
Command and published in a universal service contract. An exact copy of
the universal service contract, including any amendments thereto, shall
be filed with the Commission as soon as it becomes available.
* * * * *
0
10. Amend Sec. 530.15 by revising paragraph (c) to read as follows:
Sec. 530.15 Recordkeeping and audit.
* * * * *
(c) Production for audit within 30 days of request. Every carrier
or agreement shall, upon written request of the FMC's Director, Bureau
of Enforcement, any Area Representative or the Director, Bureau of
Trade Analysis, submit copies of requested original service contracts
or their associated records within thirty (30) days of the date of the
request.
* * * * *
Appendix A to Part 530 [Amended]
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11. In Appendix A revise all references to ``BTCL'' to read ``BTA'' and
revise all references to ``OIRM'' to read ``OIT''.
By the Commission.
Rachel E. Dickon,
Secretary.
[FR Doc. 2020-13045 Filed 6-24-20; 8:45 am]
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