Definition of Unreasonable Refusal To Deal or Negotiate With Respect to Vessel Space Accommodations Provided by an Ocean Common Carrier, 59648-59672 [2024-16148]

Agencies

• Federal Maritime Commission

[Federal Register Volume 89, Number 141 (Tuesday, July 23, 2024)]
[Rules and Regulations]
[Pages 59648-59672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16148]


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FEDERAL MARITIME COMMISSION

46 CFR Part 542

[Docket No. FMC-2023-0010]
RIN 3072-AC92


Definition of Unreasonable Refusal To Deal or Negotiate With 
Respect to Vessel Space Accommodations Provided by an Ocean Common 
Carrier

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

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SUMMARY: The Federal Maritime Commission (FMC or Commission) is issuing 
regulations to implement the Ocean Shipping Reform Act of 2022's 
prohibition against unreasonable refusals of cargo space accommodations 
when available and unreasonable refusals to deal or negotiate with 
respect to vessel space accommodations by ocean common carriers. This 
final rule adopts with changes the supplemental notice of proposed 
rulemaking published on June 14, 2023. This rule establishes the 
necessary elements for the FMC to apply Federal law with respect to 
refusals of cargo space accommodations when available. It also 
establishes the necessary elements for the FMC to apply Federal law 
with respect to refusals of vessel space accommodations. This rule 
applies to complaints brought before the FMC by a private party, as 
well as enforcement cases brought by the Commission.

DATES: This final rule is effective on September 23, 2024, except for 
instruction 2 adding Sec.  542.1(j), and instruction 3 adding Sec.  
542.99, which are delayed. The Commission will publish a document in 
the Federal Register announcing the effective date of those amendments.

ADDRESSES: To view background documents or comments received, you may 
use the Federal eRulemaking Portal at www.regulations.gov under Docket 
No. FMC-2023-0010.

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

SUPPLEMENTARY INFORMATION:

I. Background

A. Procedural History

    The Ocean Shipping Reform Act of 2022 (OSRA 2022), Public Law 117-
146, was enacted on June 16, 2022. OSRA 2022 amended various statutory 
provisions contained in part A of subtitle IV of title 46, United 
States Code. OSRA 2022 made clear that the categorical refusal by an 
ocean common carrier, alone or in conjunction with another person, 
directly or indirectly, to accommodate U.S. exports, without 
demonstrating that the refusal is reasonable, is a violation of the 
Shipping Act. By definition, not all refusals will necessarily be a 
violation. Whether a refusal to deal or a refusal to negotiate falls 
within the scope of section 41104(a)(10), or a refusal of cargo space 
accommodations falls within the scope of section 41104(a)(3), depends 
upon the particular circumstances of a given case.
    Section 7(d) of OSRA 2022 requires the Commission, in consultation 
with the United States Coast Guard, to initiate and complete a 
rulemaking to define the phrase ``unreasonable refusal to deal or 
negotiate with respect to vessel space accommodations'' provided by an 
ocean common carrier to work in conjunction with 46 U.S.C. 
41104(a)(10). In response to this requirement, on September 21, 2022, 
the FMC issued a notice of proposed rulemaking (NPRM) that proposed 
adding a new part 542 under title 46 of the Code of Federal Regulations 
(CFR), which would work in conjunction with 46 U.S.C. 41104(a)(10).\1\ 
The proposal considered the common carriage roots of 46 U.S.C. 
41104(a)(10), as well as the overall competition basis of the 
Commission's authority.\2\
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    \1\ 87 FR 57674.
    \2\ 87 FR 57674, 57676.
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    On June 14, 2023, after reviewing the comments received in response 
to the NPRM, the Commission issued a revised and expanded supplemental 
notice of proposed rulemaking (SNPRM). In addition to addressing OSRA 
2022's amendment to 46 U.S.C. 41104(a)(10), the SNPRM also addressed 
OSRA 2022's amendment to 46 U.S.C. 41104(a)(3), which prohibits a 
common carrier from unreasonably refusing cargo space accommodations 
when available. The restrictions that 46 U.S.C. 41104 (a)(3) and 
(a)(10) impose on ocean common carriers are distinct but closely 
related. Both provisions address refusals by ocean common carriers to 
accommodate shippers' attempts to secure overseas transportation for 
their cargo. The distinction between the conduct covered by these two 
provisions is timing, more specifically whether the refusal occurred 
while the parties were still negotiating and attempting to reach a deal 
on service terms and conditions (negotiation stage), or after a deal 
was reached (execution stage). If the refusal occurred at the execution 
stage, after the parties reached a deal or mutually agreed on service 
terms and conditions, then 46 U.S.C. 41104(a)(3) applies. If the 
refusal occurred at the negotiation stage, before the parties reached a 
deal or mutually agreed on service terms and conditions, then 46 U.S.C. 
41104(a)(10) applies. Interpreting these related provisions in a single 
rulemaking allows the Commission to delineate the types of refusal 
conduct covered by 46 U.S.C. 41104 (a)(3) and (a)(10) and highlight the 
differences between them. As discussed in the SNPRM, restricting the 
rulemaking to refusals to deal or negotiate under 46 U.S.C. 
41104(a)(10) would not address the reliability issues that commenters 
on the NPRM identified as a critical and a driving factor impeding 
their ability to ship cargo overseas. Shippers impacted by unlawful 
refusals to accommodate their requests for vessel space accommodations 
have been able to bring a cause of action against ocean common carriers 
since the OSRA 2022 amendments took effect immediately in

[[Page 59649]]

June 2022. They may find it more difficult, however, to plead and 
prevail on those claims without implementing regulations from the 
Commission defining the elements and statutory terms. Parties may also 
find it more difficult to identify and litigate claims for unreasonable 
refusals under 46 U.S.C. 41104(a)(3) without a clearer indication from 
the Commission of what conduct is covered by that provision as 
distinguished from 46 U.S.C. 41104(a)(10). Clearly delineating these 
distinctions as part of the current rulemaking lessens the time and 
resources that shippers, carriers, and the Commission will otherwise 
need to devote to defining these concepts in individual cases. Defining 
the elements and terms used in 46 U.S.C. 41104(a)(3) as part of this 
rulemaking is also important because, in practice, it may be difficult 
to discern whether a carrier's refusal was at the negotiation or 
execution stage. Additional guidance from the Commission now may help 
avoid needless disputes over that issue.
    The Commission acknowledges that it has not previously recognized a 
temporal distinction between (a)(3) and (a)(10). However, as discussed 
in the SNPRM, reading the conduct governed by 46 U.S.C. 41104(a)(10) to 
include the same conduct prohibited by 46 U.S.C. 41104(a)(3), as 
amended by OSRA 2022, would violate the canon of statutory construction 
against construing statutes in a manner that renders language 
superfluous or meaningless. Previously, FMC distinguished (a)(3) from 
other prohibitions in 41104 based on the shipper's involvement in 
protected activity.\3\ OSRA 2022, however, removed the protected entity 
and the protected activity language from (a)(3).\4\ Therefore, there 
must be some other means of distinguishing the two provisions.
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    \3\ See Federal Maritime Commission, Statement of the Commission 
on Retaliation (Dec. 28, 2021) (available at https://www2.fmc.gov/readingroom/docs/21-15/21-15_Policy_Retaliation.pdf/) (``The 
Commission also acknowledges that Sec.  41104(a)(3) should not be 
read so expansively that it renders other prohibitions in Chapter 
411 of Title 46 superfluous. Section 41104 of Title 46, for 
instance, only prohibits specific types of unfair or unjustly 
discriminatory conduct. Section 41104(a)(3) prohibits a common 
carrier from ``resort[ing] to other unfair or unjustly 
discriminatory methods . . . for any other reason.'' The latter does 
not swallow the other prohibitions, however, because it is not a 
flat prohibition on all unfair or unjustly discriminatory conduct. A 
complainant must show that a carrier engaged in prohibited conduct 
(refusing cargo space accommodations or other unfair or unjustly 
discriminatory methods), with respect to a protected entity 
(shipper), because the protected entity engaged in protected 
activity (patronizing other carriers, filing a complaint, or other 
activities of the same class.'' (internal citations omitted)).
    \4\ The protected activity language did remain with the 
prohibition on retaliation, now found at 46 U.S.C. 41102(d).
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    Consistent with section 7(d) of OSRA 2022, the Commission has 
consulted with the Coast Guard regarding this rulemaking. The Coast 
Guard offered no objections to the Commission's approach.

B. Scope of the Rule

    There are two types of common carriers--vessel-operating common 
carriers (VOCCs) and non-vessel-operating common carriers (NVOCCs).\5\ 
Section 41104 applies generally to both VOCCs and NVOCCs; this rule, 
however, only applies to VOCCs. The specific prohibition in 46 U.S.C. 
41104(a)(10) that is the subject of this rule applies only to VOCCs 
because ``ocean common carrier'' is defined as a vessel-operating 
common carrier in the Shipping Act.\6\ Although 46 U.S.C. 41104(a)(3) 
and 46 U.S.C. 41104(a)(10) apply to both VOCCs and NVOCCs, this rule 
only applies to VOCCs to mirror the scope of the specific prohibition 
in 41104(a)(10) added by OSRA 2022.\7\ The limitation in scope of this 
rule to VOCCs does not in any way limit the application of 46 U.S.C. 
41104(a)(3) or 46 U.S.C. 41104(a)(10). NVOCCs remain legally liable 
under 46 U.S.C. 41104(a)(3) and 46 U.S.C. 41104(a)(10) for violations 
of the Shipping Act.
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    \5\ 46 U.S.C. 40102.
    \6\ 46 U.S.C. 40102(18) (definition of ``ocean common 
carrier'').
    \7\ OSRA 2022 added ``including with respect to vessel space 
accommodations provided by an ocean common carrier'' to the general 
prohibition imposed on all common carriers to not ``unreasonably 
refuse to deal or negotiate.'' Thus, while the general prohibition 
of (a)(10) against unreasonably refusing to deal or negotiate 
applies to all common carriers, the specific prohibition against 
refusing to deal or negotiate ``with respect to vessel space 
accommodations'' is limited to acts by ocean common carriers (i.e., 
VOCCs).
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    Similarly, 41104 applies generally to roll-on/roll-off cargo, bulk 
cargo, and containerized cargo. This rule, however, only applies to 
containerized cargo because the sorts of issues that arose around 
container availability during the pandemic do not appear to have been 
present, or at least not present to the same extent, for roll-on/roll-
off cargo or bulk cargo. While this rule is limited to containerized 
cargo, it does not preclude refusal to deal cases arising in the 
context of roll-on/roll-off cargo or bulk cargo--the framework in this 
rule could be applied to such cases.\8\
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    \8\ See 87 FR 57674, 57676, FN 14.
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    As noted in the SNPRM, the Commission will address, at a different 
time, the statutory requirement in section 7(c) of OSRA 2022 to 
complete a rulemaking defining ``unfair or unjustly discriminatory 
methods'' in 46 U.S.C. 41104(a)(3).
    The common carrier prohibitions in 46 U.S.C. 41104 do not 
distinguish between U.S. exports and imports. This rule applies to 
both.

C. Challenges Faced by U.S. Exporters

    One basis, but not the only one, for some of the OSRA 2022 
provisions were the challenges expressed by U.S. exporters trying to 
obtain vessel space to ship their products.9 10
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    \9\ OSRA 2022 originated as S.3580 and the bill is partially 
summarized as: ``This bill revises requirements governing ocean 
shipping to increase the authority of the Federal Maritime 
Commission (FMC) to promote the growth and development of U.S. 
exports through an ocean transportation system that is competitive, 
efficient, and economical.'' See Congress.gov summary for S. 3580 
(https://www.congress.gov/bill/117th-congress/senate-bill/3580?q=%7B%22search%22%3A%22S.+3580%22%7D&s=4&r=1, accessed July 10, 
2022).
    \10\ The export-focus arguably is also supported by the 
amendments to the ``Purposes'' section of the Commission's overall 
authority contained in 46 U.S.C. 40101. Specifically, 46 U.S.C. 
40101(4) ratified the purpose to ``promote the growth and 
development of United States exports through a competitive and 
efficient system for the carriage of goods by water.'' Congress 
further highlighted issues related to U.S. exports and imports in 
section 9 of OSRA 2022. Section 9 created 46 U.S.C. 41110 and the 
requirement for ocean common carriers to provide information to the 
Commission to enable the Commission to publish quarterly statistics 
on total import and export tonnage and the total loaded and empty 
20-foot equivalent units (TEUs) per vessel.
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1. Trade Deficit
    As discussed in the NPRM, there is a long-running U.S. trade 
deficit in goods (approximately $1 trillion in 2023) and an imbalance 
of imports and exports moving through U.S. ports in international 
trade.\11\
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    \11\ United States Bureau of Economic Analysis, available at 
https://www.bea.gov/news/blog/2024-02-07/2023-trade-gap-7734-
billion#:~:text=The%20U.S.%20goods%20and%20services,%2456.4%20billion
%20to%20%24288.2%20billion (last visited April 24, 2024).
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    VOCCs, particularly those on the major east-west trade lanes 
between the United States and Asia and the United States and Europe, 
make operational decisions regarding the import and export goods they 
carry based on both economic and engineering considerations. Export 
loads are, on average, heavier than import loads. This means that ships 
that come into U.S. ports largely laden with goods cannot safely load 
the same number of laden twenty-foot equivalent units (TEUs) when 
leaving the United States for foreign ports. A higher volume of laden 
exports will result in a lower vessel utilization rate on the outbound 
voyage from the United States, resulting in fewer containers returning 
to where the

[[Page 59650]]

equipment is in highest demand. The economics of this trade imbalance 
result in very different revenue returns for import and export trades. 
U.S. imports feature higher value items on average and the rates that 
shippers pay to move these goods are historically higher than the rates 
paid to move U.S. exports. For example, the average rate of a 20-foot 
dry container moving from Shanghai to the U.S. West Coast was $1,740 in 
January 2019, $4,270 in January 2021, $8,130 in January 2022, $1,591 in 
January 2023 and $2,845 in January 2024. The corresponding rate for a 
20-foot dry container moving from the U.S. West Coast to Shanghai was 
$730 in January 2019, $800 in January 2021, $1,220 in January 2022, 
$978 in January 2023, and $633 in January 2024.\12\ Further, the inland 
destination of import containers is often not located near export 
customers, which requires equipment repositioning costs as well as the 
opportunity cost of unused equipment.
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    \12\ Drewry Container Freight Rate Insight, (last visited April 
15, 2024).
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    Prior to the pandemic, the ratio of import TEUs to export TEUs 
moving through U.S. ports across all trade lanes was over 50 percent; 
in April 2019 this ratio was 59 percent.\13\ While containerized 
imports (measured in TEUs) increased steadily from May 2020 through 
April 2022, imports tapered off in the latter half of 2022 and 
containerized exports declined over the same period. There was an 
import-export TEU ratio of 45 percent in April 2023. Approximately 1.8 
million TEUs of all U.S. imports moved through U.S. ports in April 
2023, versus 1.98 million in April 2019. Total U.S. exports fell from 
1.2 million TEUs in April 2019 to 803,673 in April 2023.\14\
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    \13\ PIERS, S&P Global Market Intelligence, available at https://www.spglobal.com/marketintelligence/en/mi/products/piers.html?cq_cmp=19414807564&cq_plac=&cq_net=g&cq_pos=&cq_plt=gp&utm_source=google&utm_medium=cpc&utm_campaign=Data_and_Insights_Maritime_GTA_PIERS_TCS_PIERS_Search_Google_PC1132_16&utm_term=pie (last 
visited April 23, 2024).
    \14\ Id.
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    Trade on some specific lanes is even more imbalanced. Trade from 
Asia to U.S. ports was characterized by an import/export TEU ratio of 
39 percent in 2019, 36 percent in 2020, 29 percent in 2021, 28 percent 
in 2022, and 33 percent in 2023. As of January 2024, that number sits 
at 28 percent. There is no homogeneity among carriers, even within 
trade lanes. On the Asia to United States trade lane, among the largest 
carriers, the ratio of exports to imports ranged from 27 percent to 52 
percent in 2019, from 23 percent to 44 percent in 2021, and from 27 
percent to 57 percent in 2023. Some carriers had very stable export to 
import ratios throughout the pandemic, though most saw a substantial 
drop in both the ratio of exports to imports and the absolute number of 
export containers moved, particularly between 2020 and 2021. This 
pattern continued into the first quarter of 2022.
2. Operational Decisions
    While some export markets have been affected by trade shocks, such 
as China's ban on solid waste imports and other items, these trade 
shocks do not fully explain the drop in total exports carried; nor do 
safety concerns over ship loading. These changes can be best explained 
by carrier operational decisions based on equipment availability and 
differential revenues from import and export transportation.\15\ Common 
carriers stated they have seen delays in the movement of export cargo 
due to a lack of mutual commitment between shippers and common carriers 
leading to cancellations of vessel space accommodation by either party, 
sometimes up to the day of sailing. This contributes to uncertainty for 
both the shippers and common carriers.
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    \15\ Ana Swanson, Crunch at Ports May Mean Crisis for American 
Farms, N.Y. Times (Nov. 14, 2021), https://www.nytimes.com/2021/11/14/business/economy/farm-exports-supply-chain-ports.html.
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    In addition to the challenges faced by exporters, there have also 
been reports of restricted access to equipment and vessel capacity for 
U.S. importers, particularly in the Trans-Pacific market. Access to 
import vessel space was impacted by congestion, equipment availability, 
and VOCC commercial decisions.\16\
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    \16\ Peter S. Goodman, American Importers Accuse Shipping Giants 
of Profiteering, N.Y. Times (May 4, 2022), https://www.nytimes.com/2022/05/04/business/shipping-container-shortage.html.
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II. Comments

    In response to the SNPRM, the Commission received 26 comments from 
a variety of interested parties. This included comments from freight 
forwarders, customs brokers, ocean transportation intermediaries 
(OTIs), chemical manufacturers, importers and exporters and 
distributors in a range of industries, vessel-operating common carriers 
(VOCCs), shipper trade associations, ocean carrier and marine terminal 
operator associations, ocean carrier agreements, shipping industry 
associations, agricultural exporter coalitions and one federal agency. 
All comments are available in the docket for this action (FMC-2023-
0010) on Regulations.gov.
    These comments are addressed in the discussion that follows.

III. Discussion of Comments

A. Sec.  542.1(a): Purpose (and Applicability of the Rule)

1. A Common Carrier's Obligation To Engage in Both Imports and Exports
    Issue: One comment argued that the Commission's statement in the 
NPRM that ocean common carriers should offer service in both inbound 
and outbound trade is incorrect and inconsistent with Commission 
precedent.\17\ The comment asserted that just because a common carrier 
holds itself out as a common carrier in U.S. imports does not mean that 
the carrier is obligated to act as a common carrier for U.S. exports.
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    \17\ Caribbean Shipowners' Association, FMC Agreement No. 
010979/Central America Discussion Agreement, FMC Agreement No. 
011075 (FMC-2023-0010-0038) at 3-4.
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    FMC response: In the SNPRM, the Commission stated that ``every 
ocean common carrier operating in the U.S. market is presumed by the 
Commission--barring the submission of further information to the 
contrary--to be able to transport both exports and imports.'' \18\ 
Whether or not an entity is an ocean common carrier is determined on a 
case-by-case basis.\19\
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    \18\ 88 FR 38789, 38790-91 (emphasis added).
    \19\ See e.g., Logfret, Inc., Complainant v. Kirsha, B.V., 
Leendert Johanness Bergwerff A/k/a Hans Bergwerff, and Linda Sieval, 
Respondents, 2019 WL 5088014, 11-12 (``The Commission has long 
relied on these three factors--holding itself out, assuming 
responsibility, and transportation by water--to identify a common 
carrier . . . The most essential factor is whether the carrier holds 
itself out to accept cargo from whoever offers to the extent of its 
ability to carry, and the other relevant factors include the variety 
and type of cargo carried, number of shippers, type of solicitation 
utilized, regularity of service and port coverage, responsibility of 
the carrier towards the cargo, issuance of bills of lading or other 
standardized contracts of carriage, and the method of establishing 
and charging rates. The absence of solicitation does not determine 
that a carrier is not a common carrier. Holding out can also be 
demonstrated by a course of conduct. It is sufficient if an entity 
`held out, by a course of conduct, that they would accept goods from 
whomever offered to the extent of their ability to carry.' Moreover, 
`the common carrier status depends on the nature of what the carrier 
undertakes or holds itself out to undertake to the general public 
rather than on the nature of the arrangements which it may make for 
the performance of its undertaken duty.' Addressing the element of 
holding out to provide transportation by water between the United 
States and a foreign country for compensation, the Commission stated 
in Worldwide Relocations (FMC 2012) that an entity may hold out to 
the public `by the establishment and maintenance of tariffs, by 
advertisement and solicitation, and otherwise.''' (internal 
citations omitted)).

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[[Page 59651]]

2. Application of the Rule to NVOCCs
    Issue: World Shipping Council (WSC) argued that 46 U.S.C. 
41104(a)(3) applies to all common carriers, including NVOCCs, and that 
to exempt NVOCCs from application of the Shipping Act, the Commission 
would need to first provide an opportunity for a hearing in accordance 
with 46 U.S.C. 40103.\20\ WSC further argued that the Commission 
creates a competitive advantage for NVOCCs by exempting them from 
liability under 46 U.S.C. 41104(a)(3), while at the same time creating 
a situation that is ``detrimental to commerce'' by denying the NVOCC's 
customer a meaningful remedy for an NVOCC's violation of 
41104(a)(3).\21\ WSC stated that this would violate 46 U.S.C. 
40103(a)'s standard that the Commission may only grant an exemption if 
it finds that the exemption would not result in substantial reduction 
in competition or be detrimental to commerce.
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    \20\ FMC-2023-0010-0041 at 22.
    \21\ Id. at 4, 23-24.
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    WSC also asserted that it is important to include NVOCCs within the 
scope of the rule as a practical matter as well as a legal matter 
because NVOCCs control cargo space accommodations.\22\ WSC argued that 
NVOCCs, like VOCCs, can face situations in which the space available to 
them is exceeded by customer demand or is limited by safety, weight, 
stability, or other operational factors. WSC said that in such a 
situation, the NVOCC will have to decide which of its customers' 
containers are booked on that vessel and which are not.
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    \22\ Id. at 23.
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    By contrast, the National Customs Brokers & Forwarders Association 
of America, Inc. (NCBFAA) supported the rule's exclusion of NVOCCs.\23\
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    \23\ FMC-2023-0010-0057 at 2.
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    FMC response: WSC is correct that 46 U.S.C. 41104(a)(3) applies to 
both VOCCs and NVOCCs. This rule, however, only applies to VOCCs. The 
NPRM was limited to the OSRA 2022 amendments to 46 U.S.C. 41104(a)(10), 
which is statutorily limited in scope to VOCCs because the Shipping Act 
defines an ``ocean common carrier'' as a vessel-operating common 
carrier.\24\ The SNPRM adhered to this exclusion, despite the expansion 
of the proposal to also address 46 U.S.C. 41104(a)(3), to mirror the 
scope of the affected population of the NPRM. The limitation in scope 
of this rule to VOCCs, however, does not in any way limit the scope of 
46 U.S.C. 41104(a)(3). NVOCCs are legally liable under 46 U.S.C. 
41104(a)(3) for unreasonably refusing cargo space accommodations. For 
additional discussion see I, B of this preamble discussing the scope of 
this final rule.
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    \24\ 87 FR 57674 at FN 4; 46 U.S.C. 40102(18).
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3. Application of the Rule to Vehicle Carriers/Ro-Ro Vessels.
    Issue: World Shipping Council (WSC) asked the Commission to clarify 
the applicability of the rule to VOCCs that are vehicle carriers.\25\
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    \25\ FMC-2023-0010-0041 at 5, FN 5.
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    FMC response: This rule does not apply to roll-on/roll-off cargo 
(or to bulk cargo). The definitions of ``cargo space accommodations'' 
and ``vessel space accommodations'' in this rule are limited to 
containerized cargo because the sorts of issues that arose around 
container availability during the pandemic were not present, or at 
least not present to the same extent, for roll-on/roll-off cargo or 
bulk cargo vessels. In response to this comment, the FMC has revised 
Sec.  542.1(a) to clearly state that part 542 is limited to 
containerized cargo. While this rule defines refusal to deal cases with 
regards to containerized cargo, it does not preclude refusal to deal 
cases to which the statute applies, such as cases arising in the 
context of roll-on/roll-off cargo or bulk cargo. See also I, B of this 
preamble discussing the scope of this final rule.

B. Sec.  542.1(b): Definitions

1. ``Blank Sailing''
    In response to comments on Sec. Sec.  542.1 (e)(1) and (j)(1)(i) 
the Commission has added a definition of ``blank sailing'' to Sec.  
542.1(b). For additional discussion regarding blank sailing, see the 
discussion regarding 46 CFR 542.1(c) and the request to define ``when 
available''.
2. ``Cargo Space Accommodations''
    (a) Revising the definition to include language regarding whether 
cargo space accommodations have been confirmed.
    Issue: The National Industrial Transportation League (NITL) 
recommended revising the definition of ``cargo space accommodations'' 
to ``space which has been negotiated for and/or confirmed aboard the 
vessel . . .'' \26\ NITL argued that adding ``or confirmed'' would 
broaden the definition to instances where space has not been 
``negotiated'' between a carrier and a shipper in the traditional 
sense--i.e., there have been no ``back and forth'' communications 
between the two parties but rather involve a shipper's request for 
vessel space under an existing service contract or other arrangements, 
and a responsive vessel booking confirmation from the carrier.\27\ NITL 
agreed with the Commission that the proposed definition includes 
situations where the parties may have an existing relationship and 
already mutually agreed on terms and conditions via a booking 
confirmation, but that shippers sometimes purchase vessel space without 
negotiating after reviewing an ocean carrier's tariff by paying the 
rate quoted in the tariff. NITL argued that the proposed definition 
does not explicitly contemplate such a situation.\28\
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    \26\ FMC-2023-0010-0045 at 6.
    \27\ Id.
    \28\ Id.
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    Similarly, the National Association of Chemical Distributors (NACD) 
supported the adoption of the definition of ``cargo space 
accommodation'' proposed in the SNPRM but expressed concern that this 
definition only covered ``negotiated'' vessel space.\29\ NACD noted 
that its members have experienced cancelled bookings and unfulfilled 
agreements when space is confirmed and urged the Commission to include 
confirmed vessel space in this definition.\30\
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    \29\ FMC-2023-0010-0046 at 3.
    \30\ Id.
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    FMC response: In response to these comments, the Commission has 
added the language ``or confirmed'' to the definition of ``cargo space 
accommodations.'' Using the phrase ``or confirmed'' rather than the 
phrase ``and/or confirmed'' aligns with the Federal Plain Language 
Guidelines' recommendation to avoid the use of slashes to avoid 
ambiguity.
    (b) Trans-shipment of cargo.
    Issue: BassTech International (BassTech) suggested removing the 
clause ``from a vessel calling at a U.S. port'' from the last line of 
the definition of ``cargo space accommodations''.\31\ BassTech argued 
that the services necessary to load or unload cargo at a U.S. port are 
also necessary to load and unload cargo to a vessel that might not call 
on a U.S. port but from which the cargo may be trans-shipped onto a 
vessel that then calls on a U.S. port.\32\
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    \31\ FMC-2023-0010-0055 at 2.
    \32\ Id.
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    FMC response: The Commission declines to make this change. This 
rulemaking is not intended to address the situation BassTech describes, 
nor are changes to the definition of ``cargo space accommodations'' 
that BassTech suggests likely to resolve the matter. A future 
rulemaking could address these considerations, if necessary.
    (c) Proposed definition is vague and confusing.

[[Page 59652]]

    Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979 
and Central America Discussion Agreement, FMC Agreement No. 011075 (the 
``Agreements'') said that the phrase ``space which has been negotiated 
for'' within the definition of ``cargo space accommodations'' is 
``vague and confusing''.\33\ The comment stated that the definition of 
``cargo space accommodation'' arguably includes space which was 
negotiated for but for which no agreement was reached, and that this is 
inconsistent with the Commission's intent to apply 46 U.S.C. 
41104(a)(3) to the execution stage. The Agreements argued that the 
Commission needs to clarify this definition, and that the clarification 
should consider the various ways in which carriers and their customers 
reach agreement: through service contract negotiations, through 
automated contracting processes, and under tariff rates. As an example, 
the Agreements asked whether the parties have ``negotiated for'' space 
where a shipper tenders cargo to a carrier under a rate the carrier has 
published in its tariff and when that rate was not agreed upon with the 
shipper prior to publication.
---------------------------------------------------------------------------

    \33\ FMC-2023-0010-0038 at 8-9.
---------------------------------------------------------------------------

    FMC response: As noted above, in accordance with other comments, 
the Commission has added the phrase ``or confirmed'' to clarify the 
definition's scope. This definition remains broad enough to encompass 
the various methods by which carriers and the customers reach 
agreements, as this rule is intended to regulate unreasonable refusals 
to deal rather than whether carriers and their customers reach 
agreements by way of contract negotiations, automated contracting 
processes, or under tariff rates.
    (d) Whether space onboard a vessel has been agreed to when a 
booking confirmation is issued.
    Issue: In the SNPRM, the Commission asked for comments on whether 
space onboard a vessel has been agreed to at the time of issuance of a 
booking confirmation.\34\ The National Industrial Transportation League 
(NITL) stated that it believes that a booking confirmation does 
represent the carrier's commitment and agreement to provide access to 
vessel space as reflected in the confirmation, since such confirmations 
are issued after the carrier evaluates the specific request for 
services.\35\ Similarly, the International Federation of Freight 
Forwarders Associations (FIATA) expressed that a booking confirmation 
represents the conclusion of a contract to transport the cargo, and 
that the booking should be honored such that the shipper is obligated 
to deliver the container and the carrier to accept it as agreed to in 
the booking confirmation. FIATA noted that this would apply to NVOCCs 
as well as beneficial cargo owners (BCOs), since they both rely on 
VOCCs to adhere to contracted terms regarding space allocations.\36\
---------------------------------------------------------------------------

    \34\ 88 FR 38789, 38803.
    \35\ FMC-2023-0010-0045 at 6-7.
    \36\ FMC-2023-0010-0056 at 2-3.
---------------------------------------------------------------------------

    By contrast, the National Customs Brokers & Forwarders Association 
of America, Inc. (NCBFAA) suggested that space accommodations are not 
agreed to at the time of a booking confirmation.\37\ NCBFAA stated that 
booking confirmations are merely acknowledgments from the ocean carrier 
that the shipper's request for carriage has been received. NCBFAA noted 
that booking confirmations typically contain language stating that the 
confirmation information is subject to change due to vessel space, and 
that ocean carriers are understood to take shipment bookings six to 
eight weeks prior to the projected departure date, meaning that not all 
details are finalized. NCBFAA stated that ocean carriers ultimately 
determine whether cargo shall be loaded on a particular vessel 
regardless of whether the shipper has received a booking confirmation 
and that ocean carriers may ultimately revise the minimum quantity 
amount by reducing the volume they will accept. Lastly, NCBFAA stated 
that often shippers are provided little to no notice of these reduced 
capacities and are given limited recourse. As a result, NCBFAA 
concluded that space accommodations are merely requested and not 
necessarily treated as agreed to by the ocean carrier at the time of 
booking.
---------------------------------------------------------------------------

    \37\ FMC-2023-0010-0057 at 1, 4.
---------------------------------------------------------------------------

    FMC response: In the SPNRPM, the Commission requested input on 
whether vessel space has been agreed to at the time of a booking 
confirmation because the term ``cargo space accommodations'' concerns 
situations where the parties have an existing relationship and/or 
already mutually agreed on terms and conditions via a booking 
confirmation.\38\ As such, in these situations, the Commission presumed 
that there is some evidence that negotiation for space aboard the 
vessel has already occurred. In accordance with the input supplied by 
NITL and FIATA, the Commission will continue to maintain the temporal 
distinction between 46 U.S.C. 41104(a)(3) and 46 U.S.C. 41104(a)(10) 
that the SNPRM expressed: claims under 46 U.S.C. 41104(a)(10) will 
generally involve those actions occurring prior to a carrier providing 
a shipper with a booking confirmation to carry that shipper's cargo. 
When read in conjunction with this provision, to ``unreasonably refuse 
cargo space accommodations'' under 46 U.S.C. 41104(a)(3) will involve a 
set of acts that occur after a booking has been confirmed.
---------------------------------------------------------------------------

    \38\ 88 FR 38789, 38803.
---------------------------------------------------------------------------

    Lastly, the Commission notes that the experiences that NCBFAA 
describes in its comments are the type of practices that this 
regulation is meant to change within the industry in order to establish 
fewer cancelled bookings and more certainty.
3. ``Documented Export Policy''
    Issue: One commenter requested clarification of the phrase 
``practices and procedures'' used in the proposed definition of 
``documented export policy.'' \39\ The commenter said that guidance as 
to the meaning of this term is needed to better understand what is 
necessary to include in a documented export policy as the proposed 
Sec.  541.1(j)(1) did not appear to include anything that could be 
described as a ``practice or procedure.'' Another commenter suggested 
that ``practices and procedures'' be replaced with ``reasonable 
practices and procedures'' to emphasize that ocean common carriers may 
not unreasonably refuse a class of cargo.\40\
---------------------------------------------------------------------------

    \39\ Caribbean Shipowners' Association, FMC Agreement No. 
010979/Central America Discussion Agreement, FMC Agreement No. 
011075 (FMC-2023-0010-0038) at 9.
    \40\ National Association of Chemical Distributors (FMC-2023-
0010-0046) at 4.
---------------------------------------------------------------------------

    FMC response: The terms ``practices'' and ``procedures'', as used 
in the definition, have their normal and ordinary meaning.\41\ The 
information required by paragraph (j)(1)--pricing strategies, services 
offered, strategies for equipment provision, and description of markets 
served--are clearly practices and procedures as they describe an ocean 
common carrier's usual way of doing business. The same is true for the 
effect of blank sailings or other schedule disruptions and alternative 
remedies in paragraphs (j)(1)(i) and (ii). In this final rule, the 
Commission has also added a

[[Page 59653]]

requirement, in (j)(1)(ii), that the documented export policy include 
the ocean common carrier's rules and practices for the designation and 
use of sweeper vessels.
---------------------------------------------------------------------------

    \41\ a. E.g., ``practice.'' Merriam-Webster.com. 2024. https://www.merriam-webster.com (April 1, 2024) (noun, ``a: actual 
performance or application; b: a repeated or customary action; c: 
the usual way of doing something''; ``practice.''; Black's Law 
Dictionary (11th ed. 2019) (noun, ``4. A customary action or 
procedure'').
    b. E.g., ``procedure.'' Merriam-Webster.com. 2024. https://www.merriam-webster.com (April 1, 2024) (noun, ``1a: a particular 
way of accomplishing something or of acting; 2a: a series of steps 
followed in a definite order; 3a: a traditional or established way 
of doing things'').
---------------------------------------------------------------------------

    FMC declines to add the qualifier ``reasonable'' to ``practices and 
procedures''. Doing so would potentially create a circular analysis as 
a primary purpose of requiring ocean common carriers to have a 
documented export policy is to help the agency determine whether a 
particular refusal was reasonable or unreasonable.
4. ``Sweeper Vessel''
    Issue: BassTech International suggested that ``voyage'' be inserted 
between ``vessel'' and ``exclusively designated'' to clarify that it is 
not a ship but a specific voyage of a ship that is designated as 
``sweeper''.\42\ MSC Mediterranean Shipping Company (USA) Inc.\43\ and 
World Shipping Council \44\ requested that FMC revise the definition of 
``sweeper vessel'' to permit designated sweeper vessels to carry empty 
containers so that they can also carry export cargo if they have the 
capacity to do so.
---------------------------------------------------------------------------

    \42\ FMC-2023-0010-0055 at 2.
    \43\ FMC-2023-0010-0036 at 2, 11.
    \44\ FMC-2023-0010-0041 at 21-22.
---------------------------------------------------------------------------

    FMC response: The FMC declines to revise the definition of 
``sweeper vessel''. The definition, however, is not intended, and 
should not be used, to prevent carriage of cargo if the vessel has the 
capacity to do so--even if the primary purpose of a particular voyage 
may be to reposition empty containers. Rather, the definition of a 
``sweeper vessel'' proposed in the SNPRM and adopted by this final rule 
ensures that if a vessel carries containerized cargo, even one box of 
cargo, then the default presumption is that the carriage is undertaken 
in common carriage and thus subject to the unreasonable refusal to deal 
or negotiate requirements of 46 U.S.C. 41104(a)(3) and (a)(10). An 
ocean common carrier should not be excepted from the requirements of 46 
U.S.C. 41104(a)(3) and (a)(10) just because they are carrying only a 
small amount of cargo. An ocean common carrier likewise cannot avoid 
complying with the provisions of this rule by unreasonably designating 
a vessel as a ``sweeper vessel'' for only certain legs of an overall 
trade route. If a complaint is brought, an ocean common carrier may 
present relevant information to the Commission to demonstrate why 
designation as a sweeper vessel in the particular case was reasonable.
5. ``Transportation Factors''
    (a) Intermodal and landside considerations.
    Issue: Some commenters requested that the definition of 
``transportation factors'' be expanded to include intermodal 
considerations, such as train service on through bills of lading \45\ 
and landside considerations such as port operations, rail capacity, 
scheduling and performance, trucking capacity, and availability of 
warehouse dock appointments.\46\
---------------------------------------------------------------------------

    \45\ MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-
0010-0036) at 3 and 5; National Milk Producers Federation/U.S. Dairy 
Export Council (FMC-2023-0010-0035) at 2; ZIM Integrated Shipping 
Services Ltd. (FMC-2023-0010-0042) at 2.
    \46\ ZIM Integrated Shipping Services Ltd. (FMC-2023-0010-0042) 
at 2; see also MSC Mediterranean Shipping Company (USA) Inc. (FMC-
2023-0010-0036) at 2, 4-5.
---------------------------------------------------------------------------

    FMC response: FMC declines to expand the definition to include 
intermodal or landside considerations. As noted in the SNPRM, 
``[g]enerally, . . . . transportation factors relate to the 
characteristics of the vessel . . . .'' \47\ Because intermodal 
considerations and landside considerations do not relate to vessel 
characteristics, it would be inappropriate to expand the definition as 
requested. FMC notes, however, that such considerations may be 
considered by the Commission as ``other factors relevant in determining 
whether there was a refusal'' under 46 CFR 542.1(d)(4) and (g)(4).
---------------------------------------------------------------------------

    \47\ 88 FR 38789, 38797 (citing Credit Practices of Sea-land 
Serv., Inc., & Nedlloyd Lijnen, B.V., No. 90-07, 1990 WL 427463 
(F.M.C. Dec. 20, 1990); Dep't of Def. v. Matson Navigation Co., 19 
F.M.C. 503 (1977)).
---------------------------------------------------------------------------

    (b) Character of cargo.
    Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979 
and Central America Discussion Agreement, FMC Agreement No. 011075 (the 
``Agreements'') requested that the definition of ``transportation 
factors'' be expanded to include more than just vessel-related factors, 
and specifically requested that the definition be amended to include 
character of the cargo, competition, and cost of providing 
services.\48\ As an example of why, the Agreements noted that 
foodstuffs may require specialized, food-safe containers, and that 
those containers may need to be de-contaminated between loads in order 
to carry back-to-back food shipments.\49\ They noted that this may lead 
to some carriers opting not to carry foodstuffs on the back half of a 
haul in those containers.
---------------------------------------------------------------------------

    \48\ FMC-2023-0010-0038 at 10.
    \49\ Id.
---------------------------------------------------------------------------

    FMC response: FMC declines to expand the definition beyond vessel-
related considerations. As noted in the SNPRM, ``[g]enerally, . . . . 
transportation factors relate to the characteristics of the vessel . . 
. . '' \50\ FMC notes, however, that such additional considerations as 
those raised by the commenters may be considered by the Commission as 
``other factors relevant in determining whether there was a refusal'' 
under 46 CFR 542.1(d)(4) and (g)(4).
---------------------------------------------------------------------------

    \50\ 88 FR 38789, 38797 (citing Credit Practices of Sea-land 
Serv., Inc., & Nedlloyd Lijnen, B.V., No. 90-07, 1990 WL 427463 
(F.M.C. Dec. 20, 1990); Dep't of Def. v. Matson Navigation Co., 19 
F.M.C. 503 (1977)).
---------------------------------------------------------------------------

    (c) Disruptions in carrier networks.
    Issue: Two commenters also requested that the definition of 
``transportation factors'' be amended to expressly incorporate 
disruptions in carriers' networks.\51\
---------------------------------------------------------------------------

    \51\ MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-
0010-0036) at 3; World Shipping Council (FMC-2023-0010-0041) at 9.
---------------------------------------------------------------------------

    FMC response: FMC declines to expand the definition to include 
disruptions in carriers' networks. As noted in the SNPRM, 
``[g]enerally, . . . . transportation factors relate to the 
characteristics of the vessel . . . . '' \52\ Because disruptions to 
carriers' networks do not relate to vessel characteristics, it would be 
inappropriate to expand the definition as requested. FMC notes, 
however, that such considerations can be considered by the Commission 
as ``other factors relevant in determining whether there was a 
refusal'' under 46 CFR 542.1 (d)(4) and (g)(4).
---------------------------------------------------------------------------

    \52\ 88 FR 38789, 38797 (citing Credit Practices of Sea-land 
Serv., Inc., & Nedlloyd Lijnen, B.V., No. 90-07, 1990 WL 427463 
(F.M.C. Dec. 20, 1990); Dep't of Def. v. Matson Navigation Co., 19 
F.M.C. 503 (1977)).
---------------------------------------------------------------------------

    (d) Foreseeability.
    Issue: Some commenters said that the Commission should narrow the 
scope of the definition of ``transportation factors'' to differentiate 
between factors that are reasonably foreseeable to the carrier under 
the circumstances and those that are not reasonably foreseeable.\53\ In 
particular, the Retail Industry Leaders Association (RILA) argued that 
in the majority of circumstances, these factors are reasonably 
foreseeable and the carrier has a responsibility to its customers to 
forecast and plan for those factors. RILA stated that the regulation's 
failure to distinguish between foreseeable and unforeseeable events 
allows the carriers to make a general assertion, such as ``port 
congestion,''

[[Page 59654]]

and advance that as a legitimate transportation factor.\54\ Other 
commenters raising this issue made the same arguments.\55\ By contrast, 
Caribbean Shipowners' Association, FMC Agreement No. 010979/Central 
America Discussion Agreement, FMC Agreement No. 011075 (the 
``Agreements'') said that the definition should include factors within 
the control of the vessel operator.\56\ In particular, the Agreements 
argued that there are numerous operational situations in which a 
carrier makes a conscious decision to change its vessel operations in 
some way, such as to omit a scheduled port of call, or to change the 
order in which it calls at particular ports for reasons such as weather 
or because of port closures.\57\ The Agreements argued that under 
proposed Sec.  542.1(e), with the definition of ``transportation 
factors'' in the SNPRM, many decisions of this type could be considered 
unreasonable and that the Commission should make clear that it will 
consider the impact of any such decision on other customers, ports, and 
the supply chain as a whole when assessing reasonableness.\58\
---------------------------------------------------------------------------

    \53\ Retail Industry Leaders Association (FMC-2023-0010-0049) at 
4; American Chemistry Council/National Association of Manufacturers/
American Association of Exporters and Importers (FMC-2023-0010-0050) 
at 4; International Dairy Foods Association (FMC-2023-0010-0053) at 
2-3.
    \54\ FMC-2023-0010-0049 at 4.
    \55\ American Chemistry Council/National Association of 
Manufacturers/American Association of Exporters and Importers (FMC-
2023-0010-0050) at 4; International Dairy Foods Association (FMC-
2023-0010-0053) at 2-3.
    \56\ FMC-2023-0010-0038 at 11.
    \57\ Id.
    \58\ Id.
---------------------------------------------------------------------------

    FMC response: The Commission agrees that it would be beneficial to 
clarify that the definition of ``transportation factors'' is not 
intended to include factors that are reasonably foreseeable by a vessel 
operator and has amended the regulation accordingly. We also agree with 
the statement that ``[i]f a transportation factor is reasonably 
foreseeable by the carrier, then the carrier has a responsibility to 
its customers to find alternative pathways to deliver the cargo and 
otherwise mitigate the negative impacts of that factor.'' \59\ FMC has 
modified the definition accordingly in this final rule.
---------------------------------------------------------------------------

    \59\ American Chemistry Council/National Association of 
Manufacturers/American Association of Exporters and Importers (FMC-
2023-0010-0050) at 4.
---------------------------------------------------------------------------

    In addition, the Commission believes the Agreements are 
misinterpreting the proposal. The Commission understands the ever-
changing shipping landscape and that it can be affected by a number of 
items. This rule does not automatically punish a carrier for making 
decisions in response to changing conditions. To the contrary, the 
Commission's examination of cases involving a refusal to deal or 
negotiate may examine all factors that led a carrier to make that 
decision, in order to determine whether the decision was reasonable.
    (e) Contractual obligations.
    Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979 
and Central America Discussion Agreement, FMC Agreement No. 011075 
asserted that the definition of ``transportation factors'' is unduly 
narrow and should be amended to account for carriers' minimum service 
commitments made pursuant to its service contracts.\60\
---------------------------------------------------------------------------

    \60\ FMC-2023-0010-0038 at 12.
---------------------------------------------------------------------------

    FMC response: Another commenter raised this concern in its input 
regarding the non-binding considerations when evaluating unreasonable 
conduct of Sec.  542.1(d). The Commission has addressed this issue 
under that subsection.
6. ``Unreasonable''
    (a) Proposed definition is too vague and subjective.
    Issue: Several commenters asserted that the FMC's proposed 
definition of ``unreasonable'' in the SNPRM was too vague and 
subjective and were concerned that any conduct could fit into the 
definition.\61\ Some of these commenters said that the agency had 
failed to explain a ``rational connection between the facts found and 
the choice made'' and that therefore promulgation of the proposed 
definition into the CFR would be arbitrary and capricious and therefore 
violate the Administrative Procedure Act (APA).\62\
---------------------------------------------------------------------------

    \61\ MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-
0010-0036) at 3; The National Industrial Transportation League (FMC-
2023-0010-0045) at 5; National Association of Chemical Distributors 
(FMC-2023-0010-0046) at 3; Pacific Merchant Shipping Association 
(FMC-2023-0010-0054) at 1; MAERSK A/S (FMC-2023-0010-0039) at 4; CMA 
CGM (America) LLC (FMC-2023-0010-0043) at 3; World Shipping Council 
(FMC-2023-0010-0041) at 3; and OOCL (USA) Inc. (FMC-2023-0010-0052) 
at 2.
    \62\ MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-
0010-0036) at 3; National Industrial Transportation League (FMC-
2023-0010-0045) at 5; National Association of Chemical Distributors 
(FMC-2023-0010-0046) at 3; Pacific Merchant Shipping Association 
(FMC-2023-0010-0054) at 1; MAERSK A/S (FMC-2023-0010-0039) at 4; CMA 
CGM (America) LLC (FMC-2023-0010-0043) at 3.
---------------------------------------------------------------------------

    FMC response: FMC disagrees with commenters that the rule's 
definition of ``unreasonable'' is too vague and therefore contrary to 
law. Although commenters referenced the APA, these assertions are 
better categorized as a Fifth Amendment, Due Process concern. Most of 
the cases dealing with the Vagueness Doctrine construe statutes as 
opposed to regulations; however, the same legal principles apply to 
both.\63\ Due Process does not require mathematical precision; rather, 
it requires only ``boundaries sufficiently distinct for judges and 
juries fairly to administer the law''.\64\ Fair notice requirements 
apply to civil statutes and regulations when penalties or drastic 
sanctions are at stake; \65\ however, courts demand less precision of 
statutes and regulations that impose only civil penalties because the 
consequences are less severe.\66\
---------------------------------------------------------------------------

    \63\ Bokum Res. Corp. v. New Mexico Water Quality Control 
Comm'n, 1979-NMSC-090, 12, 93 N.M. 546, 549, 603 P.2d 285, 288.
    \64\ E.g. Roth v. United States, 354 U.S. 476, 491 (1957); see 
also Ward v. Rock Against Racism, 491 U.S. 781, 794 (1989) 
(``perfect clarity and precise guidance have never been required 
even of regulations that restrict expressive activity'').
    \65\ Albert C. Lin, Refining Fair Notice Doctrine: What Notice 
is Required of Civil Regulations?, 55 Baylor L. Rev. 991, 995 (Fall 
2003) (internal citations omitted).
    \66\ 16B Am. Jur. 2d Constitutional Law Sec.  962.
---------------------------------------------------------------------------

    Paragraphs (a)(3) and (10) of 46 U.S.C. 41104 prohibit ocean common 
carriers from ``unreasonably'' refusing cargo space accommodations or 
refusing to deal or negotiate with respect to vessel space 
accommodations in specified conditions. Neither OSRA 2022, nor previous 
amendments to the Shipping Act, define the term ``unreasonable''. 
Section 7 of OSRA 2022 mandated the FMC to issue a rulemaking 
``defining unreasonable refusal to deal or negotiate with respect to 
vessel space under [46 U.S.C. 41104(a)(10)].'' \67\ FMC was therefore 
required to develop a definition of the term as part of meeting this 
mandate.
---------------------------------------------------------------------------

    \67\ Section 7, paragraph (d), Public Law 117-146 (June 16, 
2022).
---------------------------------------------------------------------------

    The power delegated by Congress to an agency generally does not 
include the inherent authority to decide whether a particular statute 
(or regulation) that the agency is charged with enforcing is 
constitutional.\68\ Therefore, the FMC must assume as a starting 
premise that the legal standard set by Congress of unreasonableness in 
46 U.S.C. 41104(a) (3) and (10) is legally valid. Additionally, 
``reasonable'', the inverse of ``unreasonable'', is a familiar legal 
standard.\69\ Indeed, ``reasonable and

[[Page 59655]]

prudent'' standard statutes are ubiquitous throughout the United States 
and have been uniformly upheld against constitutional challenges.\70\ 
Because the underlying conduct--unreasonable refusal--is not 
unconstitutionally vague, neither is the FMC's implementing regulation 
defining the term.\71\
---------------------------------------------------------------------------

    \68\ See Motor and Equipment Mfrs. Ass'n, Inc. v. EPA, 627 F.2d 
1095 n.42 (D.C. Cir. 1979) (``administrative agencies generally have 
no jurisdiction to consider the constitutionality of their organic 
statutes''); Am. Jur. 2d Admin. Law Sec.  68 (May 2023 update) 
(``The power delegated by the legislature to an agency generally 
does not include the inherent authority to decide whether a 
particular statute or regulation that the agency is charged with 
enforcing is constitutional.'').
    \69\ United States v. Leal-Matos, No. CR 21-150 (SCC), 2022 WL 
476094, at 1 (D.P.R. Feb. 15, 2022) (citing United States v. Hunter, 
663 F.3d 1136, 1142 (10th Cir. 2011) (``[I]dentical or very similar 
`reasonable and prudent' standard statutes are ubiquitous throughout 
the United States and have been uniformly upheld against 
constitutional challenges.''); cf. United States v. Phillipos, 849 
F.3d 464, 477 (1st Cir. 2017) (holding that ``materiality'' is not 
vague merely because it ``is not mathematically precise'' and noting 
that it is a familiar standard in the law). Its imprecision ``simply 
build[s] in needed flexibility while incorporating a comprehensible, 
normative standard easily understood by the ordinary [person].'' 
Hunter, 663 F.3d at 1142; see also Roth v. United States, 354 U.S. 
476, 491 (1957) (explaining that due process requires only 
``boundaries sufficiently distinct for judges and juries fairly to 
administer the law'').
    \70\ United States v. Leal-Matos, No. CR 21-150 (SCC), 2022 WL 
476094, at *1 (D.P.R. Feb. 15, 2022) (internal citations omitted).
    \71\ Paredes v. Garland, No. CV 20-1255 (EGS), 2023 WL 8648830, 
at *16 (D.D.C. Dec. 14, 2023) (``Here, the underlying conduct 
proscribed by statute that rendered Mr. [ ] Paredes inadmissible was 
his commission of a `crime involving moral turpitude,' . . . a term 
which the Supreme Court has already analyzed and determined is not 
unconstitutionally vague, . . . Accordingly, since the underlying 
conduct--the grounds of inadmissibility themselves--are not 
unconstitutionally vague, neither can it be determined that the 
guiding standard in [the regulation] is unconstitutionally vague. . 
. .'').
---------------------------------------------------------------------------

    The definition of ``unreasonable'' proposed in the SNRPM, and 
adopted in this final rule, is not arbitrary or capricious under the 
APA. As discussed in depth in the NRPM reasonableness is necessarily a 
case-by-case determination.\72\ The definition of ``unreasonable'' 
proposed in the SNPRM and adopted by this final rule takes that into 
account, while providing an overarching definition, in line with the 
purposes of OSRA 2022 and the Shipping Act, as amended, as a whole, 
that is applicable in both 46 U.S.C. 41104(a)(3) and 41104(a)(10) 
claims.\73\ Furthermore, FMC has provided notice and opportunity to 
comment on both the original NPRM and, later, in the SNPRM, regarding 
the best interpretation of the term ``unreasonable'', and how, in 
future enforcement, FMC intends to evaluate unreasonable behavior with 
respect to refusal of cargo space accommodations and refusal to 
negotiate with respect to vessel space accommodations. The promulgation 
of this rule through notice-and-comment procedures reduces vagueness 
concerns by providing fair notice of the definition of ``unreasonable'' 
and elements for a claim under 46 U.S.C. 41104(a)(3) and 41104(a)(10).
---------------------------------------------------------------------------

    \72\ 87 FR 57674, 57676-77 (Sept. 21, 2022).
    \73\ 88 FR 38789, 38803-04 (June 14, 2023).
---------------------------------------------------------------------------

    (b) Meaning of ``meaningfully access''.
    Issue: Two commenters requested guidance on how the Commission will 
interpret the phrase ``meaningfully access'' in the definition of 
``unreasonable''.\74\ One of the commenters noted that clarification of 
the term ``would be helpful especially in the context of the spot 
market and common carriage arrangements.'' \75\
---------------------------------------------------------------------------

    \74\ The National Industrial Transportation League (FMC-2023-
0010-0045) at 5; National Association of Chemical Distributors (FMC-
2023-0010-0046) at 3.
    \75\ The National Industrial Transportation League (FMC-2023-
0010-0045) at 5.
---------------------------------------------------------------------------

    FMC response: FMC declines to define the phrase ``meaningfully 
access'' at this time. Determinations of what ``meaningfully access'' 
means are better decided on a case-by-case basis.
    (c) Suggested changes.
    Issue: The National Industrial Transportation League (NITL) and 
BassTech International suggested including ``from the ocean common 
carrier'' at the end of the definition of ``unreasonable'' to clarify 
that a carrier cannot escape liability for an ``unreasonable refusal'' 
by asserting that alternative market choices and service options from 
other carriers were available.\76\
---------------------------------------------------------------------------

    \76\ Id. at 5; BassTech International (FMC-2023-0010-0055) at 2.
---------------------------------------------------------------------------

    World Shipping Council (WSC) and MSC Mediterranean Shipping Company 
(USA) Inc. (MSC) asserted that in accordance with Commission precedent, 
the regulatory text should be amended to clarify that the appropriate 
standard for interpreting conduct under (a)(3) and (a)(10) is one of 
commercial reasonableness.\77\
---------------------------------------------------------------------------

    \77\ MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-
0010-0036) at 2 and 3-4; World Shipping Council (FMC-2023-0010-0041) 
at 6-7.
---------------------------------------------------------------------------

    FMC response: FMC agrees with NITL and BassTech and has added the 
suggested language, ``from the ocean common carrier'' at the end of the 
definition. FMC declines to amend the rule, in the definition of 
``unreasonable'', or elsewhere, to re-frame the standard as whether it 
was ``commercially unreasonable'' as requested by WSC and MSC. As 
discussed in the SNPRM, ``profit and business factors may be present in 
negotiations [or execution], but these factors . . . have to be 
considered alongside other factors presented when the Commission is 
determining what the true driving factor is for refusing to deal in a 
given case and whether that driving factor is reasonable.'' \78\ The 
Commission re-emphasizes that the rule allows the Commission to 
consider any relevant factor in determining whether a refusal to deal 
or negotiate was unreasonable.
---------------------------------------------------------------------------

    \78\ 88 FR 38789, 38797.
---------------------------------------------------------------------------

7. ``Vessel Space Accommodations''
    FMC did not receive any comments that expressed concern regarding 
the proposed definition of ``vessel space accommodations''. The agency 
is implementing the definition in this final rule without change from 
the SNPRM.
8. Proposed Additional Definition
    Issue: The Retail Industry Leaders Association (RILA) and the 
International Dairy Foods Association (IDFA) requested that FMC amend 
46 CFR 542.1(b) to add a definition of ``legitimate,'' as is used in 
Sec. Sec.  542.1 (d)(3) and (g)(3) when it modifies ``transportation 
factors.'' \79\ According to the commenters, lack of a definition could 
lead to a wide variety of interpretations and substantial 
disagreements. The commenters proposed that the term be defined as ``a 
transportation factor that was not reasonably foreseeable by an ocean 
common carrier under the circumstances.'' \80\
---------------------------------------------------------------------------

    \79\ Retail Industry Leaders Association (FMC-2023-0010-0049) at 
4; International Dairy Foods Association (FMC-2023-0010-0053) at 3.
    \80\ Id.
---------------------------------------------------------------------------

    FMC response: The Commission declines to define ``legitimate'' as 
part of this rulemaking. The agency believes that changes made to the 
definition ``transportation factors'' in this final rule to address 
similar concerns about foreseeability sufficiently address these 
commenters' concerns.

C. Sec.  542.1(c): Elements for Claims for Unreasonable Refusal of 
Cargo Space Accommodations Under 46 U.S.C. 41104(a)(3)

1. Revising the Proposed Rule To Strengthen Carrier Obligations To 
Ensure That Cargo Accommodations Remain Available
    Issue: The International Dairy Foods Association (IDFA) argued that 
an ocean common carrier's refusal of cargo space is the crux of the 
problem faced by shippers, especially small and medium-sized shippers, 
because ocean carriers effectively control shippers' access to their 
existing and potential customers in overseas markets.\81\ IDFA stated 
that carriers' failure to honor the terms of a contract and provide the 
cargo space that has been contracted for has negative repercussions for 
U.S. dairy exporters who, in some cases, have been forced to absorb the 
high cost of air freighting

[[Page 59656]]

their goods to their customers in order to meet their contract 
deadlines, or risk losing those customers to suppliers in other 
markets.\82\ To help address this issue, IDFA recommends that the 
Commission strengthen the regulatory text to clarify that an ocean 
carrier needs to be proactive in ensuring that cargo space is available 
when it has been contracted for.\83\
---------------------------------------------------------------------------

    \81\ FMC-2023-0010-0053 at 3.
    \82\ Id.
    \83\ Id.
---------------------------------------------------------------------------

    Specifically, IDFA points to the second element for a successful 
claim under Sec.  542.1(c)--namely, that ``[t]he respondent refuses or 
refused cargo space accommodations when available.'' IDFA argued that 
it cannot be the case that a carrier, facing reasonably foreseeable 
factors, can take no action to ensure that cargo space that has been 
contracted for is available to its customers, and then be allowed to 
assert that cargo space accommodations are not ``available.'' IDFA 
argued that such an interpretation would unfairly absolve a carrier 
from its commitments to a shipper.
    IDFA also argued that the carrier has exclusive control of 
information regarding space availability, and that as such, it is 
unfair for a private party or the Commission to bear the burden of 
proving that space was available before the reasonableness discussion 
under Sec.  541.2(c)(3) can begin. IDFA argued that the Commission 
should revise Sec.  541.2(c) to address this issue by inserting a 
provision to clarify that the Commission's determination of whether 
cargo space accommodations were ``available'' for purposes of Sec.  
542.1(c)(2) will not be determined solely on a carrier's assertion of 
unavailability, but that the Commission will also base its 
determination on: (1) whether availability issues were reasonably 
foreseeable under the circumstances; and (2) if so, what actions, if 
any, the carrier took to ensure that the cargo space the shipper had 
contracted for would be available or, in the alternative, to find other 
cargo space accommodations.
    FMC response: In response to this comment and others received in 
response to the SNPRM, the Commission has added language to the 
definition of ``transportation factors'' in Sec.  542.1(b) to address 
whether the factors at issue were reasonably foreseeable by the 
carrier. The Commission has also added language to the definition of 
``unreasonable'' in Sec.  542.1(b) to clarify that it means conduct 
that unduly restricts the ability of shippers to meaningfully access 
ocean carriage service ``from that ocean common carrier.'' The 
Commission believes this language is broad enough that, if a refusal to 
deal case is brought before the Commission, the Commission can examine 
what actions the carrier took to ensure that cargo space the shipper 
had contracted for would be available or, in the alternative, to find 
other cargo space accommodations.
2. Meaning of the Phrase ``When Available'' Under 46 U.S.C. 41104(a)(3) 
and 46 CFR 542.1(c)(2) in Association With Blank Sailings
    Issue: Both MSC Mediterranean Shipping Company (USA) Inc., (MSC) 
\84\ and World Shipping Council (WSC) \85\ requested that the 
Commission provide an interpretation of the phrase ``when available'' 
as it appears in 46 U.S.C. 41104(a)(3) and 46 CFR 542.1(c)(2). These 
commenters assert that ``when available'' is an important qualifier 
because it narrows when the Commission can say a carrier has 
unreasonably refused cargo space accommodations to occasions on which 
the space can reasonably be considered available. These commenters also 
asserted that the meaning of ``when available'' is directly relevant to 
the Commission's treatment of blank sailings, which the Commission 
discusses in the context of the proposed export policy requirement and 
in the example in proposed Sec.  542.1(e)(1).
---------------------------------------------------------------------------

    \84\ FMC-2023-0010-0036 at 2 and 9.
    \85\ FMC-2023-0010-0041 at 4, 17-18.
---------------------------------------------------------------------------

    Next, these commenters argue that by not addressing the meaning of 
the statutory phrase ``when available,'' the Commission ignores the 
point that when a vessel call is cancelled or delayed, by definition, 
there is no space available on that vessel on its originally scheduled 
call date. The commenters further argue that under a statutory 
provision that is limited to situations in which vessel space is 
available, it is logically incoherent to impose regulations that apply 
to situations in which the vessel is not even present. The statutory 
language indicates that Congress only intended to address the situation 
that arises when a vessel is at the port and has useable space, but the 
carrier unreasonably denies loading of cargo. The commenters argue that 
instead of following this mandate, the Commission has ignored the 
``when available'' limitation, and in so doing, has opened up an almost 
limitless universe of possible Shipping Act claims never contemplated 
or authorized by OSRA 2022.\86\
---------------------------------------------------------------------------

    \86\ E.g., FMC-2023-0010-0036 at 9.
---------------------------------------------------------------------------

    Lastly, the commenters argue that the Commission cannot ignore 
``when available'' in defining what it means to be an unreasonable 
refusal to provide cargo space, because, under the ``whole text'' canon 
of statutory interpretation, the Commission must consider all 
instructions given by Congress. Because OSRA requires the Commission to 
define ``unfair or unjustly discriminatory methods'' and ``unreasonable 
refusal [of] cargo space accommodations when available'' is a 
subcategory of those methods, the Commission must consider ``when 
available'' when defining this element.\87\
---------------------------------------------------------------------------

    \87\ Id.
---------------------------------------------------------------------------

    FMC response: The Commission declines to add a definition of ``when 
available.'' Determinations of what ``when available'' means are 
necessarily made based on the individual set of facts and circumstances 
of each case. This is consistent with the Commission's case-by-case 
approach, which was explained in both the NPRM and the SNPRM.

D. Sec.  542.1(d): Non-Binding Considerations When Evaluating 
Unreasonable Conduct Under 46 U.S.C. 41104(a)(3)

1. Business Decisions
    Issue: The SNPRM removed ``business decisions'' as an explicit 
factor that the Commission would be required to consider in determining 
whether there was an unreasonable refusal to deal.\88\ However, the 
preamble to the SNPRM made clear that the change would still allow the 
Commission to consider any relevant factor in determining whether a 
refusal to deal or negotiate was unreasonable.\89\ A number of comments 
advocated for reincorporating business decisions explicitly back into 
the regulatory text in the final rule.\90\
---------------------------------------------------------------------------

    \88\ See 87 FR 57674, 57679 NPRM-draft 46 CFR 542.1(b)(2)(ii) 
(``Whether the ocean common carrier engaged in good-faith 
negotiations, and made business decisions that were subsequently 
applied in a fair and consistent manner'').
    \89\ 88 FR 38789, 38797.
    \90\ E.g., MSC Mediterranean Shipping Company (USA) Inc. (FMC-
2023-0010-0036) at 2, 4; World Shipping Council (FMC-2023-0010-0041) 
at 3, 7-8.
---------------------------------------------------------------------------

    MSC Mediterranean Shipping Company, (USA) Inc. (MSC) and World 
Shipping Council (WSC) argued that by expressly removing business 
decisions from the regulatory text, the Commission is effectively 
saying, despite its assurances in the SNPRM's preamble, that business 
factors will no longer be considered in evaluating reasonableness.\91\ 
They assert that the explanation the Commission offered for

[[Page 59657]]

this removal--that business factors are too important to be included in 
the regulation--is directly contrary to the Commission's claim that all 
legitimate factors will be considered.\92\ As a result, they argued 
that FMC must explicitly reincorporate business decisions into the list 
of factors to be considered by the Commission when adjudicating a 
claim.\93\ WSC argued that removing business decisions from the 
regulatory text is a conscious and systematic refusal by the Commission 
to consider what it has itself identified as an important part of the 
analysis, and thus constitutes a failure to consider a critical part of 
the issue under the Administrative Procedure Act (APA), 5 U.S.C. 
706.\94\
---------------------------------------------------------------------------

    \91\ MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-
0010-0036) at 4; World Shipping Council (FMC-2023-0010-0041) at 3, 
7-8.
    \92\ Id.
    \93\ MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-
0010-0036) at 2, 4.
    \94\ FMC-2023-0010-0041 at 3.
---------------------------------------------------------------------------

    Hapag-Lloyd (America) LLC (Hapag-Lloyd) argued that business 
factors are necessary considerations to ensure the safety of personnel 
and the operational success of a voyage.\95\ It stated that a carrier's 
non-vessel-based personnel and operations can have a direct impact on 
the operational success of a voyage and the safety of all personnel 
involved. Hapag-Lloyd argued that customer conduct can become 
disruptive in other ways, including customer harassment or misconduct 
towards an ocean carrier's employees, which can have detrimental 
effects on the well-being of the workforce and the overall work 
environment.
---------------------------------------------------------------------------

    \95\ FMC-2023-0010-0040 at 2-4.
---------------------------------------------------------------------------

    Hapag-Lloyd disagrees with the Commission's reluctance to use 
profitability as a factor for determining reasonableness, given that it 
is a for-profit company, and profit is important to ensuring a 
competitive and sustainable service. Hapag-Lloyd asserted that 
customers' consistent fraudulent behavior and non-payment for services 
can affect the company's bottom line, and that in such instances, an 
ocean carrier should be allowed to refuse dealing with the offending 
customers.\96\
---------------------------------------------------------------------------

    \96\ Id. at 2-4.
---------------------------------------------------------------------------

    ZIM Integrated Shipping Services Ltd. (ZIM) argued that removal of 
business decisions from the factors goes against Commission regulations 
and precedent. In particular, ZIM argued that Commission regulations 
define ocean common carriers as ``hold[ing] [themselves] out to the 
general public to provide transportation by water of passengers or 
cargo between the United States and a foreign country for 
compensation.'' \97\ Furthermore, citing Docking & Lease Agreement By & 
Between City of Portland, ME & Scotia Princess Cruises, Ltd., ZIM 
argued that the Commission recognized that decisions ``connected to a 
legitimate business decision or motivated by legitimate transportation 
factors'' are presumptively reasonable.\98\
---------------------------------------------------------------------------

    \97\ FMC-2023-0010-0042 at 2 (citing 46 CFR 515.2(e) (emphasis 
in the original)).
    \98\ FMC-2023-0010-0042 at 2 (citing Docking & Lease Agreement 
By & Between City of Portland, ME & Scotia Princess Cruises, Ltd., 
30 S.R.R. 377, 379 (F.M.C. 2004) (emphasis in original)).
---------------------------------------------------------------------------

    In addition, ZIM argued that while the Commission's focus on the 
potential for business decisions to overwhelm the rest of the factors 
may be legitimate, it does not justify disregarding critical factors in 
the equation or eliminate the duty to determine if a refusal to deal 
was in violation of the Shipping Act. Instead, it requires the finder 
of fact to consider the various operational factors within the 
carrier's control, as well as factors such as profit, cargo type, 
customer balance and other factors that fall within the definition of 
legitimate business factors.\99\
---------------------------------------------------------------------------

    \99\ FMC-2023-0010-0042 at 3.
---------------------------------------------------------------------------

    CMA CGM argued that exporters and importers would be penalized by 
the Commission's failure to recognize carriers' legitimate business 
considerations as ``legitimate transportation factors,'' because it is 
not viable for carriers to offer services to customers who present 
risks such as non-payment, mis-declaring cargo, improperly packaging 
hazardous cargo and/or causing ``fall down'' by placing bookings for 
vessel space which they failed to fulfill. CMA CGM asserts that 
continued service to customers, as well as the viability of the supply 
chain, depends on carriers being able to exercise legitimate business 
discretion.
    OOCL argued that while it is clear that business decisions are 
being removed under the premise that these would become a core factor 
for carriers to refuse space or equipment to support customer's ability 
to ship cargo, this bears no resemblance to the ability of any business 
to effectively manage its operations. OOCL argued that business factors 
will always be part of any consideration--and should remain so in any 
free market economy.\100\
---------------------------------------------------------------------------

    \100\ FMC-2023-0010-0052 at 2.
---------------------------------------------------------------------------

    FMC response: The Commission declines to explicitly re-insert 
business decisions into the regulatory text. The rule, however, 
explicitly allows the Commission to consider any relevant factor in 
determining whether a refusal to deal or negotiate was 
unreasonable.\101\ This includes non-transportation factors, such as 
business decisions (which includes profit considerations). The 
Commission has made clear that information on business decisions 
relevant to establishing a reasonable refusal to deal would still be 
relevant to the Commission's analysis.\102\ Therefore, the Commission 
has not refused to consider an important part of the analysis. The 
Commission, however, must look at the totality of circumstances 
relevant to each case to determine whether or not an ocean common 
carrier has acted unreasonably. For this reason, the Commission has 
removed business factors from being specifically listed as a 
requirement the Commission must consider to something that the 
Commission ``may'' consider, and is not precluded from doing so.
---------------------------------------------------------------------------

    \101\ Final rule at Sec. Sec.  542.1 (d)(4) and (g)(4).
    \102\ E.g., 88 FR 38789, 38797.
---------------------------------------------------------------------------

    (a) Internal inconsistency within the regulation.
    Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979/
Central America Discussion Agreement, FMC Agreement No. 011075 (the 
``Agreements'') noted that one element the rule would require to be 
included in a documented export policy is pricing strategies, and that 
the Commission indicated that certain business decisions should be 
justified in the documented export policy.\103\ At the same time, the 
Commission has proposed excluding legitimate business factors from the 
reasonableness factors. The Agreements argue that these two positions 
are inconsistent. In addition, the Agreements question the veracity of 
the Commission's informal statement that business decisions would still 
be relevant to its analysis of reasonableness is of no comfort to the 
Agreements, given the position taken by the Commission in its brief in 
Evergreen v. United States.\104\ There, the Agreements assert, the 
Commission argued it is not required to consider factors that are not 
expressly included in the regulations. As a result, the Agreements 
argue that if legitimate business considerations will be considered, 
the regulations should so state.\105\
---------------------------------------------------------------------------

    \103\ FMC-2023-0010-0038 at 5 (citing 88 FR 38789, 38797).
    \104\ FMC-2023-0010-0038 at 5 (citing Evergreen v. United 
States, (D.C. Cir. 2023) Case No. 23-1052 Brief for Respondents 
Federal Maritime Commission and United States, Docket. No. 2005698 
at 10).
    \105\ FMC-2023-0010-0038 at 5.
---------------------------------------------------------------------------

    FMC response: One reason the Commission is requiring a documented 
export policy is to determine whether a carrier's decisions adhere to 
that policy.

[[Page 59658]]

The degree of divergence from that policy will be one factor that the 
Commission may consider in a refusal to deal or negotiate case. In 
doing so, the Commission is not making any statements on pricing 
strategy as a business factor. As such, requiring pricing strategy to 
be part of the documented export policy is consistent with removing 
business factors from being explicitly stated in the rule.
    The key difference is between regulations that state that the 
Commission must do something, and situations in which the Commission is 
not precluded from doing something.\106\ In the present matter, the 
Commission has removed business factors from being specifically listed 
as a requirement the Commission must consider under transportation 
factors. The Commission is moving them from a position that it ``must'' 
consider these factors to a position that the Commission ``may'' 
consider them and is not precluded from doing so. As such, we find no 
inconsistency in this position.
---------------------------------------------------------------------------

    \106\ See Evergreen v. United States, (D.C. Cir. 2023) Case No. 
23-1052 Brief for Respondents Federal Maritime Commission and United 
States, Docket. No. 2005698 at 10 (comparing 46 CFR 545.5(c)(1) with 
46 CFR 545.5(c)(2)(iii), 545.5(d), and 545.5(e), and citing 85 FR 
29638, 29641 (May 18, 2020)).
---------------------------------------------------------------------------

    (b) Parties' prior dealings as a consideration when evaluating 
unreasonable conduct.
    Issue: Retail Industry Leaders Association (RILA) argued that the 
parties' prior course of dealings should be explicitly added to the 
final rule as a consideration for the Commission in evaluating 
unreasonable conduct. RILA argued that it is ``critical to evaluate 
past business actions in the context of allegations to refuse the 
provision of service.'' \107\ Hapag-Lloyd (America) LLC (Hapag-Lloyd) 
made similar arguments against the Commission's removal of legitimate 
business factors, as discussed above.\108\
---------------------------------------------------------------------------

    \107\ FMC-2023-0010-0049 at 2.
    \108\ FMC-2023-0010-0040 at 2-4.
---------------------------------------------------------------------------

    FMC response: The Commission declines to explicitly add this factor 
into the regulatory text of the final rule. However, the Commission 
maintains that in the course of deciding these matters on a case-by-
case basis, the parties' prior relationship and conduct may be one of 
the factors it examines in determining whether an ocean common 
carrier's conduct is unreasonable. In these cases, the Commission will 
continue to examine the totality of the circumstances and is not 
precluded from examining the parties' prior dealings simply because 
this factor is not explicitly stated as a consideration in the final 
rule. As noted in the SNPRM, it would be impossible for the Commission 
to predict every situation. As such, maintaining the flexibility of a 
case-by-case determination in these situations remains the Commission's 
best path.
    (c) Cargo perishability as a nonbinding consideration in evaluating 
unreasonable conduct under Sec. Sec.  542.1 (d) and (g).
    Issue: The Retail Industry Leaders Association (RILA) recommends 
adding whether the goods at issue are perishable as a non-binding 
consideration when evaluating whether carrier conduct is unreasonable 
under Sec. Sec.  542.1(d) and (g) of the final rule.\109\ This would 
include goods such as food and medical products. Citing the SNPRM's 
preamble, RILA noted that the Commission recognized that the goods' 
perishability could be a factor in determining unreasonable conduct but 
decided not to put specific time limits on these, opting instead for 
analyzing them on a case-by-case basis.\110\ RILA argued that 
perishability is a factor that has a bearing on the reasonableness 
analysis in specific circumstances, thereby requiring expedited 
decision-making on cargo movement in those cases. As a result, RILA 
argued that the Commission should include perishability as a factor in 
the regulatory text.
---------------------------------------------------------------------------

    \109\ FMC-2023-0010-0049 at 3.
    \110\ Id. (citing 88 FR 38789, 38799).
---------------------------------------------------------------------------

    Similarly, the International Dairy Foods Association (IDFA) argued 
that the Commission should add the consideration of whether the goods 
are perishable to the list of considerations of Sec.  542.1(d), and 
also cites to the same SNPRM language that RILA cited.\111\ IDFA argued 
that the longer it takes for perishable goods to reach their ultimate 
destination, the less valuable those goods become, as shelf life 
dwindles and eventually expires. Such goods are also more expensive to 
maintain in storage than most non-perishable goods. As a result, IDFA 
argued that the Commission should insert perishability into the list of 
non-binding considerations to be evaluated ``as appropriate'' as part 
of its ``case-by-case approach'' to determining whether the conduct of 
an ocean common carrier is unreasonable.
---------------------------------------------------------------------------

    \111\ FMC-2023-0010-0053 at 4-5.
---------------------------------------------------------------------------

    FMC response: The Commission declines to make this change. 
Consistent with the approach articulated in the SNPRM, the Commission 
will continue to make decisions on a case-by-case basis. The 
perishability of the goods, and the time pressure that this adds to 
getting the goods to their final destination, can remain one factor 
that the Commission may examine in the course of deciding each case 
that comes before it. This allows the Commission to retain flexibility 
in its decision-making, while also examining the totality of the 
circumstances in each case.
    (d) Safety and the carriage of hazardous or dangerous goods.
    Issue: Some VOCCs argue that the rule should account for 
considerations within the vessel operator's control that also serve 
legitimate purposes, such as safety. ZIM Integrated Shipping Services 
(ZIM) argued that refusing to accept and carry a particular class of 
Dangerous Goods because of a prior commitment to carry incompatible 
cargoes or the absence of equipment necessary for those cargoes are 
both elements that fall within a carrier's control. ZIM also argued 
that a carrier's calculation of vessel stability or compliance with 
safety regulations may require refusal to load a consignment, and that 
each of these decisions should be presumed to be reasonable.\112\ 
Similarly, CMA CGM (America) LLC argued that it is not viable for 
carriers to offer services to customers who present risks such as mis-
declaring cargo or improperly packaging hazardous cargo, because it 
could result in violations of regulatory requirements and significant 
safety risks for vessels, crew, and cargo. Rather, such circumstances, 
present valid customer-centric considerations that are entirely 
reasonable.\113\
---------------------------------------------------------------------------

    \112\ FMC-2023-0010-0042 at 2.
    \113\ FMC-2023-0010-0043 at 2.
---------------------------------------------------------------------------

    On the other side of the argument, another commenter, whose members 
produce and export a wide variety of chemicals, polymers, and related 
products, asks the Commission to add the consideration of whether the 
goods are properly tendered hazardous cargo to Sec. Sec.  542.1(d) and 
542.1(g).\114\ These commenters argue that including this factor in the 
list of non-binding considerations would be an appropriate part of the 
Commission's case by-case approach to determining whether an ocean 
common carrier's conduct is unreasonable, and would act as a deterrent 
against carriers that unreasonably refuse to transport such cargo.
---------------------------------------------------------------------------

    \114\ American Chemistry Council/National Association of 
Manufacturers/American Association of Exporters and Importers (FMC-
2023-0010-0050) at 5.

---------------------------------------------------------------------------

[[Page 59659]]

    FMC response: The definition of ``transportation factors'' in Sec.  
542.1(b) includes vessel safety. A carrier can reasonably refuse 
hazardous cargo if there is a legitimate safety concern. This includes 
there being a real safety risk presented by the specific cargo load on 
a particular vessel (in particular weather conditions, for example). 
However, in accordance with 46 U.S.C. 41104(a) (4)(B) and (5), a 
carrier cannot categorically deny all hazardous materials.
    (e) Carriers must be able to meet their obligations under minimum 
quantity commitments.
    Issue: OOCL USA, Inc. (OOCL) argued that as part of the service 
contract negotiation, the parties agree to a minimum quantity 
commitment.\115\ This is a commitment from the carriers to support and 
fulfill the agreement--with an understanding that the shipping party 
operates under the same consideration. OOCL argued that in cases where 
contracts are implemented and shipments cover the entire period of the 
contracts, carriers need to ensure space is available to allow the 
carrier to fulfill its obligation. To this end, carriers ensure that an 
allocation is reserved to protects carriers' ability to support both 
U.S. and foreign exporters. OOCL argued that this could mean that space 
appears to be available when a shipper tries to book cargo, but the 
carrier may not actually have that space available as part of its legal 
obligation under its contractual agreement. OOCL argued that if the 
carrier undermines this legal obligation it could be subject to 
complaints before the Commission, as well as legal action related to 
breach of contract, but that there is nothing in the SNPRM that 
indicates how the Commission would classify this situation if a 
complaint were raised.
---------------------------------------------------------------------------

    \115\ FMC-2023-0010-0052 at 2.
---------------------------------------------------------------------------

    FMC response: This rulemaking is not intended to interfere with the 
parties' contractual obligations. If a minimum quantity commitment 
pursuant to a service contract is a factor in a carrier's decision to 
allocate vessel or cargo space, the carrier may raise that argument 
before the Commission if a complaint is filed. The Commission may then 
consider this factor in deciding the case. As noted in the NPRM and 
SNPRM, the Commission will consider these cases on a case-by-case 
basis, and we continue to adhere to that position in this final rule.
    (f) Carriers must be able to consider a number of factors when 
accepting cargo bookings.
    Issue: OOCL argued that vessel space is not the only factor in a 
carrier's decision to accept a cargo booking, and that many other 
factors play a role in the decision. One example that OOCL noted is if 
a customer were looking to move cargo to a port that was not directly 
serviced by the ocean common carrier, there may be limitations or gaps 
in services between the carrier's port of discharge and the port to 
which the customer wants its cargo delivered even if the carrier has 
adequate space aboard the intended vessel. OOCL also argued that most 
carriers look at ``round trip'' movement of cargo to ensure effective 
support of all customers in moving cargo.\116\
---------------------------------------------------------------------------

    \116\ Id.
---------------------------------------------------------------------------

    FMC response: This rulemaking is not intended to cover every factor 
that affects the ocean borne carriage of goods. The examples of 
unreasonable conduct listed in the rule are just that--examples. In 
examining complaints of unreasonable refusals to deal, the Commission 
will be looking at the totality of the circumstances surrounding a 
complaint on a case-by-case basis.
    (g) Carrier retaliation as a factor in evaluating unreasonable 
conduct under Sec. Sec.  542.1(d) and (g).
    Issue: In a joint comment submitted by the American Chemistry 
Council (ACC), the National Association of Manufacturers (NAM), and the 
American Association of Exporters and Importers (AAEI), these entities 
argue that the Commission should amend Sec. Sec.  542.1(d) and (g) to 
take into account whether the carrier's conduct was preceded by the 
shipper raising concerns about a carrier's performance on a 
contract.\117\ ACC, NAM and AAEI argue that, based on the circumstances 
of a particular case, the Commission may be able to infer from the 
nature and timing of a carrier's conduct that there is a link between 
the shipper communicating their concerns and the alleged unreasonable 
conduct by the carrier.
---------------------------------------------------------------------------

    \117\ FMC-2023-0010-0050 at 4.
---------------------------------------------------------------------------

    FMC response: The Commission declines to make this change. The 
timing of the conduct may not, by itself, indicate that it is 
unreasonable. Instead, the Commission would need to examine the timing 
of the conduct in the context of the rest of the factors presented by 
the case to determine whether it contributes to a determination that 
the carrier's conduct was unreasonable.
2. Expressly Excluding Certain Classes of Cargo
    Issue: The American Cotton Shippers Association (ACSA) argued that 
the rule should expressly state that excluding certain classes or types 
of cargo, such as a specific type of agricultural commodity, may 
constitute an unreasonable refusal to deal or negotiate in the absence 
of a demonstration that such refusal is reasonable.\118\ The ACSA 
believes this should apply regardless of whether the VOCC's conduct is 
at the negotiation stage or the execution stage, and that it should 
apply even where other U.S. exports may be accepted by the carrier. The 
ACSA also stated that the Commission should consider whether such 
categorial exclusions constitute ``unfair or unjustly discriminatory 
methods.''
---------------------------------------------------------------------------

    \118\ FMC-2023-0010-0047 at 5.
---------------------------------------------------------------------------

    FMC response: Sections 41104(a)(4)(B) and 41104(a)(5) of title 46 
of the United States Code prohibit common carriers from engaging in any 
unfair or unjustly discriminatory practice regarding cargo 
classification. This includes refusing to carry certain classes of 
goods, such as agricultural goods. Additionally, as noted in the SNPRM, 
the Commission will address the statutory requirement in section 7(c) 
of OSRA 2022 to complete a rulemaking defining unfair or unjustly 
discriminatory methods in a separate rulemaking.

E. Sec.  542.1(e): Non-Binding Examples of Unreasonable Conduct Under 
46 U.S.C. 41104(a)(3)

1. Sec.  542.1(e)(1) Blank Sailings/Insufficient Notice of Scheduling 
Changes
    (a) Whether blank sailings are commercially reasonable.
    Issue: MSC requested that the Commission provide clarification as 
to whether blank sailings are commercially reasonable, and to update 
the text of Sec.  542.1(c)(2) accordingly.\119\
---------------------------------------------------------------------------

    \119\ FMC-2023-0010-0036 at 2.
---------------------------------------------------------------------------

    FMC response: The Commission declines to make this change. While 
there may be instances in which legitimate transportation factors 
necessitate a blank sailing, the Commission is unwilling to make a 
general finding that blank sailings will always be reasonable in every 
single case. Instead, the Commission will adhere to deciding 
reasonableness on the case-by-case basis put forth in both the NPRM and 
SNPRM.
    (b) Advance notice.
    Issue: MSC Mediterranean Shipping Company (USA) Inc. (MSC) argued 
that the Commission's use of lack of advance notice or insufficient 
advance notice as an example of unreasonable conduct under 46 U.S.C. 
41104(a)(3) is an improper attempt to rewrite service

[[Page 59660]]

contracts and should be withdrawn.\120\ MSC agrees with the 
Commission's statement, in the preamble of the SNPRM, that blank 
sailings are reasonable when they are based upon decreased demand, port 
congestion, weather, force majeure, vessel mechanical failure, or 
changes in service by a vessel sharing partner. MSC argued, however, 
that the Commission's example of ``blank sailing or schedule changes 
with no advance notice or with insufficient advance notice'' as an 
example of unreasonable conduct under 46 U.S.C 41104(a)(3) goes against 
the standard of commercial reasonableness. MSC argued that in most 
cases, a service contract or a carrier's tariff offering does not 
guarantee that a booking will be loaded on a particular ship or sailing 
and it is therefore reasonable not to give notice that a given 
container will not go on a given vessel. As a result, MSC argued that 
the Commission's proposal amounts to it rewriting the service contract 
or the carrier's tariff, and the Commission's rewrite is asymmetrical 
because it provides strict liability against carriers but no 
corresponding responsibility on the part of shippers or remedy for 
carriers. Lastly, MSC argued that if the Commission implements the rule 
as proposed, it must explain what provisions of the Shipping Act 
authorizes it to place Shipping Act liability on a carrier whenever it 
misses a scheduled port call without giving ``sufficient,'' but 
undefined, notice.\121\ World Shipping Council (WSC) also objects to 
this advance notice provision for the same reasons.\122\
---------------------------------------------------------------------------

    \120\ Id. at 2, 10.
    \121\ Id. at 10.
    \122\ FMC-2023-0010-0041 at 18-19.
---------------------------------------------------------------------------

    Similarly, OOCL (USA) Inc. (OOCL) argued against blank sailings 
being an example of an unreasonable refusal to deal.\123\ OOCL stated 
that it is inconceivable that a business does not have the ability to 
make best use of its assets to ensure service continuity and capability 
to supply services based on demand. OOCL further noted that there is no 
definition as to what would be construed as lack of advance notice or 
insufficient advance notice, and therefore argued that this provision 
should be removed. OOCL also argued that even under service contract 
terms, there is no guarantee made that cargo will be shipped on any 
specific vessel--only that the carrier will commit to shipping its 
minimum quantity commitment (MQC) within the period of the contract. 
Similarly, OOCL argued that the Bill of Lading's terms also provide 
that there is no guarantee that cargo will ship on any specific vessel, 
and that while the company tries to ensure that all cargo is loaded 
onto the intended and booked vessel, extenuating issues outside of the 
carrier's control could impact that capability. Lastly, OOCL stated 
that, in all cases where blank sailings are involved, OOCL always 
offers alternative options to accommodate the shipper's requirements 
and there is no attempt to refuse to deal.
---------------------------------------------------------------------------

    \123\ FMC-2023-0010-0052 at 4-5.
---------------------------------------------------------------------------

    FMC response: The Commission declines to remove lack of or 
insufficient advance notice of blank sailings or schedule changes as a 
non-binding example of unreasonable conduct. Contrary to OOCL's 
comments, blank sailings themselves are not being deemed unreasonable 
here; it is the lack of advance notice or insufficient notice that is 
relevant to the reasonableness analysis. The Commission recognizes that 
blank sailings or schedule changes may be reasonable depending on the 
circumstances, but is of the opinion that the lack of adequate notice 
cannot be justified by legitimate transportation factors. Carriers' 
ability to communicate with its customers is not hindered by the type 
of events that might cause a blank sailing or a schedule change. 
Shippers are impacted by these changes and deserve notice when they 
take place in order to make their own business decisions regarding 
their cargo. The Commission also declines to specifically define how 
much notice is required--that, too, depends on the circumstances, 
including when the carrier itself determines that a blank sailing or 
schedule change is necessary, and how much time elapses between that 
determination and the notice it gives the shippers. Whether the carrier 
offers alternative options to accommodate the shipper's requirements 
when a blank sailing occurs, as OOCL stated it does, will be another 
factor that the Commission can consider when examining a refusal to 
deal case in front of it.
2. Sec.  542.1(e)(2) Vessel Capacity Limitations Not Justified by 
Legitimate Transportation Factors
    The Commission did not receive any negative comments on this 
specific section of the rule. As such, we are adopting the language 
from the SNPRM in the final rule.
3. Sec.  542.1(e)(3) Alerting Shippers With Confirmed Bookings
    Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979/
Central America Discussion Agreement, FMC Agreement No. 011075 (the 
``Agreements'') suggested that the Commission clarify what types of 
events VOCCs need to notify or alert shippers with confirmed bookings 
of in 46 CFR 542.1(e)(3).\124\ In addition, the National Industrial 
Transportation League (NITL) suggested that Commission add the word 
``timely'' before the phrase ``alert or notify shippers.'' \125\ NITL 
argued that this change is necessary because shippers need adequate 
notice from ocean carriers so they can ship on time, and that giving a 
shipper a booking confirmation one day before the vessel sails is akin 
to a constructive refusal to provide cargo space.\126\
---------------------------------------------------------------------------

    \124\ FMC-2023-0010-0038 at 12-13.
    \125\ FMC-2023-0010-0045 at 9.
    \126\ Id.
---------------------------------------------------------------------------

    FMC response: The Commission has added language to 46 CFR 
541.1(e)(3) to clarify the paragraph. This provision now reads: 
``failing to alert or notify shippers with confirmed bookings of any 
other changes to the sailing that will affect when their cargo arrives 
at its destination port.'' The Commission declines to add the word 
``timely,'' as what it means to be ``timely'' can vary according to 
circumstances and must be evaluated on a case-by-case basis. Paragraph 
(e)(3) is a non-binding example. Exclusion of the word ``timely'' does 
not preclude complainants from presenting evidence that notice was not 
adequate, including for reasons of timing.
4. Sec.  542.1(e)(4) Insufficient Loading Time
    (a) Removing insufficient time for vessel loading as an example of 
unreasonable ocean carrier conduct from the rule.
    Issue: MSC Mediterranean Shipping Company (USA) Inc. (MSC) argued 
that the Commission's use of scheduling insufficient time for vessel 
loading so that cargo is constructively refused as a non-binding 
example of unreasonable conduct in Sec.  542.1(e)(4) is improperly 
directed at ocean carriers. MSC argued that vessel loading times are 
controlled by maritime terminal operations and ports, not ocean 
carriers, and that as such, the Commission should withdraw this 
provision.\127\ Similarly, OOCL (USA) Inc. (OOCL) argued that 
scheduling of ``insufficient time'' for vessel loading, is not a valid 
carrier issue. OOCL stated that in almost all cases where vessels do 
not allow ``sufficient'' time, it is because of port operations or port 
requirements that determine when vessels can berth and when they need 
to vacate that berth. OOCL argued that carriers do not purposely depart 
early and leave cargo

[[Page 59661]]

behind, and that when this happens it is because the port has asked the 
vessel operator to leave. As such, OOCL also requested that this 
provision be removed.\128\ World Shipping Council (WSC) made the same 
arguments regarding this provision.\129\
---------------------------------------------------------------------------

    \127\ FMC-2023-0010-0036 at 3.
    \128\ FMC-2023-0010-0052 at 5.
    \129\ FMC-2023-0010-0041 at 19.
---------------------------------------------------------------------------

    FMC response: The Commission declines to remove this provision from 
the rule. While factors such as port congestion may play a role in when 
a vessel gets a berth and can begin loading and unloading containers, 
it is the VOCC that determines its initial schedule of which ports it 
will visit on which days. Thus, the VOCC sets a certain amount of time 
in each port, a decision that contributes to whether there is 
sufficient time to load cargo onto the vessel. As such, it remains the 
VOCC's responsibility in the first instance to schedule sufficient time 
to load cargo. Such considerations can be reviewed by the Commission as 
``other factors relevant in determining whether there was a refusal'' 
under 46 CFR 542.1(d)(4) and (g)(4).
    (b) Distinguishing between vessel loading time and cargo loading 
time.
    Issue: The National Industrial Transportation League (NITL) argued 
that the Commission should replace the words ``vessel loading'' in 
Sec.  542.1(e)(4) with ``container loading and tender of cargo.'' \130\ 
NITL expressed concern that this subsection was focused on vessel 
loading, as vessel loading is what occurs when the ocean carrier loads 
the vessel. According to NITL, container loading is what happens when 
shippers load the container at their facility and then tender the 
container to the carrier. Shippers need sufficient time to load and 
transport containers to the port where they will be loaded onto the 
vessels.
---------------------------------------------------------------------------

    \130\ FMC-2023-0010-0045 at 10.
---------------------------------------------------------------------------

    Similarly, BassTech International (BassTech) argued that Sec.  
542.1(e)(4) should be amended by inserting ``cargo tendering or'' 
between ``time for'' and ``vessel loading.'' BassTech argued that when 
shippers refer to the impediment of ``inadequate loading times,'' they 
are usually referring to the limited time provided by the ocean common 
carriers for the shipper to collect an empty container, bring it to 
their facility to load the container with their cargo, and then tender 
the laden container to the carrier.\131\ BassTech noted that the 
``insufficient time'' of Sec.  542.1(e)(4) is meant to address the 
problematic timelines surrounding cargo receiving dates that inhibit 
shippers from tendering laden containers to the carriers, and suggests 
the additional language at issue to identify cargo loading time as 
distinct from vessel loading time.
---------------------------------------------------------------------------

    \131\ FMC-2023-0010-0055 at 2.
---------------------------------------------------------------------------

    FMC response: In accordance with these comments, the Commission has 
added the phrase ``cargo tendering'' to Sec.  542.1(e)(4), such that 
this subsection will now read ``scheduling insufficient time for cargo 
tendering or vessel loading so that cargo is constructively refused.'' 
As BassTech noted, Sec.  542.1(e) focuses on conduct by the VOCC that 
is unreasonable with respect to cargo accommodations and Sec.  
542.1(e)(4) looks to ensure sufficient time for loading laden 
containers onto the vessel. Adding the phrase ``cargo tendering,'' 
while also retaining the phrase ``vessel loading'', ensures sufficient 
time for shippers to load and return their containers to the vessel for 
loading instead of limiting this provision to circumstances where the 
carrier may be the one loading the cargo onto the vessel.
5. Sec.  542.1(e)(5) Inaccurate or Unreliable Vessel Information
    The Retail Industry Leaders Association (RILA) and the 
International Dairy Foods Association (IDFA) supported the inclusion of 
the provision of inaccurate or unreliable vessel information as a non-
binding example of unreasonable conduct under 46 U.S.C. 41104(a)(3). 
Both commenters noted that the American Society for Testing and 
Materials (ASTM International) and other organizations who develop 
standards are working to develop standards on the sharing and use of 
digital information in the supply chain. RILA also noted the related 
work of Commissioner Bentzel with the Maritime Transportation Data 
Initiative.\132\
---------------------------------------------------------------------------

    \132\ RILA (FMC-2023-0010-0049) at 4; IDFA (FMC-2023-0010-0053) 
at 5.
---------------------------------------------------------------------------

    The Commission has decided to retain this factor as part of its 
analysis.
6. Sec.  542.1(e)(6) Categorical or Systematic Exclusion of Exports
    Issue: The International Dairy Foods Association (IDFA) supported 
the inclusion of the concept of systematically excluding exports in 
providing cargo space accommodations section. IDFA said that in its 
experience, ``de facto exclusionary tactics are more likely to be 
employed by carriers than employing a categorical prohibition, which 
would be easier to spot.'' \133\
---------------------------------------------------------------------------

    \133\ FMC-2023-0010-0053 at 5.
---------------------------------------------------------------------------

    Conversely, CMA CGM argued that carriers must have discretion to 
carry, or not carry, any particular product.\134\ The company argued 
that it should not be required to export categories of goods that go 
against its policies, and that it should be able to exercise 
independent business discretion to refuse certain shipments without 
concerns that these decisions will be deemed unreasonable.
---------------------------------------------------------------------------

    \134\ FMC-2023-0010-0043 at 2-3.
---------------------------------------------------------------------------

    FMC response: Common carriers are prohibited from unfairly or 
unjustly discriminating against a commodity group or type of shipment 
under 46 U.S.C. 41104(a)(4)(B) and (a)(5). The example in subsection 
(e)(6) was not intended to mirror the prohibitions in these provisions. 
Rather, the example is intended to reference the wholesale refusal by a 
VOCC of all exports. This confusion appears to result from our use of 
``categorical'' in the example. Our use of the term in this example was 
not intended to refer to categories of commodities, but rather to the 
de facto, absolute exclusion of all exports by a VOCC. In response to 
this question, FMC has revised the example to read: ``The de facto, 
absolute, or systematic exclusion of exports in providing cargo space 
accommodations.'' The Commission notes that it may consider an unfair 
or unjustly discriminatory practice, such as the unfair or unjust 
discrimination against a commodity group, as ``any other factor'' in 
accordance with 46 CFR 542.1(d)(4) and (g)(4) in determining whether 
there was an unreasonable refusal under 46 U.S.C. 41104(a)(3) or 
(a)(10).
7. Sec.  542.1(e)(7) Any Other Conduct the Commission Finds 
Unreasonable
    Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979 
and Central America Discussion Agreement, FMC Agreement No. 011075 (the 
Agreements'') objected to the proposed Sec.  542.1(e)(7) because it is 
not a true example.\135\ They said that it would instead be preferrable 
to state the intent that this is a non-exhaustive list more 
explicitly.\136\
---------------------------------------------------------------------------

    \135\ FMC-2023-0010-0038 at 12; information on the Maritime 
Transportation Data Initiative is available at https://www.fmc.gov/fmc-maritime-transportation-data-initiative/.
    \136\ FMC-2023-0010-0038 at 12.
---------------------------------------------------------------------------

    FMC response: In response to these comments, the Commission has 
removed proposed Sec.  542.1(e)(7) from the final rule. The commenter 
correctly pointed out that this subsection of the regulatory text did 
not actually provide an example of unreasonable conduct. No additional 
revisions were made as the header for the paragraph clearly designates 
these as ``non-binding examples''.

[[Page 59662]]

8. Requests for Additional Examples
    Issue: The International Dairy Foods Association (IDFA) proposed 
the inclusion of an additional example in paragraph (e): ``Not 
providing contracted-for cargo space accommodations where a shipper has 
raised frequent and urgent concerns with the carrier's documented 
failure to perform on the contract and/or threatened to litigate 
against the carrier for alleged non-performance and/or switch service 
providers due to the carrier's failure to perform.'' \137\ According to 
the commenter, it is unlikely that there will be future situations 
where retaliatory conduct is documented by carriers, so the Commission 
needs to focus on retaliation through the lens of unreasonable conduct 
``whether one can prove retaliation through incriminating email traffic 
or not''.\138\
---------------------------------------------------------------------------

    \137\ FMC-2023-0010-0053 at 6.
    \138\ Id.
---------------------------------------------------------------------------

    FMC response: FMC declines to add this as a specific example in the 
regulation. However, we do note that this is an important issue and is 
something that can be considered by the agency under Sec.  542.1(d)(4). 
FMC emphasizes the lists of examples in the rules are non-binding 
examples.

F. Sec.  542.1(f): Elements for Claims Under 46 U.S.C. 41104(a)(10)

    In response to the SNPRM, the Commission received no comments 
regarding Sec.  541.2(f), which sets out the elements necessary to 
establish a successful private party or enforcement claim under 46 
U.S.C. 41104(a)(10). These elements will be included in the final rule 
as proposed.

G. Sec.  542.1(g): Non-Binding Considerations When Evaluating 
Unreasonable Conduct Under 46 U.S.C. 41104(a)(10)

    Many of the comments the Commission received regarding the non-
binding considerations when evaluating unreasonable conduct explicitly 
stated that they applied to both sections 542.1(d) and 541.2(g). The 
comments that did not cite to either section contained arguments 
applicable to both sections. As a result, all of these comments are 
analyzed above, in the section for Sec.  542.1(d).

H. Sec.  542.1(h): Non-Binding Examples of Unreasonable Conduct Under 
46 U.S.C. 41104(a)(10)

1. Sec.  542.1(h)(1): Quotes Above Current Market Rates
    (a) Commission's authority to promulgate this requirement.
    Issue: Mediterranean Shipping Company (USA) Inc. (MSC) and World 
Shipping Council (WSC) argue that the Commission has no authority to 
regulate prices, and the proposal to use ``so far above current market 
rates'' as a standard is vague and unworkable.\139\ OOCL (USA) Inc. 
(OOCL) also argued that the Commission does not regulate rates, and 
that this provision eliminates the carrier's and shipper's ability to 
negotiate, which is part of the basis of a free market economy.\140\ 
OOCL further argued that this provision is vague and provides no basis 
to determine whether the quoted rates exceed the required rate from the 
customer or the market, which is problematic in a market where rates 
fluctuate wildly due to external forces.\141\ The Pacific Merchant 
Shipping Association (PMSA) also argued that the Commission has no 
authority to set rates or determine whether a rate is ``so high'' that 
it is unreasonable.\142\ PMSA further noted that the Commission has not 
explained how it would apply any such analysis, which it is required to 
do.\143\
---------------------------------------------------------------------------

    \139\ MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-
0010-0036) at 3, 10-11; World Shipping Council (FMC-2023-0010-0041) 
at 19-20.
    \140\ FMC-2023-0010-0052 at 6.
    \141\ Id.
    \142\ FMC-2023-0010-0054 at 2.
    \143\ Id.
---------------------------------------------------------------------------

    FMC response: In response, the Commission emphasizes that this is a 
non-binding example rather than a bright line rule. In addition, the 
Commission is not regulating or setting specific rates with this 
provision. It is simply providing a comparison point between rates a 
carrier offers in negotiation, and rates that the rest of the market is 
charging for that space. Contrary to the commenters' assertions, the 
Commission is letting the market work here because it is allowing the 
market to set the rates and is then examining whether the rates that 
any carrier puts forth in negotiations is so far above those market 
rates as to be unreasonable. While the Commission declines to set a 
bright line to determine how far above the market rate is unreasonable, 
it disagrees with the commenters that this makes for a vague rule. Some 
leeway in prices offered during negotiations is permissible and even 
encouraged by the market itself. As such, the Commission will retain 
this factor as written in the final rule. With regards to the 
assertions of vagueness, see the discussion concerning the definition 
of ``unreasonable''.
    (b) Shipper's significantly below-market rate proposal.
    Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979/
Central America Discussion Agreement, FMC Agreement No. 011075 argued 
that proposed Sec.  542.1(h)(1) should be revised to make clear that a 
carrier does not engage in unreasonable conduct when it rejects a 
customer proposal that is so low that it cannot be considered a real 
offer or an attempt at good faith negotiations.\144\
---------------------------------------------------------------------------

    \144\ FMC-2023-0010-0038 at 13.
---------------------------------------------------------------------------

    FMC response: The FMC declines to make the requested change. In 
parallel to the language of 46 U.S.C. 41104, the focus on the 
definition of reasonableness in this rule, and the related non-binding 
examples, is on the conduct of the ocean common carrier, rather than 
the conduct of, or impact on, the shipper. However, the rule does not 
prohibit the Commission from considering any relevant evidence.
2. Sec.  542.1(h)(2): Categorically or Systematically Excluding Exports
    The Commission received no comments on this regulatory text. As 
such, the Commission adopts this language without further changes in 
the final rule. However, for the same reasons discussed in relation to 
subsection (e)(6), the Commission has revised the example to read: 
``The de facto, absolute, or systematic exclusion of exports in 
providing vessel space accommodations.''
3. Sec.  542.1(h)(3): Any Other Unreasonable Conduct
    Issue: Caribbean Shipowners' Association, FMC Agreement No. 010979 
and Central America Discussion Agreement, FMC Agreement No. 011075 (the 
``Agreements'') objected to the proposed Sec.  542.1(h)(3) because it 
is not a true example.\145\ They said that it would instead be 
preferrable to state the intent that this is a non-exhaustive list more 
explicitly.
---------------------------------------------------------------------------

    \145\ Id. at 12.
---------------------------------------------------------------------------

    FMC response: In response to this comment the Commission has 
removed proposed Sec.  542.1(h)(3) from the final rule. The commenter 
correctly pointed out that this subsection of the regulatory text did 
not actually provide an example. No additional revisions were made as 
the header for the paragraph clearly designates these as ``non-binding 
examples''.

[[Page 59663]]

I. Sec.  542.1(i): Use of Sweeper Vessels

    Issue: MSC Mediterranean Shipping Company USA, Inc. (MSC) and World 
Shipping Council (WSC) requested that the Commission amend the 
regulatory text of paragraph (i) to include the SNPRM preamble's 
language that nothing in the rule is meant to restrict the ability of 
ocean common carriers to reposition empty containers.\146\
---------------------------------------------------------------------------

    \146\ MSC Mediterranean Shipping Company USA, Inc. (FMC-2023-
0010-0036 at 2-3); World Shipping Council (FMC-2023-0010-0041 at 
22); 88 FR 38789, 38790 (``The Commission also notes that nothing in 
the previous proposed rule or in this SNPRM is meant to restrict the 
ability of ocean common carriers to reposition empty containers. The 
repositing of empty containers can include the use of sweeper 
vessel.'').
---------------------------------------------------------------------------

    FMC response: FMC has amended the regulatory text as requested. 
However, as noted in the discussion above regarding the definition of 
``sweeper vessel,'' the Commission's position is that an ocean common 
carrier carrying even a single container of cargo should meet the same 
standards under 46 U.S.C. 41104(a) (3) and (10) as a vessel fully 
loaded with containerized cargo. Therefore, the Commission has also 
amended the regulatory text to make it clear that the designation of a 
sweeper is subject to Commission review to determine whether the 
designation results in an unreasonable refusal of ocean carriage 
services.

J. Sec.  542.1(j): Documented Export Policy

1. Confidentiality
    Issue: The Commission stated in the SNPRM that documented export 
policies filed by ocean common carriers would remain confidential.\147\ 
Some commenters argued that instead these reports should be made 
public, either in whole or in a redacted version.\148\ Other commenters 
stated that if documented export policies are required, the regulations 
should state expressly that such policies are confidential and exempt 
from disclosure under the Freedom of Information Act.\149\
---------------------------------------------------------------------------

    \147\ 88 FR 38789, 38805 (June 14, 2023).
    \148\ American Chemistry Council/National Association of 
Manufacturers/American Association of Exporters and Importers (FMC-
2023-0010-0050) at 6; The National Industrial Transportation League 
(FMC-2023-0010-0045) at 7; Retail Industry Leaders Association (FMC-
2023-0010-0049) at 6; U.S. Dairy Export Council/National Milk 
Producers Federation (FMC-2023-0010-0035) at 4.
    \149\ Caribbean Shipowners' Association, FMC Agreement No. 
010979/Central America Discussion Agreement, FMC Agreement No. 
011075 (FMC-2023-0010-0038) at 6; see also MSC Mediterranean 
Shipping Company (USA) Inc. (FMC-2023-0010-0036) at 4.
---------------------------------------------------------------------------

    FMC response: The documented export policies filed with the 
Commission shall remain confidential in accordance with 46 U.S.C. 
40306. With certain limited exceptions, section 40306 prohibits the 
disclosure of information and documents filed with the FMC. In response 
to comments received, the Commission has amended the regulatory text to 
clearly state that documented export policies and information therein 
is not disclosable, in whole or in part, including in response to 
requests under the Freedom of Information Act. This provision is 
located at 46 CFR 542.2(j)(3) in the final rule. As noted in the SNPRM, 
aggregate data may be provided by the Commission in annual reports 
submitted to Congress or compiled for other purposes but will not 
reveal confidential information provided by or about individual 
carriers.
2. The Commission's Legal Authority To Impose the Obligation
    Issue: Several commenters asserted that there is no authority in 
OSRA 2022 or elsewhere in the Shipping Act to impose a requirement on 
ocean common carriers to file a documented export policy with the FMC, 
or for the FMC to use such a document as a factor in determining 
whether an ocean common carrier has acted unreasonably.\150\ Commenters 
asserted that 46 U.S.C. 40104 only provides FMC authority to collect 
information or an accounting of events that have already taken place 
and does not authorize ``the Commission to direct the development and 
submission of a forward-looking policy or strategy aiming document.'' 
\151\
---------------------------------------------------------------------------

    \150\ MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-
0010-0036) at 3, 5-8; ZIM American Integrated Shipping Services Co. 
LLC (FMC-2023-0010-0042) 3-4; World Shipping Council (FMC-2023-0010-
0041) at 3, 10-11.
    \151\ Id.
---------------------------------------------------------------------------

    Commenters also asserted that the FMC's active involvement in the 
day to day operations of ocean carriers as contemplated by the rule 
contravenes the Shipping Act's stated purpose to establish a non-
discriminatory regulatory process for common carriage of goods by water 
in the foreign commerce of the United Sates with a minimum of 
government intervention and regulatory costs (46 U.S.C. 40101(1)).\152\
---------------------------------------------------------------------------

    \152\ Id.
---------------------------------------------------------------------------

    World Shipping Council (WSC) asserted that the proposed requirement 
for ocean common carriers to file documented export policies was in 
violation of the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3521, 
``because the Commission has failed to show how its proposal to require 
an export policy will have any utility to the agency, either in 
benchmarking unreasonable action, or for use in litigation.'' \153\
---------------------------------------------------------------------------

    \153\ World Shipping Council (FMC-2023-0010-0041) at 16; see 
also Mediterranean Shipping Company (USA) Inc. (MSC) (FMC-2023-0010-
0036) at 3 (arguing that the use of confidential export policy in 
litigation has no precedential value for carriers, shippers, or 
finders of fact because the basis of the decision will be 
confidential).
---------------------------------------------------------------------------

    Finally, one commenter argued that the regulation, as proposed, is 
too broad and should be more narrowly tailored to reduce unnecessary 
burden.\154\ This commenter argued that not all carriers should be 
required to file a documented export policy because concerns about 
refusals to provide export cargo space does not apply to all trade 
routes.\155\
---------------------------------------------------------------------------

    \154\ Caribbean Shipowners' Association, FMC Agreement No. 
010979/Central America Discussion Agreement, FMC Agreement No. 
011075 (FMC-2023-0010-0038) at 2-3.
    \155\ Id.
---------------------------------------------------------------------------

    FMC response: Section 40104 of title 46 of the United States Code 
provides the FMC with clear authority to require ocean common carriers 
to file documented export policies as directed by this final rule. The 
statute unambiguously states on its face that the agency may require a 
common carrier to file with the Commission a periodical, special 
report, or memorandum of facts and transactions related to the business 
of the common carrier.\156\ An ocean common carrier's general policies 
concerning their export operations are facts related to the business of 
the common carrier. Contrary to the commenters' assertions, the statute 
does not restrict the Commission to only gathering information about 
past actions. In accordance with 46 U.S.C. 40104(a)(3), this rule is 
limited in scope to fulfill its objective and provides a reasonable 
period for respondents to respond based upon their capabilities and 
scope of the order. In accordance with 44 U.S.C. 3508 and implementing 
guidance from the Office of Management and Budget, the Commission has 
explained the purpose, need, and practical utility of the collection of 
this information. These reports are an important part of monitoring the 
industry for unreasonable behavior vis-[aacute]-vis exports. The 
information provided will help the Commission determine whether an 
ocean common carrier's conduct in a specific matter aligns with their 
general policies and whether the ocean common carrier thus acted 
reasonably. Requiring common carriers to submit this information does 
not involve the Commission in the day-to-day operations of ocean common 
carriers

[[Page 59664]]

and does not impose unnecessary or unreasonable burdens on carriers.
---------------------------------------------------------------------------

    \156\ 46 U.S.C. 40104(a)(1).
---------------------------------------------------------------------------

    The commenter is correct that not all trade routes currently 
demonstrate the same concerns about refusals to provide export services 
on vessels departing from the United States. However, the shipping 
industry is a dynamic one that is constantly responding to changing 
conditions; as such, it is reasonable to assume that these conditions, 
which are present today on some routes, may present on different trade 
routes in the future. In drafting this rule, the Commission is 
considering not only present conditions, but those that may 
realistically develop in the future. Having this information from all 
carriers allows the Commission to monitor all trade routes and engage 
in enforcement actions as issues are identified in a particular route.
3. Import Policy
    Issue: Two commenters suggested that the Commission should also 
require a documented import policy as import policies cannot be de-
coupled from export policies.\157\ In a similar vein, another commenter 
noted that the ocean transportation system is one continuous loop, with 
no separate import and export systems.\158\ Other commenters, while 
they do not advocate for an import policy, would not object to the 
requirement.\159\
---------------------------------------------------------------------------

    \157\ Retail Industry Leaders Association (FMC-2023-0010-0049) 
at 5; North American Meat Institute (FMC-2023-0010-0037) at 2-3.
    \158\ MSC Mediterranean Shipping Company (USA) Inc. (FMC-2023-
0010-0036) at 6.
    \159\ American Chemistry Council/National Association of 
Manufacturers/American Association of Exporters and Importers (FMC-
2023-0010-0050) at 7.
---------------------------------------------------------------------------

    FMC response: At this time, the Commission declines to mandate that 
ocean common carriers file a documented import policy. While there have 
been reports of restricted access to equipment and vessel capacity for 
U.S. importers, particularly in the Trans-Pacific market, there are few 
carriers who would need to rely on such a document to provide evidence 
that they intend to serve the U.S. markets when their ships are already 
visiting U.S. ports.\160\ As noted in the SNPRM, if an ocean common 
carrier wants to provide an import policy to help establish how a 
refusal is reasonable, the Commission would consider that 
information.\161\
---------------------------------------------------------------------------

    \160\ 88 FR 38789, 38790 and 38796.
    \161\ 88 FR 38789, 38796.
---------------------------------------------------------------------------

4. Miscellaneous Concerns
    (a) Deviating from a Documented Export Policy.
    Issue: One commenter said that if an export policy is required to 
be filed, the Commission should explicitly recognize that a deviation 
from that policy is not necessarily unreasonable or a violation of the 
Shipping Act.\162\ The mere following of a documented export policy by 
a carrier should not justify the carrier's refusal to accept cargo on a 
vessel.\163\ Another commenter said that the text should be amended to 
add ``with deviations as may be appropriate'' to enable efficient 
movement of export cargo.\164\
---------------------------------------------------------------------------

    \162\ Caribbean Shipowners' Association, FMC Agreement No. 
010979/Central America Discussion Agreement, FMC Agreement No. 
011075 (FMC-2023-0010-0038) at 6.
    \163\ The National Industrial Transportation League (FMC-2023-
0010-0045) at 9.
    \164\ BassTech International (FMC-2023-0010-0055) at 2.
---------------------------------------------------------------------------

    FMC response: In response to these comments, the Commission has 
amended Sec.  542.1(j) to state that the ocean common carrier must file 
the document with the Commission, not that the ocean common carrier 
must follow the document. This change aligns with the Commission's 
intent, as articulated in Sec.  542.1 (d)(1) and (g)(1) that whether 
the ocean common carrier followed a documented export policy is one, 
non-binding consideration that the Commission may consider in 
determining whether unreasonable conduct has occurred.
    (b) Timely movement of cargo.
    Issue: One commenter suggested that the text of the export policy 
considerations could be clarified by requiring ``the timely and 
efficient movement of export cargo.'' \165\
---------------------------------------------------------------------------

    \165\ The National Industrial Transportation League (FMC-2023-
0010-0045) at 9.
---------------------------------------------------------------------------

    FMC response: The Commission agrees and has incorporated the 
suggestion into the regulatory text. The original proposed language was 
written to mirror 46 U.S.C. 40104, which includes the descriptor 
``efficient'', but not ``timely''. While section 40104 does not include 
``timely'', its inclusion here comports with the goals of the OSRA 2022 
generally. Many exports, particularly agricultural exports, must be 
loaded and transported to their destinations in a timely manner in 
order for exporters to fulfill contract obligations.
    (c) Stagnant document in a dynamic market.
    Issue: Some commenters expressed concern with the documented export 
policy being a stagnant document when the commercial reality is that an 
ocean common carrier's export strategy is constantly evolving, 
adjusting to market realities. Commenters also said that being bound to 
a stagnant policy would stifle innovation and negatively impact 
customers.\166\
---------------------------------------------------------------------------

    \166\ Hapag-Lloyd (America) LLC (FMC-2023-0010-0040) at 5; CMA 
CGM (America) LLC (FMC-2023-0010-0043) at 1-2.
---------------------------------------------------------------------------

    FMC response: The Commission acknowledged in the SNPRM that export 
strategies are constantly evolving as the nature of international trade 
changes.\167\ For this reason the rule does not define an exhaustive 
list of items that must be included in an export policy, but instead 
identifies certain elements that would be helpful in determining 
reasonableness.\168\ The documented export strategy is intended to be a 
long-term document,\169\ and therefore the Commission is only requiring 
that it be filed once a year. If an ocean common carrier, however, 
believes that it is necessary to do so, they may file an amended or 
revised report anytime throughout the year. The Commission may also 
revisit, in the future, whether it should require documented export 
policy reports to be filed more frequently.
---------------------------------------------------------------------------

    \167\ 88 FR 38789, 38796.
    \168\ Id.
    \169\ Id.
---------------------------------------------------------------------------

    (d) Narrowly tailoring the requirements of the documented export 
policy.
    Issue: One commenter said that Sec.  542.1(j)(1) appears to be 
overly broad, requiring information not essential to implementation of 
the rule.\170\
---------------------------------------------------------------------------

    \170\ Agriculture Transportation Coalition (FMC-2023-0010-0048) 
at 4.
---------------------------------------------------------------------------

    FMC response: FMC disagrees with the commenter's assertion that the 
requirements in Sec.  542.1(j)(1) are overly broad. FMC has determined, 
based on its subject-matter expertise and role as regulator, the key 
information necessary for the Commission to have to monitor the 
industry for unreasonable conduct. According to comments received on 
the NPRM, many of the elements of the documented export policy are 
elements that ocean common carriers already include or monitor as part 
of export strategies. As such, providing this information to the 
Commission should not pose an unreasonable burden on VOCCs. 
Furthermore, as noted elsewhere in this preamble, one reason the 
Commission is requiring the documented export policy is to determine 
the extent to which ocean common carriers comply with their own 
policies. To the extent that a VOCC's conduct diverges from its own 
policies, the Commission may take that into account in determining 
whether an unreasonable refusal has taken place.

[[Page 59665]]

5. Suggested Changes to the Text Wording
    (a) Clarifying the export policy to show that it covers exports 
from the United States.
    Issue: One commenter argued that the export policy requirement 
should add ``U.S.'' to show that the document is not intended to 
include a carrier's export policies and practices from other countries 
to the United States.\171\
---------------------------------------------------------------------------

    \171\ BassTech International (FMC-2023-0010-0055) at 2.
---------------------------------------------------------------------------

    FMC response: The Commission declines to adopt this change. The 
definition of documented export policy in paragraph (b) makes clear 
that this document pertains to practices and procedures for U.S. 
outbound services.
    (b) Requiring the suggested elements of the documented export 
policy.
    Issue: The American Chemistry Council, National Association of 
Manufacturers and American Association of Exporters and Importers 
argued that the regulatory text should be revised to require carriers 
to submit the information contained in the proposed Sec.  
542.1(j)(1)(i)-(ii).\172\
---------------------------------------------------------------------------

    \172\ FMC-2023-0010-0050 at 6.
---------------------------------------------------------------------------

    FMC response: The Commission declines to make this change. As 
discussed in the SNPRM, the Commission is aware that export strategies 
are constantly evolving as the nature of international trade changes 
and for this reason has not defined an exhaustive list of items that 
must be included in an export policy, but in addition to certain 
mandatory elements, has identified certain elements that would be 
helpful in determining reasonableness.

K. Sec.  542.1(k): Shifting the Burden of Production

1. Clarifying the Burden Shifting Process To Explicitly State That It 
Is the Burden of Production That Shifts, Not the Burden of Proof
    Issue: MSC Mediterranean Shipping Company (USA) Inc. (MSC) argued 
that the Commission's intent with respect to the respective burdens of 
the parties in the adjudication process is clear, but that the wording 
of the regulation is not. Citing the language of the SNPRM, MSC stated 
the Commission made clear in the preamble that the burden that shifts 
to the carrier is the burden of production, not the ultimate burden of 
persuasion. In order to make the final rule consistent with the 
Commission's intent and with the header in Sec.  542.1(k), MSC 
requested that the Commission insert the words ``of production'' in 
Sec.  542.2(k)(2) between ``burden'' and ``shifts.'' \173\ World 
Shipping Council (WSC) made the same arguments.\174\
---------------------------------------------------------------------------

    \173\ FMC-2023-0010-0036 at 3, 11.
    \174\ FMC-2023-0010-0041 at 20-21.
---------------------------------------------------------------------------

    FMC response: The Commission declines to make this change. The 
burden-shifting regime was discussed at length in the SNPRM.\175\ After 
reexamining this discussion in light of these comments, the Commission 
believes it remains a strong system whose goals and parameters were 
well-expressed in the SNPRM. The shifting of the burden of production, 
whether that uses the words ``production of evidence,'' as the SNPRM 
does, or the ``burden of proof'' for which MSC and WSC advocate, has 
the same meaning in this context. Changing the language will not 
clarify or change the process.
---------------------------------------------------------------------------

    \175\ 88 FR 38799.
---------------------------------------------------------------------------

2. The Current Language Is a Deterrent to Small- and Medium-Sized 
Shippers
    Issue: The North American Meat Institute (NAMI) cautions against 
the adoption of Sec.  542.1(k)(3), which places the ultimate burden of 
persuasion on the complainant or the Commission's Bureau of 
Enforcement, Investigations, and Compliance. NAMI believes that it is 
clear that a complainant would have to set forth a prima facie case of 
a violation and supports the burden shift to the ocean common carrier 
to justify its actions were reasonable. Nonetheless, NAMI remains 
concerned that the language specifying the ultimate burden of 
persuasion will preclude small- and medium-sized shippers from availing 
themselves of the protections provided in this rule.\176\
---------------------------------------------------------------------------

    \176\ FMC-2023-0010-0037 at 4.
---------------------------------------------------------------------------

    FMC response: The Commission declines to make this change. As noted 
in the SNPRM, the process spelled out in Sec.  541.2(l) is the process 
that is followed in cases arising under the Administrative Procedure 
Act (APA). While the Commission recognizes and appreciates that this 
process might present more of a burden for small- and medium-sized 
shippers than for large shippers, it also noted that the Commission's 
Bureau of Enforcement, Investigations, and Compliance may also bring a 
case for a violation under this section. As such, there are multiple 
avenues for complaints to be brought before the Commission under this 
section.
3. Setting Forth a Prima Facie Case
    (a) Meaning of ``prima facie case'' is vague.
    Issue: MSC Mediterranean Shipping Company (USA) Inc. (MSC) argued 
that the use of ``prima facie case'' is so vague that any conduct could 
fit into the Commission's definition of unreasonableness. MSC argued 
that the Commission should revise the description of when a shipper or 
the Bureau of Enforcement, Investigations, and Compliance (BEIC) has 
set forth a prima facie case to provide clarity and regulatory 
certainty to carriers, shippers, and finders of fact as to what actions 
the Commission believes constitute reasonable or unreasonable behavior.
    MSC \177\ and World Shipping Council (WSC) \178\ also argue that 
the Commission should revise the text to make clear that the standard 
for reasonable behavior is one of commercial reasonableness, as 
consistent with Commission's precedent.
---------------------------------------------------------------------------

    \177\ FMC-2023-0010-0036 at 2.
    \178\ FMC-2023-0010-0041 at 6-7.
---------------------------------------------------------------------------

    FMC response: The Commission declines to make these changes. The 
term ``unreasonable'' is defined in Sec.  542.1(b). Sections 542.1(c) 
and (f) set forth the discrete elements necessary to establish 
successful claims under 46 U.S.C. 41104(a)(3) and (a)(10), 
respectively. Sections 542.1(e) and (h) provide examples of 
unreasonable conduct and sections 542.1(d) and (h) list considerations 
when evaluating unreasonable conduct. These sections provide 
significant insight into what the Commission believes constitutes 
unreasonable conduct, as well as a clear roadmap to establishing a 
prima facie case. The Commission's reasons for not incorporating the 
``commercial reasonableness'' standard for which MSC advocates has been 
discussed in earlier sections of this preamble.
    (b) Carrier response to a prima facie claim.
    Issue: Maersk A/S (Maersk) argued that the Commission should 
consider that, if in response to a shipper's prime facie case, the 
ocean carrier provides evidence that the ocean carrier either provided 
an opportunity for a two-way commitment (with respect to 46 U.S.C. 
41104(a)(10)) or entered into a contract with a two-way commitment 
(with respect to 46 U.S.C. 41104(a)(3)), then that fact in itself 
should shift the burden of persuasion to the shipper. In this scenario, 
Maersk argued that it should then be up to the shipper to make a case 
as to why its refusal was unreasonable in light of opportunities it 
failed to take or contractual remedies that it failed to pursue.\179\
---------------------------------------------------------------------------

    \179\ FMC-2023-0010-0039 at 4.
---------------------------------------------------------------------------

    FMC response: The Commission declines to make this change, as it 
adds an extra, and unnecessary, step to the process. If it allows this 
step, the

[[Page 59666]]

Commission can readily predict a scenario where the burden continually 
shifts back and forth, allowing each party to present an ever-
increasing amount of evidence. This is contrary to the streamlined 
process that the Commission has proposed. Under Sec.  542.1(l), the 
ocean common carrier may present evidence it deems necessary to justify 
its actions as reasonable, including evidence of a two-way commitment 
and evidence of opportunities or contractual remedies it believes the 
shipper failed to take. In accordance with this process, and mindful of 
the burden of persuasion that remains in Sec.  542.1(l)(3), the 
Commission will consider this evidence when formulating its decision in 
each case.
    (c) Documents created by carriers.
    Issue: Malmo Limited (Malmo) argued that carriers' self-created 
documents supporting its basis for refusing to deal or negotiate should 
be reviewed with skepticism, as giving them weight would encourage 
carriers to document its pretexts and not the true reasons for cutting 
off a shipper. Malmo stated that the last thing the Commission should 
do is provide a roadmap for carriers on how to avoid liability by 
creating pretext evidence ``to justify that its actions were 
reasonable.'' As an example, Malmo stated that a carrier, knowing that 
it planned to refuse to deal or negotiate with a shipper, could create 
evidence by sending internal emails with self-serving pretexts, or 
communicating to the shipper supposed legitimate reasons for not 
dealing when, in reality, the carrier had no such justifications. As 
such, Malmo argued that these communications should be given less 
weight than a complainant's prima facie evidence establishing a 
violation.\180\
---------------------------------------------------------------------------

    \180\ FMC-2023-0010-0044 at 1-2.
---------------------------------------------------------------------------

    FMC response: In creating the standards established in Sec.  
542.1(l), the Commission has been mindful of creating a scheme that is 
not weighted towards one side or the other. The system must allow a 
carrier to present evidence on its own behalf to rebut a claim of 
unreasonable refusal to deal, and a presumption that carrier-created 
documents are pretexts would undermine that the fair approach of the 
final rule. The Commission will weigh all of the evidence presented and 
decide each case on a case-by-case basis.

L. Miscellaneous Comments

1. Penalties/Reparations
    Issue: Malmo Limited (Malmo) argued that an overlooked issue in the 
rule is the massive damage that an unreasonable refusal to deal or 
negotiate can inflict on a shipper. Malmo argued that this harm needs 
to be properly redressed by the Commission, and that when a carrier 
cuts off a shipper during negotiations, the last deal terms discussed 
should be held against the carrier when determining appropriate 
reparations.\181\ In support of this, Malmo noted that carriers receive 
an advantage when refusing to deal in that they cause uncertainty with 
respect to the shipper's damages because the deal or negotiation often 
is not finalized in a written agreement before the unlawful refusal 
takes place.\182\ Citing further Commission precedent and Supreme Court 
case law, Malmo argued that uncertainty caused by a carrier should not 
be held against the complainant.\183\
---------------------------------------------------------------------------

    \181\ Id. at 2.
    \182\ Id.
    \183\ Id. at 3 (citing California Shipping Line, Inc. v. 
Yangming Marine Transport Corp., FMC Docket No. 88-15, 25 S.R.R. 
1213, 1990 WL 427466, at 23 (Oct. 19, 1990) (citing Bigelow v. RKO 
Radio Pictures, 327 U.S. 251, 264-65 (1946)).
---------------------------------------------------------------------------

    As such, Malmo argued that the rule should implement reparations 
that are not limited by the uncertainty caused by the timing of a 
carriers' unlawful conduct. Instead, reparations should be based on the 
last deal terms discussed by the parties before the illegal refusal to 
deal. If not implemented, the carriers will have a strong incentive to 
refuse to deal before final deal terms are fully executed.\184\
---------------------------------------------------------------------------

    \184\ Id. at 4.
---------------------------------------------------------------------------

    FMC response: The Commission declines to make this change. 
Violations under 46 U.S.C. 41104(a)(3) already carry the possibility of 
up to double reparations under 46 U.S.C. 41305(c). The Commission will 
address the issue of penalties or reparations for refusal to deal in 
each case as necessary. The Commission recognizes that penalties for 
unreasonable refusal to deal may be appropriate, depending on the 
circumstances of each case. Given that the Commission is maintaining 
its posture on deciding each complaint on a case-by-case basis, 
however, the Commission declines to mandate penalties in the rule.
2. The Relationship Between the Prohibition on a Refusal to Deal and 
Breach of Service Contracts
    Issue: In the SNPRM, the Commission assumed that in those instances 
where a service contract already exists between an ocean common carrier 
and a shipper, a refusal to deal or negotiate would be addressed within 
the context of the provisions of the agreement and the remedies 
afforded when there is a breach of contract. Noting, however, that it 
is possible for a contract to be silent in such situations, the 
Commission requested comments identifying how those situations would be 
remedied.\185\
---------------------------------------------------------------------------

    \185\ 88 FR 38789, 38802.
---------------------------------------------------------------------------

    In response, BassTech International (BassTech) stated that while it 
is not impossible for a service contract to be silent on this issue, it 
seems odd that it would not address the remedies for failure of a party 
to honor their obligations, which is something that is typically 
addressed through liquidated damages. BassTech noted that this became 
problematic during the demand surge of recent years, because liquidated 
damages did little to remedy a shipper's inability to access space that 
had been committed under a service contract given the enormous 
increases in freight rates during that time. This dynamic made payment 
of liquidated damages less of a deterrent for the offender and less 
compensatory for the aggrieved. BassTech argued that while that 
situation could hardly have been predicted or written into a service 
contract, ocean common carriers are unlikely to agree to future 
contract provisions that allow regulations to prevail over specific 
contract terms. As a result, BassTech argued that, given shippers' 
inferior negotiating power with respect to carriers, it would help to 
have some guardrails to prevent pressure on shippers to agree to 
service contract terms that excuse the carrier from their regulatory 
obligations, such as refusal to deal.\186\
---------------------------------------------------------------------------

    \186\ FMC-2023-0010-0055 at 5.
---------------------------------------------------------------------------

    The National Industrial Transportation League (NITL) argued that a 
carrier should not be able to operate contrary to the Shipping Act 
notwithstanding the existence of a service contract. In other words, a 
shipper should not lose access to claims arising under the Shipping Act 
if a carrier may be in violation of the Act simply because it 
negotiated a contract with the carrier.\187\ Similarly, the National 
Association of Chemical Distributors (NACD) argued that although 
contract breaches are reserved for the courts, under the Shipping Act, 
where a contract is silent on remedies and a carrier's conduct 
constitutes an unreasonable refusal to deal, both remedies should be 
available for an aggrieved shipper.\188\
---------------------------------------------------------------------------

    \187\ FMC-2023-0010-0045 at 10-11.
    \188\ FMC-2023-0010-0046 at 5.
---------------------------------------------------------------------------

    By contrast, Caribbean Shipowners' Association, FMC Agreement No. 
010979/Central America Discussion Agreement, FMC Agreement No. 011075 
(the ``Agreements'') argue that the

[[Page 59667]]

Commission fails to address the relationship between 46 U.S.C. 
41104(a)(3) and 46 U.S.C. 40502(f), the latter of which provides that 
the exclusive remedy for breach of a service contract is an action in 
an appropriate court.\189\ The Agreements argued that under the 
proposed rule, if a carrier refuses to provide space to a customer with 
whom it has entered into a service contract, the carrier is potentially 
in violation of 41104(a)(3) as well as being in breach of a service 
contract. The Agreements state that if the rule is adopted as proposed, 
the line between Shipping Act claims and breach of contract claims will 
be blurred even further.
---------------------------------------------------------------------------

    \189\ FMC-2023-0010-0038 at 6-8.
---------------------------------------------------------------------------

    The National Customs Brokers & Forwarders Association of America, 
Inc. (NCBFAA) stated that its service contracts contain shortfall (or 
``dead freight'') provisions to penalize either the shipper or the 
ocean carrier for nonperformance of the service contract, as well as 
arbitration provisions to address any unresolved disputes.\190\ NCBFAA 
noted, however, that shippers dealing with ocean carriers in these 
scenarios are typically obliged to accept any remedies offered and do 
not have any specific remedies or avenue for relief with respect to an 
ocean carrier's refusal to deal or negotiate with respect to vessel 
space accommodations. Given that service contracts do not specifically 
provide for disputes regarding vessel space, NCBFAA requested the 
Commission consider whether current regulations may be further revised 
to afford greater protections to shippers.
---------------------------------------------------------------------------

    \190\ FMC-2023-0010-0057 at 3.
---------------------------------------------------------------------------

    FMC response: The Commission's request for comments on this issue 
arose out of comments asking the Commission to strengthen the rule's 
protections against refusals to deal in the context of existing service 
contract relationships, as a way of addressing conduct that is already 
occurring in the industry.\191\ Given that it seems possible for 
contracts to remain silent on remedies for refusal to deal, and that 
there are some situations where a contract's specified remedies do not 
have the intended effects of remedying the breach or deterring 
behavior, the Commission reiterates its position that regardless of 
contract status, an ocean common carrier may not effectively bar a 
shipper, including one without a service contract, from having direct 
access to ocean common carriage by unreasonably refusing to deal or 
negotiate the terms of such carriage. This is consistent with the 
position the Commission took in the SNPRM.\192\ As also stated in the 
SNPRM, the Commission remains ``[f]ully cognizant of the privilege that 
private parties may enter into their own service contracts,'' \193\ and 
nothing in this rule prevents parties from entering service contracts.
---------------------------------------------------------------------------

    \191\ 88 FR 38789, 38802.
    \192\ Id. at 38797-38798.
    \193\ Id. at 38797.
---------------------------------------------------------------------------

3. This Rule Should Be Narrowly Tailored To Target Unusual Behavior 
That Is Contrary to Traditional Market Practices
    Issue: Maersk A/S (Maersk) supported the Commission's objective of 
addressing systemic, chronic, or outlying ocean carrier policies that 
unreasonably restrict space, but opposes resetting the efficient 
commercial market for vessel space and equipment.\194\ Maersk argued 
that the Commission needs to narrowly tailor this rule to target 
unusual positions that are contrary to traditional market practices--a 
good example of which is the SNPRM's example of an ocean carrier that 
only transports loaded imports, refuses all loaded exports, and uses 
its vessels departing U.S. ports solely to reposition empty containers. 
Maersk argued that if the Commission issues a final regulation that is 
too ambiguous and broad, it could jeopardize the market mechanisms that 
have, for decades, made containerization a boon for U.S. importers and 
exporters in terms of reduced transportation costs and diversity of 
services. Maersk opines that the final rule should not transform the 
Shipping Act into a loaded gun pointed at carriers for each difficult 
negotiation with individual customers about vessel space in a tight 
market. Maersk noted that no comments submitted to OSRA 2022's 
legislative record or this rule's proceedings identified shipper-ocean 
carrier contract practices as unreasonable and the root cause of 
shipper capacity problems.
---------------------------------------------------------------------------

    \194\ FMC-2023-0010-0039 at 2-3.
---------------------------------------------------------------------------

    FMC response: The Commission initiated this rulemaking for one of 
the same reasons that OSRA 2022 was passed: to counteract the specified 
problem in the market of American exporters being shut out of cargo 
accommodations and vessel space by carriers' refusal to deal. To this 
end, the SNPRM noted that ``the focus of the definition of 
reasonableness, however, is on the ocean common carrier's conduct 
rather than the impact on the shipper.'' \195\ This is a problem that 
had become chronic, systemic, and widespread. Through the extended 
process of an NPRM, SNPRM, and this final rule, the Commission has 
adjusted this rule so that it is as narrowly tailored as possible to 
address this issue. As such, the Commission disagrees with Maersk's 
assessment that this rule is a broadly construed attack on ocean common 
carriers.
---------------------------------------------------------------------------

    \195\ 88 FR 38789, 38797.
---------------------------------------------------------------------------

4. Freight Forwarders
    Issue: International Federation of Freight Forwarders Associations 
(FIATA) recognizes that the Commission's focus for this rule is 
eliminating impediments to accessing space on vessels, but noted that 
many shippers, especially small and medium-sized enterprises (SMEs) or 
those exporting or importing cargo, often seek the services of 
specialized freight forwarders. FIATA argued that to uphold the 
intention of this rulemaking, the Commission should add ``shippers and/
or their authorized representatives'' to the regulatory text to ensure 
that the authorized representatives of shippers, or a forwarder acting 
in their own name, such as an NVOCC, all have the same rights accorded 
to beneficial cargo owners (BCOs) to secure access to vessel and cargo 
space and related services defined in this rulemaking.\196\
---------------------------------------------------------------------------

    \196\ FMC-2023-0010-0056 at 2.
---------------------------------------------------------------------------

    FMC response: The Commission declines to make this change. First, 
as noted in the NPRM and expanded upon in the SNPRM, this rule does not 
apply to NVOCCs.\197\ Secondly, as noted in response to other comments 
above, this rule focuses on the behavior of the ocean common carrier 
rather than shipper. Nothing in this rule prevents a freight forwarder 
from acting on behalf of a shipper or bringing a claim against a 
shipper for refusal to deal.
---------------------------------------------------------------------------

    \197\ 87 FR 57674 at n. 4; 88 FR 38789, 38798.
---------------------------------------------------------------------------

5. Preference Cargo
    Issue: USA Maritime and the U.S. Department of Defense's United 
States Transportation Command both expressed concern that the SNPRM had 
not adequately accounted for U.S. cargo preference requirements.\198\ 
Cargo preference is a framework of U.S. laws, regulations, and policies 
that require the use of U.S.-flag vessels in the movement of cargo that 
is owned, procured, furnished, or financed by the U.S. Government.\199\ 
It also includes cargo that is being shipped under an

[[Page 59668]]

agreement of the U.S. Government, or as part of a Government 
program.\200\
---------------------------------------------------------------------------

    \198\ USA Maritime (FMC-2023-0010-0034) at 2-3; Department of 
Defense, United States Transportation Command (FMC-2023-0010-0059) 
at 2-3.
    \199\ See https://www.maritime.dot.gov/ports/cargo-preference/cargo-preference (last visited April 4, 2024).
    \200\ Id.
---------------------------------------------------------------------------

    FMC response: The Commission recognizes and appreciates the 
importance of this issue, and the importance of cargo preference, 
particularly to national security and U.S. military activities. 
However, the Commission cannot exempt preference cargo from Shipping 
Act requirements by this final rule. While 46 U.S.C. 40103 allows 
exemptions to the Shipping Act by Commission order or regulation, FMC 
regulations (46 CFR 502.92) require a formal petition to be filed with 
the Commission and notification in the Federal Register to give the 
opportunity for public comment.\201\ The Commission is open to 
considering a petition for exemption for preference cargo filed in 
accordance with 46 CFR 502.92.
---------------------------------------------------------------------------

    \201\ 46 CFR 502.92.
---------------------------------------------------------------------------

IV. Summary of Final Rule and Changes From SNPRM

    This final rule describes how the Commission will consider private 
party adjudications and agency-initiated enforcement cases in which 
violations of 46 U.S.C. 41104(a)(3) and (a)(10) are alleged relating to 
unreasonable refusal to provide cargo space accommodations and/or 
refusals to deal by ocean common carriers. It considers the common 
carriage roots in the Shipping Act, as well as the overall competition 
basis of the Commission's authority. Future cases that allege 
violations of 46 U.S.C. 41104(a)(3) or (a)(10) will be factually driven 
and determined on a case-by-case basis. The framework established by 
this final rule is taken from Commission precedent on refusal to deal 
cases generally and on suggestions offered by commenters on the NPRM 
and SNPRM. This rule ensures that shippers can readily discern when a 
carrier has acted outside the bounds of reasonableness and know what 
type of claim, 46 U.S.C. 41104(a)(3) or 46 U.S.C. 41104(a)(10), to 
bring before the Commission.

A. Sec.  542.1(a) Purpose

    While 46 U.S.C. 41104 applies generally to both VOCCs and NVOCCs, 
this rule only applies to VOCCs. The specific prohibition in 46 U.S.C. 
41104(a)(10) that is the subject of this rule applies only to VOCCs 
because ``ocean common carrier'' is defined as a vessel-operating 
common carrier in the Shipping Act.\202\ Although section 41104(a)(3) 
applies to both VOCCs and NVOCCs, this rule only applies to VOCCs to 
mirror the scope of the affected population of the NPRM. Importantly, 
however, this rule does not limit the application of 46 U.S.C. 
41104(a)(3) or the rest of 46 U.S.C. 41104(a)(10) to VOCCs. Rather, 
NVOCCs remain legally liable under 41104(a)(3) and 41104(a)(10) for 
violations of the Shipping Act.
---------------------------------------------------------------------------

    \202\ 46 U.S.C. 40102(18).
---------------------------------------------------------------------------

    Similarly, section 41104 applies generally to roll-on/roll-off 
cargo, bulk cargo, and containerized cargo. This rule, however, only 
applies to containerized cargo because the issues arising from 
container availability during the pandemic were not present, or at 
least not present to the same extent, for roll-on/roll-off cargo or 
bulk cargo vessels. While this rule is limited to containerized cargo, 
it does not preclude refusal to deal claims arising in the context of 
roll-on/roll-off cargo or bulk cargo. FMC has amended Sec.  542.1(a) to 
clarify that the rule is limited in scope to containerized cargo.

B. Sec.  542.1(b) Definitions

    This paragraph sets out terms defined for part 542. FMC has: (1) 
added a definition of the term ``blank sailing''; and (2) amended the 
definitions of ``cargo space accommodations, ``sweeper vessel'', 
``transportation factors'', ``unreasonable'' and ``vessel space 
accommodations''. The paragraphing structure has also been amended to 
allow for easier amendment in the future if needed.
    FMC has revised the definition of ``cargo space accommodations'' by 
changing ``negotiated for'' to ``negotiated for or confirmed''. This 
change broadens the definition to instances where space has not been 
``negotiated'' between a carrier and a shipper in the traditional 
sense--i.e., there have been no ``back and forth'' communications 
between the two parties, but rather involve a shipper's request for 
vessel space under an existing service contract or other arrangements, 
and a responsive vessel booking confirmation from the carrier.
    FMC has amended the definition of ``transportation factors'' by 
adding ``and not reasonably foreseeable'' to the end of the definition 
to clarify that the term is not intended to include factors that are 
reasonably foreseeable by a vessel operator and has amended the 
regulation accordingly. If a transportation factor is reasonably 
foreseeable by the carrier, then the carrier has a responsibility to 
its customers to find alternative pathways to deliver the cargo and 
otherwise mitigate the negative impacts of that factor. Transportation 
factors are not justifications for a carrier to refuse to carry entire 
classes of cargo, like properly tendered hazardous cargo, heavier 
products, or inland shipments. Instead, legitimate transportation 
factors must exist and be outside the vessel operator's control.\203\
---------------------------------------------------------------------------

    \203\ 88 FR 38789, 38803.
---------------------------------------------------------------------------

    FMC has amended the definition of ``unreasonable'' by adding ``from 
that ocean common carrier'' at the end of the definition to clarify 
that the purpose of paragraph (b) is to mean conduct that unduly 
restricts the ability of shippers to meaningfully access ocean carriage 
services from the ocean common carrier.
    FMC has amended the definition of ``vessel space accommodations'' 
by changing ``necessary to access or book vessel space accommodations'' 
to ``necessary to book or access vessel space accommodations''. This is 
a technical correction that reflects that booking occurs before access.

C. Sec.  542.1(c) Elements for Claim Under 46 U.S.C. 41104(a)(3)

    Paragraph (c) sets out the elements of a claim under 46 U.S.C. 
41104(a)(3) for the unreasonable refusal of cargo space accommodations 
when available. Section 41104(a)(3) claims focus on those refusals that 
occur at the execution stage, after the parties have reached a deal or 
mutually agreed on service terms and conditions via a booking 
confirmation.
    FMC has amended the paragraph by adding ``with respect to refusals 
of cargo space accommodations when available'' at the end of the 
introductory sentence. This change clarifies the scope of the rule and 
aligns Sec.  542.1(c) with Sec.  542.1(a). Section 41104(a)(3)'s 
prohibition on unfair or unjustly discriminatory methods will be 
addressed in a separate rulemaking.

D. Sec.  542.1(d) Non-Binding Considerations When Evaluating 
Unreasonable Conduct Under 46 U.S.C. 41104(a)(3)

    Paragraph (d) sets out a list of non-binding factors the Commission 
may consider in evaluating whether a particular ocean common carrier's 
conduct was unreasonable under 46 U.S.C. 41104(a)(3). The factors 
listed may help to establish an ocean common carrier's bona fide 
attempts and interest in fulfilling its previously made commitment to a 
shipper to take its cargo. The list, however, is not exhaustive.
    FMC has amended paragraphs (d)(1) and (d)(4) from the SNPRM 
proposal. FMC has amended paragraph (d)(1) by changing ``the efficient 
movement of export cargo'' to ``the timely and efficient movement of 
export cargo''. While section 40104 does not include

[[Page 59669]]

``timely'', its inclusion here comports with the goals of the OSRA 2022 
generally. Many exports, particularly agricultural exports, must be 
loaded and transported to their destinations in a timely manner in 
order for exporters to fulfill contract obligations. Additionally, FMC 
has re-written paragraph (d)(4), to simplify the language and better 
conform with Plain Language. No substantive change is intended by the 
re-write.

E. Sec.  542.1(e) Non-Binding Examples of Unreasonable Conduct Under 46 
U.S.C. 41104(a)(3)

    Paragraph (e) sets out non-binding examples of the kinds of conduct 
that may be considered unreasonable under 46 U.S.C. 41104(a)(3) when 
linked to a refusal to provide cargo space accommodations. The list is 
not exhaustive.
    FMC has amended examples (3), (4), and (6) and removed proposed 
example (7). In paragraph (e)(3) FMC has added to the end: ``of any 
other changes to the sailing that will affect when their cargo arrives 
at its destination port''. This change was added in response to a 
request for clarification of what a carrier needed to alert or notify 
shippers about. In paragraph (e)(4) FMC has changed ``for vessel 
loading'' to ``for cargo tendering or vessel loading''. Adding the 
phrase ``cargo tendering,'' while also retaining the phrase ``vessel 
loading'', ensures that sufficient time instead of narrowing this 
provision to circumstances where the carrier may be the one loading the 
cargo onto the vessel. FMC has revised the example in subsection (e)(6) 
to read: ``The de facto, absolute, or systematic exclusion of exports 
in providing cargo space accommodations'' in order to remove ambiguity 
regarding the term ``categorically.'' FMC has also removed proposed 
paragraph (e)(7) as it was not a true example.

F. Sec.  542.1(f) Elements for Claim Under 46 U.S.C. 41104(a)(10)

    Paragraph (f) sets out the elements of a claim under 46 U.S.C. 
41104(a)(10) for the unreasonable refusal to deal or negotiate with 
respect to vessel space accommodations when available. Section 
41104(a)(10) claims focus on those refusals that occur at the 
negotiation stage.
    FMC has amended paragraph (f) by adding ``with respect to refusals 
of vessel space accommodations provided by an ocean common carrier to 
the end of the introductory sentence to clarify its scope and aligns 
Sec.  542.1(f) with Sec.  542.1(a). This rule is focused on the OSRA 
2022 amendment to 46 U.S.C. 41104(a)(10) related to vessel space 
accommodations provided by an ocean common carrier. Although this rule 
does not extend to claims outside of those related to vessel space 
accommodation refusals, as noted in the NPRM, the framework of this 
rule may be applicable in non-vessel-space accommodation cases 
involving 46 U.S.C. 41104(a)(10).

G. Sec.  542.1(g) Non-Binding Considerations When Evaluating 
Unreasonable Conduct Under 46 U.S.C. 41104(a)(10)

    Paragraph (g) sets out a list of non-binding factors the Commission 
may consider in evaluating whether a particular ocean common carrier's 
conduct was unreasonable under 46 U.S.C. 41104(a)(10). This list is not 
exhaustive.
    FMC has amended paragraphs (g)(1) and (g)(4). FMC has amended 
paragraph (g)(1) by changing ``the efficient movement of export cargo'' 
to ``the timely and efficient movement of export cargo''. The inclusion 
of the word ``timely'' comports with the goals of OSRA 2022. Many 
exports, particularly agricultural exports, must be loaded and 
transported to their destinations in a timely manner in order for 
exporters to fulfill contract obligations. FMC has re-written paragraph 
(g)(4), to simplify the language and better conform with Plain 
Language. No substantive change is intended by the re-write of (g)(4).
    The Commission highlights that investigations into good faith 
negotiations may include an inquiry into whether or not good customer 
service was provided by a carrier. It can be unreasonable for an ocean 
common carrier to fail to provide a meaningful way for customers to 
contact the carrier or fail to timely provide a rate quotation upon 
request.

H. Sec.  542.1(h) Non-Binding Examples of Unreasonable Conduct Under 46 
U.S.C. 41104(a)(10)

    Paragraph (h) sets out non-binding examples of the kinds of conduct 
that may be considered unreasonable under 46 U.S.C. 41104(a)(10) 
concerning the refusal of vessel space accommodations. The list is not 
exhaustive.
    FMC has made a technical amendment to (h)(1) by replacing ``real 
offer'' with ``good faith'' offer. FMC believes that the changed 
wording better captures the true meaning of the example and is better 
aligned with concepts known by the legal and corporate communities.
    FMC has revised the example in subsection (h)(2) to read: ``The de 
facto, absolute, or systematic exclusion of exports in providing vessel 
space accommodations'' in order to remove ambiguity regarding the term 
``categorically.''
    FMC has removed proposed example (h)(3) as this was not a true 
example.

I. Sec.  542.1(i) Use of Sweeper Vessels

    Along with the definition of sweeper vessel, this paragraph allows 
the use of a sweeper vessel that has been previously designated for 
that purpose. The Commission also amended the regulatory text in Sec.  
542.1(i) to state that the designation of a vessel as a sweeper vessel 
is subject to Commission review to determine whether the designation 
results in an unreasonable refusal of ocean carriage services.

J. Sec.  542.1(j) Documented Export Policy

    The Commission amended Sec.  542.1(j) to state that the ocean 
common carrier must file the document with the Commission, not that the 
ocean common carrier must follow the document. This change aligns with 
the Commission's intent that whether the ocean common carrier followed 
a documented export policy is a non-binding consideration that the 
Commission may consider in determining whether unreasonable conduct has 
occurred. In addition to using documented export policies to determine 
whether an ocean common carrier's conduct in a specific matter aligns 
with their general policies, and thus whether the ocean common carrier 
acted reasonably, the policies will be used by the Commission to 
monitor the industry for the unreasonable behavior vis-[agrave]-vis 
exports.
    The Commission also added the words ``timely and'' before the word 
``efficient.'' This inclusion comports with the goals of the OSRA 2022 
generally. Many exports, particularly agricultural exports, must be 
loaded and transported to their destinations in a timely manner in 
order for exporters to fulfill contract obligations.
    The Commission also rephrased 542.1(j)(1) to place this provision 
in the active tense rather than the passive tense. This is a technical 
amendment that does not make a substantive change to the regulation.
    In association with the amendments to Sec.  542.1(i) regarding the 
Commission's review of sweeper vessel designations, the Commission 
added Sec.  542.1(j)(ii) to state that one topic that the documented 
export policy should address, if applicable, is the ocean common 
carrier's rules and practices for the designation and use of sweeper 
vessels.
    The Commission also added Sec.  541.2(j)(3), to clarify that the

[[Page 59670]]

documented export policies required to be filed with the Commission, in 
accordance with 46 U.S.C. 40306, will remain confidential except as may 
be relevant to an administrative or judicial proceeding. In accordance 
with the statute, the information may also be disclosed to either House 
of Congress, or to a duly authorized committee or subcommittee of 
Congress.

K. Sec.  542.1(k) Shifting the Burden of Production

    The Commission has made technical and clarifying edits to paragraph 
(k), which describes the burden of production. One, the Commission 
amended Sec.  542.1(k) (1) and (3) to add the words ``the 
Commission's'' before ``Bureau of Enforcement, Investigations and 
Compliance.'' This is a technical amendment to clarify that the Bureau 
is part of the Commission. Two, the Commission has amended (k)(1) to 
clarify, as discussed in the preamble to the SNPRM, that this paragraph 
addresses the initial burden to establish a prima facie case of a 
violation. Finally, the Commission has amended (k)(3) to clarify that 
the ultimate burden of persuasion is always with the complainant or the 
Bureau of Enforcement, Investigations and Compliance, as also discussed 
in the preamble to the SNPRM.

VI. Rulemaking Analyses

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601-612, provides that 
whenever an agency is required to publish a notice of proposed 
rulemaking under the Administrative Procedure Act (APA), 5 U.S.C. 553, 
the agency must prepare and make available for public comment an 
initial regulatory flexibility analysis (IRFA) describing the impact of 
the proposed rule on small entities, unless the head of the agency 
certifies that the rulemaking will not have a significant economic 
impact on a substantial number of small entities. 5 U.S.C. 603, 605.
    The Commission initiated the rulemaking to fulfill a statutory 
requirement arising from the Ocean Shipping Reform Act of 2022 that 
prohibits ocean common carriers from unreasonably refusing to deal or 
negotiate with respect to vessel space accommodations and a related 
prohibition against unreasonably refusing cargo space accommodations. 
The final rule defines terms related to what is unreasonable refusal by 
ocean common carriers and also requires submission of a documented 
export policy. Like the NPRM and SNPRM, the final rule also applies 
only to vessel-operating common carriers (VOCCs) who would bear the 
associated costs of implementation.
    VOCCs fall under the Deep Sea Freight Transportation category in 
the North American Industrial Classification System, and the U.S. Small 
Business Administration (SBA) defines small entities in this category 
as having fewer than 1,050 employees. The Commission generally presumes 
that VOCCs do not qualify as small entities under these SBA guidelines. 
The Commission did not receive comments following publication of the 
NPRM or SNPRM contrary to this presumption.
    For these reasons, the Chairman of the Federal Maritime Commission 
certifies that this rule will not have a significant economic impact on 
a substantial number of small entities.

B. Congressional Review Act

    The rule is not a ``major rule'' as defined by the Congressional 
Review Act (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 U.S.-based companies to compete with foreign based 
companies. 5 U.S.C. 804(2).

C. 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. This final rule describes the 
Commission's criteria to determine whether an ocean common carrier has 
engaged in an unreasonable refusal to deal with respect to vessel space 
accommodations under 46 U.S.C. 41104(a)(10), or engaged in unreasonable 
refusal of cargo space accommodations when available under 46 U.S.C. 
41104(a)(3), and the elements necessary for a successful claim under 
those provisions. This rulemaking thus falls within the categorical 
exclusion for matters related solely to the issue of Commission 
jurisdiction and the exclusion for investigatory and adjudicatory 
proceedings to ascertain past violations of the Shipping Act. See 46 
CFR 504.4(a) (20) and (22). Therefore, no environmental assessment or 
environmental impact statement is required.

D. Paperwork Reduction Act

    This final rule calls for a collection of information under the 
Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520). As defined 
in 5 CFR 1320.3(c), ``collection of information'' comprises reporting, 
recordkeeping, monitoring, posting, labeling, and other, similar 
actions. In compliance with the PRA, the Commission submitted the 
proposed information collection to the Office of Management and Budget 
(OMB). Notice of the information collections was published in the 
Federal Register and public comments were invited.\204\ No comments 
were received directly on the burden estimate. However, a small number 
of commenters noted that the SNPRM burden estimate did not take into 
account the possibility that some vessel operating common carriers 
(VOCCs) might voluntarily update and submit written export policies 
more than once a year. While the Commission does not anticipate that 
many ocean carriers will do so, the burden calculations have been 
slightly updated for this final rule.
---------------------------------------------------------------------------

    \204\ 88 FR 38789, 38806.
---------------------------------------------------------------------------

    The title and description of the information collections, a 
description of those who must collect the information, and an estimate 
of the total annual burden follow. The estimate covers the time for 
reviewing instructions, searching existing sources of data, gathering 
and maintaining the data needed, and completing and reviewing the 
collection.
Title: 46 CFR Part 542--Common Carrier Prohibitions
    Summary of the Collection of Information: Section 542.1(j) of title 
46 Code of Federal Regulations, by this final rule, requires that VOCCs 
must submit a documented export policy once per year which is to 
include pricing strategies, services offered, strategies of equipment 
provision, and descriptions of markets served. The FMC has authority to 
require this collection under 46 U.S.C. 40104.
    Need for Information: The report will allow the Commission to 
monitor the industry for unreasonable behavior prohibited by 46 U.S.C. 
41104(a) (3) and (10). This in will allow the Commission to meet two 
key purposes of the Shipping Act: (1) ``ensur[ing] an efficient, 
competitive, and economical transportation system in the ocean commerce 
of the United States'' (46 U.S.C. 40101(2)); and (2) ``promot[ing] the 
growth and development of United States exports through a competitive 
and efficient system for the carriage of

[[Page 59671]]

goods by water in the foreign commerce of the United States, and by 
placing greater reliance on the marketplace'' (46 U.S.C. 40101(4)).
    Frequency: The regulation requires VOCCs to submit a documented 
export policy once per year. However, there is no prohibition against 
carriers updating these export policies and submitting more frequently 
if they voluntarily elect to do so. The Commission estimates that ten 
percent of VOCCs will submit documented export policies twice per year, 
and an additional five percent of VOCCs will submit three times per 
year.
    Types of Respondents: This requirement applies only to VOCCs.
    Number of Annual Respondents: The Commission anticipates an annual 
respondent universe of 140 VOCCs.
    Estimated Time per Response: The Commission estimates 40 hours of 
burden for developing, documenting, and submitting an export policy 
using the parameters in Sec.  542.1(j) for the first year, assuming 
that no such policy already exists. For updates, whether annual as 
required or more frequently as desired by the VOCC, the estimated 
burden would be 5 hours including review and revisions of the existing 
policy and submitting it electronically.
    Total Annual Burden: The Commission estimates the total person-hour 
burden at 5,600 hours for initial filing (140 carriers x 40 hours). 
Additionally in the first year, the Commission estimates an additional 
burden of 70 hours for the ten percent of carriers that will submit 
policies a second time (14 carriers x 5 hours), plus an additional 70 
hours for the carriers that will submit a third updated policy per year 
(7 carriers x 5 hours x 2 submissions). The annual burden thereafter is 
estimated to be 840 hours ((140 carriers x 5 hours) + (14 carriers x 5 
hours) + (7 carriers x 5 hours x 2 submissions)).
    The Commission estimates the total financial burden to be 
$783,048.00 for the initial provision of the required export policy, 
and then an additional $234,914.40 per year for updates, including 
carriers that may choose to update and provide their export policies on 
a more frequent basis.
    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), we have submitted a copy of this rule to OMB for its review 
of the collection of information. Before the Commission may enforce the 
collection of information requirements in this rule, OMB must approve 
FMC's request to collect this information. You need not respond to a 
collection of information unless it displays a currently valid control 
number from OMB.

E. Executive Order 12988 (Civil Justice Reform)

    This rule meets the applicable standards in E.O. 12988, ``Civil 
Justice Reform,'' (61 FR 4729, Feb. 7, 1996) to minimize litigation, 
eliminate ambiguity, and reduce burden.

List of Subjects in 46 CFR Part 542

    Administrative practice and procedure, Non-vessel-operating common 
carriers, Ocean common carrier, Refusal to deal or negotiate, Vessel-
operating common carriers, Vessel space accommodations.

    For the reasons set forth in the preamble, the Federal Maritime 
Commission amends title 46 of the CFR by adding part 542 to read as 
follows:

0
1. Add part 542 to read as follows:

PART 542--COMMON CARRIER PROHIBITIONS

Sec.
542.1 Definition of unreasonable refusal of cargo space 
accommodations when available and unreasonable refusal to deal or 
negotiate with respect to vessel space provided by an ocean common 
carrier.
542.2-542.99 [Reserved]

    Authority:  5 U.S.C. 553; and 46 U.S.C. 40104, 46105, 40307, 
40501-40503, 40901-40904, 41101-41106.


Sec.  542.1  Definition of unreasonable refusal of cargo space 
accommodations when available and unreasonable refusal to deal or 
negotiate with respect to vessel space provided by an ocean common 
carrier.

    (a) Purpose. This part establishes the elements and definitions 
necessary for the Federal Maritime Commission (Commission) to apply 46 
U.S.C. 41104(a)(3) with respect to refusals of cargo space 
accommodations when available for containerized cargo and to apply 46 
U.S.C. 41104(a)(10) with respect to refusals of vessel space 
accommodations provided by an ocean common carrier with respect to 
containerized cargo. This part applies to complaints brought before the 
Commission by a private party and enforcement cases brought by the 
Commission.
    (b) Definitions. For the purposes of this section:
    Blank sailing means a sailing skipping one or more specific port(s) 
while still traversing the rest of the scheduled route or the entire 
sailing being canceled.
    Cargo space accommodations means space which has been negotiated 
for or confirmed aboard the vessel of an ocean common carrier for laden 
containers being imported to or exported from the United States. Cargo 
space accommodations includes the services necessary to access and load 
or unload cargo from a vessel calling at a U.S. port.
    Documented export policy means a written report produced by an 
ocean common carrier that details the ocean common carrier's practices 
and procedures for U.S. outbound services.
    Sweeper vessel means a vessel exclusively designated to load and 
move empty containers from a U.S. port for the purpose of transporting 
them to another designated location.
    Transportation factors means factors that encompass the vessel 
operation considerations underlying an ocean common carrier's ability 
to accommodate laden cargo for import or export, which can include, but 
are not limited to, vessel safety and stability, weather-related 
scheduling considerations, and other factors related to vessel 
operation outside the vessel operator's control and not reasonably 
foreseeable.
    Unreasonable means ocean common carrier conduct that unduly 
restricts the ability of shippers to meaningfully access ocean carriage 
services from that ocean common carrier.
    Vessel space accommodations means space available aboard a vessel 
of an ocean common carrier for laden containers being imported to or 
exported from the United States. Vessel space accommodations also 
includes the services necessary to book or access vessel space 
accommodations.
    (c) Elements for claims. The following elements are necessary to 
establish a successful private party or enforcement claim under 46 
U.S.C. 41104(a)(3) with respect to refusals of cargo space 
accommodations when available:
    (1) The respondent must be an ocean common carrier as defined in 46 
U.S.C. 40102;
    (2) The respondent refuses or refused cargo space accommodations 
when available; and
    (3) The ocean common carrier's conduct is unreasonable.
    (d) Non-binding considerations when evaluating unreasonable 
conduct. In evaluating the reasonableness of an ocean common carrier's 
refusal to provide cargo space accommodations, the Commission may 
consider the following factors:
    (1) Whether the ocean common carrier followed a documented export 
policy that enables the timely and efficient movement of export cargo;
    (2) Whether the ocean common carrier made a good faith effort to 
mitigate the impact of a refusal;
    (3) Whether the refusal was based on legitimate transportation 
factors; and

[[Page 59672]]

    (4) Any other relevant factors or conduct.
    (e) Non-binding examples of unreasonable conduct. The following are 
examples of the kinds of conduct that may be considered unreasonable 
under 46 U.S.C. 41104(a)(3) when linked to a refusal to provide cargo 
space accommodations:
    (1) Blank sailings or schedule changes with no advance notice or 
with insufficient advance notice;
    (2) Vessel capacity limitations not justified by legitimate 
transportation factors;
    (3) Failing to alert or notify shippers with confirmed bookings of 
any other changes to the sailing that will affect when their cargo 
arrives at its destination port;
    (4) Scheduling insufficient time for cargo tendering or vessel 
loading so that cargo is constructively refused;
    (5) Providing inaccurate or unreliable vessel information; or
    (6) The de facto, absolute, or systematic exclusion of exports in 
providing cargo space accommodations.
    (f) Elements for claims. The following elements are necessary to 
establish a successful private party or enforcement claim under 46 
U.S.C. 41104(a)(10) with respect to refusals of vessel space 
accommodations provided by an ocean common carrier:
    (1) The respondent must be an ocean common carrier as defined in 46 
U.S.C. 40102;
    (2) The respondent refuses or refused to deal or negotiate with 
respect to vessel space accommodations; and
    (3) The ocean common carrier's conduct is unreasonable.
    (g) Non-binding considerations when evaluating unreasonable 
conduct. In evaluating the reasonableness of an ocean common carrier's 
refusal to deal or negotiate with respect to vessel space 
accommodations, the Commission may consider the following factors:
    (1) Whether the ocean common carrier followed a documented export 
policy that enables the timely and efficient movement of export cargo;
    (2) Whether the ocean common carrier engaged in good faith 
negotiations;
    (3) Whether the refusal was based on legitimate transportation 
factors; and
    (4) Any other relevant factors or conduct.
    (h) Non-Binding examples of unreasonable conduct. The following are 
examples of the kinds of conduct that may be considered unreasonable 
under 46 U.S.C. 41104(a)(10) when linked to a refusal to deal or 
negotiate:
    (1) Quoting rates that are so far above current market rates they 
cannot be considered a good faith offer or an attempt at engaging in 
good faith negotiations; or
    (2) The de facto, absolute, or systematic exclusion of exports in 
providing vessel space accommodations.
    (i) Use of sweeper vessels. Ocean common carriers are not precluded 
from using sweeper vessels previously designated for that purpose to 
reposition empty containers; however, the designation of a vessel as a 
sweeper vessel is subject to Commission review to determine whether the 
designation results in an unreasonable refusal of ocean carriage 
services.
    (j) [Reserved]
    (k) Shifting the burden of production. In accordance with 
applicable laws, the following standard applies:
    (1) The initial burden of production to establish a prima facie 
case of a violation of this part is with the complainant or the 
Commission's Bureau of Enforcement, Investigations, and Compliance.
    (2) Once a complainant sets forth a prima facie case of a 
violation, the burden shifts to the ocean common carrier to justify 
that its actions were reasonable.
    (3) The ultimate burden of persuading the Commission always remains 
with the complainant or the Commission's Bureau of Enforcement, 
Investigations, and Compliance.


Sec.  542.2-542.99  [Reserved]

0
2. Delayed indefinitely, add Sec.  542.1(j) to read as follows:


Sec.  542.1  Definition of unreasonable refusal of cargo space 
accommodations when available and unreasonable refusal to deal or 
negotiate with respect to vessel space provided by an ocean common 
carrier.

* * * * *
    (j) Documented export policy. Ocean common carriers must file with 
the Federal Maritime Commission a documented export policy that enables 
the timely and efficient movement of export cargo.
    (l) Each ocean common carrier must submit a documented export 
policy to the Commission once per calendar year and include, in a 
manner prescribed by the Commission, pricing strategies, services 
offered, strategies for equipment provision, and descriptions of 
markets served. Updates may be submitted more than once per year if the 
ocean common carrier chooses to do so. Other topics a documented export 
policy should also address, if applicable, include:
    (i) The effect of blank sailings or other schedule disruptions on 
the ocean common carrier's ability to accept shipments;
    (ii) The ocean common carrier's rules and practices for the 
designation and use of sweeper vessels; and
    (iii) The alternative remedies or assistance the ocean common 
carrier would make available to a shipper to whom it refused vessel 
space accommodations.
    (2) A documented export policy required to be filed by this part 
must be submitted to: Director, Bureau of Trade Analysis, Federal 
Maritime Commission, [email protected].
    (3) The documented export policies filed in accordance with this 
section shall not be circulated outside of the Federal Maritime 
Commission. These documents, and the information contained therein, 
shall not be publicly disclosable, in whole or in part, including in 
response to requests under the Freedom of Information Act. The 
information may, however, be disclosed to the extent that it is 
relevant to an administrative or judicial action or proceeding; or to 
either House of Congress, or a duly authorized committee or 
subcommittee of Congress.

0
3. Delayed indefinitely, add Sec.  542.99 to read as follows:


Sec.  542.99  OMB control number assigned pursuant to the Paperwork 
Reduction Act.

    The Commission has received Office of Management and Budget 
approval for the collection of information in Sec.  542.1(k) pursuant 
to the Paperwork Reduction Act of 1995, as amended. The valid control 
number for this collection is 3072-XXXX.

    By the Commission.
David Eng,
Secretary.
[FR Doc. 2024-16148 Filed 7-22-24; 8:45 am]
BILLING CODE 6730-02-P