Myths about NRAs rife
As the U.S. Federal Maritime Commission prepares to take a second look at its decision last year to allow non-vessel-operating common carriers to forgo filing tariffs and enter into negotiated rate arrangements (NRAs) with shippers, advocates for the industry say there are still misimpressions about them.
The FMC will solicit comments through March 26 on how to make NRAs more useful, and said it will look at possibly allowing unlicensed, foreign-based NVOs to use them.
Meanwhile, FMC Commissioner Rebecca Dye said in December that she believes the FMC should eliminate all unnecessary regulatory requirements, including tariff publication, for both NVOs and ocean carriers alike.
Ed Greenberg, general counsel to the National Customs Brokers and Forwarders Association of America, said “it seems to be fairly clear that people don’t use tariffs any longer or look at them, so why have them?
“The railroads and motor carrier industry seem to have done very nicely without them,” he added.
Greenberg said there are still NVOs that think “there is too much formality in the process. They don’t quite understand it, which is regrettable. To the extent that people have that feeling, I think it would be useful for the FMC to do what it could to make it clear that it is a simple process and is intended to be user-friendly.”
In a recent newsletter, Washington-based attorney Carlos Rodriguez agreed, saying proper implementation of NRAs “usually involves either a quotation, email exchanges, booking confirmation by the NVOCC, and conventional acknowledgments by the shipper that reflect the rates and charges which apply for a transaction or series of transactions. These, in most cases, are already the normal business practices currently in place.”
He said rumors that the FMC will target NVOs who use NRAs are false and “there is more concern by the FMC over NVOCCs that opt to publish tariff rates, and do not do so timely and accurately.”
Another false impression is that NRA rules require all surcharges be included in the rules tariff, he said.
“Applicable surcharges can be included in the rules tariff, but we have found that it is more customary for some NVOCCs to include applicable charges such as BAF, PSS, CAF, etc., as separate line items in the quotations made to customers. This is permissible,” Rodriguez explained.
He also said NVOs could include a statement in quotations and rules tariffs with regard to local origin and destination port charges that says “all origin and destination local charges apply whether or not included in this rules tariff or in quotations.”
In addition, Rodriquez said it’s wrong that NRA record-keeping requirements should be any more burdensome than what is already required for maintaining shipment records.
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