“Everything is at an absolute standstill at the FMC,” said Albert Saphir, principal of ABS Consulting, who has helped many newly minted forwarders and NVOs get their start.
Even if the shutdown should be lifted on Wednesday, it is expected to take weeks for the FMC to dig out from the existing backlog and resume normal operations.
The FMC’s Bureau of Certification and Licensing oversees and audits about 6,460 licensed and/or registered OTI companies.
In recent years, the FMC has instituted a number of changes that aim to simplify and ease regulatory and compliance burdens for OTIs.
In 2015, the FMC published a final rule making significant amendments to its regulations governing OTIs. These changes included adding requirements to renew OTI licenses every three years, providing for simple online renewals, eliminating the $10,000 financial responsibility coverage requirement for each unincorporated branch office and establishing an expedited hearing process for license denials, revocations and suspensions, while continuing to provide applicants and licensees due process and the ability to appeal adverse decisions to the commission. Most of the changes were implemented in December 2015, and OTI license renewals were initiated in 2017.
• Updating the title and scope of Part 515 of the Shipping Act to include foreign-based NVO registrations;
• Clarifying the requirements for U.S. agents of foreign-based registered NVOs;
• Removing the optional paper application process and related reference to fee amounts;
• Adding language to clarify who can be the qualifying individual in partnerships between entities other than individuals;
• Adding clarifying language regarding the commission’s direct review of applications in certain cases;
• Clarifying the information that sureties are to provide regarding claims against OTIs;
• Adding a requirement that NVOs submit their Form FMC-1 prior to being issued a license;
• And deleting reference to availability of the Regulated Person’s Index.
The most significant OTI regulatory changes made by the FMC last year involved the publication of final rules for NVO negotiated rate arrangements (NRAs) and NVO service arrangements (NSAs).
NRAs may be amended at any time, permit the inclusion of non-rate economic terms and allow an NVO to provide for the shipper’s acceptance of the NRA by booking a shipment, while NSAs remove the requirement of NVOs filing essential terms with the FMC.
The National Customs Brokers and Forwarders Association of America, at the time, said the changes would provide “groundbreaking relief” to NVOs.
“These changes will benefit American consumers and the industry by expanding choices for shippers, reducing regulatory requirements and increasing efficiencies in contracting for ocean shipping services,” the FMC’s Khouri told the Association of Transportation Law Professionals Transportation Forum XV on Nov. 5.
These changes, in addition to the burgeoning and dynamic third-party logistics market, will continue to entice more people to enter the OTI space.