FMC levels the playing field

After years of watching jealously from the sidelines, NVOCCs will soon be able to conduct confidential negotiations of their own. In a move intended to remedy a longstanding inequity in international shipping, the U.S. Federal Maritime Commission has agreed to grant non-vessel-operating common carriers (NVOCCs) conditional authority to enter into confidential service agreements with shippers. Currently, only vessel operators have that right. The new ruling, which will give shippers more service options, could take effect as early as Jan. 1.

This came as welcome news to BAX Global, FedEx Trade Networks Transport & Brokerage Inc., UPS and others that had filed petitions in 2003 seeking the change. "Clearly, there has been a longstanding need for regulatory change in the way shippers and NVOCCs conduct business with each other," commented Tom Donahue, vice president, ocean services for BAX.

Still, this is only a conditional authority. The petitioners now must await a final ruling, which is expected to come soon. Final comments on the ruling were expected by Nov. 19. Amy W. Larson, general counsel for the Federal Maritime Commission, says that timeframe could be pushed back slightly if the industry needs more time to comment on the ruling. "If the comments we receive are straightforward, the ruling could be in effect by Jan. 1," she says. "If we get contentious comments, however, then that may not be the case."