We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
Home » FMC reverses policy on unlicensed ocean intermediaries
newsworthy

FMC reverses policy on unlicensed ocean intermediaries

December 10, 2009
Mark B. Solomon
No Comments

In a move that could have a wide-ranging impact on the operational flexibility and security of the global supply chain, the Federal Maritime Commission (FMC) will permit government-licensed U.S.-based third-party logistics service providers to use unlicensed agents to perform ocean logistics services for them.

The FMC's policy reversal, which took effect in early November, opens the door for U.S.-licensed "ocean transportation intermediaries," a term that encompasses a raft of freight forwarders and non-vessel operating common carriers, to engage companies without U.S. licenses to act on the licensed company's behalf. The one stipulation is that the unlicensed company must disclose that it is rendering services on behalf of its licensed partner and not under its own name.

A Nov. 6 decision by the U.S. Court of Appeals for the District of Columbia Circuit overturned agency regulations barring a licensed intermediary from conducting business with an unlicensed firm. The FMC maintained that it was following a congressional mandate in a 1984 law deregulating the U.S. shipping industry that the agency protect the public from unknown, unqualified, and unscrupulous agents acting as intermediaries.

However, the appellate court, siding with U.S.-licensed agent Landstar Express America that filed suit to invalidate the FMC law, ruled against the agency on jurisdictional grounds, saying the FMC regulation exceeded the agency's statutory powers.

The court found that the 1984 law's definition of an "ocean transportation intermediary" includes only those entities that are held out to the public as providing the services of an intermediary. Because an unlicensed agent would only provide services on behalf of a licensed third party and would not hold itself out to the public as providing an intermediary's services, the FMC lacked the authority to extend its licensing requirements to those agents, the court found.

The court also said that enough legal safeguards were in place to shield the public from the actions of an unscrupulous agent because the identity of the licensed intermediary who the agent was working for would be disclosed.

The FMC has decided not to challenge the ruling and will either rewrite its regulations to conform to the court's edict or seek a legislative remedy from Congress.

The ruling is a blow to the FMC and to the U.S. Bureau of Customs and Border Protection (CBP), which in a post-9/11 world has striven for greater visibility of the companies responsible for moving goods to and from the United States. CBP and the U.S. Department of Homeland Security, which oversees CBP, "may now be on the outside looking in," says Ashley Craig, an attorney for the Washington, D.C.-based law firm of Venable LLP, which has been closely monitoring the case. CBP had opposed changes to the FMC regulation.

The ruling may also open carriers, third parties, and shippers up to greater liability and security risk because the field of potential shipping agents includes many who are unknown to U.S. authorities, Craig says.

At the same time, the ruling may give the entire supply chain greater flexibility to conduct commerce. Third parties can expand their coverage and service capabilities through new agency relationships, while shippers could benefit from increased service options, Craig says.

Craig says the major shipping trade groups such as the National Industrial Transportation League, the World Shipping Council, and the National Customs Brokers & Forwarders Association of America have "remained silent" on the case and its potential impact.

Transportation Maritime & Ocean Regulation/Government Transportation 3PL
KEYWORDS Landstar Express America
  • Related Articles

    Amazon China subsidiary gets FMC approval to operate as ocean freight forwarder—report

    FMC approves OCEAN vessel-sharing pact

    Intermediaries muscling in on LTL market, poised to change the pricing game

Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

Recent Articles by Mark Solomon

Coming together for road safety: interview with Joshua Girard

Off the rails

Freight rate spikes shaking up the C-suite

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Big and bulky last-mile delivery segment set for hot growth

  • Outlook 2023: What’s in store for logistics/supply chain?

  • Ports, maritime operators see tide turning as ocean freight tsunami subsides

  • In Person: Steve Beverly of Penske

  • InPerson interview: Rob McKeel of Fortna

Now Playing on DCV-TV

89cfed30 8aac 4284 960d c8c8c1886e16

Have you checked your read rate lately?

DCV-TV 4: Viewer Contributed
No reads. Unaccounted for boxes. Boxes sent to the wrong place. A logistics nightmare! But this nightmare doesn’t have to come true. SICK’s linear line scan camera is what dreams are made of for your logistics operations. And if you’re worried about motion and vibration from conveyor belts...well, there’s no reason...

FEATURED WHITE PAPERS

  • The five best applications for robotic lift trucks in warehouse environments

  • Fulfillment Facility Improved Efficiencies by 4x

  • 3PLs: Complete Orders Faster with Flexible Automation

  • Reusable Packaging for the New Wave of Supply Chain Automation

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing