The Federal Maritime Commission Newsroom


Commissioner Dye Votes Against Final Rules Concerning OTIs

October 22, 2015

I am pleased that this Final Rule reflects many of the excellent comments provided to us by ocean transportation intermediaries. I remain concerned, however, that this Rule does not incorporate other important comments and respond to my basic objections to the regulatory approach in this proceeding.

Although this Final Rule is improved from the Advance Notice stage, on balance, I am unable to support this Final Rule.

Executive Order 13563

I believe that we should focus our limited Commission resources on actual harm in the marketplace, and give priority to reforms that will promote competitiveness and economic growth, in light of the standards and priorities of Executive Order 13563.

In comments the Commission received on our ongoing Retrospective Review, no comment mentioned the need for additional OTI regulatory requirements. The comments did support eliminating certain regulatory burdens, including tariff publication and inflexible service contract filing.

Real Harm Ignored

Instead of focusing on the critical problems in the supply chain, this rule focuses on our own internal regulatory challenges and imposes new regulatory requirements on the entire OTI industry without adequate justification. My basic objection to this rulemaking is that it does not address demonstrable harm in the international supply chain.

The commercial OTI industry has pointed out to us that real harm to the shipping public originates with international household goods movers. Unfortunately, this Rule does not address it. The industry also points to serious supply chain security problems involving fraud, cargo theft and deceptive pickup transportation crimes that are not being investigated.

I would support seeking additional authority to address actual harm in the supply chain, and reallocate Commission law enforcement resources to address these problems.

Additional Problems

The Proposed Rule attempts to establish a new licensing requirement for OTI’s that hold out to "act" or "advertise." The statutory licensing requirement for Ocean Transportation Intermediaries is contained in section 40902 of title 46, United States Code, and applies to persons who "act" as an OTI.

The Commission discussed an approach on how to deal with unlicensed OTI’s that advertise services—predominately household goods movers—at our February 22, 2012, Commission Meeting. At that meeting, the Commission favorably discussed employing a regulatory interpretation by the Commission of the term "act" in section 40902 to include "advertising." Unfortunately, that regulatory interpretation is not contained in this proposal.

Finally, and unfortunately, this Rule reinforces the appearance that the Commission is more concerned with internal regulatory challenges than with evaluating and responding to actual harm in the marketplace.