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Commission Meeting Includes Vote to Update OTI Rules & Briefing on Carrier Alliances

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The Federal Maritime Commission voted during the open session of its meeting Wednesday to issue a final rule updating the licensing rules for Ocean Transportation Intermediaries (OTIs).  Other agenda items during open session were a briefing on procedures for monitoring ocean carrier alliances, and Frank LoBiondo Coast Guard Authorization Act of 2018 amendments to the Shipping Act.

In closed session, the Commission received briefings concerning two pending agreements: the Georgia-South Carolina Marine Terminal Operator Cooperative Working Agreement (Agreement No. 201293); and, the Puerto Nuevo Terminals LLC Cooperative Working Agreement (Agreement No. 201292).

Final Rule on OTIs

Several amendments to the licensing rules will be of particular interest to Non-Vessel Operating Common Carriers (NVOCCs) and Ocean Freight Forwarders:

  • Clarification as to who is eligible to be a Qualified Individual when partnerships are involved.
  • NVOCCs will be required to file a Form FMC-1 at the Commission before being issued a license.
  • Clarifies that for the initial renewal of an OTI license, the process can take place no sooner than one-year and no later than four-years from issuance. All subsequent renewals will take place on regular three-year intervals.  This process allows the Commission to evenly distribute the number of licenses renewed each month assuring efficient and timely responsiveness to industry.

The Final Rule will become effective after additional procedural steps required by the Paperwork Reduction Act have been completed.

Briefing on Ocean Carrier Alliances

The Bureau of Trade Analysis briefed the Commission on the global carrier alliances: 2M (Maersk and MSC), OCEAN (CMA CGM, COSCO Shipping Line [with OOCL], and Evergreen) and THE (Hapag Lloyd, ONE, and Yang Ming).  Topics covered in the briefing included an update on world trade, the state of the alliances, how the Commission monitors alliances, and an update on services and developments related to each of the alliances.

Changes to the Shipping Act

In December 2018, the President signed into law the Frank LoBiondo Coast Guard Authorization Act of 2018 (Public Law 115-282).  Contained as a provision within the legislation is the Federal Maritime Commission Authorization Act of 2017.  In addition to authorizing the appropriations of the Commission for fiscal years 2018 and 2019, the legislation amends the Shipping Act in several ways including by broadening the Commission’s authority and increasing the means at the Commission’s disposal to carry out its mission.  The Commission was briefed on the specifics of the changes precipitated by the LoBiondo Act and the steps that will need to be taken to implement them.