The Federal Maritime Commission (FMC) on April 8 issued an Advanced Notice of Proposed Rulemaking (ANPRM) seeking comments regarding carrier (1) pass-through charges, and (2) tariff access fees. The ANPRM is a part of the FMC’s initiative to review existing regulations to determine whether they are outdated, unnecessary, or ineffective. Specifically, the FMC is seeking comments on how non-vessel operating common carriers (NVOCCs) apply pass-through charges under their tariffs, and the reasonableness of certain tariff access fees. The FMC is seeking public input prior to determining whether to change its carrier tariff regulations.
Pass-through charges are not defined in FMC regulations, but are referenced in 46 CFR 520.8 (Effective Dates), which provides that tariff amendments relating to changes to governmental or non-governmental charges beyond the carrier’s control (e.g., terminal handling charges) and are passed on without markup are effective upon publication. The FMC is concerned that NVOCCs have applied a too broad interpretation of what charges can be passed on immediately without mark up to the shipper, in some cases passing through all vessel-operating common carrier (VOCC) charges, surcharges and General Rate Increases (GRIs). The Commission is concerned that carriers’ inconsistent and perhaps inappropriate application of pass-through charges without giving 30 days advance notice may be harmful to shippers, as it may deny them full transparency on total freight charges that will apply to a shipment. The FMC is seeking comment on the following:
- For a VOCC, what are the typical charges that are not under its control and for which the ocean common carrier merely acts as a collection agent?
- For a VOCC, how does its tariff specify or address those charges for which it merely acts as a collection agent?
- For an NVOCC, what are the typical charges that are not under its control and for which the NVOCC merely acts as a collection agent?
- For an NVOCC, how does its tariff specify or address those charges for which it merely acts as a collection agent?
- How do common carriers communicate to shippers that the so-called pass-through charges are for the account of shippers?
- How can shippers be assured that common carriers collect pass-through charges without adding any mark-up?
Tariff Access Fees
The Shipping Act of 1984 requires that NVOCCs and VOCCs maintain their tariff rules in an automated tariff system available to the public. Carrier tariffs must be published electronically and made available to any person but carriers are entitled to impose a reasonable fee for access to their tariffs. The FMC noted that although most carriers (both VOCCs and NVOCCs) self-publish and provide access free of charge, carriers that do not provide free access have widely differing fees. In some instances, the FMC found that access fees were so high that it effectively prevented tariff users from reviewing carrier tariffs. Accordingly, the FMC is seeking comments on the following:
- Do you agree or disagree with the Commission’s guidance found in Circular Letter 00-2, that “‘a reasonable charge’ for access should recover only costs and expenses incurred by carriers in making their tariffs accessible to the public”? In your response, please provide examples of potential other costs that should be included or excluded in an access fee, and why.
- In your experience, do you believe the carriers you do business with are charging tariff access fees that only recover the costs and expenses incurred in making tariffs accessible to the public? If not, please provide examples where this may not be the case.
- Are you inhibited from accessing common carrier tariffs because of tariff access fees or tariff access processes?
Comments are due to the FMC by June 7, so please submit your comments to FCBF by May 15.
If you have comments or case studies where you’ve been affected by these issues, please let us know as we consider submitting an FCBF response on behalf of our membership. Information and/or comments can be submitted to email@example.com with the subject line “Carrier Automated Tariffs ANPRM”