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FEDERAL MARITIME COMMISSION UPDATES Thursday, October 11, 2012 10:30 a m – 11:30 am. VERN W. HILL Director, Bureau of Certification and Licensing JENNIFER M. GARTLAN Deputy Director, Office of Consumer Affairs & Dispute Resolution Federal Maritime Commission. Roadmap.

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FEDERAL MARITIME COMMISSION

UPDATES

Thursday, October 11, 2012

10:30 am – 11:30 am


VERN W. HILL

Director, Bureau of Certification and

Licensing

JENNIFER M. GARTLAN

Deputy Director, Office of Consumer

Affairs & Dispute Resolution

Federal Maritime Commission


Roadmap
Roadmap

  • Unique Challenges Associated with International Moving

  • Federal Maritime Commission (“FMC”) Jurisdiction

  • Licensing Requirements for International Movers

  • Tariff Publication Requirements and Negotiated Rate Agreements

  • Prohibited Practices and Enforcement

  • Dispute Resolution Options

  • Fact Finding 27 and Future Commission HHG Initiatives


International moving common challenges
International Moving: Common Challenges

  • Multiple Actors in the Logistics Chain

  • One-time Shippers

  • Packing Issues

  • Delays due to LCL Consolidation

  • Import and Export Regulatory Requirements

  • Port Related Issues (e.g. Demurrage, Surcharges)

  • Documentation Issues

  • Communication Issues

  • Different Regime for Loss and Damage (i.e. COGSA)

  • Marine Insurance Issues


Jurisdiction
Jurisdiction

  • Statutes and Regulations Applicable to International Movers:

    • Shipping Act of 1984, as Amended

    • 46 CFR 500

  • Jurisdiction: Shipments of HHGs that travel between the US and foreign destinations via ocean (including intermodal transportation)


Fmc jurisdiction
FMC Jurisdiction

  • FMC doesnot exercise jurisdiction over military or GSA HHG shipments

  • FMC doesnot have criminal jurisdiction

  • FMC doesnot have jurisdiction over:

    • Air shipments

    • Maritime shipments between the U.S. and another U.S. state or territory (e.g. Puerto Rico to NY, CA to HI)



Oti license required when
OTI License Required When:

  • Any entity in the US that provides FF or NVOCC services

  • Foreign based NVOCCs are not required to obtain a license, but must file an FMC-1 and hold a $150k bond


Licensing exceptions
Licensing Exceptions

  • Shippers whose primary business is the sale of merchandise

  • Vessel Operators that perform FF services for cargo under the their own B/L

  • Ocean Freight Brokers

  • Entities that exclusively transport HHGs for US military or federal civilian executive agencies

  • Agents, employees or branch offices of a licensed OTI


Types of licenses
Types of Licenses

  • Freight Forwarders

  • Non-Vessel Operating Common Carriers (NVOCCs)


Comparing ffs vs nvoccs
Comparing FFs vs. NVOCCs

FF

NVOCC

Common carrier status under FMC regulations

Serves as a shipper to the ocean common carrier

Serves as carrier to its shipper customer(s)

Normally listed as the shipper on the vessel operator’s Master Bill of Lading

  • Not a common carrier

  • Serves as an agent to the shipper

  • Does not issue a bill of lading

  • Must identify the shipper on vessel operator’s bill of lading:

    • John Doe is listed as the shipper

    • “FF as agent for John Doe”


How to obtain a license
How to Obtain a License

  • Complete and file a Form FMC-18 available at http://www.fmc.gov/forms_and_applications.aspx

  • Obtain and provide FMC with proof of financial responsibility in the following amounts:

    • FF: $50k

    • NVOCC: $75k

    • Additional Branch Offices require additional $10k per office

  • NVOCCs must file a Tariff Registration Form FMC-1



Tariff publishing requirements
Tariff Publishing Requirements

  • NVOCCs and vessel operators must publish a tariff that has:

    • Rates, charges, and rules for each shipment

    • Copy of the bill of lading

  • Rates:

    • Rate increases no less than 30 days’ notice

    • Reductions effective on date of publication

    • No retroactive publication


  • Tariff publishing alternatives
    Tariff Publishing Alternatives

    • Negotiated Rate Agreements (NRAs)

    • NVOCC Service Arrangements (NSAs)



    What must nvoccs do to use nras
    What Must NVOCCs Do to Use NRAs

    • Be Licensed with the FMC

    • Post Notice in Tariff and B/Ls

    • End all Tariff Access Charges

    • Agree to an NRA in Writing Before Receiving Cargo

    • Keep NRA Documentation for 5 Years



    Enforcement overview
    Enforcement Overview

    • Shipping Act

      • Licensing Requirements

      • Tariff and Service Contract Requirements

      • Prohibited Practices

    • Regulatory

      • Augmentation of Statutory Requirements

      • NSA and NRA Requirements


    Common hhg violations
    Common HHG Violations

    • Performing OTI Services without a License

    • Providing Transportation for an unlicensed OTI

    • Providing OTI Services not in accordance with a Tariff

    • Failure to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.


    Consequences for regulatory violations
    Consequences for Regulatory Violations

    • Civil Penalties:

      • Up to $8,000 per violation if not knowing and willful

      • Up to $40,000 per violation if knowing and willful

  • Suspension of Tariff

  • Injunction to prevent violation of the Shipping Act (particularly helpful to shut down unlicensed entities)



  • Formal adjudication of disputes
    Formal Adjudication of Disputes

    • Parties can file suit at FMC for Shipping Act violations

    • Remedies:

      • Reparations

      • Injunction (Court-based)


    Alternative cadrs
    Alternative: CADRS

    • Independent

    • Neutral and Confidential

    • Practical, Real Time Solutions

    • Cost Savings

    • Enhanced Business Relationships

    • Experienced Neutrals with Industry Knowledge


    Services provided by cadrs
    Services Provided by CADRS

    • Education and Outreach

    • Small Claims

    • ADR Services:

      • Rapid Response and Ombuds

      • Facilitation

      • Mediation

      • Binding Arbitration


    Binding arbitration vs mediation
    Binding Arbitration vs. Mediation

    Binding Arbitration

    Mediation

    Voluntary participation

    Confidential

    Rules Based and Adjudicative

    Limited to legal issues

    Arbitration decision issued by arbitrator(s)

    Award is final

    • Voluntary participation

    • Confidential

    • Rules Based and Adjudicative

    • Limited to legal issues

    • Arbitration decision issued by arbitrator(s)

    • Award is final


    Advantages of using cadrs
    Advantages of Using CADRS

    • Faster, Easier, Less Formal, Than Litigation

    • Less Costly

    • Confidential; Avoids Publicity

    • Creative, Practical Solutions

    • Better for On-going Relationships

    • Minimize Risk

    • Parties Retain Control of Outcome

    • Little to Lose



    Examples of issues encountered
    Examples of Issues Encountered

    • Delays

    • Missing Shipments

    • Release and Receipt of Cargo

    • Cargo damage

    • Volume Disputes

    • Rates and Surcharges (e.g. detention and demurrage)

    • Cancellation Fees

    • Documentation Issues

    • Communication Issues


    Obtaining assistance
    Obtaining Assistance

    Office of Consumer Affairs & Dispute Resolution Services

    (202) 523-5807

    [email protected]


    Fact finding 27
    Fact Finding 27

    Potentially Unlawful, Unfair, or Deceptive Ocean Transportation Practices Related to the Movement of Household Goods or Personal Property in U.S.-Foreign Oceanborne Trades


    Background
    Background

    • 2005-2009: 2,500 HHG consumer complaints received

    • June 23,2010: The Commission issued an Order of Investigation to:

      • Develop a record on the nature and scope of the problem presented by potentially unfair, unlawful, or deceptive practices in the shipping of household goods or personal property in U.S.-foreign oceanborne trade; and

      • Provide recommendations for further Commission action, including any policies, rulemaking proceedings, etc.

    • April 15, 2011: Final Report Issued (Public)

    • May 12, 2011: Commission adopted FF 27 Final Report Recommendations

    • September 30, 2011: Commission staff issued progress report to Commission re: implementation of recommendations


    Recommendations
    Recommendations

    • Educating the Consumer

    • Enhancing Consumer Experience

    • Consumer Protection


    Highlights consumer education
    Highlights: Consumer Education

    • Development of consumer education materials

    • Development of consumer resource website

    • Plan to use social media to further outreach initiatives

    • Outreach to Lead Source Providers to ask for assistance in educating consumers

    • Encourage FMC licensed/registered movers to link websites to Commission website


    Highlights enhancing consumer experience
    Highlights: Enhancing Consumer Experience

    • Collaboration with industry stakeholders, partners, and other government agencies to develop best practices and model forms to reduce problems

    • Development of FMC appropriate guidance documents to provide best practices and model forms

    • Conduct outreach to HHG trade associations and arrange for ongoing information sharing and development of best practices


    Highlights consumer protection
    Highlights: Consumer Protection

    • Collaboration with other government agencies to enhance protection for shippers

    • Provide mediation/arbitration for HHG disputes

    • Development requirements for a voluntary best practices HHG Program

    • Enhanced enforcement procedures


    Get involved
    Get Involved!

    • Website Linkage

    • Outreach Initiatives

    • Best Practices and Model Forms

    • Collaboration and Information Sharing

    • Use CADRS for your dispute resolution needs



    Thank you
    Thank You

    Vern Hill, Director, Bureau of Certification and Licensing

    (202) 523-5787, [email protected]

    Jennifer M. Gartlan, Deputy Director, Office of Consumer Affairs & Dispute Resolution Services

    (202) 688-0244, [email protected]


    FEDERAL MARITIME COMMISSION

    UPDATES

    Thursday, October 11, 2012

    10:30 am – 11:30 am


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