FMC Discusses Rollback of Service Contract Reporting Rule

February 22, 2017 - On Wednesday, February 15, 2017, the Federal Maritime Commission (FMC) held its first public meeting under the Trump Administration.  As had been previously announced by President Trump, Commissioner Michael Khouri became the Acting Chairman of the FMC, succeeding Chairman Mario Cordero.  Following the passing of the gavel, the Commission then discussed a proposed rule that the Commission may act upon in the near future which would eliminate or reduce the requirements for ocean carriers to report amendments to service contracts.

Acting Chairman Michael Khouri is a Kentuckian who has worked in a variety of capacities in the maritime industry, including time spent on barges on the Mississippi River and with the U.S. Merchant Marine.  Chairman Khouri holds a law degree from Brandeis School of Law at the University of Louisville, and served as both a lawyer and a business executive in the transportation and maritime trades before his appointment to the FMC by President Obama in 2010.

Under a review of FMC rules governing ocean carriers, shippers, and NVOCCs that started with an Executive Order by President Obama, the FMC appears likely to move forward with reducing burdensome regulations for ocean carriers.  Currently, amendments to service contracts between shippers (and NVOCCs) and ocean carriers must be filed with the Commission prior to going into effect.  A new rule, which was docketed by the FMC in 2016, would allow any such amendments to take effect immediately, so long as they are filed with the Commission within up to 30 days of the change.

The proposal has received support for the change from industry groups, although the FMC has not received any reports of delays from either large beneficial cargo owners or from NVOCCs as a result of the current regulations.  The World Shipping Council, which represents the companies that operate almost 90 percent of global container shipping capacity, proposed the change to a 30-day filing window and has promised the Commission that they will still submit all service contract amendments and filings under the new deadline.

The goal of this change would be to enhance commerce by making service agreement filings and amendments more expedient.  This will save time and benefit the end customer and make the supply chain more efficient.  TIA’s International Logistics Conference works to provide the latest updates on FMC regulations and international freight trends.  For more information, or to participate in the Committee, please contact Will Sehestedt at or 703-299-5713.