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
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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
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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
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Statutes and Regulations Applicable to International Movers:
• Shipping Act of 1984, as Amended
• 46 CFR 500
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Jurisdiction: Shipments of HHGs that travel between the US and foreign
destinations via ocean (including intermodal transportation)
FMC Jurisdiction
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FMC does not exercise jurisdiction over military or GSA HHG shipments
FMC does not have criminal jurisdiction
FMC does not 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)
Licensing for International Movers
OTI License Required When:
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Any entity in the US that provides FF or NVOCC services
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Foreign based NVOCCs are not required to obtain a license, but must file an
FMC-1 and hold a $150k bond
Licensing Exceptions
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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
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Freight Forwarders
Non-Vessel Operating Common Carriers (NVOCCs)
Comparing FFs vs. NVOCCs
FF
NVOCC
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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”
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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
How to Obtain a License
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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 and Tariff Alternatives
Tariff Publishing Requirements
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NVOCCs and vessel operators must publish a tariff that has:
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Rates, charges, and rules for each shipment
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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
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Negotiated Rate Agreements (NRAs)
NVOCC Service Arrangements (NSAs)
NRAs
What Must NVOCCs Do to Use NRAs
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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
Regulatory Enforcement
Enforcement Overview
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Shipping Act
– Licensing Requirements
– Tariff and Service Contract Requirements
– Prohibited Practices
Regulatory
– Augmentation of Statutory Requirements
– NSA and NRA Requirements
Common HHG Violations
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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
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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)
Dispute Resolution at the FMC
Formal Adjudication of Disputes
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Parties can file suit at FMC for Shipping Act violations
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Remedies:
– Reparations
– Injunction (Court-based)
Alternative: CADRS
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Independent
Neutral and Confidential
Practical, Real Time Solutions
Cost Savings
Enhanced Business Relationships
Experienced Neutrals with Industry Knowledge
Services Provided by CADRS
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Education and Outreach
Small Claims
ADR Services:
• Rapid Response and Ombuds
• Facilitation
• Mediation
• Binding Arbitration
Binding Arbitration vs. Mediation
Binding Arbitration
Mediation
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Voluntary participation
Confidential
Rules Based and Adjudicative
Limited to legal issues
Arbitration decision issued by
arbitrator(s)
Award is final
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Voluntary participation
Confidential
Rules Based and Adjudicative
Limited to legal issues
Arbitration decision issued by
arbitrator(s)
Award is final
Advantages of Using CADRS
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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
Types of Cases FY 2012
Examples of Issues Encountered
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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
Office of Consumer Affairs & Dispute Resolution Services
(202) 523-5807
compliants@fmc.gov
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
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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
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Educating the Consumer
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Enhancing Consumer Experience
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Consumer Protection
Highlights: Consumer Education
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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
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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
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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!
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Website Linkage
Outreach Initiatives
Best Practices and Model Forms
Collaboration and Information Sharing
Use CADRS for your dispute resolution needs
Questions?
Thank You
Vern Hill, Director, Bureau of Certification and Licensing
(202) 523-5787, vhill@fmc.gov
Jennifer M. Gartlan, Deputy Director, Office of
Consumer Affairs & Dispute Resolution Services
(202) 688-0244, jgartlan@fmc.gov
FEDERAL MARITIME COMMISSION
UPDATES
Thursday, October 11, 2012
10:30 am – 11:30 am