FMC says dialogue with industry can help shape rule changes on ocean transport

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Freight forwarders, shippers and carriers have been urged to become more active in consultations with US authorities when planning important investments and to help shape rule changes being pushed through that will affect their businesses.

Greater dialogue early on in is essential for the success of any large private sector initiative and for the smooth implementation of new regulations by government, according to Federal Maritime Commission (FMC) chairman Mario Cordero.

The FMC is working on a new set of ocean rules that will determine matters surrounding licensing for more than 5,700 ocean transport intermediaries (OTIs) operating in the US – including domestic and foreign non-vessel operating common carriers (NVOCCs) and ocean freight forwarders.

He said the FMC had sought to consult early on the new procedures to try and smooth out difficulties in introducing the plans.

“The Federal Maritime Commission is looking to renew its ocean rules, the rules that were put out by the staff have been posted – it’s a process that is going to require consultation,” he said.

“We need a consultation procedure that allows us to limit the impact, but you can’t ignore the reason why we are doing this. The rules have to come in to the 21^st century to create a reliable, efficient international transport system that protects the shipping community from unlawful practices.”

Under current regulations, an OTI’s licence is for an unlimited term, while the proposed change would see OTI licences subject to renewal every two years.

Renewal applications would have to be submitted at least 60 days prior to the expiration date, and would include qualifying individual identification and contact information, along with changes to the OTI’s business or organisation, trade names, tariff publication, physical address and electronic contact data. Experience requirements for OTIs are expanded and are stated in more detail than before.

Cordero urged stakeholders in the industry to participate in the consultations and alleviate the impact of the new regulations on the industry, and added that the private sector should start talks with authorities early when developing investment plans.

“Let me suggest that you invest in early consultation of the expansion of any project – there has to be sustainable dialogue at the beginning with local communities and the authorities,” he said.

The spate of new regulations in the wake of the September 11 terror attacks highlighted the greater security fears, and efforts to clean up the industry’s carbon footprint were having punitive impacts on small operators in the US, according to forwarders and truckers dealing with the consequences.

US shippers and forwarders have needed to adapt to a spate of regulation changes under the current administration that were still being digested.

President Barack Obama’s $105bn MAP-21 package was just the latest layer of new guidelines introduced affecting overland transport in the US.

Bruce Roberts, managing director of US trucking specialist Sterling Transportation, said new regulations were constantly forcing operators to adapt. Small operators were particularly affected by the revision of guidelines affecting OTIs, he added.

“The increased regulations of the Federal Maritime Commission and MAP-21 requires freight forwarders to have someone to be able to work with truckers and there are now service rules that reduce the numbers of hours that truckers can work. That drives operating costs up.”

By reducing the number of hours a driver can work, MAP-21 regulations had increased costs on the key land link between the ports of Los Angeles and the airports and ports in Miami. Roberts welcomed more consultation with the industry in a bid to avoid these issues.

“Frustratingly, many of the rules are being drawn up by people that don’t really understand the business part of what we are doing. Compliance is just one thing, and the extra costs it incurs are very real,” he said.