Carrier Automated Tariffs
| Published date | 08 April 2021 |
| Citation | 86 FR 18240 |
| Record Number | 2021-06128 |
| Section | Proposed rules |
| Court | Federal Maritime Commission |
Federal Register, Volume 86 Issue 66 (Thursday, April 8, 2021)
[Federal Register Volume 86, Number 66 (Thursday, April 8, 2021)]
[Proposed Rules]
[Pages 18240-18243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06128]
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FEDERAL MARITIME COMMISSION
46 CFR Part 520
[Docket No. 21-03]
RIN 3072-AC86
Carrier Automated Tariffs
AGENCY: Federal Maritime Commission.
ACTION: Advance notice of proposed rulemaking.
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SUMMARY: The Federal Maritime Commission (Commission) has identified
inconsistencies in the manner in which different carriers are
interpreting and applying certain aspects of the Commission's rules.
This Advance Notice of Proposed Rulemaking (ANPRM) will facilitate a
fuller understanding of these issues prior to the Commission
potentially proposing regulatory changes to its tariff regulations. The
Commission observes that carriers are charging widely varying
[[Page 18241]]
fees and imposing varying minimum requirements for access to common
carrier tariffs. The Commission seeks information regarding the impact
of such fees and minimum requirements on public access to common
carrier rules, rates, practices and charges in published tariffs and
whether existing fees or requirements are unreasonable. Additionally,
certain non-vessel-operating common carriers (NVOCCs) are applying what
are commonly known as ``pass-through charges'' inconsistently under
common carrier tariffs, and the Commission seeks to gain a broader
understanding and information from industry stakeholders, including
NVOCCs and vessel-operating common carriers (VOCCs).
DATES: Submit comments on or before June 7, 2021.
ADDRESSES: You may submit comments, identified by Docket No. 21-03, by
the following methods:
Email: [email protected]. For comments, include in the
subject line: ``Docket No. 21-03, Comments on Carrier Automated Tariffs
Rulemaking.'' Comments should be attached to the email as a Microsoft
Word or text-searchable PDF document.
Instructions: For detailed instructions on submitting comments,
including requesting confidential treatment of comments, and additional
information on the rulemaking process, see the Public Participation
heading of the SUPPLEMENTARY INFORMATION section of this document. Note
that all comments received will be posted without change to the
Commission's website unless the commenter has requested confidential
treatment.
Docket: For access to the docket to read background documents or
comments received, go to the Commission's Electronic Reading Room at:
https://www2.fmc.gov/readingroom/proceeding/21-03/.
FOR FURTHER INFORMATION CONTACT: Rachel E. Dickon, Secretary; Phone:
(202) 523-5725; Email: [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Shipping Act of 1984, as amended (46 U.S.C. 40101-41309)
(Shipping Act or Act) requires that common carriers (i.e., VOCCs and
NVOCCs) and conferences keep open for public inspection in an automated
tariff system, their tariffs showing all rates, charges,
classifications, rules and practices, and to make those tariffs
available electronically to any person without time, quantity, or other
limitation. 46 U.S.C. 40501(c). The Act charges the Commission with
establishing requirements for the accuracy and accessibility of all
private automated systems used to provide tariff information to the
public. Sec. 40501(g)(1). The Act also provides that a reasonable fee
may be charged for such access, except that Federal agencies may not be
charged a fee. Sec. 40501(c).
Pursuant to the Commission's Plan for Regulatory Review of Existing
FMC Rules, the Commission's regulations at 46 CFR part 520, Carrier
Automated Tariffs, are currently under review.\1\ As part of this
initiative, two issues have been identified that would benefit from
receiving clarifying information from industry participants and other
supply chain stakeholders. Accordingly, the Commission is seeking
comment regarding: (1) Tariff access fees and minimum access
requirements; and (2) pass-through charges prior to potentially moving
forward with a proposed rulemaking.
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\1\ See Plan for Regulatory Review of Existing FMC Rules,
updated November 23, 2020, at https://www.fmc.gov/wp-content/uploads/2020/11/RegulatoryReformPlan.pdf.
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II. Request for Comment
A. Tariff Access Fees
Before the passage of the Ocean Shipping Reform Act of 1998 (OSRA),
which became effective May 1, 1999, carrier and conference tariffs were
filed with the Commission through the Commission's Automated Tariff
Filing and Information system. OSRA eliminated the requirement that
tariffs be filed with the Commission, and instead, directed carriers
and conferences to publish tariffs in carrier automated tariff systems.
The Commission promulgated implementing regulations reflecting this
change effective May 1, 1999, in FMC Docket No. 98-29, Carrier
Automated Tariff Systems.\2\ Once carriers and conferences deployed
their carrier automated tariff systems, the Commission began receiving
informal complaints regarding certain tariff access fees and minimum
subscription requirements that potential tariff users believed were
excessive. As a result, on May 9, 2000, the Commission initiated FMC
Docket No. 00-07, Advance Notice of Proposed Rulemaking Concerning
Public Access Charges to Carrier Automated Tariffs and Tariff Systems
Under the Ocean Shipping Reform Act of 1998, to determine whether
certain tariff access charges and monthly subscription requirements
might limit the public's ability to access tariffs and tariff systems,
and sought public comment to address the reasonableness of tariff
access charges. Based on an assessment of the comments received in
response to Docket No. 00-07, the Commission determined that
promulgating a proposed rule on tariff access charges and their
reasonableness was not necessary. The Commission did, however, issue a
Circular Letter to provide guidance to common carriers, conferences,
and tariff publishers with respect to the issue of reasonable fees, and
subsequently discontinued the proceeding.\3\ In relevant part, Circular
Letter No. 00-2 read:
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\2\ See Final Rule and Interim Final Rule, Carrier Automated
Tariff Systems, 64 FR 11218 (March 8, 1999).
\3\ See FMC Docket No. 00-07 (Proceeding Discontinued, July 11,
2001) at https://www2.fmc.gov/readingroom/proceeding/00-07/. See
also Circular Letter No. 00-2, Charges for Access to Tariffs and
Tariff Systems (October 6, 2000) at https://www.fmc.gov/about-the-fmc/circulars/.
The Commission has not promulgated regulations governing tariff
access charges. However, it appears that ``a reasonable charge'' for
access should recover only costs and expenses incurred by carriers
in making their tariffs accessible to the public, and should not
recover the costs and expenses associated with:
(1) Developing or publishing a tariff/essential terms
publication;
(2) Providing access to federal agencies;
(3) Providing access to the publishing carrier's employees or
agents or to a publishing conference's employees or its members'
employees or agents; or
(4) Developing any other function or service for possible use by
a carrier's or conference's employees or agents, as the case may be.
Any subscription fees assessed should also be consistent with these
criteria.
While the foregoing relates to the Commission's experience at the
inception of carrier automated tariff systems in 1999, more recent
experience indicates that some tariff access fees may be so high that
they effectively prevent tariff users from reviewing certain carrier
tariffs, particularly those with substantial minimum charges, such as
$1,000 or $1,500.\4\ This can be an issue, not only for shippers who
primarily ship cargo under tariff rates, but also for shippers using
service contracts. Once the shipper's minimum quantity commitment under
the service contract has been fulfilled, the carrier often rates
subsequent shipments under its tariff rates, For this reason, shippers
may have a need to access tariffs to determine the applicable rate for
their cargo once the volume commitment for their service contract has
been fulfilled. The unimpeded access to tariffs is also
[[Page 18242]]
imperative during periods of rate volatility, to ensure the shipper is
aware of the most current applicable rates.
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\4\ Fee range based on information reported to Commission staff
when contacted periodically by users for guidance and assistance
with tariff access.
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The Commission notes, however, that many major VOCCs and NVOCCs
that self-publish tariffs provide access free of charge. While for such
carriers, it is customary to request a user to register for tariff
access by providing contact information and creating a Login/Username
and Password. Once this has been accomplished, free access has
generally been granted. For those carriers that do not provide tariff
access free of charge, access fees appear to vary widely, with some
carriers charging what appear to be excessive fees. This may indicate
that, contrary to guidance provided by the Commission in Circular
Letter 00-2, some carriers are not relating charges only to the actual
costs of providing public access to tariff systems.
For the foregoing reasons, the Commission is concerned that the
level of some tariff access fees may impair the public's ability to
access the information in carrier tariffs. Accordingly, the Commission
seeks responses to the following questions, as well as any additional
information related to the public's experience with tariff access fees.
1. 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.
2. 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.
3. Are you inhibited from accessing common carrier tariffs
because of tariff access fees or tariff access processes?
In your response, where possible, please include the carrier name,
tariff number and title, tariff publisher (if applicable), and access
fees for any tariffs you believe have excessive fees or unreasonable
access requirements.
B. Pass-Through Charges
The Commission has become aware of disparate industry
interpretations of the types of charges that may be ``passed
through'' to shippers without markup (not to exceed the charge the
common carrier incurs) in connection with shipments moving under
common carrier tariffs, particularly by NVOCCs. While the
Commission's tariff regulations do not define so called ``pass-
through charges,'' such charges are referenced in 46 CFR 520.8,
Effective Dates, which specifies the types of tariff amendments that
may become effective immediately upon tariff publication. More
specifically, Sec. 520.8(b)(4) provides that amendments may take
effect upon publication that make changes in charges for terminal
services, canal tolls, additional charges, or other provisions not
under the control of the common carriers or conferences, which
merely acts as a collection agent for such charges and the agency
making such changes does so without notifying the tariff owner.
Historically, we understand VOCCs have relied on this provision to
make changes to port charges, governmental charges, and other similar
charges beyond their control effective upon publication in their
tariffs. In contrast, NVOCCs have varied widely in the types of charges
they have attempted to charge to shippers pursuant to Sec. 520.8(b)(4)
when applying tariff rates, particularly with respect to VOCC charges
and surcharges. The Commission has encountered narrow interpretations
by NVOCCs of the types of VOCC charges that can be passed through
without markup, but more commonly, broader interpretations by NVOCCs
have been seen, including the pass-through of all VOCC charges and
surcharges, as well as VOCC General Rate Increases (GRIs).
In this regard, some NVOCCs appear to be conflating the
Commission's tariff regulations with the Commission's 2018 rulemaking
that expanded the flexibility of NVOCC Negotiated Rate Arrangements
(NRAs) and NVOCC Service Arrangements (NSAs).\5\ NVOCCs using NRAs are
exempt from the general tariff publication requirements in 46 U.S.C.
40501 and many of the corresponding regulations in 46 CFR part 520. 46
CFR 532.2. Unlike common carriers subject to the tariff requirements in
46 U.S.C. 40501 and 46 CFR part 520, NVOCCs using NRAs must describe
the applicable pass-through charges in either the NRA or rules tariff
but need not specify the amount of those charges. 46 CFR 532.5(d)(2).
Rather ``[f]or any pass-through charge for which a specific amount is
not included in the NRA or the rules tariff, the NVOCC may only invoice
the shipper for charges the NVOCC incurs, with no markup.'' 46 CFR
532.5(d)(2)(iv). For NVOCC NRAs, the Commission provided greater
flexibility by further stating that ``[t]he Commission is removing the
prohibition on the pass-through of ocean carrier GRIs in order to
increase efficiency and flexibility within the NRA framework.'' 83 FR
34780, 34787 (July 23, 2018).
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\5\ See Final Rule in FMC Docket No. 17-10, Amendments to
Regulations Governing NVOCC Negotiated Rate Arrangements and NVOCC
Service Arrangements, 83 FR 34780 (July 23, 2018).
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The current tariff regulations permit common carriers to apply
changes to any governmental or non-governmental charge beyond the
carrier's control (e.g., terminal handling charges or canal tolls)
effective on publication. 46 CFR 520.8(b)(4). But the Commission does
not view VOCC GRIs as falling within this provision. A GRI is an
adjustment to the base freight rate rather than a surcharge and may not
become effective immediately on publication under Sec. 520.8(b)(4).
While the Commission has treated VOCC GRIs as pass-through charges
under the NVOCC NRA exemption from tariff rate publication, there is no
corresponding provision in the Commission's regulations for cargo
moving under tariffs. VOCCs and NVOCCs are common carriers in their
relationship with their shippers. Therefore, like VOCCs, NVOCCs must
also publish GRIs in their tariffs and provide 30 days' notice of the
increase to their shippers, as required by the Commission's regulation
at 46 CFR 520.8(a)(1). Additionally, common carriers, which include
NVOCCs, must include in their tariffs all rates and charges, including
the charges described in 46 CFR 520.8(b)(4). 46 CFR 520.3.
The Commission is concerned that the widely varying interpretations
and inappropriate application of so-called pass-through charges under
common carrier tariffs may result in harm to shippers. The practice of
some carriers to incorrectly pass-through charges could deny the
shipper full transparency regarding the total freight charges that will
apply to a shipment, as well as deprive the shipper of advance notice
of any increase in those charges. The Commission, therefore, seeks
responses to the following questions, as well as any additional
information related to the public's experience with pass-through
charges.
1. For an ocean common carrier (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?
2. For an ocean common carrier (VOCC), how does its tariff specify
or address those charges for which it merely acts as a collection
agent?
3. 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?
4. For an NVOCC, how does its tariff specify or address those
charges for which it merely acts as a collection agent?
5. How do common carriers communicate to shippers that the so-
[[Page 18243]]
called pass-through charges are for the account of shippers?
6. How can shippers be assured that common carriers collect pass-
through charges without adding any mark-up?
In your response, where possible, please include the carrier
name(s) and the relevant tariff provisions.
III. Public Participation
How do I prepare and submit comments?
Your comments must be written and in English. To ensure that your
comments are correctly filed in the docket, please include the docket
number of this document in your comments.
You may submit your comments via email to the email address listed
above under ADDRESSES. Please include the docket number associated with
this notice and the subject matter in the subject line of the email.
Comments should be attached to the email as a Microsoft Word or text-
searchable PDF document.
How do I submit confidential business information?
The Commission will provide confidential treatment for identified
confidential information to the extent allowed by law. If your comments
contain confidential information, you must submit the following by
email to the address listed above under ADDRESSES:
A transmittal letter requesting confidential treatment
that identifies the specific information in the comments for which
protection is sought and demonstrates that the information is a trade
secret or other confidential research, development, or commercial
information.
A confidential copy of your comments, consisting of the
complete filing with a cover page marked ``Confidential-Restricted,''
and the confidential material clearly marked on each page.
A public version of your comments with the confidential
information excluded. The public version must state ``Public Version--
confidential materials excluded'' on the cover page and on each
affected page and must clearly indicate any information withheld.
Will the Commission consider late comments?
The Commission will consider all comments received before the close
of business on the comment closing date indicated above under DATES. To
the extent possible, we will also consider comments received after that
date.
How can I read comments submitted by other people?
You may read the comments received by the Commission at the
Commission's Electronic Reading Room at the addresses listed above
under ADDRESSES.
In addition to soliciting the comments of regulated entities, the
shipping public and supply chain stakeholders, the Commission
encourages any interested party to comment on these questions and any
experience they have related to these two issues.
By the Commission.
Rachel E. Dickon,
Secretary.
[FR Doc. 2021-06128 Filed 4-7-21; 8:45 am]
BILLING CODE 6730-02-P
