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T25u—FMC Regulatory Compliance for U.S. Ocean Forwarders and NVOs Serving U.S. Ports

Subscriber price: $174.00, Non-subscriber price: $225.00
Estimated total study time: 14 hours 18 minutes

This course addresses the various regulatory requirements imposed by the U.S. Federal Maritime Commission on ocean freight forwarders, NVOCCs and agents of foreign NVOs arranging or providing transportation via U.S. ports. It is designed for managers, supervisors, sales, and full charge operations staff responsible for providing and marketing these services.

Important: This course has been updated to include detailed coverage of NVOCC Negotiated Rate Arrangements ("NRA") which became available for use on April 18, 2011.

FMC Regulatory Mission and Primary Methods

The U.S. Federal Maritime Commission exists to protect shippers and consignees, particularly small ones, from unfair practices by ocean common carriers, and to protect U.S. flag common carriers and U.S.-based NVOs from discriminatory practices by foreign carriers or nations. In this lesson we will address how the FMC performs these regulatory mandates given to it by the U.S. Congress.

(Estimated study time: 41 minutes)

• Introduction
• The Federal Maritime Commission Mission
• Preservation of Common Carriage
  • General
  • FMC Regulation of Common Carriage vs. Contract Carriage
• FMC Carrier Oversight Methods/Requirements
  • Publication of Ocean Carrier Tariffs
  • Additional NVOCC Requirements
  • Filing of Carrier-to-Carrier and Carrier-to-Terminal Agreements

FMC Requirements for Ocean Carrier Tariff Publication; Exceptions to Tariff Applicability

This lesson addresses the mechanisms by which scheduled ocean carriers establish their shipping rates, other charges and conditions of service, including tariff publication and alternatives to tariff publication.

(Estimated study time: 59 minutes)

• Introduction
• FMC Tariff Publication
  • Notice and Authority to Publish Tariffs
  • Tariff Regulations; Format & Procedure
  • Tariff Applicability to FMC Regulated Ocean Shipments
  • Alternatives and Exemptions to FMC Tariff Requirements
  • Shipper Requests/Complaints/Rate Negotiations
  • Freight Rate Requests & Change Process

Tariff Enforcement & Dispute Resolution; Shipper-VOCC Service Contracts

This lesson addresses ocean carrier tariff enforcement by the FMC, and then shipper-VOCC Service Contracts in lieu of tariff rules and rates for ocean transportation.

(Estimated study time: 1 hour 8 minutes)

• Introduction
• FMC Enforcement of Tariffs, Agreements and Shipping Law
  • FMC Enforcement—General
  • Anti-Rebate Enforcement
  • FMC Complaint, Claim and Dispute Resolution Procedures
    • Formal Complaints
    • Informal Procedures/Formal Small Claims Procedures
    • FMC Alternative Dispute Resolution (Mediation)
    • Additional Complaint and Dispute Resolution Options under OSRA 22
• U.S. Ocean Carrier Service Contracts
  • General
  • Benefiting From Service Contracts
  • Parties to Service Contracts
  • Service Contract Filing with FMC
  • Amendment, Correction and Cancellation of Service Contracts
    • Amendment
    • Corrections
    • Cancellation of a Service Contract
  • Service Contract Recordkeeping

Regulation of Ocean Transportation Intermediaries (OTIs)

This lesson covers the FMC regulations with respect to:

• definition of an "ocean freight forwarder"
• services performed by forwarders
• when an FMC OTI license is required
• OTI licensing requirements, and,
• FMC procedures for shipper complaints against forwarders.

(Estimated study time: 1 hour 18 minutes)

• FMC Regulation of Ocean Freight Forwarders
• Definitions Based on Service Performed
  • Underlying FMC Regulatory Scope/Criteria
  • Definition of Ocean Freight Forwarder
  • Definition of Freight Forwarder Services
• FMC OTI License, "When Required"
• "License, When Not Required"
• Further Information, Boundaries of FMC Regulation of OTIs
• Summary—Scope of U.S. Forwarder Activities Regulated by FMC
• General—The "Qualifying Individual"
• OTI License Application
• Ocean Forwarder Financial Responsibility, Surety Bond
  • Financial Responsibility Requirements
  • Proof of Financial Responsibility
  • Claims Against an OTI
• License Issuance and Renewal

Shipper-Forwarder Relationship

In this lesson we address the relationship between shipper and forwarder as being that of agent to principal, a forwarder's responsibilities a agent, and operational concerns when working with foreign forwarders in obtaining routed shipments.

(Estimated study time: 1 hour 12 minutes)

• Introduction
• Forwarder Represents Shipper as an Agent
• Responsibility as Agent
  • General
  • Conflicts of Interest
  • Confidentiality of Information
  • FMC Regulatory Prohibitions
• Protection of Sensitive Information Received from Principals
• Shipments Quoted/Handled on Behalf of Foreign Agents
  • Shipping Quotations and Routed Shipments From Agents—General
  • Potential FMC Compliance Concerns
  • Competitive and Operational Concerns
  • Solutions to Forwarder-Foreign Agent Problems
    • Basic Compliance Requirements and Options
    • Income from Ocean Freight Charges
• Complaints to the FMC Against a Forwarder
• More Information on FMC Complaints and Dispute Resolution

Forwarder-Carrier Relationship; Routing Ocean Cargo, Use of NVOCC Routings

This lesson focuses on the relationship between an ocean forwarder and the ocean carrier, particularly an NVO. We pay special attention to the frequent case in which a forwarder concurrently acts as an NVO for its's shipper's cargo.

(Estimated study time: 1 hour 13 minutes)

• Introduction
• General—Selecting an Ocean Carrier
• Prudence in Selecting and Dealing with Independent NVOCCs
  • Diligence Checklist
  • Destination Charges
  • Obtain Written Information from NVOs Concerning Co-loading
  • Avoid Negligence Claims over NVO Routings
• Forwarder Concurrently Acting as NVOCC
  • General
  • Competing Interests
  • Addressing Competing Interests
  • Focus on Benefits to Shipper of Joint Forwarder-NVO Service
  • Rate/Service Guidelines
  • Confirm Services To be Performed and Rates Prior to Routing Cargo
  • A Principal's Access to Underlying Costs

Key Points Every Ocean Forwarder Employee Should Know about FMC Regulations

This lesson serves as a summary of issues already learned, plus a number of additional compliance issues, with links to more information for those learners who which to expand their understanding.

(Estimated study time: 52 minutes)

• Introduction
• Key Points Every Ocean Forwarder Employee Should Know about FMC Regulations

NVO Regulation & Tariff Filing

(Estimated study time: 1 hour 18 minutes)

• Introduction
• NVOCC as Ocean Transportation Intermediary (OTI)
  • Licensing
  • Surety Bond
• General—FMC Regulation and Jurisdiction over NVOs
• NVOCCs Are Regulated as Common Carriers
  • Public Tariff an Essential Characteristic of Common Carriage
  • NVOs Operate De Facto as Contract Carriers
• NVOCC Tariff Publication and Maintenance
  • NVO Tariff Publication Requirements
  • Treatment of Destination Charges
  • Tariff Rate Strategy

NVOCC Service Arrangements ("NSAs")

This lesson addresses confidential "NSAs" between an NVOCC and a shipper.

(Estimated study time: 1 hour 13 minutes)

• Introduction
• NVOCC Service Arrangements (NSAs)
  • General Requirements for an NSA
  • Specification of Applicable Freight Rates and Other Charges
  • Required NSA Information in Addition to Freight Rates and Charges
  • Additional NSA Requirements
  • NSA Document Format
  • NSAs Used in Conjunction with Underlying VOCC Service Contracts

NVO Negotiated Rate Arrangements (NRAs)

This lesson addressed this important new (April, 2011) ability of NVO's to enter into negotiated rate arrangements with shippers in a much simpler way than an NVOCC service arrangement ("NSA"), thereby avoiding the requirement to publish freight rates in their tariffs, and maintaining rates conficential.

(Estimated study time: 1 hour 33 minutes)

• Introduction
• NVOCC Negotiated Rate Arrangement (NRA)
  • What is an NRA?
  • Benefits to Shipper of Using NRAs
  • Benefits to NVO of Using NRAs
  • Pre-Requirements for NVO Use of NRAs
  • NRA Negotiation
  • NRA Operational Requirements & Limitations
    • FMC Regulatory Requirements
    • Implementation – How to Specify Shipments Subject to an NRA
    • Implementation – How to Specify the Freight Rate
    • Implementation – NVO Operational Risk and Good Practice
  • NRA Amendment
  • NRAs Used in Co-Loading
  • NRA Record Keeping Requirements
    • Specific Requirements
    • Inspection by FMC
  • Precedence of NRA vs. Tariff Rate; Dispute Resolution
• Summary: Comparison between NSAs and NRAs
  • NSAs
  • NSAs vs. NRAs
  • FMC's Summary of NSA vs. NRA

NVOCC Bills of Lading

This lesson addresses NVO B/L issuance and carrier liability.

(Estimated study time: 49 minutes)

• Introduction
• NVOCC Bills of Lading
  • B/L Document Format
  • General Terms and Conditions
  • NVO Carrier Liability Terms; Uncertainty for Through Land Transportation
  • Preparation and Issuance of NVO/MTO Bills of Lading
  • U.S. FMC Requirements Affecting NVO Bills of Lading
    • NVO Bills of Lading Subject to NVO's Tariff, NSA, or Rules Tariff+NRA
    • Qualifying Language (Annotation) on NVO B/L
      • When Co-Loading
      • When B/L Subject to an NSA
      • When B/L Subject to an NRA

NVOCC Co-Loading

This lesson addresses the benefits and risks of NVO co-loading, including U.S. regulatory concerns.

(Estimated study time: 1 hour 18 minutes)

• Introduction
• U.S. NVO Co-Loading Basics
  • As Indirect Carriers, NVOs Sub-Contract All or Most Transportation
  • Co-Loading Benefits
  • FMC Rules on NVOCC Co-Loading
• Carrier-to-Carrier Co-Loading
• Co-loading Risks to Shipper/Consignee
  • Physical Handling Risks
  • Non-Tariffed, Unknown and Excessive Destination Costs
  • Co-Loaded Shipment Tracking & Communicating with Breakbulk Agent
• Co-loading Risks to Freight Forwarder
  • Delivery Dependability
  • Increased Risk of LCL Cargo Loss, Damage and Delay
  • Excessive Destination Charges
  • FMC Regulatory Concerns over Destination Charges

NVO Regulatory Compliance Summary & Checklist

In this final lesson, key FMC compliance and operational issues are reviewed in checklist format.

(Estimated study time: 44 minutes)

• Introduction
• U.S. NVO Operations and Compliance Summary—Key "Do's" and "Don'ts"
  • General
  • U.S. NVO Regulatory Compliance Checklist