US FMC Regulations

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US FMC Regulations

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FMC Filing

Introduction - What is FMC?

The Federal Maritime Commission is an independent governmental agency whose responsibility is to regulate and control maritime activities. The FMC regulates all ocean carriers, both VOCC (Vessel Owning Common Carrier) such as Maersk, OOCL, Evergreen and NVOCC (Non-Vessel Owning Common Carriers) such as Pelorus Shipping Line Ltd., Ecu-Line, etc. Both types of carriers are subject to the exact same rules and regulations in regard to transportation of cargo. The FMC makes no distinction between the two types of carriers when it comes to cargo. Rates for Pelorus Shipping Line Ltd are filed utilizing the FMC process known as NRA (Negotiated Rate Agreement). Legal requirements of this process can be found in 46 CFR section 532. Under this process, a rate quote is provided to the paying party (US entity or overseas Hellmann office). That party accepts the rate quote – in writing.

For details SOP - FMC Filing (US) Sea - Air & Sea Operation eLibrary - HWL Confluence

FMC Filing

Pelorus Notice about NRA (Negotiated Rate Agreement)

FMC Regulatory Framework

Legislative Framework Federal statutes like the Shipping Act and Ocean Shipping Reform Act establish compliance rules for carriers and intermediaries. Recent Regulatory Updates Ocean Shipping Reform Act of 2022 modernizes billing practices and improves accountability to reduce port congestion. Compliance and Procedures FMC procedural rules guide filings, evidentiary standards, and administrative processes for regulated entities.

Role of FMC in Ocean Transportation

Regulatory Oversight and Enforcement FMC monitors carrier behavior and prevents anti-competitive practices to maintain a fair marketplace in ocean transport. Fee Assessment Investigations The FMC investigates unjust demurrage and detention charges causing financial strain on shippers. Dispute Resolution Mechanisms FMC provides formal channels and guidelines for complaint filing and legal recourse to resolve disputes. Supply Chain Transparency The FMC publishes data and regulatory updates to enhance transparency and support maritime logistics resilience.

Regulated Entities and Their Responsibilities

Vessel Operating Common Carriers VOCCs operate ships transporting cargo and must follow tariff, service contract, and billing regulations. Non-Vessel Operating Common Carriers NVOCCs issue bills of lading and act as intermediaries between shippers and carriers without operating vessels. Ocean Freight Forwarders OFFs manage shipment documentation and coordinate logistics as part of Ocean Transportation Intermediaries. Marine Terminal Operators MTOs manage cargo facilities and comply with regulations on terminal operations, storage, and service access.

OSRA 2022 and Key Regulatory Impacts

Demurrage and Detention Fee Reform OSRA 22 mandates clearer billing and transparency to prevent excessive demurrage and detention fees caused by external delays. Expanded FMC Enforcement The act empowers FMC with stronger authority to act against carriers and terminal operators engaging in unfair practices. Improved Data Sharing and Accountability OSRA 22 requires better data exchange and accountability in service agreements to enhance operational fairness. Cargo Space Access Protections The legislation prevents carriers from unreasonably refusing cargo space to U.S. exporters, promoting fair access.

Key FMC Rules and Compliance Requirements

Licensing and Financial Responsibility OTIs must comply with Part 515 licensing requirements, ensuring financial responsibility and proper operational documentation. Tariff Publication and Service Contracts Carrier Automated Tariff Part 520 and Parts 530-532 govern tariff publication and service contract filing with transparency obligations. Administrative and Enforcement Procedures FMC rules include administrative procedures, civil penalties, and complaint handling to ensure compliance and accountability. Demurrage and Detention Regulations Demurrage and detention rules under Part 541, influenced by OSRA reforms, require freight professionals to manage related charges carefully.

FMC– HITS & CW Integration

Cargowise Mandatory Compliance Data

Data Integrity and Compliance Accurate documentation ensures compliance with FMC regulations by linking shipments to sales contracts. System Integration and Automation HITS and Cargowise integration automates contract data transfer, reducing errors and speeding booking creation. Manual Entry for Spot Quotes Manual entry of quotation numbers is required for spot quotes to maintain data accuracy and compliance. Impact of Incomplete Referencing Missing or incorrect references cause delays and compliance issues during audits and contract filings. Cargowise Data Entry Please follow the enclosed CW instructions for better reference.

CW instructions

HITS & Cargowise Integration

Streamlined Quotation to Booking Integration automates transition from quotation in HITS to booking in Cargowise, reducing manual effort and errors. Compliance with FMC Regulations Mandatory fields like Client Contract Number auto-populate to ensure shipment compliance with FMC service contracts. Increased Operational Accuracy System reduces data inconsistencies and manual cross-referencing, improving accuracy and audit readiness. Enhanced Internal Visibility Aligned data sources provide commercial and operational teams with consistent information throughout shipment lifecycle.

Spot Quotes Outside HITS

Manual Spot Quote Workflow Spot quotes require manual data entry outside the automated HITS-Cargowise integration workflow. Compliance and Reference Linking Entering quotation numbers in Cargowise ensures proper linkage and maintains FMC compliance. Risk Mitigation and Training Internal controls, job aids, and training minimize errors in manual processes and ensure accuracy. Operational Integrity Importance Manual workflows are vital to uphold documentation standards and avoid shipment delays.

Sales Contracts and Tender‑Based Quotations

Long-Term Agreement Importance Sales contracts and tender quotations define pricing, service levels, and volume commitments over extended periods. Accurate Shipment Referencing Users must add SALES CONTRACT references to shipments for traceability during audits and customer reviews. Compliance and Validation Maintaining master contract indexes and validation rules ensures billing accuracy and regulatory compliance. Enhancing Operational Reliability Correct contract linkage strengthens process reliability and supports seamless commercial and operational execution.

Archiving Requirements for Spot Quotations

Mandatory Physical Archiving Physical document archiving is mandatory for all spot quotations to ensure regulatory compliance and quality control. Digital Upload in Cargowise Users must upload or archive hard-copy documents in Cargowise under the SQU document type for traceability. Ensuring Traceability and Compliance Standardized archiving enables complete traceability for spot quotations supporting audits and regulatory reviews. Operational Reliability Consistent archiving prevents data loss or misfiling and improves operational reliability in high-volume environments.

FMC Filing

Important Recommendations

The customer must be invoiced exactly the same as the rates on accepted quote. Per HWL SOP, for a valid NRA to be established, the following requirements must be met:

• The freight rate and terms must be quoted to the customer in English
• Every NRA must be in writing and clearly specify the following:

• Each quote and acceptance need to include the names of the parties (NVOCC and Shipper & any affiliates) and the names of the representatives agreeing to the NRA 
• Stated service date or within a defined window of time
• Named origin, named destination and transportation service (such as door pickup or delivery, terminal service, origin or destination container yard, transit time, underlying VOCC service that will be utilized, etc.) 
• Quantity of cargo and all charge items must be in English
• The NVOCC needs to include the following text on all quotations, which must be in bold font and must be in all uppercase letters:

“THE SHIPPER’S BOOKING OF CARGO AFTER RECEIVING THE TERMS OF THIS NRA OR NRA AMENDMENT CONSTITUTES ACCEPTANCE OF THE RATES AND TERMS OF THIS NRA OR NRA AMENDMENT.”

FMC Filing

Where and how should NRA be stored? – Tenders (RFQ)

Governance upload of account rates (sale) to Sharepoint

HWL Rate Management - Home (sharepoint.com)

FMC Filing

Where and How should NRA be stored? – Spot Quotes (HITS)

HITS is our Quotation Tool

HITS - Our Sea & Air Quotation Tool

FMC Filing

Change Log

AMCS - Regional AF BPM & Regional L&D

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