20 January 2005

Shippers ask court to review NVO rule

The following article is excerpted from the 19 January 2005 edition of “The Journal of Commerce”.

The International Shippers Association has asked the U.S. Court of Appeals… to review the Federal Maritime Commission's new rule allowing non-vessel-operating common carriers to enter confidential contracts with their customers.

The petition alleges that the FMC acted capriciously and unjustly in allowing NVOs to enter service arrangements, but barring NVOs that are members of shippers associations, and acting as shippers, from participating.

The petition also claims that the agency exceeded its authority under the Shipping Act of 1984 in granting NVOs an exemption from the law's tariff-filing requirements and prohibitions against service contracting.

ISA, which represents international household goods shippers, also has filed a petition with the FMC asking for reconsideration of the rule. The American Institute of Shippers Associations also intends to file a reconsideration petition….

The NVO rule, which was widely praised for giving NVOs parity with ocean carriers in entering confidential agreements with shippers, went into effect on [19 January].