Service Contract Filing RequirementsMiscellaneous Revisions

FEDERAL MARITIME COMMISSION

46 CFR Part 514

[Docket No. 95-08]

Service Contract Filing Requirements--Miscellaneous Revisions

AGENCY: Federal Maritime Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Maritime Commission proposes to amend its rules to

provide an optional, abbreviated service contract format and to require

service contracts to include certain identifying information concerning

the signatories. This should reduce duplication and Commission and

carrier costs, as well as facilitate automation of the Commission's

service contract records.

DATES: Comments due June 22, 1995.

ADDRESSES: Comments (original and 15 copies) are to be submitted to:

Joseph C. Polking, Secretary, Federal Maritime Commission, 800 North

Capitol Street, N.W., Washington, D.C. 20573, (202) 523-5725.

FOR FURTHER INFORMATION CONTACT: Bryant L. VanBrakle, Director, Bureau

of Tariffs, Certification and Licensing, Federal Maritime Commission,

800 North Capitol Street, N.W., Washington, D.C. 20573, (202) 523-5796.

SUPPLEMENTARY INFORMATION: Service contracts subject to section 8(c) of

the Shipping Act of 1984 (``1984 Act'' or ``the Act''), 46 U.S.C. app.

1707(c),1 are filed confidentially with the Federal Maritime

Commission (``FMC'' or ``Commission'').2 Prior to such filing, a

statement of each contract's essential terms (``ET'') is filed

electronically in the Commission's Automated Tariff Filing and

Information System (``ATFI''), made available to the general public in

tariff format, and offered to all similarly situated shippers.3

\1\ A service contract is defined by section 3(21) of the Act

as:

* * * a contract between a shipper and an ocean common carrier

or conference in which the shipper makes a commitment to provide a

certain minimum quantity of cargo over a fixed time period, and the

ocean common carrier or conference commits to a certain rate or rate

schedule as well as a defined level--such as assured space, transit

time, port rotation, or similar service features; the contract may

also specify provisions in the event of nonperformance on the part

of either party.

\2\ Section 8(c) of the 1984 Act provides:

* * * each [service] contract entered into * * * shall be filed

confidentially with the Commission, and at the same time, a concise

statement of its essential terms shall be filed with the Commission

and made available to the general public in tariff format, and those

essential terms shall be available to all shippers similarly

situated. The essential terms shall include--

(1) the origin and destination port ranges in the case of port-

to-port movements, and the origin and destination geographic areas

in the case of through intermodal movements;

(2) the commodity or commodities involved;

(3) the minimum volume;

(4) the line-haul rate;

(5) the duration;

(6) service commitments; and

(7) the liquidated damages for nonperformance, if any.

\3\ This requirement is implemented in the Commission's rules

and regulations at 46 CFR 514.7(f)(1).

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ETs have been required to be filed in ATFI since November 1993.

However, the associated confidential service contracts continue to be

filed in paper format and can often be of considerable length. There is

significant duplication between a service contract's text and that of

its corresponding ET. To the extent the overlap between these

interdependent documents can be minimized, the rate of error between

the two documents should also be reduced.

Because service contracts are filed confidentially with the

Commission, they must be secured under lock and key. Given the rapidly

rising number of contract filings, and their sheer physical bulk, these

documents are consuming an ever larger portion of the Commission's

limited secured storage space.

Apart from the foregoing, the Commission is also proposing to

address a ministerial detail relating to the content of service

contracts. The current service contract rules do not require contracts

to set forth the signatories' addresses. This has resulted in

difficulty in clearly identifying shipper parties, including named

affiliates, to certain service contracts, and, in some cases, hampered

the Commission's investigative efforts.

The Commission therefore proposes to afford service contract

parties the option of filing their service contracts in an abbreviated

format, on condition that such filings incorporate by reference the

corresponding ATFI ETs; certify that said ET contains all aspects of

the parties' contract which are not set forth in the service contract

filing; and set forth certain specific information. The FMC also

proposes to require service contracts to set forth the parties' names,

titles and addresses.

The collection of information requirements contained in this

proposed rule have been submitted to the Office of Management and

Budget for review under the provisions of the Paperwork Reduction Act

of 1980 (Pub. L. 96-511), as amended. Public reporting burden for this

collection of information is estimated to decrease to an average of one

manhour per response, including the time for reviewing instructions,

searching existing data sources, gathering and maintaining the data

needed, and completing and reviewing the collection of information.

Send comments regarding this burden estimate or any other aspect of

this collection of information, including suggestions for reducing the

burden, to Bruce A. Dombrowski, Deputy Managing Director, Federal

Maritime Commission, Washington, D.C. 20573 and to the Office of

Information and Regulatory Affairs, Office of Management and Budget,

Washington, D.C. 20503.

The Chairman of the Commission certifies, pursuant to section

605(b) of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., that

this proposed rule will not have a significant economic impact on a

substantial number of small entities, including small businesses, small

organizational units, and small governmental jurisdictions.

List of Subjects in 46 CFR Part 514

Administrative practice and procedure, Antitrust, Automatic data

processing, Cargo vessels, Confidential business information,

Contracts, Exports, Freight, Freight forwarders, Imports, Maritime

carriers, Penalties, Rates and fares, Reporting and recordkeeping

requirements.

Therefore, pursuant to 5 U.S.C. 553 and sections 3, 8, and 17 of

the Shipping Act of 1984 (46 U.S.C. app. 1702, 1707 and 1716), the

Federal Maritime Commission proposes to amend Part 514 of Title 46 of

the Code of Federal Regulations as follows:

PART 514--[AMENDED]

1. The authority citation for Part 514 continues to read:

Authority: 5 U.S.C. 552 and 553; 31 U.S.C. 9701; 46 U.S.C. app.

804, 812, 814-817(a), 820, 833a, 841a, 843, 844, 845, 845a, 845b,

847, 1702-1712, 1714-1716, 1718, 1721, and 1722; and sec. 2(b) of

Pub. L. 101-92, 103 Stat. 601.

2. Section 514.7 is amended by revising paragraphs (h)(1)(v) and

(h)(1)(vi) and adding paragraph (h)(2)(i)(C) to read as follows:

[[Page 27249]]

Sec. 514.7 Service contracts in foreign commerce.

* * * * *

(h) * * *

(1) * * *

(v) The true and complete names and addresses of the contract

parties and the typewritten names, titles and addresses of the

representatives signing the contract for the parties. Any further

references in the contract to such parties shall be consistent with the

first reference (e.g., (exact name), ``carrier,'' ``shipper,'' or

``association,'' etc.); and

(vi) The true and complete names and addresses of every affiliate

of each contract party named under paragraph (h)(1)(v) of this section

entitled to receive or authorized to offer services under the contract,

except that in the case of a contract entered into by a conference or

shippers' association, individual members need not be named unless the

contract includes or excludes specific members. In the event the list

of affiliates is too lengthy to be included on the first page,

reference shall be made to the exact location of such information.

* * * * *

(2) * * *

(i) * * *

(C) Section 514.7(h)(2)(i)(A) does not apply to a service contract

that incorporates by reference all of the associated essential terms

filing as published in ATFI, provided that the parties certify that,

other than for those provisions set forth in the filed service

contract, such essential terms filing sets forth the parties' true and

complete contract.1

\1\ See Exhibit II of this part for an example of an abbreviated

format service contract.

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* * * * *

By the Commission.

Joseph C. Polking,

Secretary.

Exhibit II to Part 514

Sample Abbreviated Format Service Contract

Service Contract No.: SC 1-95

FMC File No.: 50,000

Essentials Terms No.: ET 1-95

Amendment No.: ______

Service Contract Essential Terms Publication No.: 003

Tariff(s) of General Applicability No.: 001, 002

Carrier/Conference Name: Efficient Liner Transportation, Inc.

Carrier/Conference Address: 1227 Seaway Drive, Washington, DC 20573

and

Shipper Name: ABC Electronics Company

Shipper Address: 7221 Happiness Lane, New York, NY 10001

This is a service contract pursuant to the Shipping Act of 1984

(46 U.S.C. app. 1701 et seq.) and FMC rules at 46 C.F.R. Part 514,

between ``CARRIER/CONFERENCE'' and ``SHIPPER'' parties named herein.

The contract parties certify that the terms set forth herein and the

essential terms as published in Carrier/Conference Service Contract

Essential Terms Tariff No. 003, ET No. 1-95, in the Federal Maritime

Commission's Automated Tariff Filing and Information System,

constitute the true and complete copy of all aspects of this

contract and are hereby incorporated by reference.

Further, shipper party named herein certifies its status and

that of any affiliate(s)/subsidiary(ies) named herein as (check

appropriate box(es):

{time} NVOCC

{time} Shippers' Association

{time} Owner of Cargo

{time} Other (Please specify)

Records maintained to support shipments under this service

contract are: bills of lading, shipping manifests, and other related

written correspondence between contract parties.

Contact person for records in the event of a request by the

Federal Maritime Commission: Efficient Liner Transportation, Inc.,

Traffic Manager, 1227 Seaway Drive, Washington, DC 20573, (202) 523-

5856.

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(Carrier/Conference Signature)

Date-------------------------------------------------------------------

Carl T. Booker, President

Efficient Liner Transportation, Inc.

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(Shipper Signature)

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Vanessa M. Banks, President

ABC Electronics Company

Affiliate of shipper: Quality Compact Discs, Inc.

Affiliate's address: 7221-A Happiness Lane, New York, NY 10001

[FR Doc. 95-12512 Filed 5-22-95; 8:45 am]

BILLING CODE 6730-01-P