NCBFAA Freight Forwarding/NVOCC Committee Meeting Minutes
Saturday – January 13, 2007
Ft. Worth, TX

Freight Forwarding/NVOCC/Air Committee Attendance:

Position / Name / Attending
Area 1 / Matt Walker / Yes
Area 2 / Hermann Amsz / No
Area 3 / Geoff Powell / Yes
Area 4 / Jan Fields / Yes
Area 5 / Air Freight Chair / Scott Case / Yes
Area 6 / Bob Coleman / No
Area 7 / Chairman / Billy App / Yes
Area 8 / Frank Parker / Yes
Area 9 / Co-Chairman / Jeff Coppersmith / Yes
NVOCC Chairman / Joe Meunier / Yes
Security Chairman / Bill Evans / Yes
Legislative Rep / Jon Kent / Yes
Transportation Counsel / Ed Greenberg / Yes
Senior Counsel / Peter Powell Sr. / Yes
Guest / Gary Klestadt / Yes
Guest / Michael Dugan / Yes
Guest / Karen West / Yes
Guest / G Bonnie Peacock / Yes

Maritime Issues

  • What’s happening at the FMC? - There seems to be dissent amongst the current FMC commissioners on a variety of issues with a chairman yet to be named.
  • AntiTrust Commission - Ed Greenberg was applauded for the paper he wrote on antitrust issues for the Antitrust Modernization Commission, and his report to the Board on October 30. Ed also testified in support of abolishing antitrust immunity for the carriers and his testimony and the transcript of the hearing before the Anitrust Modernization Commission can be found on FABNET. This issue has always been as a battle we felt we couldn’t win. We rejoined the fight and timing is good. We are very happy with Ed’s testimony. The NIT League has submitted a statement in support of elimination of antitrust immunity. With few remaining American flag carriers and the elimination of European and possibly Japanese carrier immunity there is clearly no justification for maintaining this immunity. The Antitrust Modernization Commission will likely recommend the abolishment of anti-trust immunity to the lines, and then we will watch and see where it will go. The Commission’s report will go to Congress to decide if and when to do anything.
  • Paperwork Reduction Act of 1995 - The Act mandates the examination of filing requirements imposed on industry on a cyclical basis. Now up for review happens to be the carrier required filings for antitrust-immunized agreements. We discussed and agreed that we would file comments supporting retaining the requirement and that the FMC should go further in order to properly monitor collective carrier behavior.
  • Restrictions on foreign owned freight forwarders operating in the USA. - We received a recommendation from Tom James stating we review a previous requirement of citizenship for the forwarding industry, in light of the Virgin American Airlines declination. Counsel advised that we could find no specific previous restriction of this nature with regards to freight forwarders. We will table this item pending Tom’s further research.
  • Kirby case - The shipper sued the railroad contending they weren’t covered by COGSA limitations, but instead had unlimited liability under the Carmack Amendment. The Court held that the NVO’s intermodal bill of lading governed the liability of all carriers, so that COGSA was applicable. Regrettably, the Supreme Court’s decision was conflicted by a few decisions in Circuit Courts. Sompo Marine: Because Kirby didn’t discuss the affect of the Carmack amendment; they felt free to hold the railroad liable for full value. About a week later, from the Fifth Circuit in the Altadis case, the exact opposite was affirmed and COGSA’s application was upheld. At the time of Kirby, we helped Justice reach the position that they ultimately reached. The lawyers for the shipper in the Altadis case have sought review in the Supreme Court and want the opposite decision to take place. They are making strong arguments about why Carmack should govern. Unfortunately the briefs by the motor carrier are not very good and that concerns the government.This issue has not been settled and could easily change. We are concerned that if inland carriers are held liable under Carmack, they might not be so willing to accept intermodal contracts. Ed Greenberg’s long view is that if carrier liability is not limited to COGSA, this will cause a major change, causing rates and operating practices to be forced to change.This issue may be moot in the relatively near future with a new Intl Convention on Cargo Liability at the United Nations. The UN treaty would supersede Carmack. We will continue to monitor these decisions which could affect rates due to liability issued as consistency has not been determined.
  • A letter was sent to the FMC by a lawyer representing a forwarder requesting an advisory opinion to the Commission seeking affirmation that forwarder filings (of any kind) can be made from overseas locations. The FMC’s General Counsel requested a meeting with Ed and a Committee representative or two in order to better understand how the industry operates.

10 + 2 Data Elements

  • Ideally, we (brokers) would like to have a reason to be the preferred filer of this information. The required data elements are more or less identical to what will be filed on the entry. Large importers want their foreign forwarder to be able to file the elements. If approved, the foreign entity will need to be ABI certified. As the filer of the security data this information can be rolled into the 3461, which should eliminate some inspections and delays at the port of arrival. The NVOCC community is concerned with their ability, or lack of ability, to identify the broker responsible for the information and possible delays in the shipments. All participants will have to be notified electronically. There are many tiered co-loadings and in many instances, the master bill isn’t known by the original co-loader. Since Census and Customs have not reached an agreement on data sharing it is thought that they may be holding off until the ten plus two procedures are finalized, making this determination even more important.The forwarding committee assigned Joe Muenier (NVO side), Peter Powell (Freight Forwarding side) and Ed Greenberg to work with the subcommittee on the ten plus two filing issue.

NVOCC Committee

  • Chairman Joe Meunier wants to develop a forum for NVOs to address and solve issues through FABNET. We want to establish a mechanism whereby NVOs can submit problems with certain carrier regarding demurrage, customer service, etc and be addressed on a national level. An NVOCC Best Practices Portal on FABNET was suggested to give folks the opportunity to have a carrier reporting form. When we have a carrier with frequent complaints, we could try to solve the issues one-on-one. Ed Greenberg warned that we must be cautious and would like to look at what data we are aggregating. We cannot collectively take action, but can assemble the information and determine what to do. Geoff Powell suggested we reach out to the local Associations and can get a lot of this information through the APN. Joe will define the elements we want in the form to help us narrow the scope of our activities

Forwarder Best Practices Export Compliance

  • The emphasis right now should be placed on getting the CTS certification up and running and once that is defined; perhaps we can glean some more forwarder best practices. The CCS needs some tweaking but once finalized we will then be able to move on to the CTS certification.

OTI Program for Conference

  • Joe Meunier will handle the panel on Hazmat container discussion. Scott Case will moderate the session on Air Carriers and it was agreed this panel will be closed to only IACs. The program schedule was rearranged so that the entire morning can focus on Export Control. Speakers are being coordinated at this time.

Security

  • Geoff Powell has done five training sessions at the TSOC. We are trying to get an update on the pandemic flu session from last year. We are will consider joining ISAC (Information Sharing Analysis Center) to determine if there is a benefit to our members.

NEIReport

  • We are holding off the CTS until CCS is more solidified.

OtherBusiness

  • Ed Greenberg brought up the recent implementation of gross receipts taxes in Texas raised by that association. The state is attempting to charge this tax on all transactions for CHBs and freight forwarders. The issue is that the language in the statute states that flow through revenues cannot be deducted. Also language that states the tax is based on the line item in the federal return where forwarders report their reportable income. If done correctly, that number should be a net figure. There is an opposite opinion from some other accountants. We will explore this situation further if this is an unconstitutional overreach by the state of Texas. It may just be a matter of interpretation by accountants. We will bring this up to the board for possible involvement because of states copying others revenue ideas.
  • We discussed the NCBFAA maintaining a national database for truckers containing certificates of insurance, audit trails, IAC security information. All felt this would be of tremendous benefit to the membership. One freight forwarder was issued a million dollar fine for not properly maintaining proof of insurance and although this was settled with no penalty the fight was costly.

There being no further business the meeting was adjournment 11:40 a.m.