BEFORE THE
FEDERAL MARITIME COMMISSION
WASHINGTON, D.C.
PETITION OF NATIONAL CUSTOMS BROKERS AND FORWARDERS ASSOCIATION OF AMERICA FOR EXEMPTION
FROM MANDATORY RATE TARIFF PUBLICATION
DOCKET NO. P1-08
VERIFIED SUPPORTING STATEMENT OF [NAME OF WITNESS]
I am [name and title or description of position in the company].
[Description of company, stating the NVOCC license number, the number of offices and locations (unless extremely numerous) and whether the company also has offices or agents overseas.]
[Explain that is a member of the NCBFAA and, if applicable, the NVOCC Committee, very familiar with issues relating to the requirements for mandatory publication of ocean rate tariffs and is supporting the Association’s petition to exempt NVOCCs from having to memorialize rates that have been negotiated with shippers in rate tariffs]
[Explain how business with shippers is normally done. In that regard, we should at least discuss how shipper accounts are solicited, how are rate arrangements with shippers are typically made, whether those rates are separately negotiated with each customer or whether the traffic moves based upon existing rates in your company’s tariff, whether this varies depending upon whether the traffic is FCL or LCL, whether those rates are dependent upon the buy rates obtained from vessel operators, how often those buy rates change with as much detail as possible about the dynamic structure of the market (i.e., frequency of rate changes both as to base rates and the various surcharges), whether those rates change even where there are service contracts in place, how many carriers are used, how many shippers are served during a typical year, whether and how the rates negotiated with shippers are memorialized in a typical file (email, letter, notes from a phone call).[On this last point, remember that the petition will specifically limit the scope of the exemption to just those situations where the negotiated rates are memorialized in writing, so that merely making a note in a file of a rate would not qualify for the exemption; instead, the writing would need to be communicated to the shipper as well via email or some other means.]
[Explain how your company handles tariff publication - - own system or use of a tariff publishing agent and what is involved in transmitting the negotiated rates to the person responsible for having the rate item placed in the tariff; as part of this, it would be helpful to note how much time typically exists from the time a rate is negotiated to the time when the cargo needs to be booked
[Some examples of these issues might include the following points:
- Traffic moves exclusively on rates that are negotiated, often if not usually, on a shipment by shipment basis
- Even if have a service contract with steamship line, many rates are negotiated on a spot market basis so that the traffic moves under bullet rates; as a result, NVOCC costs vary frequently and so the rates we offer will also vary frequently even for the same commodity moving in the same trade lane
- Because the traffic usually moves almost immediately after the rates are negotiated, it is often difficult to ensure that the rates are memorialized in tariff form before the traffic moves.
- Shippers are satisfied to rely on the rates quoted via email, so they are not confused about the rate; nor have there been any disagreements about what the rate is
- It is clear that shippers don’t need or rely upon rate tariff since there have been no hits on company’s tariff website by any shippers over the past __ years
- In view of the large number of shippers serviced and the large number of carriers used, the publication process is a very cumbersome and expensive proposition
[Explain the practical difficulties in complying with the requirement to publish rate tariffs - - examples might include:
1.The difficulty of keeping up with the constantly changing carrier tariffs, which may on occasion not provide sufficient notice
2.The need to quote numerous rates for prospective customers, only a few of which may ultimately be accepted
[Explain why NVOCC Service Arrangements have not provided relief from the burden of tariff filing - - examples might include
- The benefit of confidentiality is not important, since no one accesses our rate tariffs anyway
- NSAs still have to be written documents that have to be filed with the agency and the essential terms still have to be published in the tariff, so there is no cost savings
- Many shippers don’t want to sign NSA’s - - too formal, don’t feel it is necessary
- NSAs too cumbersome except for large volume contracts with shippers; even there, many large shippers still prefer to avoid formal contracts
[Describe as appropriate to your company, the approximate cost entailed in
1.Establishing a tariff website;
2.The annual cost of subscribing to a tariff publishing service, if applicable;
3.The approximate number of hours and costs spent each month in maintaining the tariff website or making changes to tariff;
4.To the extent possible, a calculation of the full cost of rate tariff publication (including costs to outside vendors, internal IT development and maintenance, and costs of personnel assigned to tariff compliance)
5.Whether your company has established a charge for accessing its tariff, the amount of that charge and the amount that has actually been collected;
6. Whether your company is able to track the number of times shippers or other persons have accessed your tariff, and, if so, the number of times this was done in 2006 or 2007 or some other period, such as the last month.]
[Estimate the percentage of the company’s costs that are related directly or indirectly (i.e., indirectly through supervisory effort) to rate tariff compliance.]
[Estimate the percentage of time rates are separately negotiated with shippers as opposed to already being in your tariff.]
I, ______[name] declare under penalty of perjury that the foregoing is true and correct. Further I certify that I am qualified and authorized to file this verified statement.
Executed on ____ [date], 2008.
______[name]______
Sample Statement Format for NVOCCs-1-