Effective December 9, 2015, the Federal Maritime Commission (FMC) will eliminate the branch office bonding requirement for licensed ocean transportation intermediaries (OTI) operating in the USA as ocean freight forwarders and/or NVOCCs. This means surety bonds of FMC licensed OTIs will no longer be required to provide an additional USD 10,000 per US branch office. However, licensed OTIs will continue to be required to report to FMC whenever they add, remove, or change the address of a branch office in the USA. This change is part of the amendment to FMC’s licensing regulations that will implement a new three year renewal requirement for OTI licenses beginning in December 2016.

In its initial proposal to update its licensing regulations, FMC proposed increasing the bonding requirements for ocean freight forwarders and NVOCCs, but this proposal was withdrawn. The surety bond requirements for ocean freight forwarders and NVOCC in the USA remain at USD 50,000 and USD 75,000, respectively. NVOCCs outside the USA registered with FMC continue to be required to submit bonds of USD 150,000. However, Docket 13-05 does make changes to wording of the forms required for surety bonds, including bond form FMC-48. Bond providers will be allowed to use riders to amend bonds as required, and will be allowed up to 12 months to update bonds to use the new forms.

The other key change made by Docket 13-05 will be the assignment of license expiration dates and the three year renewal process for licensed OTIs. This will be phased-in starting in December 2016 over a three year period and will use an on-line portal. The “license renewal form” has not yet been released by FMC, but it is expected it will require licensed OTIs to reconfirm key details provided in their license applications, including head office and branch office addresses and contact info, and the names of company shareholders, directors and officers, and details of affiliate companies. Licensees who report changes to these details to FMC as they occur will find the license renewal process easy to satisfy. The process will result in a renewed license, which specifies the date by which the next renewal is to be completed. OTI licenses will not simply expire.

NVOCCs outside the USA who are registered with the FMC are not subject to this license renewal requirement, however, these NVOCCs are already required to new their FMC registrations every three years. This requirement was adopted October 17, 2013 when FMC Docket 11-22 created Part 515.19, Registration of foreign-based unlicensed NVOCC, and the FMC-65 registration form.

The final rules adopted under Docket 13-05 will update FMC licensing regulations provided in Title 46 of U.S. Code of Federal Regulations (CFR) under Part 515. This amendment to these regulations also provides for an expedited hearing process for license denials, revocations, or suspensions. It also updates the definitions of ocean freight forwarder services and NVOCC services and expands the NVOCC services definition to include more detail relevant to U.S. imports.

Here at DPI, we assist with the preparation and filing of FMC-OTI license applications and registrations, and with reports to FMC by licensed OTIs. We will assist our members with the new OTI license renewal requirement and provide expert guidance on best practices for compliance with the FMC regulations.

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Several carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223 serving the East Asia/USA trade lanes, will reduce fuel surcharges significantly effective January 1 through March 31, 2016. The Alameda Corridor Charge (ACC) will increase. Details are as follows:

Recommended BAF amounts shown with the asterisk (*) include the low-sulfur fuel component. For IPI/MLB destinations, the BAF includes both low-sulfur fuel component and the Inland Fuel Surcharge (IFS) component (**). BAF and LSF for other container sizes are as per the usual formula. Several TSA members have filed GENERAL RATE INCREASES (GRIs) effective January 1, 2016; GRI amounts on rates for shipment to or via US Pacific Coast Ports USD 1200 per 40' container; GRI amounts on shipments to or via US Atlantic or Gulf Coast Ports are USD 1600 per 40' container. GRI amounts for other container sizes are as per formula.

The TSA's fifteen member carriers are: American President Lines, China Shipping Container Lines, CMA CGM, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag-Lloyd AG, Hyundai Merchant Marine, "K" Line, Maersk Line, Mediterranean Shipping, NYK Line, OOCL, Yang Ming Marine, and Zim Integrated Shipping Services. Visit www.tsacarriers.org for additional information.

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Members of the Transpacific Stabilization Agreement Westbound (TSA), FMC Agreement No. 011223, whose member carriers serve the USA/East Asia trade lanes, will reduce fuel surcharges for the January to March 2016 quarter. Bunker fuel surcharges, including the low-sulfur component, will be USD 704 per 40'/45' dry container for shipments from/via US Atlantic/Gulf Coast Ports, and USD 411 per 40'/45' dry container on shipments from/via US Pacific Coast Ports. When the low-sulfur bunker component is charged separately, it will be USD 46 per 40' container from/via US Atlantic/Gulf Coast Ports, and USD 32 per 40'/45' container on shipments from/via US Pacific Coast Ports. Inland Fuel Charges (IFC) will decrease to USD 174 per container for rail and intermodal rail/truck shipments and USD 50 per container for local/regional truck shipment, and Currency Adjustment Factors (CAF) on shipments to Taiwan will reduce to 5%, and to Singapore will reduce to 17% for the Jan-Mar 2016 quarter.

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