FMC Proposes to Permit Service Contract Filings up to 30 Days After the Effective Date

Transportation Update

Date: January 22, 2021

On January 19, 2021, the Federal Maritime Commission (“FMC” or the “Commission”) published a notice in the Federal Register proposing to amend its service contract requirements to permit ocean common carriers to file original service contracts up to 30 days after the contract goes into effect. Currently, contracts must be filed with the FMC before shipments may be transported under the contract. Comments are due on March 5, 2021.

The Commission’s proposal follows its temporary exemption permitting delayed filings for original contracts as part of its COVID-19 response. The Commission also recently amended its service contract regulations to allow delayed filing for service contract amendments of up to 30 days. Based on its experience with the delayed filings of contracts and amendments, including the lack of any industry complaints, the Commission aims to “make the status quo permanent” and to fix the disparate treatment of original service contracts and amendments in its regulations. The Commission’s proposal is intended to provide additional flexibility for carriers and shippers and avoid the potential to “delay performance under the contract to the detriment of shippers.” Another reason for the proposal is the Commission’s finding that allowing delayed filings of up to 30 days from the effective date will not materially impact the agency’s ability to provide oversight. 

In the Commission’s proposal, an original service contract can become effective 30 days before the filing date. The Commission also clarified in the proposal that the effective date of an original contract or an amendment may not be earlier than the date on which all parties have signed the contract or the amendment. In other words, although service contracts and amendments may be filed after their effective date, the Commission is retaining the requirement that service contracts and amendments must have an effective date that is prospective in nature and cannot have retroactive effect.

FOR MORE INFORMATION

For more information, please contact:

Karyn A. Booth
202.263.4108
Karyn.Booth@ThompsonHine.com

Jason D. Tutrone
202.263.4143
Jason.Tutrone@ThompsonHine.com

Kerem Bilge*
202.263.4104
Kerem.Bilge@ThompsonHine.com

*Not admitted in the District of Columbia; practice is supervised by principals of the firm.

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