Federal Maritime Commission Publishes Final Rule on Unreasonable Refusal to Deal or Negotiate with Respect to Vessel Space Accommodations

WASHINGTON, D.C. — The Federal Maritime Commission (FMC) has issued its final rule concerning the “Definition of Unreasonable Refusal to Deal or Negotiate with Respect to Vessel Space Accommodations.” The rule outlines the elements necessary for the Commission to apply 46 U.S.C. 41104(a)(3) and 46 U.S.C. 41104(a)(10) concerning refusals of cargo and vessel space accommodations.

Key Provisions of the Rule:

• Application of 46 U.S.C. 41104(a)(10): This applies to refusals by ocean common carriers during the “negotiation” phase of a transaction.
• Application of 46 U.S.C. 41104(a)(3): This applies to refusals occurring after the negotiation phase, during the “execution” stage.
• Case-by-Case Basis: Claims under sections 41104(a)(3) or 41104(a)(10) will be reviewed and decided based on specific facts and circumstances.

Requirements and Guidelines:

• Scope: The rule applies to vessel-operating common carriers (VOCCs) and containerized cargo.
• Reasonable Basis for Refusal: Not all refusals will be considered violations. VOCCs must demonstrate a reasonable basis for refusing to negotiate or carry cargo to avoid being found in violation.
• Evaluation Criteria: The rule includes non-binding and non-exhaustive examples and considerations the FMC may use to evaluate alleged violations.

Export Policy Filing:

• Confidential Export Policy: VOCCs are required to file a confidential documented export policy annually with the FMC. This policy must include:
• Pricing strategies
• Services offered
• Strategies for equipment provision
• Descriptions of markets served

Implementation:

• Effective Date: The rule will take effect 60 days from publication in the Federal Register.
• Export Policy Filing Requirement: The requirement for VOCCs to file a documented export policy is delayed pending approval from the Office of Management and Budget (OMB). The FMC will announce the effective date of this requirement upon OMB’s approval.

The FMC’s final rule aims to provide clarity on what constitutes an unreasonable refusal to deal or negotiate regarding vessel space accommodations, ensuring fair practices in the maritime shipping industry. The rule’s detailed criteria and case-by-case review process are designed to address specific circumstances while allowing VOCCs to operate within a clearly defined legal framework.