The Time For (Regulatory) Change is Now

Maritime regulators voted to toss the rule requiring container lines to report amendments to service contracts before they go into effect. It’s part of a broader effort by the US Federal Maritime Commission to save beneficial cargo owners, carriers, and non-vessel operating common carriers time and money by simplification of the filing process.

The First of Many Regulatory Rollbacks?

The review of existing rules at the Federal Maritime Commission began under the Obama administration, and continue to be put into motion with the Trump administration. This current regulatory rollback is the first of many planned changes aimed at reducing superfluous and expensive regulations plaguing the logistics industry.

Right and left leaning officials alike are welcoming the regulatory rollbacks, as a means of easing the burdens associated with international shipments and filing amendments with the commission. Nearly 600k service contract amendments were filed last year, and all had to be filed before they went into effect; now shippers have an additional 30 days after they go into effect to file. This change is the first revision to freight forwarding (NVOCC) service arrangements since 2005.

Proceeding with Caution

The same voices that encourage soft deregulation are cautioning against deregulation in other areas, such as possible changes to the infrastructure of service contracts themselves. One thing that is certain is that the NVOCC community cannot agree on the fundamental core of NVOCC regulations. Making too hasty decisions to change things on a larger scale can disrupt the industry much more than anticipated.

Identifying Outdated Rules

Acting FMC Chairman, Michael Khouri stated: “I am committed to continuing to identify rules that are outdated, or impede the efficient operation of business, and eliminating them whenever possible.” We can expect to see continued efforts to review outdated rules and regulations moving forward.

Our team of logistics specialists has deep and current knowledge of international supply chain management. To learn more about how we can assist your company and ensure you have excellence in your supply chain, visit our services tab.

Source: JOC