You may have read about the FMC’s recent settlement agreements and the collection of fines and penalties in the amount of nearly One Million U.S. Dollars.  Eight of the nine companies named were NVOCCs and their agents accounting for more than $800,000.00 of the amount collected . . . a whopping amount of money for so few companies.

While the settlement agreements covered a variety of infractions, most of them included a failure by the NVOCC to provide “service in a liner trade that was not in accordance with the rates and charges in its published tariff.”  In plain English, cargo moved, HBLs were issued and freight was invoiced, all without rates having been filed in the NVO’s tariff.

Whether or not you agree with the concept of filed rates or understand the regulations that govern them, surely you know that having a rate filed in your tariff is the only LEGAL means by which an NVOCC can mark-up the ocean freight and collect the higher price to make a profit.  Lacking a filing, what are you charging your customer?  The Cargo, N.O.S. rate filed in your tariff OR possibly a Commodity, N.O.S. rate would be the ONLY rate(s) that could be applied AND those rates should be the highest rates in the tariff (i.e., $500.00 WM from CFS U.S. Base Port to CFS Foreign Base Port).  Wouldn’t you love to have just one customer who would pay that much freight for an LCL Shipment?

Bottom line: An NVO is a "common carrier" and, by definition, must be compensated in exchange for providing transportation on its Bill of Lading AND assuming responsibility for the transportation when cargo moves in the foreign commerce of the United States (46 CFR § 515.2 Definitions. (e) Common Carrier).

So, when they would you NOT file your rte when that very process is the lifeblood, the very core, of your business as an NVOCC.  The rate filing in and of itself affords you the opportunity to legally mark-up the underlying ocean freight charges, without which your company as an NVOCC cannot:

1. Be compensated as a carrier at levels other than Cargo, N.O.S. or the Commodity, N.O.S. tariff rate(s);
2. Invoice any amount of ocean freight as compensation for the transportation of goods carried on your Bill of Lading for rates less than the Cargo, N.O.S. or Commodity, N.O.S. rate(s) filed in your tariff; and
3. Up-hold or enforce the terms and conditions of your Bill of Lading, which is part and parcel of your tariff, if it does not correspond to a rate filed therein.

I hear many reasons for not filing rates:

• “I don’t have time.”
• “Who’s going to find out if I don’t file a rate?”
• “NVOs are exempt from the rate filing regulations.”
• "Our company doesn't file rates.  We haven't been caught yet and, if we do, we'll just pay the fine."
• “In a perfect world, I would file the rate when I get a booking, but I just file them at the end of each month if I remember."

It’s certainly not a perfect world and no one in this industry is sitting around twiddling their thumbs looking for something to do, that’s for certain.  Everyone is busy, busy, busy; technology makes it so.  I personally long for the days of the ditto machine and snail mail.  But, don’t be lulled into the false belief that filing tariff rates is an antiquated step that can be by-passed to save time or money.  On the contrary, it is a step that is important, necessary and, per FMC regulations, clearly enforceable.

By the way, the Federal Maritime Commission has posted its Final Rules under 46 CFR Part 506 the 2017 Civil Monetary Inflation Adjustment for Fines & Penalties in the Federal Register, a part of which reads as follows:

I just thought you’d want to know what’s at stake.  Ultimately, it’s your choice to be compliant or not.  Just know that a free will in this case may be quite costly in the end.