NCBFAA Freight Forwarding and NVOCC
Committee
Meeting Minutes
Saturday - September 16, 2006
The Wyndham Washington DC
Freight Forwarding/NVOCC/Air Committee Attendance:
Position
Area 1
Area 2
Area 3
Area 4
Area 5
Name
Open position
Hermann Amsz
Geoff Powell
Jan Fields
Air Freight Chair Scott
Case
Area 6
Bob Coleman
Area 7
Chairman Billy App
Area 8
Frank Parker
Area 9
Co-Chairman Jeff
Coppersmith
NVOCC Chairman
Joe Meunier
NVOCC Co Chairman John Abisch
Security Chairman
Bill Evans
Legislative Rep
Jon Kent
Transportation
Ed Greenberg
Counsel
Senior Counsel
Peter Powell Sr
Guest
Gary Klestadt
Best Practices Chair Darrell Sekin
Guest
Gary Ryan
Guest
Tom James
Guest
Paulette Kolba
Guest
Len James
Guest
Myra Reynolds
Guest
Jill James
Attending
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Call to Order and Introductions
Everyone was introduced and Billy App opened the meeting by adding Anti-trust issues and
NVOCC to the agenda.
NVOCC
Joe Meunier announced the construction of the official NVOCC Committee and issued the
attached minutes. A conference call will be held within the next two weeks and responsibilities of
committee members will be defined. There is still a need for representation from areas one, two
and eight.
Legislative Issues – Jon Kent
"Port Security Improvement Act of 2006" – H. R. 4954
The Port Security Act passed the Senate on 09/14/2006 and ended up being a good bill. The
previous draconian amendments were eliminated and we are more satisfied with the final results.
The bill addresses mostly import ocean.
A good bit of what you see in the final draft came from the suggestions from the NCBFAA.
There still remains a push by Congress to require one hundred percent radiation inspection
at origin port. If this is ever adopted, the U.S. will be expected to also comply therefore affecting
our exports.
With CTPAT regarding tiers; if an NVOCC is consolidating fourteen shipments and one is
not CTPAT, then the entire shipment will not be eligible for green lane priority.
The TSN committee, specifically Sandra Scott as chairman would be someone to go to and
discuss data elements formulated for ITDS.
There are currently six committees; three in house three in senate reporting to DHS.
We will address specific areas of the security bill when we go to capital hill on Tuesday - our
previous position paper will be updated.
Automated Export System (AES)
Below Comments made by Pat Fosberry, who submitted this agenda item:
AES - The forwarder filing AES and the USPPI will be liable for all fines. The carriers have no
liability when the dates of vessels change, vessels themselves change, or when cargo is
advanced on an earlier vessel. When data must be transmitted AFTER the sail date, we are then
liable for fines and penalties, which are certain to come automatically once the new fines are in
place and Customs is in charge of enforcement. Why have the forwarders and USPPI'S been
mandated to use AES, yet the carriers have not. This was discussed and felt that we do not want
the carriers to have access to AES, however all agreed that census needs to define expectations
and have the procedures in place to penalize the actual party causing the error.
Carrier Best Practices Committee Report.
Darrell Sekin spoke on the carriers best practices committee actions. The committee is
focusing on addressing door delivery and the holding of brokers as responsible parties for the
payment of demurrage when they are only listed as the notify party on the bill of lading or simply
supplied the delivery order. The NVO’s are sometimes responsible for demurrage depending on
the circumstances.
According to Transportation Counsel, the "merchants clause" on bills of lading does not
clearly make the notify party a responsible party to the transaction. We will go to the FMC to
obtain an official ruling that the notify party is not included under merchants clause. We will do
this through the declaratory order procedures. A sub committee will be named to address this
issue.
Darrell Sekin submitted the attached report which was later presented to the Board.
Maritime Issues - Ed Greenberg
ANTI TRUST
A formal paper was issued by World Shipping Council in support of the carriers’ antitrust
immunity. A commission was formed to study the anti trust regulations and a hearing will be held
October 18th.
Sensenbrenner is pushing the effort to study antitrust immunity protecting both carriers and
marine terminal operators.
Should we participate?
We have had discussions with Chris Koch at World Shipping Council regarding NVOCC
filing status. We are against mandatory tariff filing requirements, but there is really no direct
correlation between this and the topic of antitrust immunity. Note that more than eighty five
percent of freight moves under contract.
If anyone has any issues for testimony against antitrust immunity please get with Ed
Greenberg. We will find out from the commission as to what is needed; statements, testimony,
etc?
NIT League has chosen not to participate in antitrust immunity discussions.
John Abisch asked for a consensus and for the NCBFAA to prepare a position paper on
Antitrust provided NCBFAA budget allows.
Herman Amsz will be solicited for his participation in the preparation of the position paper.
CARGO LIABILITY ISSUES
KIRBY Case
NVO issued bill of Lading
Cargo was destroyed by railroad - could the shipper separately sue the inland carrier?
Supreme Court said no as the bill of lading issued by the NVO presides and their limits of
liability under the Himalayan clause prevails.
SAMPO Case
Similar circumstances with ocean bill of lading issued by carrier
The second circuit court rules against enforcing the Himalayan clause
This allows for the shipper to sue the inland carrier directly, effectively disrupting the
Supreme Court ruling.
The second court contends the CARMACK agreement should be a consideration CARMACK is a statute and could trump a contract agreement.
ALTADIS Case
This third case agreed with the Kirby ruling
UNCTRAL is a UN committee and is currently studying COGSA regulations which may
address issues such as the above.
No action from the committee is required - we just need to keep a watch and Ed Greenberg
will keep us posted.
NVOCC AND OTI AGENTS
Do agents of NVOCCs and OTIs also require an OTI license? What about agents such as
warehouses?
The only agent a freight forwarder can have is a sales agent.
There are no comparable issues for the NVO arm of the OTI and these requirements need
to be more clearly defined. Transportation Counsel previously sought an opinion for one of their
clients and this issue has been debated within the FMC.
Team Ocean Services was recently penalized $100,000 in part for having unlicensed agents
acting on their behalf. They have filed a petition with the agency to define the licensing/agency
requirements and the services allowed.
We agreed that it is difficult to define when a vendor for NVOCC services is acting as the
NVO agency and that it is prudent that NVOCCs have written agreements. However, we do not
believe that the FMC should require written agency agreements; that this is a matter for the
business judgment of the parties and concur that the agents of licensed NVOCCs should not
need to have their own separate license. We will recommend to the board that the NCBFAA
participate in the pending proceedings at the FMC.
FUEL SURCHARGES
It has been reported that fuel surcharges assessed by the railroads do not necessarily reflect
the actual cost. Is this our issue to address? In the air cargo industry there is an investigation
going on regarding the assessment of surcharges. Penalties have been assessed with treble
damages to Lufthansa. All air cargo agents, even though no damage was suffered directly by the
air forwarder, because there was collusion in establishing the fees, become a party to the civil
suit. Unless we opt out of the class action suit the settlement would theoretically go to the party
who booked the cargo (the IAC).
INDIA AND BANGLADESH ISSUES
No further actions have been made on the India and Bangladesh issues.
BILL OF LADING ISSUES
Certain countries require that NVOCCs consign the master bill of lading directly to the
underlying consignee and not to the agent or steamship line. Is this a trend for foreign countries?
Indonesia, Egypt, and Ethiopia have adopted this policy thus far.
NVOCCs have experienced the carriers releasing cargo to anyone who issues the delivery
order even if the house bill of lading has not been released. Express masters should not be used.
Forwarders "Best Practices" from Export Compliance Prospective
No report available
Air Cargo– Scott Case
The Transportation Security Administration (TSA) has been busy with new regulations. Over
a thousand comments were received regarding the Air Security Proposed regulations issued
earlier this summer. In general, the TSA has been receptive to our comments and suggestions.
We are growing a relationship with TSA. October 1st was originally the date for the regulations to
go into affect. Only Indirect Air Carriers (IAC) are privy to information regarding these regulations
and our panel session at the Government Affairs Conference will restrict its attendees to only
those we have verified as an IAC.
Note that the current port security bill does not address air regulations.
NEI Report
J
an Fields reported that the Certified Transportation Specialist (CTS) course is close to
being completed. Of the 32 chapters there are only four chapters missing. The completed
chapters are in the review process.
Other Business, if any
SWPM
Non compliant containers do not necessarily have to go back to the originating country. They
can be taken to a third country and the non compliant material removed.
Meeting adjourned
NVOCC Committee Report
September 16 2006
Slightly ahead of schedule of the BIG DIG in Boston the construction of the NVOCC
Committee is almost complete. Your NVOCC Committee members are as follows:
Area 1
Area 2
Area 3
Area 4
Area 5
Area 6
Area 7
Area 8
Don’t know who from
don’t know where
Currently the same
person from Area 1
Ed Piza
John Abisch/Co-Chair
Lori Fleissner
Ben Coleman
Shane Garcia
See Area 1 and 2
Complete contact details can be found on the NCBFFA website.
As you can see from the above list there are still some openings. If you are interested in
actively participating with this dynamic group please contact me with your interest.
Some of the items on our current agenda include:





Demurrage and Detention on Store/Door deliveries. This issue has been discussed with
the carriers during meetings with the Carrier Best Practices Committee and unfortunately
the findings are not favorable for NVO/OTI's. Since we are named parties on the B/L the
carrier can hold us responsible for demurrage or detention even though the ultimately
delivery is one they control. I would strongly suggest that you change your routing to
terminate at a port and control the delivery independent of the carrier's involvement.
I have asked the Customs Committee to investigate the possibility of CBP in particular
providing us with some type of written acknowledgement that exams can generally be
done within 24 hours. The reason for this is we are trying to determine if the delay in
exams is due to a CBP practice or terminal operators not staging equipment timely. With
that being said the hope would be to get terminal operators to show some leniency on
storage fees if the delay is a result of a Government action.
Fuel Surcharges
India and Bangladesh issues regarding NVOCC's having to register and post security
deposits
Bill of Lading Issues with several governments requiring ultimate consignee reporting on
the MBL even for NVOCC shipments with HBL details
As you can see there is an overlap of issues between our group, the Forwarding Committee
and the Ocean Carrier Best Practices Committee, which is why we will actively participate with
both committees. We will have representation at the upcoming OCBPC meeting in Houston on
October 4th and I will provide details of that meeting upon my return.
Once the committee is complete I will be scheduling our first teleconference in an effort to
review these and other issues and set priorities for our plan of attack.
I challenge the Area Directors and representatives from the APN to assist me in filling the
voids in Area 1, 2 and 8 to ensure our committee represents the interests of our entire
membership.
Our committee looks forward to serving our membership and welcome any and all input.
Should you have any concerns please feel free to contact your local committee member and
share your thoughts. We are much more effective with active participation from the entire
membership so take advantage of this valuable resource.
Sincerely,
Joseph (Joe) Meunier
NVOCC Committee Chairman
Ocean Carrier Better Practices Sub-Committee Report
NCBFAA Board of Directors Meeting,
September 17, 2006,
Washington, D.C.
The committee continues its work on various issues involving ocean carrier service practices
and practices concerning the assessment and collection of demurrage/detention charges. We
have a couple of carriers who seem to really be trying, while others seem to give mere lip service.
It becomes extremely frustrating, as at times we seem to take 1 step forward and two steps back.
We are trying to keep our focus on working on items that will be of ultimate benefit to our mutual
end customer. However, with many of the carriers we run into so many "industry" operational
problems that it is frequently difficult to keep one’s perspective. We once again have to re-hash
with Maersk Lines the concept of the ocean carrier taking liberties and invoicing the customs
broker for demurrage/detention charges, even on their own door delivery. Maersk at the moment
is trying to claim they have a right under the merchant clause in the terms and conditions. We are
of the opinion that Maersk is wrong on this point and feel that if necessary we should consider
addressing the issue with the FMC.
We are making some progress since the start of these quarterly meetings. A mission
statement has been finalized and will be "tagged" to all our media releases. An overweight
container policy statement will be voted on at the next meeting and we hope to clarify the various
representations made by carriers so we can arrive at a common vision of responsibilities on
store/door movements (which are treated identical to merchant haulage by some carriers.)
Our next meeting of the Ocean Carrier Better Practices Sub-Committee will be held in
Houston, TX on October 5, 2006.
Darrel J. Sekin
John T. Hyatt
Co-Chairs