What does the OTIs mean?
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Ocean Transportation Intermediaries (OTIs) are either Ocean Freight Forwarders or Non-Vessel-Operating
Common Carriers and are regulated by the FMC pursuant to the Shipping Act of 1984.
What does the Ocean Freight Forwarder (OFF) mean?
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An Ocean Freight Forwarder (OFF) is an individual or company located in the U.S. which:
arranges cargo movement to an international destination
dispatches shipments from the United States via common carriers and books or otherwise arranges space for those shipments on behalf of shippers
prepares and processes the documentation and performs related activities pertaining to those shipments
What are requirements the OFF must meet before servicing clients in US trade?
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o obtain a license from the FMC (46 CFR § 515.3)
To submit proof of financial responsibility for payment of claims (46 CFR Part 515 Subpart C)
arising from transportation-related activities
Who is a Non-Vessel-Operating Common Carrier (NVOCC) ?
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A Non-Vessel-Operating Common Carrier (NVOCC) is:
a common carrier that holds itself out to the public to provide ocean transportation, issues its own
house bill of lading or equivalent document, and does not operate the vessels by which ocean transportation is provided
a shipper in its relationship with the vessel-operating common carrier involved in the movement of cargo
What are requirements the NVOCC must meet before servicing clients in US trade?
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To obtain a license from the FMC (46 CFR § 515.3) (if a U.S.-based company)
To submit proof of financial responsibility for payment of claims (46 CFR Part 515 Subpart C)
(arising from its transportation-related activities
To publish a tariff (46 CFR § 520.3)
Who need a OTI license?
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All NVOCCs operating in the U.S. trades are required to publish a tariff (46 CFR § 520.3). Tariffs must be open for public inspection and
show all rates, charges, classifications, rules, and practices between all points or ports on their service routes.
What is NSA?
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NVOCC Service Arrangement (“NSA”) means a written contract, other than a bill of lading or receipt,
between one or more NSA shippers and an individual NVOCC or two or more affiliated NVOCCs, in which the NSA
shipper makes a commitment to provide a certain minimum quantity or portion of its cargo or freight revenue over
a fixed time period, and the NVOCC commits to a certain rate or rate schedule and a defined service level.
The NSA may also specify provisions in the event of nonperformance on the part of any party
Are the NSA or their amendments are open to the public?
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No, in fact, all NSAs and amendments to NSAs filed with the Commission shall,
to the fullest extent permitted by law, be held in confidence by FMC.
Who is on the duty to file the NSAs to FMC?
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The duty to file NSAs, amendments and notices, and to publish statements of essential terms,
shall be upon the NVOCC acting as carrier party to the NSA.
Are the NSAs could be amended, and when are amendments effective if they could be amended?
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Yes, the NSAs could be amended, and every amendment to a filed NSA no later than thirty (30)
days after any cargo moves pursuant to that NSA amendment.
What are NRAs?
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NVOCC Negotiated Rate Arrangements (NRAs)a written and binding arrangement between an NRA Shipper and an eligible NVOCC
to provide specific transportation service for a stated cargo quantity, from origin to destination, on and after receipt
of the cargo by the carrier or its
agent (or the originating carrier in the case of through transportation).
NVOCC Negotiated Rate Arrangements (NRAs)
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1. What are the NRAs?
An NRA is a written agreement between an NVOCC and an NRA Shipper used to document the agreed rate for the shipment or shipments of a specific cargo quantity. NRAs may act as a substitute for tariff rate filings – rates filed as NRAs do not need to be filed into your FMC tariff. NRAs offers an exemption for qualified NVOCCs from filing and publishing tariff rates in their FMC tariff.
2. Requirements for NVOCC negotiated rate arrangements
In order to qualify for the exemptions to the general rate publication requirement as set forth in section 532.2, an NRA must:
(a) Be in writing;
(b) Contain the names of the parties and the names of the representatives agreeing to the NRA;
(c) Be agreed to by both NRA shipper and NVOCC, prior to receipt of cargo by the common carrier or its agent (including originating carriers in the case of through transportation);
(d) Clearly specify the rate and the shipment or shipments to which such rate will apply; and
(e) May not be modified after the time the initial shipment is received by the carrier or its agent (including originating carriers in the case of through transportation).
3. NRA recordkeeping and audit requirements
(a) An NVOCC invoking an exemption pursuant to this part must maintain original NRAs in an organized, readily accessible or retrievable manner for 5 years from the completion date of performance of the NRA by an NVOCC, in a format easily produced to the Commission.
(b) NRAs are subject to inspection and reproduction requests by the Commission. An NVOCC shall produce the requested NRAs promptly in response to a Commission request. All records produced must be in English or be accompanied by a certified English translation.
(c)Failure to keep or timely produce original NRAs will disqualify an NVOCC from the operation of the exemption of general tariff.
