10 Essential FMC Compliance Tips for NVOCCs and Freight Forwarders

Navigating compliance with the Federal Maritime Commission (FMC) can be a complex task for Non-Vessel-Operating Common Carriers (NVOCCs) and Freight Forwarders. With the right strategies, you can avoid costly penalties and audits. 

Below are 10 essential compliance tips to help you stay audit-ready, penalty-free, and ahead of industry standards.

1. Maintain a Valid FMC Bond

An active FMC bond is critical for all NVOCCs and Ocean Freight Forwarders. The specific bond requirements depend on your registration type:

• U.S.-based NVOCC License: $75,000

• Ocean Freight Forwarder License (OFF): $50,000

• FMC-Registered Foreign NVOCC: $150,000

Keeping your bond current is non-negotiable—any lapse can result in the automatic suspension or revocation of your FMC license. Regularly monitor your bond status to ensure timely renewal and avoid operational interruptions.

2. Keep Detailed, Organized Records of Key Documents for Audits

FMC audits demand comprehensive documentation to verify compliance. You must have these essential documents organized and readily accessible:

• Dated & Rated Ocean Carrier Master Bills of Lading (all pages, final version)

• VOCC Service Contract Number

• Dated & Rated NVOCC House Bills of Lading (final version for each house bill issued)

• Freight Invoices

• Booking Instructions

• Arrival Notices

• Customer Billing Invoices

• Credit & Debit Reports (issued at the time of shipment)

• All Relevant Documents and Communications

Ensuring these records are complete and easily retrievable makes the audit process smoother and demonstrates a high standard of compliance.

3. Use Tariff Rate Filings (TLIs) and Negotiated Rate Arrangements (NRAs) for Accurate Rate Management

Under FMC regulations, NVOCCs are required to publish their rates in their FMC tariff or manage Negotiated Rate Arrangements (NRAs) for client-specific agreements. Tariff Line Items (TLIs)—specific rates filed within your FMC tariff—allow consistent rate documentation for compliance, while NRAs provide flexibility for customized rates. Using these tools effectively helps meet compliance standards efficiently.

4. Utilize an FMC-Compliant Tariff Platform for Record-Keeping

FMC-compliant platforms, like AP Tariffs' FMC Tariff Platform, simplify recordkeeping for rate filings, NRAs, and tariffs. They provide you a secure and searchable repository for essential documents. An organized platform like this can reduce administrative tasks and streamline compliance management.

5. Regularly Update Your Tariff Rules

FMC tariff rules and surcharges should be reviewed and updated periodically to reflect the latest FMC regulatory changes and current market conditions. Annual updates to tariff rules ensure compliance, prevent discrepancies, and protect your business from penalties.

6. Leverage Digital Filing Solutions and APIs for Efficient Compliance Management

Using digital solutions with API integrations for tariff filings and rate management streamlines compliance efforts. AP Tariffs’ platform, for example, offers both a secure filing system and API integrations, allowing users to manage filings, updates, and records efficiently.

7. Conduct Regular Compliance Audits Internally or with a Compliance Provider

Routine internal audits or third-party compliance reviews can help identify and correct issues early on. Conducting these audits at least once per year is recommended. AP Tariffs provides various levels of compliance reviews, including complimentary reviews for tariff clients, to help ensure your records, filings, and rates meet FMC standards.

8. Stay Updated on FMC Rule Changes with FMC Watch

FMC regulations are regularly updated, so it’s essential to stay informed. Signing up for AP Tariffs’ FMC Watch can keep you up-to-date on regulatory changes, ensuring that your compliance practices remain current.

9. Designate a Compliance Manager

Appointing a compliance lead, such as your Qualified Individual (QI), an in-house legal team member, or a third-party compliance service, is essential for managing compliance responsibilities effectively. AP Tariffs offers compliance support for its tariff clients, including two hours of free FMC consulting each month, to assist with ongoing compliance needs.

10. Respond Promptly to FMC and Customer Inquiries

Prompt responses to FMC inquiries are crucial to prevent escalation, and timely responses to customer questions demonstrate a commitment to regulatory standards. Addressing these requests promptly also strengthens client relationships and reinforces your business’s commitment to compliance.

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FMC compliance doesn’t have to be overwhelming. By integrating these strategies and leveraging resources like AP Tariffs’ compliance services, your business can avoid penalties, stay audit-ready, and maintain seamless operations.

For personalized guidance on FMC compliance requirements, schedule a free consultation with AP Tariffs to see how we can support your business. Book your FREE meeting here.

AP Tariffs to Attend 2024 Sino Conference in Bangkok

AP Tariffs is thrilled to be part of the 2024 edition of the Sino International Freight Forwarders Conference, taking place from September 11-13, 2024, in Bangkok, Thailand.

AP Tariffs works with WCA/WIS to help members quickly obtain FMC registrations. As one of the largest FMC tariff publishers for NVOCCs, we are here to support your business.

Our services include:

• Fast Registration: Obtain your FMC registration and AMS/ISF approval within just 2 to 4 weeks.

  
  

• Cost-Effective Solutions: Benefit from exclusive pricing discounts for WCA members.

  
  

• Reliable Results: We have a 99% FMC registration approval rate, ensuring your success.

For those who already have FMC registration, we offer WCA members a free assessment of your operations to ensure compliance with regulations and avoid costly FMC penalties.

AP Tariffs will engage in exclusive one-on-one meetings with other delegates during the 3-day conference and looks forward to exploring new opportunities for collaboration.

The event is co-organized by WCAworld and the China International Freight Forwarders Association (CIFA).

Get in touch with us now! Schedule a meeting here or contact us at info@aptariffs.com.

2 NVOCCs Involved in Compromise Agreements Resulting in $2.3 Million FMC Penalties

Two Non-Vessel Operating Common Carriers (NVOCCs) and one Vessel Operating Common Carriers (VOCC) were involved in compromise agreements with the Federal Maritime Commission (FMC), yielding over $2.3 million in civil penalty payments. These agreements also require significant changes to business practices.

Here are the key details:

1. CMA-CGM, S.A.:

• Ocean common carrier CMA-CGM paid $1,975,000 to settle allegations that the company had overbroadly defined and applied its definition of merchant in a bill of lading to demand payment from a third party who should not have been billed.

• CMA-CGM now limits the definition of “merchant” in its bills of lading to shippers, consignees, and those with a beneficial interest in the cargo.

• In addition to paying civil penalties, CMA-CGM will also furnish restitution to impacted third parties in the form of refunds and waivers.

• CMA-CGM has committed to comply with the Demurrage and Detention Billing Rule.

1. Vanguard Logistics Services (USA), Inc.:

• Ocean transportation intermediary (OTI) Vanguard paid $175,000 to resolve allegations that they knowingly accepted cargo from OTIs without required bonds, insurance, or sureties.

• Vanguard will conduct an internal audit and provide updates to the FMC on progress and remedial actions.

1. Shipco Transport, Inc.:

• Shipco, another OTI, paid $155,000 to resolve three misconduct allegations.

• These included accepting cargo from OTIs without proper sureties, allowing unlicensed OTIs to obtain transportation at reduced rates, and providing unauthorized access to service contracts.

Both Vanguard and Shipco committed to cooperating with the FMC in future investigations.

Avoid Penalties, Contact Us Now!

AP Tariffs offers personalized services, including Free FMC compliance consulting (free for clients up to 2 hours/month).

We aim to facilitate error-free NVOCC operations to avoid $14,608 per shipment FMC penalties. AP Tariffs offers Free Training Courses to address FMC compliance questions and conducts FMC Mock Audits of customers' Ocean Freight Documentation to identify potential errors. Our proactive approach equips customers to handle real FMC Audits penalty-free. 

Email us now at info@aptariffs.com or schedule a free consultation! Meetings in Spanish, Mandarin and Korean languages also available.