shipping containersMost agencies of the United States government, including the Federal Maritime Commission (”the Commission”), have been closed since December 22, 2018. Since that date shippers, ocean common carriers, and non-vessel operating common carriers in their shipper role have not had access to SERVCON, the service contract electronic filing system of the Commission. So how is it intended for these supply chain players to adhere to Commission regulations related to initial or service contracts about to be renewed, or amendments to existing service contracts during this dysfunctional period which at this point hasn’t shown even a hint of an end game? Short answer: the same as always, but without the filing obligation nor risk of sanctions (penalties). The filing requirement is temporarily lifted. Therefore, service contract activity can continue as usual without concern of penalties. There are some caveats though.

There is a current regulatory provision (46 C.F.R. §530.8) that provides relief in case the Commission’s filing systems are not functioning and cannot receive service contract filings for 24 continuous hours. It is our opinion that the current situation qualifies. Therefore, this regulation would have become effective December 23, 2018, and any service contract activity requiring filing would be waived as of December 23, 2018.

What’s the catch? Any service contract activity which would normally require filing to take effect during this dysfunctional process would need to be electronically filed within a 24 hour period after regulatory normalcy is established and the Commission’s SERVCON system is operational. Ocean common carriers will be watching the clock closely. Shippers should also be doing so to insure that their ocean carriers don’t miss the signal. Otherwise, it is possible that Cargo N.O.S. rates and possibly penalties will rear their ugly heads. In the event that the system becomes cluttered and breaks down during this 24 hour filing period there is other regulatory relief which could be available.

For more information, please contact Carlos Rodriguez.