NPRM OMB supporting statement FINAL

NARRATIVE SUPPORTING STATEMENT FOR
46 CFR PART 530 – SERVICE CONTRACTS AND RELATED FORM FMC-83

A.

Justification

1.
Explain the circumstances that make the collection of information necessary.
Identify any legal or administrative requirements that necessitate the collection. Attach a
copy of the appropriate section of each statute and regulation mandating or authorizing the
information collection.
Section 8(c) of the Shipping Act of 1984 (1984 Act) (46 U.S.C. 40502), as amended by
the Ocean Shipping Reform Act of 1998 (OSRA), requires ocean common carriers and
agreements among such carriers to file their service contracts confidentially with the
Commission and to publish certain essential terms of those service contracts. Service contracts
are written contracts between one or more shippers or a shippers’ association and an individual
ocean common carrier or an agreement between or among ocean common carriers in which the
shipper makes a commitment to provide a certain minimum quantity or portion of its cargo or
freight revenue over a fixed period, and the ocean common carrier or the agreement commits to a
certain rate or rate schedule as well as defined service level, such as assured space, transit time,
port rotation, etc. Authority to file or delegate the authority to file must be requested by a
responsible official of the service contract carrier in writing by submitting the Form FMC-83,
Service Contract Registration. The proposed rule would eliminate the requirement to publish
certain essential terms of filed service contracts.

2.
Indicate how, by whom, and for what purpose the information is to be used. Except
for a new collection, indicate the actual use the agency has made of the information
received from the current collection.
The Commission uses the filed service contract data for monitoring and investigatory
purposes and, in its proceedings, to adjudicate related statutory issues raised by private parties.
For Commission proceedings, as well as in any court case, the service contract on file at the
Commission and in effect is official evidence of the applicable rate, charge or rule, when so
certified by the Commission. The collection of such information by the Commission is
mandated by law.

3.
Describe whether, and to what extent, the collection of information involves the use
of automated, electronic, mechanical, or other technological collection techniques or other
forms of information technology, e.g., permitting electronic submission of responses.
The regulations at Part 530 include procedures for filing service contracts using an
electronic Internet-based system, SERVCON, to allow carriers and conferences to file their
service contracts confidentially with the Commission. All carriers and conferences use the

SERVCON system to file their service contracts electronically with the Commission. Before
filing in SERVCON, each registrant must file a Form FMC-83, Service Contract Registration.
Although the Commission anticipates electronic filing of Form FMC-83, it is not yet technically
possible.

4.

Describe efforts to identify duplication.

No duplication of effort is involved since similar information is not available from
outside sources nor elsewhere in the Commission, and the only source of accurate information is
the filing party to the service contract (respondent).

5.
If the collection of information impacts small businesses or other small entities,
describe any methods used to minimize burden.
This collection of information does not have a significant impact on small businesses or
other small entities.

6.
Describe the consequence to Federal program or policy activities if the collection is
not conducted or is conducted less frequently, as well as any technical or legal obstacles to
reducing burden.
The filing of service contracts is not assigned a specific time by the Commission; service
contracts are filed as they are entered into by the parties. Amendments to service contracts may
be filed up to 30 days after agreed to by the parties. The 1984 Act, as amended by OSRA,
requires the filing of service contracts. If records of service contracts were not produced as
requested within the time period specified, the Commission would not have the information it
requires to perform its statutory responsibilities.

7.
Explain any special circumstances that require the collection to be conducted in a
manner inconsistent with OMB guidelines. (a) requiring respondents to report information
to the agency more often than quarterly; (b) requiring respondents to prepare a written
response to a collection of information in fewer than 30 days after receipt of it; (c)
requiring respondents to submit more than an original and two copies of any document;
(d) requiring respondents to retain records, other than health, medical government
contract, grant-in-aid, or tax records, for more than three years; (e) in connection with a
statistical survey, that is not designed to product valid and reliable results that can be
generalized to the universe of study; (f) requiring the use of statistical data classification
that has not been reviewed and approved by OMB; (g) that includes a pledge of
confidentially that is not supported by authority established in stature of regulation, that is
not supported by disclosure and data security policies that are consistent with the pledge,
or which unnecessarily impedes sharing of data with other agencies for compatible
confidential use; (h) requiring respondents to submit proprietary trade secrets, or other

confidential information unless the agency can demonstrate that it has instituted
procedures to protect the information’s confidentiality to the extent permitted by law.
This information collection does not (1) require respondents to report information to the
agency more often than quarterly; (2) require written responses in fewer than 30 days; (3) require
respondents to submit more than an original and two copies of any document; (4) include
confidentiality pledges that are not supported by established statutory authority; or (5) require
respondents to submit proprietary information without protecting such information to the full
extent of the law. There is a five-year recordkeeping requirement that is consistent with the
statute of limitation provisions in section 13(f) of the Shipping Act of 1984, 46 U.S.C. 41109.

8.
If applicable, provide a copy and identify the date and page number of publication
in the Federal Register of the agency’s notice, required by 5 CFR 1320.8(d), soliciting
comments on the information collection prior to submission to OMB. Summarize public
comments received in response to that notice and describe actions taken in response to the
comments. Specifically address comments received on cost and hour burden. Describe
efforts to consult with persons outside FMC to obtain their views on the availability of data,
frequency of collection, the clarity of instructions and recordkeeping, disclosure, or
reporting format (if any), and on the data elements to be recorded, disclosed, or report.
The 60-day Federal Register Notice regarding the Notice of Proposed Rulemaking
(NPRM) was published February 14, 2020, at 85 FR 8527. Respondents will have 60 days to
submit comments on the estimated cost and hour burdens of the collection of information. The
Commission will review and address the comments in its final rule.

9.
Explain any decision to provide any payment or gift to respondents, other than
remuneration of contractors or grantees.
Not applicable – The Commission does not provide any payments or gifts to respondents.

10.
Describe any assurance of confidentiality provided to respondents and the basis for
the assurance in statute, regulation, or agency policy.
All service contracts and their amendments filed with the Commission are to be
confidential (section 8(c)(2) (46 U.S.C. § 40502(b)).

11.
Provide additional justification for any questions of a sensitive nature, such as
sexual behavior and attitudes, religious beliefs, and other matters that are commonly
considered private. This justification should include the reasons why FMC considers the
questions necessary, the specific uses to be made of the information, the explanation to be
given to persons from whom the information is requested, and any steps to be taken to
obtain their consent.

There are no questions of a sensitive nature.

12.
Provide estimates of the hour burden of the collection of information. The statement
should indicate the number of respondents, frequency of response, annual hour burden,
and an explanation of how the burden was estimated. Unless directed to do so, FMC should
not conduct special surveys to obtain information on which to base hour burden estimates.
Consultation with a sample fewer than 10 potential respondents is desirable.
The Commission estimates the actual respondent universe to be 87 and the total hour
burden for the filing of service contracts, amendments, and notices to be 30,726 (see below). The
Service Contract Registration, Form FMC-83, is required before filing of service contracts may
be made. The Commission’s previous estimates for annualized cost to respondents for
information collection did not take into account that 74% of filers make use electronic web
services to upload and file original service contracts or amendments which takes just seconds to
file. Furthermore, we previously allocated 3 minutes of time to upload and file contracts
whereas a handful of manual filers indicated this takes 30 seconds or less, therefore we have
revised the average hours per response from .05 hours to just 1 minute or 0.166 hour. The new
allocation of time more accurately reflects the actual time period it takes filers to upload or file
contracts or amendments. The Commission estimate an annualized cost to respondents for
information collection as $3,482,351. This includes overhead and benefits. (See Attachment 1.)

1

Requirement

Annual
Respondents

Annual
Instances

Service
contracts/formats

87

213,399
(820,765 less
74% of web
service filers) 1

Essential Terms
Publication/Rules &
Notices
Notification/Filing
Requirements
Form FMC-83
Disclosure/Third
Party
Recordkeeping/Audit
Requirements
TOTALS

87

87

1

87

87

87

.1

9

87
87

20
8

.1
.1

87

820,765

Average
Hours Per
Response
.0166

.033

Total Hours

3,542

2
1
27,085
30,726

This number represents the number of service contracts (initial and amendments) filed with the Commission during
Fiscal Year 2018.

The FMC offers the following descriptions of the information collection requirements
shown in the above table:
Service Contracts/Formats: All vessel-operating common carriers (VOCCs) are required by
statute to file a true and complete copy of every service contract before any cargo moves
pursuant to that service contract. Amendments to service contracts must also be filed, but may be
filed up to 30 days after the effective date of the agreement reached between the VOCC and the
contract shipper. Of the “total” respondent universe of 155 active VOCCs, only 87 annually file
service contracts and amendments in the Commission’s SERVCON system.

Essential Terms Publication/Rules & Notices: Presently, all VOCCs are required by statute to
file a publication of specific essential terms for each service contract or amendment. The
proposed rule eliminates this requirement; VOCCs would be required to publish only rules and
notices which apply to all, or a specified subset, of service contracts. The filing of a rules and
notices statement is accomplished in one instance, and is rarely amended once initially
published. Of the “total” respondent universe of 155 active VOCCs, only 87 annually file service
contracts and amendments. Therefore, under the proposed rule, the number of annual instances
would decrease from 820,765 to 87. The Commission estimates one hour to file a rules and
notices statement.
Notification/Filing Requirements: Since ocean service contracts are subject to contract law as
well as FMC statutes and regulations, virtually all contracts are settled and amended prior to the
expiration date to comport with the requirements. For good order, the Commission allowed one
instance for each of the 87 filers.
Form FMC-83: The universe of filers is 87 however, only new VOCCs intending to file service
contracts and existing VOCCs who want to amend their registration form are required to do
so. On average, only 8 new and 12 existing filers, for a total of 20 instances, utilize the form
annually. It is not an annual requirement, so the number of annual instances is based on the
number of filings in FY 2018.
Disclosure/Third Party: Pursuant to 46 U.S.C. § 40502(e), the Shipping Act requires that an
ocean common carrier that is a party to or is otherwise subject to a collective bargaining
agreement with a labor organization shall, in response to a written request by the labor
organization, state whether it is responsible for certain specific types of work at a dock area or
within a port area in the United States with respect to cargo transportation under a service
contract. As such requests are not required to be reported to the Commission, the FMC has no
specific data regarding the frequency with which such requests occur, and the time required to
respond. The Commission, therefore, has based its estimate on information it has received from
organized labor regarding the usefulness of ocean common carriers’ Essential Terms
publications. Please refer to the table above.
Recordkeeping/Audit Requirements: VOCCs create original service contracts and
amendments which are created primarily in MS Word Doc, MS Excel or Pdf formatted files and
stored electronically in databases which are easily retrievable and produced. Most VOCCs keep

hard copy files with signatures, although many contracts and amendments today are agreed to by
electronic or digital signature. The number of annual instances is 820,765, and conservatively
allowing for 2 minutes (.033 hours) per new contract or amendment for recordkeeping/auditing
purposes would encompass 27,085 hours. A VOCC is required to collect signatures prior to
filing a contract or amendment; therefore, some of this burden could be offset into the service
contracts/formats section above.

13.
Provide an estimate for the total annual cost burden to respondents or record
keepers resulting from the collection of information. (Do not include the cost of any hour
burden already reflected on the burden worksheet).
* The cost estimate should be split into two components: (a) a total capital and start-up cost
component (annualized over its expected useful life) and (b) a total operation and
maintenance and purchase of services component. The estimates should take into account
costs associated with generating, maintaining, and disclosing or providing the information.
Include descriptions of methods used to estimate major cost factors including system and
technology acquisition, expected useful life of capital equipment, the discount rate(s), and
the time period over which costs will be incurred. Capital and start-up costs include,
among other items, preparations for collecting information such as purchasing computers
and software; monitoring, sampling, drilling and testing equipment; and record storage
facilities.
* If cost estimates are expected to vary widely, agencies should present ranges of cost
burdens and explain the reasons for the variance. The cost of purchasing or contracting out
information collections services should be a part of this cost burden estimate. In developing
cost burden estimates, agencies may consult with a sample of respondents (fewer than 10),
utilize the 60-day pre-OMB submission public comment process and use existing economic
or regulatory impact analysis associated with the rulemaking containing the information
collection, as appropriate.
* Generally, estimates should not include purchases of equipment or services, or portions
thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory compliance with
requirements not associated with the information collection, (3) for reasons other than to
provide information or keep records for the government, or (4) as part of customary and
usual business or private practices.
There are no additional cost burdens to respondents or record keepers other than those
reported in item 12.

14.

Provide estimates of annualized cost to the Federal government.

Total estimated costs to the Federal Government, including overhead and operational
expenses, for this rule and form are 1,700 hours, at an estimated cost of $241,642. The
significant savings in the burden to the Federal government can be attributed to the deployment
in 2018 of a new SERVCON filing system which automated a largely manual process and

eliminated an outdated database for the verification authorized SERVCON filers. Further, the
greater adoption by the industry of the Commission’s “web services” automated filing process
led to a substantial reduction in the number of filing errors resulting from manual data entry
errors by external filers. These filing errors required extensive staff time to resolve for external
filers. As a result, the Commission was able to reallocate staff time to other program areas. (See
Attachment 2).

15.
Explain the reasons for any program changes or adjustments reported in Items 13
(or 14) of OMB Form 83-I.
Given the increased use of web services’ automated filing capabilities (accounting for
74% of all service contract filings), the respondent burden estimate for this information
collection has decreased for Service Contracts/Formats from 32,115 hours (2013 estimate) to
3,542 hours, a reduction of 28,573 hours.
Without the regulatory relief granted in the proposed rule, the Essential Terms
Publication burden would also be 41,038 hours. With the relief provided in this rule, the
Essential Terms Publication burden estimate would decrease from 32,115 hours (2013 estimate)
to 87 hours (See Attachment 1).

16.
For collections whose results will be published, outline the plans for tabulation and
publication.
Not applicable – no information will be published.

17.
If seeking approval to not display the expiration date for OMB approval of the
information collection, explain the reasons why display would be inappropriate.
Not applicable – The Commission is not seeking approval to exclude the display of the
expiration date for OMB approval of this information collection.

18.
Explain each exception to the certification statement identified in Item 19 of OMB
Form 83-I.
Not applicable -- The Commission proposes no exception to the certification statement on
OMB Form 83-I.

B.

Collections of Information Employing Statistical Methods
This collection of information does not employ statistical methods.

Attachment 1

12.

Estimated Burden and Costs, Including Overhead, to Respondents

30,724 hours (reporting and recordkeeping requirements) + 2 hours (Form FMC-83) = 30,726
total hours
Pricing Manager (30,639 hours)
Tariff Publisher (87 hours)
The annual salary calculations have been formulated using the Federal Government’s January
2018 salary table (overhead of 114.89% has been added to the basic salary). The salary for the
Pricing Manager was calculated using the salary of a GS 13/5 Senior Transportation Specialist,
and the salary for the Tariff Publisher was calculated using the salary of a GS 6/5 Transportation
Specialist. 2
Formula: Annual salary/2080 + overhead rate = adjusted hourly salary
$109,900/2080 = $52.83 (basic hourly rate) + $60.69 (overhead) = $113.52= Pricing Manager
adjusted hourly salary
$46,882/2080 = $22.53 (basic hourly rate) + $25.88 (overhead) = $48.41 = Tariff Publisher
adjusted hourly salary
Employee
Pricing Manager
Tariff Publisher
TOTALS

2

Hourly Salary
$113.52
$48.41

Number of Hours
30,639
87
30,726

Total
$3,478,139
$4,212
$3,482,351

Given the small number of tariff publishers which maintain Carrier Automated Tariffs for common carriers (less
than two dozen) and the lack of an appropriate Bureau of Labor Statistics occupation category, the Commission uses
GS schedule equivalents to estimate the burden costs.

Attachment 2

14.

Estimated Burden and Costs, Including Overhead, to Federal Government

The annual salary calculations have been formulated using the Federal Government’s January
2018 salary table (overhead of 114.89% has been added to the basic salary).
Formula: Annual salary/2080 + overhead rate = adjusted hourly salary
Office Director GS-15 – 900 hours
$152,760/2080 = $73.44 (basic hourly rate) + $84.38 (overhead) = $157.82 adjusted hourly
salary
Transportation Specialist GS-12 – 200 hours
$92,421/2080 = $44.43 (basic hourly rate) + $51.05 (overhead) = $95.48 adjusted hourly salary
Senior Transportation Advisor GS-14 – 600 hours
$129,869/2080 = $62.44 (basic hourly rate) + $71.74 (overhead) = $134.18 adjusted hourly
salary

Employee
Office Director
Transportation Specialist
Senior Transportation Advisor
TOTALS

Submitted into ROCIS: February 18, 2020

Hourly Salary
$157.82
$95.48
$134.18

Number of Hours
900
200
600
1,700

Total
$142,038
$19,096
$80,508
$241,642