Part 532 support statement CLEAN

NARRATIVE SUPPORTING STATEMENT
FOR 46 CFR part 532 – NVOCC NEGOTIATED RATE ARRANGEMENTS (NRAs)

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 16 of the Shipping Act of 1984, 46 U.S.C. § 40103, authorizes the Federal
Maritime Commission (“Commission”) to exempt by order or regulation “any class of
agreements between persons subject to this [Act] or any specified activity of those persons from
any requirement of this [Act] if the Commission finds that the exemption will not result in
substantial reduction in competition or be detrimental to commerce. The Commission may attach
conditions to any exemption and may, by order, revoke an exemption.”
The Commission added 46 CFR 532 to exempt non-vessel-operating common carriers
(NVOCCs) from the more stringent tariff rate publication requirements of the Shipping Act of
1984 and related provisions of the Commission’s regulations to permit them to enter into
negotiated rate arrangements (NRAs) with shippers.76 FR 11351 (March 2, 2011). The
Commission subsequently extended the tariff rate publication exemption contained in 46 CFR
part 532 to foreign based unlicensed NVOCCs as well. 78 FR 42886 (July 10, 2013). The
exemption is conditioned upon the NVOCC including a prominent notice invoking the
exemption in its electronically published rules tariff and indicating their intention to the
Commission. In addition, NVOCCs must maintain original NRAs and associated records for 5
years in a format easily produced to the Commission and furnish those records promptly upon
request from the Commission.

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 tariff publication requirements are intended to permit shippers and other members of
the public to obtain reliable and useful information concerning the rates and charges that will be
assessed by common carriers (including NVOCCs) and conferences for their transportation
services; and by the Commission to ensure that common carrier tariff publications are accurate
and accessible and to protect the public from violations by common carriers of section 10 of the
Shipping Act (46 U.S.C. 41101-41106). A tariff is a publication containing the actual rates,
charges, classifications, rules, regulations and practices of a common carrier. The rules tariff (or
portion of a tariff) refers to those stated terms or conditions set by the carrier which affect,
determine or change the transportation rates, charges or services provided by a common carrier,
including those rules or practices applicable to shipments under NRAs.

The Commission uses the information published by an NVOCC in its rules tariff to
determine whether an NVOCC may have invoked the NRA exemption for a particular shipment
or shipments. The Commission has used and will continue to use the information required to be
maintained by NVOCCs for monitoring and investigatory purposes and, in its proceedings
between private parties, to adjudicate alleged Shipping Act violations.

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 regulation allows licensed NVOCCs and foreign-based registered NVOCCs to
invoke the exemption by adding a prominent notice to its electronically published rules tariff.
NVOCCs invoking the exemption do not file with the Commission their NRAs nor are they
required to electronically publish any NRA rates agreed with their shipper customers.

4.

Describe efforts to identify duplication.

The NVOCC is the sole source of accurate information as to whether a particular
shipment is exempt from the otherwise applicable statutory and regulatory requirements of the
Shipping Act and the Commission’s tariff regulations to file rates. An NVOCC invokes the
exemption by including a prominent notice invoking the exemption in its electronically
published rules tariff and entering into an NRA with their shipper(s). By invoking the exemption,
the NVOCC eliminates the obligation to simultaneously publish in its publicly-accessible
NVOCC tariff those rates and charges agreed by the NVOCC with a particular shipper or
shippers. Amendments approved in FMC Docket No. 17-10 remove the need to complete an
entirely new NRA each time a rate or term needs to be amended, and permits acceptance of an
NRA without mandating the formality of the shipper’s agreement thereto. The exemption further
reduces duplication of effort by the NVOCC, and removes the attendant costs of tariff rate
publication.

5.
If the collection of information impacts small businesses or other small entities,
describe any methods used to minimize burden.
The Commission has historically recognized the NVOCC industry as composed primarily
of small businesses, as that term is defined under the Regulatory Flexibility Act, 5 U.S.C. § 601.
While use of NRAs is optional, NVOCCs are thereby exempted from the more stringent tariff
rate publication requirements of the Shipping Act of 1984 and related provisions of the
Commission’s regulations at 46 CFR Part 520. NVOCCs invoking the exemption do not file with
the Commission their NRAs nor are they required to electronically publish those NRA rates
agreed with their shipper customers. Finally, NVOCCs who do not wish to avail themselves of
the exemption are not subject to any new filing or information requirements.

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.
Under the Final Rule in FMC Docket No. 17-10, NVOCCs seeking to invoke the
exemption publish, on a one-time basis, a prominent notice in their electronically published rules
tariff. They may retract or eliminate the use of NRAs in the same way, by modifying or
removing the tariff notice. Application of the exemption is not subject to a periodic renewal or
re-certification requirement, and thus the collection cannot be conducted less frequently.
If the collection requirement were to be removed, as by revoking the exemption granted
as to NRAs, all rates negotiated by an NVOCC with a shipper would again be subject to the tariff
publication requirements of the Shipping Act, 46 U.S.C. 40501, and related provisions of the
Commission’s tariff regulations, 46 CFR Part 520. The burden upon the NVOCC would thus be
increased.

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
confidentiality 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.
NVOCCs are not required to furnish periodic reports of any kind to the Commission.
NVOCCs invoking exemption are subject to the same five-year recordkeeping
requirement applied to other ocean transportation intermediaries (NVOCCs and ocean freight
forwarders) under 46 CFR Part 515. The five-year recordkeeping requirement is consistent with
the statute of limitations provisions in section 13(f) of the Shipping Act of 1984, 46 U.S.C. §
41109(e). Upon written request for records from the Commission’s Bureau of Enforcement, or in
connection with formal administrative hearings conducted under Part 502 of the Commission’s
regulations, a responding party has 30 days to respond to a request for records.
The Commission does not make any pledge of confidentiality with respect to any
information or documents submitted to the Commission in response to this collection. The

Commission will, however, seek to protect such information from disclosure as reflecting
investigative records and/or containing proprietary commercial and financial information.

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 320.8(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 was published December 7, 2021, at 86 FR 69254.
During the 60-day period, a clerical error was discovered. A correction was published in the
Federal Register on February 9, 2022, and the Commission extended the comment period for an
additional 30 days (87 FR 7453). No comments were received in response to the notice.

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.
The Commission provides no assurance of confidentiality with respect to information
submitted by an NVOCC in response to this collection. Information contained in the NVOCC’s
electronically published tariff is required by statute to be available to the public. The purpose of
the Commission’s requirement is to inform the public of the NVOCC’s intentions with regard to
invocation of the exemption.
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.
Not applicable - 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 estimated potential reporting respondent universe (licensed NVOCCs and foreignbased registered NVOCCs) is 6929. Of the total respondent universe, 2,349 have thus far
invoked the exemption to use NRAs. Based on the current number of NVOCCs that have evoked
this exemption the total estimated hour burden for this information collection is 2,402 personhours, as set forth below:
Requirements

Annual
Respondents 1

Modification of Tariff 2,129
Invoking Exemption –
using a combination of
tariff rates and NRAs
Modification of Tariff 183
Invoking Exemption –
using NRAs exclusively
(3%)
Recordkeeping/Auditing 2,349
Requirements
TOTALS

Annual
Instances
188

Average
Person-hours
Per Response
.25

Total
Person-hours

6

1

6

2,349

1

2,349

47

2,402

The FMC offers the following descriptions of the information collection requirements shown in
the above table:
Modification of Tariff Invoking Exemption to use NRAs: An NVOCC publishes a prominent
notice in its tariff to invoke the exemption. The Commission uses the information filed by
NVOCCs in its rules tariff to determine whether an NVOCC has invoked the exemption to use
NSAs. On average, 194 existing or new NVOCCs annually invoke the exemption to use NRAs
by filing a rule or prominent notice in their rules tariff. The time estimate is greater for the 3% of
NVOCCs that use NRAs exclusively because those NVOCCs largely self-publish their tariffs.
Recordkeeping/Audit Requirements: NVOCCs create original NRAs, which are kept
primarily in MS Word Doc, MS Excel or Pdf formatted files and stored electronically in their
internal databases/contract management systems which are easily retrievable and
produced. Many NRAs are executed by electronic signature or by an email acceptance. Based
on consultation with a major tariff publisher who provides NRA contract management software,
their NVOCC clients incur, on average, one hour to manage and organize their electronic
portfolio of NRAs to file/store for recordkeeping and auditing requirements. For smaller
NVOCCs that opt to self-publish their tariffs and use NRAs, we likewise estimate one hour
annually for recordkeeping and storage management. The recordkeeping/audit processes used by

1

The total number of NVOCCs is approximately 6,929. Of the total, 2,349 NVOCCs thus far have invoked the
exemption to use NRAs.

NVOCCs invoking the NRA exemption result in an estimated burden of 2,349 hours for the
recordkeeping function.
In aggregate, the annual cost to respondents is estimated at $266,495.94. (see Attachment
1), reflecting the increasing number of NVOCCs transitioning to NRAs from the more
burdensome and costly tariff requirements. The cost has been calculated in consideration of the
time to gather information and furnish it to the Commission if requested, as well as comply with
the requirements of 46 CFR part 532. It also includes clerical time as well as overhead and
operational expenses.

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 capital or start-up costs associated with this regulation, nor are there any
operational, maintenance, or purchase of service components.
14.

Provide estimates of annualized cost to the Federal government.

Annualized cost to the government primarily involves staff time in determining whether
an NVOCC has invoked the exemption and currently maintains an accessible rules tariff, for
recordkeeping and enforcement-related purposes. Total estimated burden to the Federal
Government is 71.25 hours. Thus, the total estimated cost to the Federal Government, including
overhead and operational expenses is $10,688.47 (See Attachment 2).

15.
Explain the reasons for any program changes or adjustments reported in Items 13
(or 14) of OMB Form 83-I.
There have been no program changes or adjustments in Items 13 or 14 that require
explanation. The respondent universe fluctuates annually, as new NVOCCs are licensed and
existing NVOCCs go out of business.
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 - OMB information is displayed in the Commission’s rule, 46 CFR part
532.

18.
Explain each exception to the certification statement identified in Item 19 of OMB
Form 83-I.
Not applicable - there are no exceptions to the certification statement.

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
2,402 person-hours (reporting and recordkeeping requirements)
Pricing Manager (2161 person-hours)
Tariff Publisher (241 person-hours)
The annual salary calculations have been formulated using the Federal Government’s January
2022 salary table (overhead of 102.93% 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.
Formula: Annual salary/2087 + overhead rate = adjusted hourly salary
$121,065/2087 = $58.01(basic hourly rate) + 59.71(overhead) = $117.72 (Pricing Manager
adjusted hourly salary)
$51,651/2087 = $24.75 (basic hourly rate) + 25.47(overhead) = $50.22 (Tariff Publisher adjusted
hourly salary)
Employee
Pricing Manager
Tariff Publisher
TOTALS

Hourly Salary
$117.72
$ 50.22

Number of Hours
2,161
241
2,402

Total
$ 254,392.92
$ 12,103.02
$ 266,495.94

Attachment 2

14. Estimated Burden and Costs, Including Overhead, to Federal Government
71.25 person hours (compliance verification)
Office Director GS-15 (56.25 person hours)
Transportation Specialist GS-12 (15 person hours)
The annual salary calculations have been formulated using the Federal Government’s January
2022 salary table (overhead of 102.93% has been added to the basic salary).
Formula: Annual salary/2087 + overhead rate = adjusted hourly salary
$168,282/2087 = $80.63 (basic hourly rate) + $82.99 (overhead) = $163.62 (Office Director
adjusted hourly salary)
$101,813/2087 = $48.78 (basic hourly rate) + $50.21 (overhead) = $98.99 (Transportation
Specialist adjusted hourly salary)
Employee
Office Director
Transportation Specialist
TOTALS

Date:

Hourly Salary
$163.62
$ 98.99

Number of Hours
56.25
15

Total
$9,203.62
$1,484.85

71.25

$10,688.47