by M. Sigmund Shapiro
August 26, 2003

Whoops – I mean is the FMC really necessary? Perhaps it once was marginally so, but if one looks at its history when it became the successor to the old Federal Maritime Board, one must wonder.

In its earliest days, the main thrust of the FMC was the dreaded word ‘rebating’. As a result of the FMC’s efforts to stop it, steamship lines started using every technique available to compensate big shippers by aiding them in misclassification, or even depositing funds in offshore bank accounts. In one instance the Commission brought an action against a prominent U.S. Customs broker for handling a shipment of ‘sporting goods’ classified as ‘toys’. No on could convince the FMC that the broker here had nothing to do with the preparation of the bill of lading in Hong Kong.

Then there was the labyrinthine discussion as to when a forwarder was entitled to collect freight brokerage from the line. Criteria were set up which were followed to the letter, but ignored in spirit. The problem was alleviated somewhat when rules came out allowing ‘lump sum quotations’ (which in themselves were unnecessarily complex).

The birth of the NVO meant new, unnecessary rules, which we live with today. Tariff filing in an age of competitive pricing is an empty, expensive and bureaucratic exercise benefiting no one. Rebating, at least overseas is rife; a method of doing business, a competitive tool and not illegal. Discrimination against NVOs with respected to service contracts has no meaning. One wonders whether the fines and penalties collected by the Commission for violations is its sole source of revenue.

A great comedian, the late Fred Allen described an NBC vice-president as a ‘molehill man’. He would come to work each day and find a molehill on his desk. His job was to make a mountain out of it by five o’clock.

Does this describe the FMC?