Inflation triggers major user fee increases at FMC

Source: Freight Waves
Date: 21st March 2023

Higher staff salaries, electronic filing upgrade take toll on agency costs; fee bumps as high as 650%.

The Federal Maritime Commission is raising its user fees as high as 650% over current rates to account for higher costs related to staff salaries, inflation and an electronic filing upgrade.

The FMC acknowledged the increases in a Federal Register notice, noting that when it last updated user fees in 2020 (when many of its fees were adjusted downward or raised slightly), the agency used FY2019 cost data, including 2019 staff salaries.

Ocean Transportation Intermediary (OTI) applications, which include the cost to apply for a freight forwarder or non-vessel operating common carrier license, received the biggest increase. A new license application increases 422%, from $250 to $1,304. The cost to make changes to a current license increases even more — 654%, from $125 to $943.

“Despite the fact that the 2022 update to user fees is occurring two years later, the Commission is using salary and cost data from FY2022 to provide the most precise estimate of costs associated with user fees,” the agency stated. “This three-year gap contributes to a significant increase in fees. Further, during this three-year period, inflation has raised salaries as well as overhead. Many of the fee increases of more than 10% are simply due to updating fees to reflect current costs.”

In explaining the OTI fee jump, FMC pointed out that when it issued its 2020 user fee update it was in the process of transitioning from a paper application process to an electronic process for processing OTI applications. “The Commission has completed the migration to an electronic application and now updates the user fees … to reflect the true cost to the agency of providing this service,” the agency stated.

Fees associated with “rules of practices and procedure,” which include filing formal complaints and informal small claims against a carrier or a shipper, will also receive a boost. A formal complaint filing at the FMC will now cost $387, up 34% from $288. An informal procedure/small claims filing fee increases by 57%, from $112 to $176.

Also, all claims for relief or other affirmative action by the FMC, including appeals from commission staff action (except when submitted in connection with a formal proceeding), must be accompanied by a $450 filing fee, up 47% from the current $306 fee. And a common carrier or shipper seeking permission to refund or waive the collection of a portion of freight charges will now have to pay a $187 filing fee, up 63% from $115.

The only fees being adjusted downward from 2020 are those associated with documents needing FMC certification and validation — dropping 16% to $93, and applications for admission to practice before the FMC (for those who are not attorneys), which decreased 5% to $195.

Despite the increases, the FMC expects the fee adjustments to be noncontroversial and therefore determined that providing notice and comment prior to issuing the rule was unnecessary. The changes are scheduled to go into effect on June 5.

However, the FMC also acknowledged that “parties may have information that could impact the commission’s views and intentions with respect to the revised regulations, and the commission intends to consider any comments filed.” If it receives “significant adverse comments” prior to April 20, it will withdraw the rule no later than May 5.

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