§40502 — Title 46 Shipping | U.S. Code

Summary

Ocean carriers, either alone or acting under an agreement, can make service contracts with shippers and must file those contracts in confidence with the Federal Maritime Commission. Contracts about bulk cargo, forest products, recycled metal scrap, new assembled motor vehicles, waste paper, or paper waste do not have to be filed. Each contract must say the origin and destination port ranges (and origin/destination areas for through intermodal moves), the commodities, the minimum volume or portion, the line-haul rate, how long the contract lasts, the service commitments, any liquidated damages for not meeting the contract, and any other essential terms the Commission later requires. When a contract is filed confidentially, the carrier must publish a short, public tariff statement listing the origin/destination port ranges, the commodities, the minimum volume or portion, and the duration. If a carrier is covered by a collective bargaining agreement, a labor organization can write and ask whether the carrier is responsible for certain dock or port work for cargo under a service contract. The carrier must answer within a reasonable time about moving cargo on the dock or to/from rail cars, assigning intraport carriage, assigning carriage between a container yard and an adjacent rail yard, and assigning container freight station or repair work. This duty to answer applies only when a lawful collective bargaining agreement exists. Any dispute about coverage is decided under the collective bargaining agreement and the National Labor Relations Act. Unless the parties agree otherwise, the only remedy for breaking a service contract is a court action, and any contract dispute forum cannot be controlled by a carrier’s affiliate or by a government that owns or controls the carrier.

Title 46, §40502

Shipping — Source: USLM XML via OLRC

(a)An individual ocean common carrier or an agreement between or among ocean common carriers may enter into a service contract with one or more shippers subject to the requirements of this part.

(b)(1)Each service contract entered into under this section by an individual ocean common carrier or an agreement shall be filed confidentially with the Federal Maritime Commission.

(2)Paragraph (1) does not apply to contracts regarding bulk cargo, forest products, recycled metal scrap, new assembled motor vehicles, waste paper, or paper waste.

(c)Each service contract shall include—

(1)the origin and destination port ranges;

(2)the origin and destination geographic areas in the case of through intermodal movements;

(3)the commodities involved;

(4)the minimum volume or portion;

(5)the line-haul rate;

(6)the duration;

(7)service commitments;

(8)the liquidated damages for nonperformance, if any; and

(9)any other essential terms that the Federal Maritime Commission determines necessary or appropriate through a rulemaking process.

(d)When a service contract is filed confidentially with the Commission, a concise statement of the essential terms specified in paragraphs (1), (3), (4), and (6) of subsection (c) shall be published and made available to the general public in tariff format.

(e)(1)In this subsection, the terms “dock area” and “within the port area” have the same meaning and scope as in the applicable collective bargaining agreement between the requesting labor organization and the carrier.

(2)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 the following work at a dock area or within a port area in the United States with respect to cargo transportation under a service contract:

(A)The movement of the shipper’s cargo on a dock area or within the port area or to or from railroad cars on a dock area or within the port area.

(B)The assignment of intraport carriage of the shipper’s cargo between areas on a dock or within the port area.

(C)The assignment of the carriage of the shipper’s cargo between a container yard on a dock area or within the port area and a rail yard adjacent to the container yard.

(D)The assignment of container freight station work and container maintenance and repair work performed at a dock area or within the port area.

(3)The common carrier shall provide the information described in paragraph (2) to the requesting labor organization within a reasonable period of time.

(4)This subsection does not require the disclosure of information by an ocean common carrier unless there exists an applicable and otherwise lawful collective bargaining agreement pertaining to that carrier. A disclosure by an ocean common carrier may not be deemed an admission or an agreement that any work is covered by a collective bargaining agreement. A dispute about whether any work is covered by a collective bargaining agreement and the responsibility of an ocean common carrier under a collective bargaining agreement shall be resolved solely in accordance with the dispute resolution procedures contained in the collective bargaining agreement and the National Labor Relations Act (29 U.S.C. 151 et seq.), and without reference to this subsection.

(5)This subsection does not affect the lawfulness or unlawfulness under this part or any other Federal or State law of any collective bargaining agreement or element thereof, including any element that constitutes an essential term of a service contract.

(f)Unless the parties agree otherwise, the exclusive remedy for a breach of a service contract is an action in an appropriate court. The contract dispute resolution forum may not be controlled by or in any way affiliated with a controlled carrier or by the government that owns or controls the carrier.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 40502(a)46 App.:1707(c)(1) (1st sentence).Pub. L. 98–237, § 8(c), Mar. 20, 1984, 98 Stat. 75; restated Pub. L. 105–258, title I, § 106(b), Oct. 14, 1998, 112 Stat. 1905. 40502(b)46 App.:1707(c)(2) (1st sentence). 40502(c)46 App.:1707(c)(2) (last sentence). 40502(d)46 App.:1707(c)(3). 40502(e)46 App.:1707(c)(4). 40502(f)46 App.:1707(c)(1) (2d, last sentences). In subsection (e)(5), the words “the National Labor Relations Act [29 U.S.C. 151 et seq.], the Taft-Hartley Act [29 U.S.C. 141 et seq.], the Federal Trade Commission Act [15 U.S.C. 41 et seq.], the antitrust laws” are omitted as unnecessary because of the reference to “any other Federal or State law”.

Editorial Notes

References in Text

The National Labor Relations Act, referred to in subsec. (e)(4), is act July 5, 1935, ch. 372, 49 Stat. 449, which is classified generally to subchapter II (§ 151 et seq.) of chapter 7 of Title 29, Labor. For complete classification of this Act to the Code, see section 167 of Title 29 and Tables.

Amendments

2022—Subsec. (c)(9). Pub. L. 117–146 added par. (9).

§40502 Service contracts