Page 14: of Marine News Magazine (September 2026)

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Washington Watch

Legal Beat

Destination Agent Compliance Under the Shipping Act

By J. Philip Nester, Partner, Transportation & Logistics Practice Group

Foreign non-vessel-operating common carriers (NVOCCs) remain with the NVOCC, and avoid language suggesting increasingly rely on U.S.-based logistics companies to serve agent discretion over rates or service terms.

as destination agents. These arrangements involve a domes-

Ongoing Compliance Obligations.

tic provider handling cargo receipt, warehousing, customs coordination, and last-mile delivery on behalf of an ocean Foreign NVOCCs must maintain valid FMC registra- transportation intermediary headquartered abroad. The rev- tion and a surety bond of at least $150,000 pursuant to enue opportunity is real, but the regulatory, ? nancial, and 46 C.F.R. § 515.21. For destination agents, this creates operational risks demand careful assessment before commit- monitoring obligations such that if the principal’s regis- ting to this framework. tration lapses or bond is cancelled, the agent may be en- gaged in facilitating the performance of unlicensed ocean

Regulatory Framework.

transportation. Best practices include verifying FMC reg-

The Shipping Act and the Federal Maritime Commission’s istration before engagement and then periodically thereaf- (FMC) implementing regulations govern ocean transporta- ter, establishing contractual requirements for maintained tion intermediaries (OTIs) in the foreign commerce of the registration with prompt notice of changes, and including

U.S. Under 46 C.F.R. § 515.2, the two principal OTI cat- termination rights triggered by compliance lapses. Under egories are ocean freight forwarders (OFFs) and NVOCCs. 46 U.S.C. § 40501, foreign NVOCCs must publish tar-

NVOCCs provide ocean transportation and issue their own iffs and may not deviate from published rates and destina- bills of lading but do not operate the vessels. Even without tion agents collecting freight charges should do so minis- a permanent U.S. of? ce, foreign NVOCCs must comply terially with set procedures to verify that charges match with FMC registration and bonding requirements under the NVOCC’s tariff. Service contracts must be ? led with 46 U.S.C. § 40901 and 46 C.F.R. § 515.21. Many oper- the FMC pursuant to 46 U.S.C. § 40502, so destination ate through destination agents where domestic companies agents must avoid assuming “shipper” obligations such as handle the receipt and processing of inbound cargo. volume commitments, and all carrier-facing communica- tions should identify the NVOCC as the contracting party.

Agent Versus Principal.

Financial and Liability Exposure.

The fundamental regulatory question is this: at what point does an agent’s conduct cross from agency into prin- Freight collection timing presents signi? cant ? nancial cipal liability? A destination agent exercises too much au- risk. Destination agents typically receive cargo, release it to tonomy if it sets rates, issues its own bills of lading, or makes consignees, collect freight charges, and remit funds to the independent shipping decisions risks, which can draw FMC NVOCC on periodic settlement terms. This creates cash- scrutiny to deem the agent to be acting in its capacity as a ? ow exposure where the agent might have to advance pay- co-carrier or as an NVOCC. A true agent acts under the ments to carriers, terminal operators, and drayage providers principal’s direction, by performing delegated functions before collecting from consignees, potentially carrying accu- without assuming independent carrier obligations. If an mulated receivables for weeks. Ocean carriers and terminal agent exercises discretion over pricing, routing, or terms of operators assess demurrage and detention charges against the carriage, the FMC may view it as a de facto NVOCC, trig- “party of record,” which may include the destination agent, gering independent registration, bonding, and tariff publi- creating cross-border collection challenges if the agent needs cation requirements. Destination agent agreements should to recover U.S.-paid charges from a foreign principal or a delineate authority, con? rm that transportation decisions disputing consignee. A destination agent that takes physical 14 | MN September 2026