OMB supporting statement Dtk 20-22 part 530 FINAL

NARRATIVE SUPPORTING STATEMENT FOR
46 CFR PART 530 – SERVICE CONTRACTS AND RELATED FORM FMC-83

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 8(c) of the Shipping Act of 1984 (1984 Act) (46 U.S.C. 40502), as amended by
the Ocean Shipping Reform Act of 1998 (OSRA), requires ocean common carriers and
agreements among such carriers to file their service contracts confidentially with the
Commission. Service contracts are written contracts between one or more shippers or a
shippers’ association and an individual ocean common carrier or an agreement between or
among ocean common carriers in which the shipper makes a commitment to provide a certain
minimum quantity or portion of its cargo or freight revenue over a fixed period, and the ocean
common carrier or the agreement commits to a certain rate or rate schedule as well as defined
service level, such as assured space, transit time, port rotation, etc. Authority to file or delegate
the authority to file must be requested by a responsible official of the service contract carrier in
writing by submitting the Form FMC-83, Service Contract Registration.
To reduce unnecessary regulatory burdens, the rule allows up to 30 days to file original
service contracts with the Commission, consistent with the filing requirements for amendments
to existing service contracts.
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 Commission uses the filed service contract data for monitoring and investigatory
purposes and, in its proceedings, to adjudicate related statutory issues raised by private parties.
For Commission proceedings, as well as in any court case, the service contract on file at the
Commission and in effect is official evidence of the applicable rate, charge or rule, when so
certified by the Commission. The collection of such information by the Commission is
mandated by law.
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 regulations at Part 530 include procedures for filing service contracts using an
electronic Internet-based system, SERVCON, to allow carriers and conferences to file their
service contracts confidentially with the Commission. All carriers and conferences use the

SERVCON system to file their service contracts electronically with the Commission. Before
filing in SERVCON, each registrant must file a Form FMC-83, Service Contract Registration.
Although the Commission anticipates electronic filing of Form FMC-83, it is not yet technically
possible.
4.

Describe efforts to identify duplication.

No duplication of effort is involved since similar information is not available from
outside sources nor elsewhere in the Commission, and the only source of accurate information is
the filing party to the service contract (respondent).
5.
If the collection of information impacts small businesses or other small entities,
describe any methods used to minimize burden.
As the filing obligation rests upon the ocean common carrier, this collection of
information does not have a significant impact on small businesses or other small entities.
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.
The filing of service contracts is not assigned a set, periodic filing date by the
Commission; service contracts are filed as they are entered into by the parties. Amendments to
service contracts may be filed up to 30 days after agreed to by the parties. 1 The rule extends the
filing flexibility permitted for service contract amendments to also allow the filing of original
service contracts up to 30 days after agreed to by the parties. The 1984 Act, as amended by
OSRA, requires the filing of service contracts. If records of service contracts were not produced
as requested within the time period specified, the Commission would not have the information it
requires to perform its statutory responsibilities.
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 produce 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
confidentially that is not supported by authority established in statute or regulation, that is
not supported by disclosure and data security policies that are consistent with the pledge,
1

In order to address business disruptions caused by the COVID-19 pandemic, the Commission recently granted a
temporary exemption through December 31, 2020 (later extended to June 1, 2021) to permit the filing of original
service contracts up to 30 days following the date agreed to by the parties (FMC Docket No. 20-06).

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.
With the exception of a records retention requirement (section (d) above), this
information collection does not require the collection to be conducted in a manner inconsistent
with OMB guidelines. There is a five-year recordkeeping requirement for this information
collection that is consistent with the statute of limitation provisions in section 13(f) of the
Shipping Act of 1984, 46 U.S.C. 41109.

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 1320.8(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 included in the Notice of Proposed Rulemaking
(NPRM) published January 19, 2021, at 86 FR 5106. No comments specifically addressed the
revised information collection. The majority of commenters, including respondents, generally
supported the proposed rule to allow original service contracts to be filed up to 30 days after they
take effect. However, several commenters expressed concern that carriers may abuse the filing
flexibility granted by the rule to pressure shippers into accepting unfavorable terms. In addition,
comments were received indicating concern with an industry trend to use single shipment service
contracts rather than tariff rates to move spot cargo. The final rule does not make regulatory
changes in response to these comments; nonetheless the Commission will closely monitor carrier
contracting practices and broader industry trends, and will investigate problematic conduct and
take action as necessary. The Commission also clarified in the supplemental information section
of the final rule notice that the signature on the service contract may be an electronic signature.
Finally, in response to shipper concerns about the consequences of a carrier failing to timely file
a service contract, the final rule includes a new provision clarifying that failure to timely file a
service contract or amendment will not affect the applicability of the contract to shipments
received by the carrier on or after the effective date.

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.
All service contracts and their amendments filed with the Commission are to be
confidential (section 8(c)(2) (46 U.S.C. § 40502(b)).
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.
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 Commission estimates the actual respondent universe to be 86 and the total hour
burden for the filing of service contracts, amendments, and notices to be 30,448 hours (see
below). The Service Contract Registration, Form FMC-83, is required before filing of service
contracts may be made. The Commission’s estimates for annualized cost to respondents for the
information collection presently takes into account that 74% of filers utilize electronic web
services to upload and file original service contracts or amendments, an integrated contract
maintenance and filing format which takes just seconds to file. The remaining 26% of filers
manually key in minimal identifying data on the SERVCON filing screen and attach a copy of
the service contract or amendment for uploading. This allocation of time in the table below more
accurately reflects the actual time it takes filers to upload or file contracts or amendments. The
Commission estimates an annualized cost to respondents for information collection as
$3,473,658. This includes overhead and benefits. (See Attachment 1.)

Requirement

Service
contracts/formats

2

Annual
Respondents
86

Annual
Instances
211,468
(813,340 less
74% of web
service filers) 2

Average
Hours Per
Response
.0166

Total Hours

3,510

This number represents an average of the number of service contracts (initial and amendments) filed with the
Commission during Fiscal Years 2018, 2019 and 2020.

Service Contract
Rules & Notices
Notification/Filing
Requirements
Form FMC-83
Disclosure/Third
Party
Recordkeeping/Audit
Requirements
TOTALS

86

86

1

86

86

86

.1

9

86
86

20
8

.1
.1

2
1

86

813,340

.033

26,840
30,448

The FMC offers the following descriptions of the information collection requirements shown in
the above table:
Service Contracts/Formats: All vessel-operating common carriers (VOCCs) are required by
statute to file a true and complete copy of every service contract before any cargo moves
pursuant to that service contract. Of the “total” respondent universe of 133 active VOCCs, only
86 annually file service contracts and amendments in the Commission’s SERVCON system.
Amendments to service contracts must also be filed, but may be filed up to 30 days after
the effective date of the agreement reached between the VOCC and the contract shipper. As
noted in item 6, the Commission granted a temporary exemption through December 31, 2020
(later extended to June 1, 2021) to the requirement that original contracts must be filed before
cargo moves in order to mitigate business disruptions as a result of the COVID-19 pandemic
(See FMC Docket No. 20-06). The rule makes permanent the option to file original service
contracts up to 30 days after agreed to by the parties
Service Contract Rules & Notices: VOCCs are optionally permitted to publish rules and
notices which apply to all, or a specified subset, of service contracts where that method would be
more convenient to the carrier. The publication of a rule or notice typically is accomplished in
one instance, and is rarely amended once initially published. The Commission estimates one
hour to publish a rule or notice, in those instances where the carrier elects to do so. The estimate
is predicated on each carrier publishing one such rule or notice annually, although because it is
optional, this burden may be overstated.
Notification/Filing Requirements: Since ocean service contracts are subject to contract law as
well as FMC statutes and regulations, virtually all contracts are settled and amended prior to the
expiration date to comport with the requirements. For good order, the Commission allowed one
instance for each of the 86 filers.
Form FMC-83: The universe of filers is 86; however, only new VOCCs intending to file service
contracts and existing VOCCs who want to amend their registration form are required to do
so. On average, only 8 new and 12 existing filers, for a total of 20 instances, utilize the form
annually. It is not an annual requirement, so the number of annual instances is based on the
average number of filings in FY 2018, 2019 and 2020.

Disclosure/Third Party: Pursuant to 46 U.S.C. § 40502(e), the Shipping Act requires that 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 certain specific types of work at a dock area or
within a port area in the United States with respect to cargo transportation under a service
contract. As such requests are not required to be reported to the Commission, the FMC has no
specific data regarding the frequency with which such requests occur, and the time required to
respond. The Commission, therefore, has based its estimate on information it has received from
organized labor regarding the usefulness of ocean common carriers’ Essential Terms
publications. Please refer to the table above.
Recordkeeping/Audit Requirements: VOCCs create original service contracts and
amendments which are created primarily in MS Word Doc, MS Excel or PDF formatted files and
stored electronically in databases which are easily retrievable and produced. Most VOCCs keep
hard copy files with signatures, although many contracts and amendments today are agreed to by
electronic or digital signature. The number of annual instances of new contracts and amendments
is 813,340, and conservatively allowing for 2 minutes (.033 hours) per new contract or
amendment for recordkeeping/auditing purposes would encompass 26,840 hours (equivalent to
312 hours on average per carrier utilizing service contracts on an annual basis). A VOCC is
required to collect signatures prior to filing a contract or amendment or in addressing customer
disputes relating thereto; therefore, some of this burden could be offset into the service
contracts/formats section above.
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 additional cost burdens to respondents or record keepers other than those
reported in item 12.
14.

Provide estimates of annualized cost to the Federal government.

Total estimated costs to the Federal Government, including overhead and operational
expenses, for this collection are 1,700 hours, at an estimated cost of $243,183. (See Attachment
2).
15.
Explain the reasons for any program changes or adjustments reported in Items 13
(or 14) of OMB Form 83-I.
The slight decrease in total burden is attributable to the reduction in the respondent
universe by one ocean carrier that is no longer operating in the U.S. trades. The regulatory relief
granted under this rule allows ocean carriers greater flexibility in expeditiously contracting with
shippers for ocean transportation services. The additional time afforded to the carrier for filing
original service contacts has no impact on an individual respondent’s burden. (See Attachment
1).
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 – The Commission is not seeking approval to exclude the display of the
expiration date for OMB approval of this information collection.
18.
Explain each exception to the certification statement identified in Item 19 of OMB
Form 83-I.
Not applicable -- The Commission proposes no exception to the certification statement on
OMB Form 83-I.
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

30,446 hours (reporting and recordkeeping requirements) + 2 hours (Form FMC-83) = 30,448
total hours
Pricing Manager (30,362 hours)
Tariff Publisher (86 hours)
The salary calculations have been formulated using the Federal Government’s January 2021
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. 3
Formula: Hourly salary 4 + overhead rate = adjusted hourly salary
$ 56.31 (basic hourly rate) + $57.96 (overhead) = $114.27= Pricing Manager adjusted hourly
salary
$ 24.02 (basic hourly rate) + $ 24.72 (overhead) = $48.74= Tariff Publisher adjusted hourly
salary
Employee
Pricing Manager
Tariff Publisher
TOTALS

Adjusted Hourly
Salary
$ 114.27
$ 48.74

Number of Hours

Total

30,362
86
30,448

$3,469,466
$ 4,191.64
$3,473,658

3

Given the small number of tariff publishers which maintain Carrier Automated Tariffs for common carriers (less
than two dozen) and the lack of an appropriate Bureau of Labor Statistics occupation category, the Commission uses
GS schedule equivalents to estimate the burden costs.
4

Hourly salary rate from OPM hourly rate pay table effective January 1, 2021.

Attachment 2

14.

Estimated Burden and Costs, Including Overhead, to Federal Government

The annual salary calculations have been formulated using the Federal Government’s January
2021 salary table (overhead of 102.93% has been added to the basic salary).
Formula: Hourly salary 5 + overhead rate = adjusted hourly salary
Senior Advisor, Service Contracts & Tariffs GS-15/5 – 900 hours
$78.27 (basic hourly rate) + $80.56(overhead) = $158.83 adjusted hourly salary
Transportation Specialist GS-12/5 – 200 hours
$47.35 (basic hourly rate) + $48.74(overhead) = $96.09 adjusted hourly salary
Senior Transportation Advisor GS-14/5 – 600 hours
$66.54 (basic hourly rate) + $68.49 (overhead) = $135.03 adjusted hourly salary

Employee
Senior Advisor, Service Contracts &
Tariffs
Transportation Specialist
Senior Transportation Advisor
TOTALS

Adjusted
Hourly Salary
$158.83

Number of Hours

Total

900

$142,947

$96.09
$135.03

200
600
1,700

$19,218
$81,018
$243,183

Submitted into ROCIS: April 23, 2021

5

Hourly salary rate from OPM hourly rate pay table effective January 1, 2021.