How much does a federal maritime commission bond cost?
The Federal Maritime Commission (FMC), the agency regulating international ocean transportation, requires Ocean Transportation Intermediaries (OTIs) to provide proof of financial security in the form of a FMC-48 surety bond.
The premium you’ll pay for your OTI bond will vary because these bonds require underwriting. It will also depend on the amount of bond coverage required for your particular occupation.
Why do I need this bond?
The Federal Maritime Commission requires OTI ocean freight forwarders (OFFs) and non-vessel-operating common carriers (NVOCCs) to purchase a surety bond as proof of financial security. OTIs provide various international ocean transportation services. If you provide any of the services listed below, you’ll need to purchase an OTI bond.
Ocean Freight Forwarders
OFFs are U.S.-based companies or individuals who provide these services:
- Organize international cargo movement
- Arrange shipments from the U.S. via common carriers for shippers
- Handles all documentation and related duties for the shipments
OFFs must become licensed and submit proof of financial security–a surety bond. The bond must provide $50,000 of coverage, with an additional $10,000 of coverage for each U.S. unincorporated branch office.
Non-Vessel-Operating Common Carriers
NVOCCs fulfill these roles:
- Common carriers that provide ocean transportation but do not own or operate the vessel
- Issues their own house bills of lading or comparable document
- Work with vessel-operating common carriers as shippers
NVOCCs need to obtain a license (if they are based in the U.S.), a surety bond and publish a tariff. A published tariff details the actual rates, charges, classifications, rules, regulations and practices of a common carrier(s), as defined in 520.2 of Title 46 of the Code of Federal Regulations.
Licensed NVOCCs, whether they are in the U.S. or internationally, must carry a $75,000 bond plus $10,000 per each U.S. unincorporated branch office. Unlicensed, non-U.S.-based NVOCCs must carry a $150,000 bond.
OTIs (both OFFs and NVOCCs) can submit their bond in a group using Form FMC-69, or individually using Form FMC-48. This bond ensures that OTIs comply with the Shipping Act of 1984 and any other applicable FMC regulations. If the OTI disregards any of the Act’s provisions, the bond can be used to pay fines, proven claims and judgments against the OTI.
Breaches of the Shipping Act can result in an up to $5,000 fine per violation, or up to $25,000 per violation if they were committed deliberately. Detailed information about other penalties can be found in Sections 41107, 41108, and 41109 of the Act.
Have any questions concerning your FMC-48 bond? Talk to a surety specialist today by calling 1 (800) 308-4358 or complete our bond request form online and an expert will contact you immediately.
What’s the fine print?
Your Ocean Transportation Intermediary bond can be canceled with 30 days’ written notice to the Commission. If the bond is canceled, the OTI’s license will be revoked, as they cannot operate without active acceptable proof of financial responsibility.
Applicants for an OTI license must meet these qualifications:
- At least three years of demonstrable OTI experience
- Depending on the business, must be a partner, officer, or sole proprietor of the applying business
- If applying for a U.S.-based license, OTI experience must have been earned in the U.S.
- If applying for a non-U.S.-based license, OTI experience can be earned outside of the U.S.
If there are any changes to the information provided on the original application form, a new form must be filed with the FMC. If the applicant files their application electronically, the fee is $250. The fee for paper applications is $825.
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