The Federal Maritime Commission (FMC) regulates ocean and non-vessel freight operators. An ocean transport intermediary may be an ocean freight forwarder (OFF) or a non-vessel operating common carrier (NVOCC). Per the FMC, each class must "submit acceptable proof of financial responsibility to the Commission." The surety bond obligations for both classes is form FMC-48 (OMB 3072-0018). This document is used for both the OTI (OFF) bond and NVOCC bond. In order to determine the bond penalty (amount) the FMC offers three classifications:
Pursuant to the FMC's directive, OTI bonds must be issued by a surety company appearing on the U.S. Department of Treasury's Circular 570 of insurers acceptable for federal obligations. An ocean freight forwarder or NVOCC bond must be uniquely numbered and marked to indicate whether it is an NVOCC or ocean freight forwarder bond. The exact legal name, including trade name(s) must appear as principal, the bond amount and the effective date of the OTI bond. Both the OTI and the surety must execute the obligation and a current power of attorney attached authorizing the surety's representative to sign the obligation. A group of OTIs may alternatively file "Form FMC-69", each member being included or excluded (canceled) by schedule.
There are special protocols for those NVOCCs that engage in foreign shipping/trade that include China. The Chinese government may impose fines and penalties for activities involving U.S.-China trades. A "rider" may be added to the NVOCC bond to bring the operator in to compliance. The rider may be non-renewed or canceled independent of the OTI bond however cancellation of the principal bond automatically suspends the Chinese compliance rider. Surety may cancel an OTI bond by giving thirty days prior notice the the FMC. Failure of the operator to provide replacement financial assurance will result in removal from the Federal Register, the FMC-1 list and the Commission's website.
The Office of Passenger Vessels and Information Processing (OPVIP) is the regulatory contact for OTI bonding and permitting. Full information about the program can be viewed here. The contact information for the director is as follows:
Underwriting of OFF and NVOCC bonds is best accomplished by a surety specialist with knowledge of this type of obligation and the specific forms required by the Federal Maritime Commission. Surety One, Inc. specializes in freight obligations. A NVOCC bond application submission is reviewed and responded to "same day". We are the MOST RESPONSIVE surety bond underwriter in North America. Call (800) 373-2804, email us at Underwriting@SuretyOne.com or click here if you would like to have a conversation about your OTI bond need.
FYI: Forwarders/freight operators may also need a customs bond or if engaged in land operations within the United States, a BMC-84 Freight Broker Bond. Read more about these surety bonds by clicking on the links!
Surety bond application review and quoting are free of charge. There is no obligation to purchase.