What is a California Federal Maritime Commission Bond?
The California Federal Maritime Commission bond is related to ocean transport. The Federal Maritime Commission (FMC) regulates international ocean transportation and requires Ocean Transportation Intermediaries (OTIs) to carry this bond.
The Federal Maritime Commission bond is also known as the FMC-48 surety bond.
Who Needs a Federal Maritime Commission Bond?
The FMC requires all U.S.-based Ocean Transportation Intermediaries (OTIs) to carry the Federal Maritime Commission bond as proof of financial security. This surety bond is required for both Ocean Freight Forwarders (OFFs) and Non-Vessel Operating Common Carriers (NVOCC) to become licensed by the FMC.
OFFs are U.S.-based companies or individuals who offer the following services:
- Organizing international movement of cargo
- Arranging shipments from the United States using common carriers for shippers
- Handling all documentation and related duties for the shipments
NVOCCs are U.S.-based companies that offer the following services:
- Common carriers providing ocean transportation, but not maintaining ownership of the vessel and not operating the vessel
- Issuing of house bills of landing or other applicable documents
- Working with vessel-operating common carriers as shippers
Why Do I Need a Federal Maritime Commission Bond?
The Federal Maritime Commission bond ensures that all U.S.-based OTIs will act in compliance with the Shipping Act of 1984 and any additional FMC rules and regulations. Put simply; this law aims to establish efficiency and consistency for U.S. involvement in international shipping while maintaining national security needs.
If the OTI violates any of the Act’s provisions, it can be charged fines up to $5,000 per accidental violation and $25,000 per deliberate violation. The Federal Maritime Commission bond may be used to pay fines, claims, and judgments against the OTI. For detailed information about penalties surrounding the Shipping Act of 1984, refer to Sections 41107, 41108, and 41109 of the law. Additional information on the Federal Maritime Commission can be found on their website.
How Much Does a Federal Maritime Commission Bond Cost?
The amount of the required surety bond varies based upon the details of the business. U.S.-based OFFs have an obligation to provide $50,000 of coverage, and an additional $10,000 of coverage will be required for each additional U.S. unincorporated branch office. Licensed NVOCCs, regardless of whether they are in the U.S. or internationally, are required to carry $75,000 worth of coverage plus an additional $10,00 0 per each U.S. unincorporated branch office. NVOCCs that are unlicensed and not U.S.-based must secure a $150,000 bond before operating in U.S. waters.
Get Started Today!
To receive your licensing to operate as an Ocean Transport Intermediary, you must first purchase a Federal Maritime Commission bond. Don’t delay your application.