What is a Utah Federal Maritime Commission Bond?
Ocean Transportation Intermediaries (OTI) such as a Non-Vessel-Operating Common Carrier (NVOCC) or an Ocean Freight Forwarder (OFF), are required to post a bond before they can perform their duties.
Both license applicants and licensed OTIs need this proof of financial responsibility. The surety bond is mandated by the Federal Maritime Commission in line with The Shipping Act of 1984.
An Ocean Freight Forwarder (OFF) is someone who is in charge of the following:
- Sends shipments via an ocean carrier from the United States to international destinations.
- Manages freight shipments that are imported to the United States
- Follows the progress of a shipment and compiles the necessary paperwork.
A Non-Vessel-Operating Common Carrier (NVOCC), on the other hand, is a common carrier that does not own or operate its vessels.
In its association with an ocean common carrier engaged in cargo transportation, an NVOCC is also a shipper.
What is the Surety Bond amount?
Individual OTI Bond Amount
$50,000 – Ocean Freight Forwarder (OFF)
$75,000 – A Non-Vessel-Operating Common Carrier (NVOCC) operating in the United States
$150,000 – Registered NVOCC whose primary place of business is outside the U.S.
Group OTI Bond Amount
For group Ocean Transportation Intermediaries, the surety bond amount will be up to $3,000,000. Each cluster should also:
- Provide a list that contains each member of the group, the corresponding surety bond, and that claims will be permitted for each.
- Notify and document its desire to participate to the Commission.
- To the Commission, submit a copy of the financial responsibility coverage.
Individuals who use the same common trade name must each provide their own surety bond. Surety bonds required for military and civilian household items are different.
An additional $21,000 should be added to the bond amount for Optional Rider for Additional NVOCC Financial Responsibility.
These are the NVOCCs who intend to be included in the U.S.-China trade.
The one who will be responsible for the reviewing and processing of the submitted surety bond is the Office of Passenger Vessels and Information Processing (OPVIP).
What are the Bond conditions?
- Valid claims originating from the principal’s transportation-related activity violation are the responsibility of the principal to pay.
- The principal must abide by the Shipping Act of 1984, the Coast Guard Authorization Act of 1998, and all other relevant regulations.
- The bond will remain valid until canceled. In the case of cancellation, a 30-day notice is required.
- The bond should be issued by a surety bond company like Surety Bond Authority, which is approved by the US Department of Treasury.
Securing a Utah Federal Maritime Commission Bond:
STEP 1: You must submit a bond application.
STEP 2: We will then ask you a couple of relevant information needed for the underwriting process such as your: job performance history, credit score, and financial history.
STEP 2: Once those were evaluated, we will issue and send the surety bond to you immediately!
Ready to get bonded? Give us a call today!