What is a Washington Federal Maritime Commission Bond?
The Federal Maritime Commission, by The Shipping Act of 1984, indicates that no license will be issued to Ocean Transportation Intermediaries (OTI) such as an Ocean Freight Forwarder (OFF) or a Non-Vessel-Operating Common Carrier (NVOCC) until they post a surety bond.
An OFF (Ocean Freight Forwarder) is a person who is in charge of the following:
- Manages the importation of freight into the United States.
- Ships cargo from the United States to international locations via an ocean carrier.
- Follows the status of the shipment and produces the correct documentation.
On the other hand, a Non-Vessel-Operating Common Carrier (NVOCC) is a common carrier that does not own or manage its vessels.
In its relation with an ocean common carrier participating in cargo transit, an NVOCC is also a shipper.
What is the bond amount?
Individual OTI Bond Amount
- $50,000 – Ocean Freight Forwarder (OFF)
- $75,000 – a person who works as a Non-Vessel-Operating Common Carrier in the United States
- $150,000 – Registered NVOCCs that have their main place of business outside of the United States
Group OTI Bond Amount
The surety bond amount will be up to $3,000,000.
Also, each group shall:
- Notify the Commission of its desire to participate and provide documents.
- Provide a list that contains each member of the group, the corresponding surety bond, and that claims will be permitted for each.
- Provide the Commission with a copy of the financial responsibility coverage.
- Individuals using the same common trade name should each provide their own surety bond.
- Different surety bonds are required for federal military and civilian household items.
- An additional $21,000 should be added to the bond amount for Optional Rider for Additional NVOCC Financial These are the NVOCCs who intend to be included in the U.S.-China trade.
The Office of Passenger Vessels and Information Processing (OPVIP) will be the one responsible for reviewing and processing the submitted surety bond.
What are the conditions of the bond?
- Like Surety Bond Authority, a US Department of Treasury-approved surety bond business should issue the bond.
- The principal must follow the Shipping Act of 1984, the Coast Guard Authorization Act of 1998, and all other applicable requirements.
- Any valid claims arising from the principal’s transportation-related activity wrongdoing must be paid by the principal.
- The bond will remain valid until canceled. In case of cancellation, a 30-day notice is required.
How do I get this type of Washington Federal Maritime Commission Bond?
You must first fill out a bond application.
We will ask you a couple of important information needed for the underwriting process such as the following:
- Your financial history
- Your business performance history
- Your credit score
Once those have been assessed, we will issue the bond and deliver it to you shortly!
Need more information? Call us today!