Now is an uncertain time for Texas companies that do business with the shipping industry as trade deals are renegotiated and the shipping industry continues to rank in the top of most lists for industries likely to face insolvency. In light of this likelihood, Texas businesses and their attorneys should be aware of legal and practical issues that may arise in the event of a shipping insolvency. Two particularly murky areas that have been illuminated by recent case law are maritime liens and reclamation rights.

Cast of Characters

In order to discuss maritime, it is necessary to begin with an overview of the relevant supply chain and cast of characters involved in shipping. A Texas business shipping goods by sea generally deals with the following supply chain and cast of characters: 1) a freight forwarder; 2) a nonvessel operating common carrier (“NVOCC”); 3) a vessel operating common carrier (“VOCC”); 4) a customs broker; 5) ground transport; and 6) a supplier. The roles of the first three actors require further introduction. A Texas business usually works with a small portfolio of freight forwarders, who organize the logistics of getting the cargo from Point A to Point B. A freight forwarder owes a fiduciary duty to a shipper and operates as its agent in coordinating logistics for the cargo—which can include land, air, and sea transport. Importantly, a freight forwarder can also be one and the same as an NVOCC, affiliated with an NVOCC, or acting as an agent of an NVOCC. An NVOCC is not a ship, but possesses many rights and responsibilities, including those under maritime law, similar to operating vessels. An NVOCC coordinates with a portfolio of VOCCs, which are operating vessels, to carry the shipper’s cargo over international waters. NVOCCs and freight forwarders are licensed by the Federal Maritime Commission.

Freight Forwarders and Floating Liens

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]