FMC shifts contract filings to Internet system

The Federal Maritime Commission has decided to eliminate a dial-up system that carriers have used for the past five years to file service contracts and change to an Internet-based system that will enable them to use off-the-shelf software to file their contracts in standard word processing formats.

The FMC announced the decision to move to the Internet-based Service Contract Filing System (Servcon) in a notice published in late July in the Federal Register.

Under the rule, the agency will complete the transition from the Automated Tariff Filing and Information system to the new Internet system by Oct. 1, at which point it will discontinue ATFI.

Every time a carrier signs a deal to transport goods for a shipper, it must file that contract with the FMC. A preliminary estimate by the FMC shows that carriers stand to save $2.5 million over the next five years as a result of the change to Internet filing.

Additionally, the new Internet-based application, developed by Prospect Technologies Inc., is expected to reduce the amount of paperwork and to make it possible to manage the increasing number of service contracts.

The number of contracts has increased exponentially in the past two years, rising from about 8,000 in May and June 1997 to about 25,000 for the same months this year, said Theodore Zook, deputy director of the FMC's Bureau of Tariffs, Certification and Licensing.

The terms of the Ocean Shipping Reform Act of 1998 (OSRA), which took effect in May, are one reason for the increase in the number of contracts, Zook said.

The service contracts include key information such as the rates, ports and the commodity being shipped. The AFTI stored the information in a massive database, to which all shippers had access, but the database did not identify the shippers.

The filing requirements changed under OSRA, and carriers now submit their service contracts in electronic form over the Internet and publish the essential terms of the contract, including rates paid, at their own World Wide Web sites.

The job of dealing with the mountain of paper was compounded by the commission's shrinking staff, Zook said. Even before OSRA was passed, the commission was aware that it had to do something about the amount of paper, but the law became the catalyst driving the change, he said.

When the FMC decided to change systems, it initially proposed modifying the AFTI system, but shippers opposed that and urged the commission to develop an Internet-based system that would be as simple as ordering merchandise from a catalog. The chief concern was maintaining the confidentiality of the shippers.

Bill Lewis, president and chief executive officer of Prospect Technologies, said Servcon uses "some of the latest and most tested and tried" security methods, including many of the same technologies used by the Defense Department. In addition, Servcon information that moves over the Internet is protected by the latest encryption technology.

"It was a requirement of the law that we be able to do this in a secure manner," Lewis said, adding that Prospect Technologies' chief technologist, Chris Williams, gained much of his expertise during nine years at the National Security Agency.

Because of the higher security, users must have Netscape Communication Corp.'s Navigator 3.0 or higher or Microsoft Corp.'s Internet Explorer 4.0 or higher, Lewis said.

The new system, which carriers can access by going to the FMC Web site (, is easier to learn than ATFI, Lewis said. Carriers can learn Servcon by following a simple tutorial that is available at the site and takes the user through the filing process step by step.

The system also confirms that a service contract has been filed and builds a database of statistics that can help FMC determine what commodities are moving where and when.

The solution, which has been nominated for a Hammer Award, represents a quantum leap in efficiency and cost of maintenance, Lewis said, adding that it also shows that the commission is attempting to make as much use as possible of the Internet.


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