By Charlie Delacruz, Senior Vice President, General Counsel and Secretary
The NGFA Board of Directors this month approved changes to the NGFA Trade Rules that establish timelines for the application of a barge to a contract under the Barge Trade Rules and providing billing instructions under the Barge Freight Trading Rules.
Previously, the trading parties had seven days under the Barge Trade Rules to apply a barge from the date of the bill of lading and three days under the Barge Freight Trading Rules to provide billing instructions. The new timeline for both sets of rules is five days, effective Aug. 1, 2020.
The NGFA Trade Rules Committee in 2019 first addressed this area and referred review of the potential conflict between the rules to the respective committees that administer the Barge Trade Rules (which supplement the Grain Trade Rules and Feed Trade Rules for shipments by barge) and the Barge Freight Trading Rules (which govern transactions for the purchase or sale of barge transportation and carriage).
Serving on the two subcommittees are representatives from various member companies: American Commercial Barge Line, American River Transportation Co., Bunge North America Inc., Cargill Inc., CGB Enterprises Inc., Farmers Grain Terminal Inc., Ingram Barge Co., Jayhawker Consulting Co. LLC, Louis Dreyfus Co., Tate & Lyle PLC, The Gavilon Group LLC and Zen-Noh Grain Corp.
Over the following year, the groups teleconferenced, exchanged proposals and consulted with the broader Trade Rules Committee and others within the industry. The groups’ decision ultimately was to align the two sets of rules with a five-day timeline.
“Although the industry had largely worked around problems arising from the conflict between the two sets of rules, we concluded it was better to harmonize them and further avoid the potential for disputes,” said Steve Lucas, president of Jayhawker Consulting Co., and chairman of the NGFA Barge Trade Rules Subcommittee.
After approval of the subcommittees’ recommendations by the full Trade Rules Committee, the proposal was presented to the NGFA Board for consideration earlier this year. The vote for approval of the new rules was extended so that it would not go into effect until Aug. 1.
“We decided it was better to wait on introducing this change to the trade until August, which typically involves relatively reduced trade activity, than the April or October timeframes when new rules more commonly are implemented,” said Jeff Webb, president of Cargill Marine & Terminal, and chairman of the NGFA Barge Freight Trading Rules Committee.
The language of the new rules changes can be viewed here.