[Congressional Record Volume 141, Number 164 (Monday, October 23, 1995)]
[Senate]
[Pages S15498-S15499]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. PRESSLER:
  S. 1356. A bill to amend the Shipping Act of 1984 to provide for 
ocean shipping reform, and for other purposes; to the Committee on 
Commerce, Science, and Transportation.


                 the ocean shipping reform act of 1995

 Mr. PRESSLER. Mr. President, I ask unanimous consent that a 
summary of the text of the bill be printed in the Record.
  There being no objection, the summary was ordered to be printed in 
the Record, as follows:

            Summary of the Ocean Shipping Reform Act of 1995


             elimination of the federal maritime commission

       Under the new legislation the Federal Maritime Commission 
     will be eliminated no later than October 1, 1997. The 
     legislation directs that the existing functions and 
     responsibilities of the Commission should begin to be 
     transferred to the Secretary of Transportation, beginning as 
     soon as practical in fiscal year 1996.


    elimination of tariff enforcement and tariff and contract filing

       On January 1, 1997, tariffs shall no longer be enforced 
     and, on June 1, 1997, all requirements that tariffs and 
     service contracts be 

[[Page S 15499]]
     filed with the federal government are eliminated.


                            common carriage

       On June 1, 1997, a new and separate system for common and 
     contract carriage takes effect. Under the common carriage 
     regime, common carriers and conferences will be required to 
     make available a schedule of transportation rates which shall 
     include the rates, terms, and conditions for transportation 
     services not governed by an ocean transportation contract. 
     Upon the request of any person, the schedule of 
     transportation rates shall be provided to the requesting 
     person in writing. Common carriers and conferences may assess 
     a reasonable charge for providing the schedule in writing; 
     however, the charge may not exceed the cost of providing the 
     information requested. Any disputes concerning the 
     applicability of the rates, terms, and conditions provided, 
     or any claim involving false billing, false classification, 
     false weighing, false report of weight, or false measurement 
     must be decided in State or Federal court.


                           contract carriage

       The new legislation eliminates completely the rules and 
     requirements pertaining to service contracts and establishes 
     a broad and deregulated system of ocean transportation 
     contracts. Under this system, one or more common carriers or 
     a conference may enter into an ocean transportation contract 
     with one or more shippers (as discussed below the definition 
     of shipper has been expanded to include shippers' 
     associations and ocean freight forwarders that accept 
     responsibility for the payment of the ocean freight). The 
     duties of the parties to an ocean transportation contract are 
     limited to the duties specified by the terms of the contract, 
     and ocean transportation contracts may not be challenged on 
     the grounds that the contract violates a provision of the 
     Act. The exclusive remedy for an alleged breach of an ocean 
     transportation contract is an action in State or Federal 
     court.
       Ocean transportation contracts are not required to be filed 
     with the federal government as are service contracts, and on 
     January 1, 1998, such contracts may be made on a confidential 
     basis, upon agreement of the parties. Also effective on 
     January 1, 1998 is a requirement that members of a conference 
     agreement may not be prohibited or restricted from agreeing 
     with one or more shippers that the parties to the contract 
     will not disclose the rates, services, terms, or conditions 
     of that contract to any other member of the agreement, to the 
     conference, to any other carrier, shipper, conference, or to 
     any other third party.


                    independent action on contracts

       On January 1, 1997, authorization is provided to the 
     members of conference agreements to enter individual and 
     independent contracts and, on June 1, 1997, the requirement 
     that conferences may not prohibit or restrict conference 
     members from engaging in individual negotiations for 
     contracts and may not issue mandatory rules affecting 
     individual contracts is implemented. However, a conference 
     may require that a member of the conference disclose the 
     existence of an individual contract or negotiations for a 
     contract when the conference enters negotiations for a 
     contract with the same shipper.


                 independent action on conference rates

       On June 1, 1997, the notice requirements concerning 
     independent action on conference common carriage rates is 
     reduced from 10 calendar days to 3 business days.


                       changes to prohibited acts

       All prohibited acts related to rebating are stricken from 
     the Shipping Act on January 1, 1997, and a new 
     antidiscrimination provision is added that prohibits 
     unreasonable discrimination by one or more common carriers 
     against a person, place, port, or shipper, except when 
     entering ocean transportation contracts.
       On June 1, 1997, several other prohibitions concerning 
     discrimination are stricken as is the restriction on the use 
     of loyalty contracts. However, prohibitions concerning 
     retaliation by carriers, the employment of fighting ships 
     unreasonable refusals to deal, refusals to negotiate with 
     shippers' associations, the acceptance of cargo or contracts 
     with non-licensed and bonded ocean freight forwarders, and 
     improper disclosure of information are retained. The 
     legislation adds a new and controversial prohibited act that 
     prevents conferences from subjecting a person, place, port, 
     class or type of shipper, or ocean freight forwarder, to 
     unjust or unreasonable ocean contract provisions.


                  expansion of the meaning of shipper

       The definition of shipper is expanded to include shippers' 
     associations and ocean freight forwarders that accept 
     responsibility for payment of the ocean freight. One of the 
     primary purposes of this change was to ensure that shippers' 
     associations and ocean freight forwarders could enter ocean 
     transportation contracts under the new contract carriage 
     scheme established by the legislation. This change will also 
     afford certain protections to such entities that 
     traditionally have been limited to shippers.


                    ocean freight forwarders/nvoccs

       The new Act collapses the definition of non-vessel-
     operating common carriers (''NVOCCs'') into the definition of 
     ocean freight forwarders and requires all United States ocean 
     freight forwarders to obtain a license and bond (or other 
     surety). This change effectively eliminates the confusing 
     legal distinctions between various types of third parties who 
     perform similar or related functions.


                      other changes to definitions

       The definitions of certain terms that are no longer 
     relevant or necessary under the new statutory scheme are 
     stricken (i.e. ``deferred rebates,'' ``bulk cargo,'' ``forest 
     products,'' ``loyalty contracts'' and ``service contracts'') 
     and a new definition for ``ocean transportation contracts'' 
     is added.


                     controlled carriers amendments

       All requirements that controlled carriers file tariffs with 
     the FMC are eliminated by the new legislation. Additionally, 
     a new provision is added to this section of the `84 Shipping 
     Act that would expand the application of rate scrutiny to not 
     only controlled carriers but to ``ocean common carriers that 
     have been determined by the Secretary to be structurally or 
     financially affiliated with nontransportation entities or 
     organizations (government or private) in such a way as to 
     affect their pricing or marketplace behavior in an unfair, 
     predatory, or anticompetitive way that disadvantages United 
     States carriers.'' The Secretary may make such a 
     determination upon the request of any person or upon his own 
     motion. This provision has been strongly criticized by many 
     foreign carriers.


                   marine terminal operator schedules

       In order to address concerns raised by the ports and other 
     providers of terminal services relative to the elimination of 
     tariff enforcement, a provision is included in the Act that 
     would require marine terminal operators to make a schedule of 
     rates, regulations, and practices available to the public. 
     This schedule shall be enforceable as an implied contract, 
     without proof of actual knowledge of its provisions, for any 
     activity taken by the operator to-- (1) efficiently transfer 
     property between transportation modes; (2) protect property 
     from damage or loss; (3) comply with any governmental 
     requirement; or (4) store property in excess of the terms of 
     any other contract or agreement, if any, entered into by the 
     marine terminal operator.


 policy regarding foreign governments' ownership and control of ocean 
                            common carriers

       The Secretary of Transportation is required under the Act 
     to implement a negotiation strategy to persuade foreign 
     governments to divest themselves of ownership and control of 
     ocean common carriers. The Secretary must develop and submit 
     such strategy to Congress no later than January 1, 1997.


                            other amendments

       Technical and conforming changes were made to the Penalties 
     section of the 1984 Shipping Act and the Foreign Laws and 
     Practices Act. In addition, the requirement concerning anti-
     rebating certificates is eliminated.

                          ____________________