[Congressional Record Volume 144, Number 16 (Thursday, February 26, 1998)]
[Senate]
[Pages S1067-S1068]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE OCEAN SHIPPING REFORM ACT

  Mr. LOTT. Mr. President, I rise today to report on the status of the 
Ocean Shipping Reform bill, S. 414. This bill is one of two very 
important bills in the Senate which are badly needed to reform 
America's maritime industry. The other such bill would implement the 
OECD Shipbuilding Agreement.
  A few months ago, I reported that the Ocean Shipping Act was D.I.W.--
``dead in the water''. Down on my native Gulf Coast, that usually means 
the engines are broken. ``D.I.W'' doesn't mean you're sinking--it just 
means you've got some work to do. It means that everyone's got to roll 
up their sleeves, get down in the engine space, pitch in and get the 
problem fixed.
  And, I'm glad to say, that's just what the maritime industry has 
done. Rolled up their sleeves and fixed the engine of the Ocean 
Shipping Reform bill.
  I am pleased to report that staff members of the shippers, port 
authorities, ocean carriers, and labor unions--all rolled up their 
sleeves and have fixed this legislation.
  It was very important to get everyone working together on this bill. 
The maritime industry is very large and very complex. Given the many 
interests involved, it is not surprising it has required slow, steady, 
and difficult work to get this bill ship-shape and steaming along.
  But that work has been done--and I want to congratulate those who 
have done the heavy repair work. We are now prepared to move quickly to 
pass this legislation.
  Mr. BREAUX. Mr. President, I too am pleased to report on the 
successful efforts to prepare S. 414 for Senate passage. I would concur 
with the Majority Leader that the OECD Shipbuilding Agreement bill is 
badly needed and I believe it is long overdue. I am hopeful that the 
progress made on S. 414 would provide momentum to pass the OECD 
Shipbuilding Trade Agreement implementing legislation.
  At the end of the last session, we prepared a draft Senate floor 
manager's amendment to this bill and circulated it within the industry 
and to members of the Senate. That draft manager's amendment was 
helpful in moving S. 414 along, but it also continued to present some 
serious problems to various sectors of the maritime community.
  Accordingly, over the past several months, representatives of those 
affected maritime sectors have worked to find an acceptable solution 
and to resolve their differences. With the Commerce Committee staff's 
help and guidance, a package of modifications to that original 
manager's amendment have been agreed upon.
  The diverse segments of the industry--U.S. ocean carriers, foreign 
ocean carriers, shippers, labor, and the ports--are now in agreement on 
how to reform and reduce government's role in international ocean 
transportation. More importantly, all these industry sectors have 
agreed on meaningful deregulation of the ocean shipping industry to 
allow greater choice, flexibility, and competition in this 
transportation mode.
  Let me say that again. Mr. President, all these industry sectors are 
now in agreement. Although it is a delicate balance, it is still an 
agreement.

[[Page S1068]]

  This agreement will lead to greater efficiency in providing ocean 
transportation services to U.S. importers and exporters, and will 
benefit American consumers. U.S. importers and exporters will now, 
under the reforms of S. 414, be able to enter into more comprehensive 
and productive contractual relationships with ocean carriers. At the 
same time, S. 414 provides important protections for ports and labor 
which will safeguard their interests in a more deregulated environment.
  Mrs. HUTCHISON. Mr. President, I'd like to join my colleagues in 
commending the industry representatives for their efforts in crafting 
the modifications which have allowed them to join together in support 
of ocean shipping reform. The scope of industry support is impressive 
and includes U.S. and foreign flag carriers, the National Industrial 
Transportation League, the American Association of Port Authorities, 
and organized labor.
  I would like to detail some of the modifications to the manager's 
amendment of S. 414. I believe these modifications show how much 
thought and work have gone into this agreement. Those modifications 
being made to the manager's amendment of S. 414 are as follows:
  1. Amend section 8(c) of the 1984 Act to provide that all service 
contracts are treated in a uniform manner. Individual ocean carrier and 
agreement service contracts would be filed confidentially with the FMC, 
and an abbreviated set of essential terms would be made publicly 
available. A similar uniform method of contract regulation was 
unanimously adopted by the Senate Committee on Commerce, Science, and 
Transportation for S. 414 and was included in the bill as reported. 
This addresses the core concern and goal of shippers and various 
carriers who want to be able to enter into contracts with confidential 
rates and service terms. At the same time, it allows for some 
transparency, thereby addressing the concerns of ports, labor and some 
small shippers and carrier interests.
  2. Revise section 8(c) of the 1984 Act to provide for a mechanism for 
labor organizations to obtain information on the movement of cargo in 
the dock or port area that would otherwise not be disclosed as a result 
of these amended service contract publication requirements. This will 
help these organizations to continue to enforce their collective 
bargaining agreements with ocean carriers.
  3. Continue the existing requirement that NVOCCs offer their services 
to shippers pursuant to tariffs, instead of service contracts. NVOCCs, 
as shippers, are free to pursue the purchase of ocean carrier service 
through the amended service contract process.
  4. Amend section 10(c)(4) of the 1984 Act to permit ocean carriers to 
jointly negotiate U.S. inland transportation rates and services with 
truck, rail or air carriers when such negotiations are subject to pro-
competitive restrictions, such as the antitrust laws. Today, ocean 
carriers cooperate with respect to the utilization of space on vessels. 
Enabling them to cooperate in connection with rail service, for 
example, will allow for greater efficiencies. Such cooperation could 
improve movement of containers in and out of the port area.
  5. Revise section 13(f) of the 1984 Act to make clear that, while a 
common carrier may be penalized for charging shippers less than its 
tariff or service contract rates, a carrier should not be able to 
collect from the shipper the difference between the tariff or contract 
rate and the rate actually charged and agreed upon in writing. The 
collection of these so-called ``undercharges'' was a major problem for 
shippers when the trucking industry was deregulated. We want to avoid 
any recurrence of that problem in connection with ocean shipping 
reform.
  Finally, we will clarify that members of an agreement will not be 
penalized under the revised 1984 Act because a member divulges 
confidential service contract information. The offending member will be 
liable for breach of contract damages, but the government should have 
no role in policing the confidential agreements of carriers and 
shippers. While no revision to S. 414 is needed to accomplish this 
objective, an appropriate statement of clarification will be made by 
the managers of the bill.
  Mr. President, again let me express my appreciation to all those who 
have worked on and support these modifications and the passage of 
meaningful ocean shipping reform. I and my colleagues, as well as the 
maritime industry, look forward to enacting this bill this year.

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