[Congressional Record Volume 144, Number 101 (Friday, July 24, 1998)]
[Extensions of Remarks]
[Pages E1435-E1436]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    IN SUPPORT OF THE SHIPPING RELIEF FOR AGRICULTURE ACT, H.R. 4236

                                 ______
                                 

                            HON. NICK SMITH

                              of michigan

                    in the house of representatives

                         Friday, July 24, 1998

  Mr. SMITH of Michigan. Mr. Speaker, I rise in support of the Shipping 
Relief for Agriculture Act, H.R. 4236. U.S. domestic maritime law is 
embodied in section 27 of the Merchant Marine Act, known as the Jones 
Act. The Jones Act requires that all cargo transported from one U.S. 
port to another (even via a foreign port) must travel on vessels built, 
owned, manned, and flagged in the United States. While initially 
sounding pro-American, the Jones Act has not protected the fleet. 
According to the U.S. Maritime Administration, there are only 119 deep-
sea ships left in the domestic fleet (down from over 2,500 in 1945) and 
only three of these are dry bulk vessels.
  Only two bulkers have been built in U.S. shipyards in the last 35 
years. To contract for a new ship would cost an American operator over 
three times the international market rate before any type of export 
subsidy was applied. This practically assures no new bulkers will be

[[Page E1436]]

built in this country. It is time that we stop fooling ourselves that a 
renaissance in U.S. shipbuilding is just around the corner.
  Because of the Jones Act, U.S. agricultural producers today do not 
have access to domestic deep-sea transportation options available to 
their foreign competitors. There are no bulk carriers operating on 
either coast of the United States, in the Great Lakes, nor out to Guam, 
Alaska, Puerto Rico, or Hawaii. This puts American producers at a 
competitive disadvantage because foreign producers are able to ship 
their products to American markets at competitive international rates 
whereas U.S. producers are not.
  American agricultural producers also need access to deep-sea 
transportation options because other modes of transportation are 
saturated. Last year's rail woes would have been averted if just 2% of 
domestic agricultural production could have traveled by ocean-going 
vessel. With an expected record harvest on the way, the bottlenecks and 
congestion of last year will in all likelihood be revisited. Burlington 
and Union Pacific have already notified agricultural shippers to expect 
delays. This raises rail rates to artificially high levels at a time 
when commodity prices are already depressed--directly impacting farm 
income.
  The Shipping Relief for Agricultural Act will eliminate the U.S. 
build requirement for deepwater dry bulk vessels for the carriage of 
agricultural products, dry bulk cargo, and forest products. All vessels 
would still be required to obey all U.S. law, including environmental, 
safety, labor, and tax regulations. This bill brings more ships to the 
U.S. fleet, allows U.S. Agricultural shippers access to ships, and will 
also provide much needed jobs for the American Merchant Marine.

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