[Congressional Record Volume 144, Number 108 (Tuesday, August 4, 1998)]
[House]
[Pages H7011-H7019]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1045
OCEAN SHIPPING REFORM ACT OF 1998
Mr. SHUSTER. Mr. Speaker, I move to suspend the rules and pass the
Senate bill (S. 414) to amend the Shipping Act of 1984 to encourage
competition in international shipping and growth of United States
exports, and for other purposes, as amended.
The Clerk read as follows:
S. 414
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Ocean Shipping Reform Act of
1998''.
SEC. 2. EFFECTIVE DATE.
Except as otherwise expressly provided in this Act, this
Act and the amendments made by this Act take effect May 1,
1999.
TITLE I--AMENDMENTS TO THE SHIPPING ACT OF 1984
SEC. 101. PURPOSE.
Section 2 of the Shipping Act of 1984 (46 U.S.C. App. 1701)
is amended by--
(1) striking ``and'' after the semicolon in paragraph (2);
(2) striking ``needs.'' in paragraph (3) and inserting
``needs; and'';
(3) adding at the end thereof the following:
``(4) to promote the growth and development of United
States exports through competitive and efficient ocean
transportation and by placing a greater reliance on the
marketplace.''.
SEC. 102. DEFINITIONS.
Section 3 of the Shipping Act of 1984 (46 U.S.C. App. 1702)
is amended by--
(1) striking ``the government under whose registry the
vessels of the carrier operate;'' in paragraph (8) and
inserting ``a government;'';
(2) striking paragraph (9) and inserting the following:
``(9) `deferred rebate' means a return by a common carrier
of any portion of freight money to a shipper as a
consideration for that shipper giving all, or any portion, of
its shipments to that or any other common carrier over a
fixed period of time, the payment of which is deferred beyond
the completion of service for which it is paid, and is made
only if the shipper has agreed to make a further shipment or
shipments with that or any other common carrier.'';
(3) striking paragraph (10) and redesignating paragraphs
(11) through (27) as paragraphs (10) through (26);
(4) striking ``in an unfinished or semifinished state that
require special handling moving in lot sizes too large for a
container,'' in paragraph (10), as redesignated;
(5) striking ``paper board in rolls, and paper in rolls.''
in paragraph (10) as redesignated and inserting ``paper and
paper board in rolls or in pallet or skid-sized sheets.'';
(6) striking ``conference, other than a service contract or
contract based upon time-volume rates,'' in paragraph (13) as
redesignated and inserting ``agreement'';
(7) striking ``conference.'' in paragraph (13) as
redesignated and inserting ``agreement and the contract
provides for a deferred rebate arrangement.'';
(8) by striking ``carrier.'' in paragraph (14) as
redesignated and inserting ``carrier, or in connection with a
common carrier and a water carrier subject to subchapter II
of chapter 135 of title 49, United States Code.'';
(9) striking paragraph (16) as redesignated and
redesignating paragraphs (17) through (26) as redesignated as
paragraphs (16) through (25), respectively;
(10) striking paragraph (17), as redesignated, and
inserting the following:
``(17) `ocean transportation intermediary' means an ocean
freight forwarder or a non-vessel-operating common carrier.
For purposes of this paragraph, the term--
``(A) `ocean freight forwarder' means a person that--
``(i) in the United States, dispatches shipments from the
United States via a common carrier and books or otherwise
arranges space for those shipments on behalf of shippers; and
``(ii) processes the documentation or performs related
activities incident to those shipments; and
``(B) `non-vessel-operating common carrier' means a common
carrier that does not operate the vessels by which the ocean
transportation is provided, and is a shipper in its
relationship with an ocean common carrier.'';
(11) striking paragraph (19), as redesignated and inserting
the following:
[[Page H7012]]
``(19) `service contract' means a written contract, other
than a bill of lading or a receipt, between one or more
shippers and an individual ocean common carrier or an
agreement between or among ocean common carriers in which the
shipper or shippers makes a commitment to provide a certain
volume or portion of cargo over a fixed time period, and the
ocean common carrier or the agreement commits to a certain
rate or rate schedule and a defined service level, such as
assured space, transit time, port rotation, or similar
service features. The contract may also specify provisions in
the event of nonperformance on the part of any party.''; and
(12) striking paragraph (21), as redesignated, and
inserting the following:
``(21) `shipper' means--
``(A) a cargo owner;
``(B) the person for whose account the ocean transportation
is provided;
``(C) the person to whom delivery is to be made;
``(D) a shippers' association; or
``(E) an ocean transportation intermediary, as defined in
paragraph (17)(B) of this section, that accepts
responsibility for payment of all charges applicable under
the tariff or service contract.''.
SEC. 103. AGREEMENTS WITHIN THE SCOPE OF THE ACT.
(a) Ocean Common Carriers.--Section 4(a) of the Shipping
Act of 1984 (46 U.S.C. App. 1703(a)) is amended by--
(1) striking ``operators or non-vessel-operating common
carriers;'' in paragraph (5) and inserting ``operators;'';
(2) striking ``and'' in paragraph (6) and inserting ``or'';
and
(3) striking paragraph (7) and inserting the following:
``(7) discuss and agree on any matter related to service
contracts.''.
(b) Marine Terminal Operators.--Section 4(b) of that Act
(46 U.S.C. App. 1703(b)) is amended by--
(1) striking ``(to the extent the agreements involve ocean
transportation in the foreign commerce of the United
States)'';
(2) striking ``and'' in paragraph (1) and inserting ``or'';
and
(3) striking ``arrangements.'' in paragraph (2) and
inserting ``arrangements, to the extent that such agreements
involve ocean transportation in the foreign commerce of the
United States.''.
SEC. 104. AGREEMENTS.
(a) In General.--Section 5 of the Shipping Act of 1984 (46
U.S.C. App. 1704) is amended by--
(1) striking subsection (b)(8) and inserting the following:
``(8) provide that any member of the conference may take
independent action on any rate or service item upon not more
than 5 calendar days' notice to the conference and that,
except for exempt commodities not published in the conference
tariff, the conference will include the new rate or service
item in its tariff for use by that member, effective no later
than 5 calendar days after receipt of the notice, and by any
other member that notifies the conference that it elects to
adopt the independent rate or service item on or after its
effective date, in lieu of the existing conference tariff
provision for that rate or service item;
(2) redesignating subsections (c) through (e) as
subsections (d) through (f); and
(3) inserting after subsection (b) the following:
``(c) Ocean Common Carrier Agreements.--An ocean common
carrier agreement may not--
``(1) prohibit or restrict a member or members of the
agreement from engaging in negotiations for service contracts
with 1 or more shippers;
``(2) require a member or members of the agreement to
disclose a negotiation on a service contract, or the terms
and conditions of a service contract, other than those terms
or conditions required to be published under section 8(c)(3)
of this Act; or
``(3) adopt mandatory rules or requirements affecting the
right of an agreement member or agreement members to
negotiate and enter into service contracts.
An agreement may provide authority to adopt voluntary
guidelines relating to the terms and procedures of an
agreement member's or agreement members' service contracts if
the guidelines explicitly state the right of members of the
agreement not to follow the guidelines. These guidelines
shall be confidentially submitted to the Commission.''.
(b) Application.--
(1) Subsection (e) of section 5 of that Act, as
redesignated, is amended by striking ``this Act, the Shipping
Act, 1916, and the Intercoastal Shipping Act, 1933, do'' and
inserting ``this Act does''; and
(2) Subsection (f) of section 5 of that Act, as
redesignated, is amended by--
(A) striking ``and the Shipping Act, 1916, do'' and
inserting ``does'';
(B) striking ``or the Shipping Act, 1916,''; and
(C) inserting ``or are essential terms of a service
contract'' after ``tariff''.
SEC. 105. EXEMPTION FROM ANTITRUST LAWS.
Section 7 of the Shipping Act of 1984 (46 U.S.C. App. 1706)
is amended by--
(1) inserting ``or publication'' in paragraph (2) of
subsection (a) after ``filing'';
(2) striking ``or'' at the end of subsection (b)(2);
(3) striking ``States.'' at the end of subsection (b)(3)
and inserting ``States; or''; and
(4) adding at the end of subsection (b) the following:
``(4) to any loyalty contract.''.
SEC. 106. TARIFFS.
(a) In General.--Section 8(a) of the Shipping Act of 1984
(46 U.S.C. App. 1707(a)) is amended by--
(1) inserting ``new assembled motor vehicles,'' after
``scrap,'' in paragraph (1);
(2) striking ``file with the Commission, and'' in paragraph
(1);
(3) striking ``inspection,'' in paragraph (1) and inserting
``inspection in an automated tariff system,'';
(4) striking ``tariff filings'' in paragraph (1) and
inserting ``tariffs'';
(5) striking ``freight forwarder'' in paragraph (1)(C) and
inserting ``transportation intermediary, as defined in
section 3(17)(A),'';
(6) striking ``and'' at the end of paragraph (1)(D);
(7) striking ``loyalty contract,'' in paragraph (1)(E);
(8) striking ``agreement.'' in paragraph (1)(E) and
inserting ``agreement; and'';
(9) adding at the end of paragraph (1) the following:
``(F) include copies of any loyalty contract, omitting the
shipper's name.''; and
(10) striking paragraph (2) and inserting the following:
``(2) Tariffs shall be made available electronically to any
person, without time, quantity, or other limitation, through
appropriate access from remote locations, and a reasonable
charge may be assessed for such access. No charge may be
assessed a Federal agency for such access.''.
(b) Service Contracts.--Subsection (c) of that section is
amended to read as follows:
``(c) Service Contracts.--
``(1) In general.--An individual ocean common carrier or an
agreement between or among ocean common carriers may enter
into a service contract with one or more shippers subject to
the requirements of this Act. The exclusive remedy for a
breach of a contract entered into under this subsection shall
be an action in an appropriate court, unless the parties
otherwise agree. In no case may the contract dispute
resolution forum be controlled by or in any way affiliated
with a controlled carrier as defined in section 3(8) of this
Act, or by the government which owns or controls the carrier.
``(2) Filing requirements.--Except for service contracts
dealing with bulk cargo, forest products, recycled metal
scrap, new assembled motor vehicles, waste paper, or paper
waste, each contract entered into under this subsection by an
individual ocean common carrier or an agreement shall be
filed confidentially with the Commission. Each service
contract shall include the following essential terms--
``(A) the origin and destination port ranges;
``(B) the origin and destination geographic areas in the
case of through intermodal movements;
``(C) the commodity or commodities involved;
``(D) the minimum volume or portion;
``(E) the line-haul rate;
``(F) the duration;
``(G) service commitments; and
``(H) the liquidated damages for nonperformance, if any.
``(3) Publication of certain terms.--When a service
contract is filed confidentially with the Commission, a
concise statement of the essential terms described in
paragraphs 2 (A), (C), (D), and (F) shall be published and
made available to the general public in tariff format.
``(4) Disclosure of certain terms.--
``(A) An ocean common carrier, which is a party to or is
subject to the provisions of a collective bargaining
agreement with a labor organization, shall, in response to a
written request by such labor organization, state whether it
is responsible for the following work at dock areas and
within port areas in the United States with respect to cargo
transportation under a service contract described in
paragraph (1) of this subsection--
``(i) the movement of the shipper's cargo on a dock area or
within the port area or to or from railroad cars on a dock
area or within the port area;
``(ii) the assignment of intraport carriage of the
shipper's cargo between areas on a dock or within the port
area;
``(iii) the assignment of the carriage of the shipper's
cargo between a container yard on a dock area or within the
port area and a rail yard adjacent to such container yard;
and
``(iv) the assignment of container freight station work and
container maintenance and repair work performed at a dock
area or within the port area.
``(B) The common carrier shall provide the information
described in subparagraph (A) of this paragraph to the
requesting labor organization within a reasonable period of
time.
``(C) This paragraph requires the disclosure of information
by an ocean common carrier only if there exists an applicable
and otherwise lawful collective bargaining agreement which
pertains to that carrier. No disclosure made by an ocean
common carrier shall be deemed to be an admission or
agreement that any work is covered by a collective bargaining
agreement. Any dispute regarding whether any work is covered
by a collective bargaining agreement and the responsibility
of the ocean common carrier under such agreement shall be
resolved solely in accordance with the dispute resolution
procedures contained in the collective bargaining agreement
and the National Labor Relations Act, and without reference
to this paragraph.
[[Page H7013]]
``(D) Nothing in this paragraph shall have any effect on
the lawfulness or unlawfulness under this Act, the National
Labor Relations Act, the Taft-Hartley Act, the Federal Trade
Commission Act, the antitrust laws, or any other Federal or
State law, or any revisions or amendments thereto, of any
collective bargaining agreement or element thereof, including
any element that constitutes an essential term of a service
contract under this subsection.
``(E) For purposes of this paragraph the terms `dock area'
and `within the port area' shall have the same meaning and
scope as in the applicable collective bargaining agreement
between the requesting labor organization and the carrier.''.
(c) Rates.--Subsection (d) of that section is amended by--
(1) striking the subsection caption and inserting ``(d)
Tariff Rates.--'';
(2) striking ``30 days after filing with the Commission.''
in the first sentence and inserting ``30 calendar days after
publication.'';
(3) inserting ``calendar'' after ``30'' in the next
sentence; and
(4) striking ``publication and filing with the
Commission.'' in the last sentence and inserting
``publication.''.
(d) Refunds.--Subsection (e) of that section is amended
by--
(1) striking ``tariff of a clerical or administrative
nature or an error due to inadvertence'' in paragraph (1) and
inserting a comma; and
(2) striking ``file a new tariff,'' in paragraph (1) and
inserting ``publish a new tariff, or an error in quoting a
tariff,'';
(3) striking ``refund, filed a new tariff with the
Commission'' in paragraph (2) and inserting ``refund for an
error in a tariff or a failure to publish a tariff, published
a new tariff'';
(4) inserting ``and'' at the end of paragraph (2); and
(5) striking paragraph (3) and redesignating paragraph (4)
as paragraph (3).
(e) Marine Terminal Operator Schedules.--Subsection (f) of
that section is amended to read as follows:
``(f) Marine Terminal Operator Schedules.--A marine
terminal operator may make available to the public, subject
to section 10(d) of this Act, a schedule of rates,
regulations, and practices, including limitations of
liability for cargo loss or damage, pertaining to receiving,
delivering, handling, or storing property at its marine
terminal. Any such schedule made available to the public
shall be enforceable by an appropriate court as an implied
contract without proof of actual knowledge of its
provisions.''.
(f) Automated Tariff System Requirements; Form.--Section 8
of that Act is amended by adding at the end the following:
``(g) Regulations.--The Commission shall by regulation
prescribe the requirements for the accessibility and accuracy
of automated tariff systems established under this section.
The Commission may, after periodic review, prohibit the use
of any automated tariff system that fails to meet the
requirements established under this section. The Commission
may not require a common carrier to provide a remote terminal
for access under subsection (a)(2). The Commission shall by
regulation prescribe the form and manner in which marine
terminal operator schedules authorized by this section shall
be published.''.
SEC. 107. AUTOMATED TARIFF FILING AND INFORMATION SYSTEM.
Section 502 of the High Seas Driftnet Fisheries Enforcement
Act (46 U.S.C. App. 1707a) is repealed.
SEC. 108. CONTROLLED CARRIERS.
Section 9 of the Shipping Act of 1984 (46 U.S.C. App. 1708)
is amended by--
(1) striking ``service contracts filed with the
Commission'' in the first sentence of subsection (a) and
inserting ``service contracts, or charge or assess rates,'';
(2) striking ``or maintain'' in the first sentence of
subsection (a) and inserting ``maintain, or enforce'';
(3) striking ``disapprove'' in the third sentence of
subsection (a) and inserting ``prohibit the publication or
use of''; and
(4) striking ``filed by a controlled carrier that have been
rejected, suspended, or disapproved by the Commission'' in
the last sentence of subsection (a) and inserting ``that have
been suspended or prohibited by the Commission'';
(5) striking ``may take into account appropriate factors
including, but not limited to, whether--'' in subsection (b)
and inserting ``shall take into account whether the rates or
charges which have been published or assessed or which would
result from the pertinent classifications, rules, or
regulations are below a level which is fully compensatory to
the controlled carrier based upon that carrier's actual costs
or upon its constructive costs. For purposes of the preceding
sentence, the term `constructive costs' means the costs of
another carrier, other than a controlled carrier, operating
similar vessels and equipment in the same or a similar trade.
The Commission may also take into account other appropriate
factors, including but not limited to, whether--'';
(6) striking paragraph (1) of subsection (b) and
redesignating paragraphs (2), (3), and (4) as paragraphs (1),
(2), and (3), respectively;
(7) striking ``filed'' in paragraph (1) as redesignated and
inserting ``published or assessed'';
(8) striking ``filing with the Commission.'' in subsection
(c) and inserting ``publication.'';
(9) striking ``Disapproval of Rates.--'' in subsection (d)
and inserting ``Prohibition of Rates.--Within 120 days after
the receipt of information requested by the Commission under
this section, the Commission shall determine whether the
rates, charges, classifications, rules, or regulations of a
controlled carrier may be unjust and unreasonable.'';
(10) striking ``filed'' in subsection (d) and inserting
``published or assessed'';
(11) striking ``may issue'' in subsection (d) and inserting
``shall issue'';
(12) striking ``disapproved.'' in subsection (d) and
inserting ``prohibited.'';
(13) striking ``60'' in subsection (d) and inserting
``30'';
(14) inserting ``controlled'' after ``affected'' in
subsection (d);
(15) striking ``file'' in subsection (d) and inserting
``publish'';
(16) striking ``disapproval'' in subsection (e) and
inserting ``prohibition'';
(17) inserting ``or'' after the semicolon in subsection
(f)(1);
(18) striking paragraphs (2), (3), and (4) of subsection
(f); and
(19) redesignating paragraph (5) of subsection (f) as
paragraph (2).
SEC. 109. PROHIBITED ACTS.
(a) Section 10(b) of the Shipping Act of 1984 (46 U.S.C.
App. 1709(b)) is amended by--
(1) striking paragraphs (1) through (3);
(2) redesignating paragraph (4) as paragraph (1);
(3) inserting after paragraph (1), as redesignated, the
following:
``(2) provide service in the liner trade that--
``(A) is not in accordance with the rates, charges,
classifications, rules, and practices contained in a tariff
published or a service contract entered into under section 8
of this Act unless excepted or exempted under section 8(a)(1)
or 16 of this Act; or
``(B) is under a tariff or service contract which has been
suspended or prohibited by the Commission under section 9 of
this Act or the Foreign Shipping Practices Act of 1988 (46
U.S.C. App. 1710a);'';
(4) redesignating paragraphs (5) and (6) as paragraphs (3)
and (4), respectively;
(5) striking ``except for service contracts,'' in paragraph
(4), as redesignated, and inserting ``for service pursuant to
a tariff,'';
(6) striking ``rates;'' in paragraph (4)(A), as
redesignated, and inserting ``rates or charges;'';
(7) inserting after paragraph (4), as redesignated, the
following:
``(5) for service pursuant to a service contract, engage in
any unfair or unjustly discriminatory practice in the matter
of rates or charges with respect to any port;'';
(8) redesignating paragraphs (7) and (8) as paragraphs (6)
and (7), respectively;
(9) striking paragraph (6) as redesignated and inserting
the following:
``(6) use a vessel or vessels in a particular trade for the
purpose of excluding, preventing, or reducing competition by
driving another ocean common carrier out of that trade;'';
(10) striking paragraphs (9) through (13) and inserting the
following:
``(8) for service pursuant to a tariff, give any undue or
unreasonable preference or advantage or impose any undue or
unreasonable prejudice or disadvantage;
``(9) for service pursuant to a service contract, give any
undue or unreasonable preference or advantage or impose any
undue or unreasonable prejudice or disadvantage with respect
to any port;
``(10) unreasonably refuse to deal or negotiate;'';
(11) redesignating paragraphs (14), (15), and (16) as
paragraphs (11), (12), and (13), respectively;
(12) striking ``a non-vessel-operating common carrier'' in
paragraphs (11) and (12) as redesignated and inserting ``an
ocean transportation intermediary'';
(13) striking ``sections 8 and 23'' in paragraphs (11) and
(12) as redesignated and inserting ``sections 8 and 19'';
(14) striking ``or in which an ocean transportation
intermediary is listed as an affiliate'' in paragraph (12),
as redesignated;
(15) striking ``Act;'' in paragraph (12), as redesignated,
and inserting ``Act, or with an affiliate of such ocean
transportation intermediary;''
(16) striking ``paragraph (16)'' in the matter appearing
after paragraph (13), as redesignated, and inserting
``paragraph (13)''; and
(17) inserting ``the Commission,'' after ``United States,''
in such matter.
(b) Section 10(c) of the Shipping Act of 1984 (46 U.S.C.
App. 1709(c)) is amended by--
(1) striking ``non-ocean carriers'' in paragraph (4) and
inserting ``non-ocean carriers, unless such negotiations and
any resulting agreements are not in violation of the
antitrust laws and are consistent with the purposes of this
Act'';
(2) striking ``freight forwarder'' in paragraph (5) and
inserting ``transportation intermediary, as defined by
section 3(17)(A) of this Act,'';
(3) striking ``or'' at the end of paragraph (5);
(4) striking ``contract.'' in paragraph (6) and inserting
``contract;''; and
(5) adding at the end the following:
``(7) for service pursuant to a service contract, engage in
any unjustly discriminatory practice in the matter of rates
or charges with respect to any locality, port, or persons due
to those persons' status as shippers' associations or ocean
transportation intermediaries; or
[[Page H7014]]
``(8) for service pursuant to a service contract, give any
undue or unreasonable preference or advantage or impose any
undue or unreasonable prejudice or disadvantage with respect
to any locality, port, or persons due to those persons'
status as shippers' associations or ocean transportation
intermediaries;''.
(c) Section 10(d) of the Shipping Act of 1984 (46 U.S.C.
App. 1709(d)) is amended by--
(1) striking ``freight forwarders,'' and inserting
``transportation intermediaries,'';
(2) striking ``freight forwarder,'' in paragraph (1) and
inserting ``transportation intermediary,'';
(3) striking ``subsection (b)(11), (12), and (16)'' and
inserting ``subsections (b)(10) and (13)''; and
(4) adding at the end thereof the following:
``(4) No marine terminal operator may give any undue or
unreasonable preference or advantage or impose any undue or
unreasonable prejudice or disadvantage with respect to any
person.
``(5) The prohibition in subsection (b)(13) of this section
applies to ocean transportation intermediaries, as defined by
section 3(17)(A) of this Act.''.
SEC. 110. COMPLAINTS, INVESTIGATIONS, REPORTS, AND
REPARATIONS.
Section 11(g) of the Shipping Act of 1984 (46 U.S.C. App.
1710(g)) is amended by--
(1) striking ``section 10(b)(5) or (7)'' and inserting
``section 10(b)(3) or (6)''; and
(2) striking ``section 10(b)(6)(A) or (B)'' and inserting
``section 10(b)(4)(A) or (B).''.
SEC. 111. FOREIGN SHIPPING PRACTICES ACT OF 1988.
Section 10002 of the Foreign Shipping Practices Act of 1988
(46 U.S.C. App. 1710a) is amended by--
(1) striking `` `non-vessel-operating common carrier','' in
subsection (a)(1) and inserting `` `ocean transportation
intermediary','';
(2) striking ``forwarding and'' in subsection (a)(4);
(3) striking ``non-vessel-operating common carrier'' in
subsection (a)(4) and inserting ``ocean transportation
intermediary services and'';
(4) striking ``freight forwarder,'' in subsections (c)(1)
and (d)(1) and inserting ``transportation intermediary,'';
(5) striking ``filed with the Commission,'' in subsection
(e)(1)(B) and inserting ``and service contracts,'';
(6) inserting ``and service contracts'' after ``tariffs''
the second place it appears in subsection (e)(1)(B); and
(7) striking ``(b)(5)'' each place it appears in subsection
(h) and inserting ``(b)(6)''.
SEC. 112. PENALTIES.
(a) Section 13(a) of the Shipping Act of 1984 (46 U.S.C.
App. 1712(a)) is amended by adding at the end thereof the
following: ``The amount of any penalty imposed upon a common
carrier under this subsection shall constitute a lien upon
the vessels operated by that common carrier and any such
vessel may be libeled therefore in the district court of the
United States for the district in which it may be found.''.
(b) Section 13(b) of the Shipping Act of 1984 (46 U.S.C.
App. 1712(b)) is amended by--
(1) striking ``section 10(b)(1), (2), (3), (4), or (8)'' in
paragraph (1) and inserting ``section 10(b)(1), (2), or
(7)'';
(2) by redesignating paragraphs (4), (5), and (6) as
paragraphs (5), (6), and (7), respectively;
(3) inserting before paragraph (5), as redesignated, the
following:
``(4) If the Commission finds, after notice and an
opportunity for a hearing, that a common carrier has failed
to supply information ordered to be produced or compelled by
subpoena under section 12 of this Act, the Commission may
request that the Secretary of the Treasury refuse or revoke
any clearance required for a vessel operated by that common
carrier. Upon request by the Commission, the Secretary of the
Treasury shall, with respect to the vessel concerned, refuse
or revoke any clearance required by section 4197 of the
Revised Statutes of the United States (46 U.S.C. App. 91).'';
and
(4) striking ``paragraphs (1), (2), and (3)'' in paragraph
(6), as redesignated, and inserting ``paragraphs (1), (2),
(3), and (4)''.
(c) Section 13(f)(1) of the Shipping Act of 1984 (46 U.S.C.
App. 1712(f)(1)) is amended by--
(1) striking ``or (b)(4)'' and inserting ``or (b)(2)'';
(2) striking ``(b)(1), (4)'' and inserting ``(b)(1), (2)'';
and
(3) adding at the end thereof the following ``Neither the
Commission nor any court shall order any person to pay the
difference between the amount billed and agreed upon in
writing with a common carrier or its agent and the amount set
fourth in any tariff or service contract by that common
carrier for the transportation service provided.''.
SEC. 113. REPORTS AND CERTIFICATES.
Section 15 of the Shipping Act of 1984 (46 U.S.C. App.
1714) is amended by--
(1) striking ``and certificates'' in the section heading;
(2) striking ``(a) Reports.--'' in the subsection heading
for subsection (a); and
(3) striking subsection (b).
SEC. 114. EXEMPTIONS.
Section 16 of the Shipping Act of 1984 (46 U.S.C. App.
1715) is amended by striking ``substantially impair effective
regulation by the Commission, be unjustly discriminatory,
result in a substantial reduction in competition, or be
detrimental to commerce.'' and inserting ``result in
substantial reduction in competition or be detrimental to
commerce.''.
SEC. 115. AGENCY REPORTS AND ADVISORY COMMISSION.
Section 18 of the Shipping Act of 1984 (46 U.S.C. App.
1717) is repealed.
SEC. 116. OCEAN FREIGHT FORWARDERS.
Section 19 of the Shipping Act of 1984 (46 U.S.C. App.
1718) is amended by--
(1) striking ``freight forwarders'' in the section caption
and inserting ``transportation intermediaries'';
(2) striking subsection (a) and inserting the following:
``(a) License.--No person in the United States may act as
an ocean transportation intermediary unless that person holds
a license issued by the Commission. The Commission shall
issue an intermediary's license to any person that the
Commission determines to be qualified by experience and
character to act as an ocean transportation intermediary.'';
(3) redesignating subsections (b), (c), and (d) as
subsections (c), (d), and (e), respectively;
(4) inserting after subsection (a) the following:
``(b) Financial Responsibility.--
``(1) No person may act as an ocean transportation
intermediary unless that person furnishes a bond, proof of
insurance, or other surety in a form and amount determined by
the Commission to insure financial responsibility that is
issued by a surety company found acceptable by the Secretary
of the Treasury.
``(2) A bond, insurance, or other surety obtained pursuant
to this section--
``(A) shall be available to pay any order for reparation
issued pursuant to section 11 or 14 of this Act, or any
penalty assessed pursuant to section 13 of this Act;
``(B) may be available to pay any claim against an ocean
transportation intermediary arising from its transportation-
related activities described in section 3(17) of this Act
with the consent of the insured ocean transportation
intermediary and subject to review by the surety company, or
when the claim is deemed valid by the surety company after
the ocean transportation intermediary has failed to respond
to adequate notice to address the validity of the claim; and
``(C) shall be available to pay any judgment for damages
against an ocean transportation intermediary arising from its
transportation-related activities under section 3(17) of this
Act, provided the claimant has first attempted to resolve the
claim pursuant to subparagraph (B) of this paragraph and the
claim has not been resolved within a reasonable period of
time.
``(3) The Commission shall prescribe regulations for the
purpose of protecting the interests of claimants, ocean
transportation intermediaries, and surety companies with
respect to the process of pursuing claims against ocean
transportation intermediary bonds, insurance, or sureties
through court judgments. The regulations shall provide that a
judgment for monetary damages may not be enforced except to
the extent that the damages claimed arise from the
transportation-related activities of the insured ocean
transportation intermediary, as defined by the Commission.
``(4) An ocean transportation intermediary not domiciled in
the United States shall designate a resident agent in the
United States for receipt of service of judicial and
administrative process, including subpoenas.'';
(5) striking, each place such term appears--
(A) ``freight forwarder'' and inserting ``transportation
intermediary'';
(B) ``a forwarder's'' and inserting ``an intermediary's'';
(C) ``forwarder'' and inserting ``intermediary''; and
(D) ``forwarding'' and inserting ``intermediary'';
(6) striking ``a bond in accordance with subsection
(a)(2).'' in subsection (c), as redesignated, and inserting
``a bond, proof of insurance, or other surety in accordance
with subsection (b)(1).'';
(7) striking ``Forwarders.--'' in the caption of
subsection (e), as redesignated, and inserting
``Intermediaries.--'';
(8) striking ``intermediary'' the first place it appears in
subsection (e)(1), as redesignated and as amended by
paragraph (5)(A), and inserting ``intermediary, as defined in
section 3(17)(A) of this Act,'';
(9) striking ``license'' in paragraph (1) of subsection
(e), as redesignated, and inserting ``license, if required by
subsection (a),'';
(10) striking paragraph (3) of subsection (e), as
redesignated, and redesignating paragraph (4) as paragraph
(3); and
(11) adding at the end of subsection (e), as redesignated,
the following:
``(4) No conference or group of 2 or more ocean common
carriers in the foreign commerce of the United States that is
authorized to agree upon the level of compensation paid to an
ocean transportation intermediary, as defined in section
3(17)(A) of this Act, may--
``(A) deny to any member of the conference or group the
right, upon notice of not more than 5 calendar days, to take
independent action on any level of compensation paid to an
ocean transportation intermediary, as so defined; or
``(B) agree to limit the payment of compensation to an
ocean transportation intermediary, as so defined, to less
than 1.25 percent of the aggregate of all rates and charges
which are applicable under a tariff and which
[[Page H7015]]
are assessed against the cargo on which the intermediary
services are provided.''.
SEC. 117. CONTRACTS, AGREEMENTS, AND LICENSES UNDER PRIOR
SHIPPING LEGISLATION.
Section 20 of the Shipping Act of 1984 (46 U.S.C. App.
1719) is amended by--
(1) striking subsection (d) and inserting the following:
``(d) Effects on Certain Agreements and Contracts.--All
agreements, contracts, modifications, licenses, and
exemptions previously issued, approved, or effective under
the Shipping Act, 1916, or the Shipping Act of 1984, shall
continue in force and effect as if issued or effective under
this Act, as amended by the Ocean Shipping Reform Act of
1998, and all new agreements, contracts, and modifications to
existing, pending, or new contracts or agreements shall be
considered under this Act, as amended by the Ocean Shipping
Reform Act of 1998.'';
(2) inserting the following at the end of subsection (e):
``(3) The Ocean Shipping Reform Act of 1998 shall not
affect any suit--
``(A) filed before the effective date of that Act; or
``(B) with respect to claims arising out of conduct engaged
in before the effective date of that Act filed within 1 year
after the effective date of that Act.
``(4) Regulations issued by the Federal Maritime Commission
shall remain in force and effect where not inconsistent with
this Act, as amended by the Ocean Shipping Reform Act of
1998.''.
SEC. 118. SURETY FOR NON-VESSEL-OPERATING COMMON CARRIERS.
Section 23 of the Shipping Act of 1984 (46 U.S.C. App.
1721) is repealed.
TITLE II--AUTHORIZATION OF APPROPRIATIONS FOR THE FEDERAL MARITIME
COMMISSION
SEC. 201. AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEAR
1998.
There are authorized to be appropriated to the Federal
Maritime Commission, $15,000,000 for fiscal year 1998.
SEC. 202. FEDERAL MARITIME COMMISSION ORGANIZATION.
Section 102(d) of Reorganization Plan No. 7 of 1961 (75
Stat. 840) is amended to read as follows:
``(d) A vacancy or vacancies in the membership of
Commission shall not impair the power of the Commission to
execute its functions. The affirmative vote of a majority of
the members serving on the Commission is required to dispose
of any matter before the Commission.''.
SEC. 203. REGULATIONS.
Not later than March 1, 1999, the Federal Maritime
Commission shall prescribe final regulations to implement the
changes made by this Act.
TITLE III--AMENDMENTS TO OTHER SHIPPING AND MARITIME LAWS
SEC. 301. AMENDMENTS TO SECTION 19 OF THE MERCHANT MARINE
ACT, 1920.
(a) In General.--Section 19 of the Merchant Marine Act,
1920 (46 U.S.C. App. 876) is amended by--
(1) striking ``forwarding and'' in subsection (1)(b);
(2) striking ``non-vessel-operating common carrier
operations,'' in subsection (1)(b) and inserting ``ocean
transportation intermediary services and operations,'';
(3) striking ``methods or practices'' and inserting
``methods, pricing practices, or other practices'' in
subsection (1)(b);
(4) striking ``tariffs of a common carrier'' in subsection
7(d) and inserting ``tariffs and service contracts of a
common carrier'';
(5) striking ``use the tariffs of conferences'' in
subsections (7)(d) and (9)(b) and inserting ``use tariffs of
conferences and service contracts of agreements'';
(6) striking ``tariffs filed with the Commission'' in
subsection (9)(b) and inserting ``tariffs and service
contracts'';
(7) striking ``freight forwarder,'' each place it appears
and inserting ``transportation intermediary,''; and
(8) striking ``tariff'' each place it appears in subsection
(11) and inserting ``tariff or service contract''.
(b) Stylistic Conformity.--Section 19 of the Merchant
Marine Act, 1920 (46 U.S.C. App. 876), as amended by
subsection (a), is further amended by--
(1) redesignating subdivisions (1) through (12) as
subsections (a) through (l), respectively;
(2) redesignating subdivisions (a), (b), and (c) of
subsection (a), as redesignated, as paragraphs (1), (2), and
(3);
(3) redesignating subdivisions (a) through (d) of
subsection (f), as redesignated, as paragraphs (1) through
(4), respectively;
(4) redesignating subdivisions (a) through (e) of
subsection (g), as redesignated, as paragraphs (1) through
(5), respectively;
(5) redesignating clauses (i) and (ii) of subsection
(g)(4), as redesignated, as subparagraphs (A) and (B),
respectively;
(6) redesignating subdivisions (a) through (e) of
subsection (i), as redesignated, as paragraphs (1) through
(5), respectively;
(7) redesignating subdivisions (a) and (b) of subsection
(j), as redesignated, as paragraphs (1) and (2),
respectively;
(8) striking ``subdivision (c) of paragraph (1)'' in
subsection (c), as redesignated, and inserting ``subsection
(a)(3)'';
(9) striking ``paragraph (2)'' in subsection (c), as
redesignated, and inserting ``subsection (b)'';
(10) striking ``paragraph (1)(b)'' each place it appears
and inserting ``subsection (a)(2)'';
(11) striking ``subdivision (b),'' in subsection (g)(4), as
redesignated, and inserting ``paragraph (2),'';
(12) striking ``paragraph (9)(d)'' in subsection (j)(1), as
redesignated, and inserting ``subsection (i)(4)''; and
(13) striking ``paragraph (7)(d) or (9)(b)'' in subsection
(k), as redesignated, and inserting ``subsection (g)(4) or
(i)(2)''.
SEC. 302. TECHNICAL CORRECTIONS.
(a) Public Law 89-777.--Sections 2 and 3 of the Act of
November 6, 1966 (46 U.S.C. App. 817d and 817e) are amended
by striking ``they in their discretion'' each place it
appears and inserting ``it in its discretion''.
(b) Tariff Act of 1930.--Section 641(i) of the Tariff Act
of 1930 (19 U.S.C. 1641) is repealed.
TITLE IV--CERTAIN LOAN GUARANTEES AND COMMITMENTS
SEC. 401. CERTAIN LOAN GUARANTEES AND COMMITMENTS.
(a) The Secretary of Transportation may not issue a
guarantee or commitment to guarantee a loan for the
construction, reconstruction, or reconditioning of a liner
vessel under the authority of title XI of the Merchant Marine
Act, 1936 (46 U.S.C. App. 1271 et seq.) after the date of
enactment of this Act unless the Chairman of the Federal
Maritime Commission certifies that the operator of such
vessel--
(1) has not been found by the Commission to have violated
section 19 of the Merchant Marine Act, 1920 (46 U.S.C. App.
876), or the Foreign Shipping Practices Act of 1988 (46
U.S.C. App. 1701a), within the previous 5 years; and
(2) has not been found by the Commission to have committed
a violation of the Shipping Act of 1984 (46 U.S.C. App. 1701
et seq.), which involves unjust or unfair discriminatory
treatment or undue or unreasonable prejudice or disadvantage
with respect to a United States shipper, ocean transportation
intermediary, ocean common carrier, or port within the
previous 5 years.
(b) The Secretary of Commerce may not issue a guarantee or
a commitment to guarantee a loan for the construction,
reconstruction, or reconditioning of a fishing vessel under
the authority of title XI of the Merchant Marine Act, 1936
(46 U.S.C. App. 1271 et seq.) if the fishing vessel operator
has been--
(1) held liable or liable in rem for a civil penalty
pursuant to section 308 of the Magnuson-Stevens Fishery
Conservation and Management Act (16 U.S.C. 1858) and not paid
the penalty;
(2) found guilty of an offense pursuant to section 309 of
the Magnuson-Stevens Fishery Conservation and Management Act
(16 U.S.C. 1859) and not paid the assessed fine or served the
assessed sentence;
(3) held liable for a civil or criminal penalty pursuant to
section 105 of the Marine Mammal Protection Act of 1972 (16
U.S.C. 1375) and not paid the assessed fine or served the
assessed sentence; or
(4) held liable for a civil penalty by the Coast Guard
pursuant to title 33 or 46, United States Code, and not paid
the assessed fine.
The SPEAKER pro tempore (Mr. Dickey). Pursuant to the rule, the
gentleman from Pennsylvania (Mr. Shuster) and the gentleman from
Tennessee (Mr. Clement) each will control 20 minutes.
The Chair recognizes the gentleman from Pennsylvania (Mr. Shuster).
Mr. SHUSTER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, this is the Ocean Shipping Reform Act of 1998 which
modernizes our system of international ocean shipping. This reform is
long overdue. In fact, in the last Congress, the House overwhelmingly
passed Ocean Shipping Reform. However, there was no action in the other
body.
The bill before us today maintains the essential reforms contained in
that previous bill, and the most important of these reforms is the
authority for American businesses to keep their ocean transportation
costs confidential from their foreign competitors.
Today our ocean transportation systems are competing against foreign
exporters and foreign importers, and indeed, American exporters and
importers are required to publicly file their ocean transportation
contract prices. This bill will allow American businesses to keep those
transportation costs confidential from their foreign competitors, and
it will level the international playing field for our U.S. exporters.
Further delay in not passing this bill will sacrifice any chance of
reform in this Congress.
This bill is strongly supported by millions of U.S. businesses,
including the National Industrial Transportation League and the
American Flag Carriers. It is supported by the administration and it is
supported by organized labor.
I would emphasize to my colleagues that competitive American ocean
shipping is becoming more and more important to our country as we
compete
[[Page H7016]]
more and more in a global economy. In fact, let me share a statistic
that I find a bit stunning.
The average American plant, if it wants to ship product overseas from
a seaport, must ship its product to that port an average distance of
1,500 miles. For a German company in Germany, it must ship its product
to a seaport only 300 miles. For a Japanese company, it must ship its
product to a seaport only 30 miles. So one can see the relative
disadvantage we have in transportation costs, and therefore, the
extraordinary need for us to make our transportation system as
efficient as possible.
This, of course, means the multimodal nature of our transportation
system, from an efficient railroad system, an efficient trucking
system, shipping into those ports, to modernize ports which can handle
those products to be shipped overseas, and the actual passage, the
actual ocean shipping itself.
For all of these reasons we need to pass this legislation today as
one of the steps in making American global transportation more
efficient. For that reason, I urge my colleagues to support this
legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. CLEMENT. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in strong support of the Senate bill, S. 414, the
Ocean Shipping Reform Act of 1997. S. 414 will significantly increase
competition in international shipping, and help make U.S. industries
more competitive by decreasing their transportation costs to overseas
markets.
In the last Congress the House passed H.R. 2149, the Ocean Shipping
Reform Act of 1995, legislation which was widely criticized for
allowing international shipping conferences to enter into totally
confidential contracts with shippers while maintaining their antitrust
immunity. The Ocean Shipping Reform Act of 1997 does not allow for
totally confidential contracts by conferences. Carriers in conferences
must continue to disclose to the Federal Maritime Commission the
commodity, volume, origin, and destination port ranges, as well as the
contract duration.
In the interests of eliminating unnecessary government involvement,
tariffs and rates will not need to be filed with the Federal Maritime
Commission. We are going to allow the electronic technology in the
marketplace to promote competition by requiring that tariffs and rates
be made available on the Internet. People around the world will have
instantaneous access to the rates and services provided by water
carriers.
Many of the complaints about the Shipping Act of 1984 centered around
restrictions that international shipping conferences had placed upon
their members. For many years, conferences had restricted the ability
of their members to enter into service contracts with their customers.
S. 414 solves this problem by prohibiting a conference from restricting
its members from entering into service contracts. Similarly, a
conference may not require its members to disclose the terms of the
service contracts that they enter into.
Mr. Speaker, this bill will increase competition among international
carriers. It will benefit both large and small companies that desire to
have their goods exported.
The Ocean Shipping Reform Act of 1997 has broad support from shipping
lines, such as Sea-Land and American President Lines, from shoreside
labor, including the ILA and the ILWU, the American Association of Port
Authorities, and the National Industrial Transportation League.
There is one group, Transportation Intermediaries, that has concerns
about S. 414. These companies do not operate the vessels on which the
cargo is carried, but resell their space to shippers. One of the
purposes of the Shipping Act is to promote investment in international
shipping. This bill attempts to give people reason to invest in
shipping by allowing the company that operates the vessel on which the
goods are transported to have a more confidential contract with
shippers than those that do not operate the vessel.
International shipping is continuing to evolve with larger, more
efficient ships. By promoting investment in these types of ship
operations, we will help to decrease the cost of transporting goods in
the future.
However, if we do not see this type of investment and increased
competition as a result of enactment of S. 414, I do not believe that
Congress will hesitate to revisit these issues to promote competition
in international shipping.
Mr. Speaker, I would like to take a moment to mention one other
essential of S. 414 that is being dropped from that bill. Title IV, as
passed by the Senate, grants limited burial and funeral benefits to
Merchant Mariners who served in World War II between August 16, 1945,
and December 31, 1946.
In 1987, the Department of Defense granted veterans status to
Merchant Mariners who served between December 7th, 1941, and August 16,
1945. However, the dangers of the war did not end on that day. Foreign
harbors continued to have dangerous mines. At least 11 merchant ships
were sunk during those 14\1/2\ months between 1945 and at the end of
1946.
Mr. Speaker, over 310 members of the House have cosponsored H.R.
1126, which would have granted these Merchant Mariners full veterans
status. The provisions that were contained in S. 414 would have simply
allowed these men to be buried in our national cemeteries, and be given
a flag and a headstone for their valiant service to our country. I do
not think that was too much to ask.
However, when considered in its entirety, S. 414 is a major step
forward in promoting competition in international shipping when
compared to the Shipping Act of 1984. I strongly urge my colleagues to
support passage of this bill so that it can be signed into law by the
President.
Mr. Speaker, I reserve the balance of my time.
Mr. SHUSTER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, we bring this bill to the floor today in consultation
with the Committee on the Judiciary. I ask to include for the Record
the letters between the Committee on Transportation and Infrastructure
and the Committee on the Judiciary concerning the committees'
respective jurisdictions over this legislation.
The letters referred to are as follows:
House of Representatives,
Committee on the Judiciary,
Washington, DC, August 3, 1998.
Hon. Bud Shuster,
Chairman, Committee on Transportation and Infrastructure,
U.S. House of Representatives, Washington, DC.
Dear Bud: I understand that you intend to move to suspend
the rules and pass S. 414, the ``Ocean Shipping Reform Act of
1998,'' as passed by the Senate.
Title I of S. 414, as passed by the Senate, makes a variety
of amendments to the regime under which ocean common carrier
conferences enjoy antitrust immunity. Under Rule X(1)(j)(15),
the Committee on the Judiciary has jurisdiction over the
antitrust provisions of the Act.
Because of the leadership's request that we move this bill
to the floor quickly and the delicate political balance
involved in this compromise legislation, I am willing to
waive this Committee's right to a referral of S. 414. I will
not attempt to impede this legislation from going forward so
long as it remains in exactly the form it was passed by the
Senate, other than the provisions of Title IV, which I
understand will be removed at the request of the Committee on
Veterans' Affairs. However, my doing so does not constitute
any waiver of the Committee's jurisdiction over these
provisions and does not prejudice its rights in any future
legislation relating to these provisions or any other
antitrust immunity provided in the Act. I will, of course,
insist that Members of this Committee be named as conferees
on these provisions or any other antitrust immunity provided
in the Act should the bill go to the conference.
I want to note, however, that I am very concerned about the
situation of the non-vessel-owning common carriers, or
NVOCCs, the freight forwarders, and the shipping
associations. These groups were not included in the
compromise that was reached in the Senate, and I believe that
the provisions of this bill will harm them. For that reason,
I will not be able to support S. 414 when it comes to the
floor, and I intend to speak against it. I understand that
you also are concerned about the plight of these groups and
that you intend to take further action to address their
concerns in the next Congress. This action will include
hearings and other oversight activities as the amendments to
the Shipping Act of 1984 are implemented.
If the foregoing meets with your understanding of the
matter, I would appreciate your placing this letter and your
response in the record during the debate on S. 414. Thank you
for your cooperation in this matter.
Sincerely,
Henry J. Hyde,
Chairman.
[[Page H7017]]
____
House of Representatives, Committee on Transportation and
Infrastructure,
Washington, DC, August 4, 1998.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary, Rayburn House Office
Building, Washington, DC.
Dear Mr. Chairman: Thank you for your letter waiving your
Committee's right to a referral of amendments to the Shipping
Act of 1984 contained in S. 414, the Ocean Shipping Reform
Act. I agree that the waiver should not be viewed as a waiver
of any jurisdictional claim that you might have over the
bill. As you know, ocean shipping reform has been an
extremely controversial subject, and I appreciate your
continuing support of my effort to modernize international
ocean shipping.
Since the House of Representatives passed H.R. 2149, the
Ocean Shipping Reform Act of 1996, the Senate has worked to
pass a bill that maintained the most essential provisions of
H.R. 2149. Earlier this year, the Senate passed S. 414, the
Ocean Shipping Reform Act of 1998. That bill is not identical
to H.R. 2149, but it retains the provisions from the House
bill that are the most important to millions of American
businesses. These provisions give American businesses the
freedom to keep their ocean transportation contract prices
confidential from their foreign competitors. This change in
the law will improve the competitive position of American
exporters, and stimulate American exports.
I believe we must act now to pass S. 414. This bill is a
huge step forward in the process of deregulation of
international ocean shipping. If we delay action on this
important matter any longer, we will lose this chance to
modernize ocean shipping transportation practices and level
the playing field for American businesses.
I understand that you have strong concerns about the
provisions in S. 414 related to shipping intermediaries and
other matters. During the next Congress, I will work with
you, the shipping intermediaries, and the Federal Maritime
Commission to bring a more level playing field to all U.S.
businesses involved in ocean shipping.
Please be assured that I will submit our correspondence on
S. 414 for the Record when we take the bill up on the House
Floor.
With kind personal regards, I am
Sincerely,
Bud Shuster,
Chairman.
Mr. Speaker, I am pleased to yield 3\1/2\ minutes to the
distinguished gentleman from Illinois (Mr. Hyde), chairman of the
Committee on the Judiciary.
Mr. HYDE. Mr. Speaker, I thank the gentleman for yielding time to me.
Mr. Speaker, I rise in reluctant opposition to S. 414, the Ocean
Shipping Reform Act of 1998. Two years ago I stood here and supported
H.R. 2149, another version of shipping reform. The bill we consider
today differs from the 1996 bill in important ways, and I cannot
support it.
Current law provides an antitrust exemption for ocean-going ships,
most of which are foreign-owned, to form cartels that legally enter
into price-fixing agreements at the expense of American shippers. As
chairman of the committee with jurisdiction over antitrust, I find that
system difficult to accept.
If we were writing on a blank slate, I do not think such a system
would pass. However, I understand the political reality that this
system has been in the law since 1916, and it probably cannot be
eliminated in one shot. I reluctantly accept that change probably has
to come incrementally. However, in making that incremental change, we
should follow the fundamental principles of medicine: First, do no
harm.
I think this bill does harm in some important ways. First and most
importantly, one group of small businesses, many of whom are my
constituents, will suffer severe harm if this bill becomes law. At
every port there are businesses that consolidate small shipments into
large shipments, thereby getting lower rates for small shippers.
These businesses go by various names, nonvessel operating common
carriers, freight forwarders, or shipping associations, but they all
perform basically the same economic function. In doing so, they compete
directly with the ocean-going common carriers for shipping business.
This bill puts these small businesses at a severe disadvantage. It
allows their competitors to use secret contracts to undermine the
cartels, but it requires these small businesses to publish their rates
for all to see. It does not take an economic genius to realize that
this system will soon drive them out of business.
Second, I am concerned that this bill actually encourages the joint
negotiation of inland shipping rates. Thus, not only will the rates for
the ocean part of the trip be set by legally-sanctioned price-fixing
cartels, but now those same cartels will be encouraged to jointly
negotiate rates for the overland trip to the port, as well. I see no
justification for this further extension of cartel behavior.
Let me just repeat, I would like to see the entire antitrust
exemption eliminated. Failing that, I would like to allow all of the
competitors to use secret contracts so that the cartels are undermined.
But I am not willing to make those changes in a way that gives one
group of competitors an insurmountable advantage over another, and
unfortunately, that is what this bill does.
This compromise was reached in the Senate after the committee
reported the bill, but before it reached the floor. We are now taking
it up on the floor without any committee consideration. We are told if
we change one word the whole thing will fall apart. I understand that
reality as well, and thus, I have not insisted on a referral. However,
I can only go so far, and I cannot support this bill, which harms my
constituents. I urge my colleagues to defeat it.
I want to thank my colleagues, the gentleman from Pennsylvania (Mr.
Shuster) and the gentleman from Maryland (Mr. Gilchrest). I appreciate
their commitment to conduct vigorous oversight of the situation of the
various types of freight consolidators if this bill becomes law, and I
intend to conduct such oversight in the Committee on the Judiciary, as
well.
Mr. SHUSTER. Mr. Speaker, I am pleased to yield 4 minutes to the
gentleman from Maryland (Mr. Gilchrest), the distinguished chairman of
our subcommittee.
Mr. GILCHREST. Mr. Speaker, I thank the chairman for yielding time to
me. I am not sure if I need the entire 4 minutes. I want to address
some of the concerns that the chairman of the Committee on the
Judiciary raised.
One is the antitrust exemption, and he is correct, we have tried to
deal with this particular issue, and ocean shipping in general, in an
international way since 1916. This has been addressed in Congress in
1961, during the 1970s recession, then in 1984 in the Ocean Shipping
Act, and again as recently as a couple of years ago, in order to
stabilize ocean shipping in an international way, understanding that 85
percent of the regulated ocean shipping is basically controlled by the
international community or our foreign competitors.
{time} 1100
To deal with this issue in an incremental fashion would mean that we
are trying to do no harm to U.S. shipping, the main goal of this
legislation. It is not a panacea. It does not solve all of the problems
for those people who are involved in the shipping industry, especially
the freight forwarders that the gentleman from Illinois (Mr. Hyde)
mentioned, but it does, in an incremental fashion, create stability and
a further advantage for the U.S. shipping industry, with the U.S.
shipping industry being able to enter into private contracts, the
shippers and the carriers.
This has not been done before. Our foreign competitors were able to
enter into private contracts, which was a big disadvantage to U.S.
shippers, and if that was a big disadvantage to U.S. shippers, it was
not helpful to those who are categorized as a freight forwarder.
We do have to deal with those constituents of the gentleman from
Illinois (Mr. Hyde), the gentleman from Illinois (Mr. Fawell), myself
and a number of other Members in the area of what we might call travel
agents, those people who try to decide, someone who has a small
business, who cannot fill up many containers or who may not be able to
fill up one container, how do we consolidate all those small businesses
so that we can get their goods on these ships and ship overseas at the
lowest rate possible? The competition in there is very great.
I would say to the chairman of the Committee on the Judiciary that we
are very cognizant of that particular problem. As we go through this
legislation again next year, those areas of concern will be addressed
and the freight forwarders and people in that particular arena, we want
to make sure that those small businesses stay in
[[Page H7018]]
business, because they add such a great deal to the free and open
marketplace.
The chairman of the Committee on Transportation and Infrastructure
talking about the intermodal system, which the gentleman from Illinois
(Mr. Hyde) also raised, in order to be competitive with the rest of the
world, knowing that we do not ship these goods, understanding how short
the distance is shipping from Japan to the ports and from Germany to
the ports or from Holland to the ports and from the Midwest to our
coastal areas, our intermodal system must be very organized, very
structured, very aligned.
We are doing what we can for the whole international marketplace for
the United States to be able to compete not only with the shipping but
with the intermodal transportation system.
Mr. HYDE. Mr. Speaker, will the gentleman yield?
Mr. GILCHREST. I yield to the gentleman from Illinois.
Mr. HYDE. Mr. Speaker, I just want to express my thanks to the
gentleman for his assurances that he will give this problem continuing
attention. I will be very interested in his performance. I am very
grateful for his understanding.
Mr. GILCHREST. Mr. Speaker, I thank the chairman of the Committee on
the Judiciary, and I thank the gentleman for yielding me the time.
Mr. CLEMENT. Mr. Speaker, I yield 2 minutes to the gentleman from New
Jersey (Mr. Menendez), my friend.
Mr. MENENDEZ. Mr. Speaker, I want to thank the distinguished
gentleman for yielding me the time.
As a representative of one of the Nation's largest ports in the Ports
of Elizabeth and Newark within the context of the Port of New York, I
had opposed ocean shipping before in the last Congress, but I rise in
support of S. 414, the Ocean Shipping Reform Act of 1998.
I do want to express, however, some concerns. We clearly should not
underestimate the importance of this topic. Ocean shipping is the very
means that our Nation trades with the world. Ocean-going vessels move
more than 95 percent of all the international trade, and small
businesses account for the majority of all export and import trade.
Unfortunately, small business did not end up being part of this
compromise which produced the current version. In my district, small
businesses have made it clear to me that S. 414 is not perfect. While
S. 414 is an attempt to introduce more competition, and that is good,
in the ocean-shipping industry, freight forwarders, nonvessel operating
common carriers, shipper associations and independently owned
businesses, all important and vital elements in the international
ocean-borne commerce community, have reservations about the bill.
I have sincere concerns for the many ocean freight forwarders and
NVOCCs that are active in New Jersey. I want to reiterate the thoughts
of my Democratic colleague, Senator Breaux, who called upon the Federal
Maritime Commission to actively monitor how this legislation impacts
small businesses and freight forwarders in the areas of ocean freight
forwarder compensation and whether confidential contracts will
undermine the forwarder's place as an integral service provider to
smaller business active in the international trade community.
I am glad to hear that the chairman of the subcommittee as well as
the chairman of the Committee on the Judiciary are going to continue to
pursue these concerns.
Let me reiterate my support for the bill, which represents careful
negotiation by labor groups and shippers. It was clearly no small task
to reach the agreement that we will be voting on. However, I hope that
we will continue to examine the effects of the bill to ensure that
unintended consequences do not take place.
Mr. CLEMENT. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
Mr. SHUSTER. Mr. Speaker, I yield myself such time as I may consume.
In closing, I would simply emphasize that this bill has the support
of NIT league, the shippers who use the ocean-going vessels, of the
AFL-CIO, labor, and of the administration, and it is a big step in the
right direction. It does not solve all of the problems, but certainly
moves in the right direction.
I would urge passage of this important legislation.
Mr. OBERSTAR. Mr. Speaker, I rise in support of S. 414, the Ocean
Shipping Reform Act of 1997. This bill is the culmination of a process
that began in the Transportation Committee last Congress with House
passage of the Ocean Shipping Reform Act of 1995. That bill, H.R. 2149,
would have drastically changed the way international common carriage by
water is regulated. I was very concerned about that bill because of the
unrestricted authority it gave conferences or cartels to enter into
confidential contracts.
The approach contained in S. 414 is much more balanced. That is why
it is supported by vessel operators, manufacturers, ports, seagoing
labor, and shoreside labor.
Enactment of S. 414 will allow individual carriers and conferences to
enter into more confidential contracts than they are allowed today.
However, they must continue to disclose with the Federal Maritime
Commission the commodity, volume, origin and destination port ranges,
and contract duration. Similarly, carriers and conferences will no
longer have to file tariffs with the Commission, but they must make
their tariffs publicly available electronically, such as through the
internet.
S. 414 prohibits conferences from requiring its individual members to
disclose their service contract terms and prohibits conferences from
restricting in any way the ability to their members to enter into
service contracts with shippers. Along with this, S. 414 will allow
individual carriers to act independently of the conferences with notice
of 5 calendar days, instead of the current 10 business days.
Mr. Speaker, the changes made by S. 414 will profoundly change
international shipping by increasing competition among carriers and by
allowing carriers to offer a broader array of services to their
customers.
Not everyone is totally happy with S. 414. Under the bill, only the
person operating the vessel on which the goods are actually carried can
enter into a confidential service contract with a shipper. The basis
for this is simple: these people have invested millions of dollars in
the vessel and pay for its operating cost. Why should they be treated
the same as someone who has not invested any money in the vessel on
which the goods are transported? This bill attempts to give an
incentive for capital investment in these ships. Others may argue that
allowing people that do not operate the vessel on which the goods are
transported to enter into confidential contracts will help promote
competition and reduce rates. However, investment in new, more
efficient ships, will also increase capacity and decrease rates. The
FMC is going to continue to oversee these contracts and will be
responsible for ensuring that the conferences and their members do not
engage in anti-competitive practices such as voluntarily pooling
information on their service contracts with each other.
Mr. Speaker, I must say that I am very disappointed that an amendment
to S. 414 has been added that eliminates a Senate provision that would
have granted merchant mariners who served during World War II the same
burial benefits as other veterans from that war. Merchant Mariners
suffered the second highest casualty rate of any service during the
war, second only to the Marine Corps. The convoys of ships they
operated were the lifeline to England and enabled our forces to free
Europe. The provisions in the bill were but a small way of our nation
telling these gallant men thanks. The benefits that would have been
provided for in the Senate passed bill would have been a small part of
the benefits provided for by H.R. 1126, which currently has over 310
cosponsors.
And why was this section deleted? Because, the gentleman from
Arizona, Mr. Stump, the Chairman of the Veterans Affairs Committee,
refused to agree to scheduling S. 414 for the House floor with the
merchant mariners benefits provisions included, unless his bill, H.R.
3211, restricting who can be buried in Arlington National Cemetery was
passed by the Senate. Why won't the Senate consider his bill? Because
it does not allow for heroes like Officer John Gibson to be buried in
Arlington National Cemetery under a waiver process. The gentleman from
Arizona opposes burial of national heroes such as Officer Gibson in
Arlington Cemetery and does not want U.S. merchant mariners who served
their country during World War II buried in any national cemetery, even
though 310 members of this body disagree with him. I believe this is
terribly wrong and that the Republican leadership should not prevent
all of these people who served our country from being buried in our
national cemeteries simply because one Member is opposed.
Mr. Speaker, on balance, I believe that S. 414 is a good bill. Our
Committee is going to continue its oversight of international shipping
to ensure that there is fair competition and that the needs of U.S.
exporters are being met. Therefore, I urge my colleagues to support
passage of S. 414, the Ocean Shipping Reform Act of 1997.
[[Page H7019]]
Mr. FAWELL. Mr. Speaker, I rise today to express my concern about S.
414, the Ocean Shipping Reform Act of 1998. I have always supported
deregulation, because I believe the free market is the best way to
receive goods and services at the best price. Unfortunately, S. 414
does not fully deregulate the ocean shipping industry. This bill has
the potential to benefit only the large shipping companies at the
expense of small and medium-size exporters, importers, and freight
intermediaries.
Under a 1916 law, all steamship companies are granted ``antitrust
immunity,'' thereby exempting them from compliance with the Sherman
Antitrust Act. As a result, steamship companies have historically
grouped together in what are known as ``conferences'' to consider,
establish, and enforce collective transportation rates. This situation
puts the shipping public at a disadvantage.
To counterbalance the antitrust exemption, all charges and rates are
``transparent''--made available to the public, to ensure that there is
no discrimination against small business and even the government.
S. 414, however, would give steamship conferences the ability to
negotiate contracts in a confidential environment. These ``secret''
contracts could very well allow the conferences to provide lower costs
to large shippers at the expense of small businesses and the U.S.
government, which purchases about $1 billion of ocean transportation
per year. If S. 414 becomes law, there will be no way of determining
what the private sector is paying to transport goods. As a result,
steamship companies could force the government, along with small
businesses, to subsidize the lower rates extended secretly to these
large shippers.
I do not oppose shipping deregulation, as long as it is done for the
benefit of large as well as small shippers. S. 414 in its current form
creates inequalities that could easily drive small shipping companies
and shipping intermediaries out of business. This bill should be
considered before a House committee and brought back to the House after
these inequities are resolved and S. 414 benefits all shippers.
Mr. EVANS. Mr. Speaker, during World War II thousands of young men
volunteered for service in the United States Merchant Marine. Many of
these mariners were recruited specifically to staff ships under the
control and direction of the United States Government to assist the
U.S. war effort. These seamen were subject to government control, their
vessels were controlled by the government under the authority of the
War Shipping Administration and, like branches of military service,
they traveled under sealed orders and were subject to the Code of
Military Justice.
Some volunteers joined the Merchant Marines because their youthful
age or minor physical problems, such as poor eyesight, made them
ineligible for service in the Army, Navy, or Marine Corps. Others were
encouraged by military recruiters to volunteer for service in the
Merchant Marines because the recruiter recognized that the special
skills offered by the volunteer could best be put to use for our
country by service in the Merchant Marines. Most importantly, all were
motivated by their deep love of country and personal sense of
patriotism to contribute to the war effort.
In order to staff our growing merchant fleet during World War II, the
U.S. Maritime Commission established training camps around the country
under the direct supervision of the Coast Guard. After completing basic
training, which included both small arms and cannon proficiency, seamen
became active members of the U.S. Merchant Marine. These seamen, often
at great personal risk, helped deliver troops and war supplies needed
for every Allied invasion site from Guadalcanal to Omaha Beach. I have
heard from the merchant mariners who were responsible in 1946 for
transporting tons of German mustard and other poisonous gas containers
from Europe to the San Jacinto ordinance base in Texas.
More than 6,500 Merchant Mariners who served our country during World
War II gave the ultimate sacrifice of their lives, including 37 who
died as prisoners of war, and almost 5,000 World War II Merchant
Mariners remain officially missing and are presumed dead. In addition,
733 U.S. Merchant ships were destroyed. Even after the surrender of
Japan, members of our Merchant Marine fleet were in mortal danger as
they continued to support the war effort by entering mined harbors to
transport our troops safely home. After the war ended, they carried
food and medicine to millions of the world's starving people.
In spite of the illustrious service of the World War II U.S. Merchant
Marine, the Secretary of the Air Force, Edward Aldridge, inexplicably
and erroneously made the decision in 1988 to define the dates for World
War II service differently for Merchant Marines than for those who
served in the other American forces. The effect of this decision was to
deny veteran status to those mariners who served between the dates of
August 15, 1945 and December 31, 1946, the official end of World War
II.
It is important to remember that during the time period addressed by
this bill, August 15, 1945 through December 31, 1946, 12 U.S. Flag
Merchant Vessels were lost or damaged as a result of striking mines,
and some of the Merchant Mariners serving on these vessels were killed
or injured. Fully understanding the tremendous risks they faced,
mariners nonetheless willingly went into mined harbors so that they
could bring our American troops home to their families and friends. I
believe these courageous Merchant Mariners, who were subject to the
risks and dangers of war between V-J Day and the official end of the
war, have been wrongfully denied veteran status. They faced the very
real hazards of wartime hostile actions and should not be denied the
status of veteran of purposes of laws administered by the Department of
Veterans Affairs because their seagoing contributions began after
August 15, 1945.
In recognition of the service rendered and dangers faced by those
mariners who served during the period of August 15, 1945 through
December 31, 1946, on March 19, 1997, I introduced the Merchant Mariner
Fairness Act (H.R. 1126). H.R. 1126 will finally provide appropriate
recognition: veteran status for a few thousand World War II American
Merchant Mariners. While this status will enable them to be eligible
for veterans' benefits, it is likely that the only benefit most will
receive is proper recognition of their contributions to the war effort
and the right to a veterans' funeral. The merchant mariners who would
be granted veteran status by this bill are aging. They will not qualify
for educational benefits. As Medicare beneficiaries, most already have
long standing relationships with their medical providers and are
unlikely to seek VA health care. Nonetheless, the Merchant Mariners of
World War II will receive the long-overdue thanks from the nation they
served faithfully and courageously. The Merchant Mariners Fairness Act
would correct this erroneous administrative decision by making the
service eligibility period for World War II Merchant Mariners identical
to that established for others.
As of yesterday, H.R. 1126 has been cosponsored by 310 Members of the
House. Clearly, there is widespread and bipartisan support for H.R.
1126 and an overwhelming majority of the House agree with me on
granting veteran status to this select group of Merchant Mariners of
World War II. Unfortunately, the House has not yet taken action on the
Merchant Mariners Fairness Act.
It has been more than than a half century since the end of World War
II. How much longer must these aging Merchant Mariners, who are the
forgotten partriots of World War II, wait for their service to our
Nation to be properly and fully honored and acknowledged?
As approved by the other body, S. 414, the Ocean Shipping Reform Act
of 1998, contained an important provision granting veteran status and
limited veteran's benefits to a select group of World War II merchant
mariners. With the number of days remaining in the 105th Congress
rapidly dwindling, enactment of S. 414 as approved by the other body,
would have properly provided the long overdue recognition to the
Merchant Mariners who bravely served our Nation during the final days
of World War II by granting veteran status and limited veterans'
benefits. At long last, our Nation would have appropriately
acknowledged their sacrifice and service to our Nation during wartime.
I regret, however, that the provisions contained in S. 414 bestowing
veterans' status to those mariners, who served between the dates of
August 15, 1945 and the official end of World War II, have been deleted
from this legislation being considered by the House. As a result of
striking these provisions from S. 414, those mariners who served
between the dates of August 15, 1945 and December 31, 1946, will be
required to wait even longer to receive the veterans status which I
strongly believe they have earned and are due.
On a more positive note, I am very pleased to report that the
Chairman of the House Committee on Veterans Affairs has pledged to work
for Congressional approval of legislation granting veteran status and
limited veterans' benefits to those mariners who served between the
dates of August 15, 1945 and December 31, 1946, before the end of the
105th Congress. I welcome this commitment from Chairman Stump and based
on his pledge I look forward to the approval of this legislation before
the adjournment of the 105th Congress sine die.
Mr. SHUSTER. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Dickey). The question is on the motion
offered by the gentleman from Pennsylvania (Mr. Shuster) that the House
suspend the rules and pass the Senate bill, S. 414, as amended.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the Senate bill, as amended, was
passed.
A motion to reconsider was laid on the table.
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