[Congressional Record Volume 144, Number 135 (Thursday, October 1, 1998)]
[Senate]
[Pages S11297-S11302]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
OCEAN SHIPPING REFORM ACT OF 1998
Mrs. HUTCHISON. Mr. President, I ask the Chair lay before the Senate
a message from the House of Representatives on the 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.
The PRESIDING OFFICER laid before the Senate the following message
from the House of Representatives:
Resolved, That the bill from the Senate (S. 414) entitled
``An Act to amend the Shipping Act of 1984 to encourage
competition in international shipping and growth of United
States exports, and for other purposes'', do pass with the
following amendment:
Strike out all after the enacting clause and insert:
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:
``(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;'';
[[Page S11298]]
(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.
``(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,
[[Page S11299]]
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
``(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.''.
[[Page S11300]]
(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 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'';
[[Page S11301]]
(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.
Mrs. HUTCHISON. Mr. President, S. 414 is my bill that was passed by
the Senate. It was passed by the House. It is now back in the
conference, and there will be an amendment.
American ports and carriers are disadvantaged by current laws that
require all contracts to be public. To avoid this, shippers who
conveniently can, will ship out of foreign ports in nearby Canada and
Mexico to avoid this. U.S. ports are bypassed and the U.S. carriers
lose business because only U.S. companies have to reveal their ocean
transportation costs. This permits their foreign competition to
undercut our shippers.
Recent economic problems in Asia will increase pressure in those
countries to increase their exports. Therefore, S. 414 will be even
more important as our shippers meet the heightened competitive
challenge.
S. 414 attempts to level the playing field between U.S. companies
which export and their foreign competitors.
This bill will encourage greater competition among carriers. It will
provide American exporters and importers with greater choice in
obtaining ocean transportation services, and promote more ocean
shipping activity for our carriers and our ports.
In providing our shippers with this important reform, we have still
attempted to preserve anti-discrimination provisions in current law and
the elements of our current ``transparent'' system that protect our
ports, smaller shippers and U.S. workers. This bill balances the need
to have enough transparency to assure fair pricing with contract
privacy.
Our shippers say they want more flexibility in dealing with their
ocean carriers, and the ability to go outside the traditional tariff
system and conference structure. We've provided this needed
confidentiality, but balanced it with protections for ports and U.S.
dock workers who seek information on the movement of commodities to
protect their competitive position.
Ninety-five percent of U.S. foreign commerce is transported via ocean
shipping. Half of this trade, which is carried by container liner
vessels with scheduled service and is regulated under the Shipping Act
of 1984, is affected by these reforms. This bill represents the first
major reform of this critical industry in a decade, and the most
significant change to the underlying statute since 1984.
Mr. President, I am proud to have worked with the distinguished
Majority Leader and colleagues from both sides of the aisle to pass
this important legislation.
I would like to commend, in addition to the Majority Leader, the
ranking member of the full Commerce Committee, Senator Hollings, the
ranking member of the Surface Transportation and Merchant Marine
Subcommittee, Senator Inouye, and my colleague from Louisiana, Senator
Breaux, for their hard work in putting together meaningful legislation
that we're passing today.
I am very pleased we have now worked this important bill out. I think
it will certainly help our economy.
I ask unanimous consent the Senate concur in the amendment of the
House.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LOTT. Mr. President, I rise to acknowledge today's passage of the
Ocean Shipping Reform Act. This action sets America's maritime industry
on the right course. It increases competition for U.S. exporters by
allowing America's exporters to compete on a level playing field with
foreign entities. It has been fourteen years since Congress tackled
comprehensive ocean shipping reform for the commercial sector. Since
most of the world's commerce travels by sea, and the industry has
changed so much during that period, additional reform is long since
overdue. This legislation will update, revise, and improve upon the
Shipping Act of 1984. It ensures fairness for U.S. carriers and
shippers by modernizing America's ocean shipping regulatory system.
The Ocean Shipping Reform Act represents true compromise. This
legislative effort brought together many divergent interests--parties
who often do not agree with one another. As my colleagues can attest
to, achieving mutually beneficial reform was not an easy task. The
process was difficult and sometimes arduous. It was, however, a
necessary and important legislative journey for our nation's ocean
shipping industry. In the end, all affected parties rolled-up their
sleeves and worked hard to develop an equitable solution. The result is
a consensus bill that received the solid backing of all industry
segments including U.S. shippers, American and foreign ocean carriers,
ports nation-wide, and U.S. labor. The 105th Congress' passage of this
compromise measure represents a milestone in maritime policy. Everyone
involved can be proud of this significant accomplishment.
I would like to take this opportunity to express my thanks to the
many individuals from industry and labor who participated in this
endeavor. I also want to congratulate the many Senators and staff who
worked on this bill.
[[Page S11302]]
I particularly want to express my gratitude to Senator McCain, Senator
Kay Bailey Hutchison and Senator Gorton who worked diligently to
deliver to the U.S. shipping industry and to all Americans real
maritime reform. I also want to recognize the efforts of Chairman
Shuster of the House Committee on Transportation and Infrastructure who
spearheaded this reform effort in the House of Representatives.
Mr. President, the Ocean Shipping Reform Act of 1998 focuses on the
needs of America's small, medium, and large shippers, carriers, U.S.
ports, and on our nation's dock workers. It will ensure that the
collective power of some industry elements will not be allowed to abuse
other industry segments. The bill provides protection for small ports
and small shippers through increased competition among shipping lines
for export and import cargoes. It allows shipping lines and their
customers to negotiate volume discount arrangements through the signing
of confidential service contracts for transportation services without
first obtaining the blessing of the shipping line conferences. This
legislation gives shippers greater ability to shop around for the best
rates and service from the carriers of their choice. Additionally, the
bill continues current filing requirements for service contracts to
provide continued FMC oversight of common carrier activities.
This legislation will retain common carrier tariff publication and
enforcement while eliminating the requirement to file tariffs with the
government. Common carriers would be able to take advantage of
available modern technology by using a World Wide Web home page or an
electronic bulletin board to satisfy the tariff publication
requirement. This just makes common sense. It reduces the cost of doing
business while maintaining protections for small shippers. The wide
availability of competitive price and service information will make for
a better informed shipping consumer.
The Ocean Shipping Reform Act of 1998 does much to ensure that
America's presence in the shipping industry is not subjected to unfair
foreign rules or discriminatory practices. The FMC's enforcement
actions taken against unfair port practices in Japan illustrates the
essential and unique mission that this agency performs. Even more
recently, issues concerning Brazil and China have come on their radar
screen. This is a function that will continue, a mission that I
wholeheartedly support.
This legislation will significantly change the regulatory framework
governing ocean transportation. It increases shipper and carrier
flexibility and competitive options, ensures tariff accuracy and
fairness, produces government efficiencies and provides genuine reform
to protect American interests. These changes will strengthen the
ability of common carriers to market their services and makes America's
shippers more competitive. The Ocean Shipping Reform Act of 1998 makes
sense for American businesses and consumers alike. It will help sustain
a strong and vibrant American maritime industry--fostering economic
growth and enhancing our national security for years to come.
Mr. McCAIN. Mr. President, today I rise to praise the Senate for the
final passage of S. 414, the Ocean Shipping Reform Act of 1998, and to
clarify the legislative history of the bill with the Senator from
Texas, who authorized the bill.
On April 21, 1998, the Senate first adopted S. 414. In her statement
providing legislative history for the bill, the Senator from Texas
identified a need to resolve the requirement for Federal agencies,
including those in the Department of Defense, to ensure U.S.-flag ocean
common carrier compliance with cargo preference law requirements
concerning shipping rates with the new confidential service contracting
regime authorized by S. 414., At that time, my colleague encouraged the
Federal Maritime Commission to work with other Federal agencies to
address this concern.
I'd like to ask the Senator from Texas to clarify the ability of the
FMC to share confidential service contract rate and service information
with other Federal agencies to ensure that U.S.-flag shipping rates for
preference cargo shipments meet statutory requirements.
Mrs. HUTCHISON. Mr. President, I want to thank the distinguished
Chairman of the Commerce Committee for raising this issue. The General
Counsel of the FMC, in a recent written response to an inquiry on this
issue with respect to the Department of Defense, stated:
I have no doubt that we will be able to develop an
intragovernmental system for providing the DOD with the
pricing and service information it needs to effectively
execute its mission, within the framework of S. 414. If we
determine that technical legislative corrections would aid
this process, we will no doubt make such recommendations
jointly. At this time, however, I do not believe that any
additional amendments to the bill are necessary to meet your
concerns for the Department.
Mr. President, I want to make it clear that the FMC is authorized to
share with another Federal agency service contract information that
parties of the service contract have legally decided to protect from
public disclosure in order to enable that Federal agency to ensure the
compliance of U.S.-flag ocean common carriers with cargo preference law
shipping rate requirements. Of course, that confidential service
contract information would remain protected from disclosure to the
public consistent with the Shipping Act of 1984, as amended by the
Ocean Shipping Reform Act of 1998, and other applicable Federal laws.
Mr. McCAIN. Mr. President, I'd like to thank my colleague from Texas
for clarifying this issue. Also, I'd like to complement her on her
efforts to protect the interests of the Department of Defense, other
Federal agencies, and American taxpayers while reforming the ocean
liner transportation system in a manner that encourages greater
competition. The Ocean Shipping Reform Act of 1998 is a thoroughly
crafted piece of legislation that required hard work by her and many
others for more than 3 years. It is a worthy accomplishment for the
106th Congress.
____________________