[Congressional Record (Bound Edition), Volume 145 (1999), Part 3]
[Senate]
[Pages 3546-3547]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         OCEAN SHIPPING REFORM

  Mr. LOTT. Mr. President, on February 26, 1999, the Federal Maritime 
Commission (FMC) completed its rulemaking to implement the Ocean 
Shipping Reform Act of 1998. The regulatory framework for the liner 
shipping industry is now in place and ready for the May 1, 1999, start 
date.
  The 1998 Act signals a paradigm shift in the conduct of the ocean 
liner business and its regulation by the FMC. Where ocean carrier 
pricing and service options were diluted by the conference system and 
``me too'' requirements, an unprecedented degree of flexibility and 
choice will result. Where agency oversight once focused on using rigid 
systems of tariff and contract filing to scrutinize individual 
transactions, the ``big picture'' of ensuring the existence of 
competitive liner service by a

[[Page 3547]]

healthy ocean carrier industry to facilitate fair and open maritime 
commerce among our trading partners will become the oversight priority.
  Mr. President, as FMC Commissioner Ming Hsu recently told a large 
gathering of shippers and industry representatives, ``This has been not 
only a long journey, but a long needed journey * * * With the passage 
of the Ocean Shipping Reform Act and the FMC's new regulations, I 
believe the maritime industry will be far less shackled by burdensome 
and needless regulations * * * I believe we can now look forward to an 
environment which gives you the freedom and flexibility to develop 
innovative solutions to your ever-changing ocean transportation 
needs.'' I couldn't agree more.
  The FMC regulatory process bore some resemblance to the legislative 
process that preceded it. A few early steps started to head off in the 
wrong direction, but through honest dialogue among the industry and the 
government parties, the course was corrected and the intent of the 1998 
Act was embodied in the regulations. Now the FMC faces the challenge of 
implementing the new regulations in a manner consistent with 
Congressional intent.
  Mr. President, through the 1998 Act, the Congress directed the FMC to 
spend less effort attempting to regulate the day-to-day business of 
ocean carriers and spend more effort on countering truly market 
distorting activities. This shift is made possible by giving exporters 
and importers greater opportunity and ability to use the marketplace to 
satisfy their ocean shipping requirements through less government 
intervention.
  Recent efforts by some countries to protect their domestic maritime 
industries by imposing restrictive trade practices indicates that this 
shift in emphasis is well-timed. I am particularly concerned about 
China's efforts to impose greater regulatory control over the ocean 
shipping industry as the rest of the world is heading in the opposite 
direction. While the Maritime Administration seem to be nearing an 
agreement eliminating unfair practices by Brazil, continued vigilance 
is required. As we are seeing with Japan's port practices, the problem 
can remain long after such an agreement is reached.
  Mr. President, I should point out that paradigm shifts are often 
painful, but enlightening, for involved organizations. To its credit, 
the FMC met the challenge of promulgating the new regulations by the 
March 1, 1999 deadline. Now, I recognize that Congress issues many 
deadlines for the Executive Branch, sometimes with little success. But 
I want to personally congratulate the FMC for its tremendous effort and 
responsiveness to complete these regulations on time. Not only did the 
FMC deliver its rules on time; the FMC's rules are clearly within the 
intent of Congress. I feel good about that.
  I want to express my gratitude to the four FMC Commissioners, 
Chairman Hal Creel, Ming Hsu, John Moran, and Delmond Won, for their 
leadership and wisdom during this process. This band of four challenged 
the staff to think ``outside the box'' of the previous regulatory 
system and develop innovative methods to monitor the industry in a less 
intrusive manner. Also, I want to recognize the efforts of the FMC 
staff members who worked long and hard to meet Congress' deadline: 
George Bowers, Florence Carr, Jennifer Devine, Rachel Dickon-Matney, 
Bruce Dombrowski, Rebecca Fenneman, Vern Hill, Christopher Hughey, Amy 
Larson, David Miles, Tom Panebianco, Austin Schmitt, Matthew Thomas, 
Bryant VanBrakle, Ed Walsh, and Ted Zook. Their hard work and sweat 
will truly benefit this Nation by enabling industry and its customers 
to prepare for this new era of ocean shipping.
  Mr. President, just as it took several years for the legislative 
process to bear fruit, I urge patience before evaluating the results of 
this rulemaking. I will continue to monitor the transition process for 
this fundamental change. The Ocean Shipping Reform Act can't fix 
international economic imbalances and uncertainties, but it will give 
the industry and its customers much-needed flexibility to work through 
many difficult situations.
  Mr. President, The health of our Nation's economy depends on a 
healthy system for international trade, and therefore, a dependable 
ocean shipping industry. The FMC rules will provide the necessary 
certainty in a manner consistent with Congressional intent. Again, I 
salute the FMC for being responsive.

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