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Signals™ Headlines - August 1, 1998

Ocean Shipping Reform Act Approved by US House of Representatives

The US House of Representatives voted today to approve the Ocean Shipping Reform Act of 1998, and send the bill back to the Senate. While the House vote is a big step forward for the ship reform bill, it is still not yet US law. Due to an amendment placed on the ship reform bill by the House, the Senate must approve the bill again before it can be sent to President Clinton for approval.

There is very little time left in this year’s legislative calendar for the Senate to schedule another vote on the bill, and the Clinton administration has expressed less than strong support for it. Opinions on the bill’s chances for passage this year still vary widely, but Federal Maritime Commission (FMC) Chairman Hal Creel expects it will win full approval. The FMC has already begun the process of soliciting public comments, and drafting regulations mandated by the ship reform bill.

The amendment to the ship reform bill made by the House deletes a provision inserted by Senate Majority Leader Trent Lott (R-MS) that would provide veterans death benefits to about 3,000 merchant mariners who served the US War Shipping Administration in 1945 and 1946. Senator Lott, a co-sponsor of the bill, must now accept this change, and find time to schedule the bill for another successful vote sometime after the Senate returns from its summer recess. This new delay gives opponents of the bill one last chance to lobby for changes to it. Sen. Slade Gorton (R-WA), has objected to key parts of the ship reform bill, and could delay its approval by insisting on a debate on the Senate floor.

If the Ocean Ship Reform Act of 1998 does gain full approval in this year’s legislative session, the FMC will finalize the new regulations mandated by it no later than March 1, 1999. These new regulations would take effect on May 1, 1999. Here is a brief summary of the potential new regulations:

  • Maintains an independent Federal Maritime Commission (FMC), at current staffing levels.
  • Eliminates public disclosure of service contract rates and charges agreed between vessel operators and shippers and shipper associations, however contracts will continue to be filed with the FMC. Only the US ports, commodities, volumes and contract duration will be made available to the public.
  • Removes equal access requirements on service contracts for similarly situated shippers. Carriers will no longer be required to enter into contracts with shippers who demand “me too” access.
  • Eliminates the FMC’s “ATFI” tariff filing system, but replaces it with privately operated electronic publishing systems approved and closely monitored by the FMC. Both vessel operators and NVOCCs will be required by the FMC to issue tariffs in these approved and monitored systems.
  • New assembled automobiles become exempt from FMC tariff publication requirements.
  • Reclassifies Ocean Freight Forwarders and Non-Vessel Operating Common Carriers (NVOCC) as “Ocean Transportation Intermediaries,” and requires licensing by the FMC. It appears every Ocean Transportation Intermediary (OTI) doing business in the USA will be required to submit a detailed application and surety bond to the FMC to obtain an OTI license.
  • Prohibits conferences and rate agreements from restricting individual tariff and rate actions by member carriers; shortens notice period from not more than 10 days to 5 days.
  • Requires conferences and rate agreements to allow individual member carriers to enter into confidential service contracts with shippers. Some observers believe this requirement will ultimately lead to the demise of many conferences and rate agreements in US trades.

Docket 98-10: Inquiry Into Automated Tariff Filing Systems for the Ship Reform Act of 1998

This FMC inquiry seeks public comments on automated tariff publication systems that best comport with the directives of S.414, the Ocean Shipping Reform Act of 1998, and its legislative history. Also, the FMC suggests carriers should be required to file service contracts electronically, instead of in paper format as is currently required. The 15 questions listed in the docket suggest the FMC intends to aggressively enforce its obligation under the Ship Reform Act to ensure comprehensive and accurate ocean carrier tariffs are available to the public and to US Federal Agencies via electronic means. There is no mention of the Internet in the docket, but there are many references to the “ATFI” tariff system.

This is the FMC’s first step in the process of drafting new tariff publication regulations. These regulations will not be finalized until March 1999, and will be implemented in May 1999. Here at Distribution-Publications, Inc. (DPI) we are following these developments very closely. SIGNALS™ readers can expect detailed and timely updates on these regulatory developments.

Docket 98-09: Update of Existing and Addition of New Filing and Service Fees

By this docket the FMC proposes to review its existing fees for filing petitions, complaints, special docket applications, freight forwarder license applications, ATFI tariff filing and user charges, agreements, and other services. For ATFI tariff filing, the fee will increase from $ .17 to $ .20 per filing object. New fees are proposed for copies of the Regulated Persons Index, for applications to amend passenger vessel certifications, and for the agency’s review of clerical errors in service contracts, as requested by parties to the contract. These fees are proposed to become effective on October 1, 1998.

Index of all SIGNALS™ Issues

SIGNALS™ is provided as a service to its customers by Distribution-Publications, Inc. © 1999. All rights reserved.

“Navigating the Regulatory Seas” is a service mark of Distribution-Publications, Inc.

The information contained herein is obtained from reliable sources. It is subject to change at any time, however, depending on changes in laws and regulations. While we continually attempt to monitor this information, we do not guarantee its accuracy and are not responsible for any damages suffered by any party in reliance on it.

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SIGNALS™ the newsletter of Distribution-Publications, Inc. Vol. 2, No. 4, August 1, 1998

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