FMC AT 25: UP WITH THE TIMES

The U.S. Federal Maritime Commission was established by President Kennedy in August, 1961 as an independent regulatory agency, the successor to the old Federal Maritime Board. It is fitting that on this anniversary a few words be said regarding the nature of the FMC today, 25 years since its organization.

Probably the most significant fact of our recent past is the much discussed and debated Shipping Act of 1984. The general consensus appears to be that regulatory reform was long overdue. The Act largely replaced a statute nearly 70 years old, one that most had come to regard as needlessly cumbersome and restrictive. The 1984 Act removed many impediments to the smooth working of the maritime industry for both shippers and carriers.Challenges to conference agreements often tied proceedings up in adjudication for months, even years, an unwelcome burden in these days of overtonnaging and keen competition for cargo. Now, carrier agreements become automatically effective 45 days after filing, unless there is a demonstrable violation of antitrust statutes. Shippers can form associations and negotiate contracts with individual members of liner conferences as well as the conferences themselves. Clearly the Act resulted in greater opportunities for the industry. It has also enhanced the effectiveness of the FMC by providing the mechanism for it to operate more efficiently and with an emphasis on enforcement rather than regulation.

We are, however, still trying to sort out and deal with some exigencies of the '84 Act. For example, a provision in the Act allowing service contracts between shippers and carriers has been the object of some controversy and differing interpretations. Based on comments received and our experience in processing service contracts under the new Act, the Commission has proposed a rule-making to clarify the rights and obligations of shippers and carriers who enter into such contracts.

By its very nature, the Commission is continually evaluating and assessing its role as a regulator of world maritime commerce. Like any governmental regulatory body, our actions might occasionally elicit complaint. However, it is worth saying that if there were no FMC, the maritime industry would probably have to invent its own equivalent.

This is not a defense of government regulation in general. In fact, the feeling shared by the five members of the Commission, along with the administration, is that a minimum of government intervention is beneficial to the health of the industry. It should be stressed that even with regulation, a reasonable degree of discipline among industry participants is vital to the continued existence of that industry. But the value of an agency like the FMC is that it is a port in the storm of maritime commerce. The simple fact is that the industry with which we are all concerned is one of intensely competing interests. Conflicts are inevitable, and there is a need for an impartial, quasi-judicial body to resolve disputes. In this respect, the FMC fulfills a vital role.

We are, moreover, more than a tariff-processing office and middleman in industry disputes. The Commission's responsibilities are international in scope, and our actions often have far-reaching repercussions. The economic realities of the international maritime trades today are harsh. Overtonnaging has created a situation in which many governments have been moved to protect their own national-flag lines, sometimes at the expense of others in the trades. Protectionism in general is on the rise around the world. In cases where it is determined that the United States' foreign commerce is being unduly hampered, the FMC is directed by statute to take corrective action against the government and national lines responsible. We are not a promotional agency for the U.S. Merchant Marine as is the Maritime Administration. Yet we have a clear legislative mandate to protect the Merchant Marine as well as U.S. shippers against unfair foreign trade practices.

All of these aspects, together with our investigative, trade monitoring and enforcement responsibilities, combine to make the FMC unique among regulatory agencies. We are a small agency, and must fulfill our many obligations and deal with an increasing flow of paperwork on a budget of less than $12 million a year. Yet, the function of the FMC in the maritime industry - an industry historically important to the economy and security of this country - is certainly one that exceeds in importance any budgetary expenditure.

Maritime regulation has been and will continue to be essential to the maintenance of fair conditions for all participants in the industry.

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