CONSOLIDATORS: SHIP BILL HURTS OUR BUSINESS

CONSOLIDATORS: SHIP BILL HURTS OUR BUSINESS

Freight consolidators are emerging as the key holdout to an ocean shipping deregulation proposal that otherwise has gained broad support in the maritime industry.

In an interview with The Journal of Commerce, top officials from the National Customs Brokers & Forwarders Association of America vowed to fight against Senate approval of a bill unless the concerns of their members are reconciled.The group's primary concern is that the legislation will make them less competitive against the ocean carriers.

''There's no guarantee this bill is going to fly and go through at this time,'' said Peter Powell, a Massachusetts-based consolidator who serves as the association's vice president.

That view separates Mr. Powell and his group from U.S.-flag and foreign shipping lines, ports, shippers and maritime labor.

They expect swift Senate action following a compromise reached within the industry after three years of divisiveness.

The breakthrough agreement was unveiled earlier this week by the National Industrial Transportation League, a shippers group leading the charge for container shipping law changes.

It was confirmed by the representatives of other supporting sectors.

SUPPORT COMPROMISE

Senate maritime leaders are expected soon to announce their support for the compromise, along with plans to bring the legislation to a Senate floor vote in two to three weeks.

The legislation would allow for the first time confidential contracting between ocean carriers and their shipper customers. It would end the requirement that tariffs be filed with the federal government. It also would preserve the Federal Maritime Commission as an independent agency.

The legislation is intended to increase competition in ocean transportation, said Mr. Powell. Instead it will enhance shipping lines' ability to discriminate against freight forwarders by cutting them out of deals, to the disadvantage of small shippers, he said.

Jon Kent, a Washington lobbyist for the trade group, said some provisions ''create too great a burden on us to show that we've been the object of (rate and service) discrimination as intermediaries.''

Another key concern is the legislation continues a prohibition against non-vessel-operating common carriers offering to shippers volume discount agreements known as service contracts.

Additionally, consolidators want to make sure that under deregulation they don't suffer financial losses as a result of the shift to confidential contracting.

Weaknesses in the bill, particularly the discrimination issue, give consolidators leverage in their Senate battle, Mr. Kent said.

SOME SKEPTICISM

That leverage, said Mr. Powell, is ''a couple of senators that have had experience with deregulation and are skeptical.'' The two officials declined to give any senators' names.

Under Senate procedures, the opposition of just one or two senators can easily delay action on legislation.

Despite the opposition of freight consolidators, the compromise plan has the backing of labor unions, which carry enormous clout with Democrats, especially in the House.

Labor's opposition last year was instrumental in shelving the bill. ''We have pledged to support this package in its entirety,'' said Edward Wytkind, executive director of the Transportation Trades Department of the AFL-CIO.

The provision barring freight consolidators from offering confidential contracts to their customers was inserted into the bill, according to those who helped draft it, largely at the insistence of labor.

MAY SAVE MORE JOBS

Unions representing long- shoremen have long accused freight consolidators of using non-union dockworkers to handle their shipments.

By potentially curbing some of the consolidators' business, labor believes more union jobs might be saved.

Privately, shipping lines support the ban on consolidator contracting, since it means less competition for them.

Publicly, carriers say consolidators should not have the same rights as ship lines because they do not own vessels and do not take on the full responsibilities of cargo hauling.

Shippers supported the ban as part of the overall political compromise, but would have preferred that freight consolidators not be shackled.

''Shippers like having (NVOs) around because they are a competitive alternative,'' said a lobbyist who followed the talks closely.