DEREGULATION DIVIDES EAST, WEST PORTS

DEREGULATION DIVIDES EAST, WEST PORTS

The thought of ocean carrier deregulation has most East Coast ports shaking. West Coast ports, however, barely feel a tremor.

Legislation deregulating container shipping could pass the House as early as this week and then go on to the Senate. As the bill progresses, various segments of the maritime industry are taking positions. The port industry, however, appears divided.While East Coast and Gulf Coast ports for the most part have opposed the proposal, West Coast ports - which include four of the nation's top five containerports - have remained ambivalent.

In fact, the Ocean Shipping Reform Act of 1995 isn't drawing any opposition from the Port of Long Beach, the nation's largest. Up the coast, the Port of Oakland is ready to go along with the proposed changes. And if reforms are troubling port operators in Los Angeles and Seattle, it's not apparent. The two ports have yet to focus on the legislation.

Conversely, the deregulation proposal has met stiff resistance from Eastern port representatives who see it leading to rate wars, carrier consolidations and fewer port calls.

Some critics have predicted dire consequences, including a decline in U.S. trade and a diminution of cargo at some ports that would threaten their viability.

In general, U.S. port operators - as represented through the American Association of Port Authorities - have not staked out a clear-cut position on the deregulation compromise reached in June by two of their best customers, U.S.-flag shipping lines and shippers represented by the National Industrial Transportation League.

The package would repeal the 1984 Shipping Act, the primary law governing container shipping. It would end public tariff filing, preserve antitrust immunity for carriers and ports, and abolish the Federal Maritime Commission. AAPA has called for hearings on the proposal.

The shipper-carrier compromise, negotiated by the NIT League and Sea-Land Service Inc., the nation's largest shipping line, is embodied in legislation advanced to the House floor by the Transportation and Infrastructure Committee. Senate action could start as soon as this week.

The proposed changes primarily would affect shipping lines, not the Port of Long Beach, said Yvonne Avila, the communications director for the port. Long Beach officials see no chance of losing cargo.

The port's board has not taken a position, Ms. Avila said, and the port has not asked members of the California congressional delegation to block its path.

Said Leo Brien, maritime director for the Port of Oakland, "Even some of the (U.S.) carriers are nervous, but it's going to happen - deregulation and (carrier) rationalization."

"The rough deal that has been cut is probably the best that can happen. Ports are not in a position to stop it. We should work with the carriers," Mr. Brien said.

The plan structured in June likely will remain intact through congressional deliberations, the port official said. "The essence of the deal is something we're prepared to live with."

Oakland officials don't see U.S. trade declining as a result of shipping law reforms, Mr. Brien said.

Carrier consolidations could be a different story, and Oakland, like any port, needs to prepare for those changes, he said. "We need to invest our money responsibly."

The Port of Los Angeles' board of directors has not taken a position on the Ocean Shipping Reform Act of 1995, said spokeswoman Barbara Yamamoto.

Henry Yates, the government relations director for the Port of Seattle, said the bill is "a piece of legislation we need to take a look at, but we have not done so yet."

Northwest ports generally have not drawn a sharp focus on deregulation, according to various industry officials. They said they have not put together a consensus position.

"We've been watching it with interest, but have not been actively involved in it," said Tom Decker, government relations manager for the Port of Portland, Ore.

Portland's position is that the FMC ought to be retained, at least temporarily, until other regulatory moves, like eliminating tariff filing, are sorted out, Mr. Decker said.

"It's a real tough call," said John Terpstra, the executive director for the Port of Tacoma. "There's so much uncertainty and speculation as to what to expect and what could happen, and ports sometimes feel like we're in the middle" between carriers and shippers, with"U.S. carriers on one side and foreign flag carriers on the other."

The Port Authority of New York & New Jersey, the nation's second-ranked containerport, is among the leading critics of the House deregulation bill.

Lillian Borrone, director of the port, has expressed concern that the elimination of the Federal Maritime Commission could be a serious disruption for the ports.

An analysis of the House bill prepared by N.Y. & N.J. port officials in mid-September calls for the retention of tariff filing, contrary to one of the fundamental objectives of reformists. Secret rates and agreements will put ports at a disadvantage, the analysis says.

J. Ron Brinson, president of the Port of New Orleans, said at a September conference the elimination of the Federal Maritime Commission could expedite a trend among shipping lines to concentrate their service at larger ports.

Mr. Brinson, other industry officials and consultants have warned that carrier consolidations stemming from deregulation could lead to an underutilization of port infrastructure in which billions in public funds have been invested.