PUERTO RICO AUTHORITY'S MARAD REQUEST DRAWS FIRE WAIVER IS SOUGHT ON SUBSIDIZED SHIPS

PUERTO RICO AUTHORITY'S MARAD REQUEST DRAWS FIRE WAIVER IS SOUGHT ON SUBSIDIZED SHIPS

Operators in the U.S.-Puerto Rico trade are urging the Maritime Administration to deny the Puerto Rico Maritime Shipping Authority's request to operate five subsidy-built vessels temporarily in that domestic service.

Under shipping law, operators of vessels that were built with construction subsidy funds are not permitted to operate in U.S. coastal commerce unless they receive a six-month waiver in writing from Marad.The Puerto Rico authority, a government agency that owns Navieras de Puerto Rico, recently asked the agency for permission to operate its Lancer-class containerships exclusively in the Puerto Rico trade under such a waiver.

The application followed a recent district court decision that sent Marad back to the drawing boards to determine the amount of space on subsidy-built ships that operators may set aside for mixed foreign and domestic operations.

The shipping authority has used its Lancer vessels in that type of mixed service, but cited the "uncertainty caused by the decision" as the reason behind its waiver application.

Marine Transportation Services Sea-Barge Group Inc., which operates oceangoing tugs between Florida and Puerto Rico, has battled Marad's decisions on mixed foreign and domestic services.

Sea-Barge also criticized the authority's application, calling it "so bereft of a statement of the intended use" of the requested waiver that it precludes a "meaningful opportunity to comment" and provides Marad with "no basis" for making a determination.

Sea-Barge added that the Puerto Rican authority's application is unprecedented because the waiver is not for a particular vessel or vessels for which it might show a need, but for the entire Lancer fleet.

"Never has Marad granted so open-ended a waiver application. Never has Marad granted an application based upon such a paucity of supporting data," Sea-Barge attorneys said.

Trailer Marine Transport Corp., which operates a tug and barge service in the trade, complained that the shipping authority "apparently would have a blank check to deploy all or any of the vessels in the domestic trade at any time for an uncertain period."

Another operator, Kadampanattu Corp., said the authority's application will place domestic carriers in the trade "at a severe and unfair disadvantage."