SENATE PASSES SHIP DEEREGULATION

SENATE PASSES SHIP DEEREGULATION

In a historic decision for the maritime industry and for U.S. importers and exporters, the Senate voted decisively 71-26 Tuesday to pass the Ocean Shipping Reform Act without amendment.

The bill now goes to the House where backers are pressing Republican and Democrat leaders to accept Senate compromise language.House members could take up the legislation as early as this week, but more likely, it will be several days or weeks.

The United States should study shipping regulations overseas with an eye toward creating an international regulatory body, Conrad H.C. Everhard told a maritime dinner crowd. 12A

Lobbyists on both sides said they expect to hear from House leadership within a matter of days about what procedure the House will use to handle the bill, telling quickly whether it is likely to be enacted this year.

Major U.S. ship lines and large international shippers who had pushed for the legislation expressed delight Tuesday at the Senate action. Freight forwarders and shippers associations expressed satisfaction at clarifications they won.

An amendment offered by Sen. Slade Gorton, R-Wash., that would have extended confidential contracting rights to the shipper customers of maritime freight consolidators, also known as non-vessel-operating common carriers, was defeated by the Senate vote.

Proponents of the Gorton amendment, which was vigorously opposed by longshore unions and the national AFL-CIO, said they would take the fight to the House, but didn't hold out much optimism.

'BIG WIN'

''It's a big win,'' said Kathy Luhn, a lobbyist for the National Industrial Transportation League, which in 1994 had kicked off the maritime deregulation debate by successfully convincing the new GOP majority in the House to simply eliminate the Federal Maritime Commission.

The Senate bill passed Tuesday preserves the FMC as an independent agency but eliminates the requirement that ship lines file tariffs with the agency.

Further the bill would allow ship lines to enter into confidential contracts with individual customers, outside the bounds of the collective rate-setting process of the ship line conferences that now dominate most international trade lanes. It does not allow the big freight consolidators, acting as NVOCCs, to also offer confidential contracts to their shipper customers, a fact that some NVOCCs think will open the door to new competition from ship lines for their larger customers.

''In terms of regulatory policy, it's the biggest vote since 1984,'' said Chris Koch, a former staffer for Senate Commerce Committee Chairman John McCain, R-Ariz., now legal counsel for Sea-Land Service Inc. Sea-Land, the largest U.S. ship line, had pushed hard for the legislation.

Carlos Rodriquez, a lobbyist who represented the New York/New Jersey Freight Forwarders Association and backed the Gorton amendment, expressed disappointment that it had not received better support in the Senate. He said he would continue to push the concerns of freight intermediaries in the House.

SMALL EXPORTERS' ISSUE

''This is a small exporters issue. It's not necessarily an NVO issue,'' Mr. Rodriquez said.

Jon Kent, a lobbyist for the National Customs Brokers and Freight Forwarders Association, said he was pleased that the legislation included language negotiated with Sen. Tom Harkin, D-Iowa, clarifying the anti-discrimination provisions of the bill as they apply to shipper associations.

He said the Gorton amendment had been opposed by a ''devastating consortium of interests that felt they had to hold themselves together. If Gorton had succeeded they were going to kill the bill,'' he said.

Proponents said they have had ''positive'' meetings with House leaders, including Speaker Newt Gingrich, R-Ga., and Minority Leader Richard Gephardt, D-Mo., and Minority Whip Rep. David Bonior, D-Mich. Specifically, U.S. carriers and shippers are asking the House to use shortcut legislative procedures to avoid referring the shipping reform bill to the Transportation and Infrastructure Committee where it could be rewritten.

CALL FOR FACE VALUE

Instead, they are asking House leaders to simply take the Senate bill as is, call it the best possible deal and send it to the president for approval.

''I hope the House will take the bill up and won't tinker with it too much,'' said FMC chairman Hal Creel, who added he was relieved to see a bill preserving the FMC, rather than eliminating it, gain ground on Capitol Hill.

''At least, we'll have the uncertainty that's been out there, removed,'' Mr. Creel said.

OCEAN SHIPPING REFORM ACT

Changes to the landmark Shipping Act of 1984 provide greater contract flexibility in international containerized cargo shipping.

SEN. KAY BAILEY HUTCHISON'S BILL:

* Allows confidential contracting between vessel operators and shippers

* Makes the dock movement terms of all confidential deals disclosable to longshore unions.

* Lets carriers negotiate different deals with different customers.

* Prohibits conferences from restricting individual rate actions; shortens notice from 10 days to five.

* Freight consolidators must continue to issue public tariffs.

* Eliminates tariff filing system at the FMC; replaces it with electronic publishing.

SEN. SLADE GORTON'S AMENDMENT:

* Would extend confidential contracting rights to freight middlemen known as non-vessel-operating common carriers, or NVOCCs (Amendment defeated)

SEN. TOM HARKIN'S CLARIFICATION:

* States that carriers cannot discriminate against shippers associations or ocean freight intermediaries by unreasonable refusing to deal or negotiate.

(SOURCE: Journal of Commerce.