Politics beach ocean reform

By Staff -- Logistics Management, 4/1/1998

The long-awaited Ocean Shipping Reform Act of 1998 was set to move to the Senate floor. Co-sponsors Sen. Trent Lott (R-Miss.), Sen. Kay Bailey Hutchinson (R-Texas), and Sen. John Breaux (D-La.) were prepared to present the legislation to the Senate. Then party politics temporarily set the legislation adrift.

Sen. Richard Durbin (D-Ill.) blocked the bill, S. 414, and all bills scheduled for consideration under the unanimous consent rules, because Sen. Phil Gramm (R-Texas) blocked two Illinois judiciary confirmations. The stalemate continued at press time.

Kathy Luhn, director of government affairs for the National Industrial Transportation League (NITL), says the bill could be brought to the floor anytime after the dispute is resolved. "Senate leaders are working behind the scenes to resolve the dispute," she says, noting that Durbin's action has nothing to do with the merits of S. 414.

The bill would end requirements that carriers file tariffs with the Federal Maritime Commission but would require the publication and enforcement of common carrier rates. Additionally, it would permit confidential contracts between shippers and carriers. Though the rates in these contracts would not be published, the contracts would be filed with the proposed Intermodal Transportation Board, an independent agency to be formed by the merger of the FMC and the Surface Transportation Board.

The Senate will consider the bill along with an amendment proposed by Sen. Slade Gorton (R-Wash.). The amendment, supported by third-party transportation providers, would permit freight consolidators, known as non-vessel operating common carriers (NVOCCs), to enter into confidential contracts with shippers. "Large shippers can enter into confidential contracts with ocean carriers [under S. 414], but small shippers must arrange transportation through NVOs," says Robert A. Voltmann, executive director and chief executive officer of the Transportation Intermediaries Association. "Without Sen. Gorton's amendment, large shippers will know what their small competitors pay for ocean freight, while the smaller competitor will not know what the larger shipper is paying. The benefits of deregulation would flow only to big business."

NITL opposes the amendment, Luhn says. She notes that NVOCCs, acting as shippers, would be allowed to enter into confidential contracts with carriers under S. 414. "But they can't turn around, acting as carriers, and offer confidential service contracts to shippers when they are not providing the service," she says. "You can't have it both ways."

The United States is the only country that recognizes the term NVOCC, Luhn continues. "In all other countries, they are freight forwarders, and freight forwarders are shippers," she says.

Luhn also says that passage of the amendment could affect the chances of ocean-shipping reform's passage altogether. "S. 414 reached a delicate balance between the Senate, labor, carriers, ports, and shippers," she says. "We don't want the amendment to upset the balance and have the bill fall apart."

She says that Sen. Gorton has supported ocean-shipping reform and "he does not intend to kill the bill" if the Senate does not pass his amendment.