NON-NATIONAL-FLAG OCEAN SHIPPING RATES THURSDAY, DECEMBER 6, 1973 U.S. SENATE, SENATE COMMERCE COMMITTEE, SUBCOMMITTEE ON MERCHANT MARINE, Washington, D.C. The subcommittee met at 10:10 a.m., in room 1202, Dirksen Senate Office Building, Hon. Daniel K. Inouye, presiding. OPENING STATEMENT BY SENATOR INOUYE Senator INOUYE. The hearing will please come to order. This morning the Merchant Marine Subcommittee of the Senate. Commerce Committee opens hearings on S. 2576, a bill to provide for minimum ocean rates by non-national or third-flag common carriers by water operating in the foreign commerce of the United States. I introduced this legislation in the Senate on October 12, 1973, but I am not wedded to its language. My intention in this effort is to maintain a stable tariff situation in our Nation's foreign trade. The bill is not designed to eliminate non-national-flag carriers from the U.S. trades nor to prop up artificially high rates in a given trade. Low rates filed by non-national-flag carriers would still be permitted if they meet the test of covering fully distributed commercial costs and there is nothing to prevent a national-flag carrier from filing rates which might be lower than other rates in the trade. This morning's hearing is the beginning of our job to develop the facts related to the rate situation in some of our trades which may be detrimental to the well-being of our shipping industry and our foreign trade. We have reached no conclusions at this point, we only want to get all of the facts. [The bill and agency comments follow:] Staff member assigned to these hearings: Richard J. Daschbach (1) 93D CONGRESS 1ST SESSION S. 2576 IN THE SENATE OF THE UNITED STATES OCTOBER 12, 1973 Mr. INOUYE introduced the following bill; which was read twice and referred to the Committee on Commerce A BILL To provide for minimum rate provisions by nonnational carriers in the foreign commerce of the United States, and for other purposes. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That section 18 of the Shipping Act, 1916 (46 U.S.C. 817), 4 is amended by 5 6 7 8 9 10 II (a) striking from paragraph (2) of subsection (b) the phrase: "which results in an increase in cost to the shippers,"; (b) striking the second sentence of said paragraph (2), which reads: "Any changes in the rates, charges, or classifications, rules, or regulations which result in a 1 2 3 4 5 2 decreased cost to the shipper may become effective upon the publication and filing with the Commission."; and (c) inserting at the end thereof a new subsection. (c), as follows: "(c). From and after ninety days following enactment 6 hereof, every nonnational flag carrier in any given trade 7 in the foreign commerce of the United States shall not main8 tain rates or charges in its tariffs filed with the Federal 9 Maritime Commission in that trade that are lower than the 10 lowest corresponding rate or charge of any national flag 11 carrier in that trade unless said rate or charge is first deter12 mined by the Commission as provided herein to be compen13 satory on a fully distributed commercial cost basis. When14 ever there shall be filed with the Commission by any non15 national flag carrier a rate or charge which is lower than 16 the lowest corresponding rate or charge effective in that 17 given trade filed by any national flag carrier in that given 18 trade, upon complaint of a national flag carrier in that given 19 trade that such rate or charge is lower than the lowest corre20 sponding rate or charge of any national flag carrier rate or 21 charge as herein provided, or upon the Commission's own 22 order so alleging, such filing shall be rejected pending a 23 determination by the Commission, after hearing, concern24 ing the lawfulness of said rate or charge: Provided, however, 3 1 That the Commission may rescind such rejection at any time 2 within thirty days after the filing of such rate or charge, 3 upon a good cause showing by the nonnational flag carriers 4 that the rejected matter is not in violation of this section. 5 The rate or charge of the nonnational flag carrier may then 6 become effective on its originally filed effective date. At any 7 hearing under this subsection, the burden of proof to show 8 that the rate or charge is not lower than the lowest corre9 sponding rate or charge of any national flag carrier or that 10 such rate or charge is compensatory on a fully distributed 11 commercial cost basis, shall be upon the publishing carrier. 12 Rates or charges which have been rejected by the Commis13 sion are void and their use is unlawful unless authorized by 14 the Commission as provided in this subsection. For the pur15 poses of this subsection "(i) the term 'national flag carrier' means a common carrier by water operating vessels on regular berth services to and from United States ports of call that are registered in the United States or the other country in the given trade; "(ii) the term 'nonnational flag carrier' means any common carrier by water operating in the given trade, other than a national flag carrier; and "(iii) the term 'given trade' means the trade be tween the United States and another country. |