Future regulatory debates. (maritime regulation)

EDITOR'S NOTE: In speeches to Propeller Clubs in Seattle, Wash., and Jacksonville, Fla., during January, FMC chairman Christopher Koch described the upcoming regulatory debates between shippers and carriers and the likely outcome. The following is excerpted from those addresses.

Stage one is over. The next stage will determine ways to 'relax the bureaucratic grip' on commercial activity. 'The most difficult task for shippers ... is to demonstrate that their proposals will not lead to chaos or destructive rate wars.' A 'calmer, focused dialogue' may bring agreement.

So what do the future debates of the Shipping Act of 1984 look like and where do they lead?

Obviously, much will depend on the philosophies and personalities of the new incoming administration's appointees, which is uncertain at this time.

But as significant as those changes can be, the changing demands of international transportation by themselves will continue to be the cause of scrutiny of the Shipping Act and its implementation.

The 1984 Act was an excellent piece of legislation in 1984. It provided welcome and productive changes in ocean shipping, including: simplified, efficient, intermodal transportation; increased competition in pricing because of mandatory independent rate action and service contracts; legal certainty to carriers in the formation and operation of conference and other agreements; certain legal standing for NVOCCs; authority for shippers' associations; and reduced involvement of the government in creating regulatory uncertainty and costly litigation. The Act was clearly a major improvement in shipping for carriers and shippers alike. That was stage one.

The next stage may be nearing its completion: that is, to relax, within the terms of the existing statute, the bureaucratic grip on regulating consenting commercial conduct between carriers and shippers.

Substantial change is possible but may have to come, at least in part, from a more liberal use by the Commission of its authority under Section 16 of the Act to exempt particular activities from regulation. That authority has not been expansively used by the Commission to date.

In my opinion, the Commission must resist pleas to return to greater regulatory intrusions in regulating shipping. The Commission should stay on a course of being more concerned about whether its regulatory requirements raise Americans' costs of doing business or adversely affect exporters' ability to market their products in a global economy, than whether carriers' and shippers' transportation agreements are stated or structured in a particular way.

During the review of the 1984 Act by the Advisory Commission on Conferences in Ocean Shipping, and in my own experience, it has been very difficult to find shippers who don't want to change and further liberalize the present regulatory system. …