I
104TH CONGRESS
1ST SESSION
H. R. 2149
To reduce regulation, promote efficiencies, and encourage competition in the
international ocean transportation system of the United States, to elimi-
nate the Federal Maritime Commission, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 1, 1995
Mr. SHUSTER (for himself, Mr. MINETA, Mr. COBLE, Mr. TRAFICANT, and
Mr. OBERSTAR) introduced the following bill; which was referred to the
Committee on Transportation and Infrastructure
A BILL
To reduce regulation, promote efficiencies, and encourage
competition in the international ocean transportation sys-
tem of the United States, to eliminate the Federal Mari-
time Commission, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Ocean Shipping Re-
form Act of 1995’’.
TITLE I—OCEAN SHIPPING
REFORM
SEC. 101. PURPOSES.
Section 2 of the Shipping Act of 1984 (46 App.
U.S.C. 1701) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(2);
(2) by striking the period at the end of para-
graph (3) and inserting ‘‘; and’’; and
(3) by adding a new paragraph (4) to read as
follows:
‘‘(4) to permit carriers and shippers to develop
transportation arrangements to meet their specific
needs.’’.
SEC. 102. DEFINITIONS.
Section 3 of the Shipping Act of 1984 (46 App.
U.S.C. 1702) is amended—
(1) effective on January 1, 1997—
(A) by striking paragraph (9); and
(B) by redesignating the remaining para-
graphs accordingly;
(2) effective on June 1, 1997—
(A) by striking paragraph (4);
(B) in paragraph (7), by striking ‘‘a com-
mon tariff;’’ and inserting ‘‘a common schedule
of transportation rates;’’;
(C) by striking paragraph (10) (as redesig-
nated by paragraph (1) of this section);
(D) by striking paragraph (13) (as redesig-
nated by paragraph (1) of this section);
(E) by striking paragraph (16) (as redesig-
nated by paragraph (1) of this section);
(F) by amending paragraph (18) (as redes-
ignated by paragraph (1) of this section) to
read as follows:
‘‘(18) ‘ocean freight forwarder’ means a person
that—
‘‘(A)(i) in the United States, dispatches
shipments from the United States via a com-
mon carrier and books or otherwise arranges
space for those shipments on behalf of shippers;
or
‘‘(ii) processes the documentation or per-
forms related activities incident to those ship-
ments; or
‘‘(B) acts as a common carrier that does
not operate the vessels by which the ocean
transportation is provided, and is a shipper in
its relationship with an ocean common car-
rier.’’;
(G) by striking paragraph (20) (as redesig-
nated by paragraph (1) of this section);
(H) in paragraph (22) (as redesignated by
paragraph (1) of this section)—
(i) by striking ‘‘or’’ the second time it
appears and inserting a comma; and
(ii) by striking the period and insert-
ing ‘‘, a shippers’ association, or an ocean
freight forwarder that accepts responsibil-
ity for payment of the ocean freight.’’;
(I) by amending paragraph (23) (as redes-
ignated by paragraph (1) of this section) to
read as follows:
‘‘(23) ‘shippers’ association’ means a group of
shippers that consolidates or distributes freight, on
a nonprofit basis for the members of the group in
order to secure carload, truckload, or other volume
rates or ocean transportation contracts.’’; and
(J) by inserting after paragraph (18) the
following new paragraph:
‘‘(19) ‘ocean transportation contract’ means a
contract in writing separate from the bill of lading
or receipt between 1 or more common carriers or a
conference and 1 or more shippers to provide speci-
fied services under specified rates and conditions.’’.
SEC. 103. AGREEMENTS WITHIN THE SCOPE OF THE ACT.
Section 4(a) of the Shipping Act of 1984 (46 App.
U.S.C. 1703(a)) is amended, effective on June 1, 1997—
(1) in paragraph (5), by striking ‘‘non-vessel-
operating common carriers’’ and inserting ‘‘ocean
freight forwarders’’; and
(2) by amending paragraph (7) to read as
follows:
‘‘(7) discuss any matter related to ocean trans-
portation contracts, and enter ocean transportation
contracts and agreements related to those con-
tracts.’’.
SEC. 104. AGREEMENTS.
Section 5 of the Shipping Act of 1984 (46 App.
U.S.C. 1704) is amended—
(1) effective on January 1, 1997—
(A) in subsection (b)(4), by striking ‘‘at
the request of any member, require an inde-
pendent neutral body to police fully’’ and in-
serting ‘‘state the provisions, if any, for the po-
licing of’’;
(B) in subsection (b)(7), by striking ‘‘and’’
at the end;
(C) in subsection (b)(8), by striking the
period and inserting ‘‘; and’’; and
(D) by adding at the end of subsection (b)
the following new paragraph:
‘‘(9) provide that a member of the conference
may enter individual and independent negotiations
and may conclude individual and independent service
contracts under section 8 of this Act.’’;
(2) effective on June 1, 1997—
(A) by amending subsection (b)(8) to read
as follows:
‘‘(8) provide that any member of the conference
may take independent action on any rate or service
item agreed upon by the conference for transpor-
tation provided under section 8(a) of this Act upon
not more than 3 business days’ notice to the con-
ference, and that the conference will provide the new
rate or service item for use by that member, effec-
tive no later than 3 business days after receipt of
that notice, and by any other member that notifies
the conference that it elects to adopt the independ-
ent rate or service item on or after its effective date,
in lieu of the existing conference provision for that
rate or service item;’’; and
(B) by adding the following new paragraph
to read as follows:
‘‘(10) prohibit the conference from—
‘‘(A) prohibiting or restricting the mem-
bers of the conference from engaging in individ-
ual negotiations for ocean transportation con-
tracts under section 8(b) with 1 or more ship-
pers; and
‘‘(B) issuing mandatory rules or require-
ments affecting ocean transportation contracts
that may be entered by 1 or more members of
the conference, except that a conference may
require that a member of the conference dis-
close the existence of an existing individual
ocean transportation contract or negotiations on
an ocean transportation contract, when the con-
ference enters negotiations on an ocean trans-
portation contract with the same shipper.’’;
(C) in subsection (e), by striking ‘‘carrier
that are required to be set forth in a tariff,’’
and inserting ‘‘carrier,’’; and
(D) in subsection (b)(9), by striking ‘‘serv-
ice’’ and inserting ‘‘ocean transportation’’.
involved. The status of a common carrier as an
ocean common carrier is not affected by the number
or terms of ocean transportation contracts entered.
‘‘(2) A party to an ocean transportation con-
tract entered under this section shall have no duty
in connection with services provided under the con-
tract other than the duties specified by the terms of
the contract.
‘‘(3)(A) An ocean transportation contract or the
transportation provided under that contract may not
be challenged in any court on the grounds that the
contract violates a provision of this Act.
‘‘(B) The exclusive remedy for an alleged
breach of an ocean transportation contract is an ac-
tion in an appropriate State or Federal court of
competent jurisdiction, unless the parties otherwise
agree.’’.
(b) CONFIDENTIALITY OF CONTRACTS.—Effective on
January 1, 1998, section 8(b) of the Shipping Act of 1984
(46 App. U.S.C. 1707(b)), as amended by subsection (a)
of this section, is amended by adding at the end the
following:
‘‘(4) A contract entered under this section may
be made on a confidential basis, upon agreement of
the parties. An ocean common carrier that is a
member of a conference agreement may not be pro-
hibited or restricted from agreeing with 1 or more
shippers that the parties to the contract will not dis-
close the rates, services, terms, or conditions of that
contract to any other member of the agreement, to
the conference, to any other carrier, shipper, con-
ference, or to any other third party.’’.
SEC. 107. PROHIBITED ACTS.
Section 10 of the Shipping Act of 1984 (46 App.
U.S.C. 1709) is amended—
(1) effective on January 1, 1997, by amending
subsection (b)—
(A) by amending paragraph (1) to read as
follows:
‘‘(1) except for service contracts, subject a per-
son, place, port, or shipper to unreasonable discrimi-
nation;’’; and
(B) by repealing paragraphs (2), (3), (4),
and (8);
(2) effective on June 1, 1997, by amending
subsection (b) to read as follows:
‘‘(b) COMMON CARRIERS.—No common carrier, ei-
ther alone or in conjunction with any other person, directly
or indirectly, may—
‘‘(1) except for ocean transportation contracts,
subject a person, place, port, or shipper to unreason-
able discrimination;
‘‘(2) retaliate against any shipper by refusing,
or threatening to refuse, cargo space accommoda-
tions when available, or resort to other unfair or un-
justly discriminatory methods because the shipper
has patronized another carrier or has filed a com-
plaint, or for any other reason;
‘‘(3) employ any fighting ship;
‘‘(4) subject any particular person, locality,
class, or type of shipper or description of traffic to
an unreasonable refusal to deal;
‘‘(5) refuse to negotiate with a shippers’ asso-
ciation;
‘‘(6) knowingly and willfully accept cargo from
or transport cargo for the account of an ocean
freight forwarder that does not have a bond, insur-
ance, or other surety as required by section 19;
‘‘(7) knowingly and willfully enter into an ocean
transportation contract with an ocean freight for-
warder or in which an ocean freight forwarder is
listed as an affiliate that does not have a bond, in-
surance, or other surety as required by section 19;
or
‘‘(8)(A) knowingly disclose, offer, solicit, or re-
ceive any information concerning the nature, kind,
quantity, destination, consignee, or routing of any
property tendered or delivered to a common carrier
without the consent of the shipper or consignee if
that information—
‘‘(i) may be used to the detriment or preju-
dice of the shipper or consignee;
‘‘(ii) may improperly disclose its business
transaction to a competitor; or
‘‘(iii) may be used to the detriment or prej-
udice of any common carrier;
except that nothing in paragraph (8) shall be con-
strued to prevent providing the information, in re-
sponse to legal process, to the United States, or to
an independent neutral body operating within the
scope of its authority to fulfill the policing obliga-
tions of the parties to an agreement effective under
this Act. Nor shall it be prohibited for any ocean
common carrier that is a party to a conference
agreement approved under this Act, or any receiver,
trustee, lessee, agent, or employee of that carrier, or
any other person authorized by that carrier to re-
ceive information, to give information to the con-
ference or any person, firm, corporation, or agency
designated by the conference or to prevent the con-
ference or its designee from soliciting or receiving
information for the purpose of determining whether
a shipper or consignee has breached an agreement
with a conference or for the purpose of determining
whether a member of the conference has breached
the conference agreement or for the purpose of com-
piling statistics of cargo movement, but the use of
that information for any other purpose prohibited by
this Act or any other Act is prohibited; and
‘‘(B) after December 31, 1997, the rates, serv-
ices, terms, and conditions of an ocean transpor-
tation contract may not be disclosed under this
paragraph if the contract has been made on a con-
fidential basis under section 8(b) of this Act.
The exclusive remedy for a disclosure under this para-
graph shall be an action for breach of contract as provided
in section 8(b)(3) of this Act.’’;
(3) effective on June 1, 1997—
(A) in subsection (c)(5), by inserting ‘‘as
defined in section 3(14)(A) of this Act’’ after
‘‘freight forwarder’’; and
(B) in subsection (c)(6), by striking ‘‘a
service contract.’’ and inserting ‘‘an ocean
transportation contract.’’;
(4) effective on June 1, 1997, in subsection
(d)(3), by striking ‘‘(b) (11), (12), and (16)’’ and in-
serting ‘‘(b) (1), (4), and (8)’’; and
(5) effective on June 1, 1997, by adding a new
subsection (f) to read as follows:
‘‘(f) CONFERENCE ACTION.—No conference may sub-
ject a person, place, port, class or type of shipper, or ocean
freight forwarder, to unjust or unreasonable ocean con-
tract provisions.’’.
SEC. 108. REPARATIONS.
Effective June 1, 1997, section 11(g) of the Shipping
Act of 1984 (46 App. U.S.C. 1710(g)) is amended—
(1) by inserting ‘‘or counter-complainant’’ after
‘‘complainant’’ the second time it appears;
(2) by striking ‘‘10(b) (5) or (7)’’ and inserting
‘‘10(b) (2) or (3)’’; and
(3) by striking the last sentence.
SEC. 109. FOREIGN LAWS AND PRACTICES.
Section 10002 of the Foreign Shipping Practices Act
of 1988 (46 App. U.S.C. 1710a) is amended, effective on
June 1, 1997—
(1) in subsection (a)(1)—
(A) by striking ‘‘non-vessel-operating com-
mon carrier,’’; and
(B) by inserting ‘‘ocean freight forwarder,’’
after ‘‘ocean common carrier,’’;
(2) in subsection (a)(4), by striking ‘‘non-ves-
sel-operating common carrier operations,’’;
(3) in subsection (e)(1), by striking subpara-
graph (B) and all that follows through subparagraph
(D) and inserting the following:
‘‘(B) suspension, in whole or in part, of the
right of an ocean common carrier to operate
under any agreement filed with the Secretary,
including agreements authorizing preferential
treatment at terminals, preferential terminal
leases, space chartering, or pooling of cargo or
revenues with other ocean common carriers; and
‘‘(C) a fee, not to exceed $1,000,000 per
voyage.’’; and
(4) in subsection (h), by striking ‘‘section
13(b)(5) of the Shipping Act of 1984 (46 App.
U.S.C. 1712(b)(5))’’ and inserting ‘‘section 13(b)(2)
of the Shipping Act of 1984 (46 App. U.S.C.
1712(b)(2))’’.
SEC. 110. PENALTIES.
Section 13 of the Shipping Act of 1984 (46 App.
U.S.C. 1712) is amended, effective on June 1, 1997—
(1) in subsection (b)—
(A) by striking paragraphs (1) and (3) and
redesignating paragraphs (2), (4), (5), and (6)
in order as paragraphs (1), (2), (3), and (4);
(B) by striking paragraph (1), as so redes-
ignated, and inserting the following:
‘‘(1) If the Secretary finds, after notice and an
opportunity for a hearing, that a common carrier
has failed to supply information ordered to be pro-
duced or compelled by subpoena under section 1711
of this Act, the Secretary may request that the Sec-
retary of the Treasury refuse or revoke any clear-
ance required for a vessel operated by that common
carrier. Upon request by the Secretary, the Sec-
retary of the Treasury shall, with respect to the ves-
sel concerned, refuse or revoke any clearance re-
quired by section 4197 of the Revised Statutes of
the United States (46 App. U.S.C. 91).’’; and
(C) in paragraph (3), as so redesignated,
by striking ‘‘finds appropriate,’’ and all that
follows through the end of the paragraph and
inserting ‘‘finds appropriate including the impo-
sition of the penalties authorized under para-
graph (2).’’;
(2) in subsection (f)(1), by striking ‘‘section 10
(a)(1), (b)(1), or (b)(4)’’ and inserting ‘‘section
10(a)(1)’’.
SEC. 111. REPORTS.
(a) IN GENERAL.—Section 15 of the Shipping Act
of 1984 (46 App. U.S.C. 1714) is amended, effective on
January 1, 1997—
(1) in the section heading by striking ‘‘AND
CERTIFICATES’’;
(2) by striking ‘‘(a) REPORTS.—’’; and
(3) by striking subsection (b).’’.
(b) CLERICAL AMENDMENT.—The Shipping Act of
1984 (46 App. U.S.C. 1701 et seq.) is amended in the
first section in the table of contents by amending the item
relating to section 15 to read as follows:
‘‘Sec. 15. Reports.’’.
SEC. 112. REGULATIONS.
Section 17 of the Shipping Act of 1984 (46 App.
U.S.C. 1716) is amended—
(1) by striking ‘‘(a)’’; and
(2) by striking subsection (b).’’.
SEC. 113. REPEAL.
Section 18 of the Shipping Act of 1984 (46 App.
U.S.C. 1717) is repealed.
SEC. 114. OCEAN FREIGHT FORWARDERS.
Section 19 of the Shipping Act of 1984 (46 App.
U.S.C. 1718) is amended, effective on June 1, 1997—
(1) in subsection (a), by inserting ‘‘in the
United States’’ after ‘‘person’’ the first time it ap-
pears;
(2) in subsection (a)(2), by striking ‘‘a bond’’
and inserting ‘‘a bond, proof of insurance, or other
surety’’;
(3) by adding after subsection (a)(2) the
following:
‘‘A bond, insurance, or other surety obtained pursuant to
this section shall be available to pay any judgment for
damages against an ocean freight forwarder arising from
its transportation-related activities under this Act or order
for reparation issued pursuant to section 11 or 14 of this
Act. An ocean freight forwarder not domiciled in the
United States shall designate a resident agent in the
United States for receipt of service of judicial and admin-
istrative process, including subpoenas.’’;
(4) in subsection (b), by striking ‘‘a bond’’ and
inserting ‘‘a bond, proof of insurance, or other sur-
ety’’; and
(5) in subsection (d), by striking paragraph (3)
and redesignating paragraph (4) as paragraph (3).’’.
SEC. 115. EFFECTS ON CERTAIN AGREEMENTS AND CON-
TRACTS.
Section 20(e) of the Shipping Act of 1984 (46 App.
U.S.C. 1719) is amended to read as follows:
‘‘(e) SAVINGS PROVISIONS.—
‘‘(1) Each service contract entered into by a
shipper and an ocean common carrier or conference
before the date of the enactment of the Ocean Ship-
ping Reform Act of 1995 may remain in full force
and effect according to its terms.
‘‘(2) This Act and the amendments made by
this Act shall not affect any suit—
‘‘(A) filed before the date of the enactment
of the Ocean Shipping Reform Act of 1995;
‘‘(B) with respect to claims arising out of
conduct engaged in before the date of the en-
actment of the Ocean Shipping Reform Act of
1995, filed within 1 year after the date of the
enactment of the Ocean Shipping Reform Act
of 1995;
‘‘(C) with respect to claims arising out of
conduct engaged in after the date of the enact-
ment of the Ocean Shipping Reform Act of
1995 but before January 1, 1997, pertaining to
a violation of section 10(b) (1), (2), (3), (4), or
(8), as in effect before January 1, 1997, filed
by June 1, 1997;
‘‘(D) with respect to claims pertaining to
the failure of a common carrier or conference to
file its tariffs or service contracts in accordance
with this Act in the period beginning January
1, 1997, and ending June 1, 1997, filed by De-
cember 31, 1997; or
‘‘(E) with respect to claims arising out of
conduct engaged in on or after the date of the
enactment of the Ocean Shipping Reform Act
of 1995 but before June 1, 1997, filed by De-
cember 31, 1997.’’.
SEC. 116. REPEAL.
Section 23 of the Shipping Act of 1984 (46 App.
U.S.C. 1721) is repealed, effective on June 1, 1997.
SEC. 117. MARINE TERMINAL OPERATOR SCHEDULES.
(a) IN GENERAL.—The Shipping Act of 1984 (46
App. U.S.C. 1701 et seq.) is amended, effective on June
1, 1997, by adding at the end the following new section:
‘‘SEC. 24. MARINE TERMINAL OPERATOR SCHEDULES.
‘‘A marine terminal operator shall make available to
the public a schedule of rates, regulations, and practices,
including limitations of liability, pertaining to receiving,
delivering, handling, or storing property at its marine ter-
minal. The schedule shall be enforceable as an implied
contract, without proof of actual knowledge of its provi-
sions, for any activity by the marine terminal operator
that is taken to—
‘‘(1) efficiently transfer property between trans-
portation modes;
‘‘(2) protect property from damage or loss;
‘‘(3) comply with any governmental require-
ment; or
‘‘(4) store property in excess of the terms of
any other contract or agreement, if any, entered into
by the marine terminal operator.’’.
(b) CLERICAL AMENDMENT.—The Shipping Act of
1984 (46 App. U.S.C. 1701 et seq.) is amended in the
first section in the table of contents by adding at the end
the following new item:
‘‘Sec. 24. Marine terminal operator schedules.’’.
TITLE II—CONTROLLED
CARRIERS AMENDMENTS
SEC. 201. CONTROLLED CARRIERS.
Section 9 of the Shipping Act of 1984 (46 App.
U.S.C. 1708) is amended, effective on June 1, 1997—
(1) in subsection (a), by striking ‘‘in its tariffs
or service contracts filed with the Commission’’ and
‘‘in those tariffs or service contracts’’ in the first
sentence, and by striking ‘‘filed by a controlled car-
rier’’ in the last sentence;
(2) in subsection (b), by striking ‘‘filed’’ and in-
serting ‘‘published’’, in paragraphs (1) and (2);
(3) in subsection (c), by striking the first sen-
tence;
(4) subsection (d) is amended to read as fol-
lows:
‘‘(d) Within 120 days of the receipt of information
requested by the Secretary under this section, the Sec-
retary shall determine whether the rates, charges, classi-
fications, rules, or regulations of a controlled carrier may
be unjust and unreasonable. If so, the Secretary shall
issue an order to the controlled carrier to show cause why
those rates, charges, classifications, rules, or regulations
should not be approved. Pending a determination, the Sec-
retary may suspend the rates, charges, classifications,
rules, or regulations at any time. No period of suspension
may be greater than 180 days. Whenever the Secretary
has suspended any rates, charges, classifications, rules, or
regulations under this subsection, the affected carrier may
publish and, after notification to the Secretary, assess new
rates, charges, classifications, rules, or regulations—ex-
cept that the Secretary may reject the new rates, charges,