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FMC Issues OSRA Impact Study

September 26, 2001

FEDERAL MARITIME COMMISSION

FMC ISSUES OSRA IMPACT STUDY

Washington, D.C. 20573

NR 01-09

CONTACT: Florence A. Carr, Deputy Executive Director, at (202) 523-5800

FOR RELEASE: September 26, 2001

The Federal Maritime Commission today issued its two-year study on the regulatory and economic impact of the Ocean Shipping Reform Act of 1998 ("OSRA"). The study assesses the ocean shipping industry's operations during the first two years of implementation under OSRA. In preparing the study, the Commission relied upon a broad range of sources, including the cross section of industry views provided in response to the FMC's Notice of Inquiry on OSRA's impact.

The study provides a general regulatory and economic overview of ocean shipping, and examines several key issues:  service contract developments, agreement and voluntary service contract guideline activities, ocean transportation intermediary licensing and bonding, and tariff publication. Other issues covered include:  controlled carriers, restrictive shipping practices by foreign governments, port trucking, and e-commerce. The study's closing observations identify issues meriting continuing attention and offer several suggestions for possible legislative consideration.

In announcing the issuance of the study, Chairman Harold J. Creel, Jr., stated that OSRA appears to be achieving its primary policy objectives: "OSRA was enacted to promote a more competitive and efficient ocean liner industry by placing a greater reliance on the marketplace -- indications are that it is doing so. Carriers and shippers are tailoring service contracts to their specific market-place needs. Discussion agreements with non-binding ratemaking authority essentially have replaced traditional conferences as the primary forum for carriers to exercise their antitrust immunity with regard to pricing. And our findings regarding voluntary service contract guideline adherence by agreement carriers indicate that adherence generally depended on the overall market conditions of the particular trade examined."

Chairman Creel indicated that he particularly endorsed the study's conclusion that the Commission must continue to monitor the evolution of the industry under OSRA to ensure that it fosters a viable ocean liner industry primarily dependent on marketplace forces rather than government regulation.

The study can be viewed by visiting the Commission's Internet website at www.fmc.gov, and is available in several downloadable formats.