[Federal Register Volume 62, Number 19 (Wednesday, January 29, 1997)]
[Notices]
[Pages 4376-4377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2084]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
[Docket MSP-006/Docket S-942]
American President Lines; Notice of Application for a Waiver
Pursuant to Section 804 of the Merchant Marine Act, 1936, as Amended
American President Lines, Ltd. (APL), by application received
November 7, 1996, applied under Section 651, Subtitle B, of the Act for
participation in the Maritime Security Program (MSP). In support of its
participation in the MSP, APL by letter dated January 17, 1997 has
applied for a waiver pursuant to section 804 of the Merchant Marine Act
of 1936, as amended (Act).
On January 21, 1997, APL and MARAD entered into MSP Operating
Agreements for nine vessels: APL KOREA, APL PHILIPPINES, APL SINGAPORE,
APL THAILAND, PRESIDENT ADAMS, PRESIDENT JACKSON, PRESIDENT KENNEDY,
PRESIDENT POLK and PRESIDENT TRUMAN. APL, in connection with the MSA,
was awarded ``grandfather'' rights under section 804 for its six C-11
vessels: APL KOREA, APL PHILIPPINES, APL SINGAPORE, APL THAILAND, APL
JAPAN, and APL CHINA.
APL states that in its capacity both (I) as a contractor under
Subtitle A of Title VI of the Act under existing Contract No. MA/MSB
417 and (ii) as an awardee of Operating Agreements and prospective
contractor under the new Maritime Security Program established by
Subtitle B of Title VI of the Act, APL requests a waiver of the
provisions of section 804 to allow APL (or any holding company,
subsidiary, affiliate or associate of APL or any transferee of any MSP
Operating Agreement from APL to own, operate and/or charter up to 18
foreign-flag vessels in line haul service between the United States and
foreign ports in addition to the six such vessels that the Maritime
Administration (MARAD) has determined that APL is entitled to own,
operate and/or charter pursuant to section 804(f)(2)(A) of the Act. The
requested waiver is for the full remaining term of APL's ODS contract
and for the full term of APL's MSP Operating Agreements as well as any
subsequent renewals of any such Operating Agreement.
APL asserts that grant of the requested waiver is required for
several reasons.
1. On the date of enactment of the Maritime Security Act of 1996
(MSA), APL moved cargo on 37 foreign-flag vessels in line haul service
between the United States and foreign ports. Only six of these vessels
were owned and/or operated by APL, viz., the six C-11 class vessels
which are the basis for MARAD's above-noted determination that APL has
an entitlement to six vessels under section 804(f)(2)(A). For
historical reasons--including APL's pre-existing status as an ODS
contractor subject to section 804, under which (prior to the amendments
made by the MSA) it was considerably more difficult for a contractor to
own and/or operate, as opposed to charter space on, foreign-flag
vessels--APL's interest in the other 31 foreign-flag line haul vessels
on the date of the MSA's enactment was in the form of space sharing and
sailing coordination agreements. Under such agreements, APL chartered
and utilized large proportions of the slot capacity of the 31 ships.
APL's position is that it is entitled under section 804(f)(2)(A) to
at least 37 foreign-flag line haul vessels, based on the six C-11s plus
the 31 vessels subject to space charter agreements. A list of the 37
foreign-flag vessels is provided as follows:
------------------------------------------------------------------------
Vessel name Flag
------------------------------------------------------------------------
ALIGATOR BRAVERY..................... Panama
ALIGATOR COLUMBUS.................... Panama
ALIGATOR STRENGTH.................... Panama
ALIGATOR WISDOM...................... Panama
OOCL SHANGHAI........................ Panama
OOCL AMERICA......................... Liberia
OOCL CALIFORNIA...................... Liberia
OOCL CHINA........................... Liberia
OOCL HONG KONG....................... Liberia
OOCL JAPAN........................... Liberia
APL CHINA............................ Marshall Islands
APL JAPAN............................ Marshall Islands
APL KOREA............................ Marshall Islands
APL PHILIPPINES...................... Marshall Islands
APL SINGAPORE........................ Marshall Islands
APL THAILAND......................... Marshall Islands
ALIGATOR AMERICA..................... Japan
ALLIGATOR GLORY...................... Liberia
ALLIGATOR PRIDE...................... Liberia
ALLIGATOR VICTORY.................... Panama
OOCL FAME............................ Liberia
OOCL FRONTIER........................ Great Britain
AGLE ANAHUAC......................... Liberia
TMM ACAPULCO......................... Germany
TMM CHETUMAL......................... Greece
TMM MANZANILLO....................... Greece
TMM SINALOA.......................... Greece
TMM VERACRUZ......................... Liberia
ALLIGATOR INDEPENDENCE............... Panama
ALIGATOR LIBERTY..................... Japan
ALIGATOR RELIANCE.................... Japan
ALLIGATOR TRIUMPH.................... Liberia
NEDLLOYD DEJIMA...................... Netherlands
NEDLLOYD DELFT....................... Netherlands
OOCL FAIR............................ Liberia
OOCL FIDELITY........................ Liberia
OOCL FORTUNE......................... Liberia
------------------------------------------------------------------------
However, MARAD determined that, with respect to the 31 vessels
subject to space charter arrangements, APL would not be entitled to
grandfather rights under section 804(f)(2)(A). APL states that, while
it disagrees with this determination, APL is willing to pursue an
alternative course--this waiver application--to obtain the
authorization for foreign-flag line haul vessels that is essential to
APL's success as an ODS and MSP contractor. The requested waiver for 18
vessels is equivalent to half of the 31 vessels subject to space
sharing agreements, rounded up to 18 to allow three six-vessel strings
in recognition of the operational need to operate line haul vessels in
strings providing regular weekly port calls. That number reflects the
approximate vessel equivalence of APL's share of the 31 foreign flag
line haul vessels on which APL is a charterer.
In addition to the six ships grandfathered under section 804(f)(2)
of rights recognized by MARAD based on
[[Page 4377]]
the C-11s, the requested 18-vessel waiver would give APL a right to own
and/or operate a total of 24 foreign-flag line haul vessels calling on
U.S. ports.
2. APL states that the central purpose of the MSA and the MSP is to
preserve and advance a U.S.-flag commercial fleet, not only by
providing necessary financial assistance for the operation of U.S.-flag
vessels, but also by allowing the operators of such vessels the
flexibility to structure their overall fleet and services to be
responsive and competitive in the world marketplace. APL argues that
Congress recognized that, in order to achieve this purpose, ODS and MSP
contractors must be free to utilize foreign-flag vessels in close and
efficient conjunction with their U.S.-flag services, as evidenced by
the dramatic amendments made to section 804 by section 5 of the MSA.
APL maintains that Congress also clearly intended that, in this respect
among others, the principal operators in the U.S. foreign trades should
be placed on a level playing field.
As noted above, for historical reasons that are unrelated to
current economic and competitive realities, APL argues it has wound up,
under MARAD's interpretation of section 804(f)(2)(A), with much less
flexibility to efficiently structure its services than its major U.S.
and foreign competitors. According to APL, grant of the requested
waiver would rectify this situation, and carry out the intent of
Congress in enacting the MSA.
3. APL maintains that, to the extent the section 804 concepts of
``good cause'' and ``special circumstances'' may have any continuing
substance following the amendments made to that section by the MSA,
they are clearly present here:
a. Grant of the request would be mutually beneficial to APL as an
MSP contractor and the U.S. Merchant Marine.
b. The number of vessels for which a waiver is requested is fair,
given that (I) it is far fewer than the 31 foreign-flag line haul
vessels on which APL chartered substantial space on the date of
enactment of the MSA, as discussed above, and (ii) it achieves parity
with APL's major MSP competitors.
c. Given the expansive authority to operate foreign-flag line haul
vessels that MARAD has recognized for Sea-Land and Maersk, there can be
no claim that the requested waiver would injure either of those MSP
contractors (or any other MSP contractor) in any way. Moreover, given
the limitations imposed on the MSP funding that is essential to vessel
operations under the U.S. flag, there is no possibility that U.S.-flag
operations could be performed in lieu of the foreign-flag authorities
herein sought.
4. Finally, given the importance of the requested waiver to APL as
a MSP contractor, and the compelling reasons for grant of a waiver
explained above, APL requests that MARAD act promptly on this
application.
The application may be inspected in the Office of the Secretary,
Maritime Administration. Any person, firm or corporation having any
interest in the application for waiver pursuant to section 804, and
desiring to submit comments concerning APL's request must by 5:00 PM (5
working days after the date of publication) file comments in triplicate
to the Secretary, Maritime Administration, Room 7210, Nassif Building,
400 Seventh Street, SW., Washington, D.C. 20590. This notice is
published as a matter of discretion. The Maritime Administrator will
consider any comments submitted and take such action with respect
thereto as may be deemed appropriate.
Dated: January 23, 1997.
By Order of the Maritime Administrator.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 97-2084 Filed 1-28-97; 8:45 am]
BILLING CODE 4910-81-P
