[Federal Register Volume 61, Number 222 (Friday, November 15, 1996)]
[Notices]
[Pages 58603-58604]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29458]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
[Docket MSP-003]
OSG Car Carriers, Inc.; Notice of Application Pursuant to Section
656 of the Merchant Marine Act, 1936, as Amended
OSG Car Carriers, Inc. (OSG) by application received October 22,
1996, and supplemented by letter dated November 4, 1996 applied under
Section 651, Subtitle B, of the Act for participation in the Maritime
Security Program (MSP). In support of its application OSG submitted
information pertaining to its level of noncontiguous domestic trade
service. Pursuant to section 656 of the Act, the Maritime
Administration must determine OSG's level of noncontiguous domestic
trade service should it become party to a MSP operating agreement.
In support of its request OSG described its level of service
provided in each noncontiguous domestic trade served as of August 9,
1995. The vessels listed below are contract (liquid bulk) carriers,
rather than common carriers, and their itineraries are determined by
their respective charters. These vessels operate from time to time in
the noncontiguous domestic trades between the contiguous 48 States and
Alaska, Hawaii, the U.S. Virgin Islands or Puerto Rico and between
Alaska and the U.S. Virgin Islands. OSG's submittal of noncontiguous
domestic trade service, as well as its affiliates, was provided as
follows:
Applicant's Noncontiguous Trade
------------------------------------------------------------------------
Deadweight
Name tonnage
------------------------------------------------------------------------
Overseas Boston............................................. 120,800
Overseas Juneau............................................. 120,500
Overseas Chicago............................................ 90,650
Overseas Ohio............................................... 90,550
Overseas Washington......................................... 90,500
Overseas New York........................................... 90,400
Overseas Arctic............................................. 62,000
Overseas Alaska............................................. 62,000
Overseas New Orleans........................................ 42,950
Overseas Philadelphia....................................... 42,600
Overseas Vivian............................................. 37,800
Overseas Alice.............................................. 37,800
Overseas Valdez............................................. 37,800
------------------------------------------------------------------------
OSG further clarified the level of service provided by its
affiliates in the noncontiguous domestic trades in the year preceding
August 9, 1995 as being 100% of the annual capacity of their entire
fleet of U.S. flag tankers, i.e., 926,350 deadweight tons.
OSG states that the Maritime Security Act defines the term ``level
of service'' provided by a contractor [operating non-container Vessels]
in a trade as of a date * * *.'' to mean ``the total annual capacity
provided by the contractor in that trade for the twelve calendar months
preceding that date.'' [Section 4(h)(1)(A)]. OSG asserts that all of
the U.S.-flag tankers operated by the Applicant's affiliates are liquid
bulk carriers offered for charter; they are not common carriers that
operate on predetermined schedules or itineraries. The movements of the
vessels are entirely up to the charterer. The ``trade'' in which those
tankers operate is therefore a worldwide trade, and by inclusion, the
noncontiguous domestic trade.
OSG states that the use of 100% of the capacity of tankers utilized
in the noncontiguous domestic trade is supported by the proviso of
Section 4(h)(1)(A) by which Congress permitted the ``level of service''
for certain ``contract carrier tug and barge service'' to be calculated
on the basis of 100% of vessel capacity. Where Congress addressed the
issue of ``level of service'' provided by carriers that have no
itineraries (which is OSG's case), Congress prescribed a reference to
100% of capacity. Congress states that it has recognized that a
definition of ``trade'' by area, rather than specific ports, is
required for bulk vessels. Before 1970, and before bulk carriers were
made eligible for subsidy, Section 905(a) of the Merchant Marine Act,
1936, 46 U.S.C. 1244, defined ``foreign trade'' as ``trade between the
United States * * * and a foreign country''. The Merchant Marine Act of
1970, P.L. 91-469, 91st Cong. 2d Sess., amended the definition in
Section 905(a) to ``include, in the case of liquid and dry bulk
carrying services, trading between foreign ports in accordance with
normal commercial bulk shipping practices in such a manner as will
permit U.S.-flag bulk vessels freely to compete with foreign-flag bulk
carrying vessels in their operation or in competing for charters,
subject to rules and regulations promulgated by the Secretary.'' As
explained in the Senate Report on the Merchant Marine Act 1970,
Congress was concerned that ``a narrow construction of the [earlier]
definition [of foreign trade] might prove unduly restrictive as applied
to bulk cargo
[[Page 58604]]
vessels which are not to be included in the program for the first
time.'' Therefore, Congress ``amended this section to authorize the
Secretary of Commerce to promulgate regulations to include sufficient
flexibility to make the new bulk cargo vessels competitive.'' Senate
Rept. 91-1080, 91st Cong. 2d Sess., reprinted in 1970 USCCAAN, p. 4194.
Similar considerations require a nonspecific definition of the
``trade'' of liquid bulk vessels under the Maritime Security Act.
OSG asserts that the vessels ``provided'' in that ``trade'' are all
the U.S.-flag tankers of OSG's affiliates. The service ``provided'' is
construed to include periods of lay-up because the failure to operate
was due to conditions beyond the control of OSG's affiliates. Compare
Section 805 of the Merchant Marine Act, 1936. 46 U.S.C. 1223, which
includes in grandfathered service ``interruptions of service over which
the applicant or its predecessor in interest had no control.''
Any person, firm or corporation having any interest in the
application for section 656 consent and desiring to submit comments
concerning OSG's request must by 5:00 PM December 16, 1996 file
comments in triplicate to the Secretary, Maritime Administration, Room
7210, Nassif Building, 400 Seventh Street, SW., Washington, DC 20590.
By Order of the Maritime Administrator.
Dated: November 13, 1996.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 96-29458 Filed 11-14-96; 8:45 am]
BILLING CODE 4910-81-P
