[Federal Register Volume 61, Number 148 (Wednesday, July 31, 1996)]
[Notices]
[Page 40067]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19363]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
[Docket S-939]
Lykes Bros. Steamship Co., Inc.; Notice of Application for a
Waiver of Section 804(a) of the Merchant Marine Act, 1936, as Amended,
to Participate in a Space Charter and Sailing Agreement With Foreign-
Flag Operators
Lykes Bros. Steamship Co., Inc. (Lykes) by application dated July
11, 1996, requests a waiver of the provisions of Section 804 of the
Merchant Marine Act, 1936, as amended (Act), through December 31, 1997,
the expiration of its operating-differential subsidy (O.D.S.) contract
MA/MSB-451, to permit it to participate in a space charter and sailing
agreement with Transportacion Maritima Mexicana, S.A. de C.V. (TMM),
and Contship Containerlines Ltd. (Contship) to serve primarily the
foreign commerce of the United States.
The purpose of the Agreement is to improve the productivity and
operating efficiency of the parties' vessels and equipment and to
provide efficient, reliable and stable liner shipping services through
space chartering and coordination of sailings. The Agreement does not
authorize the parties to fix rates.
The Agreement covers the trade between ports on the Atlantic Coast
of Florida and U.S. Gulf Coast, and ports in Spain, Italy, and France
and between ports on the Atlantic Coast of Florida and the U.S. Gulf
Coast and ports on the Gulf Coast of Mexico.
Assuming approval of the Agreement by the Maritime Administration
and the Federal Maritime Commission, Lykes three subsidized Pacesetter
Class vessels--HOWELL LYKES, THOMPSON LYKES, and JEAN LYKES--will serve
the Mediterranean trade from U.S. Atlantic ports North of Florida.
Lykes will initially charter space on TMM and Contship vessels
providing service between Mexican, U.S. Gulf and Florida ports and
Mediterranean ports in Spain, Italy and France. The vessels are
scheduled to call at ports including but not limited to: Houston,
Altamira, Veracruz, New Orleans, Mobile, Miami, Valencia, Barcelona, La
Spezia, and Gioia Tauro.
According to Lykes, the Contship and TMM vessels that serve the
above trades and any Lykes vessels that might ultimately serve those
trades will not compete ``with any American-flag service determined by
the secretary to be essential as provided in Section 211 of this Act''
as that term is used in Section 604(a) of the Act.
Lykes points out that Sea-Land does not provide an all U.S.-flag
direct service to the Mediterranean from Mexican, U.S. Gulf or Florida
ports. Farrell Lines, Inc.'s (Farrell) Mediterranean service does not
include U.S. Gulf, Mexican or Florida ports. Waterman Steamship Co.
(Waterman) only serves Mediterranean ports in Egypt from the U.S. Gulf.
Because the parties to the proposed Space Charter and Sailing Agreement
will provide direct service to the Western Mediterranean ports in
Spain, Italy, and France, Lykes believes that the parties to this
Agreement will not compete with any American-flag service determined to
be essential by the Secretary.
In Lykes' view, there are ample good cause and special
circumstances to support the granting of this application. The
opportunity this proposed agreement offers to rationalize schedules
will permit operational savings to be realized and lend considerable
flexibility to Lykes' schedules through the use of space on Contship
and TMM vessels. The agreement will enable Lykes to offer shippers
broader, more responsive service without any additional capital
outlays. Lykes contends that its presence on the proposed routes is
essential to the preservation of its customer base which relies on
Lykes to provide a sufficiently broad array of services to satisfy
their multitrade transportation needs. It will also assist Lykes in
maintaining its experienced management. The additional revenue that the
agreement will permit Lykes to earn will also spread overhead costs
currently being borne by a limited number of Lykes U.S.-flag vessels,
over an additional number of vessels.
Lykes notes that the scrapping of its older U.S.-flag vessels has
accelerated and there is no program in place for the construction of
replacement tonnage in the United States. Moreover, satisfactory
existing U.S.-flag vessels are also not available to serve the
contemplated services. Consequently, Lykes maintains that the proposed
Agreement will not affect U.S. seafaring jobs. Since Lykes' O.S.
contract expires in approximately seventeen (17) months, Lykes
concludes that approval of this Agreement is critical if it is to
gradually position itself as a viable mixed U.S.-flag, foreign-flag
operation capable of operating independent of subsidy.
This application may be inspected in the Office of the Secretary,
Maritime Administration. Any person, firm, or corporation having any
interest in such request within the meaning of section 804 of the Act
and desiring to submit comments concerning the application must file
written comments in triplicate with the Secretary, Maritime
Administration, Room 7210, Nassif Building, 400 Seventh Street SW.,
Washington, DC 20590. Comments must be received no later than 5:00 p.m.
on August 2, 1996. This notice is published as a matter of discretion
and publication should in no way be considered a favorable or
unfavorable decision on the application, as filed or as may be amended.
The Maritime Administrator will consider any comments submitted and
take such action with respect thereto as may be deemed appropriate
(Catalog of Federal Domestic Assistance Program No. 20.804
(Operating-Differential Subsidies)).
By Order of the Maritime Administrator.
Dated: July 24, 1996.
Edmund T. Sommer, Jr.,
Acting Secretary.
[FR Doc. 96-19363 Filed 7-30-96; 8:45 am]
BILLING CODE 4910-81-P
