[Federal Register Volume 60, Number 21 (Wednesday, February 1, 1995)]
[Proposed Rules]
[Pages 6067-6068]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2410]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
46 CFR Part 381
[Docket No. R-153]
RIN 2133-AB17
Cargo Preference--U.S.-Flag Vessels; Available U.S.-Flag
Commercial Vessels
AGENCY: Maritime Administration, Department of Transportation.
ACTION: Proposed rule.
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SUMMARY: This amendment to the cargo preference regulations of the
Maritime Administration (MARAD) would provide that during the 1995
shipping season when the St. Lawrence Seaway is in use, MARAD will
consider the legal requirement for the carriage of bulk agricultural
commodity preference cargoes on privately-owned ``available'' U.S.-flag
commercial vessels to have been satisfied where the cargo is initially
loaded at a Great Lakes port on one or more U.S.-flag or foreign-flag
vessels, transferred to a U.S.-flag commercial vessel at a Canadian
transshipment point outside the St. Lawrence Seaway, and carried on
that U.S.-flag vessel to a foreign destination. This amendment would
allow Great Lakes ports to compete for agricultural commodity
preference cargoes during an entire season trial period. MARAD issued a
prior final rule on August 8, 1994, that adopted this policy for the
1994 Great Lakes shipping season that had been in progress since April
1994. This did not allow for a true trial period that MARAD could
evaluate in determining whether to make this a permanent policy.
DATES: Comments must be received on or before March 3, 1995.
ADDRESSES: Send original and two copies of comments to the Secretary,
Maritime Administration, Room 7210, Department of Transportation, 400
7th Street S.W., Washington, D.C. 20590. To expedite review of
comments, the Agency requests, but does not require, submission of an
additional ten (10) copies. All comments will be made available for
inspection during normal business hours at the above address.
Commenters wishing MARAD to acknowledge receipt of comments should
enclose a self-addressed envelope or postcard.
FOR FURTHER INFORMATION CONTACT: John E. Graykowski, Deputy Maritime
Administrator for Inland Waterways and Great Lakes, Maritime
Administration, Washington, DC 20590, Telephone (202) 366-1718.
SUPPLEMENTARY INFORMATION: United States law at sections 901(b) (the
``Cargo Preference Act'') and 901b, Merchant Marine Act, 1936, as
amended (the ``Act''), 46 App. U.S.C. 1241(b) and 1241f, requires that
at least 75 percent of certain agricultural product cargoes
``impelled'' by Federal programs (preference cargoes), and transported
by sea, be carried on privately-owned United States-flag commercial
vessels, to the extent that such vessels ``are available at fair and
reasonable rates.'' The Secretary of Transportation wishes to
administer that program so that all ports and port ranges may
participate.
Prior Rulemaking
On August 8, 1994, MARAD published a final rule on this subject in
the Federal Register (59 FR 40261). That rule stated that it was
intended to allow U.S. Great Lakes ports to participate with ports in
other U.S. port ranges in the carriage of bulk agricultural commodity
preference cargoes. Dramatic changes in shipping conditions have
occurred since 1960, including the disappearance of any all-U.S.-flag
commercial ocean-going service to foreign countries from U.S. Great
Lakes ports. The static configuration of the St. Lawrence Seaway system
and the evolving greater size of commercial vessels contributed to the
disappearance of any all-U.S.-flag service.
No preference cargo has moved on U.S.-flag vessels out of the Great
Lakes since 1989, with the exception of one trial shipment in 1993.
Under the Food Security Act of 1985, Public Law 99-198, codified at 46
App. U.S.C. 1241f(c)(2), a certain minimum amount of Government-
impelled cargo was required to be allocated to Great Lakes ports during
calendar years 1986, 1987, 1988, and 1989. That ``set-aside'' expired
in 1989, and was not renewed by the Congress. The disappearance of
Government-impelled cargo flowing from the Great Lakes coincided with
the expiration of the Great Lakes ``set aside.''
At the time of the opening of the 1994 Great Lakes shipping season
on April 5, 1994, the Great Lakes did not have any all-U.S.-flag ocean
freight capability for carriage of bulk preference cargo. In contrast,
the total export nationwide by non-liner vessels of USDA and USAID
agricultural assistance program cargoes subject to cargo preference in
the 1992-1993 cargo preference year (the latest program year for which
figures are available) amounted to 6,297,015 metric tons, of which
4,923,244, or 78.2 percent, was transported on U.S.-flag vessels.
(Source: Maritime Administration database.)
MARAD issued the previous rule to provide Great Lakes ports with
the opportunity to compete for agricultural commodity preference
cargoes for only the 1994 Great Lakes shipping season cargoes, and to
assess the results.
Extension of Trial Period
As predicted by numerous commenters, the timing of the final rule,
which was not published until August 18, 1994, did not allow for a true
trial period since it actually extended for less than one-half of the
1994 Great Lakes Shipping season. Because of the long lead time
required for arranging shipments of bulk agriculture commodity
preference cargoes, there apparently was no real opportunity for U.S.-
flag vessel operators to make the necessary arrangements and bid on
preference cargoes. Accordingly, MARAD proposes to extend the trial
period for applying its modified policy with respect to shipment of
preference cargoes on U.S.-flag vessels through the 1995 Great Lakes
shipping season.
Rulemaking Analyses and Notices
Executive Order 12866 (Regulatory Planning and Review)
This rulemaking has been reviewed under Executive Order 12866 and
Department of Transportation Regulatory Policies and Procedures (44 FR
11034, February 26, 1979). It is not considered to be an economically
significant regulatory action under section 3(f) of E.O. 12866, since
it has been determined that it is not likely to result in a rule that
may have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities. However, since this rule would affect other Federal
agencies, is of great interest to the maritime industry, and has been
determined to be a significant rule under the Department's Regulatory
Policies and Procedures, it is considered to be a significant
regulatory action under E.O. 12866.
MARAD projects that this rule would allow the movement of up to
300,000 metric tons of agricultural commodities from Great Lakes ports,
with a reduction in the shipping cost to sponsoring
[[Page 6068]] Federal agencies up to $3 per metric ton ($900,000).
Since the substance of this rule is identical to that contained in
the May 11, 1994 NPRM, which solicited comments that MARAD addressed in
its final rule issued on August 8, 1994, and since no commenter opposed
a one-season trial period MARAD is allowing a 30-day comment period for
this second proposed rule.
If this rule is finalized, MARAD will evaluate the results of the
one-season trial period before determining whether to issue a rule to
make this arrangement permanent.
This rule has been reviewed by the Office of Management and Budget
under Executive Order 12866.
Federalism
The Maritime Administration has analyzed this rulemaking in
accordance with the principles and criteria contained in Executive
Order 12612, and it has been determined that these regulations do not
have sufficient federalism implications to warrant the preparation of a
Federalism Assessment.
Regulatory Flexibility Act
The Maritime Administration certifies that this rulemaking will not
have a significant economic impact on a substantial number of small
entities.
Environmental Assessment
The Maritime Administration has considered the environmental impact
of this rulemaking and has concluded that an environmental impact
statement is not required under the National Environmental Policy Act
of 1969.
Paperwork Reduction Act
This rulemaking contains no reporting requirement that is subject
to OMB approval under 5 CFR Part 1320, pursuant to the Paperwork
Reduction Act of 1980 (44 U.S.C. 3501, et seq.)
List of Subjects in 46 CFR Part 381
Freight, Maritime carriers.
Accordingly, MARAD hereby proposes to amend 46 CFR part 381 as
follows:
PART 381--[AMENDED]
1. The authority citation for Part 381 continues to read as
follows:
Authority: 46 App. U.S.C. 1101, 1114(b), 1122(d) and 1241; 49
CFR 1.66.
2. Section 381.9 would be revised to read as follows:
Sec. 381.9 Available U.S.-flag service for 1995.
For purposes of shipping bulk agricultural commodities under
programs administered by sponsoring Federal agencies from U.S. Great
Lakes ports during the 1995 shipping season, if direct U.S.-flag
service, at fair and reasonable rates, is not available at U.S. Great
Lakes ports, a joint service involving a foreign-flag vessel(s)
carrying cargo no farther than a Canadian port(s) or other point(s) on
the Gulf of St. Lawrence, with transshipment via a U.S.-flag privately
owned commercial vessel to the ultimate foreign destination, will be
deemed to comply with the requirement of ``available'' commercial U.S.-
flag service under the Cargo Preference Act of 1954. Shipper agencies
considering bids resulting in the lowest landed cost of transportation
based on U.S.-flag rates and service shall include within the
comparison of U.S.-flag rates and service, for shipments originating in
U.S. Great Lakes ports, through rates (if offered) to a Canadian port
or other point on the Gulf of St. Lawrence and a U.S.-flag leg for the
remainder of the voyage. The ``fair and reasonable'' rate for this
mixed service will be determined by considering the U.S.-flag component
under the existing regulations at 46 CFR Part 382 or 383, as
appropriate, and incorporating the cost for the foreign-flag component
into the U.S.-flag ``fair and reasonable'' rate in the same way as the
cost of foreign-flag vessels used to lighten U.S.-flag vessels in the
recipient country's territorial waters. Alternatively, the supplier of
the commodity may offer the Cargo FOB Canadian transshipment point, and
MARAD will determine fair and reasonable rates accordingly.
Dated: January 26, 1995.
By Order of the Maritime Administrator.
Joel Richard,
Secretary, Maritime Administration.
[FR Doc. 95-2410 Filed 1-31-95; 8:45 am]
BILLING CODE 4910-81-P
