US Shipping Industry Faces Rough Seas in Washington

Article excerpt

THE monopoly- and subsidy-pampered shipping industry had better batten down the hatches. Free-market forces are building on the horizon.

Under way in Washington are efforts to scuttle laws that dictate who may build, own, and operate the merchant and passenger ships that ply United States waters. And federal subsidies that allow US-flag ships to compete in international waters could run aground as House Republicans concentrate on balancing the budget. All of this alarms those who benefit from the status quo.

Tampering with the fleet's protections will "take away a lot of jobs for American mariners" and harm military readiness, warns Daniel Duncan, a spokesman for the Seafarers International Union (SIU).

But the shipping industry's century-old arguments about employment and national security no longer float, skeptics say. They insist that the dwindling US fleet has few shipboard jobs - perhaps a few thousands - left to protect. Competition will create more jobs throughout the economy, they say, and save the Treasury $21 billion over seven years.

They also scoff at the notion that a cargo fleet is vital to resupply a US war effort. "The laughable part of that is, when the Gulf war came, only six of those ships went directly into the war," says Rob Quartel, a former maritime regulator who wants to harpoon a school of shipping laws.

Among the developments both sides are watching:

*The House may soon vote on the Ocean Shipping Reform Act of 1995. This bill would abolish the Federal Maritime Commission, whose role in regulating international shipping amounts to helping a cartel of mostly foreign companies maintain artificially high prices, Mr. Quartel says. If the FMC sinks beneath the waves, rate wars could follow.

*The Marine Security Act has advanced in the Senate but faces entrenched opposition by budget-minded Republicans in the House. The bill would give millions of dollars in subsidies to the international operations of a single US-flag carrier, giant Sea-Land to help it compete with foreign carriers. Other US-flag carriers, already subsidized under a law that expires in 1997, hope to be added to the MSA by then, Quartel says.

*By year end, the Coast Guard will review its new procedure for doling out the "z-card," a document enabling merchant mariners to work. For 58 years, the Coast Guard granted them only to bearers of "letters of commitment" from an employer. …