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TWO LEADING U.S.-FLAG SHIPPING LINES STRESS NEED FOR IMMEDIATE, DECISIVE ACTION TO PRESERVE U.S.-FLAG MERCHANT FLEET

 WASHINGTON, Aug. 5 /PRNewswire/ -- After two decades and at least six major legislative attempts to reform outdated maritime policies and regulations, the chairmen of the two largest U.S.-flag container- shipping lines told a Senate subcommittee today that they must begin focusing their planning on remaining competitive, economically viable U.S. companies. Both Sea-Land Service Inc. and American President Lines Ltd. (APL) recently submitted applications to the Maritime Administration to reflag certain ships under a foreign registry.
 "We have focused our energies and devoted significant resources in support of U.S.-flag promotional reform over the last two decades," said John Lillie, chairman of American President Companies Ltd. (NYSE: APS), APL's parent. "Despite our efforts, the U.S. government's lack of a concrete response has made it clear to us that it has little interest in maintaining an economically viable, U.S.-flag, U.S.-crewed commercial merchant fleet."
 Lillie and John Snow, chairman of CSX Corporation (NYSE: CSX), Sea-Land's parent, voiced strong opposition in their testimony to an amendment to a Maritime Administration authorization bill that would impose a 1-1/2-year moratorium on the reflagging of U.S. ships. "This step is unnecessary and inappropriate and will set back genuine progress toward maritime reform," they said. "We have repeatedly stated that we would not reflag our vessels if the Congress enacted an acceptable maritime revitalization program in which all of our ships operating in foreign commerce could participate."
 The two companies began a joint effort in early 1992 to urge Congress and the administration to enact a comprehensive reform program. Yet a legislative proposal failed to pass Congress in 1992, and the Clinton administration informed the carriers in May 1993 that it would neither initiate nor fund maritime reform legislation this year.
 "It is against this background of government inaction that we reluctantly reached our decision to reflag," Snow said.
 Both Snow and Lillie pledged their companies' continued support for comprehensive, fully funded maritime reform legislation. A maritime reform bill has been introduced in the House of Representatives. But, they noted, great uncertainty and indecision remain concerning the bill's content, funding, timing and even likelihood of passage.
 To preserve a healthy U.S. merchant fleet, the U.S. government must address the outdated policies and regulations that have led to a steep decline in the number of U.S.-flag ships and maritime jobs for U.S. citizens over the last two decades. These measures must include:
 -- Allowing U.S. carriers to acquire their ships without restriction on the world market and deploy them freely on a worldwide basis, as do their foreign competitors;
 -- Developing a successor to the Operating Differential Subsidy program that is being phased out, to compensate vessel operators for the extra cost of U.S. crewing requirements;
 -- Removing the unequal tax burden placed upon U.S. operators compared to their foreign competitors, by accelerating depreciation on investments in vessels, reforming the Capital Construction Fund and repealing a punitive 50 percent duty on overseas repairs;
 -- Eliminating the duplicative and costly vessel standards imposed on U.S. vessels but not on their foreign competitors calling at U.S. ports.
 Both APC and CSX said they are confident of their ability to remain world-class, competitive shipping lines, employing thousands of Americans, if their applications to reflag vessels are approved. "We continue to hope the U.S. government will be responsive in allowing U.S.-owned shipping companies to do what is necessary to remain competitive in the fast-changing world of international competition in which we operate," Lillie said. "There is no 'moratorium' on competition in international shipping."
 -0- 8/5/93
 /CONTACT: Tom Hoppin, 804-782-1449, or Elisabeth Gabrynowicz, 804-782-6775, both of CSX Corporation, or Gil Roeder of American President Cos., 510-272-7702/
 (APS CSX)


CO: American President Companies Ltd.; CSX Corporation ST: District of Columbia IN: MAR SU: LEG

MH-TW -- DC010 -- 9778 08/05/93 10:04 EDT
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Publication:PR Newswire
Date:Aug 5, 1993
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