Opening Statement for the record for Congressman Lindsey Graham

Legislative Hearing on H.R. 1253, the Free Market Antitrust Immunity Reform Act

June 5, 2002

Mr. Chairman, ranking Member Conyers, and distinguished Members of the Judiciary Committee, I am submitting this statement for the record of the Committee’s June 5, 2002, hearing on ocean carrier antitrust immunity. This issue and the overall regulatory scheme governing the liner shipping industry is a matter of great importance to the State of South Carolina, which is home to the Port of Charleston, the busiest container port along the Southeast and Gulf coasts and the fourth busiest nationwide.

The enormous role in which international trade plays in South Carolina is not well known outside the State, but it is well recognized within our borders. International trade through the Port of Charleston provides over 83,000 jobs throughout the State and pumps $2.6 billion in wages into our economy each year. Charleston has played a major role in international commerce throughout our nation’s history, and with three major port-related projects underway today, it will continue its leading role in the future.

In 1998, Congress approved the Ocean Shipping Reform Act (OSRA). It was a hard-won consensus among shippers, carriers, ports and the maritime unions. Enactment of OSRA was a four-year project for Congress, and we are now seeing the benefits of its implementation. There is ample capacity in the ocean carrier industry, high quality service, regulatory oversight and price competition. Rates are lower than they were 15 years ago. Last September, the Federal Maritime Commission released a two-year study of OSRA. It concluded that OSRA is working as intended to the common benefit of shippers, ports, ocean carriers and transportation intermediaries.

Mr. Chairman, in order to keep our ports strong and vibrant into the future, we should allow OSRA to continue in effect and not make major changes to it. If it’s not broken, then let’s not try to fix it. In my opinion, repeal of the limited antitrust immunity that ocean carriers use to address the structural defects and chronic instability of this unique market would disturb the hard-won consensus reached in OSRA. The result will be destabilization of the market, destructive price wars, severe financial loss, industry consolidation and poorer service for U.S. customers.

We also must be mindful of the fact that this is an international business which must operate under a regulatory regime that is acceptable to all trading nations. No country in the world applies its domestic antitrust laws to liner shipping. Instead, the current regulatory regime, overseen in the U.S. by the Federal Maritime Commission, is well-understood, functioning well and is internationally accepted.

Finally, the Chairman knows full well, having served as the House’s point person on much of the post-9-11 anti-terrorism legislation, the heavy burdens being placed on our nation’s transportation infrastructure to prevent future attacks. The port community and the ocean carriers are front and center in this debate, and they are devoting considerable manpower and resources to confronting the challenge. At this time of intense activity on this front, we should not be enacting legislation to fundamentally alter the economics of the industry that keeps our ports bustling, productive and efficient links to the world.

Thank you, Mr. Chairman.