Good afternoon. First I want to thank you for having me here this afternoon. I am very pleased to have the opportunity to speak to this group at the outset of my term as Chairman. I have a great respect for the creativity and entrepreneurial spirit that embody your industry. At the same time, I recognize the competitive challenges you face and believe that the Commission has a responsibility to your members as a part of the ocean transportation community to ensure fairness and balance.

While I know that most of you are familiar with the FMC, I would like to briefly describe the agency's mission as I see it. The Federal Maritime Commission plays a crucial role in the marketplace by ensuring that "Fair Maritime Competition" exists in the ocean transportation industry, resulting in maximum benefits to the nation, with a minimum of government intervention and regulatory cost. The intent of our governing laws is to let market forces guide the growth and development of U.S. international trade. The Federal Maritime Commission is charged with ensuring that there are no undue controls, influences, or non-market barriers imposed by any nation, carrier, cargo owner or intermediary, which can adversely affect U.S. oceanborne trade. The FMC does not have a promotional role; rather, our mandate is to help remove impediments to fair competition and thereby allow you to conduct business as effectively as possible.

Most relevant to those of you here, the FMC is obligated, through our licensing function, to ensure that unqualified persons do not hold themselves out as ocean transportation intermediaries. The Shipping Act requires that any person in the United States who operates as an ocean transportation intermediary ("OTI") obtain a license from the Commission. OTIs include both ocean freight forwarders, which have historically been licensed by the Commission, as well as NVOCCs. Moreover, all OTIs, whether in the U.S. or foreign based but engaged in the U.S. foreign commerce, must furnish evidence of financial responsibility in the form of a surety bond, guarantee or insurance. This is available to pay for damages arising from an OTI's transportation related activities. This licensing and financial responsibility requirement help to ensure that unqualified or unscrupulous operators do not undermine those of you who fairly and honestly compete in a tough marketplace.

I've had a lot of questions in recent weeks about the "agenda" for my tenure as Chairman. I don't have a particular "agenda" except to ensure that the Commission continues the role envisioned for it by Congress upon creation of the agency 41 years ago, and more recently with the passage of the Ocean Shipping Reform Act of 1998 (OSRA). Four years after enactment, OSRA is still in its infancy. The industry is still striving to reach a balance in this new environment. Among the most significant changes have been the emergence of voluntary rate discussion agreements, the establishment of confidential service contracts between shippers and individual ocean common carriers, and the licensing of NVOCCs. The recent economic downturn and continuing trade imbalances, particularly in the transpacific, have challenged the industry even further. I believe that this industry will continue to shape itself around the new statutory mandates and the new, and evolving, marketplace.

I know that the FMC has historically been quite responsive to the industry and I will do all that I can to ensure that it continues to be. FMC staff are easily accessible and always available to answer questions you might have concerning the requirements and regulations that may be relevant to your businesses. We encourage you to utilize our website, www.fmc.gov , which contains contact phone numbers and email addresses, plus other useful information concerning the FMC and the laws which we administer. We have just added a frequently asked questions section to our website. I trust you will find it useful.

In the very near future the FMC will begin to offer a series of seminars hosted by our five field offices to help educate the public and the industry about our functions and services. Our area representatives have always functioned as a kind of "help desk" for the industry and we hope to formally expand this through these seminars. Topics will likely range from the assistance the Commission can offer you in your day to day business to topics of timely interest to the industry.

As you all are well aware, back in December of last year the People's Republic of China issued a new law which caused much confusion and consternation in the ocean shipping industry. This new law took us all by surprise and raised concerns about whether it would create or perpetuate differing requirements for, and treatment of, Chinese and non-Chinese carriers and intermediaries, or create new and unreasonable barriers to those who provide transportation services to and from China.

The Maritime Administrator, Captain William Schubert, and many private industry groups have raised their concerns with the Chinese government's Ministry of Communications (MOC). They have requested further clarification of the meaning and impact of the law and asked for a more transparent process in the development of the rules which will implement the law. I can advise that MARAD is evaluating several options to address the difficulties presented by the proposed requirement that NVOCCs make cash deposits.

As you know, the Commission is authorized to address restrictive foreign shipping trade practices. Section 19 of the Merchant Marine Act of 1920 and the Foreign Shipping Practices Act of 1988 empower the Commission to make rules and regulations governing shipping in the foreign trade to adjust or meet conditions unfavorable to shipping and to address adverse conditions that affect carriers, OTIs and shippers in the foreign trade, but which conditions are not otherwise applied to foreign entities operating in the U.S.

In August of 1998, the Commission instituted a proceeding involving certain potential Chinese restrictions. We opened that proceeding initially to examine apparently restrictive Chinese laws, rules and regulations in order to determine if further action is warranted. In response to these new regulations, the Commission issued a Notice of Inquiry earlier this year asking for input from the shipping public on this new law and particularly how it would affect business in the industry. At the moment, we are in the process of reviewing the comments from the industry and shipping public in response to our requests for further information on the effects of this new law. I am aware that the NCBFAA did comment, and we appreciate the input. The FMC relies on you for input on the effects that foreign practices have both on your ability to do business on a day-to-day basis, and on your ability to expand your business in different geographic and service markets. We look forward to continuing the dialogue with you on this difficult matter.

Rest assured, the FMC continues to closely scrutinize the impact of this law as well as MOC rules and the practices that result from it. I am somewhat encouraged thus far by the apparent openness in the Chinese implementing process. In April when the MOC was visiting Washington for consultation discussions with Marad, the FMC staff spent several days with their staffers, explaining how we operate here in the U.S. - both specifically as to the FMC and more generally, as to all U.S. regulatory agencies. We were pleased to learn that in June the MOC requested public comment on its implementing rules, and did not make them effective immediately. We hope that the Chinese take the comments they have received into consideration when developing their final rules, and continue to keep the industry involved in the development of this regulation and all future regulations. The Commission, as always, stands ready to use the tools at its disposal should adverse conditions arise from this new initiative.

With regard to the Fact Finding proceeding recently begun in response to your group's petition, I cannot give many specifics. I can note, however, that earlier this month, Commissioner Brennan issued a Section 15 order to TSA members and expressed his intent to ask similar questions of NVOCCs and other affected parties. Commissioner Brennan will hold a hearing tomorrow afternoon at 1:30 p.m. in a non-public session in the hearing room at our headquarters - 800 North Capitol St. N.W. Any and all comments or testimony you might have to offer individually or collectively would be greatly appreciated.
I know that maritime security and port security legislation is a topic of much interest to you and to the industry in general. While our role at the FMC is primarily of support to the front line organizations, I would just like to assure you that it is something we at the FMC include in our day to day functions, such as the licensing of OTIs. We hope to use our expertise and vast collection of commercial information to assist the various entities on the front lines of securing our ports and vessels. As such, we regularly provide technical expertise and assistance to those entities.

As many have said before, I believe it is essential that each entity in the supply chain, including government agencies, do its own part towards securing the chain. I believe that all of the entities involved in ocean transportation, including government agencies, must form a collaborative and integrated system to ensure the safety and efficiency of the supply chain. I support the C-T PAT - Customs-Trade Partnership Against Terrorism - and see that Customs is now accepting applications from OTIs to participate in this program. I encourage you to avail yourselves of this opportunity. By working with trusted partners, you can help to ensure the safe and expedient transportation of cargo.

In closing I thank you again for having me here today and I want to reiterate my commitment to serve you, and the entire shipping public. Our door at the FMC is always open to provide assistance and counsel to the industry. And likewise, we always appreciate your feedback to let us know how we can serve you better.