APL allowed to register six ships overseas

PUBLISHED : Friday, 18 November, 1994, 12:00am
UPDATED : Friday, 18 November, 1994, 12:00am

AMERICAN President Lines (APL) has received permission from the United States Maritime Administration (MarAd) to operate six vessels, now under construction, under foreign registry when they enter transpacific service next year.

Sea-Land Service is still awaiting MarAd approval on five of its applications to put US-flag vessels under the registry of the Marshall Islands.

APL was granted a waiver on the provisions of Section 804 (a) of the Merchant Marine Act of 1936.

This requires participants in the US Government operating differential subsidy programmes to obtain MarAd approval in order to operate ships under a foreign registry in US commerce trade.

Besides standard 804 (a) conditions, MarAd has set conditions to ensure that the US Government will have access to the ships in times of crisis, and to preserve the opportunity to enroll the ships in a future maritime programme, should Congress and the Administration enact one.

MarAd also stipulated that APL does not scrap or reflag any ships currently under an operating subsidy contract prior to October 1 next year.

John Lillie, chairman of APL's parent, American President Companies, said the company accepted these conditions.

'We appreciate MarAd's response to our request for a prompt decision, in view of the failure of the 103rd Congress to enact a new maritime reform programme in 1994,' he said.

'The waiver, and the conditions under which it has been granted, serve the country's interests by keeping these new ships in US commerce trade, so they could be available if a comprehensive new programme of support for US merchant ships were enacted.' The six C11-class ships under construction in Germany and Kora, will each have a capacity of 4,800 20-foot equivalent units and a service speed of 25 knots.

APL plans to deploy the ships to its US West Coast-Asia service.

All five Sea-Land ships now operate a highly competitive international service. Sea-Land Pride, Sea-Land Value and Sea-Land Motivator sail in the company's Asia-Middle East-Europe service.

The other two - Sea-Land Freedom and Sea-Land Mariner - sail in the company's Asia-Europe Express service.

Sea-Land, the largest US-based ocean carrier, applied in June 1993 to reflag 13 of its US-flag ships.

Those applications had been held in abeyance while Congress considered maritime reform legislation.

The legislation was approved by the House of Representatives in the 103rd Congress, but failed to gain Senate approval.

'Sea-Land was very disappointed that maritime reform legislation was not passed,' said John Clancey, Sea-Land's president and chief executive officer.