Sea-Land Service, Inc., and U.S. Ship Management, Inc., Application for Approval of the Proposed Transfer of Maritime Security Program Operating Agreements (MA/MSP-29 Through MA/MSP-43)

[Federal Register Volume 64, Number 187 (Tuesday, September 28, 1999)]
[Notices]
[Page 52361]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25124]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration
[Docket MARAD-1999-6248]


Sea-Land Service, Inc., and U.S. Ship Management, Inc., 
Application for Approval of the Proposed Transfer of Maritime Security 
Program Operating Agreements (MA/MSP-29 Through MA/MSP-43)

    By application completed September 21, 1999, Sea-Land Service, Inc. 
(Sea-Land), and U.S. Ship Management, Inc. (USSM) notified the Maritime 
Administration (MARAD) of the proposed transfer of 15 Maritime Security 
Program (MSP) Operating Agreements (MA/MSP-29 through MA/MSP-43) from 
Sea-Land to USSM, pursuant to section 652(j), Sub-title VI-B, Merchant 
Marine Act, 1936, as amended (1936 Act). The vessels originally subject 
to those contracts are also to be concomitantly transferred to USSM for 
operation. Sea-Land received the initial award of the MSP Operating 
Agreements on December 20, 1996.
    The proposed transfer of MSP Operating Agreements MA/MSP-29 through 
MA/MSP-43 is part of a series of overall transactions whereby 
affiliates of the A.P. Moller Group (Maersk) will acquire the 
international container operations of Sea-Land. In all, 19 U.S.-flag 
vessels will be transferred from Sea-Land to USSM, including the 15 
associated with the MSP Operating Agreements.
    With respect to the transfer of MSP Operating Agreements, section 
652(j) of the 1936 Act provides that ``A Contractor under an operating 
agreement may transfer the agreement (including all rights and 
obligations under the agreement) to any person eligible to enter into 
that Operating Agreement under this subtitle after notification of the 
Secretary [of Transportation] in accordance with regulations prescribed 
by the Secretary, unless the transfer is disapproved by the Secretary 
within 90 days after the date of Notification. A person to whom an 
Operating Agreement is transferred may receive payments from the 
Secretary under the agreement only if each vessel to be covered by the 
agreement after the transfer is an eligible vessel under section 
651(b).''
    In implementing the proposed transaction, it is asserted that under 
a U.S. citizen owner trust structure, the MSP Vessels will be bareboat 
chartered to USSM, which will time charter them to Maersk Line Limited 
(MLL), an affiliate of Maersk and a documentation U.S. citizen. USSM 
will manage and operate the vessels utilizing former Sea-Land 
operations employees. USSM will crew the vessels with U.S. citizens, 
utilizing the same unions presently representing seagoing employees on 
the MSP Vessels. The vessels will continue to operate in the same 
combination of world-wide container services as have been provided 
since 1995 by cooperation between Maersk and Sea-Land.
    Sea-Land and USSM have requested that MARAD allow the proposed 
transfers to become effective in accordance with the application and 
pursuant to law. This notice invites comment on legal and policy issues 
that may be raised by the Sea-Land and USSM application, including the 
transfer of the 15 MSP Operating Agreements to USSM.
    A redacted copy of the transfer application will be available for 
inspection at the Department of Transportation (DOT) Dockets Facility 
and on the DOT Dockets website (address information follows). Any 
person, firm, or corporation having an interest in this proposal, and 
desiring to submit comments concerning the application, may file 
comments as follows. You should mention the docket number that appears 
at the top of this notice. You should submit your written comments to 
the Docket Clerk, U.S. DOT Dockets, Room PL-401, Nassif Building, 
Department of Transportation, 400 Seventh Street, SW, Washington, DC 
20590. Comments may also be submitted by electronic means via 
the internet at dmses.dot.gov/submit/. All comments will become 
part of the docket. You may call Docket Management at (202) 366-9324. 
You may visit the docket room to inspect and copy comments at the above 
address between 10 a.m. and 5 p.m., EDT, Monday through Friday, except 
holidays. An electronic version of this document is available on the 
World Wide Web at dms.dot.gov. Comments must be received no 
later than the close of business on October 13, 1999.
    This notice is published as a matter of discretion, and the fact of 
its publication should in no way be considered a favorable or 
unfavorable decision on the application, as filed, or as may be 
amended. MARAD will consider any comments timely submitted, and take 
such action with respect thereto as may be deemed appropriate.

    By Order of the Maritime Administration.

    Dated: September 22, 1999.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 99-25124 Filed 9-27-99; 8:45 am]
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