Alaskan Offshore Shipping:

Changing Federal Regulation and Service

RCED-88-114BR: Published: Aug 9, 1988. Publicly Released: Aug 24, 1988.

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In response to a congressional request, GAO examined the divided regulation of ocean transportation between Alaska and the U.S. mainland, to determine how: (1) the divided offshore regulatory system developed; and (2) Alaskan offshore regulation and service have changed under the divided system.

GAO found that: (1) before the early 1960's, the Federal Maritime Commission (FMC) was responsible for ocean services, while the Interstate Commerce Commission (ICC) was responsible for land services; (2) 1962 legislation permitted ICC to engage in intermodal ocean-rail service; (3) since carriers that combine ocean and land service are subject to ICC regulation, and those who provide only ocean service are subject to FMC regulation, regulation depends on how carriers arrange their service rather than how they ship their goods; (4) as ICC relaxed its requirements in response to regulatory reform policies and FMC remained unchanged, there was a shift toward Alaskan intermodal service, with a corresponding shift in tariff activity; (5) between 1984 and 1987, the number of Alaskan ocean carriers offering intermodal service increased from 7 to 13, while the number offering separate ocean service dropped from 13 to 11; (6) from 1984 to 1986, the number of tariff changes increased from about 5,000 to 7,000 at ICC, while they decreased from about 700 to 300 at FMC; and (7) a recent economic turndown related to reductions in the price of oil led to reduced demand for ocean transportation, heightened competitive conditions, and excess capacity, forcing carriers to either shift to charter service or cease operations.

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