BY JOHN I. BORJA
Matson Navigation Co. Inc. once again is calling on the federal court to order the U.S. Department of Transportation Maritime Administration to rescind its decision to grant Matson’s competitor federal subsidies under the Maritime Security Program.
The program was established through the Maritime Security Act of 1996 and reauthorized in 2003. It provides financial assistance to U.S. flag vessels operating in foreign commerce as a way to offset the higher costs of operating such vessels internationally.
Matson in its Nov. 27 court filing with the District Court for the District of Columbia stated the administration’s decision to approve two American President Lines Inc.-operated vessels — APL Guam and APL Saipan — as replacements for two other subsidized vessels that operated in the Middle East was unlawful. Matson alleges the APL vessels are unqualified for the program and the granted subsidies create an unfair advantage.
In a statement to the Journal, Matson wrote, “When Congress enacted the MSP, it was clear that MSP payments are available only for vessels that provide transportation in foreign commerce. Vessels operated in domestic trade, including with Guam and Saipan, do not qualify. Matson supports full and fair competition on a level playing field. Our concern is that $10 million annually in federal subsidies is currently tilting the playing field in favor of a competitor whose operations don’t qualify for those subsidies.”
It’s not the first time Matson had brought this issue forward. Last summer, Matson had petitioned the U.S. Court of Appeals for the District of Columbia Circuit, but that was later dismissed due to the court’s lack of jurisdiction. (See “Matson defends appeal against APL subsidies” in the Feb. 19, 2018 issue of the Journal.)
A spokesperson for APL said the company is confident that Matson’s latest attempt is “completely lacking in merit” and emphasized that its operations in the region were approved by the Department of Transportation, the Maritime Administration and the Department of Defense.
“APL remains committed to serving the people of Guam and Saipan and the U.S. military personnel stationed there, as it has for the past three years, by maintaining its modern, efficient service to Guam and Saipan and ensuring that shippers have a competitive choice, directly benefiting the U.S. military and the people of Guam and Saipan. APL remains unwaveringly committed to its U.S.-flag operations and commitments under the MSP and Voluntary Intermodal Sealift Agreement supporting DOD operations throughout the world,” the APL spokesperson said.
Matson is requesting that the federal court deem the Maritime Administration’s approval of APL’s vessels unlawful and to have the decision vacated, terminated and set aside.
The Department of Transportation and the Maritime Administration are named as defendants in the lawsuit, and have yet to file a response. mbj