H.R. 667: Noncontiguous Shipping Relief Act of 2024

This bill, known as the Noncontiguous Shipping Relief Act of 2024, primarily modifies existing maritime transportation laws to allow for greater flexibility in how cargo is transported between noncontiguous U.S. territories (like Alaska and Hawaii) and other locations using foreign-flagged vessels. Below are the key points of the bill:

Key Provisions

• Noncontiguous Trade Exemption: The bill introduces a new exemption that allows the transportation of merchandise in noncontiguous trade on qualifying foreign freight vessels. These vessels must be at least 1,000 gross tons and registered in a foreign country. They are also required to employ U.S. citizens to some extent, as stipulated by U.S. maritime laws.
• Definition of Terms:
  • Foreign Qualified Freight Vessel: A vessel not built in the United States and registered in a foreign country, designed for transporting goods.
  • Noncontiguous Trade: Refers to the transportation of goods between U.S. states or territories that are not physically connected.
• Alterations to Coastwise Regulations: The bill makes changes to existing regulations by specifying that foreign qualified freight vessels can transport goods without requiring standard coastwise endorsements, under certain transport conditions.
• Citizenship and Registry Transfers: Modifications are made to the citizenship requirements for corporations operating these foreign qualified vessels. Additionally, the Secretary of Transportation is granted the ability to approve the transfer of such vessels to U.S. documentation more easily.
• Labor Provisions: The bill addresses liability for workplace injuries of crew members employed on these vessels. It states that certain maritime actions can be brought in U.S. district courts if an employer does not have a presence in the U.S. but operates out of U.S. ports. Moreover, employers may opt into the Longshore and Harbor Workers’ Compensation Act.
• Minimum Standards Compliance: All vessels participating in U.S. coastwise trade are required to meet international labor standards and applicable U.S. environmental regulations.
• Regulatory Oversight: The bill emphasizes that even foreign-flagged vessels must adhere to recognized minimum labor and environmental standards when operating within U.S. coastwise trade.
• Requirements for Noncitizen Owners: Any foreign owners or operators of vessels engaged in domestic coastwise trade must comply with U.S. laws, including naming an agent for legal processes and providing documentation about their vessels and operations.

Potential Impact

The legislation aims to enhance shipping flexibility and promote more efficient transportation logistics between noncontiguous areas of the U.S. by allowing foreign vessels to participate in specific trade routes, which may also reduce costs and increase shipping capacity. It is anticipated that shipping companies and maritime stakeholders will monitor the implications of these changes closely.

Relevant Companies

• UPS: United Parcel Service may experience changes in logistics operations and costs due to the expanded use of foreign vessels for noncontiguous trade.
• DPDHL: As a major international shipping provider, Deutsche Post DHL might adjust its shipping routes and operations in response to new regulations allowing foreign ships in U.S. trade.
• Marad: Companies involved in maritime regulatory compliance may see increased demand for services that help navigate the changing shipping regulations.