New Shipping Bill Shakes Up Island Trade: "Noncontiguous Shipping Competition Act" Sets New Rules for Routes

The "Noncontiguous Shipping Competition Act" aims to shake up the shipping game for trade routes to places not directly connected to the U.S. mainland, like Hawaii, Alaska, Puerto Rico, and Guam. Basically, it's looking to boost competition by loosening some rules—but only if enough independent shippers are playing ball.

Unpacking the Shipping Shake-Up

This bill changes Section 55101(b) of title 46, United States Code. The core change? Certain shipping routes to noncontiguous areas get a pass from the usual coastwise laws unless specific conditions are met. Coastwise laws, for those not in the shipping biz, generally require goods shipped between U.S. ports to be carried on U.S.-built, -owned, and -crewed vessels. This bill introduces an exemption.

The 20% Rule & "Real" Competition

Here's the catch: the exemption only kicks in if there aren't at least three independent shipping companies actively running the route. And "actively" is key here. Each company needs to be hauling at least 20% of the total goods shipped on that route. Plus, these companies can't be secretly owned by the same parent company—they have to be genuinely separate operators. Think of it like this: if you're a small business owner trying to ship goods to Alaska, this bill is designed to ensure you have multiple, truly independent shipping options, not just a couple of giants pretending to compete.

Real-World Ripples

Imagine you're a coffee grower in Hawaii shipping beans to the mainland. If this bill passes, and the route you use meets the exemption criteria, you might see more shipping companies vying for your business. That could mean lower prices or better service. On the flip side, if you're one of the existing shipping companies, you might suddenly face new competition on routes you previously dominated. For example, if a route currently has only two major players, they could lose their coastwise protection unless a third, genuinely independent competitor enters the market and captures at least 20% of the shipping volume.

Potential Hurdles

While the goal is more competition, there are potential snags. What if big shipping companies try to game the system? They could, in theory, create shell companies that look independent but are secretly controlled. Enforcing the "no common ownership" rule (as stated in SEC. 2) will be crucial. Also, existing big players could make it tough for new, smaller companies to actually grab that 20% market share needed to keep the exemption in place. If smaller companies face pressure to cut corners to compete, it's not impossible that could affect things like safety or how workers are treated, which is something to keep an eye on.

This bill could mean real changes for anyone involved in shipping goods to and from these noncontiguous areas—from business owners to consumers. Whether those changes are all positive remains to be seen, but the "Noncontiguous Shipping Competition Act" is definitely trying to stir the pot.