The Noncontiguous Shipping Relief Act of 2024 modifies regulations for foreign freight vessels operating in noncontiguous trade, establishes labor and environmental standards for all vessels in U.S. coastwise trade, and sets requirements for non-U.S. citizens irregularly engaging in domestic coastwise trade.
Ed Case
Representative
HI-1
The Noncontiguous Shipping Relief Act of 2024 modifies regulations for foreign freight vessels operating in noncontiguous trade, such as between the U.S. mainland and Alaska, Hawaii, and U.S. territories. It allows foreign vessels meeting specific criteria to transport goods in these trades under certain conditions, including documentation and adherence to labor standards. The Act also includes provisions related to jurisdiction in injury or death cases, participation in compensation plans, and compliance with environmental standards. Additionally, it sets requirements for non-U.S. citizens irregularly engaging in domestic coastwise trade.
Foreign Ships Can Now Haul Goods to Hawaii, Alaska, and Puerto Rico Under New Shipping Bill
The Noncontiguous Shipping Relief Act of 2024 shakes up maritime law, specifically for places like Hawaii, Alaska, and Puerto Rico that aren't connected to the mainland U.S. The core change? It lets some foreign-flagged ships carry goods between U.S. ports, something usually reserved for American-built and crewed vessels under the Jones Act. This is a targeted attempt to reduce shipping costs in those locations.
Shaking Up the Shipping Lanes
The bill carves out a specific exception to the usual rules. "Foreign qualified freight vessels"—basically, big cargo ships (at least 1,000 gross tons) not built in the U.S., but registered in another country—can now operate in what's called "noncontiguous trade" (SEC. 2). Think shipments to and from those non-mainland states and territories (defined in section 53501). To qualify, these ships need a special certificate from the Secretary of Transportation. This also means they can skip some of the usual restrictions on being transferred to foreign ownership (SEC. 3).
Labor and Legal Stuff
This is where it gets interesting. The bill requires all ships in U.S. coastwise trade (including these foreign ones) to meet international labor standards (SEC. 4). The Secretary of Transportation, along with Labor and Defense, will decide what those standards are. There's also a provision about where lawsuits get filed if a crew member is injured or killed—basically, if the employer doesn't have a U.S. office, the case goes to the nearest district court (SEC. 4). Employers can also opt into the Longshore and Harbor Workers Compensation Act, which would be their only liability in such cases(SEC. 4). This provides some clarity on how worker protections play out.
Leveling the Environmental Playing Field?
The bill states that all vessels, U.S. or foreign, have to follow U.S. and international environmental rules when operating in U.S. coastwise trade (SEC. 6). It also sets a floor for vessel standards – they have to meet the international standards that the U.S. recognizes, ensuring U.S. ships aren't held to a lower bar than foreign ones operating in the same waters (SEC. 5). This is potentially a good thing for environmental protection, but the real test is in the enforcement.
The Catch (and the Questions)
While the aim is to lower shipping costs, there are some potential downsides. Allowing foreign ships into this market could undercut American shipbuilding and maritime jobs. It also raises questions about how effectively the U.S. can enforce labor and environmental rules on foreign-flagged vessels. The bill also requires foreign owners/operators doing irregular coastwise trade to designate an agent for legal stuff, follow all U.S. laws (including taxes), and display ownership info on board (SEC. 7). The "irregularly" part might be a loophole worth watching. How will they define who does and doesn't qualify for this exception? How do they plan to monitor and enforce the rules on foreign-flagged vessels, especially if they are rarely in US ports?.