John F. Kennedy’s well-known locution, “Ask not what your nation can do for you, however you are able to do to your nation” stays the rallying name for civic motion and public management. The message stays foundational to the success of the US, notably as we head into an election yr that after once more seems to be stuffed with divisiveness and vitriol. That stated, earlier than we flip the calendar, it is very important set JFK’s message apart for a second and mirror upon what our political management in Washington, DC did (or didn’t) accomplish for the maritime trade in 2023.
A yr of inner focus and frustration
To place the legislative and regulatory yr in its acceptable context, one should first study the massive political local weather that permeated all through 2023. The yr had an inauspicious starting, with Rep. Kevin McCarthy (R-Calif.-20) requiring 15 ballots over the course of 4 days to grow to be Speaker of the Home, representing the longest Home Speaker election since 1860. Finally, the questions concerning Rep. McCarthy’s conservative credentials by no means dissipated, reaching fever pitch following the last-minute passage of a bipartisan Persevering with Decision in September to avert a shutdown, resulting in a profitable movement to vacate his speakership on October 3. Following 21 days of dysfunction – the longest interval and not using a Speaker since 1962 – Rep. Mike Johnson (R-La.-4) was lastly elected Speaker on October 24.
This protracted absence of Home management inevitably impacted the flexibility of Congress to make substantive adjustments to assist the U.S. maritime trade. Certainly, on the time of writing in mid-November, lots of the most crucial items of laws impacting the maritime trade stay in limbo. For instance, whereas the Home and Senate each handed their separate variations of the Nationwide Protection Authorization Act (NDAA) for Fiscal Yr 2024 in July, the 2 sides proceed to resolve variations between the 2 payments, which additionally face quite a few challenges over funding authorizations for worldwide allies.
As well as, whereas the NDAA usually acts a automobile for transferring laws impactful to the maritime trade, the slimmed-down NDAA handed by each chambers this yr lacks such provisions. For instance, the NDAA doesn’t include an authorization for the U.S. Coast Guard, which stays a separate stand-alone invoice that has not been handed by the Home (however that the invoice was reported out by the Home Committee on Transportation and Infrastructure in June). It additionally stays unclear whether or not Congress will even cross an authorization invoice for the Maritime Administration (MARAD) or Federal Maritime Fee (FMC) for this fiscal yr.
The destiny of quite a few different payments that would influence the U.S. maritime trade additionally stays unclear. For instance, Rep. John Garamendi (D-Calif.-8) has launched varied bipartisan payments that search to construct upon the Ocean Transport Reform Act of 2022 (OSRA 2022), which is but to be absolutely applied by means of regulation by the FMC (mentioned beneath). Equally, Rep. Garamendi lately reintroduced his laws – the Shut Company Loopholes to the Jones Act – that seeks to handle many areas which were carved out of the Jones Act’s attain by means of U.S. Customs and Border Safety rulings. The laws could be notably impactful on the U.S. offshore market, clarifying that U.S.-flag coastwise-qualified vessels have to be used to move merchandise from a U.S. level to the “pristine seabed” in addition to to require the usage of such vessels for offshore platform decommissioning on the U.S. Outer Continental Shelf.
Regulatory motion underway
Whereas Congress acquired off to an abysmal begin in 2023 (and went downhill from there), the Govt Department was extraordinarily energetic on the regulatory aspect to start the yr. For instance, MARAD revealed each its interim remaining rule and solicitation for functions for the Tanker Safety Program (TSP) in December 2022. Following an extension of the preliminary utility interval in February 2023, and the re-solicitation for one TSP Working Settlement in July, MARAD introduced that the TSP was absolutely subscribed in October 2023. It additionally introduced the award of the 2 Maritime Safety Program Working Agreements, which had been vacated by OSG when the Abroad Santorini and Abroad Mykonos had been awarded TSP Working Agreements. In mixture, as soon as all reflaggings are accomplished, MARAD’s actions in 2023 may have grown the U.S.-flag fleet in worldwide commerce by 10 vessels.
Equally, the FMC acquired off to a blazing begin, initiating its varied rulemakings mandated by OSRA 2022 in late calendar yr 2022, with important substantive work extending into 2023. In June 2023, the FMC issued a supplemental discover of proposed rulemaking on the definition of unreasonable refusal to deal or negotiate with respect to vessel house lodging offered by an ocean frequent service. A remaining rule stays pending. Equally, the FMC acquired quite a few feedback from each a part of the maritime provide chain on its proposed rule concerning demurrage and detention billing necessities. The FMC continues to work to handle these feedback, marching in the direction of additional regulatory motion.
Preliminary work can also be underway to develop a brand new Nationwide Maritime Technique. The NDAA for Fiscal Yr 2023, directed MARAD to contract with a s federally funded analysis and growth middle to determine the important thing parts wanted for a nationwide maritime technique. The technique, as envisioned by Congress, must be designed to realize the aims of the Service provider Marine Act of 1936, 46 U.S.C. § 50101, to make sure a sturdy U.S.-flag service provider fleet, mariner workforce, and shipbuilding trade to fulfill future financial and nationwide safety emergencies. We’re a good distance from having a Nationwide Maritime Technique in hand, however in September 2023, MARAD chosen the Heart for Naval Analyses to start the work mandated by final yr’s NDAA.
Some port funding and rather more to return
In November 2023, MARAD introduced the award of $653 million in grant funding to 41 port enchancment tasks underneath the Port Infrastructure Growth Program (PIDP). The tasks had been various in nature and site, spanning the Atlantic, Pacific, and Gulf Coasts, in addition to the Nice Lakes and inland waterways. Extra is to return because the Bipartisan Infrastructure Legislation appropriated a complete of $2.25 billion in PIDP funding, stretching out by means of Fiscal Yr 2026. Rumors abound of a forthcoming two-year Discover of Funding Alternative (NOFO), which may present as much as $950 million in funding in 2024.
MARAD shouldn’t be the one company trying to construct upon its momentum in 2023 to fund port tasks over the following yr. The Inflation Discount Act of 2022 offered the Environmental Safety Company (EPA) with $3 billion to fund zero-emission port tools and know-how and to assist ports develop local weather motion plans to scale back air pollution. EPA launched each a normal and technical request for data for public remark all through 2023, and held a “first look” program webinar in late October. The trade anxiously awaits a forthcoming NOFO to make the $3 billion in funds accessible.
Nevertheless, however these grant applications, attaining the Inflation Discount Act’s bold air emission discount objectives at U.S. ports can even require the outlay of billions of {dollars} of personal capital to buy new near-zero cargo dealing with tools. To stimulate this funding, Rep. Mike Ezell (R-Miss.-4) and Rep. Troy Carter (D-La.-2) launched a bipartisan invoice in July (H.R. 4993) to develop the Capital Building Fund (CCF) to permit for the acquisition of cargo dealing with tools by marine terminal operators with CCF deposits. The invoice seems to be gaining momentum, with quite a few cosponsors added in October and November. When coupled with PIDP and Clear Port Act funding anticipated in 2024, the adjustments to the CCF may lead to a historic recapitalization of cleaner and safer cargo dealing with tools and U.S. port infrastructure.
In different phrases, whereas 2023 may have been extra impactful for the U.S. maritime neighborhood, and 2024 sadly might convey higher political division, the final yr constructed a basis for quite a few optimistic federal investments that maritime stakeholders ought to focus upon to get by means of one other difficult election yr.
