# Understanding the Noncontiguous Shipping Competition Act

This bill changes shipping rules for states and territories that aren't connected to the mainland United States—mainly Hawaii, Alaska, and U.S. territories like Puerto Rico and Guam. Right now, federal law requires that goods shipped between the mainland and these places must be carried on American-owned and American-built ships. This rule is meant to protect the American shipping industry, but it also makes shipping more expensive because there's limited competition.

The new bill creates an exception to this rule. If a shipping route to a noncontiguous area doesn't have enough competition, foreign ships would be allowed to carry goods on that route. Specifically, the exemption only kicks in if there aren't at least three different American shipping companies each carrying at least 20 percent of the goods on that route, and these companies aren't owned by the same people. In other words, if a route is dominated by one or two shipping companies, foreign competitors can now enter the market.

The practical effect is that shipping costs could go down for consumers and businesses in Hawaii, Alaska, and U.S. territories. When foreign ships can compete on routes that currently have little competition, prices typically fall. However, this could also mean fewer jobs and less business for American shipping companies operating on those routes. The bill essentially trades some protection for the American shipping industry in exchange for lower costs and more competition on routes where consumers currently have few options.

Noncontiguous Shipping Competition Act

Case, Ed

Noncontiguous Shipping Competition Act This bill revises coastwise laws, commonly known as the Jones Act, that govern domestic transportation of merchandise or passengers by vessels.The Jones&nbsp;Act generally requires that a vessel transporting merchandise or passengers&nbsp;from one U.S. point to another U.S. point be (1) built in the United States, (2)&nbsp;at least 75% owned by U.S. citizens, and (3) mostly crewed by U.S. citizens. The act also includes several exemptions and exceptions.The bill exempts carriage on a route in noncontiguous trade from Jones Act requirements unless (1) at least three owners or operators of coastwise qualified vessels regularly operate such a vessel on the route, (2) each of such owners or operators transports at least 20% of the volume of goods on that route, and (3) none of such owners or operators are under common ownership.&nbsp;(Generally, noncontiguous trade is trade between two U.S. points where at least one of the points is in Alaska, Hawaii, Puerto Rico, or an insular territory or U.S. possession.)