HR 666119th CongressIntroduced

Noncontiguous Shipping Reasonable Rate Act of 2024

Introduced: Jan 23, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Noncontiguous Shipping Reasonable Rate Act of 2024 amends the law governing rates for noncontiguous domestic ocean trade. It replaces the existing definition of a “reasonable rate” with a new standard: a rate is reasonable if it remains within 10 percent of a rate set by a comparable international ocean rate index that is recognized by the Federal Maritime Commission (FMC). In short, the bill ties domestic shipping rates for noncontiguous U.S. trade (such as shipments to or from Alaska, Hawaii, Puerto Rico, and other noncontiguous areas) to international rate benchmarks to curb potentially excessive pricing. The text provided is limited to this definitional change and does not detail enforcement mechanisms, penalties, or how the FMC would select or recognize the applicable international index. The bill was introduced in the House (H.R. 666) on January 23, 2025, by Rep. Case (with Rep. Moylan) and referred to the Committee on Transportation and Infrastructure.

Key Points

1Defines “reasonable rate” for noncontiguous domestic ocean trade as within 10 percent of a rate set by a comparable international ocean rate index recognized by the FMC.
2Amends Section 13701(d) of title 49, United States Code, by replacing the current paragraph (1) with the new definition.
3Applies specifically to noncontiguous domestic ocean trade (e.g., shipments involving Alaska, Hawaii, Puerto Rico, and other noncontiguous areas).
4The standard relies on a rate index that is “comparable” and recognized by the Federal Maritime Commission.
5The bill’s status: introduced in the House (H.R. 666) on January 23, 2025, sponsored by Mr. Case (for himself and Mr. Moylan) and referred to the Committee on Transportation and Infrastructure. No explicit enforcement mechanism or effective date is provided in the text excerpt.

Impact Areas

Primary group/area affected- Shippers and carriers engaged in noncontiguous domestic ocean trade (e.g., routes involving Alaska, Hawaii, Puerto Rico, and other U.S. territories) who would be subject to the defined “reasonable rate” standard.Secondary group/area affected- Importers/exporters using noncontiguous routes, freight forwarders, port authorities, and regulators at the Federal Maritime Commission.Additional impacts- Potential reduction in rate volatility and price gouging on noncontiguous routes by anchoring rates to international benchmarks.- Compliance and administration costs for carriers to monitor and ensure rates stay within the 10 percent band relative to the recognized index.- Possible implications for competition and supply chain reliability in remote U.S. markets; any tension between domestic pricing practices and international benchmark movements.- FMC involvement would be needed to recognize and maintain the applicable international rate index and to resolve disputes or questions about comparability.

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