For more than 230 years, the U.S. Coast Guard (USCG) has played a critical role in ensuring maritime safety, security and environmental stewardship through its far-reaching and evolving missions. Barring any extraordinary circumstances, the service will continue into 2025 with a "business as usual" approach. Within the evolving political landscape, focus is expected to be on economic and national security, innovation and energy policies that could affect the Coast Guard. How the Coast Guard addresses its challenges will impact the commercial maritime sector.
A Regulatory Agency in an Era of Deregulation
If past trends are any indication, the Coast Guard may experience a regulatory freeze where federal agencies halt work on rulemakings to assess alignment with the incoming administration's priorities, likely favoring deregulation. This could influence the Coast Guard's development of regulations to implement the U.S. Environmental Protection Agency's (EPA) performance standards under the Vessel Incidental Discharge Act of 2018 (VIDA). The EPA's rule establishes marine pollution control device standards, and the Coast Guard's implementing regulations are essential. The incoming administration has also indicated a willingness to relax environmental laws in order to spur investment and support U.S. energy dominance. However, enforcement activities such as those under the Act to Prevent Pollution from Ships (APPS) are expected to remain a priority, with investigations into recordkeeping and obstruction of justice continuing. The voluntary disclosure policy for such violations will likely remain available and an important consideration for affected industry stakeholders.
Notable Legislation Still on the Horizon
The Coast Guard has yet to pass its Coast Guard Authorization Act (CGAA), which was removed from the National Defense Authorization Act (NDAA) and awaits another vehicle for passage. The absence of CGAA passage does not repeal the agency's duties, but it delays important administrative, maritime and environmental policy changes. Another significant piece of legislation affecting the Coast Guard is the Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act. This comprehensive legislation aims to revitalize shipbuilding and commercial maritime industries, establish national oversight and funding for U.S. maritime policy, incentivize domestic shipbuilding, enable U.S.-flagged vessels to compete internationally, rebuild the shipyard industrial base and expand the workforce. Even though revisions to the bill are expected and issues related to increasing liability limitations on foreign-flag vessels may prove controversial, the SHIPS Act includes several provisions impacting the Coast Guard such as coordination responsibilities regarding U.S. coastwide trade prohibitions and establishing a U.S. Center for Maritime Innovation, among others that could spur U.S. growth. The Coast Guard is also still addressing delays, design challenges and cost overruns to implement the Polar Security Cutter program – originally expected to enter into service in 2024 but now pushed to 2030 and crucial to U.S. presence in an increasingly active Arctic domain – in a timely manner and within budget, challenges that remain open questions.
Agency Outliers
Under the new administration, questions may arise about reallocating Coast Guard assets, potentially creating challenges for the service. Border security and mass deportation have been stated as priorities, and Coast Guard resources could conceivably be directed to support these efforts. This could further strain the Coast Guard's ability to fulfill its operational priorities as it faces a historic workforce shortage across active duty, reserve and civilian ranks. Additionally, the service is impacted by the ongoing Congressional investigation into its handling of Operational Fouled Anchor, with allegations of obstruction and lack of full responses. This investigation has reportedly involved the Coast Guard's review of more than 1.8 million pages of emails and has created a bit of an albatross around the neck of the agency, which may distract from the Coast Guard's responsiveness to other increasingly pressing industry needs, such as those related to innovation with AI and autonomy in commercial shipping, commercial spaceflight launch and reentry, approval of designs with alternative fuel marine propulsion and carbon capture, and novel uses of the marine environment.
Overall, the Coast Guard will likely continue as a key player in maritime safety and security, adapting to evolving industry needs and a focus on national and economic security requirements. Nonetheless, industry engagement with ever-evolving changes will be paramount in the untested waters that may lie ahead.
20 Posts in 20 Days Leading to Inauguration Day on Jan. 20
Holland & Knight's Transportation & Infrastructure Industry Sector Group is prepared to assist industry clients in adapting to the anticipated changes by the new administration. Our team is writing new blog posts each day leading up to President-Elect Donald J. Trump's inauguration, with insights regarding likely impacts on the various segments of the industry, including Aviation, Construction, Maritime, Freight Rail, Motor Carriers, Transit and Autonomous Transportation. Bookmark our Election Impacts on Transportation & Infrastructure resource page to follow along.
