The Coast Guard has raised the limit on damages that trigger a marine casualty report to keep pace with inflation, and eliminate the burden of chronicling and investigating relatively minor mishaps.
The new property damage threshold is $75,000, up from $25,000 and $3,000 higher than originally proposed. The limit for a serious marine incident, which requires mandatory drug and alcohol testing, is $200,000, up from $100,000 but still lower than many industry advocates sought.
The final rule published Monday – the first change since the amounts were established in the 1980s – is effective April 18.
“This is a big step forward. We welcome these improved thresholds,” said John Groundwater, executive director of the Passenger Vessel Association (PVA). “We would have liked to see higher numbers, but we’re generally pleased. It will be helpful.”
The American Waterways Operators (AWO) also supported the increase.
“By adjusting the thresholds for inflation and negating the need to report casualties that result in a relatively low amount of property damage, we believe that the final rule will save both the industry and the Coast Guard time and money, and ensure that the Coast Guard can direct its attention and resources to high-consequence incidents,” said Caitlyn Stewart, AWO’s director of regulatory affairs.
The PVA wanted a $100,000 minimum, arguing that the Coast Guard’s proposed $72,000 figure was outdated because it was based on 2015 statistics. PVA also sought to maintain the 1:4 ratio between the thresholds for a marine casualty and a serious marine incident, which would have meant a $400,000 limit instead of $200,000.
The Coast Guard estimates the rule will save the industry and the government about $6.8 million over 10 years, and it expects 316 fewer reports annually.
In its response to those comments from PVA and others, the agency said the original 1:4 ratio was neither by design, nor consistent with inflation.
They also don’t plan automatic inflation adjustments, as some suggested, because the cost increase may be too insignificant to warrant an annual change.
“Frequent adjustments could also lead to confusion in what is to be reported. Additionally, the maritime industry may also be burdened with updating training and operational materials,” the Coast Guard said. The service will, however, take a look at the numbers every five years.
As for the benchmark used for the $75,000, the Coast Guard said the unadjusted index it relied on is the most appropriate because seasonally adjusted data is subject to revision.
And stressing that the changes are for property damage only, the Coast Guard said that other types of reportable casualties mean they’ll be notified of incidents “that could indicate more serious problems and that may be averted in the future with timely intervention.
“These include groundings, bridge allisions, loss of propulsion or steering, certain equipment failures, incidents resulting in significant harm to the environment, fire or flooding that adversely affects the vessel’s seaworthiness or fitness for service, injuries beyond first aid, and loss of life — regardless of property damage cost.”