Cargo Securing Manuals, 68784-68809 [2013-26886]
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Federal Register / Vol. 78, No. 221 / Friday, November 15, 2013 / Proposed Rules
The Mine Safety and Health
Administration (MSHA) is reopening
the rulemaking record for MSHA’s
existing rule on Refuge Alternatives for
the limited purpose of obtaining
comments on the frequency for motor
task (also known as ’’hands-on’’
training), decision-making, and
expectations training for miners to
deploy and use refuge alternatives in
underground coal mines. The U.S. Court
of Appeals for the District of Columbia
Circuit remanded a training provision in
the Refuge Alternatives rule, directing
MSHA to explain the basis for requiring
motor task (hands-on), decision-making,
and expectations training annually
rather than quarterly or to reopen the
record and allow public comment.
MSHA published a notice reopening the
record on August 8, 2013, with
comments due by October 7, 2013. Due
to the government shutdown, the public
requested additional time to comment.
This notice reopens the rulemaking
record to provide an additional
opportunity for public comment.
DATES: Comments must be received by
midnight Eastern Standard Time on
December 16, 2013.
ADDRESSES: Submit comments,
identified by ‘‘RIN 1219–AB84’’, by any
of the following methods:
• Federal e-Rulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
• Email: zzMSHAcomments@dol.gov. Include ‘‘RIN 1219–
AB84’’ in the subject line of the
message.
• Mail: MSHA, Office of Standards,
Regulations, and Variances, 1100
Wilson Boulevard, Room 2350,
Arlington, Virginia 22209–3939.
• Hand Delivery/Courier: MSHA,
1100 Wilson Boulevard, Arlington,
Virginia, between 9:00 a.m. and 5:00
p.m. Monday through Friday, except
Federal holidays. Sign in at the
receptionist’s desk on the 21st floor.
Instructions: All submissions must
include the Agency name ‘‘MSHA’’ and
‘‘RIN 1219–AB84’’ and will be posted
without change on https://
www.regulations.gov and on https://
www.msha.gov/currentcomments.asp,
including any personal information
provided.
Docket: For access to the docket to
read background documents or
comments, go to https://
www.regulations.gov or https://
www.msha.gov/currentcomments.asp.
Review the docket in person at the
Office of Standards, Regulations, and
Variances, 1100 Wilson Boulevard,
Room 2350, Arlington, Virginia,
between 9:00 a.m. and 5:00 p.m.
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SUMMARY:
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Monday through Friday, except Federal
holidays. Sign in at the receptionist’s
desk on the 21st floor.
Availability of Information: To
subscribe to receive an email
notification when MSHA publishes
rulemaking documents in the Federal
Register, go to https://www.msha.gov/
subscriptions/subscribe.aspx.
FOR FURTHER INFORMATION CONTACT:
George F. Triebsch, Director, Office of
Standards, Regulations, and Variances,
MSHA, at triebsch.george@dol.gov
(email); 202–693–9440 (voice); or 202–
693–9441 (facsimile). These are not tollfree numbers.
SUPPLEMENTARY INFORMATION: MSHA
published a final rule on refuge
alternatives on December 31, 2008 (73
FR 80656), establishing requirements for
refuge alternatives in underground coal
mines. On January 13, 2009, the United
Mine Workers of America (UMWA)
petitioned the U.S. Court of Appeals for
the District of Columbia Circuit (Court)
to review MSHA’s refuge alternatives
final rule. The Court issued its decision
on October 26, 2010, holding that the
Secretary had not adequately explained
the basis for requiring motor task
(hands-on), decision-making, and
expectations training only annually,
rather than quarterly. The Court
remanded the training provision and
ordered MSHA to either ‘‘provide an
explanation . . . or . . . reopen the
record, and afford interested parties an
opportunity to comment.’’ [United Mine
Workers v. MSHA, 626 F.3d 84, 86, and
90–94 (D.C. Cir. 2010)]
In response to the Court’s decision,
MSHA reopened the record on August
8, 2013 (78 FR 48592) and the comment
period closed on October 7, 2013.
MSHA received a request from the
public that, because of the confusion
that occurred during the government
shutdown from October 1 to October 17,
2013, the Agency allow additional time
to address the issues described in the
reopening notice. In support of the
request, the requester stated that the
public had 7 fewer days to comment.
The requester believed that MSHA staff
would not be available to receive or
verify receipt of the comments.
This notice reopens the record to
provide the public an additional
opportunity to comment. Please limit
your comments to the questions in the
notice published on August 8, 2013 (78
FR 48592). MSHA will review the
comments to determine an appropriate
course of action for the Agency in
response to comments. MSHA will
publish its response in the Federal
Register addressing the public
comments and either explaining the
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reason that it is leaving the existing rule
unchanged or modifying the rule as the
result of the public comment process.
List of Subjects in 30 CFR Part 75
Coal mines, Mine safety and health,
Reporting and recordkeeping
requirements, Safety, Training
programs, Underground mining.
Authority: 30 U.S.C. 811.
Dated: November 12, 2013.
Joseph A. Main,
Assistant Secretary of Labor for Mine Safety
and Health.
[FR Doc. 2013–27397 Filed 11–14–13; 8:45 am]
BILLING CODE 4510–43–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Parts 97 and 160, and 46 CFR
Part 97
[Docket No. USCG–2000–7080]
RIN 1625–AA25 [Formerly RIN 2115–AF97]
Cargo Securing Manuals
Coast Guard, DHS.
Supplemental notice of
proposed rulemaking.
AGENCY:
ACTION:
The Coast Guard proposes
requiring cargo securing manuals
(CSMs) on vessels of 500 gross tons or
more traveling on international voyages
and carrying cargo that is other than
solid or liquid bulk cargo. The proposed
regulations would authorize recognized
classification societies or other approval
authorities to review and approve CSMs
on behalf of the Coast Guard. They
would also prescribe when and how the
loss or jettisoning of cargo at sea must
be reported. The proposed regulations
would help fulfill U.S. treaty obligations
and could help prevent or mitigate the
consequences of vessel cargo loss. This
rulemaking promotes the Coast Guard’s
maritime safety and stewardship
missions.
SUMMARY:
Comments and related material
must either be submitted to the Coast
Guard’s online docket via https://
www.regulations.gov on or before
February 13, 2014 or reach the Docket
Management Facility by that date.
Comments sent to the Office of
Management and Budget (OMB) on
collection of information must reach
OMB on or before February 13, 2014.
ADDRESSES: You may submit comments
identified by docket number USCG–
2000–7080 using any one of the
following methods:
DATES:
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Federal Register / Vol. 78, No. 221 / Friday, November 15, 2013 / Proposed Rules
(1) Federal eRulemaking Portal:
https://www.regulations.gov.
(2) Fax: 202–493–2251.
(3) Mail: Docket Management Facility
(M–30), U.S. Department of
Transportation, West Building Ground
Floor, Room W12–140, 1200 New Jersey
Avenue SE., Washington, DC 20590–
0001.
(4) Hand delivery: Same as mail
address above, between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays. The telephone number
is 202–366–9329.
To avoid duplication, please use only
one of these four methods. See the
‘‘Public Participation and Request for
Comments’’ portion of the
SUPPLEMENTARY INFORMATION section
below for instructions on submitting
comments.
Collection of Information Comments:
If you have comments on the collection
of information discussed in section
VIII.D. of this preamble, you must also
send comments to the Office of
Information and Regulatory Affairs
(OIRA), Office of Management and
Budget. To ensure that your comments
to OIRA are received on time, the
preferred methods are by email to oira_
submission@omb.eop.gov (include the
docket number and ‘‘Attention: Desk
Officer for Coast Guard, DHS’’ in the
subject line of the email) or fax at 202–
395–6566. An alternate, though slower,
method is by U.S. mail to the Office of
Information and Regulatory Affairs,
Office of Management and Budget, 725
17th Street NW., Washington, DC 20503,
ATTN: Desk Officer, U.S. Coast Guard.
Viewing incorporation by reference
material: You may inspect the material
proposed for incorporation by reference
at room 1210, U.S. Coast Guard
Headquarters, 2100 Second Street SW.,
Stop 7126, Washington, DC 20593–7126
between 9 a.m. and 4 p.m., Monday
through Friday, except Federal holidays.
The telephone number is 202–372–
1411. Copies of the material are
available as indicated in the
‘‘Incorporation by Reference’’ section of
this preamble.
FOR FURTHER INFORMATION CONTACT: If
you have questions on this proposed
rule, call or email Mr. Ken Smith,
Project Manager, U.S. Coast Guard,
Headquarters, Vessel and Facility
Operating Standards Division,
Commandant (CG–OES–2); telephone
202–372–1411, email Ken.A.Smith@
uscg.mil. If you have questions on
viewing or submitting material to the
docket, call Renee V. Wright, Program
Manager, Docket Operations, telephone
202–366–9826.
SUPPLEMENTARY INFORMATION:
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Table of Contents for Preamble
I. Public Participation and Request for
Comments
A. Submitting Comments
B. Viewing Comments and Documents
C. Privacy Act
D. Public Meeting
II. Abbreviations
III. Basis and Purpose
IV. Background and Regulatory History
V. Discussion of Comments and Changes
VI. Discussion of the Proposed Rule
VII. Incorporation by Reference
VIII. Regulatory Analyses
A. Regulatory Planning and Review
B. Small Entities
C. Assistance for Small Entities
D. Collection of Information
E. Federalism
F. Unfunded Mandates Reform Act
G. Taking of Private Property
H. Civil Justice Reform
I. Protection of Children
J. Indian Tribal Governments
K. Energy Effects
L. Technical Standards
M. Environment
I. Public Participation and Request for
Comments
We encourage you to participate in
this rulemaking by submitting
comments and related materials. All
comments received will be posted
without change to https://
www.regulations.gov and will include
any personal information you have
provided.
A. Submitting Comments
If you submit a comment, please
include the docket number for this
rulemaking (USCG–2000–7080),
indicate the specific section of this
document to which each comment
applies, and provide a reason for each
suggestion or recommendation. You
may submit your comments and
material online or by fax, mail, or hand
delivery, but please use only one of
these means. We recommend that you
include your name and a mailing
address, an email address, or a phone
number in the body of your document
so that we can contact you if we have
questions regarding your submission.
To submit your comment online, go to
https://www.regulations.gov, and follow
the instructions on that Web site. If you
submit your comments by mail or hand
delivery, submit them in an unbound
format, no larger than 81⁄2 by 11 inches,
suitable for copying and electronic
filing. If you submit comments by mail
and would like to know that they
reached the Facility, please enclose a
stamped, self-addressed postcard or
envelope.
We will consider all comments and
material received during the comment
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period and may change this proposed
rule based on your comments.
B. Viewing Comments and Documents
To view comments, as well as
documents mentioned in this preamble
as being available in the docket, go to
https://www.regulations.gov, and follow
the instructions on that Web site. If you
do not have access to the internet, you
may view the docket online by visiting
the Docket Management Facility in
Room W12–140 on the ground floor of
the Department of Transportation West
Building, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays. We have an
agreement with the Department of
Transportation to use the Docket
Management Facility.
C. Privacy Act
Anyone can search the electronic
form of comments received into any of
our dockets by the name of the
individual submitting the comment (or
signing the comment, if submitted on
behalf of an association, business, labor
union, etc.). You may review a Privacy
Act notice regarding our public dockets
in the January 17, 2008, issue of the
Federal Register (73 FR 3316).
D. Public Meeting
We do not now plan to hold a public
meeting. But you may submit a request
for one to the docket using one of the
methods specified under ADDRESSES. In
your request, explain why you believe a
public meeting would be beneficial. If
we decide to hold a public meeting, we
will announce its time and place in a
later notice in the Federal Register.
II. Abbreviations
BLS U.S. Bureau of Labor Statistics
CFR Code of Federal Regulations
CSAP Cargo safe access plan
CSM Cargo Securing Manual
CSS Code Code of Safe Practice for Cargo
Stowage and Securing
E.O. Executive Order
FR Federal Register
IMO International Maritime Organization
MARAD U.S. Department of
Transportation’s Maritime Administration
MSC Maritime Safety Committee
MISLE Marine Information for Safety and
Law Enforcement
NPRM Notice of proposed rulemaking
NVIC Navigation and Vessel Inspection
Circular
OMB Office of Management and Budget
OSHA Occupational Safety and Health
Administration
§ Section symbol
SANS Ship Arrival Notification System
SNPRM Supplemental notice of proposed
rulemaking
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Federal Register / Vol. 78, No. 221 / Friday, November 15, 2013 / Proposed Rules
SOLAS International Convention for the
Safety of Life at Sea, 1974 as amended
U.S.C. United States Code
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III. Basis and Purpose
Sections 2103 and 3306 of Title 46,
U.S. Code, provide the statutory basis
for this rulemaking. Section 2103 gives
the Secretary of the department in
which the Coast Guard is operating
general regulatory authority to
implement Subtitle II (Chapters 21
through 147) of Title 46, which includes
statutory requirements in 46 U.S.C.
Chapter 33 for inspecting the vessels to
which this rulemaking applies. Section
3306 gives the Secretary authority to
regulate an inspected vessel’s operation,
fittings, equipment, appliances, and
other items in the interest of safety. The
Secretary’s authority under both statutes
has been delegated to the Coast Guard
in Department of Homeland Security
Delegation No. 0170.1(92)(a) and (b). In
addition, the Secretary has regulatory
authority to implement the International
Convention for the Safety of Life at Sea,
1974 (SOLAS), under Executive Order
(E.O.) 12234.
The purpose of this rulemaking is to
align Coast Guard regulations with
SOLAS requirements for cargo securing
manuals and apply those requirements
to U.S. vessels and foreign vessels in
U.S. waters, and to specify when and
how the loss or jettisoning of cargo at
sea must be reported.
IV. Background and Regulatory History
Improperly secured maritime cargo
threatens the safety of life, property, and
the environment. Several maritime
incidents dating from the early 1990s to
the recent past underscore the risk of
serious injury or death, vessel loss,
property damage, and environmental
damage caused by improperly secured
cargo aboard vessels. A Coast Guard
board of inquiry established to review
an incident off the coast of New Jersey
in 1992, which involved the loss of 21
containers, 4 of which contained the
hazardous material arsenic oxide,
revealed that the incident was caused by
cargo securing failures and poor
operational planning. The Commandant
of the Coast Guard approved the board’s
recommendation that the Coast Guard
adopt the International Maritime
Organization’s (IMO) guidelines on
cargo securing manuals. With the
support of other IMO member
governments, the U.S. led a proposal to
include new requirements for CSMs in
SOLAS. In 1994, the IMO amended
SOLAS in response to the growing
international concern over maritime
incidents involving improperly secured
cargo. The amendments provided that,
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after 1997, vessels of 500 gross tons or
more engaged in international trade and
carrying cargo other than solid or liquid
bulk material must carry a flag stateapproved CSM and load, stow, and
secure cargo in compliance with the
CSM. Shortly before the SOLAS
amendments took effect, the Coast
Guard issued Navigation and Vessel
Inspection Circular (NVIC) No. 10–97 to
provide guidance concerning the
SOLAS CSM standards until Coast
Guard regulations could be developed.
Compliance with NVIC 10–97 is
voluntary. In 2009, in response to
questions raised about lost containers
during a Congressional hearing, the
Coast Guard estimated that between 500
and 2,000 containers are lost at sea
annually. In a recent paper submitted by
the International Organization for
Standardization (ISO) to the IMO,
‘‘Development of Measures to Prevent
Loss of Containers,’’ the ISO notes that
10,000 containers are damaged during
sea transport each year, of which 3,000
to 4,000 are lost overboard. The number
of damaged and lost containers has risen
and continues to rise partly because of
the growth in container transports, and
partly because of the larger impacts
from ever-larger containerships. In
addition to the dangers that improperly
secured cargo and containers pose to
vessels and crewmembers that handle
and transport them, they also pose
dangers to the environment and vessels
at sea when lost overboard.
The SOLAS CSM requirements
outline what a CSM must contain and
establish strength requirements for
securing devices and arrangements.
They also describe how to stow and
secure containers and other cargo. These
SOLAS requirements are not yet
mandatory for U.S. vessels or for foreign
vessels operating in U.S. waters.
In a notice (64 FR 1648; Jan. 11, 1999)
announcing a February 3, 1999, public
meeting to discuss the SOLAS CSM
requirements and cargo securing issues,
we suggested that the SOLAS CSM
requirements for vessels in international
trade might be beneficial for U.S. vessels
in coastwise (domestic) trade as well.
Two written comments were submitted
at the meeting. You may view them at
https://regulations.gov under docket
number USCG–1998–4951. One
commenter offered to review and
approve CSMs and the other urged
Coast Guard to align any Coast Guard
regulations with those of the
Occupational Safety and Health
Administration (OSHA). Under 29
U.S.C. 653(b)(1), OSHA’s authority does
not extend to shipboard personnel who
are subject to Coast Guard regulations.
Nevertheless, the Coast Guard has
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coordinated with OSHA to ensure
alignment of our regulations.
The first publication in this
rulemaking was a notice of proposed
rulemaking (NPRM) published
December 1, 2000 (65 FR 75201) entitled
‘‘Cargo Securing on Vessels Operating in
U.S. Waters.’’ The NPRM proposed
incorporating SOLAS requirements for
CSMs into Coast Guard regulations and
requested comment on five options for
regulating cargo securing on U.S. vessels
in coastwise trade. The Coast Guard
received 17 letters from industry and
labor groups in response to the NPRM.
We address these comments in section
V of this preamble.
V. Discussion of Comments and
Changes
The 2000 NPRM drew comments from
15 sources, with two sources submitting
two letters. Twelve commenters were
companies or trade associations
involved with maritime transportation.
Two unions commented, as did a
Maritime Administration official. In
addition, a Coast Guard memorandum
commemorating a meeting between
Coast Guard personnel and industry
representatives, and the final report of
the Towing Safety Advisory
Committee’s (TSAC’s) working group on
cargo securing, are treated in the docket
as ‘‘public submissions.’’
TSAC is a committee that advises the
Coast Guard under the Federal Advisory
Committee Act. The TSAC working
group found that there are few cargo
losses from barges, and that the variety
of cargo configurations and cargo
securing practices in the barge industry
make it difficult to apply a single cargo
securing standard for those vessels. The
working group identified cargo securing
best practices used by the barge
industry, and recommended that barge
operators should voluntarily develop,
document, and periodically update
cargo securing plans, train personnel in
procedures covered by those plans, and
audit the results. A barge operator
agreed with the working group. An
organization representing barge
operators, and one other commenter,
agreed that cargo loss from barges is
extremely rare, and agreed that barge
operators should voluntarily develop
cargo securing plans. Two other
commenters said they agree with the
organization representing barge
operators. Another commenter said that
seagoing barges are generally safe from
cargo loss. The relatively low rate of
cargo loss in U.S. coastwise trade is a
major reason why we have decided not
to extend SOLAS-style cargo securing
requirements to that trade.
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Two transportation companies (and a
third company that said it agreed with
one of the two) said that the NPRM’s
proposed regulatory text for 46 CFR
97.210(e) (cargo securing manual
contents) and 46 CFR 97.230 (inspection
and maintenance of cargo securing
devices) would make useful additions to
the SOLAS cargo securing requirements.
Those provisions have been omitted
from this supplemental notice of
proposed rulemaking (SNPRM); the
SNPRM addresses their topics by
requiring CSMs to comply with
applicable standards contained in the
IMO’s 2010 Maritime Safety Committee
Circulars (MSC.1/Circ.) 1352 (‘‘Cargo
Stowage and Securing (CSS Code)
Annex 14 Guidance on Providing Safe
Working Conditions for Securing of
Containers on Deck’’) and 1353
(‘‘Revised Guidelines for the Preparation
of the Cargo Securing Manual’’). These
two commenters also said that following
a continuous examination program
would ensure good equipment
maintenance and be less burdensome
than CSM regulatory requirements. Our
SNPRM would allow, but not require,
operators to follow a continuous
examination program. It would describe,
in proposed 33 CFR 97.205, when an
approved CSM must be amended and
re-approved. The two commenters
recommended that fixed and portable
cargo handling equipment be treated
identically for regulatory purposes. Our
proposed regulations would not require
the use of either fixed or portable
equipment. However, if portable
equipment is used, it is subject to
special provisions set out in the IMO
Circulars, and incorporated by reference
in proposed 33 CFR 97.110.
Two transportation companies said
we needed to ensure that our
rulemaking does not create confusion
between Coast Guard and OSHA
regulations. This topic was also
discussed in the Coast Guard’s meeting
with industry representatives. As
discussed in section IV of this preamble,
we have aligned our regulations with
OSHA’s, to minimize confusion.
One transportation company said the
NPRM should have approached safety
issues relating to lashing cargo to decks.
The same company said the NPRM
should have addressed vertical tandem
loading and cargo lifting devices. It said
the Coast Guard should provide
guidance to shoreside personnel on
segregating damaged or unserviceable
cargo equipment, and on dealing with
cargo containers on which one of the
doors has been removed.
These safety issues were also
discussed in the Coast Guard’s meeting
with industry representatives, at which
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time the Coast Guard said the issue was
beyond the scope of this rulemaking but
could become an issue for IMO
consideration in the future. Our
proposed rule addresses many of the
safety issues by incorporating by
reference IMO Circulars MSC.1/Circ.
1352 and 1353, which take into account
the IMO’s 2010 Code of Safe Practice for
Cargo Stowage and Securing (CSS
Code). The CSS Code contains new
provisions for the safety of personnel
engaged in lashing operations which
includes crew members and dock
workers alike.
The same company that raised the
safety issues also expressed concern that
Coast Guard personnel might be
inconsistent, in different locations, in
how they apply cargo securing policy
guidance. We encourage members of the
regulated public who think they are
being treated unfairly or arbitrarily by
Coast Guard personnel to bring the
matter to our attention. The Coast Guard
will not retaliate against persons or
businesses that question or complain
about any policy or action of the Coast
Guard.
Another transportation company
expressed support for developing cargo
securing standards that would apply
specifically to seagoing barges. The
commenter said the NPRM did not
adequately assess the economic impact
of applying cargo securing regulations to
seagoing barges. The NPRM did not
propose specific regulations for those
vessels and thus did not calculate any
regulatory economic impact on them.
Seagoing barges in coastwise trade
would not be affected by this SNPRM.
A third transportation company said
that most cargo losses result from
container structural problems that the
vessel operator cannot know about or
prevent. To guard against such risks,
this commenter said that hazardous
material containers should be stowed as
low as possible on the deck. We agree
that once containers are loaded onto a
vessel it is very difficult for a vessel
operator to know about or prevent
structural problems which have gone
undetected. In this regard, much
responsibility is placed on personnel
associated with activities related to the
transportation of the container through
the supply chain before delivery of the
container at a terminal, including
personnel involved in packing the
contents and personnel involved in
storing and loading containers from
shore. These personnel routinely
conduct internal and external
inspections to ensure that the container
is suitable for transporting cargo and
being lifted by container handling
equipment. These routine periodic
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68787
inspections help reduce the likelihood
that structurally deficient containers
will be loaded aboard a vessel. Vessel
operators are then responsible for
ensuring that the containers are stowed
and secured in accordance with the
CSM. Vessel operators who identify a
structural deficiency in a container after
it has been loaded should take whatever
action is considered necessary to ensure
the container is safely secured, handled,
or removed as the specific situation may
dictate. Stowage and transportation of
hazardous materials on vessels is guided
by 49 CFR Part 176 and the IMO
Dangerous Goods Code which address
hazardous materials according to each
specific type of cargo, recognizing that
various types of hazardous materials
require special levels of handling. Our
proposed rule addresses container
integrity and stowage as it relates to the
securing of cargo for safe transport by
sea and incorporates by reference IMO
Circulars MSC.1/Circ. 1352 and 1353
concerning that issue.
A fourth transportation company said
that no insured company would
transport $20 million worth of cargo
without first having a qualified surveyor
approve how it is lashed to the deck.
This commenter also said that many
small entities would be affected by
domestic CSM regulations. We
recognize that the lashing and securing
of some types of cargo may receive
increased scrutiny because of their
overall value, and we recognize that
such cargo poses minimal risk for
transport by sea. However, since such
surveys currently are not required by
law, securing arrangements are
currently evaluated for only a few types
of cargo. We propose requiring CSMs on
vessels of 500 gross tons or more
traveling on international voyages that
are carrying any cargo that is other than
solid or liquid bulk cargo. Neither the
NPRM nor this SNPRM proposes
specific domestic regulations and thus
we have not calculated the small entity
impact that domestic CSM regulations
could have. We request additional
public input on the topic and may
conduct further analysis based on that
input.
A fifth transportation company said
that regulatory language suitable for
larger ships would be unsuitable for
smaller vessels in coastwise trade. This
commenter also expressed concern over
how much time would be needed for
CSM approvals. As noted above, we
have decided not to apply SOLAS-style
cargo securing requirements to
coastwise trade. By facilitating the use
of third party organizations to approve
CSMs, we hope to avoid lengthy delays.
If you are preparing a CSM for approval,
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we encourage you to consult with your
approval authority upfront to help
eliminate unnecessary delays.
A cargo gear company cautioned us
against incorporating outdated industry
standards in our regulations. This
SNPRM proposes incorporating only
IMO Circulars MSC.1/Circ. 1352 and
1353, which take into account the IMO’s
2010 CSS Code. We invite public
comment on that proposal.
The Maritime Administration
commenter said our regulations should
not apply to Administration-owned
ships in the Ready Reserve Force. We
provide an exception for those vessels
in proposed 33 CFR 97.100(b).
A seagoing barge operator said it was
unclear whether the NPRM covers
seagoing barges, and whether it relates
only to hazardous materials or would
cover non-hazardous materials as well.
The NPRM discussed the possible
extension of SOLAS-style cargo securing
requirements to seagoing barges or other
vessels in coastwise trade, but we have
decided against that extension. The
NPRM did not specifically limit its
discussion to coastwise vessels carrying
hazardous material. This SNPRM
proposes regulations that would apply
to seagoing barges in international trade.
The regulations would also apply to
vessels carrying any cargo that is not
solely in liquid or solid bulk form.
The NPRM invited comments on five
options for extending SOLAS
requirements for cargo securing on
international voyages to voyages in U.S.
coastwise trade. We have decided
against such an extension because the
cargo loss record of coastwise trade does
not justify the regulatory costs that
coastwise industry would have to bear.
Nevertheless, the following discussion
summarizes the public comment on the
five options.
Nine commenters commented on
Option 1. Option 1 proposed extending
SOLAS requirements to coastwise
voyages. Two companies and the two
unions chose Option 1 as their preferred
option. One company said it would
prefer a ‘‘compromise’’ between Options
1 and 2, with vessel-specific standards
that would comply with or exceed
SOLAS standards. The cargo gear
company criticized Option 1 for not
requiring regular CSM review. One
company said Option 1 is too restrictive,
and another company said it would
require too much standardization. A
seagoing barge operator said Option 1
would not work for seagoing barges,
because no two barge cargoes are the
same.
Five commenters commented on
Option 2. Option 2 proposed allowing
each coastwise voyage vessel to set and
document its own standards, subject to
Coast Guard approval. The cargo gear
company said this option should be
evaluated in light of the Coast Guard’s
experience with continuous
examination programs, and noted
similarities between Options 2 and 5.
One company said Option 2 requires an
overly burdensome consideration of too
many variables. A seagoing barge
operator said Option 2 would not work
for seagoing barges, but did not explain
the reasons for this statement. Another
company said, without explanation, that
Option 2 would be its second choice of
the options presented. Another
company said it would prefer a
‘‘compromise’’ between Options 1 and
2, with vessel-specific standards that
would comply with or exceed SOLAS
standards.
Four commenters commented on
Option 3. Option 3 proposed requiring
a coastwise voyage vessel to obtain a
surveyor’s certificate of loading and
securing, prior to departure, if the
voyage would also be subject to Pipeline
and Hazardous Materials Safety
Administration regulations in 49 CFR
part 176. The cargo gear company said
its reaction to Option 3 would depend
on the specific standards the Coast
Guard would propose for incorporation.
A transportation company said the use
of surveyors for multiple voyages would
not be feasible due to cost and surveyor
availability. A seagoing barge operator
agreed that it would be difficult or
impossible to ensure a surveyor’s
availability. Another company opposed
Option 3 due to the high cost of hiring
surveyors.
Four commenters commented on
Option 4. Option 4 proposed developing
regulations that would allow each
coastwise vessel owner to choose from
among Options 1, 2, and 3. One
commenter opposed Option 4, but did
not make its reasons clear. The cargo
gear company said Option 4 should be
attractive to those who favor cargo
securing regulations for domestic
voyages, but did not express its own
preference or opposition. A seagoing
barge operator said the ‘‘menu of
options’’ provided by Option 4 could
cause confusion. A company said it
opposes Option 4 because it combines
the strengths, but also the weaknesses,
of Options 1 through 3.
Four commenters commented on
Option 5. Option 5 proposed
incorporating yet-to-be-developed
coastwise voyage standards that
industry might draft in cooperation with
TSAC. One company expressed support
but did not explain its preference for
Option 5. Two companies expressed
preference for Option 5 because it
would allow for the development of
standards that would be appropriate for
different types of vessel and operational
needs; one of the two said the exact
language of Option 5 should be
modified. A seagoing barge operator
opposed Option 5 because it would not
ensure the development of appropriate
standards for different vessel types and
operational needs.
VI. Discussion of Proposed Rule
We are issuing this SNPRM, rather
than proceeding directly to a final rule,
for two reasons. First, much of the
NPRM focused on the possible
extension of SOLAS requirements to
coastwise voyages. We wish to make it
clear that we are no longer considering
that extension, and that our proposed
regulations would apply only to
international voyages. Second, this
SNPRM proposes some regulatory
changes that were not discussed in the
NPRM. For example, we propose
additional language to help clarify what
information needs to be reported when
a cargo loss or jettisoning event occurs,
and what constitutes such an event; and
we propose new provisions for the use
of classification societies or other third
parties in approving CSMs.
This SNPRM proposes incorporating
by reference IMO Circulars MSC.1/Circ.
1352 and 1353. These Circulars provide
much of the guidance that we attempted
to provide in our 2000 NPRM, which
was based on the more limited guidance
then available from the IMO’s 1996
Circular MSC.1/Circ. 745 (‘‘Guidelines
for the preparation of the Cargo
Securing Manual’’). Table 1 shows
where the NPRM’s proposed regulatory
text is paralleled in the SNPRM.
TABLE 1—REGULATORY TEXT COMPARISON, NPRM AND SNPRM
[All references are to proposed sections in 33 CFR, part 97]
NPRM
SNPRM
General, 97.100–97.130 ......................................................................................................................................................
Cargo Securing Manual, 97.200–97.280 .............................................................................................................................
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97.100–97.115
97.120
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TABLE 1—REGULATORY TEXT COMPARISON, NPRM AND SNPRM—Continued
[All references are to proposed sections in 33 CFR, part 97]
NPRM
SNPRM
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How will Cargo Securing Manual Requirements be Approved and Enforced?, 97.300–97.350 ........................................
Authorization of an Organization to Act on Behalf of the U.S., 97.400–97.480 .................................................................
Reporting loss or jettisoning of cargo.
We propose prescribing in 33 CFR parts
97 and 160 when and how the
accidental loss or deliberate jettisoning
of cargo at sea must be reported.
Currently, 33 CFR 160.215 requires a
vessel owner or operator to immediately
notify the Coast Guard whenever there
is a hazardous condition caused by a
vessel or its operation. ‘‘Hazardous
condition’’ is defined in 33 CFR 160.204
as ‘‘any condition that may adversely
affect the safety of any vessel or the
environmental quality of any port,
harbor, or navigable waterway of the
United States.’’ In our view, any loss or
jettisoning of cargo at sea must be
considered a hazardous condition
because, at a minimum, it poses a
navigational hazard by threatening
vessel safety. We propose making that
explicit in part 97. We would also
amend 33 CFR 160.215 by prescribing
specific information to be included in
the notification if the hazardous
condition involves the loss or
jettisoning of cargo. This should
enhance our ability to identify potential
problems with securing equipment,
locate and warn mariners about drifting
debris before it endangers safe
navigation, and assess and respond to
any environmental hazard created by
the cargo loss.
An additional concern is containers
that sink. Sunken containers may no
longer be a hazard to navigation, but
they may pose long-term threats to the
environment. Our proposed reporting
and recordkeeping requirements would
facilitate the long-term monitoring of
sunken containers and any needed
salvage or remediation.
Incorporating SOLAS. We propose
adding 33 CFR part 97 to incorporate
the existing SOLAS requirements for
CSMs on vessels of 500 gross tons or
more traveling on international voyages
and carrying any cargo other than solid
or liquid bulk cargo. Smaller vessels
would only have to follow those
requirements if they so choose—but if
they choose to have a CSM they would
be bound by these proposed regulations
just as if they were vessels of 500 gross
tons or more, including the requirement
that the CSM would need to be
approved by an organization that we
have authorized to do so under
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proposed 33 CFR part 97. As a practical
matter, all existing vessels to which
proposed 33 CFR part 97 would apply
are already in compliance with SOLAS
CSM requirements. Most foreign
countries are parties to SOLAS and
already enforce the SOLAS CSM
requirements on their vessels. All U.S.
vessels are already in compliance
because they need SOLAS certificates to
enter foreign ports and, to obtain those
certificates, they have voluntarily
complied with Coast Guard NVIC 10–
97.
NVIC 10–97 was based in part on IMO
guidance contained in IMO Circular
MSC.1/Circ. 745. That MSC Circular
was updated on June 30, 2010, by IMO
Circular MSC.1/Circ. 1353, and since
that time Coast Guard-approved CSMs
have had to meet Circular 1353
guidelines at a minimum. Our proposed
regulations would require vessels to
meet the Circular 1353 standards. CSMs
approved before June 30, 2010 would
not need to be updated.
We propose provisions for approving
and amending CSMs, and for handling
disputes over CSM approval. We would
cross-reference those provisions in the
bulk solid cargo operations regulations
in 46 CFR subpart 97.12.
We propose that, as required by MSC
Circular 1352, ‘‘Amendments to the
Code of Safe Practice for Cargo Stowage
and Securing (CSS Code),’’ any
container vessel, subject to SOLAS,
whose keel is laid on or after January 1,
2015, will need to include a cargo safe
access plan that is consistent with
chapter 5 of the Annex to IMO Circular
MSC.1/Circ. 1353, which in turn
references Annex 14 (‘‘Guidance on
Providing Safe Working Conditions for
the Securing of Containers’’) of the IMO
2010 CSS Code. A cargo safe access plan
provides detailed information on safe
access for persons stowing and securing
cargo on container ships that are
specifically designed and fitted for the
purpose of carrying containers.
Classification societies. Finally,
proposed 33 CFR part 97 would provide
for our authorization of recognized
classification societies and other third
party organizations to review and
approve CSMs on our behalf.
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97.200–97.215
97.300–97.320
VII. Incorporation by Reference
Material proposed for incorporation
by reference appears in proposed 33
CFR 97.110. You may inspect this
material at U.S. Coast Guard
Headquarters where indicated under
ADDRESSES. Copies of the material are
available from the sources listed in
§ 97.110. Before publishing a binding
rule, we will submit this material to the
Director of the Federal Register for
approval of the incorporation by
reference.
VIII. Regulatory Analyses
We developed this proposed rule after
considering numerous statutes and
E.O.s related to rulemaking. Below we
summarize our analyses based on these
statutes or E.O.s.
A. Regulatory Planning and Review
Executive Orders 12866 (‘‘Regulatory
Planning and Review’’) and 13563
(‘‘Improving Regulation and Regulatory
Review’’) direct agencies to assess the
costs and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility.
This proposed rule is not a significant
regulatory action under section 3(f) of
E.O. 12866 (as supplemented by E.O.
13563) and does not require an
assessment of potential costs and
benefits under section 6(a)(3) of that
Order. The Office of Management and
Budget (OMB) has not reviewed it under
that Order. Nonetheless, we developed
an analysis of the costs and benefits of
the proposed rule to ascertain its
probable impacts on industry. We
consider all estimates and analysis in
this Regulatory Analysis to be
preliminary and subject to change in
consideration of public comments. A
preliminary regulatory assessment
follows.
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1. Summary
This proposed rule would amend the
CFR by adding the following provisions:
• Requirements for the reporting of
lost or jettisoned cargo;
• The CSM requirements of SOLAS
and the guidance in NVIC 10–97; and
• Procedures for authorization of
third party organizations to review and
approve CSMs on the Coast Guard’s
behalf.
Please reference Table 2 below for a
summary of our analysis.
TABLE 2—SUMMARY OF REGULATORY ECONOMIC IMPACTS
Proposed changes
Description
Costs
(7% discount rate)
Affected population
Annualized
1. Reporting of lost or jettisoned cargo.
2. CSM requirements ........
3. Approval of authorized
organizations.
Codify lost or jettisoned
cargo as a hazardous
condition and specify
data to be reported.
Codify SOLAS rules and
guidance from NVIC 10–
97.
Codify guidance from
NVIC 10–97.
Table 3 presents a summary of the 10year cost schedule, showing total costs
on an undiscounted basis and
U.S. and foreign-flag vessels engaged in transport to or from a U.S.
port.
Owners/operators of 7,163
vessels: 26 U.S.flagged, 7,137 foreignflagged.
6 currently approved organizations, others applying for approval status.
Benefits
Total
$1,420
$9,970
$45,903
$322,403
$0
$0
Better tracking and response of lost or jettisoned cargo.
Increased enforcement authority.
Increased enforcement.
discounted at 7 percent and 3 percent
rates.
TABLE 3—SUMMARY OF THE 10-YEAR TOTAL COST TO THE INTERNATIONAL CARGO INDUSTRY AND U.S. GOVERNMENT
Undiscounted
Total, discounted
Year
Industry
Government
Total
7%
3%
1 ...............................................................................................................
2 ...............................................................................................................
3 ...............................................................................................................
4 ...............................................................................................................
5 ...............................................................................................................
6 ...............................................................................................................
7 ...............................................................................................................
8 ...............................................................................................................
9 ...............................................................................................................
10 .............................................................................................................
$38,788
38,814
38,854
46,519
46,558
46,598
54,263
54,303
54,342
62,020
$500
520
550
580
610
640
670
700
730
770
$39,288
39,334
39,404
47,099
47,168
47,238
54,933
55,003
55,072
62,790
$36,718
34,356
32,165
35,932
33,630
31,477
34,210
32,012
29,956
31,919
$38,144
37,076
36,060
41,847
40,688
39,561
44,666
43,420
42,208
46,722
Total .........................................................................................................
Annualized ........................................................................................
481,059
....................
6,270
....................
487,329
....................
332,375
47,323
410,392
48,110
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2. Affected Population
The applicable population (those
vessels subject to the proposed
regulation) consists of U.S. and foreignflagged vessels that:
• Measure 500 gross tons or more,
• Are engaged in international trade
as indicated by currently having a
SOLAS Cargo Ship Safety Certificate,
and
• Carry any cargo other than solid or
liquid bulk commodities.
The United States is a signatory state
to SOLAS, and U.S.-flagged vessels in
international trade must meet SOLAS
requirements, including the CSM rules,
to receive a SOLAS certificate. An
extract from the Coast Guard’s Marine
Information for Safety and Law
Enforcement (MISLE) database
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identified 26 U.S.-flagged vessels as
meeting the above tonnage and cargo
criteria.
The applicable foreign-flagged vessels
are those that transit U.S. waters. The
source for data on these vessels was the
Coast Guard’s Ship Arrival Notification
System (SANS) database. This database
contains data on notifications of arrival
and departure of vessels to and from
U.S. ports and is supplemented by data
from MISLE. We extracted from SANS
the most recent three full years of data
available, 2009 through 2011. This
produced a list of 7,137 foreign-flagged
vessels that had one or more visits to a
U.S. port and met the tonnage and cargo
type criteria. Table 4 summarizes the
total applicable population data.
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TABLE 4—TOTAL APPLICABLE POPULATION, NON-BULK CARGO VESSELS,
500+ GROSS TONS
Flag
Vessels
U.S. .................................................
Foreign ............................................
26
7,137
Total ............................................
7,163
Sources: MISLE & SANS.
3. Economic Analyses
We include an analysis of the costs,
benefits, and alternatives for each of the
proposed rule’s three provisions:
• Requirements for the reporting of
lost or jettisoned cargo;
• CSM requirements; and
• Approval of authorized
organizations.
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a. Requirements for the Reporting of
Lost or Jettisoned Cargo
i. Current practices, applicable
population, and description of changes
and edits. As noted in section VI of this
preamble, the current regulations
require the Coast Guard to be
immediately notified when a hazardous
condition is caused by a vessel or its
operation. Our interpretation is that
incidents of lost or jettisoned cargo 1
should be considered hazardous
conditions and must be reported.
However, current industry practice does
not correspond with that interpretation.
Captain James J. McNamara, President
of the National Cargo Bureau, wrote:
‘‘When a container or containers are lost
overboard, usually there is no news
release and seldom is the fact
publicized. The loss is only revealed to
those in a need-to-know situation, i.e.,
the ship owner, shipper, receiver and
insurer.’’ 2 As we will discuss in detail,
our research indicates a significant
underreporting of lost or jettisoned
cargo to the Coast Guard. Coast Guard
and other vessels cannot respond to
these unreported incidents, so they
represent a residual risk to navigation
and the marine environment. The
underreporting also prevents the Coast
68791
Guard and other interested parties from
accurately tracking the extent and
trends of lost cargo incidents.
In this proposed rule we include
requirements for the immediate
reporting of lost or jettisoned cargo. We
anticipate that adoption of these
requirements will correct this
underreporting and lead to some
increased costs to industry. Table 5
presents the change matrix for
modifying the reporting of hazardous
conditions and summarizes the specific
edit or change, the affected population,
and the economic impact.
TABLE 5—CHANGE MATRIX FOR REPORTING OF HAZARDOUS CONDITIONS IN 33 CFR
Reference & description
Affected population
97.100
. . . (a)(1), U.S. vessels ....................................
97.105 Definitions ..............................................
97.110 Incorporation by reference, lists IBR
references.
97.115 Situation requiring report, criteria for reporting lost cargo.
160.215(a), requirement to report hazardous
condition.
160.215(b), data to be reported .........................
Economic impact
Applicability
U.S. cargo vessels 500+ GT, non-U.S. cargo
vessels in U.S. waters 500+ GT.
All vessels and approval organizations ...........
All affected vessels and approval organizations.
Vessels subject to the rule that lose cargo
overboard.
Operators of vessels involved in incident resulting in hazardous condition.
Operators of vessels involved in incident resulting in hazardous condition.
None, administrative only.
None, administrative only.
None, administrative only.
Costs for correction of noncompliance with
existing requirements.
No change, new label of existing text.
This requirement references 97.115 and all
costs are included there.
Source: Coast Guard analysis.
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ii. Affected population and costs. The
proposed rule applies to both U.S. and
foreign-flagged vessels engaged in
transport to or from U.S. ports.
Therefore, the costs for reporting the
lost or jettisoned cargo must be
accounted for throughout the entire
applicable population of 7,163 vessels,
as reported in Table 4.
For 2009 through 2011 there were
only five incidents of containers lost or
damaged at sea and reported to the
Coast Guard. As previously noted,
industry experts assert that many
incidents of lost or jettisoned cargo are
not reported to the appropriate
authorities. In order to test this, we
developed an estimate of lost or
jettisoned cargo incidents that are
subject to Coast Guard rules.
As the base of our estimate we used
the annual estimate of 4,000 containers
lost at sea worldwide, as reported in the
October 2010 issue of the Register
Expert, the journal of the Netherlands
Institute of Registered Insurance
Experts, and cited by the IMO.3 The
report cited by IMO only contained a
global estimate; there were no breakouts by route or flag of the vessel. We
derived the U.S. share of global
container traffic using data reported by
the U.S. Department of Transportation’s
Maritime Administration (MARAD),
which reported in 2010 that there were
369,155 container ship visits worldwide 4 and that 22,222 were at U.S.
ports.5 Thus, the U.S. share of global
container traffic is 6.0 percent (22,222/
369,155).
We used that 6.0 percent share to
estimate that about 240 containers in
U.S. traffic are lost annually (4,000
containers lost world-wide * U.S. 6.0
percent share of traffic, rounded). The
five incidents lost a total of 25
containers, so we estimate on average
there were five lost containers per
incident. Using those data, we estimate
that there will be 50 reports of lost
containers to the Coast Guard (240
containers lost/5 containers per
incident, rounded to the nearest 10) in
the first year the rule would become
effective.
The Tioga Group, a freight
transportation services consulting firm,6
in its report 7 on the container market to
the port authorities of Los Angeles and
Long Beach, presents estimates of 4.9
percent annual compounded growth
rate for the U.S. in container traffic from
2010 to 2020. We assume that the
number of lost container incidents will
grow proportionally with the growth in
container trade. We applied the Tioga
Group’s estimate of 4.9 percent growth
rate to the base estimate of 50 lost
containers to years 2 through 10 in this
1 All data and industry reports refer only to
containers when describing incidents involving lost
or jettisoned cargo. We will assume that containers
will continue as the only lost cargo in the future
and refer to containers as the generic description of
the involved cargo for this analysis.
2 McNamara, James J., ‘‘Containers and Cargoes
Lost Overboard’’, National Cargo Bureau;
conference of the International Union of Marine
Insurers; September 13, 2000, https://
www.iumi.com/images/stories/IUMI/Pictures/
Conferences/London2000/Wednesday/
02%20mcnamara%20cargo.pdf.
3 IMO Maritime Safety Committee report 89/22/
11, p. 1. A copy of this report is in the rulemaking
docket.
4 See https://www.marad.dot.gov/documents/
Vessel_Calls_at_US_Ports_Snapshot.pdf, p. 7,
‘‘Global Vessel Calls by Country, 2011.’’
5 See https://www.marad.dot.gov/documents/
Vessel_Calls_at_US_Ports_Snapshot.pdf, p. 3.
‘‘Containership Calls at U.S. Ports by Size, 2006–
2011.’’
6 For information on The Tioga Group see
www.tiogagroup.com.
7 The Tioga Group, Inc. and IHS Global Insight,
‘‘San Pedro Bay Container Forecast Update’’,
Exhibit 33: Total U.S. Loaded Total TEU and
CAGRs, p. 33, www.portoflosangeles.org/pdf/spb_
container_forecast_update_073109.pdf.
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cost analysis. This yields an estimate of
77 incidents by year 10 (the complete
series is shown in the ‘‘Estimated
Incidents’’ column of Table 7).
When cargo is lost or jettisoned, the
vessel staff already collects data for
company purposes.8 Thus, the only
additional cost for compliance with the
proposed rule is the time to report the
data to the Coast Guard and for the
Coast Guard to record the data. Coast
Guard staff who are familiar with vessel
operations and incident reporting
estimated that it would take 0.25 hours
for a Master or other senior ship’s officer
to compile a report and transmit it to the
Coast Guard.
The wage rate for the Master was
obtained from the U.S. Bureau of Labor
Statistics (BLS), using Occupational
Series 53–5021, Captains, Masters, and
Pilots of Water Vessels. BLS reports that
the hourly rate for a Master is $34.50 per
hour.9 To account for benefits, the load
factor, or ratio between total
compensation and wages is calculated at
1.52,10 using BLS data. The fully loaded
wage rate for a Master is estimated at
$53 per hour ($34.50 base wages * 1.52
load factor, rounded up to capture the
entire cost).
Similarly, it would take 0.25 hour for
Coast Guard personnel at the E–4 level
to record the data. The wage rate for an
E–4 rating is $40, per Commandant
Instruction 7310.1M.11 The unit cost for
the Coast Guard is $10.00 ($40 per hour
* 0.25 hours).
As shown in Table 6, the unit cost for
reporting a lost or jettisoned cargo is
$23.25.
TABLE 6—UNIT COST FOR REPORTING A LOST CONTAINER OR JETTISONED CARGO
Time
(hours)
Task
Wage
rate
Cost
Master to report incident ............................................................................................................................................
Coast Guard data entry (E4) .....................................................................................................................................
0.25
0.25
$53
40
$13.25
10.00
Total ....................................................................................................................................................................
..............
..............
23.25
Sources: BLS, Coast Guard estimates.
The baseline estimate of lost or
jettisoned cargo incidents, the growth
rate, and the unit cost data provide the
inputs into the 10-year cost schedule.
Table 7 displays the input data and the
resulting cost estimates on an
undiscounted basis and discounted at 7
percent and 3 percent interest rates.
TABLE 7—COST SCHEDULE FOR REPORTING LOST OR JETTISONED CARGO
Estimated
incidents
Year
Discounted
Rounded
incidents
Industry cost
CG Cost
Total cost
7%
3%
1 .................................
2 .................................
3 .................................
4 .................................
5 .................................
6 .................................
7 .................................
8 .................................
9 .................................
10 ...............................
50
52.45
55.02
57.72
60.55
63.52
66.63
69.89
73.31
76.90
50
52
55
58
61
64
67
70
73
77
$663
689
729
769
808
848
888
928
967
1,020
$500
520
550
580
610
640
670
700
730
770
$1,163
1,209
1,279
1,349
1,418
1,488
1,558
1,628
1,697
1,790
$1,087
1,056
1,044
1,029
1,011
992
970
948
923
910
$1,129
1,140
1,170
1,199
1,223
1,246
1,267
1,285
1,301
1,332
Total ....................
Annualized .................
..........................
..........................
........................
........................
8,309
........................
6,270
........................
14,579
........................
9,970
1,420
12,292
1,441
emcdonald on DSK67QTVN1PROD with PROPOSALS
To provide a breakout of costs by flag
status, we extracted from the Coast
Guard’s SANS database the vessels
calling on U.S. ports in 2011. We
divided the vessels into U.S. and
foreign-flag status. Table 8 presents the
data and shows that in 2011, U.S. flagvessels accounted for 2.5% of the visits
by vessels subject to this rule.
We produced a breakout for U.S. costs
TABLE 8—2011 VISITS TO U.S. PORTS
BY FLAG-STATUS OF VESSELS 500 of lost or jettisoned cargo by applying
GROSS TONS OR MORE, NON-BULK the 2.5 percent of visits by U.S. flag
vessels from Table 8 to the cost
TRADE
Flag
Visits
estimates from Table 7. Please note that
U.S. costs include both costs to U.S.flagged vessels and the Coast Guard.
2.5 Table 9 displays the data for the U.S.
97.5
costs.
Percent
U.S. ...............................
Foreign ..........................
514
20,242
Total ..........................
20,756
100.0
Source: USCG, SANS database.
8 Captain James J. McNamara, ‘‘Containers and
Cargo Lost Overboard’’, p. 2. National Cargo Bureau;
conference of the International Union of Marine
Insurers; September 13, 2000, https://
www.iumi.com/images/stories/IUMI/Pictures/
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Conferences/London2000/Wednesday/
02%20mcnamara%20cargo.pdf.
9 Mean wage, https://www.bls.gov/oes/2011/may/
oes535021.htm.
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10 Load Factor calculation, source: ftp://
ftp.bls.gov/pub/special.requests/ocwc/ect/
ececqrtn.pdf.
11 https://www.uscg.mil/directives/ci/7000-7999/
CI_7310_1M.pdf.
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68793
TABLE 9—SCHEDULE FOR U.S. COSTS FOR REPORTING LOST OR JETTISONED CARGO
Estimated
incidents
Year
Rounded
incidents
Industry
cost
CG
cost
Discounted
Total
cost
7%
3%
1 .................................
2 .................................
3 .................................
4 .................................
5 .................................
6 .................................
7 .................................
8 .................................
9 .................................
10 ...............................
50
52.45
55.02
57.72
60.55
63.52
66.63
69.89
73.31
76.90
1
1
1
1
1
2
2
2
2
2
$13
13
13
13
13
27
27
27
27
27
$10
10
10
10
10
20
20
20
20
20
$23
23
23
23
23
47
47
47
47
47
$21
20
19
18
16
31
29
27
26
24
$22
22
21
20
20
39
38
37
36
35
Total ....................
Annualized .................
..........................
..........................
........................
........................
200
........................
150
........................
350
........................
231
33
290
34
The costs of reporting lost or
jettisoned cargo for non-U.S.-flag vessels
are obtained by subtracting the U.S.
costs, as reported in Table 9, from the
costs as displayed in Table 7. Table 10
presents the results of these
calculations.
TABLE 10—SCHEDULE FOR NON-U.S. COSTS FOR REPORTING LOST OR JETTISONED CARGO
Estimated
incidents
Year
Rounded
incidents
Industry
cost
CG
cost
Discounted
Total
cost
7%
3%
50
52.45
55.02
57.72
60.55
63.52
66.63
69.89
73.31
76.90
49
51
54
57
60
62
65
68
71
75
$649
676
716
755
795
822
861
901
941
994
$490
510
540
570
600
620
650
680
710
750
$1,139
1,186
1,256
1,325
1,395
1,442
1,511
1,581
1,651
1,744
$1,064
1,036
1,025
1,011
995
961
941
920
898
887
$1,106
1,118
1,149
1,177
1,203
1,208
1,229
1,248
1,265
1,298
Total ....................
Annualized .................
emcdonald on DSK67QTVN1PROD with PROPOSALS
1 .................................
2 .................................
3 .................................
4 .................................
5 .................................
6 .................................
7 .................................
8 .................................
9 .................................
10 ...............................
..........................
..........................
........................
........................
8,110
........................
6,120
........................
14,230
........................
9,738
1,386
12,001
1,407
iii. Benefits. A 2011 news release from
the Monterey Bay Aquarium Research
Institute (MBARI) 12 stated that
containers that fall from ships can ‘‘float
at the surface for months, most
eventually sink to the seafloor.’’ While
they float they can present a hazard to
navigation. However, sunken containers
may pose immediate and long-term
threats to the marine environment. The
MBARI news release also stated that
‘‘[N]o one knows what happens to these
containers once they reach the deep
seafloor’’ and that ‘‘[p]erhaps 10 percent
of shipping containers carry household
and industrial chemicals that could be
toxic to marine life.’’ The small number
of MISLE incidents provides additional
information. Of the 25 containers, one
container contained 22,500 pounds of
used batteries and another contained an
unspecified hazardous material.
12 https://www.mbari.org/news/news_releases/
2011/containers/containers-release.html.
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The immediate benefit of the
reporting provisions is that they would
enhance the Coast Guard’s ability to
identify potential problems with
securing equipment, locate and warn
mariners about drifting containers that
endanger safe navigation, and assess
and respond to any potential
environmental hazard created by the
cargo loss. In the longer term, having
complete and accurate data on lost cargo
incidents would enable the Coast Guard
and other parties to identify industry
trends and track potential long-term
threats to the marine environment from
sunken containers.
iv. Alternatives. We considered
possible alternatives to the proposed
rule. One possibility, as suggested in the
NPRM, would be to limit the reporting
of lost containers to only those
containing hazardous materials.
However, we consider any overboard
container to be a potential hazard to
navigation and, as noted above, the
contents may pose a long-term threat to
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the marine environment. To ensure
safety of navigation and the marine
environment, we believe all lost or
jettisoned cargo should be reported.
Another option would be to reduce
the amount of information to be sent to
the Coast Guard in order to minimize
recordkeeping burden. We examined the
data specified in the proposed rule and
determined that all would be needed by
the Coast Guard in order to completely
evaluate the situation and determine the
appropriate response. Therefore, we
believe that the reporting requirements
in the proposed rule would provide the
Coast Guard with sufficient information
to fulfill its missions of maritime safety
and protection of the marine
environment while minimizing the
vessel’s recordkeeping and reporting
burdens.
b. CSM Requirements
i. Current practices, applicable
population, and description of changes
and edits. As stated in section IV of this
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preamble, current requirements for
CSMs are located in SOLAS, with
further implementing guidance
included in NVIC 10–97. The Coast
Guard’s current reference for the
minimum standards of a CSM is IMO’s
Circular 1353.
Enforcement in U.S. ports is carried
out by the Coast Guard’s safety and
security vessel examinations program.
As part of these examinations, the Coast
Guard checks that the subject vessels
have a CSM and that the crew follows
it. MISLE data show that from 2009
through 2011, the 26 U.S.-flag vessels
that are part of the affected population
were subject to 176 inspections. In all of
these inspections there were no
citations for a deficient CSM. MISLE
also recorded that in 2009 through 2011,
the Coast Guard conducted 11,989
vessel inspections of foreign-flag vessels
and found problems relating to CSMs in
only 8 instances. These data indicate an
ongoing compliance process for both
U.S.- and foreign-flagged vessels subject
to CSM rules. As a result, the Coast
Guard anticipates that the only costs
regarding the CSM requirement is that
moving the requirements from SOLAS
and the implementing guidelines from
NVIC 10–97 into the CFR could prompt
owners and operators of the few
deficient vessels to ensure their CSMs
were fully compliant with SOLAS prior
to entering U.S. waters.
Tables 11 and 12 present the change
matrix for the edits to Title 33 and Title
46 of the CFR, respectively, that relate
to the CSM requirements. Each matrix
summarizes the specific edit or change,
the affected population, and the
economic impact.
TABLE 11—CHANGE MATRIX FOR ADDING CSM REQUIREMENTS TO 33 CFR
Reference & description
Affected population
97.100
. . . (a)(1), U.S. vessels ....................................
. . . (a)(2), voluntary compliance .........................
. . . (b), exemption for Ready Reserve and
public vessels.
97.105 Definitions ............................................
97.110 Incorporation by reference, lists IBR
references.
. . . (a)(2), CSAP required after 2015 ...............
. . . (b), authorizes CG enforcement .................
Applicability
U.S. cargo vessels 500+ GT, non-U.S. cargo
vessels in U.S. waters 500+ GT.
U.S. vessels less than 500 GT requesting
coverage.
Ready Reserve and public vessels .................
All vessels and approval organizations ...........
All affected vessels and approval organizations.
97.120
. . . (a)(1), CSMs required ................................
Economic impact
None, administrative only.
No change, codifies guidance currently located in NVIC.
None, these vessels currently exempted.
None, administrative only.
None, administrative only.
Cargo Securing Manuals
SOLAS vessels and non-U.S., non-SOLAS
vessels noted with deficient CSMs by Coast
Guard.
Non-SOLAS vessels ........................................
All U.S. and foreign-flagged vessels subject to
the rule.
Cost of developing CSM for noncompliant
vessels.
Edit to close regulatory gap. No costs, no current vessels affected and none expected in
future.
No cost, provides authority for current CG
compliance activities.
Source: Coast Guard analysis.
TABLE 12—CHANGE MATRIX FOR EDITS TO 46 CFR 97 THAT APPLY TO U.S. SOLAS VESSELS
Reference & description
Affected population
Economic impact
97.12–10, Cargo securing manuals, new section to reference new 33 CFR 97.120.
Owners and operators of U.S. SOLAS vessels
Administrative edit, all costs accounted for in
33 CFR 97.120.
emcdonald on DSK67QTVN1PROD with PROPOSALS
Source: Coast Guard analysis.
ii. Affected population and costs. As
stated in the preceding section
VIII.A.3.i, the Coast Guard’s current
safety and security examinations
include checking to see if a subject
vessel has a current CSM and that the
crew follows it. The inspection results
indicate that U.S.-flagged vessels in
international trade currently comply
with the SOLAS CSM rules and will
continue with those practices. For
foreign-flagged vessels that visit U.S.
ports, we estimated the costs of
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compliance based on the following
assumptions:
(1) In the absence of the proposed
rule, the current deficiency rate for
subject foreign-flagged vessels would
continue.
(2) Under the proposed rule, the
increased enforceability posture from
codifying the CSM rules will lead all
vessels to comply with the SOLAS
standards and NVIC guidance prior to
entering U.S. waters. That is, the
deficiency rate will be reduced to zero
for foreign-flagged vessels.
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In the preceding section VIII.A.3.i, we
reported that there were 8 deficiencies
related to CMS from 2009–2011. These
deficiencies are comprised of 4 that
were missing sections or certain
technical data, 3 that were missing
approval from an authorized
organization, and 1 that did not have its
CSM on the vessel. Table 13 presents
the data from 2009 through 2011 for the
calculation of a deficiency rates by year
and an annual average for the three
years.
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TABLE 13—ANNUAL CSM DEFICIENCY RATE
Vessel
examinations
Year
CSM
deficiencies
Deficiency rate
(percent)
2009 .............................................................................................................................................
2010 .............................................................................................................................................
2011 .............................................................................................................................................
3,901
4,148
3,930
3
3
2
0.08
0.07
0.05
Total (Sum for examinations and deficiencies, average for rate) ........................................
11,979
8
0.07
The population in year 1 of the
estimate period is the foreign-flagged
component of the affected population—
7,137 vessels, as reported in Table 4. In
the analysis of the reporting
requirements, we cited the Tioga
Group’s report on the container market
that growth in container shipments to
the U.S. is expected to increase,13 so a
flat extrapolation of the baseline over
years 2 through 10 of the analysis period
would result in an underestimate.
We used the Tioga Group’s estimate of
a 4.9 percent rate for our estimate for
growth in our ten-year analysis period.
The SANS data used for an estimate of
the affected population showed that
each vessel averaged 3.5 visits per year
to U.S. ports in the three years of data
collection, 2009 through 2011.
At this time we do not have detailed
information on the current and
projected capacity utilization of
container ships visiting U.S. ports, so
we posited that the trips per year of the
affected vessels would remain constant
through the analysis period. With that
assumption, we applied the 4.9 percent
annual growth rate to the fleet of
foreign-flagged vessels serving U.S.
ports, starting with the baseline
population of 7,137 vessels. The
resulting estimates are shown in the
‘‘Affected Vessels’’ column of Table 14.
The estimate of the number of
deficient CSMs in any year equals the
estimate of the vessel population that
year times the deficiency rate. For
example, the estimate for Year 1 is
CSMs for 5 new foreign-flagged vessels
(7,137 vessels * 0.07 percent).
To obtain a current estimate for the
cost of developing a cargo securing
manual we contacted industry cargo
securing subject matter experts in
2013 14. These experts are familiar with
the entire development of cargo
securing manuals, including vessel
survey, evaluation of the cargo securing
equipment and procedures, preparing
the manuals, and training the crews.
From the information they provided, we
estimate that the cost to develop a CSM
will range between $7,500 and $10,000,
depending on factors such as the size
and type of vessel. We do not have
detailed descriptions of each deficiency,
so for the unit cost, we will assume that
in order to ensure compliance the
company will revise the CSM using an
existing survey of the vessel. A recently
completed study conducted by ABS
Consulting, Inc. for the Coast Guard
provided estimates on the costs of a
suite of marine engineering and naval
architecture services 15. That study
estimates that the average cost of a
survey for a freight ship is $1,125. We
estimated the unit cost to remedy a
deficiency as the average cost of
developing a CSM ($8,750 = ($7,500 +
$10,000)/2)) less the average cost of a
survey. This yields an estimated unit
cost of $7,625 ($8,750—$1,125). The
total cost for any year is the number of
new CSMs to remedy deficiencies, times
the unit cost of $7,625. Table 14
presents the cost estimate over the tenyear period at both an undiscounted
value and discounted at 7 percent and
3 percent interest rates. As noted, these
costs are for noncompliant foreign
vessels; all U.S. vessels in international
trade are assessed as already complying.
TABLE 14—COST OF UPGRADING DEFICIENT CSMS
[undiscounted and discounted at 7% and 3%]
(B)
Affected
vessels
(A)
Year
(C)
Annual
deficiency rate
(percent)
(D)
New CSMs
(B*C)
(E)
CSM Cost
(D*$7,625)
Discounted
7%
3%
7,137
7,487
7,854
8,239
8,643
9,067
9,511
9,977
10,466
10,979
0.07
0.07
0.07
0.07
0.07
0.07
0.07
0.07
0.07
0.07
5
5
5
6
6
6
7
7
7
8
$38,125
38,125
38,125
45,750
45,750
45,750
53,375
53,375
53,375
61,000
$35,631
33,300
31,121
34,902
32,619
30,485
33,239
31,065
29,032
31,009
$37,015
35,936
34,890
40,648
39,464
38,315
43,399
42,135
40,907
45,390
Total ..................................................
Annualized ...............................................
emcdonald on DSK67QTVN1PROD with PROPOSALS
1 ...............................................................
2 ...............................................................
3 ...............................................................
4 ...............................................................
5 ...............................................................
6 ...............................................................
7 ...............................................................
8 ...............................................................
9 ...............................................................
10 .............................................................
........................
........................
........................
........................
........................
........................
472,750
........................
322,403
$45,903
398,099
$46,669
As shown in Table 14, the total 10year cost for upgrading CSMs at a 7%
discount rate is $45,903. We anticipate
that the Coast Guard will continue its
current inspection regime, so there are
no additional government costs or
13 See. ‘‘U.S. Port and Inland Waterways
Preparing for Post Panamax Vessels’’, p. 10—
‘‘Forecast and Containerized Cargo’’: https://
www.iwr.usace.army.mil/docs/portswaterways/rpt/
June_20_U.S._Port_and_Inland_Waterways_
Preparing_for_Post_Panamax_Vessels.pdf.
14 These sources preferred not to be identified in
order to protect proprietary information.
15 ABS Consulting, Inc, ‘‘Study of Marine
Engineering and Naval Architecture Costs for Use
in Regulatory Analyses,’’ Table 5, p. 26. A copy is
included in the docket.
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resource impacts to the Coast Guard for
new, upgraded or revised CSMs.
iii. Benefits. The benefit of adding the
SOLAS requirements and the NVIC
guidance on CSMs to the CFR is
increased Coast Guard enforcement
authority. We previously cited the
statistics from the Coast Guard’s CSM
inspection activities from 2009 through
2011 for both U.S. and foreign-flagged
vessels. However, as noted in section IV
of this preamble, the only current U.S.
implementation of the CSM is via NVIC
10–97, which is unenforceable.
Incorporating these rules into the CFR
elevates the requirements to regulation
status. As described in section III of this
preamble, the Coast Guard has existing
authorities to inspect vessels; regulate
an inspected vessel’s operation, fittings,
equipment, and appliances; and
implement SOLAS. The Coast Guard
believes that it can enforce the
provisions of the proposed rule under
these authorities.
iv. Alternatives. Alternatives were
considered in this proposed rule.
Alternatives include various ways to
apply the requirements to prepare and
implement CSMs to U.S.-flagged vessels
in coastwise trade. As described in
section V of this preamble, the 2000
NPRM presented five options for
applying CSM regulations to U.S.
domestic voyages. Table 15 presents
descriptions of these options and a
summary of the comments.
TABLE 15—OPTIONS TO EXTEND CMS REQUIREMENTS TO U.S. DOMESTIC VOYAGES
Description
1 .........................
Extend SOLAS requirements to domestic voyages ................
2 .........................
Vessel specific standards, Coast Guard approval ...................
3 .........................
Certificate for carrying hazardous materials ............................
4 .........................
Allow each vessel to choose from among Options 1, 2, and 3
5 .........................
emcdonald on DSK67QTVN1PROD with PROPOSALS
Option No.
Standards developed with industry ..........................................
The options presented in the NPRM
were only outlined and did not have
cost estimates. We developed a cost
estimate for Option 1 that would extend
SOLAS requirements to domestic
vessels. We added these details to
Option 1 to make the calculations:
• The affected population will be
U.S.-flagged vessels of 500 gross tons or
more in coastwise trade. The geographic
identification was vessels with
coastwise route certifications. We
identified 675 vessels from MISLE that
met these requirements, which is
comprised of 215 freight barges, 125
freight ships, and 335 offshore supply
vessels.
• In general, the vessels in the U.S.
affected population for this alternative
are smaller than the foreign-flagged
vessels that comprise the affected
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Summary of comments
4
•
•
•
•
•
supported, 5 opposed for these reasons:
Preferred compromise of Options 1 & 2
Not requiring regular reviews
Too restrictive
Require too much standardization
Would not work for seagoing barges as no two barge cargoes are identical
1 supported, 5 opposed for these reasons:
• Evaluate against experience with continuous examination
program and noted similarity with Option 5
• Too many variables causing unneeded burden
• Would not work, but did not give specific reasons
• Second choice
• Preferred compromise of Options 1 and 2
One commenter stated its decision would depend on specific
requirements and 3 opposed for these reasons:
• Surveyors for multiple voyages not feasible for cost and
availability
• Could not ensure surveyor availability
• High costs of surveyors
One commenter noted that companies supporting domestic
rules would find this attractive, but did not state its own
opinion. Another stated that it combined the strengths and
weaknesses of the other Options. One opposed for
unstated reasons and another was opposed because the
‘‘menu of options’’ would cause confusion.
3 supported, 1 for unstated reasons and 2 because of its
flexibility; and 1 was opposed because it would not ensure
meeting needs of different vessel types and operations
population of the proposed regulation.
Data comparisons for the U.S. fleet
shows average gross tons of 8,165 and
average length of 326 feet. The
comparable data for the foreign-flagged
vessels is average gross tonnage of
31,306 and average length of 619 feet.
Therefore, we assigned for the unit cost
of the U.S. coastwise vessels the lowend value of $7,500 from the range
supplied by the subject matter experts
we contacted. The recent history of new
builds will continue through the tenyear analysis period. MISLE reported 22
new vessels per year from 2009–2012
and we used this in our analysis.
• A phase-in period was not in the
NPRM, but we added a three-year
phase-in period, to mitigate the burden
on both vessel owners and the
authorized approval organizations. We
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assume that vessel owners would
distribute the certification of the
manuals for their vessels evenly over
the phase-in period. This would enable
vessel owners and authorized approval
organizations to schedule cargo securing
approvals in conjunction with vessel
down-time, such as scheduled
examinations or times of vessel repairs
and upgrades.
With these parameters, we developed
a 10-year cost schedule for Option 1. As
the costs to foreign-flagged vessels
would be the same for Option 1 as the
preferred alternative, the data presented
show the marginal costs for Option 1.
The annualized cost, using a 7 percent
discount rate would be $759,524. The
cost estimates are displayed in Table 16.
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TABLE 16—COST ESTIMATE FOR OPTION 1, EXTEND CSM REQUIREMENTS TO DOMESTIC VESSELS
Discounted
Existing
vessels
Year
New vessels
Total vessels
Unit cost
Total cost
7%
3%
1 ...................................
2 ...................................
3 ...................................
4 ...................................
5 ...................................
6 ...................................
7 ...................................
8 ...................................
9 ...................................
10 .................................
225
225
225
0
0
0
0
0
0
0
22
22
22
22
22
22
22
22
22
22
247
247
247
22
22
22
22
22
22
22
$7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
$1,852,500
1,852,500
1,852,500
165,000
165,000
165,000
165,000
165,000
165,000
165,000
$1,731,308
1,618,045
1,512,192
125,878
117,643
109,946
102,754
96,032
89,749
83,878
$1,798,544
1,746,159
1,695,300
146,600
142,330
138,185
134,160
130,253
126,459
122,775
Total ......................
Annualized ...................
675
........................
220
........................
895
........................
........................
........................
6,712,500
........................
5,587,425
795,524
6,180,765
724,574
exclusively vessels in international
trade. However, the Coast Guard can
reevaluate this position and initiate
another rulemaking for the U.S.
coastwise trade if new information
indicates either underreporting or
upward trend of lost containers.
The goal of this alternative would be
to reduce the occurrence and impacts of
lost containers in U.S. coastwise trade.
However, the comments to the NPRM
indicate that this is not a significant
problem. One commenter stated that
cargo losses from barges are rare,
another stated that seagoing barges ‘‘are
generally safe from cargo loss’’, and
another commenter stated that ‘‘most
cargo losses result from container
structural problems that the vessel
owner operator cannot know about or
prevent.’’ Recent data from MISLE
supports the commenters. Specifically,
MISLE has only five incidents from
2009–2011 of lost or damaged
containers involving U.S. vessels in
coastwise voyages. Additionally, our
initial cost estimates, as presented in
Table 16, indicate that industry would
incur annualized costs, discounted at 7
percent, of nearly $800,000. Therefore,
the focus of this rulemaking is
c. Approval of Authorized
Organizations
The Coast Guard authorizes
classification societies and other
organizations to review and approve
CSMs on its behalf. The procedures for
these organizations are currently found
in NVIC 10–97 and cover selection
criteria, information required by
organizations applying for authorization
status, the Coast Guard’s application
review procedures, authorization
termination, and appeals processes.
Following the procedures in NVIC
10–39, the Coast Guard has authorized
these six classification societies to
review and approve CSMs: American
Bureau of Shipping, Det Norske Veritas,
Lloyd’s Register of Shipping,
Germanischer Lloyd, RINA S.p.A, and
ClassNK.16 We anticipate that no other
classification societies will be applying
for CSM approval authority in the near
future.
However, the NVIC is a guidance
document only, and not legally
enforceable. The proposed rule would
incorporate these procedures from the
NVIC into the CFR with only some
minor editorial changes. Therefore, we
believe there would be no additional
regulatory costs associated with the
codification of these application
procedures. Table 17 presents the
change matrix for the codification of the
class society approval guidance into the
CFR and summarizes the specific edit or
change, the affected population, and the
economic impact.
TABLE 17—CHANGE MATRIX FOR INCORPORATING CLASS SOCIETY APPROVAL PROCEDURES INTO 46 CFR
Reference & description
Affected population
97.100
. . .(a)(3), organizations applying for CSM approval authority.
97.115 Situation requiring report, criteria for reporting lost cargo.
emcdonald on DSK67QTVN1PROD with PROPOSALS
97.200
Economic impact
Applicability
New applicants .................................................
Vessels subject to the rule that lose cargo
overboard.
No impact, codifies application guidance currently prescribed by NVIC.
Costs for correction of noncompliance with
existing requirements.
CSM Approval for U.S. Vessels on International Voyages
. . .(a)(1), authorized applicants include owner,
operator, or agent.
. . .(a)(2), CG oversight of approval authority
applications.
. . .(a)(3), application procedures .....................
Owners, operators, and agents, of new U.S.
vessels in international trade.
Organizations applying for CSM approval authority.
U.S. vessels in international trade ...................
. . .(a)(4), approval authority retains a copy .....
. . .(b), approval letter contents ........................
. . .(c), disapproval procedures .........................
Authorized approval organizations ..................
Authorized approval organizations ..................
Authorized approval organizations ..................
Administrative change, NVIC only referenced
owner.
No change, codifies application guidance currently located in NVIC.
No change, codifies application guidance currently located in NVIC.
No change, codifies NVIC.
No change, codifies NVIC.
No change, codifies application guidance currently located in NVIC.
16 List of classification societies authorizations:
https://www.uscg.mil/hq/cg5/acp/docs/ClassSociety
Auths29May2013.pdf.
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TABLE 17—CHANGE MATRIX FOR INCORPORATING CLASS SOCIETY APPROVAL PROCEDURES INTO 46 CFR—Continued
Reference & description
Affected population
. . .(d), resubmit procedures .............................
Owners and operators resubmitting a CSM ....
. . .(e), documents kept on vessel ....................
Owners and operators of U.S. vessels subject
to the rule.
Owners and operators of U.S. vessels subject
to the rule.
Owners and operators of U.S. vessels subject
to the rule and authorized approval organizations.
ABS, Lloyds, Nat’l Cargo Bureau ....................
97.205 Requirements for amending an approved CSM, amending procedures.
97.210 Appeals, appeals procedures ................
97.300 Authorized CSM approval authorities,
lists approved organizations.
97.305 Requests for authorization, application
process.
97.310 Criteria for authorization, evaluation criteria.
97.315 Requirements for authorized approval
organizations, responsibilities of CG and authorized approval organizations.
97.320 Revocation of authorization, procedures
for CG revoking an authorization.
Economic impact
No change, codifies application
rently located in NVIC.
No change, codifies application
rently located in NVIC.
No change, codifies application
rently located in NVIC.
No change, codifies application
rently located in NVIC.
guidance curguidance curguidance curguidance cur-
Organizations seeking to become approved
organizations.
CG and organizations seeking to become approved organizations.
CG and authorized approval organizations .....
No change, codifies application guidance currently located in NVIC.
No change, codifies application guidance currently located in NVIC.
No change, codifies application guidance currently located in NVIC.
No change, rewords and codifies application
guidance currently located in NVIC.
CG and referenced organizations ....................
No change, revises and codifies application
guidance currently located in NVIC.
Source: Coast Guard analysis.
We considered alternatives to the
proposed changes and edits, however,
we concluded that there are no viable
alternatives. The procedures in the
NVIC provide a complete description of
all processes needed for approval and
oversight of the subject organizations.
Reducing or eliminating any of them,
such as the one covering appeals, would
leave a gap in the approval or oversight
processes. We did not identify any
current weaknesses or gaps in the NVIC,
other than the proposed editorial
changes. We also concluded that the
recordkeeping guidance in the NVIC
provides complete documentation for
all the involved parties—vessel owners,
approved organizations. Reducing or
eliminating any of the proposed
recordkeeping rules would run the risk
of producing a gap in the
documentation. Conversely, adding
additional recordkeeping rules would
only increase associated burdens, but
not provide any additional useful
information.
In summary, the proposed rules
governing organizations approved to
issue CSMs would codify current
procedures with no associated costs to
industry or the government. The benefit
of these proposed rules is that it would
provide a regulatory basis for the Coast
Guard’s oversight of organizations
authorized to approve CSMs.
d. Review of Costs and Benefits. The
total cost of the proposed rule is for the
two cost elements: (1) Lost or Jettisoned
Cargo and (2) CSM Requirements. Table
18 presents the ten-year cost schedule
for undiscounted costs and discounted
costs at 7 percent and 3 percent rates.
TABLE 18—SUMMARY OF THE 10-YEAR TOTAL COST TO THE INTERNATIONAL CARGO INDUSTRY AND U.S. GOVERNMENT
(A)
(B)
(C)
CSM
requirements
(1)
Year
(D)
(E)
Industry
Industry
CG
Total industry
Total cost
(B+C)
Lost or jettisoned cargo (2)
(F)
(G)
(D+E)
(H)
Discounted
7%
3%
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1 ...................
2 ...................
3 ...................
4 ...................
5 ...................
6 ...................
7 ...................
8 ...................
9 ...................
10 .................
$38,125
38,125
38,125
45,750
45,750
45,750
53,375
53,375
53,375
61,000
$663
689
729
769
808
848
888
928
967
1,020
$500
520
550
580
610
640
670
700
730
770
$38,788
38,814
38,854
46,519
46,558
46,598
54,263
54,303
54,342
62,020
$39,288
39,334
39,404
47,099
47,168
47,238
54,933
55,003
55,072
62,790
$36,718
34,356
32,165
35,932
33,630
31,477
34,210
32,012
29,956
31,919
$38,144
37,076
36,060
41,847
40,688
39,561
44,666
43,420
42,208
46,722
Total ......
Annualized ....
472,750
..........................
8,309
..........................
6,270
..........................
481,059
..........................
487,329
..........................
332,375
47,323
410,392
48,110
Table 19 presents the U.S.-based
breakout of the 10-year cost data. The
CSM plans would affect only foreignflagged vessels and there are no
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associated U.S. government costs, so the
only inputs to U.S. costs are those
associated with the proposed reporting
requirements for lost or jettisoned cargo.
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As described earlier, these requirements
would accrue costs to both industry and
government. The estimates for both
sectors are in Table 18.
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TABLE 19—COSTS TO U.S.-FLAGGED VESSELS IN INTERNATIONAL CARGO INDUSTRY AND U.S. GOVERNMENT FOR
REPORTING OF LOST OR JETTISONED CARGO
Undiscounted
Total
Year
Total
Industry
Discounted
Government
7%
1 ...................
2 ...................
3 ...................
4 ...................
5 ...................
6 ...................
7 ...................
8 ...................
9 ...................
10 .................
$13
13
13
13
13
27
27
27
27
27
$500
520
550
580
610
640
670
700
730
770
$513
533
563
593
623
667
697
727
757
797
$479
466
460
452
444
444
434
423
412
405
$498
502
515
527
537
559
567
574
580
593
Total ......
Annualized ...
200
......................................
6,270
......................................
6,470
......................................
4,419
629
5,452
639
Table 20 displays the breakout of the
10-year cost schedule for foreign-flagged
vessels. These foreign-flagged vessels
would incur costs involving both
proposed requirements: CSM plans and
reporting of lost and jettisoned cargo.
Estimates for both requirements and the
total cost are included in Table 20.
TABLE 20—COSTS FOR FOREIGN-FLAGGED VESSELS IN INTERNATIONAL CARGO INDUSTRY FOR CSM REQUIREMENTS
Undiscounted
Year
CSM plans
Discounted
Reporting of lost or
jettisoned cargo
Total
7%
3%
$38,125
38,125
38,125
45,750
45,750
45,750
53,375
53,375
53,375
61,000
$649
676
716
755
795
822
861
901
941
994
$38,774
38,801
38,841
46,505
46,545
46,572
54,236
54,276
54,316
61,994
$36,237
33,890
31,706
35,478
33,186
31,033
33,775
31,589
29,544
31,515
$37,645
36,574
35,545
41,319
40,150
39,003
44,099
42,846
41,629
46,129
Total ......
Annualized ...
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1 ...................
2 ...................
3 ...................
4 ...................
5 ...................
6 ...................
7 ...................
8 ...................
9 ...................
10 .................
472,750
......................................
8,110
......................................
480,860
......................................
327,953
46,693
404,939
47,471
The primary benefit of this proposed
rule is that it would place into the CFR
rules and procedures for the cargo
securing plans, the approval and
oversight of organizations authorized to
approve CSMs, and the reporting of lost
or jettisoned cargo. Additionally, the
reporting requirements for the lost or
jettisoned cargo would provide the
Coast Guard with additional
information to monitor the effects on
both navigation and the environment.
Overall, the proposed rule would
support the Coast Guard’s missions of
maritime safety and stewardship.
B. Small Entities
1. Summary of Findings
Under the Regulatory Flexibility Act
(5 U.S.C. 601–612), we have considered
whether this proposed rule would have
a significant economic impact on a
substantial number of small entities.
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The term ‘‘small entities’’ comprises
small businesses, not-for-profit
organizations that are independently
owned and operated and are not
dominant in their fields, and
governmental jurisdictions with
populations of less than 50,000.
We determined that this proposed
rule affects a variety of large and small
businesses, not-for-profit organizations,
and governments (see the ‘‘Description
of the Potential Number of Small
Entities’’ section below). We have
prepared the following initial regulatory
flexibility analysis assessing the impact
on small entities from the rule. Based on
the information from this analysis, we
found:
• There are an estimated 1,217
entities that control the 7,163 vessels
that could be economically impacted by
the proposed rule. Using size standards
from the Small Business
Administration, the 26 U.S-flagged
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vessels are controlled by 18 companies
and none of them are small. The 7,137
foreign-flagged vessels are controlled by
1,199 companies. A review of the
entities that control these vessels found
that one foreign-flagged vessel is
controlled by a non-U.S. not-for-profit
entity which is not small, 32 foreignflagged vessels are controlled by
government agencies, and the remaining
7,104 foreign-flagged vessels are
controlled by businesses. An analysis of
a sample of the businesses controlling
these vessels indicates that 69 percent
are considered small.
• Compliance actions would consist
of upgrading deficient CSMs and
reporting lost or jettisoned cargo.
• Of the small entities in our sample
with revenue information, 60 percent of
them had an impact of less than 1
percent and 20 percent had an impact
within the 1 percent to 3 percent range.
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2. Initial Regulatory Flexibility Analysis
The Regulatory Flexibility Act of 1980
(5 U.S.C. 601 et seq.) (RFA) establishes
‘‘as a principle of regulatory issuance
that agencies shall endeavor, consistent
with the objectives of the rule and of
applicable statutes, to fit regulatory and
informational requirements to the scale
of the businesses, organizations, and
governmental jurisdictions subject to
regulation. To achieve this principle,
agencies are required to solicit and
consider flexible regulatory proposals
and to explain the rationale for their
actions to assure that such proposals are
given serious consideration.’’
Under the RFA, we are required to
consider if this rule will have a
significant economic impact on a
substantial number of small entities.
Agencies must perform a review to
determine whether a rule will have such
an impact. If the agency determines that
it will, the agency must prepare an
initial regulatory flexibility analysis as
described in the RFA.
Under Section 603(b) and (c) of the
RFA, the initial regulatory flexibility
analysis must provide and/or address:
• A description of the reasons why
action by the agency is being
considered;
• A succinct statement of the
objectives of, and legal basis for, the
proposed rule;
• A description of and, where
feasible, an estimate of the number of
small entities to which the proposed
rule will apply;
• A description of the projected
reporting, recordkeeping and other
compliance requirements of the
proposed rule, including an estimate of
the classes of small entities which will
be subject to the requirement and the
type of professional skills necessary for
preparation of the report or record;
• An identification, to the extent
practicable, of all relevant Federal rules
which may duplicate, overlap, or
conflict with the proposed rule; and
• Descriptions of any significant
alternatives to the proposed rule which
accomplish the stated objectives of
applicable statutes and which minimize
any significant economic impact of the
proposed rule on small entities.
a. A description of the reasons why
action by the agency is being
considered. Agencies take regulatory
action for various reasons. One reason is
to harmonize the CFR with
requirements and guidance located in
other sources. The primary purpose of
this proposed rule is to incorporate into
the CFR the cargo securing manual rules
from SOLAS, as the U.S. is a signatory
state to that treaty.
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Another of the reasons is the failure
of the market to compensate for negative
externalities caused by commercial
activity. A negative externality can be
the by-product of a transaction between
two parties that is not accounted for in
the transaction. As discussed in the
regulatory analysis, this proposed rule is
addressing a negative externality, which
is that unreported lost or jettisoned
cargo could collide with other vessels
with hazardous consequences to other
vessels, human health, or the
environment. The proposed rule
mandates that all occurrences of lost or
jettisoned cargo must be reported to the
Coast Guard.
b. A statement of the objectives of,
and legal basis for, the proposed rule.
The Coast Guard proposes this
rulemaking to align U.S. regulations
with the CSM requirements of SOLAS.
The provisions of this rulemaking also
authorize recognized classification
societies to review and approve CSMs
on behalf of the Coast Guard, prescribe
how other organizations can become
CSM approval authorities, and prescribe
when and how the loss or jettisoning of
cargo must be reported. Enforcing those
requirements should help prevent or
mitigate the consequences of vessel
cargo loss, and promote the Coast Guard
strategic goals of maritime safety and
environmental protection.
Sections 2103 and 3306 of Title 46,
U.S. Code, provide the statutory basis
for this rulemaking. Section 2103 gives
the Secretary of the department in
which the Coast Guard is operating
general regulatory authority to
implement Subtitle II (Chapters 21
through 147) of Title 46, which includes
statutory requirements in 46 U.S.C.
Chapter 33 for inspecting the vessels to
which this rulemaking applies. Section
3306 gives the Secretary authority to
regulate an inspected vessel’s operation,
fittings, equipment, appliances, and
other items in the interest of safety. The
Secretary’s authority under both statutes
has been delegated to the Coast Guard
in Department of Homeland Security
Delegation No. 0170.1(92)(a) and (b).
Additionally, the United States is a
party to SOLAS. Where SOLAS must be
enforced through U.S. regulations, those
regulations are authorized by E.O.
12234.
c. A description of and, where
feasible, an estimate of the number of
small entities to which the proposed
rule will apply.
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TABLE 21—NON-U.S. VESSELS BY
TYPE OF ENTITY
Entity type
Count
Percent
Business 17 .......
Government ......
Not-for-Profit .....
7,104
32
1
99.54
0.45
0.01
Total ..............
7,137
100.00
All the government entities exceed
the threshold for being classified as a
small entity as they are either agencies
of a foreign government or exceed the
50,000 population threshold. We
excluded these government entities
from the revenue impact analysis. The
single not-for-profit entity is also
deemed not small as it is part of an
international organization.
To analyze the potential impact on
the businesses, we produced a random
sample with a 95 percent confidence
level and a confidence interval of 5
percent.18 The resulting sample
consisted of 299 businesses. We
researched public and proprietary
databases for the location of the
company, entity type (subsidiary or
parent company), primary line of
business, employee size, revenue, and
other information.19 During the initial
research we found 6 duplicated
businesses and an additional one whose
business was out of the scope of this
rulemaking. Deleting these 7 businesses
from our initial sample of 299 resulted
in a working sample consisting of 292
businesses. We found that 217 of the
companies in our sample are based in
countries other than the U.S. We
therefore excluded these non-U.S.
companies from this revenue impact
analysis.
The population for the revenue
impact analysis consists of the
remaining 75 businesses from the
working sample. Of those 75, we found
address information that locates 70 of
them in the U.S. The remaining five are
businesses for whom we could find no
information; we assumed that they are
located in the U.S. and are small
businesses.
17 A vessel may have a separate owner, operator,
and charterer. Operational control may be with any
one of these companies, depending on type of
owner (i.e., a passive ownership by a financial
institution) or the type of operating or chartering
contract. Also, the country that the vessel is
registered in can be different than the country of the
owner.
18 We selected a statistical sample so we would
not need to research and collect employee size and
revenue information for the entire affected operator
population. We selected the operators in the sample
through a random number generator process
available in most statistical or spreadsheet software.
19 We used information and data from Manta
(https://Manta.com) and ReferenceUSA (https://
www.referenceusa.com).
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We researched and compiled the
employee size and revenue data for the
70 U.S. businesses and we compared
this information to the Small Business
Administration’s (SBA) ‘‘Table of Small
Business Size Standards’’ to determine
if an entity is small in its primary line
of business as classified in the North
American Industry Classification
System (NAICS).20 We determined that
23 businesses exceeded the SBA small
business size standards, and 20
businesses are small by the SBA
standards. We could not find employee
size or revenue data for 27 businesses
that are located in the United States and
assumed they are small businesses.
Thus, 52 businesses, accounting for
69.4% of the sample, are considered to
be small. The information on location
and size determination is summarized
in Table 22.
TABLE 22—U.S. BUSINESS BY SIZE DETERMINATION
Location
Entity type
Count
U.S.
Percent
Unknown
Exceed the threshold .......................................................................................................
Below the threshold .........................................................................................................
Unknown ..........................................................................................................................
23
20
27
0
0
5
23
20
32
30.7
26.7
42.7
Total ..........................................................................................................................
70
5
75
100.0
The percentage of entities affected by
this rule is distributed among 14 NAICS
classified industries. Table 23 lists the
frequency, percentage, and size
standard, and size threshold of NAICS
codes for the 20 small businesses found
in the sample.
TABLE 23—NAICS CODES OF IDENTIFIED SMALL BUSINESSES
Industry
423860 .................
3
15.0
Employees ..................
100
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
Transportation Equipment and Supplies (except Motor Vehicle) Merchant Wholesalers.
Inland Water Freight Transportation ................
Freight Transportation Arrangement ................
Ship Building and Repairing ............................
Lumber & Wood Merchant Whls .....................
Recycling ..........................................................
Farm Supplies Merchant Whls ........................
Boat Dealers ....................................................
Deep Sea transportation ..................................
Other Specialized Trucking Long-Distance .....
Support Activities for Rail Transportation ........
Marine Cargo Handling ....................................
All Other Professional & Technical Svcs .........
Office Administrative Svcs ...............................
All Other Support Svcs ....................................
3
2
1
1
1
1
1
1
1
1
1
1
1
1
15.0
10.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
Employees ..................
Revenue .....................
Employees ..................
Employees ..................
Employees ..................
Employees ..................
Revenue .....................
Employees ..................
Revenue .....................
Revenue .....................
Revenue .....................
Revenue .....................
Revenue .....................
Revenue .....................
500
14
1,000
100
100
100
30
500
25.5
14.0
35.5
14
7
7
Total ..............
..........................................................................
20
483211
488510
336611
423310
423930
424910
441222
483111
484230
488210
488320
541990
561110
561990
Count
Percent
Size standard
Threshold
(revenue in $
millions)
NAICS code
emcdonald on DSK67QTVN1PROD with PROPOSALS
Source: https://www.sba.gov/sites/default/files/files/Size_Standards_Table(1).pdf.
We selected the three industries that
appeared most frequently in the random
sample of entities. Businesses from
these three industries accounted for
approximately 40 percent of the entities
in the random sample. Therefore, we
can assume that approximately 40
percent of all entities affected by this
regulation will be in one of these
industries. A brief description of
industries affected most by this rule is
presented below:
• Transportation Equipment and
Supplies (except Motor Vehicle)
Merchant Wholesalers (423860): This
industry comprises establishments
primarily engaged in the merchant
wholesale distribution of transportation
equipment and supplies (except marine
pleasure craft and motor vehicles).
• Inland Water Freight Transportation
(483211): This U.S. industry comprises
establishments primarily engaged in
providing inland water transportation of
cargo on lakes, rivers, or intracoastal
waterways (except on the Great Lakes
System).
• Freight Transportation
Arrangement (488510): This industry
comprises establishments primarily
engaged in arranging transportation of
freight between shippers and carriers.
These establishments are usually known
as freight forwarders, marine shipping
agents, or customs brokers and offer a
combination of services spanning
transportation modes.
d. A description of the projected
reporting, recordkeeping and other
compliance requirements of the
proposed rule, including an estimate of
the classes of small entities which will
be subject to the requirement and the
type of professional skills necessary for
preparation of the report or record. The
compliance requirements of the
proposed rule consist of upgrading
deficient CSMs and reporting lost or
20 The SBA lists small business size standards for
industries described in the North American
Industry Classification System. See https://
www.sba.gov/content/table-small-business-sizestandards.
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jettisoned cargo. Therefore, this
proposed rule would call for a
collection of information under the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3520). Details on the
burden estimate associated with this
collection is available in section VIII.D
of this preamble.
As discussed in section VIII.A, in
2009 through 2011 the Coast Guard
conducted 11,989 vessel inspections
and found problems relating to CSMs in
only 7 instances, or about 0.1 percent of
the foreign-flagged vessels were found
to have deficient CSMs. We anticipate
that the owners and operators of these
vessels will upgrade their manuals to
meet standards and comply with this
rule. We do not have detailed
descriptions on each of the deficiency
cases. To impute a cost for this
compliance action, we apply the
estimate of $7,625 develop a new CSM,
as used in the Regulatory Analysis.
For reporting lost or jettisoned cargo,
we noted in section VIII.A cost
discussions that when one of these
incidents occurs, the vessel staff already
collects the needed information for
company purposes. Thus, the only
additional cost to the vessel is to report
this information to the Coast Guard. We
estimate the additional reporting will
take 0.25 hours for the vessel’s Master
or other senior officer to compile and
transmit the report to the Coast Guard.
We estimate that the loaded wage rate
for the senior officer is $53.00 per hour.
The cost of reporting is $13.25 (0.25
hours * $53 per hour).
As discussed in section VIII.A, we
adjusted the affected population to
account for anticipated growth in
container traffic. In our ten-year
analysis, we estimate that the number of
vessels that would need to upgrade their
CSM would be 5 in year one each of and
increase to 8 in year ten. We also
accounted for this growth in container
traffic in our estimate of lost or
jettisoned cargoes. In the section VIII.A
cost discussions we estimate that in the
first year the rule would become
effective, 50 incidents of lost or
jettisoned cargo would occur. We
estimate that the affected population in
that year consists of 7,163 vessels,
yielding an incident rate of 0.7 percent
(50 incidents/7,163 vessels). To execute
a revenue impact analysis we posited
that in any given year each business
would have one vessel that would need
to upgrade its CSM and that one of their
vessels would have an incident of lost
or jettisoned cargo. Given these
assumptions, the total annual
compliance cost for any company is
$7,638.25, as shown in Table 24.
TABLE 24—ANNUAL COMPLIANCE COST FOR REVENUE IMPACT ANALYSIS
Loaded wage
Cost to upgrade 1 CSM .........................................................................
Cost to report 1 hazardous condition ....................................................
Hours
N/A .....................................
53 .......................................
Total cost
N/A .....................................
0.25 ....................................
Total ................................................................................................
7,638.25
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For each business in our sample with
revenue data, we calculated the impact
as the assumed cost of $7,638.25 as a
percentage of that business’s annual
revenue. This produced a range of
potential revenue impacts across the
sample. Table 25 presents the impact
data in ranges of less than 1 percent, 1
to 3 percent, and greater than 3 percent.
As shown in Table 25, for 60 percent of
the companies, the revenue impact is
less than 1 percent of annual revenue
and between 1 percent and 3 percent of
annual revenue for another 20 percent.
governmental jurisdiction qualifies as a
small entity and that this rule would
have a significant economic impact on
it, please submit a comment to the
Docket Management Facility at the
address under ADDRESSES. In your
comment, explain why you think it
qualifies and how and to what degree
this rule would economically affect it.
e. An identification, to the extent
practicable, of all relevant Federal rules
which may duplicate, overlap or conflict
with the proposed rule. This proposed
rule does not duplicate or conflict with
other Federal rules. This rulemaking
TABLE 25—ESTIMATED REVENUE
concerns vessel operations and the
Coast Guard has sole jurisdiction over
IMPACT ON SMALL BUSINESSES
this area at the Federal level. States may
Impact class
Count
Percent
not regulate in categories reserved for
regulation by the Coast Guard, so this
<1% ..................
12
60.0 proposed rule will not duplicate or
1%–3% .............
4
20.0
>3% ..................
4
20.0 conflict with any State regulations.
f. Descriptions of any significant
Total ..............
20
100.0 alternatives to the proposed rule which
accomplish the stated objectives of
applicable statutes and which minimize
As shown in Table 18, the highest
any significant economic impact of the
cost to industry in any one year on an
proposed rule on small entities.
undiscounted basis is $62,790 in year
Alternatives were considered in this
10. The revenue impact analysis
proposed rule and are discussed in
indicates that 60 percent of the affected
population would have an impact of
section VIII.A of this preamble.
less than 1 percent and the other 20
Alternatives include various ways to
percent would have an impact between
apply the requirements to prepare and
1 percent and 3 percent. If you think
implement CSMs to U.S.-flagged vessels
that your business, organization, or
in coastwise trade. However, we
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13.25
Sfmt 4702
concluded that standards developed for
international trade cannot be
economically justified for vessels
operating only domestically at this time.
Therefore, the focus of this rulemaking
is exclusively on vessels in international
trade.
C. Assistance for Small Entities
Under section 213(a) of the Small
Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104–121),
we want to assist small entities in
understanding this proposed rule so that
they can better evaluate its effects on
them and participate in the rulemaking.
If the proposed rule would affect your
small business, organization, or
governmental jurisdiction and you have
questions concerning its provisions or
options for compliance, please consult
Mr. Ken Smith using the contact
information in FOR FURTHER INFORMATION
CONTACT. The Coast Guard will not
retaliate against small entities that
question or complain about this rule or
any policy or action of the Coast Guard.
Small businesses may send comments
on the actions of Federal employees
who enforce, or otherwise determine
compliance with, Federal regulations to
the Small Business and Agriculture
Regulatory Enforcement Ombudsman
and the Regional Small Business
Regulatory Fairness Boards. The
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Ombudsman evaluates these actions
annually and rates each agency’s
responsiveness to small business. If you
wish to comment on actions by
employees of the Coast Guard, call 1–
888–REG–FAIR (1–888–734–3247).
D. Collection of Information
This rule would call for a new
collection of information under the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3520). As defined in 5 CFR
1320.3(c), ‘‘collection of information’’
comprises reporting, recordkeeping,
monitoring, posting, labeling, and other
similar actions. The title and
description of the information
collection, a description of those who
must collect the information, and an
estimate of the total annual burden
follow. The estimate covers the time for
preparing and reporting for the
development of a CSM, revising a CSM,
notification of other hazardous
conditions, and notification of lost or
jettisoned cargo.
This collection of information applies
to rulemaking procedures regarding
cargo securing manuals. Specific areas
covered in this information collection
include 33 CFR Part 97, ‘‘Cargo Securing
Manuals;’’ 33 CFR Part 160, ‘‘Ports and
Waterways Safety-General;’’ and 46 CFR
Part 97, ‘‘Operations.’’ This rule would
align the CFR with SOLAS.
Title: Cargo Securing Manuals.
OMB Control Number: 1625–NEW
Summary of Collection of
Information: The rule would add a new
part 97, ‘‘Cargo Securing Manuals’’ to
chapter 33 of the CFR. The collection of
information burden for CSMs derives
from one of these three events:
• A SOLAS container vessel built
after the rule becomes effective would
need to develop and implement a CSM.
The new vessel will need an approved
CSM.
• If a vessel changes its type, the CSM
must be revised. An example of a type
change is when a general break-bulk
carrier is modified to become a
containership.
• If an existing vessel either changes
15 percent of its cargo securing systems
or more than 15 percent of its portable
securing devices, then the CSM must be
revised.
Additionally, the rule would impose
burdens for the notification of
hazardous conditions. Currently, these
notifications are made via VHS radio,
satellite radio, cell phones, and other
forms of electronic communication. The
proposed rule specifically allows for
electronic communications and we
anticipate this will continue to be how
the notifications are transmitted.
Need for Information: Vessel owners
and operators need to develop and
implement CSMs to fulfill international
safety standards established by SOLAS.
The Coast Guard needs timely
information on hazardous conditions to
carry out its missions relating to
protecting vessels, their crews and
passengers, and the environment.
Proposed Use of Information: For new
and modified CSMs, Coast Guardauthorized third party organizations
would review these manuals and if
found acceptable, approve them. The
Coast Guard would use the information
from the notification of hazardous
conditions to inform other vessel
operators/waterway users of the
situation and initiate any needed
measures to reduce or eliminate the
hazard. These actions would lead to a
reduction of vessel casualties and
pollution.
Description of Respondents: There are
two groups of respondents impacted by
this rule. The first group consists of
owners and operators of U.S.-flagged
vessels that need to submit new or
revised CSMs to the recognized
classification societies. The second
group consists of the operators of
vessels that would be required to report
hazardous conditions.
Number of Respondents: We estimate
that there would be 149 respondents
affected annually by the proposed CSM
requirements. The total is divided into
these two classes: (1) 6 related to CSM
plans, and (2) 143 for notifications of
hazardous conditions, which include
lost or jettisoned cargo and other
incidents. Table 26 describes the
calculations for developing the
estimates of each requirement relating to
the CSM plans.
TABLE 26—ESTIMATES OF NUMBER OF RESPONDENTS
Class
Requirement
Description
CSM Plans ......................
Develop CSM—new vessel .......................
Notifications of lost or jettisoned cargo .....
Notifications Total ......................................
From U.S. vessel population data of 26
vessels (Table 4), average new builds
2009–2011.
MISLE data shows none of the affected
vessels have changed vessel type from
2001–2012.
Annual rate of 11.3% from information
supplied by an approved organization.
Applied to U.S. population (see Table
4), (26 * 11.3%).
....................................................................
From MISLE, average of 2009–2011 notifications.
U.S. notifications, Table 9, year 10 ...........
....................................................................
....................................................................
....................................................................
Revise CSM—change in vessel type ........
Revise CSM—replace CSM systems or
equipment.
Notifications .....................
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Grand Total ..............
CSM Total ..................................................
Notifications of hazardous condition .........
Frequency of Response: A CSM is
valid indefinitely, as long as it does not
meet any of the conditions for a
revision. The reporting of hazardous
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conditions occurs as needed. In the
subsequent ‘‘Number of Respondents’’
section, we present annual estimates of
the reports.
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Count
Total
3
....................
0
....................
3
....................
....................
141
6
....................
2
....................
....................
143
....................
149
Burden of Response: The burden
hours per requirement is estimated and
shown below in Table 27.
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TABLE 27—ANNUAL BURDEN HOURS PER REQUEST
Requirement
Hours
Develop new CSM ........................................................................
Revise CSM—change in vessel type ...........................................
Revise CSM—change in cargo securing systems or equipment
Notification of hazardous condition ...............................................
Notification of lost of jettisoned cargo ...........................................
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Estimated Total Annual Burden: We
estimate that the total annual burden to
industry will be 240 hours (rounded).
Table 28 displays the total burden hours
for each request:
48
48
20
0.25
0.25
Notes
8 hours to survey the vessel and 40 hours to draft the CSM.
8 hours to survey the vessel and 40 hours to draft the CSM.
20 hours to revise the existing CSM.
0.25 hours for vessel crew to prepare and transmit the notice.
0.25 hours for vessel crew to prepare and transmit the notice.
G. Taking of Private Property
E. Federalism
A rule has implications for federalism
under E.O. 13132, Federalism, if it has
substantial direct effects on the States,
on the relationship between the national
government and the States, or on the
TABLE 28—TOTAL ANNUAL BURDEN
distribution of power and
HOURS
responsibilities among the various
Requirement
Hours levels of government. We have analyzed
this proposed rule under E.O. 13132 and
Develop new CSM ............................
144 have determined that it does not have
Revise CSM—change in vessel type
0 implications for federalism. Our
Revise CSM—change in cargo seanalysis follows.
curing systems or equipment ........
60
It is well settled that States may not
Notification of hazardous condition ..
35.25
Notification of lost of jettisoned
regulate in categories reserved for
cargo .............................................
0.5 regulation by the Coast Guard. It is also
well settled, now, that all of the
categories covered in 46 U.S.C. 3306,
Reason For Proposed Change: The
3703, 7101, and 8101 (design,
rule would require collections of
construction, alteration, repair,
information regarding these two
activities: (1) development or revision of maintenance, operation, equipping,
a CSM, and 2) notification of hazardous personnel qualification, and manning of
conditions, including lost or jettisoned
vessels), as well as the reporting of
cargo.
casualties and any other category in
which Congress intended the Coast
As required by the Paperwork
Guard to be the sole source of a vessel’s
Reduction Act of 1995 (44 U.S.C.
obligations, are within the field
3507(d)), we will submit a copy of this
foreclosed from regulation by the States.
SNPRM to OMB for its review of the
(See the decision of the Supreme Court
collection of information.
in the consolidated cases of United
We ask for public comment on the
States v. Locke and Intertanko v. Locke,
proposed collection of information to
529 U.S. 89, 120 S.Ct. 1135 (March 6,
help us determine how useful the
2000).
information is; whether it can help us
This proposed rule on cargo securing
perform our functions better; whether it
is readily available elsewhere; how
falls into the category of vessel
accurate our estimate of the burden of
operation. Because the States may not
collection is; how valid our methods for regulate within this category,
determining burden are; how we can
preemption under E.O. 13132 is not an
improve the quality, usefulness, and
issue.
clarity of the information; and how we
F. Unfunded Mandates Reform Act
can minimize the burden of collection.
If you submit comments on the
The Unfunded Mandates Reform Act
collection of information, submit them
of 1995 (2 U.S.C. 1531–1538) requires
both to OMB and to the Docket
Federal agencies to assess the effects of
Management Facility where indicated
their discretionary regulatory actions. In
under ADDRESSES, by the date under
particular, the Act addresses actions
DATES.
that may result in the expenditure by a
State, local, or tribal government, in the
You need not respond to a collection
aggregate, or by the private sector of
of information unless it displays a
$100,000,000 (adjusted for inflation) or
currently valid control number from
more in any one year. Though this
OMB. Before the collection
proposed rule would not result in such
requirements in this final rule can be
enforced, OMB must approve Coast
an expenditure, we do discuss the
Guard’s request to collect this
effects of this rule elsewhere in this
information.
preamble.
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This proposed rule would not cause a
taking of private property or otherwise
have taking implications under E.O.
12630, Governmental Actions and
Interference with Constitutionally
Protected Property Rights.
H. Civil Justice Reform
This proposed rule meets applicable
standards in sections 3(a) and 3(b)(2) of
E. O. 12988, Civil Justice Reform, to
minimize litigation, eliminate
ambiguity, and reduce burden.
I. Protection of Children
We have analyzed this proposed rule
under E.O. 13045, Protection of
Children from Environmental Health
Risks and Safety Risks. This rule is not
an economically significant rule and
would not create an environmental risk
to health or risk to safety that might
disproportionately affect children.
J. Indian Tribal Governments
This proposed rule does not have
tribal implications under E.O. 13175,
Consultation and Coordination with
Indian Tribal Governments, because it
would not have a substantial direct
effect on one or more Indian tribes, on
the relationship between the Federal
Government and Indian tribes, or on the
distribution of power and
responsibilities between the Federal
Government and Indian tribes.
K. Energy Effects
We have analyzed this proposed rule
under E.O. 13211, Actions Concerning
Regulations That Significantly Affect
Energy Supply, Distribution, or Use. We
have determined that it is not a
‘‘significant energy action’’ under that
order because it is not a ‘‘significant
regulatory action’’ under E.O. 12866 and
is not likely to have a significant
adverse effect on the supply,
distribution, or use of energy. The
Administrator of the Office of
Information and Regulatory Affairs has
not designated it as a significant energy
action. Therefore, it does not require a
Statement of Energy Effects under E.O.
13211.
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L. Technical Standards
The National Technology Transfer
and Advancement Act (15 U.S.C. 272
note) directs agencies to use voluntary
consensus standards in their regulatory
activities unless the agency provides
Congress, through the OMB, with an
explanation of why using these
standards would be inconsistent with
applicable law or otherwise impractical.
Voluntary consensus standards are
technical standards (e.g., specifications
of materials, performance, design, or
operation; test methods; sampling
procedures; and related management
systems practices) that are developed or
adopted by voluntary consensus
standards bodies.
This proposed rule uses technical
standards other than voluntary
consensus standards. It incorporates
guidance developed by the IMO, an
international organization under United
Nations auspices. We are not aware of
any voluntary consensus standards that
are pertinent to this rule. If you are
aware of voluntary consensus standards
that might apply, please identify them
by sending a comment to the docket
using one of the methods under
ADDRESSES. In your comment, please
explain why you think the standards
might apply.
M. Environment
We have analyzed this proposed rule
under Department of Homeland
Security Management Directive 023–01
and Commandant Instruction
M16475.lD, which guide the Coast
Guard in complying with the National
Environmental Policy Act of 1969
(NEPA) (42 U.S.C. 4321–4370f), and
have made a preliminary determination
that this action is one of a category of
actions that do not individually or
cumulatively have a significant effect on
the human environment. A preliminary
environmental analysis checklist
supporting this determination is
available in the docket where indicated
under the ‘‘Public Participation and
Request for Comments’’ section of this
preamble. This action falls under
section 2.B.2, figure 2–1, paragraph
(34)(a) and involves regulations which
are editorial or procedural. We seek any
comments or information that may lead
to the discovery of a significant
environmental impact from this
proposed rule.
List of Subjects
33 CFR Part 97
Cargo stowage and securing, Cargo
vessels, Hazardous materials, Reporting
and recordkeeping requirements,
Incorporation by reference.
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33 CFR Part 160
Administrative practice and
procedure, Harbors, Hazardous
materials transportation, Marine safety,
Navigation (water), Reporting and
recordkeeping requirements, Vessels,
Waterways.
46 CFR Part 97
Cargo vessels, Marine safety,
Navigation (water), Reporting and
recordkeeping requirements.
For the reasons discussed in the
preamble, the Coast Guard proposes to
add 33 CFR part 97 and amend 33 CFR
Part 160 and 46 CFR Part 97 as follows:
TITLE 33—NAVIGATION AND NAVIGABLE
WATERS
■
1. Add part 97 to read as follows:
PART 97—RULES FOR THE SAFE
OPERATION OF VESSELS, STOWAGE
AND SECURING OF CARGOES
Subpart A—CARGO SECURING MANUALS
97.100 Applicability—Electronic
documentation.
97.105 Definitions.
97.110 Incorporation by reference.
97.115 Reporting lost or jettisoned cargo.
97.120 Cargo securing manuals.
97.121–97.199 [Reserved]
97.200 Cargo securing manual (CSM)
approval for U.S.-flagged vessels on
international voyages.
97.205 Requirements for amending an
approved cargo securing manual (CSM).
97.210 Appeals.
97.211–97.299 [Reserved]
97.300 Authorized cargo securing manual
(CSM) approval authorities.
97.305 Requests for authorization to act as
cargo securing manual (CSM) approval
authority.
97.310 Criteria for authorization.
97.320 Requirements for authorized
approval organizations.
97.320 Revocation of authorization.
Subpart B—[Reserved]
Authority: 46 U.S.C. 2103, 3306; E.O.
12234; Department of Homeland Security
Delegation No. 0170.1(92)(a) and (b).
PART 97—RULES FOR THE SAFE
OPERATION OF VESSELS, STOWAGE
AND SECURING OF CARGOES
Subpart A—Cargo Securing Manuals
§ 97.100 Applicability—Electronic
documentation.
(a) This part applies to—
(1) A vessel of 500 gross tons or more
on an international voyage that must
comply with Chapter VI/5.6 or Chapter
VII/5 of the International Convention for
the Safety of Life at Sea, 1974 as
amended (SOLAS) and that does not
solely carry liquid or solid cargoes in
bulk, and that is either a U.S.-flagged
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cargo vessel, or a foreign-flagged cargo
vessel that is operating in waters subject
to the jurisdiction of the United States;
(2) A U.S.-flagged cargo vessel that is
less than 500 gross tons but that chooses
to have this part applied to it by
submitting a cargo securing manual for
approval in accordance with
§ 97.200(a)(3);
(3) A foreign-flagged cargo vessel of
500 gross tons or more on an
international voyage from a country not
signatory to SOLAS that would
otherwise be required to comply with
Chapter VI/5.6 or Chapter VII/5 of
SOLAS and that does not solely carry
liquid or solid cargoes in bulk and is
operating in waters subject to the
jurisdiction of the United States; and
(4) Any organization applying to be
selected as a cargo securing manual
approval authority.
(b) This part does not apply to a
vessel owned by the Maritime
Administration that is part of the Ready
Reserve Force or the title of which is
vested in the United States and which
is used for public purposes only.
(c) Any manual, letter, request,
appeal, or ruling required by this part
may be provided or submitted in
electronic form as well as in printed
form.
§ 97.105
Definitions.
As used in this part—
Approval authority means a CSM
approval authority, as that term is
defined in this section.
Cargo means the goods or
merchandise conveyed in a vessel, and
includes but is not limited to cargo that
can be measured as a ‘‘cargo unit’’ as
that term is used in the International
Maritime Organization’s Code of Safe
Practice for Cargo Stowage and
Securing, 2003 edition: ‘‘a vehicle,
container, flat, pallet, portable tank,
packaged unit, or any other entity, etc.,
and loading equipment, or any part
thereof, which belongs to the ship but
is not fixed to the ship . . .’’; but it does
not include other vessel equipment or
the incidental personal possessions of
persons on board the vessel.
Cargo safe access plan (CSAP) means
a plan included in the cargo securing
manual that provides detailed
information on safe access for persons
engaged in work connected with cargo
stowage and securing on ships that are
specifically designed and fitted for the
purpose of carrying containers.
Cargo securing manual (CSM) means
an electronic or printed manual
developed to meet the requirements of
SOLAS and this part that is used by the
master of a vessel to properly stow and
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secure cargoes on the vessel for which
it is developed.
Cargo securing manual approval
authority or CSM approval authority
means an organization that meets the
requirements of this part, and that the
Commandant has authorized to conduct
certain actions and issue electronic or
printed approval letters on behalf of the
United States.
Captain of the Port (COTP) means the
U.S. Coast Guard officer as described in
33 CFR 6.01–3.
Commandant, except as otherwise
specified, means the Chief, Office of
Operating and Environmental
Standards, whose address is COMDT
(CG–OES) 2100 2nd Street SW., Stop
7126, Washington, DC 20593–7126 and
whose telephone number is 202–372–
1404.
Container means an article of
transport equipment described in 49
CFR 450.3.
Container vessel means a vessel
specifically designed and fitted for the
purpose of carrying containers.
International voyage means a voyage
between a port or place in one country
(or its possessions) and a port or place
in another country.
emcdonald on DSK67QTVN1PROD with PROPOSALS
§ 97.110
Incorporation by reference.
(a) Certain material is incorporated by
reference into this part with the
approval of the Director of the Federal
Register under 5 U.S.C. 552(a) and 1
CFR part 51. To enforce any edition
other than that specified in this section,
the Coast Guard must publish notice of
change in the Federal Register and the
material must be available to the public.
All approved material is available for
inspection at the U.S. Coast Guard,
Headquarters, Office of Operating and
Environmental Standards (CG–OES),
2100 Second Street SW., Stop 7126,
Washington, DC 20593–7126, and is
available from the sources listed below.
It is also available for inspection at the
National Archives and Records
Administration (NARA). For
information on the availability of this
material at NARA, call 202–741–6030 or
go to https://www.archives.gov/federal_
register/code_of_federal_regulations/
ibr_locations.html.
(b) International Maritime
Organization (IMO), Publications
Section, 4 Albert Embankment, London,
SE1 7SR, United Kingdom, +44(0)20
7735 7611, https://www.imo.org.
(1) Maritime Safety Committee
Circular 1353 (MSC.1/Circ. 1353),
Guidelines for the Preparation of the
Cargo Securing Manual, June 30, 2010–
97, IBR approved for § 97.120.
(2) Maritime Safety Committee
Circular 1352 (MSC.1/Circ.1352), Cargo
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Stowage and Securing (CSS Code)
Annex 14 Guidance on Providing Safe
Working Conditions for Securing of
Containers on Deck, June 30, 2010–97,
IBR approved for § 97.120.
(3) Assembly Resolution 739(18)
(Res.A.739(18)), Guidelines for the
Authorization of Organizations Acting
on Behalf of the Administration,
November 4, 1993–97, IBR approved for
§ 97.310.
§ 97.115
cargo.
Reporting lost or jettisoned
(a) In the event a vessel loses or
jettisons at sea any cargo described in
paragraph (b)(1) of this section, it must
comply with the immediate notification
requirements of 33 CFR 160.215, and if
the cargo contains hazardous material as
defined in paragraph (b)(2) of this
section the vessel must also report as
soon as possible in accordance with 49
CFR 176.48.
(b)(1) The cargo to which this section
applies includes any container, and any
other cargo the loss or jettisoning of
which could adversely affect the safety
of any vessel, bridge, structure, or shore
area or the environmental quality of any
port, harbor, or navigable waterway of
the United States.
(2) As used in this section,
‘‘hazardous material’’ means a substance
or material designated by the Secretary
of Transportation as capable of posing
an unreasonable risk to health, safety,
and property when transported in
commerce. The term includes hazardous
substances, hazardous wastes, marine
pollutants, and elevated temperature
materials as defined in 49 CFR 171.8,
materials designated as hazardous under
the provisions of 49 CFR 172.101, and
materials that meet the defining criteria
for hazard classes and divisions in 49
CFR part 173.
§ 97.120
Cargo securing manuals.
(a)(1) Any vessel to which this part
applies must have a cargo securing
manual (CSM) on board that has been
approved by the government of the
country whose flag the vessel is entitled
to fly; and a CSM approved after June
30, 2010 must at a minimum meet the
guidelines in Maritime Safety
Committee Circular 1353 (MSC.1/Circ.
1353), Guidelines for the Preparation of
the Cargo Securing Manual
(incorporated by reference, see 33 CFR
97.110).
(2) A container vessel with a keel laid
on or after January 1, 2015 must include
a cargo safe access plan that at a
minimum meets the guidelines in
Maritime Safety Committee Circular
1352 (MSC.1/Circ.1352), Cargo Stowage
and Securing (CSS Code) Annex 14
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Sfmt 4702
Guidance on Providing Safe Working
Conditions for Securing of Containers
on Deck (incorporated by reference, see
33 CFR 97.110).
(b) While operating in waters under
the jurisdiction of the United States, the
Coast Guard may board any vessel to
which this part applies to determine
that the vessel has the document(s)
required by paragraph (a) of this section
onboard. Any foreign-flagged vessel
found not to be in compliance with
paragraph (a) may be detained by order
of the COTP at the port or terminal
where the noncompliance is found until
the COTP determines that the vessel can
go to sea without presenting an
unreasonable threat of harm to the port,
the marine environment, the vessel, or
its crew.
§§ 97.121–97.199
[Reserved]
§ 97.200 Cargo securing manual (CSM)
approval for U.S.-flagged vessels on
international voyages.
(a)(1) An applicant for CSM approval
may be the owner or operator of the
vessel, or a person acting on the owner
or operator’s behalf.
(2) The Commandant is responsible
for overseeing and managing the review
and approval of approval authority
applications and provides an up-to-date
list of organizations authorized to act
under this subpart, which is available at
https://www.uscg.mil/hq/cg5/cg522/
cg5222 or by requesting it in writing
from the Commandant and enclosing a
self-addressed, stamped envelope.
(3) The applicant must submit two
dated copies of a CSM that meets the
requirements of this part to a CSM
approval authority for review and
approval. If any amendments are
submitted they must be dated. The CSM
must include a ‘‘change page’’
document to ensure continuous
documentation of amendments made
and the dates they were completed.
(4) The approval authority will retain
one copy of the CSM for its records.
(b) If the approval authority completes
the review process and approves the
CSM, the approval authority will
provide a CSM approval letter on its
letterhead, containing—
(1) Date of CSM approval;
(2) A subject line reading:
‘‘APPROVAL OF CARGO SECURING
MANUAL (AMENDMENT—if
applicable) FOR THE M/V ____,
OFFICIAL NUMBER ____’’;
(3) The following statement: ‘‘This is
to certify that the Cargo Securing
Manual (Amendment—if applicable)
dated ____ for the M/V ____, Official
Number ____, has been approved on
behalf of the United States. The Cargo
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Securing Manual (Amendment—if
applicable) was reviewed for
compliance with Maritime Safety
Committee Circular 1353 (MSC.1/Circ.
1353) for content, and correctness of the
calculations on which the approval is
based. This approval letter is to be kept
with the Cargo Securing Manual, as
proof of compliance with regulations
VI/5.6 and VII5 of the 2004 amendments
to the International Convention for the
Safety of Life at Sea (SOLAS) 1974.’’;
(4) Signature of the approval authority
official responsible for review and
approval of the CSM; and
(5) The approval authority’s seal or
stamp.
(c) If the approval authority completes
the review process and disapproves the
CSM, the approval authority will
provide a letter on its letterhead,
containing—
(1) Date of CSM disapproval; and
(2) Explanation of why the CSM was
disapproved and what the submitter
must do to correct deficiencies.
(d) The submitter of a disapproved
CSM may resubmit the CSM with
amendments for further review, either to
correct deficiencies noted by the
approval authority, or to expand the
CSM to fully meet the requirements of
this part.
(e) The original copy of the CSM
approval letter must be kept with the
approved CSM and its amendments,
together with supporting documents
and calculations used in granting the
approval, onboard the vessel for review
by Coast Guard personnel upon request.
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§ 97.205 Requirements for amending an
approved cargo securing manual (CSM).
Resubmission and re-approval by a
CSM approval authority are required
after any event listed in this section.
(a) Reconfiguration of a vessel from
one type of cargo carriage to another
(e.g., a general break-bulk cargo vessel
reconfigured to a container or a roll-on/
roll-off vessel).
(b) Reconfiguration or replacement of
15 percent or more of the vessel’s fixed
cargo securing or tie down systems with
different types of devices or systems.
(c) Replacement of 15 percent or more
of the vessel’s portable cargo securing
devices, with different types of devices
for securing the cargo not already used
aboard the vessel (e.g., wire lashings
replaced with turnbuckles or chains).
§ 97.210
Appeals.
(a) A vessel owner or operator, or
person acting on their behalf, who
disagrees with a decision of a cargo
securing manual approval authority may
submit a written appeal to the approval
authority requesting reconsideration of
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information in dispute. Within 30 days
of receiving the appeal, the approval
authority must provide the vessel owner
with a final written ruling on the
request, with a copy to the
Commandant.
(b) A vessel owner who is dissatisfied
with the approval authority’s final
written ruling may appeal directly to the
Commandant. The appeal must be made
in writing and include the
documentation and supporting evidence
the owner wants to be considered, and
may ask the Commandant to stay the
effect of the appealed decision while it
is under review by the Commandant.
(c) The Commandant will make a
decision on the appeal and send a
formal response to the vessel owner and
a copy to the approval authority. The
Commandant’s decision will constitute
final agency action on the appeal
request.
§§ 97.211–97.299
[Reserved]
§ 97.300 Authorized cargo securing
manual (CSM) approval authorities.
(a) The following organizations are
authorized to act on behalf of the U.S.
for the review and approval of CSMs:
(1) The American Bureau of Shipping,
ABS Plaza, 16855 Northchase Drive,
Houston, TX 77060, 281–977–5800,
https://www.eagle.org.
(2) Lloyd’s Register of Shipping, 71
Fenchurch Street, London EC3M 4BS,
United Kingdom, +44(0)20 7709 9166,
https://www.lr.org.
(3) Any recognized classification
society to which the Coast Guard has
delegated issuance of a Cargo Ship
Safety Equipment Certificate in
accordance with 46 CFR 8.320(b)(4). A
list of these organizations can be found
at www.uscg.mil/hq/cg5/cg522/cg5222
in the Alternate Compliance Program
site under ‘‘Programs & Services’’.
(4) The National Cargo Bureau, Inc.,
17 Battery Place, Suite 1232, New York,
NY 10004–1110, 212–785–8300, https://
www.natcargo.org.
(b) Reserved.
§ 97.305 Requests for authorization to act
as cargo securing manual (CSM) approval
authority.
An organization seeking authorization
as a CSM approval authority must make
a request to the Commandant for
authorization. The request must
include, in writing, the items listed in
this section or as otherwise specified by
the Commandant.
(a) A certified copy of the
organization’s certificate of
incorporation or partnership on file
with a U.S. State, including the name
and address of the organization, with
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68807
written statements or documents which
show that—
(1) The organization’s owners,
managers, and employees are free from
influence or control by vessel
shipbuilders, owners, operators, lessors,
or other related commercial interests as
evidenced by past and present business
practices;
(2) The organization has
demonstrated, through other related
work, the capability to competently
evaluate CSMs for completeness and
sufficiency according to the
requirements of SOLAS and this part;
(3) The organization has an acceptable
degree of financial security, based on
recent audits by certified public
accountants over the last 5 years; and
(4) The organization maintains a
corporate office in the United States that
has adequate resources and staff to
support all aspects of CSM review,
approval, and recordkeeping.
(b) A listing of the names of the
organization’s principal executives,
with titles, telephone and telefax
numbers.
(c) A written general description of
the organization, covering the
ownership, managerial structure, and
organization components, including any
directly affiliated organizations, and
their functions utilized for supporting
technical services.
(d) A written list of technical services
the organization offers.
(e) A written general description of
the geographical area the organization
serves.
(f) A written general description of the
clients the organization is serving, or
intends to serve.
(g) A written general description of
similar work performed by the
organization in the past, noting the
amount and extent of such work
performed within the previous 3 years.
(h) A written listing of the names of
full-time professional staff employed by
the organization and available for
technical review and approval of CSMs
including:
(1) Naval architects and naval
engineers, with copies of their
professional credentials, college
degrees, and specialized training
certificates.
(2) Merchant mariners with Coast
Guard-issued credentials, with a
summary of their working experience on
board cargo vessels (including vessel
tonnage and types of cargo).
(3) Written proof of staff competence
to perform CSM review and approval,
evidenced by detailed summaries of
each individual’s experience (measured
in months) during the past 5 years of
evaluating maritime cargo securing
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systems. Experience summaries must be
documented on company letterhead and
endorsed by a company executive who
has had direct observation of the
individual and quality of his or her
work product.
(j) A complete description of the
organization’s internal quality control
processes including written standards
used by the organization to ensure
consistency in CSM review and
approval procedures by qualified
professionals.
(k) A description of the organization’s
training program for assuring continued
competency of professional employees
performing CSM review and approval
who are identified in the application.
(l) Evidence of financial stability over
the past 5-year period, such as financial
reports completed independently by
certified public accountants.
(m) A list of five or more business
references, including names, addresses,
and telephone numbers of principal
executives, who can attest to the
organization’s competence within the
past 2 years.
(n) A statement to the Coast Guard
that gives its officials permission to
inspect the organization’s facilities and
records of CSM review and approval on
behalf of the U.S. at any time with
reasonable advance notice.
(o) Any additional information the
organization deems to be pertinent.
emcdonald on DSK67QTVN1PROD with PROPOSALS
§ 97.310
Criteria for authorization.
(a) The Commandant will evaluate the
organization’s request for authorization
and supporting written materials,
looking for evidence of—
(1) The organization’s clear
assignment of management duties;
(2) Ethical standards for managers and
cargo securing manual (CSM) reviewers;
(3) Procedures for personnel training,
qualification, certification, and requalification that are consistent with
recognized industry standards;
(4) Acceptable standards available for
the organization’s internal auditing and
management review;
(5) Recordkeeping standards for CSM
review and approval;
(6) Methods used to review and
certify CSMs;
(7) Experience and knowledge
demonstrating competency to evaluate
CSMs for completeness and sufficiency
according to the requirements of
SOLAS;
(8) Methods for handling appeals; and
(9) Overall procedures consistent with
IMO Resolution A.739(18), ‘‘Guidelines
for the Authorization of Organizations
Acting on Behalf of the Administration’’
(incorporated by reference, see
§ 97.110).
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(b) After a favorable evaluation of the
organization’s request, the Commandant
may arrange to visit the organization’s
corporate and port offices for an on-site
evaluation of operations.
(c) When a request is approved, the
organization and the Coast Guard will
enter into the written agreement
provided for by 33 CFR 97.315. If the
request is not approved, the
Commandant will give the organization
a written explanation, and the
organization may resubmit its request if
it corrects any noted deficiencies.
§ 97.315 Requirements for authorized
approval organizations.
Approved organizations will enter
into a written agreement with the Coast
Guard that specifies:
(a) The period the authorization is
valid;
(b) Which duties and responsibilities
the organization may perform and what
approval letters it may issue on behalf
of the U.S.;
(c) Reports and information the
organization must send to the
Commandant;
(d) Actions the organization must take
to renew the agreement when it expires;
and
(e) Actions the organization must take
if the Commandant revokes
authorization pursuant to 33 CFR
97.320.
§ 97.320
Revocation of authorization.
The Commandant may revoke a cargo
securing manual (CSM) approval
authority’s authorization and remove it
from the list of CSM approval
authorities if it fails to maintain
acceptable standards. For the purposes
of 46 CFR subpart 1.03, such a
revocation would be treated as
involving the recognition of a
classification society and could be
appealed pursuant to 46 CFR 1.03–
15(h)(4). Upon revocation, the former
approval authority must send written
notice to each vessel owner whose CSM
it approved. The notice must include
the current list of CSM approval
authorities and state:
(a) That its authorization as a CSM
approval authority has been revoked;
(b) The Coast Guard’s explanation for
the revocation; and
(c) That the vessel’s CSM remains
valid as long as amendments have not
been completed which require it to be
re-approved pursuant to 33 CFR 97.200
or 97.205.
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Subpart B—[Reserved]
PART 160—PORTS AND WATERWAYS
SAFETY—GENERAL
2. The authority citation for part 160
continues to read as follows:
■
Authority: 33 U.S.C. 1223, 1231; 46 U.S.C.
Chapter 701; Department of Homeland
Security Delegation No. 0170.1. Subpart C is
also issued under the authority of 33 U.S.C.
11225 and 46 U.S.C. 3715.
■
3. Revise § 160.215 to read as follows:
§ 160.215
Notice of hazardous conditions.
(a) Whenever there is a hazardous
condition either onboard a vessel or
caused by a vessel or its operation, the
owner, agent, master, operator, or
person in charge must immediately
notify the nearest Coast Guard Sector
Office or Group Office, and in addition
submit any report required by 46 CFR
4.05–10.
(b) When the hazardous condition
involves cargo loss or jettisoning as
described in 33 CFR 97.115, the
notification required by paragraph (a) of
this section must include—
(1) What was lost, including a
description of cargo, substances
involved, and types of packages;
(2) How many were lost, including the
number of packages and quantity of
substances they represent;
(3) When the incident occurred,
including the time of the incident or
period of time over which the incident
occurred;
(4) Where the incident occurred,
including the exact or estimated
location of the incident, the route the
ship was taking, and the weather (wind
and sea) conditions at the time or
approximate time of the incident; and
(5) How the incident occurred,
including the circumstances of the
incident, the type of securing equipment
that was used, and any other material
failures that may have contributed to the
incident.
TITLE 46—SHIPPING
PART 97—OPERATIONS
4. The authority citation for part 97
continues to read as follows:
■
Authority: 33 U.S.C. 1321(j); 46 U.S.C.
2103, 3306, 6101; 49 U.S.C. 5103, 5106; E.O.
12234, 45 FR 58801, 3 CFR, 1980 Comp., p.
277; E.O. 12777, 56 FR 54757; 3 CFR, 1991
Comp., p. 351; Department of Homeland
Security Delegation No. 0170.1.
■
5. Add § 97.12–10 to read as follows:
§ 97.12–10
Cargo securing manuals.
Each U.S.-flagged vessel that must
comply with Chapter VI/5.6 or Chapter
VII/5 of the International Convention for
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the Safety of Life at Sea, 1974 as
amended must have on board a cargo
securing manual that meets the
requirements of 33 CFR part 97.
68809
Dated: November 1, 2013,
J.G. Lantz,
Director of Commercial Regulations and
Standards, U.S. Coast Guard.
[FR Doc. 2013–26886 Filed 11–14–13; 8:45 am]
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]]>Agencies
[Federal Register Volume 78, Number 221 (Friday, November 15, 2013)]
[Proposed Rules]
[Pages 68784-68809]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-26886]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
Coast Guard
33 CFR Parts 97 and 160, and 46 CFR Part 97
[Docket No. USCG-2000-7080]
RIN 1625-AA25 [Formerly RIN 2115-AF97]
Cargo Securing Manuals
AGENCY: Coast Guard, DHS.
ACTION: Supplemental notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Coast Guard proposes requiring cargo securing manuals
(CSMs) on vessels of 500 gross tons or more traveling on international
voyages and carrying cargo that is other than solid or liquid bulk
cargo. The proposed regulations would authorize recognized
classification societies or other approval authorities to review and
approve CSMs on behalf of the Coast Guard. They would also prescribe
when and how the loss or jettisoning of cargo at sea must be reported.
The proposed regulations would help fulfill U.S. treaty obligations and
could help prevent or mitigate the consequences of vessel cargo loss.
This rulemaking promotes the Coast Guard's maritime safety and
stewardship missions.
DATES: Comments and related material must either be submitted to the
Coast Guard's online docket via https://www.regulations.gov on or before
February 13, 2014 or reach the Docket Management Facility by that date.
Comments sent to the Office of Management and Budget (OMB) on
collection of information must reach OMB on or before February 13,
2014.
ADDRESSES: You may submit comments identified by docket number USCG-
2000-7080 using any one of the following methods:
[[Page 68785]]
(1) Federal eRulemaking Portal: https://www.regulations.gov.
(2) Fax: 202-493-2251.
(3) Mail: Docket Management Facility (M-30), U.S. Department of
Transportation, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590-0001.
(4) Hand delivery: Same as mail address above, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The telephone
number is 202-366-9329.
To avoid duplication, please use only one of these four methods.
See the ``Public Participation and Request for Comments'' portion of
the SUPPLEMENTARY INFORMATION section below for instructions on
submitting comments.
Collection of Information Comments: If you have comments on the
collection of information discussed in section VIII.D. of this
preamble, you must also send comments to the Office of Information and
Regulatory Affairs (OIRA), Office of Management and Budget. To ensure
that your comments to OIRA are received on time, the preferred methods
are by email to oira_submission@omb.eop.gov (include the docket number
and ``Attention: Desk Officer for Coast Guard, DHS'' in the subject
line of the email) or fax at 202-395-6566. An alternate, though slower,
method is by U.S. mail to the Office of Information and Regulatory
Affairs, Office of Management and Budget, 725 17th Street NW.,
Washington, DC 20503, ATTN: Desk Officer, U.S. Coast Guard.
Viewing incorporation by reference material: You may inspect the
material proposed for incorporation by reference at room 1210, U.S.
Coast Guard Headquarters, 2100 Second Street SW., Stop 7126,
Washington, DC 20593-7126 between 9 a.m. and 4 p.m., Monday through
Friday, except Federal holidays. The telephone number is 202-372-1411.
Copies of the material are available as indicated in the
``Incorporation by Reference'' section of this preamble.
FOR FURTHER INFORMATION CONTACT: If you have questions on this proposed
rule, call or email Mr. Ken Smith, Project Manager, U.S. Coast Guard,
Headquarters, Vessel and Facility Operating Standards Division,
Commandant (CG-OES-2); telephone 202-372-1411, email
Ken.A.Smith@uscg.mil. If you have questions on viewing or submitting
material to the docket, call Renee V. Wright, Program Manager, Docket
Operations, telephone 202-366-9826.
SUPPLEMENTARY INFORMATION:
Table of Contents for Preamble
I. Public Participation and Request for Comments
A. Submitting Comments
B. Viewing Comments and Documents
C. Privacy Act
D. Public Meeting
II. Abbreviations
III. Basis and Purpose
IV. Background and Regulatory History
V. Discussion of Comments and Changes
VI. Discussion of the Proposed Rule
VII. Incorporation by Reference
VIII. Regulatory Analyses
A. Regulatory Planning and Review
B. Small Entities
C. Assistance for Small Entities
D. Collection of Information
E. Federalism
F. Unfunded Mandates Reform Act
G. Taking of Private Property
H. Civil Justice Reform
I. Protection of Children
J. Indian Tribal Governments
K. Energy Effects
L. Technical Standards
M. Environment
I. Public Participation and Request for Comments
We encourage you to participate in this rulemaking by submitting
comments and related materials. All comments received will be posted
without change to https://www.regulations.gov and will include any
personal information you have provided.
A. Submitting Comments
If you submit a comment, please include the docket number for this
rulemaking (USCG-2000-7080), indicate the specific section of this
document to which each comment applies, and provide a reason for each
suggestion or recommendation. You may submit your comments and material
online or by fax, mail, or hand delivery, but please use only one of
these means. We recommend that you include your name and a mailing
address, an email address, or a phone number in the body of your
document so that we can contact you if we have questions regarding your
submission.
To submit your comment online, go to https://www.regulations.gov,
and follow the instructions on that Web site. If you submit your
comments by mail or hand delivery, submit them in an unbound format, no
larger than 8\1/2\ by 11 inches, suitable for copying and electronic
filing. If you submit comments by mail and would like to know that they
reached the Facility, please enclose a stamped, self-addressed postcard
or envelope.
We will consider all comments and material received during the
comment period and may change this proposed rule based on your
comments.
B. Viewing Comments and Documents
To view comments, as well as documents mentioned in this preamble
as being available in the docket, go to https://www.regulations.gov, and
follow the instructions on that Web site. If you do not have access to
the internet, you may view the docket online by visiting the Docket
Management Facility in Room W12-140 on the ground floor of the
Department of Transportation West Building, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. We have an agreement with the Department of
Transportation to use the Docket Management Facility.
C. Privacy Act
Anyone can search the electronic form of comments received into any
of our dockets by the name of the individual submitting the comment (or
signing the comment, if submitted on behalf of an association,
business, labor union, etc.). You may review a Privacy Act notice
regarding our public dockets in the January 17, 2008, issue of the
Federal Register (73 FR 3316).
D. Public Meeting
We do not now plan to hold a public meeting. But you may submit a
request for one to the docket using one of the methods specified under
ADDRESSES. In your request, explain why you believe a public meeting
would be beneficial. If we decide to hold a public meeting, we will
announce its time and place in a later notice in the Federal Register.
II. Abbreviations
BLS U.S. Bureau of Labor Statistics
CFR Code of Federal Regulations
CSAP Cargo safe access plan
CSM Cargo Securing Manual
CSS Code Code of Safe Practice for Cargo Stowage and Securing
E.O. Executive Order
FR Federal Register
IMO International Maritime Organization
MARAD U.S. Department of Transportation's Maritime Administration
MSC Maritime Safety Committee
MISLE Marine Information for Safety and Law Enforcement
NPRM Notice of proposed rulemaking
NVIC Navigation and Vessel Inspection Circular
OMB Office of Management and Budget
OSHA Occupational Safety and Health Administration
Sec. Section symbol
SANS Ship Arrival Notification System
SNPRM Supplemental notice of proposed rulemaking
[[Page 68786]]
SOLAS International Convention for the Safety of Life at Sea, 1974
as amended
U.S.C. United States Code
III. Basis and Purpose
Sections 2103 and 3306 of Title 46, U.S. Code, provide the
statutory basis for this rulemaking. Section 2103 gives the Secretary
of the department in which the Coast Guard is operating general
regulatory authority to implement Subtitle II (Chapters 21 through 147)
of Title 46, which includes statutory requirements in 46 U.S.C. Chapter
33 for inspecting the vessels to which this rulemaking applies. Section
3306 gives the Secretary authority to regulate an inspected vessel's
operation, fittings, equipment, appliances, and other items in the
interest of safety. The Secretary's authority under both statutes has
been delegated to the Coast Guard in Department of Homeland Security
Delegation No. 0170.1(92)(a) and (b). In addition, the Secretary has
regulatory authority to implement the International Convention for the
Safety of Life at Sea, 1974 (SOLAS), under Executive Order (E.O.)
12234.
The purpose of this rulemaking is to align Coast Guard regulations
with SOLAS requirements for cargo securing manuals and apply those
requirements to U.S. vessels and foreign vessels in U.S. waters, and to
specify when and how the loss or jettisoning of cargo at sea must be
reported.
IV. Background and Regulatory History
Improperly secured maritime cargo threatens the safety of life,
property, and the environment. Several maritime incidents dating from
the early 1990s to the recent past underscore the risk of serious
injury or death, vessel loss, property damage, and environmental damage
caused by improperly secured cargo aboard vessels. A Coast Guard board
of inquiry established to review an incident off the coast of New
Jersey in 1992, which involved the loss of 21 containers, 4 of which
contained the hazardous material arsenic oxide, revealed that the
incident was caused by cargo securing failures and poor operational
planning. The Commandant of the Coast Guard approved the board's
recommendation that the Coast Guard adopt the International Maritime
Organization's (IMO) guidelines on cargo securing manuals. With the
support of other IMO member governments, the U.S. led a proposal to
include new requirements for CSMs in SOLAS. In 1994, the IMO amended
SOLAS in response to the growing international concern over maritime
incidents involving improperly secured cargo. The amendments provided
that, after 1997, vessels of 500 gross tons or more engaged in
international trade and carrying cargo other than solid or liquid bulk
material must carry a flag state-approved CSM and load, stow, and
secure cargo in compliance with the CSM. Shortly before the SOLAS
amendments took effect, the Coast Guard issued Navigation and Vessel
Inspection Circular (NVIC) No. 10-97 to provide guidance concerning the
SOLAS CSM standards until Coast Guard regulations could be developed.
Compliance with NVIC 10-97 is voluntary. In 2009, in response to
questions raised about lost containers during a Congressional hearing,
the Coast Guard estimated that between 500 and 2,000 containers are
lost at sea annually. In a recent paper submitted by the International
Organization for Standardization (ISO) to the IMO, ``Development of
Measures to Prevent Loss of Containers,'' the ISO notes that 10,000
containers are damaged during sea transport each year, of which 3,000
to 4,000 are lost overboard. The number of damaged and lost containers
has risen and continues to rise partly because of the growth in
container transports, and partly because of the larger impacts from
ever-larger containerships. In addition to the dangers that improperly
secured cargo and containers pose to vessels and crewmembers that
handle and transport them, they also pose dangers to the environment
and vessels at sea when lost overboard.
The SOLAS CSM requirements outline what a CSM must contain and
establish strength requirements for securing devices and arrangements.
They also describe how to stow and secure containers and other cargo.
These SOLAS requirements are not yet mandatory for U.S. vessels or for
foreign vessels operating in U.S. waters.
In a notice (64 FR 1648; Jan. 11, 1999) announcing a February 3,
1999, public meeting to discuss the SOLAS CSM requirements and cargo
securing issues, we suggested that the SOLAS CSM requirements for
vessels in international trade might be beneficial for U.S. vessels in
coastwise (domestic) trade as well. Two written comments were submitted
at the meeting. You may view them at https://regulations.gov under
docket number USCG-1998-4951. One commenter offered to review and
approve CSMs and the other urged Coast Guard to align any Coast Guard
regulations with those of the Occupational Safety and Health
Administration (OSHA). Under 29 U.S.C. 653(b)(1), OSHA's authority does
not extend to shipboard personnel who are subject to Coast Guard
regulations. Nevertheless, the Coast Guard has coordinated with OSHA to
ensure alignment of our regulations.
The first publication in this rulemaking was a notice of proposed
rulemaking (NPRM) published December 1, 2000 (65 FR 75201) entitled
``Cargo Securing on Vessels Operating in U.S. Waters.'' The NPRM
proposed incorporating SOLAS requirements for CSMs into Coast Guard
regulations and requested comment on five options for regulating cargo
securing on U.S. vessels in coastwise trade. The Coast Guard received
17 letters from industry and labor groups in response to the NPRM. We
address these comments in section V of this preamble.
V. Discussion of Comments and Changes
The 2000 NPRM drew comments from 15 sources, with two sources
submitting two letters. Twelve commenters were companies or trade
associations involved with maritime transportation. Two unions
commented, as did a Maritime Administration official. In addition, a
Coast Guard memorandum commemorating a meeting between Coast Guard
personnel and industry representatives, and the final report of the
Towing Safety Advisory Committee's (TSAC's) working group on cargo
securing, are treated in the docket as ``public submissions.''
TSAC is a committee that advises the Coast Guard under the Federal
Advisory Committee Act. The TSAC working group found that there are few
cargo losses from barges, and that the variety of cargo configurations
and cargo securing practices in the barge industry make it difficult to
apply a single cargo securing standard for those vessels. The working
group identified cargo securing best practices used by the barge
industry, and recommended that barge operators should voluntarily
develop, document, and periodically update cargo securing plans, train
personnel in procedures covered by those plans, and audit the results.
A barge operator agreed with the working group. An organization
representing barge operators, and one other commenter, agreed that
cargo loss from barges is extremely rare, and agreed that barge
operators should voluntarily develop cargo securing plans. Two other
commenters said they agree with the organization representing barge
operators. Another commenter said that seagoing barges are generally
safe from cargo loss. The relatively low rate of cargo loss in U.S.
coastwise trade is a major reason why we have decided not to extend
SOLAS-style cargo securing requirements to that trade.
[[Page 68787]]
Two transportation companies (and a third company that said it
agreed with one of the two) said that the NPRM's proposed regulatory
text for 46 CFR 97.210(e) (cargo securing manual contents) and 46 CFR
97.230 (inspection and maintenance of cargo securing devices) would
make useful additions to the SOLAS cargo securing requirements. Those
provisions have been omitted from this supplemental notice of proposed
rulemaking (SNPRM); the SNPRM addresses their topics by requiring CSMs
to comply with applicable standards contained in the IMO's 2010
Maritime Safety Committee Circulars (MSC.1/Circ.) 1352 (``Cargo Stowage
and Securing (CSS Code) Annex 14 Guidance on Providing Safe Working
Conditions for Securing of Containers on Deck'') and 1353 (``Revised
Guidelines for the Preparation of the Cargo Securing Manual''). These
two commenters also said that following a continuous examination
program would ensure good equipment maintenance and be less burdensome
than CSM regulatory requirements. Our SNPRM would allow, but not
require, operators to follow a continuous examination program. It would
describe, in proposed 33 CFR 97.205, when an approved CSM must be
amended and re-approved. The two commenters recommended that fixed and
portable cargo handling equipment be treated identically for regulatory
purposes. Our proposed regulations would not require the use of either
fixed or portable equipment. However, if portable equipment is used, it
is subject to special provisions set out in the IMO Circulars, and
incorporated by reference in proposed 33 CFR 97.110.
Two transportation companies said we needed to ensure that our
rulemaking does not create confusion between Coast Guard and OSHA
regulations. This topic was also discussed in the Coast Guard's meeting
with industry representatives. As discussed in section IV of this
preamble, we have aligned our regulations with OSHA's, to minimize
confusion.
One transportation company said the NPRM should have approached
safety issues relating to lashing cargo to decks. The same company said
the NPRM should have addressed vertical tandem loading and cargo
lifting devices. It said the Coast Guard should provide guidance to
shoreside personnel on segregating damaged or unserviceable cargo
equipment, and on dealing with cargo containers on which one of the
doors has been removed.
These safety issues were also discussed in the Coast Guard's
meeting with industry representatives, at which time the Coast Guard
said the issue was beyond the scope of this rulemaking but could become
an issue for IMO consideration in the future. Our proposed rule
addresses many of the safety issues by incorporating by reference IMO
Circulars MSC.1/Circ. 1352 and 1353, which take into account the IMO's
2010 Code of Safe Practice for Cargo Stowage and Securing (CSS Code).
The CSS Code contains new provisions for the safety of personnel
engaged in lashing operations which includes crew members and dock
workers alike.
The same company that raised the safety issues also expressed
concern that Coast Guard personnel might be inconsistent, in different
locations, in how they apply cargo securing policy guidance. We
encourage members of the regulated public who think they are being
treated unfairly or arbitrarily by Coast Guard personnel to bring the
matter to our attention. The Coast Guard will not retaliate against
persons or businesses that question or complain about any policy or
action of the Coast Guard.
Another transportation company expressed support for developing
cargo securing standards that would apply specifically to seagoing
barges. The commenter said the NPRM did not adequately assess the
economic impact of applying cargo securing regulations to seagoing
barges. The NPRM did not propose specific regulations for those vessels
and thus did not calculate any regulatory economic impact on them.
Seagoing barges in coastwise trade would not be affected by this SNPRM.
A third transportation company said that most cargo losses result
from container structural problems that the vessel operator cannot know
about or prevent. To guard against such risks, this commenter said that
hazardous material containers should be stowed as low as possible on
the deck. We agree that once containers are loaded onto a vessel it is
very difficult for a vessel operator to know about or prevent
structural problems which have gone undetected. In this regard, much
responsibility is placed on personnel associated with activities
related to the transportation of the container through the supply chain
before delivery of the container at a terminal, including personnel
involved in packing the contents and personnel involved in storing and
loading containers from shore. These personnel routinely conduct
internal and external inspections to ensure that the container is
suitable for transporting cargo and being lifted by container handling
equipment. These routine periodic inspections help reduce the
likelihood that structurally deficient containers will be loaded aboard
a vessel. Vessel operators are then responsible for ensuring that the
containers are stowed and secured in accordance with the CSM. Vessel
operators who identify a structural deficiency in a container after it
has been loaded should take whatever action is considered necessary to
ensure the container is safely secured, handled, or removed as the
specific situation may dictate. Stowage and transportation of hazardous
materials on vessels is guided by 49 CFR Part 176 and the IMO Dangerous
Goods Code which address hazardous materials according to each specific
type of cargo, recognizing that various types of hazardous materials
require special levels of handling. Our proposed rule addresses
container integrity and stowage as it relates to the securing of cargo
for safe transport by sea and incorporates by reference IMO Circulars
MSC.1/Circ. 1352 and 1353 concerning that issue.
A fourth transportation company said that no insured company would
transport $20 million worth of cargo without first having a qualified
surveyor approve how it is lashed to the deck. This commenter also said
that many small entities would be affected by domestic CSM regulations.
We recognize that the lashing and securing of some types of cargo may
receive increased scrutiny because of their overall value, and we
recognize that such cargo poses minimal risk for transport by sea.
However, since such surveys currently are not required by law, securing
arrangements are currently evaluated for only a few types of cargo. We
propose requiring CSMs on vessels of 500 gross tons or more traveling
on international voyages that are carrying any cargo that is other than
solid or liquid bulk cargo. Neither the NPRM nor this SNPRM proposes
specific domestic regulations and thus we have not calculated the small
entity impact that domestic CSM regulations could have. We request
additional public input on the topic and may conduct further analysis
based on that input.
A fifth transportation company said that regulatory language
suitable for larger ships would be unsuitable for smaller vessels in
coastwise trade. This commenter also expressed concern over how much
time would be needed for CSM approvals. As noted above, we have decided
not to apply SOLAS-style cargo securing requirements to coastwise
trade. By facilitating the use of third party organizations to approve
CSMs, we hope to avoid lengthy delays. If you are preparing a CSM for
approval,
[[Page 68788]]
we encourage you to consult with your approval authority upfront to
help eliminate unnecessary delays.
A cargo gear company cautioned us against incorporating outdated
industry standards in our regulations. This SNPRM proposes
incorporating only IMO Circulars MSC.1/Circ. 1352 and 1353, which take
into account the IMO's 2010 CSS Code. We invite public comment on that
proposal.
The Maritime Administration commenter said our regulations should
not apply to Administration-owned ships in the Ready Reserve Force. We
provide an exception for those vessels in proposed 33 CFR 97.100(b).
A seagoing barge operator said it was unclear whether the NPRM
covers seagoing barges, and whether it relates only to hazardous
materials or would cover non-hazardous materials as well. The NPRM
discussed the possible extension of SOLAS-style cargo securing
requirements to seagoing barges or other vessels in coastwise trade,
but we have decided against that extension. The NPRM did not
specifically limit its discussion to coastwise vessels carrying
hazardous material. This SNPRM proposes regulations that would apply to
seagoing barges in international trade. The regulations would also
apply to vessels carrying any cargo that is not solely in liquid or
solid bulk form.
The NPRM invited comments on five options for extending SOLAS
requirements for cargo securing on international voyages to voyages in
U.S. coastwise trade. We have decided against such an extension because
the cargo loss record of coastwise trade does not justify the
regulatory costs that coastwise industry would have to bear.
Nevertheless, the following discussion summarizes the public comment on
the five options.
Nine commenters commented on Option 1. Option 1 proposed extending
SOLAS requirements to coastwise voyages. Two companies and the two
unions chose Option 1 as their preferred option. One company said it
would prefer a ``compromise'' between Options 1 and 2, with vessel-
specific standards that would comply with or exceed SOLAS standards.
The cargo gear company criticized Option 1 for not requiring regular
CSM review. One company said Option 1 is too restrictive, and another
company said it would require too much standardization. A seagoing
barge operator said Option 1 would not work for seagoing barges,
because no two barge cargoes are the same.
Five commenters commented on Option 2. Option 2 proposed allowing
each coastwise voyage vessel to set and document its own standards,
subject to Coast Guard approval. The cargo gear company said this
option should be evaluated in light of the Coast Guard's experience
with continuous examination programs, and noted similarities between
Options 2 and 5. One company said Option 2 requires an overly
burdensome consideration of too many variables. A seagoing barge
operator said Option 2 would not work for seagoing barges, but did not
explain the reasons for this statement. Another company said, without
explanation, that Option 2 would be its second choice of the options
presented. Another company said it would prefer a ``compromise''
between Options 1 and 2, with vessel-specific standards that would
comply with or exceed SOLAS standards.
Four commenters commented on Option 3. Option 3 proposed requiring
a coastwise voyage vessel to obtain a surveyor's certificate of loading
and securing, prior to departure, if the voyage would also be subject
to Pipeline and Hazardous Materials Safety Administration regulations
in 49 CFR part 176. The cargo gear company said its reaction to Option
3 would depend on the specific standards the Coast Guard would propose
for incorporation. A transportation company said the use of surveyors
for multiple voyages would not be feasible due to cost and surveyor
availability. A seagoing barge operator agreed that it would be
difficult or impossible to ensure a surveyor's availability. Another
company opposed Option 3 due to the high cost of hiring surveyors.
Four commenters commented on Option 4. Option 4 proposed developing
regulations that would allow each coastwise vessel owner to choose from
among Options 1, 2, and 3. One commenter opposed Option 4, but did not
make its reasons clear. The cargo gear company said Option 4 should be
attractive to those who favor cargo securing regulations for domestic
voyages, but did not express its own preference or opposition. A
seagoing barge operator said the ``menu of options'' provided by Option
4 could cause confusion. A company said it opposes Option 4 because it
combines the strengths, but also the weaknesses, of Options 1 through
3.
Four commenters commented on Option 5. Option 5 proposed
incorporating yet-to-be-developed coastwise voyage standards that
industry might draft in cooperation with TSAC. One company expressed
support but did not explain its preference for Option 5. Two companies
expressed preference for Option 5 because it would allow for the
development of standards that would be appropriate for different types
of vessel and operational needs; one of the two said the exact language
of Option 5 should be modified. A seagoing barge operator opposed
Option 5 because it would not ensure the development of appropriate
standards for different vessel types and operational needs.
VI. Discussion of Proposed Rule
We are issuing this SNPRM, rather than proceeding directly to a
final rule, for two reasons. First, much of the NPRM focused on the
possible extension of SOLAS requirements to coastwise voyages. We wish
to make it clear that we are no longer considering that extension, and
that our proposed regulations would apply only to international
voyages. Second, this SNPRM proposes some regulatory changes that were
not discussed in the NPRM. For example, we propose additional language
to help clarify what information needs to be reported when a cargo loss
or jettisoning event occurs, and what constitutes such an event; and we
propose new provisions for the use of classification societies or other
third parties in approving CSMs.
This SNPRM proposes incorporating by reference IMO Circulars MSC.1/
Circ. 1352 and 1353. These Circulars provide much of the guidance that
we attempted to provide in our 2000 NPRM, which was based on the more
limited guidance then available from the IMO's 1996 Circular MSC.1/
Circ. 745 (``Guidelines for the preparation of the Cargo Securing
Manual''). Table 1 shows where the NPRM's proposed regulatory text is
paralleled in the SNPRM.
Table 1--Regulatory Text Comparison, NPRM and SNPRM
[All references are to proposed sections in 33 CFR, part 97]
------------------------------------------------------------------------
NPRM SNPRM
------------------------------------------------------------------------
General, 97.100-97.130......................... 97.100-97.115
Cargo Securing Manual, 97.200-97.280........... 97.120
[[Page 68789]]
How will Cargo Securing Manual Requirements be 97.200-97.215
Approved and Enforced?, 97.300-97.350.........
Authorization of an Organization to Act on 97.300-97.320
Behalf of the U.S., 97.400-97.480.............
------------------------------------------------------------------------
Reporting loss or jettisoning of cargo. We propose prescribing in
33 CFR parts 97 and 160 when and how the accidental loss or deliberate
jettisoning of cargo at sea must be reported. Currently, 33 CFR 160.215
requires a vessel owner or operator to immediately notify the Coast
Guard whenever there is a hazardous condition caused by a vessel or its
operation. ``Hazardous condition'' is defined in 33 CFR 160.204 as
``any condition that may adversely affect the safety of any vessel or
the environmental quality of any port, harbor, or navigable waterway of
the United States.'' In our view, any loss or jettisoning of cargo at
sea must be considered a hazardous condition because, at a minimum, it
poses a navigational hazard by threatening vessel safety. We propose
making that explicit in part 97. We would also amend 33 CFR 160.215 by
prescribing specific information to be included in the notification if
the hazardous condition involves the loss or jettisoning of cargo. This
should enhance our ability to identify potential problems with securing
equipment, locate and warn mariners about drifting debris before it
endangers safe navigation, and assess and respond to any environmental
hazard created by the cargo loss.
An additional concern is containers that sink. Sunken containers
may no longer be a hazard to navigation, but they may pose long-term
threats to the environment. Our proposed reporting and recordkeeping
requirements would facilitate the long-term monitoring of sunken
containers and any needed salvage or remediation.
Incorporating SOLAS. We propose adding 33 CFR part 97 to
incorporate the existing SOLAS requirements for CSMs on vessels of 500
gross tons or more traveling on international voyages and carrying any
cargo other than solid or liquid bulk cargo. Smaller vessels would only
have to follow those requirements if they so choose--but if they choose
to have a CSM they would be bound by these proposed regulations just as
if they were vessels of 500 gross tons or more, including the
requirement that the CSM would need to be approved by an organization
that we have authorized to do so under proposed 33 CFR part 97. As a
practical matter, all existing vessels to which proposed 33 CFR part 97
would apply are already in compliance with SOLAS CSM requirements. Most
foreign countries are parties to SOLAS and already enforce the SOLAS
CSM requirements on their vessels. All U.S. vessels are already in
compliance because they need SOLAS certificates to enter foreign ports
and, to obtain those certificates, they have voluntarily complied with
Coast Guard NVIC 10-97.
NVIC 10-97 was based in part on IMO guidance contained in IMO
Circular MSC.1/Circ. 745. That MSC Circular was updated on June 30,
2010, by IMO Circular MSC.1/Circ. 1353, and since that time Coast
Guard-approved CSMs have had to meet Circular 1353 guidelines at a
minimum. Our proposed regulations would require vessels to meet the
Circular 1353 standards. CSMs approved before June 30, 2010 would not
need to be updated.
We propose provisions for approving and amending CSMs, and for
handling disputes over CSM approval. We would cross-reference those
provisions in the bulk solid cargo operations regulations in 46 CFR
subpart 97.12.
We propose that, as required by MSC Circular 1352, ``Amendments to
the Code of Safe Practice for Cargo Stowage and Securing (CSS Code),''
any container vessel, subject to SOLAS, whose keel is laid on or after
January 1, 2015, will need to include a cargo safe access plan that is
consistent with chapter 5 of the Annex to IMO Circular MSC.1/Circ.
1353, which in turn references Annex 14 (``Guidance on Providing Safe
Working Conditions for the Securing of Containers'') of the IMO 2010
CSS Code. A cargo safe access plan provides detailed information on
safe access for persons stowing and securing cargo on container ships
that are specifically designed and fitted for the purpose of carrying
containers.
Classification societies. Finally, proposed 33 CFR part 97 would
provide for our authorization of recognized classification societies
and other third party organizations to review and approve CSMs on our
behalf.
VII. Incorporation by Reference
Material proposed for incorporation by reference appears in
proposed 33 CFR 97.110. You may inspect this material at U.S. Coast
Guard Headquarters where indicated under ADDRESSES. Copies of the
material are available from the sources listed in Sec. 97.110. Before
publishing a binding rule, we will submit this material to the Director
of the Federal Register for approval of the incorporation by reference.
VIII. Regulatory Analyses
We developed this proposed rule after considering numerous statutes
and E.O.s related to rulemaking. Below we summarize our analyses based
on these statutes or E.O.s.
A. Regulatory Planning and Review
Executive Orders 12866 (``Regulatory Planning and Review'') and
13563 (``Improving Regulation and Regulatory Review'') direct agencies
to assess the costs and benefits of available regulatory alternatives
and, if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility.
This proposed rule is not a significant regulatory action under
section 3(f) of E.O. 12866 (as supplemented by E.O. 13563) and does not
require an assessment of potential costs and benefits under section
6(a)(3) of that Order. The Office of Management and Budget (OMB) has
not reviewed it under that Order. Nonetheless, we developed an analysis
of the costs and benefits of the proposed rule to ascertain its
probable impacts on industry. We consider all estimates and analysis in
this Regulatory Analysis to be preliminary and subject to change in
consideration of public comments. A preliminary regulatory assessment
follows.
[[Page 68790]]
1. Summary
This proposed rule would amend the CFR by adding the following
provisions:
Requirements for the reporting of lost or jettisoned
cargo;
The CSM requirements of SOLAS and the guidance in NVIC 10-
97; and
Procedures for authorization of third party organizations
to review and approve CSMs on the Coast Guard's behalf.
Please reference Table 2 below for a summary of our analysis.
Table 2--Summary of Regulatory Economic Impacts
----------------------------------------------------------------------------------------------------------------
Costs (7% discount
Affected rate)
Proposed changes Description population -------------------------- Benefits
Annualized Total
----------------------------------------------------------------------------------------------------------------
1. Reporting of lost or Codify lost or U.S. and foreign- $1,420 $9,970 Better tracking
jettisoned cargo. jettisoned cargo flag vessels and response of
as a hazardous engaged in lost or
condition and transport to or jettisoned
specify data to from a U.S. port. cargo.
be reported.
2. CSM requirements........... Codify SOLAS Owners/operators $45,903 $322,403 Increased
rules and of 7,163 enforcement
guidance from vessels: 26 U.S.- authority.
NVIC 10-97. flagged, 7,137
foreign-flagged.
3. Approval of authorized Codify guidance 6 currently $0 $0 Increased
organizations. from NVIC 10-97. approved enforcement.
organizations,
others applying
for approval
status.
----------------------------------------------------------------------------------------------------------------
Table 3 presents a summary of the 10-year cost schedule, showing
total costs on an undiscounted basis and discounted at 7 percent and 3
percent rates.
Table 3--Summary of the 10-Year Total Cost to the International Cargo Industry and U.S. Government
----------------------------------------------------------------------------------------------------------------
Undiscounted Total, discounted
Year ----------------------------------------------------------------
Industry Government Total 7% 3%
----------------------------------------------------------------------------------------------------------------
1.............................................. $38,788 $500 $39,288 $36,718 $38,144
2.............................................. 38,814 520 39,334 34,356 37,076
3.............................................. 38,854 550 39,404 32,165 36,060
4.............................................. 46,519 580 47,099 35,932 41,847
5.............................................. 46,558 610 47,168 33,630 40,688
6.............................................. 46,598 640 47,238 31,477 39,561
7.............................................. 54,263 670 54,933 34,210 44,666
8.............................................. 54,303 700 55,003 32,012 43,420
9.............................................. 54,342 730 55,072 29,956 42,208
10............................................. 62,020 770 62,790 31,919 46,722
----------------------------------------------------------------
Total.......................................... 481,059 6,270 487,329 332,375 410,392
Annualized................................. ........... ........... ........... 47,323 48,110
----------------------------------------------------------------------------------------------------------------
2. Affected Population
The applicable population (those vessels subject to the proposed
regulation) consists of U.S. and foreign-flagged vessels that:
Measure 500 gross tons or more,
Are engaged in international trade as indicated by
currently having a SOLAS Cargo Ship Safety Certificate, and
Carry any cargo other than solid or liquid bulk
commodities.
The United States is a signatory state to SOLAS, and U.S.-flagged
vessels in international trade must meet SOLAS requirements, including
the CSM rules, to receive a SOLAS certificate. An extract from the
Coast Guard's Marine Information for Safety and Law Enforcement (MISLE)
database identified 26 U.S.-flagged vessels as meeting the above
tonnage and cargo criteria.
The applicable foreign-flagged vessels are those that transit U.S.
waters. The source for data on these vessels was the Coast Guard's Ship
Arrival Notification System (SANS) database. This database contains
data on notifications of arrival and departure of vessels to and from
U.S. ports and is supplemented by data from MISLE. We extracted from
SANS the most recent three full years of data available, 2009 through
2011. This produced a list of 7,137 foreign-flagged vessels that had
one or more visits to a U.S. port and met the tonnage and cargo type
criteria. Table 4 summarizes the total applicable population data.
Table 4--Total Applicable Population, Non-Bulk Cargo Vessels, 500+ Gross
Tons
------------------------------------------------------------------------
Flag Vessels
------------------------------------------------------------------------
U.S........................................................... 26
Foreign....................................................... 7,137
---------
Total....................................................... 7,163
------------------------------------------------------------------------
Sources: MISLE & SANS.
3. Economic Analyses
We include an analysis of the costs, benefits, and alternatives for
each of the proposed rule's three provisions:
Requirements for the reporting of lost or jettisoned
cargo;
CSM requirements; and
Approval of authorized organizations.
[[Page 68791]]
a. Requirements for the Reporting of Lost or Jettisoned Cargo
i. Current practices, applicable population, and description of
changes and edits. As noted in section VI of this preamble, the current
regulations require the Coast Guard to be immediately notified when a
hazardous condition is caused by a vessel or its operation. Our
interpretation is that incidents of lost or jettisoned cargo \1\ should
be considered hazardous conditions and must be reported. However,
current industry practice does not correspond with that interpretation.
Captain James J. McNamara, President of the National Cargo Bureau,
wrote: ``When a container or containers are lost overboard, usually
there is no news release and seldom is the fact publicized. The loss is
only revealed to those in a need-to-know situation, i.e., the ship
owner, shipper, receiver and insurer.'' \2\ As we will discuss in
detail, our research indicates a significant underreporting of lost or
jettisoned cargo to the Coast Guard. Coast Guard and other vessels
cannot respond to these unreported incidents, so they represent a
residual risk to navigation and the marine environment. The
underreporting also prevents the Coast Guard and other interested
parties from accurately tracking the extent and trends of lost cargo
incidents.
---------------------------------------------------------------------------
\1\ All data and industry reports refer only to containers when
describing incidents involving lost or jettisoned cargo. We will
assume that containers will continue as the only lost cargo in the
future and refer to containers as the generic description of the
involved cargo for this analysis.
\2\ McNamara, James J., ``Containers and Cargoes Lost
Overboard'', National Cargo Bureau; conference of the International
Union of Marine Insurers; September 13, 2000, https://www.iumi.com/images/stories/IUMI/Pictures/Conferences/London2000/Wednesday/02%20mcnamara%20cargo.pdf.
---------------------------------------------------------------------------
In this proposed rule we include requirements for the immediate
reporting of lost or jettisoned cargo. We anticipate that adoption of
these requirements will correct this underreporting and lead to some
increased costs to industry. Table 5 presents the change matrix for
modifying the reporting of hazardous conditions and summarizes the
specific edit or change, the affected population, and the economic
impact.
Table 5--Change Matrix for Reporting of Hazardous Conditions in 33 CFR
------------------------------------------------------------------------
Reference & description Affected population Economic impact
------------------------------------------------------------------------
97.100 Applicability
------------------------------------------------------------------------
. . . (a)(1), U.S. vessels.. U.S. cargo vessels None, administrative
500+ GT, non-U.S. only.
cargo vessels in
U.S. waters 500+ GT.
97.105 Definitions.......... All vessels and None, administrative
approval only.
organizations.
97.110 Incorporation by All affected vessels None, administrative
reference, lists IBR and approval only.
references. organizations.
97.115 Situation requiring Vessels subject to Costs for correction
report, criteria for the rule that lose of noncompliance
reporting lost cargo. cargo overboard. with existing
requirements.
160.215(a), requirement to Operators of vessels No change, new label
report hazardous condition. involved in of existing text.
incident resulting
in hazardous
condition.
160.215(b), data to be Operators of vessels This requirement
reported. involved in references 97.115
incident resulting and all costs are
in hazardous included there.
condition.
------------------------------------------------------------------------
Source: Coast Guard analysis.
ii. Affected population and costs. The proposed rule applies to
both U.S. and foreign-flagged vessels engaged in transport to or from
U.S. ports. Therefore, the costs for reporting the lost or jettisoned
cargo must be accounted for throughout the entire applicable population
of 7,163 vessels, as reported in Table 4.
For 2009 through 2011 there were only five incidents of containers
lost or damaged at sea and reported to the Coast Guard. As previously
noted, industry experts assert that many incidents of lost or
jettisoned cargo are not reported to the appropriate authorities. In
order to test this, we developed an estimate of lost or jettisoned
cargo incidents that are subject to Coast Guard rules.
As the base of our estimate we used the annual estimate of 4,000
containers lost at sea worldwide, as reported in the October 2010 issue
of the Register Expert, the journal of the Netherlands Institute of
Registered Insurance Experts, and cited by the IMO.\3\ The report cited
by IMO only contained a global estimate; there were no break-outs by
route or flag of the vessel. We derived the U.S. share of global
container traffic using data reported by the U.S. Department of
Transportation's Maritime Administration (MARAD), which reported in
2010 that there were 369,155 container ship visits world-wide \4\ and
that 22,222 were at U.S. ports.\5\ Thus, the U.S. share of global
container traffic is 6.0 percent (22,222/369,155).
---------------------------------------------------------------------------
\3\ IMO Maritime Safety Committee report 89/22/11, p. 1. A copy
of this report is in the rulemaking docket.
\4\ See https://www.marad.dot.gov/documents/Vessel_Calls_at_US_Ports_Snapshot.pdf, p. 7, ``Global Vessel Calls by Country,
2011.''
\5\ See https://www.marad.dot.gov/documents/Vessel_Calls_at_US_Ports_Snapshot.pdf, p. 3. ``Containership Calls at U.S. Ports
by Size, 2006-2011.''
---------------------------------------------------------------------------
We used that 6.0 percent share to estimate that about 240
containers in U.S. traffic are lost annually (4,000 containers lost
world-wide * U.S. 6.0 percent share of traffic, rounded). The five
incidents lost a total of 25 containers, so we estimate on average
there were five lost containers per incident. Using those data, we
estimate that there will be 50 reports of lost containers to the Coast
Guard (240 containers lost/5 containers per incident, rounded to the
nearest 10) in the first year the rule would become effective.
The Tioga Group, a freight transportation services consulting
firm,\6\ in its report \7\ on the container market to the port
authorities of Los Angeles and Long Beach, presents estimates of 4.9
percent annual compounded growth rate for the U.S. in container traffic
from 2010 to 2020. We assume that the number of lost container
incidents will grow proportionally with the growth in container trade.
We applied the Tioga Group's estimate of 4.9 percent growth rate to the
base estimate of 50 lost containers to years 2 through 10 in this
[[Page 68792]]
cost analysis. This yields an estimate of 77 incidents by year 10 (the
complete series is shown in the ``Estimated Incidents'' column of Table
7).
---------------------------------------------------------------------------
\6\ For information on The Tioga Group see www.tiogagroup.com.
\7\ The Tioga Group, Inc. and IHS Global Insight, ``San Pedro
Bay Container Forecast Update'', Exhibit 33: Total U.S. Loaded Total
TEU and CAGRs, p. 33, www.portoflosangeles.org/pdf/spb_container_forecast_update_073109.pdf.
---------------------------------------------------------------------------
When cargo is lost or jettisoned, the vessel staff already collects
data for company purposes.\8\ Thus, the only additional cost for
compliance with the proposed rule is the time to report the data to the
Coast Guard and for the Coast Guard to record the data. Coast Guard
staff who are familiar with vessel operations and incident reporting
estimated that it would take 0.25 hours for a Master or other senior
ship's officer to compile a report and transmit it to the Coast Guard.
---------------------------------------------------------------------------
\8\ Captain James J. McNamara, ``Containers and Cargo Lost
Overboard'', p. 2. National Cargo Bureau; conference of the
International Union of Marine Insurers; September 13, 2000, https://www.iumi.com/images/stories/IUMI/Pictures/Conferences/London2000/Wednesday/02%20mcnamara%20cargo.pdf.
---------------------------------------------------------------------------
The wage rate for the Master was obtained from the U.S. Bureau of
Labor Statistics (BLS), using Occupational Series 53-5021, Captains,
Masters, and Pilots of Water Vessels. BLS reports that the hourly rate
for a Master is $34.50 per hour.\9\ To account for benefits, the load
factor, or ratio between total compensation and wages is calculated at
1.52,\10\ using BLS data. The fully loaded wage rate for a Master is
estimated at $53 per hour ($34.50 base wages * 1.52 load factor,
rounded up to capture the entire cost).
---------------------------------------------------------------------------
\9\ Mean wage, https://www.bls.gov/oes/2011/may/oes535021.htm.
\10\ Load Factor calculation, source: ftp://ftp.bls.gov/pub/special.requests/ocwc/ect/ececqrtn.pdf.
---------------------------------------------------------------------------
Similarly, it would take 0.25 hour for Coast Guard personnel at the
E-4 level to record the data. The wage rate for an E-4 rating is $40,
per Commandant Instruction 7310.1M.\11\ The unit cost for the Coast
Guard is $10.00 ($40 per hour * 0.25 hours).
---------------------------------------------------------------------------
\11\ https://www.uscg.mil/directives/ci/7000-7999/CI_7310_1M.pdf.
---------------------------------------------------------------------------
As shown in Table 6, the unit cost for reporting a lost or
jettisoned cargo is $23.25.
Table 6--Unit Cost for Reporting a Lost Container or Jettisoned Cargo
------------------------------------------------------------------------
Time Wage
Task (hours) rate Cost
------------------------------------------------------------------------
Master to report incident................. 0.25 $53 $13.25
Coast Guard data entry (E4)............... 0.25 40 10.00
-----------------------------
Total................................. ........ ........ 23.25
------------------------------------------------------------------------
Sources: BLS, Coast Guard estimates.
The baseline estimate of lost or jettisoned cargo incidents, the
growth rate, and the unit cost data provide the inputs into the 10-year
cost schedule. Table 7 displays the input data and the resulting cost
estimates on an undiscounted basis and discounted at 7 percent and 3
percent interest rates.
Table 7--Cost Schedule for Reporting Lost or Jettisoned Cargo
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discounted
Year Estimated Rounded Industry cost CG Cost Total cost -------------------------------
incidents incidents 7% 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 50 50 $663 $500 $1,163 $1,087 $1,129
2....................................... 52.45 52 689 520 1,209 1,056 1,140
3....................................... 55.02 55 729 550 1,279 1,044 1,170
4....................................... 57.72 58 769 580 1,349 1,029 1,199
5....................................... 60.55 61 808 610 1,418 1,011 1,223
6....................................... 63.52 64 848 640 1,488 992 1,246
7....................................... 66.63 67 888 670 1,558 970 1,267
8....................................... 69.89 70 928 700 1,628 948 1,285
9....................................... 73.31 73 967 730 1,697 923 1,301
10...................................... 76.90 77 1,020 770 1,790 910 1,332
---------------------------------------------------------------------------------------------------------------
Total............................... .............. .............. 8,309 6,270 14,579 9,970 12,292
Annualized.............................. .............. .............. .............. .............. .............. 1,420 1,441
--------------------------------------------------------------------------------------------------------------------------------------------------------
To provide a breakout of costs by flag status, we extracted from
the Coast Guard's SANS database the vessels calling on U.S. ports in
2011. We divided the vessels into U.S. and foreign-flag status. Table 8
presents the data and shows that in 2011, U.S. flag-vessels accounted
for 2.5% of the visits by vessels subject to this rule.
Table 8--2011 Visits to U.S. Ports by Flag-Status of Vessels 500 Gross
Tons or More, Non-Bulk Trade
------------------------------------------------------------------------
Flag Visits Percent
------------------------------------------------------------------------
U.S................................................. 514 2.5
Foreign............................................. 20,242 97.5
-------------------
Total............................................. 20,756 100.0
------------------------------------------------------------------------
Source: USCG, SANS database.
We produced a breakout for U.S. costs of lost or jettisoned cargo
by applying the 2.5 percent of visits by U.S. flag vessels from Table 8
to the cost estimates from Table 7. Please note that U.S. costs include
both costs to U.S.-flagged vessels and the Coast Guard. Table 9
displays the data for the U.S. costs.
[[Page 68793]]
Table 9--Schedule for U.S. Costs for Reporting Lost or Jettisoned Cargo
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discounted
Year Estimated Rounded Industry cost CG cost Total cost -------------------------------
incidents incidents 7% 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 50 1 $13 $10 $23 $21 $22
2....................................... 52.45 1 13 10 23 20 22
3....................................... 55.02 1 13 10 23 19 21
4....................................... 57.72 1 13 10 23 18 20
5....................................... 60.55 1 13 10 23 16 20
6....................................... 63.52 2 27 20 47 31 39
7....................................... 66.63 2 27 20 47 29 38
8....................................... 69.89 2 27 20 47 27 37
9....................................... 73.31 2 27 20 47 26 36
10...................................... 76.90 2 27 20 47 24 35
---------------------------------------------------------------------------------------------------------------
Total............................... .............. .............. 200 150 350 231 290
Annualized.............................. .............. .............. .............. .............. .............. 33 34
--------------------------------------------------------------------------------------------------------------------------------------------------------
The costs of reporting lost or jettisoned cargo for non-U.S.-flag
vessels are obtained by subtracting the U.S. costs, as reported in
Table 9, from the costs as displayed in Table 7. Table 10 presents the
results of these calculations.
Table 10--Schedule for Non-U.S. Costs for Reporting Lost or Jettisoned Cargo
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discounted
Year Estimated Rounded Industry cost CG cost Total cost -------------------------------
incidents incidents 7% 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 50 49 $649 $490 $1,139 $1,064 $1,106
2....................................... 52.45 51 676 510 1,186 1,036 1,118
3....................................... 55.02 54 716 540 1,256 1,025 1,149
4....................................... 57.72 57 755 570 1,325 1,011 1,177
5....................................... 60.55 60 795 600 1,395 995 1,203
6....................................... 63.52 62 822 620 1,442 961 1,208
7....................................... 66.63 65 861 650 1,511 941 1,229
8....................................... 69.89 68 901 680 1,581 920 1,248
9....................................... 73.31 71 941 710 1,651 898 1,265
10...................................... 76.90 75 994 750 1,744 887 1,298
---------------------------------------------------------------------------------------------------------------
Total............................... .............. .............. 8,110 6,120 14,230 9,738 12,001
Annualized.............................. .............. .............. .............. .............. .............. 1,386 1,407
--------------------------------------------------------------------------------------------------------------------------------------------------------
iii. Benefits. A 2011 news release from the Monterey Bay Aquarium
Research Institute (MBARI) \12\ stated that containers that fall from
ships can ``float at the surface for months, most eventually sink to
the seafloor.'' While they float they can present a hazard to
navigation. However, sunken containers may pose immediate and long-term
threats to the marine environment. The MBARI news release also stated
that ``[N]o one knows what happens to these containers once they reach
the deep seafloor'' and that ``[p]erhaps 10 percent of shipping
containers carry household and industrial chemicals that could be toxic
to marine life.'' The small number of MISLE incidents provides
additional information. Of the 25 containers, one container contained
22,500 pounds of used batteries and another contained an unspecified
hazardous material.
---------------------------------------------------------------------------
\12\ https://www.mbari.org/news/news_releases/2011/containers/containers-release.html.
---------------------------------------------------------------------------
The immediate benefit of the reporting provisions is that they
would enhance the Coast Guard's ability to identify potential problems
with securing equipment, locate and warn mariners about drifting
containers that endanger safe navigation, and assess and respond to any
potential environmental hazard created by the cargo loss. In the longer
term, having complete and accurate data on lost cargo incidents would
enable the Coast Guard and other parties to identify industry trends
and track potential long-term threats to the marine environment from
sunken containers.
iv. Alternatives. We considered possible alternatives to the
proposed rule. One possibility, as suggested in the NPRM, would be to
limit the reporting of lost containers to only those containing
hazardous materials. However, we consider any overboard container to be
a potential hazard to navigation and, as noted above, the contents may
pose a long-term threat to the marine environment. To ensure safety of
navigation and the marine environment, we believe all lost or
jettisoned cargo should be reported.
Another option would be to reduce the amount of information to be
sent to the Coast Guard in order to minimize recordkeeping burden. We
examined the data specified in the proposed rule and determined that
all would be needed by the Coast Guard in order to completely evaluate
the situation and determine the appropriate response. Therefore, we
believe that the reporting requirements in the proposed rule would
provide the Coast Guard with sufficient information to fulfill its
missions of maritime safety and protection of the marine environment
while minimizing the vessel's recordkeeping and reporting burdens.
b. CSM Requirements
i. Current practices, applicable population, and description of
changes and edits. As stated in section IV of this
[[Page 68794]]
preamble, current requirements for CSMs are located in SOLAS, with
further implementing guidance included in NVIC 10-97. The Coast Guard's
current reference for the minimum standards of a CSM is IMO's Circular
1353.
Enforcement in U.S. ports is carried out by the Coast Guard's
safety and security vessel examinations program. As part of these
examinations, the Coast Guard checks that the subject vessels have a
CSM and that the crew follows it. MISLE data show that from 2009
through 2011, the 26 U.S.-flag vessels that are part of the affected
population were subject to 176 inspections. In all of these inspections
there were no citations for a deficient CSM. MISLE also recorded that
in 2009 through 2011, the Coast Guard conducted 11,989 vessel
inspections of foreign-flag vessels and found problems relating to CSMs
in only 8 instances. These data indicate an ongoing compliance process
for both U.S.- and foreign-flagged vessels subject to CSM rules. As a
result, the Coast Guard anticipates that the only costs regarding the
CSM requirement is that moving the requirements from SOLAS and the
implementing guidelines from NVIC 10-97 into the CFR could prompt
owners and operators of the few deficient vessels to ensure their CSMs
were fully compliant with SOLAS prior to entering U.S. waters.
Tables 11 and 12 present the change matrix for the edits to Title
33 and Title 46 of the CFR, respectively, that relate to the CSM
requirements. Each matrix summarizes the specific edit or change, the
affected population, and the economic impact.
Table 11--Change Matrix for Adding CSM Requirements to 33 CFR
------------------------------------------------------------------------
Reference & description Affected population Economic impact
------------------------------------------------------------------------
97.100 Applicability
------------------------------------------------------------------------
. . . (a)(1), U.S. vessels.. U.S. cargo vessels None, administrative
500+ GT, non-U.S. only.
cargo vessels in
U.S. waters 500+ GT.
. . . (a)(2), voluntary U.S. vessels less No change, codifies
compliance. than 500 GT guidance currently
requesting coverage. located in NVIC.
. . . (b), exemption for Ready Reserve and None, these vessels
Ready Reserve and public public vessels. currently exempted.
vessels.
97.105 Definitions.......... All vessels and None, administrative
approval only.
organizations.
97.110 Incorporation by All affected vessels None, administrative
reference, lists IBR and approval only.
references. organizations.
------------------------------------------------------------------------
97.120 Cargo Securing Manuals
------------------------------------------------------------------------
. . . (a)(1), CSMs required. SOLAS vessels and Cost of developing
non-U.S., non-SOLAS CSM for
vessels noted with noncompliant
deficient CSMs by vessels.
Coast Guard.
. . . (a)(2), CSAP required Non-SOLAS vessels... Edit to close
after 2015. regulatory gap. No
costs, no current
vessels affected
and none expected
in future.
. . . (b), authorizes CG All U.S. and foreign- No cost, provides
enforcement. flagged vessels authority for
subject to the rule. current CG
compliance
activities.
------------------------------------------------------------------------
Source: Coast Guard analysis.
Table 12--Change Matrix for Edits to 46 CFR 97 That Apply to U.S. SOLAS
Vessels
------------------------------------------------------------------------
Reference & description Affected population Economic impact
------------------------------------------------------------------------
97.12-10, Cargo securing Owners and operators Administrative edit,
manuals, new section to of U.S. SOLAS all costs accounted
reference new 33 CFR 97.120. vessels. for in 33 CFR
97.120.
------------------------------------------------------------------------
Source: Coast Guard analysis.
ii. Affected population and costs. As stated in the preceding
section VIII.A.3.i, the Coast Guard's current safety and security
examinations include checking to see if a subject vessel has a current
CSM and that the crew follows it. The inspection results indicate that
U.S.-flagged vessels in international trade currently comply with the
SOLAS CSM rules and will continue with those practices. For foreign-
flagged vessels that visit U.S. ports, we estimated the costs of
compliance based on the following assumptions:
(1) In the absence of the proposed rule, the current deficiency
rate for subject foreign-flagged vessels would continue.
(2) Under the proposed rule, the increased enforceability posture
from codifying the CSM rules will lead all vessels to comply with the
SOLAS standards and NVIC guidance prior to entering U.S. waters. That
is, the deficiency rate will be reduced to zero for foreign-flagged
vessels.
In the preceding section VIII.A.3.i, we reported that there were 8
deficiencies related to CMS from 2009-2011. These deficiencies are
comprised of 4 that were missing sections or certain technical data, 3
that were missing approval from an authorized organization, and 1 that
did not have its CSM on the vessel. Table 13 presents the data from
2009 through 2011 for the calculation of a deficiency rates by year and
an annual average for the three years.
[[Page 68795]]
Table 13--Annual CSM Deficiency Rate
----------------------------------------------------------------------------------------------------------------
Deficiency
Year Vessel CSM rate
examinations deficiencies (percent)
----------------------------------------------------------------------------------------------------------------
2009............................................................ 3,901 3 0.08
2010............................................................ 4,148 3 0.07
2011............................................................ 3,930 2 0.05
-----------------------------------------------
Total (Sum for examinations and deficiencies, average for 11,979 8 0.07
rate)......................................................
----------------------------------------------------------------------------------------------------------------
The population in year 1 of the estimate period is the foreign-
flagged component of the affected population--7,137 vessels, as
reported in Table 4. In the analysis of the reporting requirements, we
cited the Tioga Group's report on the container market that growth in
container shipments to the U.S. is expected to increase,\13\ so a flat
extrapolation of the baseline over years 2 through 10 of the analysis
period would result in an underestimate.
---------------------------------------------------------------------------
\13\ See. ``U.S. Port and Inland Waterways Preparing for Post
Panamax Vessels'', p. 10--``Forecast and Containerized Cargo'':
https://www.iwr.usace.army.mil/docs/portswaterways/rpt/June_20_U.S._Port_and_Inland_Waterways_Preparing_for_Post_Panamax_Vessels.pdf.
---------------------------------------------------------------------------
We used the Tioga Group's estimate of a 4.9 percent rate for our
estimate for growth in our ten-year analysis period. The SANS data used
for an estimate of the affected population showed that each vessel
averaged 3.5 visits per year to U.S. ports in the three years of data
collection, 2009 through 2011.
At this time we do not have detailed information on the current and
projected capacity utilization of container ships visiting U.S. ports,
so we posited that the trips per year of the affected vessels would
remain constant through the analysis period. With that assumption, we
applied the 4.9 percent annual growth rate to the fleet of foreign-
flagged vessels serving U.S. ports, starting with the baseline
population of 7,137 vessels. The resulting estimates are shown in the
``Affected Vessels'' column of Table 14.
The estimate of the number of deficient CSMs in any year equals the
estimate of the vessel population that year times the deficiency rate.
For example, the estimate for Year 1 is CSMs for 5 new foreign-flagged
vessels (7,137 vessels * 0.07 percent).
To obtain a current estimate for the cost of developing a cargo
securing manual we contacted industry cargo securing subject matter
experts in 2013 \14\. These experts are familiar with the entire
development of cargo securing manuals, including vessel survey,
evaluation of the cargo securing equipment and procedures, preparing
the manuals, and training the crews. From the information they
provided, we estimate that the cost to develop a CSM will range between
$7,500 and $10,000, depending on factors such as the size and type of
vessel. We do not have detailed descriptions of each deficiency, so for
the unit cost, we will assume that in order to ensure compliance the
company will revise the CSM using an existing survey of the vessel. A
recently completed study conducted by ABS Consulting, Inc. for the
Coast Guard provided estimates on the costs of a suite of marine
engineering and naval architecture services \15\. That study estimates
that the average cost of a survey for a freight ship is $1,125. We
estimated the unit cost to remedy a deficiency as the average cost of
developing a CSM ($8,750 = ($7,500 + $10,000)/2)) less the average cost
of a survey. This yields an estimated unit cost of $7,625 ($8,750--
$1,125). The total cost for any year is the number of new CSMs to
remedy deficiencies, times the unit cost of $7,625. Table 14 presents
the cost estimate over the ten-year period at both an undiscounted
value and discounted at 7 percent and 3 percent interest rates. As
noted, these costs are for noncompliant foreign vessels; all U.S.
vessels in international trade are assessed as already complying.
---------------------------------------------------------------------------
\14\ These sources preferred not to be identified in order to
protect proprietary information.
\15\ ABS Consulting, Inc, ``Study of Marine Engineering and
Naval Architecture Costs for Use in Regulatory Analyses,'' Table 5,
p. 26. A copy is included in the docket.
Table 14--Cost of Upgrading Deficient CSMs
[undiscounted and discounted at 7% and 3%]
--------------------------------------------------------------------------------------------------------------------------------------------------------
(C) Annual Discounted
(A) Year (B) Affected deficiency (D) New CSMs (E) CSM Cost -------------------------------
vessels rate (percent) (B*C) (D*$7,625) 7% 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 7,137 0.07 5 $38,125 $35,631 $37,015
2....................................................... 7,487 0.07 5 38,125 33,300 35,936
3....................................................... 7,854 0.07 5 38,125 31,121 34,890
4....................................................... 8,239 0.07 6 45,750 34,902 40,648
5....................................................... 8,643 0.07 6 45,750 32,619 39,464
6....................................................... 9,067 0.07 6 45,750 30,485 38,315
7....................................................... 9,511 0.07 7 53,375 33,239 43,399
8....................................................... 9,977 0.07 7 53,375 31,065 42,135
9....................................................... 10,466 0.07 7 53,375 29,032 40,907
10...................................................... 10,979 0.07 8 61,000 31,009 45,390
-----------------------------------------------------------------------------------------------
Total............................................... .............. .............. .............. 472,750 322,403 398,099
Annualized.............................................. .............. .............. .............. .............. $45,903 $46,669
--------------------------------------------------------------------------------------------------------------------------------------------------------
As shown in Table 14, the total 10-year cost for upgrading CSMs at
a 7% discount rate is $45,903. We anticipate that the Coast Guard will
continue its current inspection regime, so there are no additional
government costs or
[[Page 68796]]
resource impacts to the Coast Guard for new, upgraded or revised CSMs.
iii. Benefits. The benefit of adding the SOLAS requirements and the
NVIC guidance on CSMs to the CFR is increased Coast Guard enforcement
authority. We previously cited the statistics from the Coast Guard's
CSM inspection activities from 2009 through 2011 for both U.S. and
foreign-flagged vessels. However, as noted in section IV of this
preamble, the only current U.S. implementation of the CSM is via NVIC
10-97, which is unenforceable. Incorporating these rules into the CFR
elevates the requirements to regulation status. As described in section
III of this preamble, the Coast Guard has existing authorities to
inspect vessels; regulate an inspected vessel's operation, fittings,
equipment, and appliances; and implement SOLAS. The Coast Guard
believes that it can enforce the provisions of the proposed rule under
these authorities.
iv. Alternatives. Alternatives were considered in this proposed
rule. Alternatives include various ways to apply the requirements to
prepare and implement CSMs to U.S.-flagged vessels in coastwise trade.
As described in section V of this preamble, the 2000 NPRM presented
five options for applying CSM regulations to U.S. domestic voyages.
Table 15 presents descriptions of these options and a summary of the
comments.
Table 15--Options to Extend CMS Requirements to U.S. Domestic Voyages
------------------------------------------------------------------------
Option No. Description Summary of comments
------------------------------------------------------------------------
1...................... Extend SOLAS 4 supported, 5 opposed
requirements to for these reasons:
domestic voyages. Preferred
compromise of Options
1 & 2
Not requiring
regular reviews
Too
restrictive
Require too
much standardization
Would not
work for seagoing
barges as no two
barge cargoes are
identical
2...................... Vessel specific 1 supported, 5 opposed
standards, Coast Guard for these reasons:
approval. Evaluate
against experience
with continuous
examination program
and noted similarity
with Option 5
Too many
variables causing
unneeded burden
Would not
work, but did not
give specific reasons
Second choice
Preferred
compromise of Options
1 and 2
3...................... Certificate for One commenter stated
carrying hazardous its decision would
materials. depend on specific
requirements and 3
opposed for these
reasons:
Surveyors for
multiple voyages not
feasible for cost and
availability
Could not
ensure surveyor
availability
High costs of
surveyors
4...................... Allow each vessel to One commenter noted
choose from among that companies
Options 1, 2, and 3. supporting domestic
rules would find this
attractive, but did
not state its own
opinion. Another
stated that it
combined the
strengths and
weaknesses of the
other Options. One
opposed for unstated
reasons and another
was opposed because
the ``menu of
options'' would cause
confusion.
5...................... Standards developed 3 supported, 1 for
with industry. unstated reasons and
2 because of its
flexibility; and 1
was opposed because
it would not ensure
meeting needs of
different vessel
types and operations
------------------------------------------------------------------------
The options presented in the NPRM were only outlined and did not
have cost estimates. We developed a cost estimate for Option 1 that
would extend SOLAS requirements to domestic vessels. We added these
details to Option 1 to make the calculations:
The affected population will be U.S.-flagged vessels of
500 gross tons or more in coastwise trade. The geographic
identification was vessels with coastwise route certifications. We
identified 675 vessels from MISLE that met these requirements, which is
comprised of 215 freight barges, 125 freight ships, and 335 offshore
supply vessels.
In general, the vessels in the U.S. affected population
for this alternative are smaller than the foreign-flagged vessels that
comprise the affected population of the proposed regulation. Data
comparisons for the U.S. fleet shows average gross tons of 8,165 and
average length of 326 feet. The comparable data for the foreign-flagged
vessels is average gross tonnage of 31,306 and average length of 619
feet. Therefore, we assigned for the unit cost of the U.S. coastwise
vessels the low-end value of $7,500 from the range supplied by the
subject matter experts we contacted. The recent history of new builds
will continue through the ten-year analysis period. MISLE reported 22
new vessels per year from 2009-2012 and we used this in our analysis.
A phase-in period was not in the NPRM, but we added a
three-year phase-in period, to mitigate the burden on both vessel
owners and the authorized approval organizations. We assume that vessel
owners would distribute the certification of the manuals for their
vessels evenly over the phase-in period. This would enable vessel
owners and authorized approval organizations to schedule cargo securing
approvals in conjunction with vessel down-time, such as scheduled
examinations or times of vessel repairs and upgrades.
With these parameters, we developed a 10-year cost schedule for
Option 1. As the costs to foreign-flagged vessels would be the same for
Option 1 as the preferred alternative, the data presented show the
marginal costs for Option 1. The annualized cost, using a 7 percent
discount rate would be $759,524. The cost estimates are displayed in
Table 16.
[[Page 68797]]
Table 16--Cost Estimate for Option 1, Extend CSM Requirements to Domestic Vessels
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discounted
Year Existing New vessels Total vessels Unit cost Total cost -------------------------------
vessels 7% 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 225 22 247 $7,500 $1,852,500 $1,731,308 $1,798,544
2....................................... 225 22 247 7,500 1,852,500 1,618,045 1,746,159
3....................................... 225 22 247 7,500 1,852,500 1,512,192 1,695,300
4....................................... 0 22 22 7,500 165,000 125,878 146,600
5....................................... 0 22 22 7,500 165,000 117,643 142,330
6....................................... 0 22 22 7,500 165,000 109,946 138,185
7....................................... 0 22 22 7,500 165,000 102,754 134,160
8....................................... 0 22 22 7,500 165,000 96,032 130,253
9....................................... 0 22 22 7,500 165,000 89,749 126,459
10...................................... 0 22 22 7,500 165,000 83,878 122,775
---------------------------------------------------------------------------------------------------------------
Total............................... 675 220 895 .............. 6,712,500 5,587,425 6,180,765
Annualized.............................. .............. .............. .............. .............. .............. 795,524 724,574
--------------------------------------------------------------------------------------------------------------------------------------------------------
The goal of this alternative would be to reduce the occurrence and
impacts of lost containers in U.S. coastwise trade. However, the
comments to the NPRM indicate that this is not a significant problem.
One commenter stated that cargo losses from barges are rare, another
stated that seagoing barges ``are generally safe from cargo loss'', and
another commenter stated that ``most cargo losses result from container
structural problems that the vessel owner operator cannot know about or
prevent.'' Recent data from MISLE supports the commenters.
Specifically, MISLE has only five incidents from 2009-2011 of lost or
damaged containers involving U.S. vessels in coastwise voyages.
Additionally, our initial cost estimates, as presented in Table 16,
indicate that industry would incur annualized costs, discounted at 7
percent, of nearly $800,000. Therefore, the focus of this rulemaking is
exclusively vessels in international trade. However, the Coast Guard
can reevaluate this position and initiate another rulemaking for the
U.S. coastwise trade if new information indicates either underreporting
or upward trend of lost containers.
c. Approval of Authorized Organizations
The Coast Guard authorizes classification societies and other
organizations to review and approve CSMs on its behalf. The procedures
for these organizations are currently found in NVIC 10-97 and cover
selection criteria, information required by organizations applying for
authorization status, the Coast Guard's application review procedures,
authorization termination, and appeals processes.
Following the procedures in NVIC 10-39, the Coast Guard has
authorized these six classification societies to review and approve
CSMs: American Bureau of Shipping, Det Norske Veritas, Lloyd's Register
of Shipping, Germanischer Lloyd, RINA S.p.A, and ClassNK.\16\ We
anticipate that no other classification societies will be applying for
CSM approval authority in the near future.
---------------------------------------------------------------------------
\16\ List of classification societies authorizations: https://www.uscg.mil/hq/cg5/acp/docs/ClassSocietyAuths29May2013.pdf.
---------------------------------------------------------------------------
However, the NVIC is a guidance document only, and not legally
enforceable. The proposed rule would incorporate these procedures from
the NVIC into the CFR with only some minor editorial changes.
Therefore, we believe there would be no additional regulatory costs
associated with the codification of these application procedures. Table
17 presents the change matrix for the codification of the class society
approval guidance into the CFR and summarizes the specific edit or
change, the affected population, and the economic impact.
Table 17--Change Matrix for Incorporating Class Society Approval
Procedures into 46 CFR
------------------------------------------------------------------------
Reference & description Affected population Economic impact
------------------------------------------------------------------------
97.100 Applicability
------------------------------------------------------------------------
. . .(a)(3), organizations New applicants...... No impact, codifies
applying for CSM approval application
authority. guidance currently
prescribed by NVIC.
97.115 Situation requiring Vessels subject to Costs for correction
report, criteria for the rule that lose of noncompliance
reporting lost cargo. cargo overboard. with existing
requirements.
------------------------------------------------------------------------
97.200 CSM Approval for U.S. Vessels on International Voyages
------------------------------------------------------------------------
. . .(a)(1), authorized Owners, operators, Administrative
applicants include owner, and agents, of new change, NVIC only
operator, or agent. U.S. vessels in referenced owner.
international trade.
. . .(a)(2), CG oversight of Organizations No change, codifies
approval authority applying for CSM application
applications. approval authority. guidance currently
located in NVIC.
. . .(a)(3), application U.S. vessels in No change, codifies
procedures. international trade. application
guidance currently
located in NVIC.
. . .(a)(4), approval Authorized approval No change, codifies
authority retains a copy. organizations. NVIC.
. . .(b), approval letter Authorized approval No change, codifies
contents. organizations. NVIC.
. . .(c), disapproval Authorized approval No change, codifies
procedures. organizations. application
guidance currently
located in NVIC.
[[Page 68798]]
. . .(d), resubmit Owners and operators No change, codifies
procedures. resubmitting a CSM. application
guidance currently
located in NVIC.
. . .(e), documents kept on Owners and operators No change, codifies
vessel. of U.S. vessels application
subject to the rule. guidance currently
located in NVIC.
97.205 Requirements for Owners and operators No change, codifies
amending an approved CSM, of U.S. vessels application
amending procedures. subject to the rule. guidance currently
located in NVIC.
97.210 Appeals, appeals Owners and operators No change, codifies
procedures. of U.S. vessels application
subject to the rule guidance currently
and authorized located in NVIC.
approval
organizations.
97.300 Authorized CSM ABS, Lloyds, Nat'l No change, codifies
approval authorities, lists Cargo Bureau. application
approved organizations. guidance currently
located in NVIC.
97.305 Requests for Organizations No change, codifies
authorization, application seeking to become application
process. approved guidance currently
organizations. located in NVIC.
97.310 Criteria for CG and organizations No change, codifies
authorization, evaluation seeking to become application
criteria. approved guidance currently
organizations. located in NVIC.
97.315 Requirements for CG and authorized No change, rewords
authorized approval approval and codifies
organizations, organizations. application
responsibilities of CG and guidance currently
authorized approval located in NVIC.
organizations.
97.320 Revocation of CG and referenced No change, revises
authorization, procedures organizations. and codifies
for CG revoking an application
authorization. guidance currently
located in NVIC.
------------------------------------------------------------------------
Source: Coast Guard analysis.
We considered alternatives to the proposed changes and edits,
however, we concluded that there are no viable alternatives. The
procedures in the NVIC provide a complete description of all processes
needed for approval and oversight of the subject organizations.
Reducing or eliminating any of them, such as the one covering appeals,
would leave a gap in the approval or oversight processes. We did not
identify any current weaknesses or gaps in the NVIC, other than the
proposed editorial changes. We also concluded that the recordkeeping
guidance in the NVIC provides complete documentation for all the
involved parties--vessel owners, approved organizations. Reducing or
eliminating any of the proposed recordkeeping rules would run the risk
of producing a gap in the documentation. Conversely, adding additional
recordkeeping rules would only increase associated burdens, but not
provide any additional useful information.
In summary, the proposed rules governing organizations approved to
issue CSMs would codify current procedures with no associated costs to
industry or the government. The benefit of these proposed rules is that
it would provide a regulatory basis for the Coast Guard's oversight of
organizations authorized to approve CSMs.
d. Review of Costs and Benefits. The total cost of the proposed
rule is for the two cost elements: (1) Lost or Jettisoned Cargo and (2)
CSM Requirements. Table 18 presents the ten-year cost schedule for
undiscounted costs and discounted costs at 7 percent and 3 percent
rates.
Table 18--Summary of the 10-Year Total Cost to the International Cargo Industry and U.S. Government
--------------------------------------------------------------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G) (H)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CSM Total industry Total cost Discounted
requirements
(1) Lost or jettisoned cargo (2)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year Industry Industry CG (B+C) (D+E) 7% 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... $38,125 $663 $500 $38,788 $39,288 $36,718 $38,144
2....................................... 38,125 689 520 38,814 39,334 34,356 37,076
3....................................... 38,125 729 550 38,854 39,404 32,165 36,060
4....................................... 45,750 769 580 46,519 47,099 35,932 41,847
5....................................... 45,750 808 610 46,558 47,168 33,630 40,688
6....................................... 45,750 848 640 46,598 47,238 31,477 39,561
7....................................... 53,375 888 670 54,263 54,933 34,210 44,666
8....................................... 53,375 928 700 54,303 55,003 32,012 43,420
9....................................... 53,375 967 730 54,342 55,072 29,956 42,208
10...................................... 61,000 1,020 770 62,020 62,790 31,919 46,722
---------------------------------------------------------------------------------------------------------------
Total............................... 472,750 8,309 6,270 481,059 487,329 332,375 410,392
Annualized.............................. .............. .............. .............. .............. .............. 47,323 48,110
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 19 presents the U.S.-based breakout of the 10-year cost data.
The CSM plans would affect only foreign-flagged vessels and there are
no associated U.S. government costs, so the only inputs to U.S. costs
are those associated with the proposed reporting requirements for lost
or jettisoned cargo. As described earlier, these requirements would
accrue costs to both industry and government. The estimates for both
sectors are in Table 18.
[[Page 68799]]
Table 19--Costs to U.S.-Flagged Vessels in International Cargo Industry and U.S. Government for Reporting of
Lost or Jettisoned Cargo
----------------------------------------------------------------------------------------------------------------
Undiscounted Total
Year -------------------------------- Total Discounted --------------------
Industry Government 7%
-------------------------------------------------------------------------------------------------------------- ----
1............................. $13 $500 $513 $479 $498
2............................. 13 520 533 466 502
3............................. 13 550 563 460 515
4............................. 13 580 593 452 527
5............................. 13 610 623 444 537
6............................. 27 640 667 444 559
7............................. 27 670 697 434 567
8............................. 27 700 727 423 574
9............................. 27 730 757 412 580
10............................ 27 770 797 405 593
---------------------------------------------------------------------------------
Total..................... 200 6,270 6,470 4,419 5,452
Annualized.................... .............. .............. .............. 629 639
----------------------------------------------------------------------------------------------------------------
Table 20 displays the breakout of the 10-year cost schedule for
foreign-flagged vessels. These foreign-flagged vessels would incur
costs involving both proposed requirements: CSM plans and reporting of
lost and jettisoned cargo. Estimates for both requirements and the
total cost are included in Table 20.
Table 20--Costs for Foreign-Flagged Vessels in International Cargo Industry for CSM Requirements
----------------------------------------------------------------------------------------------------------------
Undiscounted Discounted
-------------------------------------------------------------------------------
Reporting of
Year lost or
CSM plans jettisoned Total 7% 3%
cargo
----------------------------------------------------------------------------------------------------------------
1............................... $38,125 $649 $38,774 $36,237 $37,645
2............................... 38,125 676 38,801 33,890 36,574
3............................... 38,125 716 38,841 31,706 35,545
4............................... 45,750 755 46,505 35,478 41,319
5............................... 45,750 795 46,545 33,186 40,150
6............................... 45,750 822 46,572 31,033 39,003
7............................... 53,375 861 54,236 33,775 44,099
8............................... 53,375 901 54,276 31,589 42,846
9............................... 53,375 941 54,316 29,544 41,629
10.............................. 61,000 994 61,994 31,515 46,129
-------------------------------------------------------------------------------
Total....................... 472,750 8,110 480,860 327,953 404,939
Annualized...................... .............. .............. .............. 46,693 47,471
----------------------------------------------------------------------------------------------------------------
The primary benefit of this proposed rule is that it would place
into the CFR rules and procedures for the cargo securing plans, the
approval and oversight of organizations authorized to approve CSMs, and
the reporting of lost or jettisoned cargo. Additionally, the reporting
requirements for the lost or jettisoned cargo would provide the Coast
Guard with additional information to monitor the effects on both
navigation and the environment. Overall, the proposed rule would
support the Coast Guard's missions of maritime safety and stewardship.
B. Small Entities
1. Summary of Findings
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have
considered whether this proposed rule would have a significant economic
impact on a substantial number of small entities. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000.
We determined that this proposed rule affects a variety of large
and small businesses, not-for-profit organizations, and governments
(see the ``Description of the Potential Number of Small Entities''
section below). We have prepared the following initial regulatory
flexibility analysis assessing the impact on small entities from the
rule. Based on the information from this analysis, we found:
There are an estimated 1,217 entities that control the
7,163 vessels that could be economically impacted by the proposed rule.
Using size standards from the Small Business Administration, the 26
U.S-flagged vessels are controlled by 18 companies and none of them are
small. The 7,137 foreign-flagged vessels are controlled by 1,199
companies. A review of the entities that control these vessels found
that one foreign-flagged vessel is controlled by a non-U.S. not-for-
profit entity which is not small, 32 foreign-flagged vessels are
controlled by government agencies, and the remaining 7,104 foreign-
flagged vessels are controlled by businesses. An analysis of a sample
of the businesses controlling these vessels indicates that 69 percent
are considered small.
Compliance actions would consist of upgrading deficient
CSMs and reporting lost or jettisoned cargo.
Of the small entities in our sample with revenue
information, 60 percent of them had an impact of less than 1 percent
and 20 percent had an impact within the 1 percent to 3 percent range.
[[Page 68800]]
2. Initial Regulatory Flexibility Analysis
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) (RFA)
establishes ``as a principle of regulatory issuance that agencies shall
endeavor, consistent with the objectives of the rule and of applicable
statutes, to fit regulatory and informational requirements to the scale
of the businesses, organizations, and governmental jurisdictions
subject to regulation. To achieve this principle, agencies are required
to solicit and consider flexible regulatory proposals and to explain
the rationale for their actions to assure that such proposals are given
serious consideration.''
Under the RFA, we are required to consider if this rule will have a
significant economic impact on a substantial number of small entities.
Agencies must perform a review to determine whether a rule will have
such an impact. If the agency determines that it will, the agency must
prepare an initial regulatory flexibility analysis as described in the
RFA.
Under Section 603(b) and (c) of the RFA, the initial regulatory
flexibility analysis must provide and/or address:
A description of the reasons why action by the agency is
being considered;
A succinct statement of the objectives of, and legal basis
for, the proposed rule;
A description of and, where feasible, an estimate of the
number of small entities to which the proposed rule will apply;
A description of the projected reporting, recordkeeping
and other compliance requirements of the proposed rule, including an
estimate of the classes of small entities which will be subject to the
requirement and the type of professional skills necessary for
preparation of the report or record;
An identification, to the extent practicable, of all
relevant Federal rules which may duplicate, overlap, or conflict with
the proposed rule; and
Descriptions of any significant alternatives to the
proposed rule which accomplish the stated objectives of applicable
statutes and which minimize any significant economic impact of the
proposed rule on small entities.
a. A description of the reasons why action by the agency is being
considered. Agencies take regulatory action for various reasons. One
reason is to harmonize the CFR with requirements and guidance located
in other sources. The primary purpose of this proposed rule is to
incorporate into the CFR the cargo securing manual rules from SOLAS, as
the U.S. is a signatory state to that treaty.
Another of the reasons is the failure of the market to compensate
for negative externalities caused by commercial activity. A negative
externality can be the by-product of a transaction between two parties
that is not accounted for in the transaction. As discussed in the
regulatory analysis, this proposed rule is addressing a negative
externality, which is that unreported lost or jettisoned cargo could
collide with other vessels with hazardous consequences to other
vessels, human health, or the environment. The proposed rule mandates
that all occurrences of lost or jettisoned cargo must be reported to
the Coast Guard.
b. A statement of the objectives of, and legal basis for, the
proposed rule. The Coast Guard proposes this rulemaking to align U.S.
regulations with the CSM requirements of SOLAS. The provisions of this
rulemaking also authorize recognized classification societies to review
and approve CSMs on behalf of the Coast Guard, prescribe how other
organizations can become CSM approval authorities, and prescribe when
and how the loss or jettisoning of cargo must be reported. Enforcing
those requirements should help prevent or mitigate the consequences of
vessel cargo loss, and promote the Coast Guard strategic goals of
maritime safety and environmental protection.
Sections 2103 and 3306 of Title 46, U.S. Code, provide the
statutory basis for this rulemaking. Section 2103 gives the Secretary
of the department in which the Coast Guard is operating general
regulatory authority to implement Subtitle II (Chapters 21 through 147)
of Title 46, which includes statutory requirements in 46 U.S.C. Chapter
33 for inspecting the vessels to which this rulemaking applies. Section
3306 gives the Secretary authority to regulate an inspected vessel's
operation, fittings, equipment, appliances, and other items in the
interest of safety. The Secretary's authority under both statutes has
been delegated to the Coast Guard in Department of Homeland Security
Delegation No. 0170.1(92)(a) and (b). Additionally, the United States
is a party to SOLAS. Where SOLAS must be enforced through U.S.
regulations, those regulations are authorized by E.O. 12234.
c. A description of and, where feasible, an estimate of the number
of small entities to which the proposed rule will apply.
Table 21--Non-U.S. Vessels by Type of Entity
------------------------------------------------------------------------
Entity type Count Percent
------------------------------------------------------------------------
Business \17\................................. 7,104 99.54
Government.................................... 32 0.45
Not-for-Profit................................ 1 0.01
-------------------------
Total....................................... 7,137 100.00
------------------------------------------------------------------------
All the government entities exceed the threshold for being
classified as a small entity as they are either agencies of a foreign
government or exceed the 50,000 population threshold. We excluded these
government entities from the revenue impact analysis. The single not-
for-profit entity is also deemed not small as it is part of an
international organization.
---------------------------------------------------------------------------
\17\ A vessel may have a separate owner, operator, and
charterer. Operational control may be with any one of these
companies, depending on type of owner (i.e., a passive ownership by
a financial institution) or the type of operating or chartering
contract. Also, the country that the vessel is registered in can be
different than the country of the owner.
---------------------------------------------------------------------------
To analyze the potential impact on the businesses, we produced a
random sample with a 95 percent confidence level and a confidence
interval of 5 percent.\18\ The resulting sample consisted of 299
businesses. We researched public and proprietary databases for the
location of the company, entity type (subsidiary or parent company),
primary line of business, employee size, revenue, and other
information.\19\ During the initial research we found 6 duplicated
businesses and an additional one whose business was out of the scope of
this rulemaking. Deleting these 7 businesses from our initial sample of
299 resulted in a working sample consisting of 292 businesses. We found
that 217 of the companies in our sample are based in countries other
than the U.S. We therefore excluded these non-U.S. companies from this
revenue impact analysis.
---------------------------------------------------------------------------
\18\ We selected a statistical sample so we would not need to
research and collect employee size and revenue information for the
entire affected operator population. We selected the operators in
the sample through a random number generator process available in
most statistical or spreadsheet software.
\19\ We used information and data from Manta (https://Manta.com)
and ReferenceUSA (https://www.referenceusa.com).
---------------------------------------------------------------------------
The population for the revenue impact analysis consists of the
remaining 75 businesses from the working sample. Of those 75, we found
address information that locates 70 of them in the U.S. The remaining
five are businesses for whom we could find no information; we assumed
that they are located in the U.S. and are small businesses.
[[Page 68801]]
We researched and compiled the employee size and revenue data for
the 70 U.S. businesses and we compared this information to the Small
Business Administration's (SBA) ``Table of Small Business Size
Standards'' to determine if an entity is small in its primary line of
business as classified in the North American Industry Classification
System (NAICS).\20\ We determined that 23 businesses exceeded the SBA
small business size standards, and 20 businesses are small by the SBA
standards. We could not find employee size or revenue data for 27
businesses that are located in the United States and assumed they are
small businesses. Thus, 52 businesses, accounting for 69.4% of the
sample, are considered to be small. The information on location and
size determination is summarized in Table 22.
---------------------------------------------------------------------------
\20\ The SBA lists small business size standards for industries
described in the North American Industry Classification System. See
https://www.sba.gov/content/table-small-business-size-standards.
Table 22--U.S. Business by Size Determination
----------------------------------------------------------------------------------------------------------------
Location
Entity type -------------------------- Count Percent
U.S. Unknown
----------------------------------------------------------------------------------------------------------------
Exceed the threshold........................................ 23 0 23 30.7
Below the threshold......................................... 20 0 20 26.7
Unknown..................................................... 27 5 32 42.7
---------------------------------------------------
Total................................................... 70 5 75 100.0
----------------------------------------------------------------------------------------------------------------
The percentage of entities affected by this rule is distributed
among 14 NAICS classified industries. Table 23 lists the frequency,
percentage, and size standard, and size threshold of NAICS codes for
the 20 small businesses found in the sample.
Table 23--NAICS Codes of Identified Small Businesses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Threshold
NAICS code Industry Count Percent Size standard (revenue in $
millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
423860................................... Transportation Equipment and 3 15.0 Employees.................. 100
Supplies (except Motor Vehicle)
Merchant Wholesalers.
483211................................... Inland Water Freight 3 15.0 Employees.................. 500
Transportation.
488510................................... Freight Transportation 2 10.0 Revenue.................... 14
Arrangement.
336611................................... Ship Building and Repairing..... 1 5.0 Employees.................. 1,000
423310................................... Lumber & Wood Merchant Whls..... 1 5.0 Employees.................. 100
423930................................... Recycling....................... 1 5.0 Employees.................. 100
424910................................... Farm Supplies Merchant Whls..... 1 5.0 Employees.................. 100
441222................................... Boat Dealers.................... 1 5.0 Revenue.................... 30
483111................................... Deep Sea transportation......... 1 5.0 Employees.................. 500
484230................................... Other Specialized Trucking Long- 1 5.0 Revenue.................... 25.5
Distance.
488210................................... Support Activities for Rail 1 5.0 Revenue.................... 14.0
Transportation.
488320................................... Marine Cargo Handling........... 1 5.0 Revenue.................... 35.5
541990................................... All Other Professional & 1 5.0 Revenue.................... 14
Technical Svcs.
561110................................... Office Administrative Svcs...... 1 5.0 Revenue.................... 7
561990................................... All Other Support Svcs.......... 1 5.0 Revenue.................... 7
----------------
Total................................ ................................ 20
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: https://www.sba.gov/sites/default/files/files/Size_Standards_Table(1).pdf.
We selected the three industries that appeared most frequently in
the random sample of entities. Businesses from these three industries
accounted for approximately 40 percent of the entities in the random
sample. Therefore, we can assume that approximately 40 percent of all
entities affected by this regulation will be in one of these
industries. A brief description of industries affected most by this
rule is presented below:
Transportation Equipment and Supplies (except Motor
Vehicle) Merchant Wholesalers (423860): This industry comprises
establishments primarily engaged in the merchant wholesale distribution
of transportation equipment and supplies (except marine pleasure craft
and motor vehicles).
Inland Water Freight Transportation (483211): This U.S.
industry comprises establishments primarily engaged in providing inland
water transportation of cargo on lakes, rivers, or intracoastal
waterways (except on the Great Lakes System).
Freight Transportation Arrangement (488510): This industry
comprises establishments primarily engaged in arranging transportation
of freight between shippers and carriers. These establishments are
usually known as freight forwarders, marine shipping agents, or customs
brokers and offer a combination of services spanning transportation
modes.
d. A description of the projected reporting, recordkeeping and
other compliance requirements of the proposed rule, including an
estimate of the classes of small entities which will be subject to the
requirement and the type of professional skills necessary for
preparation of the report or record. The compliance requirements of the
proposed rule consist of upgrading deficient CSMs and reporting lost or
[[Page 68802]]
jettisoned cargo. Therefore, this proposed rule would call for a
collection of information under the Paperwork Reduction Act of 1995 (44
U.S.C. 3501-3520). Details on the burden estimate associated with this
collection is available in section VIII.D of this preamble.
As discussed in section VIII.A, in 2009 through 2011 the Coast
Guard conducted 11,989 vessel inspections and found problems relating
to CSMs in only 7 instances, or about 0.1 percent of the foreign-
flagged vessels were found to have deficient CSMs. We anticipate that
the owners and operators of these vessels will upgrade their manuals to
meet standards and comply with this rule. We do not have detailed
descriptions on each of the deficiency cases. To impute a cost for this
compliance action, we apply the estimate of $7,625 develop a new CSM,
as used in the Regulatory Analysis.
For reporting lost or jettisoned cargo, we noted in section VIII.A
cost discussions that when one of these incidents occurs, the vessel
staff already collects the needed information for company purposes.
Thus, the only additional cost to the vessel is to report this
information to the Coast Guard. We estimate the additional reporting
will take 0.25 hours for the vessel's Master or other senior officer to
compile and transmit the report to the Coast Guard. We estimate that
the loaded wage rate for the senior officer is $53.00 per hour. The
cost of reporting is $13.25 (0.25 hours * $53 per hour).
As discussed in section VIII.A, we adjusted the affected population
to account for anticipated growth in container traffic. In our ten-year
analysis, we estimate that the number of vessels that would need to
upgrade their CSM would be 5 in year one each of and increase to 8 in
year ten. We also accounted for this growth in container traffic in our
estimate of lost or jettisoned cargoes. In the section VIII.A cost
discussions we estimate that in the first year the rule would become
effective, 50 incidents of lost or jettisoned cargo would occur. We
estimate that the affected population in that year consists of 7,163
vessels, yielding an incident rate of 0.7 percent (50 incidents/7,163
vessels). To execute a revenue impact analysis we posited that in any
given year each business would have one vessel that would need to
upgrade its CSM and that one of their vessels would have an incident of
lost or jettisoned cargo. Given these assumptions, the total annual
compliance cost for any company is $7,638.25, as shown in Table 24.
Table 24--Annual Compliance Cost for Revenue Impact Analysis
----------------------------------------------------------------------------------------------------------------
Loaded wage Hours Total cost
----------------------------------------------------------------------------------------------------------------
Cost to upgrade 1 CSM.................... N/A........................ N/A........................ $7,625
Cost to report 1 hazardous condition..... 53......................... 0.25....................... 13.25
----------------------------------------------------------------------
Total................................ 7,638.25
----------------------------------------------------------------------------------------------------------------
For each business in our sample with revenue data, we calculated
the impact as the assumed cost of $7,638.25 as a percentage of that
business's annual revenue. This produced a range of potential revenue
impacts across the sample. Table 25 presents the impact data in ranges
of less than 1 percent, 1 to 3 percent, and greater than 3 percent. As
shown in Table 25, for 60 percent of the companies, the revenue impact
is less than 1 percent of annual revenue and between 1 percent and 3
percent of annual revenue for another 20 percent.
Table 25--Estimated Revenue Impact on Small Businesses
------------------------------------------------------------------------
Impact class Count Percent
------------------------------------------------------------------------
<1%........................................... 12 60.0
1%-3%......................................... 4 20.0
>3%........................................... 4 20.0
-------------------------
Total....................................... 20 100.0
------------------------------------------------------------------------
As shown in Table 18, the highest cost to industry in any one year
on an undiscounted basis is $62,790 in year 10. The revenue impact
analysis indicates that 60 percent of the affected population would
have an impact of less than 1 percent and the other 20 percent would
have an impact between 1 percent and 3 percent. If you think that your
business, organization, or governmental jurisdiction qualifies as a
small entity and that this rule would have a significant economic
impact on it, please submit a comment to the Docket Management Facility
at the address under ADDRESSES. In your comment, explain why you think
it qualifies and how and to what degree this rule would economically
affect it.
e. An identification, to the extent practicable, of all relevant
Federal rules which may duplicate, overlap or conflict with the
proposed rule. This proposed rule does not duplicate or conflict with
other Federal rules. This rulemaking concerns vessel operations and the
Coast Guard has sole jurisdiction over this area at the Federal level.
States may not regulate in categories reserved for regulation by the
Coast Guard, so this proposed rule will not duplicate or conflict with
any State regulations.
f. Descriptions of any significant alternatives to the proposed
rule which accomplish the stated objectives of applicable statutes and
which minimize any significant economic impact of the proposed rule on
small entities. Alternatives were considered in this proposed rule and
are discussed in section VIII.A of this preamble. Alternatives include
various ways to apply the requirements to prepare and implement CSMs to
U.S.-flagged vessels in coastwise trade. However, we concluded that
standards developed for international trade cannot be economically
justified for vessels operating only domestically at this time.
Therefore, the focus of this rulemaking is exclusively on vessels in
international trade.
C. Assistance for Small Entities
Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this proposed rule so that they can better
evaluate its effects on them and participate in the rulemaking. If the
proposed rule would affect your small business, organization, or
governmental jurisdiction and you have questions concerning its
provisions or options for compliance, please consult Mr. Ken Smith
using the contact information in FOR FURTHER INFORMATION CONTACT. The
Coast Guard will not retaliate against small entities that question or
complain about this rule or any policy or action of the Coast Guard.
Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The
[[Page 68803]]
Ombudsman evaluates these actions annually and rates each agency's
responsiveness to small business. If you wish to comment on actions by
employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).
D. Collection of Information
This rule would call for a new collection of information under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). As defined in 5
CFR 1320.3(c), ``collection of information'' comprises reporting,
recordkeeping, monitoring, posting, labeling, and other similar
actions. The title and description of the information collection, a
description of those who must collect the information, and an estimate
of the total annual burden follow. The estimate covers the time for
preparing and reporting for the development of a CSM, revising a CSM,
notification of other hazardous conditions, and notification of lost or
jettisoned cargo.
This collection of information applies to rulemaking procedures
regarding cargo securing manuals. Specific areas covered in this
information collection include 33 CFR Part 97, ``Cargo Securing
Manuals;'' 33 CFR Part 160, ``Ports and Waterways Safety-General;'' and
46 CFR Part 97, ``Operations.'' This rule would align the CFR with
SOLAS.
Title: Cargo Securing Manuals.
OMB Control Number: 1625-NEW
Summary of Collection of Information: The rule would add a new part
97, ``Cargo Securing Manuals'' to chapter 33 of the CFR. The collection
of information burden for CSMs derives from one of these three events:
A SOLAS container vessel built after the rule becomes
effective would need to develop and implement a CSM. The new vessel
will need an approved CSM.
If a vessel changes its type, the CSM must be revised. An
example of a type change is when a general break-bulk carrier is
modified to become a containership.
If an existing vessel either changes 15 percent of its
cargo securing systems or more than 15 percent of its portable securing
devices, then the CSM must be revised.
Additionally, the rule would impose burdens for the notification of
hazardous conditions. Currently, these notifications are made via VHS
radio, satellite radio, cell phones, and other forms of electronic
communication. The proposed rule specifically allows for electronic
communications and we anticipate this will continue to be how the
notifications are transmitted.
Need for Information: Vessel owners and operators need to develop
and implement CSMs to fulfill international safety standards
established by SOLAS. The Coast Guard needs timely information on
hazardous conditions to carry out its missions relating to protecting
vessels, their crews and passengers, and the environment.
Proposed Use of Information: For new and modified CSMs, Coast
Guard-authorized third party organizations would review these manuals
and if found acceptable, approve them. The Coast Guard would use the
information from the notification of hazardous conditions to inform
other vessel operators/waterway users of the situation and initiate any
needed measures to reduce or eliminate the hazard. These actions would
lead to a reduction of vessel casualties and pollution.
Description of Respondents: There are two groups of respondents
impacted by this rule. The first group consists of owners and operators
of U.S.-flagged vessels that need to submit new or revised CSMs to the
recognized classification societies. The second group consists of the
operators of vessels that would be required to report hazardous
conditions.
Number of Respondents: We estimate that there would be 149
respondents affected annually by the proposed CSM requirements. The
total is divided into these two classes: (1) 6 related to CSM plans,
and (2) 143 for notifications of hazardous conditions, which include
lost or jettisoned cargo and other incidents. Table 26 describes the
calculations for developing the estimates of each requirement relating
to the CSM plans.
Table 26--Estimates of Number of Respondents
----------------------------------------------------------------------------------------------------------------
Class Requirement Description Count Total
----------------------------------------------------------------------------------------------------------------
CSM Plans........................ Develop CSM--new vessel.. From U.S. vessel 3 ...........
population data of 26
vessels (Table 4),
average new builds 2009-
2011.
Revise CSM--change in MISLE data shows none of 0 ...........
vessel type. the affected vessels
have changed vessel
type from 2001-2012.
Revise CSM--replace CSM Annual rate of 11.3% 3 ...........
systems or equipment. from information
supplied by an approved
organization. Applied
to U.S. population (see
Table 4), (26 * 11.3%).
CSM Total................ ........................ ........... 6
Notifications.................... Notifications of From MISLE, average of 141 ...........
hazardous condition. 2009-2011 notifications.
Notifications of lost or U.S. notifications, 2 ...........
jettisoned cargo. Table 9, year 10.
Notifications Total...... ........................ ........... 143
-------------------------
Grand Total.................. ......................... ........................ ........... 149
----------------------------------------------------------------------------------------------------------------
Frequency of Response: A CSM is valid indefinitely, as long as it
does not meet any of the conditions for a revision. The reporting of
hazardous conditions occurs as needed. In the subsequent ``Number of
Respondents'' section, we present annual estimates of the reports.
Burden of Response: The burden hours per requirement is estimated
and shown below in Table 27.
[[Page 68804]]
Table 27--Annual Burden Hours Per Request
------------------------------------------------------------------------
Requirement Hours Notes
------------------------------------------------------------------------
Develop new CSM.................. 48 8 hours to survey the
vessel and 40 hours to
draft the CSM.
Revise CSM--change in vessel type 48 8 hours to survey the
vessel and 40 hours to
draft the CSM.
Revise CSM--change in cargo 20 20 hours to revise the
securing systems or equipment. existing CSM.
Notification of hazardous 0.25 0.25 hours for vessel
condition. crew to prepare and
transmit the notice.
Notification of lost of 0.25 0.25 hours for vessel
jettisoned cargo. crew to prepare and
transmit the notice.
------------------------------------------------------------------------
Estimated Total Annual Burden: We estimate that the total annual
burden to industry will be 240 hours (rounded). Table 28 displays the
total burden hours for each request:
Table 28--Total Annual Burden Hours
------------------------------------------------------------------------
Requirement Hours
------------------------------------------------------------------------
Develop new CSM................................................ 144
Revise CSM--change in vessel type.............................. 0
Revise CSM--change in cargo securing systems or equipment...... 60
Notification of hazardous condition............................ 35.25
Notification of lost of jettisoned cargo....................... 0.5
------------------------------------------------------------------------
Reason For Proposed Change: The rule would require collections of
information regarding these two activities: (1) development or revision
of a CSM, and 2) notification of hazardous conditions, including lost
or jettisoned cargo.
As required by the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)), we will submit a copy of this SNPRM to OMB for its review of
the collection of information.
We ask for public comment on the proposed collection of information
to help us determine how useful the information is; whether it can help
us perform our functions better; whether it is readily available
elsewhere; how accurate our estimate of the burden of collection is;
how valid our methods for determining burden are; how we can improve
the quality, usefulness, and clarity of the information; and how we can
minimize the burden of collection.
If you submit comments on the collection of information, submit
them both to OMB and to the Docket Management Facility where indicated
under ADDRESSES, by the date under DATES.
You need not respond to a collection of information unless it
displays a currently valid control number from OMB. Before the
collection requirements in this final rule can be enforced, OMB must
approve Coast Guard's request to collect this information.
E. Federalism
A rule has implications for federalism under E.O. 13132,
Federalism, if it has substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this proposed rule under E.O. 13132 and
have determined that it does not have implications for federalism. Our
analysis follows.
It is well settled that States may not regulate in categories
reserved for regulation by the Coast Guard. It is also well settled,
now, that all of the categories covered in 46 U.S.C. 3306, 3703, 7101,
and 8101 (design, construction, alteration, repair, maintenance,
operation, equipping, personnel qualification, and manning of vessels),
as well as the reporting of casualties and any other category in which
Congress intended the Coast Guard to be the sole source of a vessel's
obligations, are within the field foreclosed from regulation by the
States. (See the decision of the Supreme Court in the consolidated
cases of United States v. Locke and Intertanko v. Locke, 529 U.S. 89,
120 S.Ct. 1135 (March 6, 2000).
This proposed rule on cargo securing falls into the category of
vessel operation. Because the States may not regulate within this
category, preemption under E.O. 13132 is not an issue.
F. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this proposed rule would not
result in such an expenditure, we do discuss the effects of this rule
elsewhere in this preamble.
G. Taking of Private Property
This proposed rule would not cause a taking of private property or
otherwise have taking implications under E.O. 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.
H. Civil Justice Reform
This proposed rule meets applicable standards in sections 3(a) and
3(b)(2) of E. O. 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.
I. Protection of Children
We have analyzed this proposed rule under E.O. 13045, Protection of
Children from Environmental Health Risks and Safety Risks. This rule is
not an economically significant rule and would not create an
environmental risk to health or risk to safety that might
disproportionately affect children.
J. Indian Tribal Governments
This proposed rule does not have tribal implications under E.O.
13175, Consultation and Coordination with Indian Tribal Governments,
because it would not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
K. Energy Effects
We have analyzed this proposed rule under E.O. 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. We have determined that it is not a ``significant
energy action'' under that order because it is not a ``significant
regulatory action'' under E.O. 12866 and is not likely to have a
significant adverse effect on the supply, distribution, or use of
energy. The Administrator of the Office of Information and Regulatory
Affairs has not designated it as a significant energy action.
Therefore, it does not require a Statement of Energy Effects under E.O.
13211.
[[Page 68805]]
L. Technical Standards
The National Technology Transfer and Advancement Act (15 U.S.C. 272
note) directs agencies to use voluntary consensus standards in their
regulatory activities unless the agency provides Congress, through the
OMB, with an explanation of why using these standards would be
inconsistent with applicable law or otherwise impractical. Voluntary
consensus standards are technical standards (e.g., specifications of
materials, performance, design, or operation; test methods; sampling
procedures; and related management systems practices) that are
developed or adopted by voluntary consensus standards bodies.
This proposed rule uses technical standards other than voluntary
consensus standards. It incorporates guidance developed by the IMO, an
international organization under United Nations auspices. We are not
aware of any voluntary consensus standards that are pertinent to this
rule. If you are aware of voluntary consensus standards that might
apply, please identify them by sending a comment to the docket using
one of the methods under ADDRESSES. In your comment, please explain why
you think the standards might apply.
M. Environment
We have analyzed this proposed rule under Department of Homeland
Security Management Directive 023-01 and Commandant Instruction
M16475.lD, which guide the Coast Guard in complying with the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and
have made a preliminary determination that this action is one of a
category of actions that do not individually or cumulatively have a
significant effect on the human environment. A preliminary
environmental analysis checklist supporting this determination is
available in the docket where indicated under the ``Public
Participation and Request for Comments'' section of this preamble. This
action falls under section 2.B.2, figure 2-1, paragraph (34)(a) and
involves regulations which are editorial or procedural. We seek any
comments or information that may lead to the discovery of a significant
environmental impact from this proposed rule.
List of Subjects
33 CFR Part 97
Cargo stowage and securing, Cargo vessels, Hazardous materials,
Reporting and recordkeeping requirements, Incorporation by reference.
33 CFR Part 160
Administrative practice and procedure, Harbors, Hazardous materials
transportation, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Vessels, Waterways.
46 CFR Part 97
Cargo vessels, Marine safety, Navigation (water), Reporting and
recordkeeping requirements.
For the reasons discussed in the preamble, the Coast Guard proposes
to add 33 CFR part 97 and amend 33 CFR Part 160 and 46 CFR Part 97 as
follows:
TITLE 33--NAVIGATION AND NAVIGABLE WATERS
0
1. Add part 97 to read as follows:
PART 97--RULES FOR THE SAFE OPERATION OF VESSELS, STOWAGE AND
SECURING OF CARGOES
Subpart A--CARGO SECURING MANUALS
97.100 Applicability--Electronic documentation.
97.105 Definitions.
97.110 Incorporation by reference.
97.115 Reporting lost or jettisoned cargo.
97.120 Cargo securing manuals.
97.121-97.199 [Reserved]
97.200 Cargo securing manual (CSM) approval for U.S.-flagged vessels
on international voyages.
97.205 Requirements for amending an approved cargo securing manual
(CSM).
97.210 Appeals.
97.211-97.299 [Reserved]
97.300 Authorized cargo securing manual (CSM) approval authorities.
97.305 Requests for authorization to act as cargo securing manual
(CSM) approval authority.
97.310 Criteria for authorization.
97.320 Requirements for authorized approval organizations.
97.320 Revocation of authorization.
Subpart B--[Reserved]
Authority: 46 U.S.C. 2103, 3306; E.O. 12234; Department of
Homeland Security Delegation No. 0170.1(92)(a) and (b).
PART 97--RULES FOR THE SAFE OPERATION OF VESSELS, STOWAGE AND
SECURING OF CARGOES
Subpart A--Cargo Securing Manuals
Sec. 97.100 Applicability--Electronic documentation.
(a) This part applies to--
(1) A vessel of 500 gross tons or more on an international voyage
that must comply with Chapter VI/5.6 or Chapter VII/5 of the
International Convention for the Safety of Life at Sea, 1974 as amended
(SOLAS) and that does not solely carry liquid or solid cargoes in bulk,
and that is either a U.S.-flagged cargo vessel, or a foreign-flagged
cargo vessel that is operating in waters subject to the jurisdiction of
the United States;
(2) A U.S.-flagged cargo vessel that is less than 500 gross tons
but that chooses to have this part applied to it by submitting a cargo
securing manual for approval in accordance with Sec. 97.200(a)(3);
(3) A foreign-flagged cargo vessel of 500 gross tons or more on an
international voyage from a country not signatory to SOLAS that would
otherwise be required to comply with Chapter VI/5.6 or Chapter VII/5 of
SOLAS and that does not solely carry liquid or solid cargoes in bulk
and is operating in waters subject to the jurisdiction of the United
States; and
(4) Any organization applying to be selected as a cargo securing
manual approval authority.
(b) This part does not apply to a vessel owned by the Maritime
Administration that is part of the Ready Reserve Force or the title of
which is vested in the United States and which is used for public
purposes only.
(c) Any manual, letter, request, appeal, or ruling required by this
part may be provided or submitted in electronic form as well as in
printed form.
Sec. 97.105 Definitions.
As used in this part--
Approval authority means a CSM approval authority, as that term is
defined in this section.
Cargo means the goods or merchandise conveyed in a vessel, and
includes but is not limited to cargo that can be measured as a ``cargo
unit'' as that term is used in the International Maritime
Organization's Code of Safe Practice for Cargo Stowage and Securing,
2003 edition: ``a vehicle, container, flat, pallet, portable tank,
packaged unit, or any other entity, etc., and loading equipment, or any
part thereof, which belongs to the ship but is not fixed to the ship .
. .''; but it does not include other vessel equipment or the incidental
personal possessions of persons on board the vessel.
Cargo safe access plan (CSAP) means a plan included in the cargo
securing manual that provides detailed information on safe access for
persons engaged in work connected with cargo stowage and securing on
ships that are specifically designed and fitted for the purpose of
carrying containers.
Cargo securing manual (CSM) means an electronic or printed manual
developed to meet the requirements of SOLAS and this part that is used
by the master of a vessel to properly stow and
[[Page 68806]]
secure cargoes on the vessel for which it is developed.
Cargo securing manual approval authority or CSM approval authority
means an organization that meets the requirements of this part, and
that the Commandant has authorized to conduct certain actions and issue
electronic or printed approval letters on behalf of the United States.
Captain of the Port (COTP) means the U.S. Coast Guard officer as
described in 33 CFR 6.01-3.
Commandant, except as otherwise specified, means the Chief, Office
of Operating and Environmental Standards, whose address is COMDT (CG-
OES) 2100 2nd Street SW., Stop 7126, Washington, DC 20593-7126 and
whose telephone number is 202-372-1404.
Container means an article of transport equipment described in 49
CFR 450.3.
Container vessel means a vessel specifically designed and fitted
for the purpose of carrying containers.
International voyage means a voyage between a port or place in one
country (or its possessions) and a port or place in another country.
Sec. 97.110 Incorporation by reference.
(a) Certain material is incorporated by reference into this part
with the approval of the Director of the Federal Register under 5
U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that
specified in this section, the Coast Guard must publish notice of
change in the Federal Register and the material must be available to
the public. All approved material is available for inspection at the
U.S. Coast Guard, Headquarters, Office of Operating and Environmental
Standards (CG-OES), 2100 Second Street SW., Stop 7126, Washington, DC
20593-7126, and is available from the sources listed below. It is also
available for inspection at the National Archives and Records
Administration (NARA). For information on the availability of this
material at NARA, call 202-741-6030 or go to https://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
(b) International Maritime Organization (IMO), Publications
Section, 4 Albert Embankment, London, SE1 7SR, United Kingdom, +44(0)20
7735 7611, https://www.imo.org.
(1) Maritime Safety Committee Circular 1353 (MSC.1/Circ. 1353),
Guidelines for the Preparation of the Cargo Securing Manual, June 30,
2010-97, IBR approved for Sec. 97.120.
(2) Maritime Safety Committee Circular 1352 (MSC.1/Circ.1352),
Cargo Stowage and Securing (CSS Code) Annex 14 Guidance on Providing
Safe Working Conditions for Securing of Containers on Deck, June 30,
2010-97, IBR approved for Sec. 97.120.
(3) Assembly Resolution 739(18) (Res.A.739(18)), Guidelines for the
Authorization of Organizations Acting on Behalf of the Administration,
November 4, 1993-97, IBR approved for Sec. 97.310.
Sec. 97.115 Reporting lost or jettisoned cargo.
(a) In the event a vessel loses or jettisons at sea any cargo
described in paragraph (b)(1) of this section, it must comply with the
immediate notification requirements of 33 CFR 160.215, and if the cargo
contains hazardous material as defined in paragraph (b)(2) of this
section the vessel must also report as soon as possible in accordance
with 49 CFR 176.48.
(b)(1) The cargo to which this section applies includes any
container, and any other cargo the loss or jettisoning of which could
adversely affect the safety of any vessel, bridge, structure, or shore
area or the environmental quality of any port, harbor, or navigable
waterway of the United States.
(2) As used in this section, ``hazardous material'' means a
substance or material designated by the Secretary of Transportation as
capable of posing an unreasonable risk to health, safety, and property
when transported in commerce. The term includes hazardous substances,
hazardous wastes, marine pollutants, and elevated temperature materials
as defined in 49 CFR 171.8, materials designated as hazardous under the
provisions of 49 CFR 172.101, and materials that meet the defining
criteria for hazard classes and divisions in 49 CFR part 173.
Sec. 97.120 Cargo securing manuals.
(a)(1) Any vessel to which this part applies must have a cargo
securing manual (CSM) on board that has been approved by the government
of the country whose flag the vessel is entitled to fly; and a CSM
approved after June 30, 2010 must at a minimum meet the guidelines in
Maritime Safety Committee Circular 1353 (MSC.1/Circ. 1353), Guidelines
for the Preparation of the Cargo Securing Manual (incorporated by
reference, see 33 CFR 97.110).
(2) A container vessel with a keel laid on or after January 1, 2015
must include a cargo safe access plan that at a minimum meets the
guidelines in Maritime Safety Committee Circular 1352 (MSC.1/
Circ.1352), Cargo Stowage and Securing (CSS Code) Annex 14 Guidance on
Providing Safe Working Conditions for Securing of Containers on Deck
(incorporated by reference, see 33 CFR 97.110).
(b) While operating in waters under the jurisdiction of the United
States, the Coast Guard may board any vessel to which this part applies
to determine that the vessel has the document(s) required by paragraph
(a) of this section onboard. Any foreign-flagged vessel found not to be
in compliance with paragraph (a) may be detained by order of the COTP
at the port or terminal where the noncompliance is found until the COTP
determines that the vessel can go to sea without presenting an
unreasonable threat of harm to the port, the marine environment, the
vessel, or its crew.
Sec. Sec. 97.121-97.199 [Reserved]
Sec. 97.200 Cargo securing manual (CSM) approval for U.S.-flagged
vessels on international voyages.
(a)(1) An applicant for CSM approval may be the owner or operator
of the vessel, or a person acting on the owner or operator's behalf.
(2) The Commandant is responsible for overseeing and managing the
review and approval of approval authority applications and provides an
up-to-date list of organizations authorized to act under this subpart,
which is available at https://www.uscg.mil/hq/cg5/cg522/cg5222 or by
requesting it in writing from the Commandant and enclosing a self-
addressed, stamped envelope.
(3) The applicant must submit two dated copies of a CSM that meets
the requirements of this part to a CSM approval authority for review
and approval. If any amendments are submitted they must be dated. The
CSM must include a ``change page'' document to ensure continuous
documentation of amendments made and the dates they were completed.
(4) The approval authority will retain one copy of the CSM for its
records.
(b) If the approval authority completes the review process and
approves the CSM, the approval authority will provide a CSM approval
letter on its letterhead, containing--
(1) Date of CSM approval;
(2) A subject line reading: ``APPROVAL OF CARGO SECURING MANUAL
(AMENDMENT--if applicable) FOR THE M/V --------, OFFICIAL NUMBER ------
--'';
(3) The following statement: ``This is to certify that the Cargo
Securing Manual (Amendment--if applicable) dated -------- for the M/V
--------, Official Number --------, has been approved on behalf of the
United States. The Cargo
[[Page 68807]]
Securing Manual (Amendment--if applicable) was reviewed for compliance
with Maritime Safety Committee Circular 1353 (MSC.1/Circ. 1353) for
content, and correctness of the calculations on which the approval is
based. This approval letter is to be kept with the Cargo Securing
Manual, as proof of compliance with regulations VI/5.6 and VII5 of the
2004 amendments to the International Convention for the Safety of Life
at Sea (SOLAS) 1974.'';
(4) Signature of the approval authority official responsible for
review and approval of the CSM; and
(5) The approval authority's seal or stamp.
(c) If the approval authority completes the review process and
disapproves the CSM, the approval authority will provide a letter on
its letterhead, containing--
(1) Date of CSM disapproval; and
(2) Explanation of why the CSM was disapproved and what the
submitter must do to correct deficiencies.
(d) The submitter of a disapproved CSM may resubmit the CSM with
amendments for further review, either to correct deficiencies noted by
the approval authority, or to expand the CSM to fully meet the
requirements of this part.
(e) The original copy of the CSM approval letter must be kept with
the approved CSM and its amendments, together with supporting documents
and calculations used in granting the approval, onboard the vessel for
review by Coast Guard personnel upon request.
Sec. 97.205 Requirements for amending an approved cargo securing
manual (CSM).
Resubmission and re-approval by a CSM approval authority are
required after any event listed in this section.
(a) Reconfiguration of a vessel from one type of cargo carriage to
another (e.g., a general break-bulk cargo vessel reconfigured to a
container or a roll-on/roll-off vessel).
(b) Reconfiguration or replacement of 15 percent or more of the
vessel's fixed cargo securing or tie down systems with different types
of devices or systems.
(c) Replacement of 15 percent or more of the vessel's portable
cargo securing devices, with different types of devices for securing
the cargo not already used aboard the vessel (e.g., wire lashings
replaced with turnbuckles or chains).
Sec. 97.210 Appeals.
(a) A vessel owner or operator, or person acting on their behalf,
who disagrees with a decision of a cargo securing manual approval
authority may submit a written appeal to the approval authority
requesting reconsideration of information in dispute. Within 30 days of
receiving the appeal, the approval authority must provide the vessel
owner with a final written ruling on the request, with a copy to the
Commandant.
(b) A vessel owner who is dissatisfied with the approval
authority's final written ruling may appeal directly to the Commandant.
The appeal must be made in writing and include the documentation and
supporting evidence the owner wants to be considered, and may ask the
Commandant to stay the effect of the appealed decision while it is
under review by the Commandant.
(c) The Commandant will make a decision on the appeal and send a
formal response to the vessel owner and a copy to the approval
authority. The Commandant's decision will constitute final agency
action on the appeal request.
Sec. Sec. 97.211-97.299 [Reserved]
Sec. 97.300 Authorized cargo securing manual (CSM) approval
authorities.
(a) The following organizations are authorized to act on behalf of
the U.S. for the review and approval of CSMs:
(1) The American Bureau of Shipping, ABS Plaza, 16855 Northchase
Drive, Houston, TX 77060, 281-977-5800, https://www.eagle.org.
(2) Lloyd's Register of Shipping, 71 Fenchurch Street, London EC3M
4BS, United Kingdom, +44(0)20 7709 9166, https://www.lr.org.
(3) Any recognized classification society to which the Coast Guard
has delegated issuance of a Cargo Ship Safety Equipment Certificate in
accordance with 46 CFR 8.320(b)(4). A list of these organizations can
be found at www.uscg.mil/hq/cg5/cg522/cg5222 in the Alternate
Compliance Program site under ``Programs & Services''.
(4) The National Cargo Bureau, Inc., 17 Battery Place, Suite 1232,
New York, NY 10004-1110, 212-785-8300, https://www.natcargo.org.
(b) Reserved.
Sec. 97.305 Requests for authorization to act as cargo securing
manual (CSM) approval authority.
An organization seeking authorization as a CSM approval authority
must make a request to the Commandant for authorization. The request
must include, in writing, the items listed in this section or as
otherwise specified by the Commandant.
(a) A certified copy of the organization's certificate of
incorporation or partnership on file with a U.S. State, including the
name and address of the organization, with written statements or
documents which show that--
(1) The organization's owners, managers, and employees are free
from influence or control by vessel shipbuilders, owners, operators,
lessors, or other related commercial interests as evidenced by past and
present business practices;
(2) The organization has demonstrated, through other related work,
the capability to competently evaluate CSMs for completeness and
sufficiency according to the requirements of SOLAS and this part;
(3) The organization has an acceptable degree of financial
security, based on recent audits by certified public accountants over
the last 5 years; and
(4) The organization maintains a corporate office in the United
States that has adequate resources and staff to support all aspects of
CSM review, approval, and recordkeeping.
(b) A listing of the names of the organization's principal
executives, with titles, telephone and telefax numbers.
(c) A written general description of the organization, covering the
ownership, managerial structure, and organization components, including
any directly affiliated organizations, and their functions utilized for
supporting technical services.
(d) A written list of technical services the organization offers.
(e) A written general description of the geographical area the
organization serves.
(f) A written general description of the clients the organization
is serving, or intends to serve.
(g) A written general description of similar work performed by the
organization in the past, noting the amount and extent of such work
performed within the previous 3 years.
(h) A written listing of the names of full-time professional staff
employed by the organization and available for technical review and
approval of CSMs including:
(1) Naval architects and naval engineers, with copies of their
professional credentials, college degrees, and specialized training
certificates.
(2) Merchant mariners with Coast Guard-issued credentials, with a
summary of their working experience on board cargo vessels (including
vessel tonnage and types of cargo).
(3) Written proof of staff competence to perform CSM review and
approval, evidenced by detailed summaries of each individual's
experience (measured in months) during the past 5 years of evaluating
maritime cargo securing
[[Page 68808]]
systems. Experience summaries must be documented on company letterhead
and endorsed by a company executive who has had direct observation of
the individual and quality of his or her work product.
(j) A complete description of the organization's internal quality
control processes including written standards used by the organization
to ensure consistency in CSM review and approval procedures by
qualified professionals.
(k) A description of the organization's training program for
assuring continued competency of professional employees performing CSM
review and approval who are identified in the application.
(l) Evidence of financial stability over the past 5-year period,
such as financial reports completed independently by certified public
accountants.
(m) A list of five or more business references, including names,
addresses, and telephone numbers of principal executives, who can
attest to the organization's competence within the past 2 years.
(n) A statement to the Coast Guard that gives its officials
permission to inspect the organization's facilities and records of CSM
review and approval on behalf of the U.S. at any time with reasonable
advance notice.
(o) Any additional information the organization deems to be
pertinent.
Sec. 97.310 Criteria for authorization.
(a) The Commandant will evaluate the organization's request for
authorization and supporting written materials, looking for evidence
of--
(1) The organization's clear assignment of management duties;
(2) Ethical standards for managers and cargo securing manual (CSM)
reviewers;
(3) Procedures for personnel training, qualification,
certification, and re-qualification that are consistent with recognized
industry standards;
(4) Acceptable standards available for the organization's internal
auditing and management review;
(5) Recordkeeping standards for CSM review and approval;
(6) Methods used to review and certify CSMs;
(7) Experience and knowledge demonstrating competency to evaluate
CSMs for completeness and sufficiency according to the requirements of
SOLAS;
(8) Methods for handling appeals; and
(9) Overall procedures consistent with IMO Resolution A.739(18),
``Guidelines for the Authorization of Organizations Acting on Behalf of
the Administration'' (incorporated by reference, see Sec. 97.110).
(b) After a favorable evaluation of the organization's request, the
Commandant may arrange to visit the organization's corporate and port
offices for an on-site evaluation of operations.
(c) When a request is approved, the organization and the Coast
Guard will enter into the written agreement provided for by 33 CFR
97.315. If the request is not approved, the Commandant will give the
organization a written explanation, and the organization may resubmit
its request if it corrects any noted deficiencies.
Sec. 97.315 Requirements for authorized approval organizations.
Approved organizations will enter into a written agreement with the
Coast Guard that specifies:
(a) The period the authorization is valid;
(b) Which duties and responsibilities the organization may perform
and what approval letters it may issue on behalf of the U.S.;
(c) Reports and information the organization must send to the
Commandant;
(d) Actions the organization must take to renew the agreement when
it expires; and
(e) Actions the organization must take if the Commandant revokes
authorization pursuant to 33 CFR 97.320.
Sec. 97.320 Revocation of authorization.
The Commandant may revoke a cargo securing manual (CSM) approval
authority's authorization and remove it from the list of CSM approval
authorities if it fails to maintain acceptable standards. For the
purposes of 46 CFR subpart 1.03, such a revocation would be treated as
involving the recognition of a classification society and could be
appealed pursuant to 46 CFR 1.03-15(h)(4). Upon revocation, the former
approval authority must send written notice to each vessel owner whose
CSM it approved. The notice must include the current list of CSM
approval authorities and state:
(a) That its authorization as a CSM approval authority has been
revoked;
(b) The Coast Guard's explanation for the revocation; and
(c) That the vessel's CSM remains valid as long as amendments have
not been completed which require it to be re-approved pursuant to 33
CFR 97.200 or 97.205.
Subpart B--[Reserved]
PART 160--PORTS AND WATERWAYS SAFETY--GENERAL
0
2. The authority citation for part 160 continues to read as follows:
Authority: 33 U.S.C. 1223, 1231; 46 U.S.C. Chapter 701;
Department of Homeland Security Delegation No. 0170.1. Subpart C is
also issued under the authority of 33 U.S.C. 11225 and 46 U.S.C.
3715.
0
3. Revise Sec. 160.215 to read as follows:
Sec. 160.215 Notice of hazardous conditions.
(a) Whenever there is a hazardous condition either onboard a vessel
or caused by a vessel or its operation, the owner, agent, master,
operator, or person in charge must immediately notify the nearest Coast
Guard Sector Office or Group Office, and in addition submit any report
required by 46 CFR 4.05-10.
(b) When the hazardous condition involves cargo loss or jettisoning
as described in 33 CFR 97.115, the notification required by paragraph
(a) of this section must include--
(1) What was lost, including a description of cargo, substances
involved, and types of packages;
(2) How many were lost, including the number of packages and
quantity of substances they represent;
(3) When the incident occurred, including the time of the incident
or period of time over which the incident occurred;
(4) Where the incident occurred, including the exact or estimated
location of the incident, the route the ship was taking, and the
weather (wind and sea) conditions at the time or approximate time of
the incident; and
(5) How the incident occurred, including the circumstances of the
incident, the type of securing equipment that was used, and any other
material failures that may have contributed to the incident.
TITLE 46--SHIPPING
PART 97--OPERATIONS
0
4. The authority citation for part 97 continues to read as follows:
Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2103, 3306, 6101; 49
U.S.C. 5103, 5106; E.O. 12234, 45 FR 58801, 3 CFR, 1980 Comp., p.
277; E.O. 12777, 56 FR 54757; 3 CFR, 1991 Comp., p. 351; Department
of Homeland Security Delegation No. 0170.1.
0
5. Add Sec. 97.12-10 to read as follows:
Sec. 97.12-10 Cargo securing manuals.
Each U.S.-flagged vessel that must comply with Chapter VI/5.6 or
Chapter VII/5 of the International Convention for
[[Page 68809]]
the Safety of Life at Sea, 1974 as amended must have on board a cargo
securing manual that meets the requirements of 33 CFR part 97.
Dated: November 1, 2013,
J.G. Lantz,
Director of Commercial Regulations and Standards, U.S. Coast Guard.
[FR Doc. 2013-26886 Filed 11-14-13; 8:45 am]
BILLING CODE 9110-04-P
