The Future of Water Carriers: Regulatory Reforms and Industry Impact

Water carriers are on the brink of a significant regulatory shift that promises clarity and reduced compliance burdens. The Trump Administration’s focus on deregulation has led to a proposed rulemaking by the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) that aims to eliminate outdated requirements for water carriers.

Since the issuance of an Executive Order early in the Administration’s tenure, the objective has been clear: reduce regulatory costs to promote economic prosperity and national security. The FMCSA’s NPRM, which concluded its comment period in July 2025, signifies a step towards lighter regulation in the transportation sector.

Historical Context and Legal Jurisdiction

For decades, water carriers have existed in a regulatory grey area, with the FMCSA and the Surface Transportation Board (STB) sharing technical jurisdiction. The term “water carrier” encompasses various vessels providing water transportation for compensation, excluding those involved in international trades overseen by the Federal Maritime Commission (FMC).

Legacy statutes and the Interstate Commerce Commission Termination Act of 1995 have left water carriers subject to outdated regulatory frameworks, leading to confusion regarding licensing and registration requirements. The FMCSA’s acknowledgment of its limited oversight in the NPRM reflects a long-standing disconnect between statutory language and regulatory practice.

Current Regulatory Landscape

While the STB retains jurisdiction over domestic water carriers, its enforcement activities are minimal, focusing primarily on dispute resolution and complaint adjudication. In contrast, the FMC oversees international ocean transportation, leaving a regulatory gap for purely domestic waterborne commerce.

Despite the FMCSA’s decision to step back from regulating non-motor carrier water operations, statutory provisions pertaining to water carriage remain unchanged. This shift clarifies registration requirements for industry participants while reducing compliance burdens in the domestic water transportation sector.

Industry Implications and Future Outlook

With regulatory ambiguity lifting, domestic water carriers and intermediaries can operate with greater certainty and reduced compliance friction. The focus can now shift towards enhancing service delivery and market competitiveness without the burden of navigating outdated regulatory practices.

While statutory frameworks may persist, the regulatory environment is evolving to align with commercial realities, signaling a new era of clarity and efficiency for water carriers in the United States.

Overall, the proposed regulatory reforms represent a positive step towards streamlining the regulatory landscape for water carriers, paving the way for a more efficient and competitive industry in the years to come.