Cost of switching to 17-digit HINs would outweigh the benefits, trade organizations say
The Coast Guard again is looking at changing hull identification numbers from 12 to 17 digits to assist in homeland security, theft and fraud investigations, but a host of industry interests say the cost is too high.
“The costs outweigh the benefits,” says Cindy Squires, director of regulatory affairs for the National Marine Manufacturers Association.
Squires says she is hopeful the National Insurance Crime Bureau can become a collection point for the information the Coast Guard is looking for in the expanded HINs, so changing them won’t be necessary. She says boatbuilders would be asked to voluntarily provide the information to the NICB.
Another possible option is asking boatbuilders to voluntarily adopt a 17-digit HIN, according to Phil Cappel, chief of the Coast Guard’s Product Assurance Branch.
The 12-digit HIN, adopted in 1972 to help the Coast Guard in product recalls, incorporates a three-digit manufacturer code, five-digit serial number, two-digit number for date of manufacturer or safety certification, and two-digit model-year number. Every boat has this unique number stamped into the hull at two locations: one on the transom and the other hidden somewhere on the boat so investigators can identify the vessel if the transom HIN is changed or obliterated.
HINs are used today not just to assist in recalls, but to identify boats for purposes of state registration and titling, as well as for federal documentation.
The Coast Guard wants to add four digits with descriptive information about the boat — length, hull material, main propulsion and vessel type — and a fifth to serve as a “check digit” that verifies that the previous 14 have been entered correctly in the computer. In a March 17 Federal Register notice seeking comments, the Coast Guard said the new HIN information would help law enforcement officers recover stolen boats and detect fraud, help officers on the water identify suspicious boats in Homeland Security operations, provide more information about boats for compiling accident statistics and rulemaking, and to check the accuracy of HINs recorded for titling, registration and documentation.
Cappel says the purpose of the notice was to gather comments about the cost of expanding the HIN and the number of lives it could save for cost-benefit analysis.
The NMMA and National Marine Bankers Association have sent the Coast Guard comments opposing expanded HINs, but the National Association of State Boating Law Administrators and the International Association of Marine Investigators are on record as supporting it.
“I’ve been fighting for [expanded HINs] for 15 years,” says Fred Messmann, Nevada’s boating law administrator. “People think my middle name should be changed to ‘17-digit HIN.’ ”
He says the longer HIN would be particularly useful in evaluating the impact of new rules. If the Coast Guard were to propose a new PFD rule for all boats smaller than 21 feet, a central listing of 17-digit HINs would give rulemakers the number of boats and an accurate count of accidents in that size range, and provide a basis for sound cost-benefit analysis, he says.
As the Coast Guard moves ahead with its Vessel Identification System, a national computer database of boats and boat owners based on registration and documentation information, the expanded HIN may just duplicate information available through that system, the NMMA said in an August white paper on HINs. Earlier this year, 16 states had signed up for the Vessel Identification System, and another 37 states and territories were considering it.An independent 2004 study estimates government and industry costs of complying with a 17-digit HIN at about $18 million over 10 years. Industry estimates are much higher. NMBA says the cost to financial institutions alone could be $15 million to $20 million. Manufacturers use HINs to identify boats in their production, inventory, tracking, logistics and sales operations, and in service, repair, warranty and lending activities. NMMA, in its white paper, says companies will spend anywhere from tens of thousands to several million dollars. Personal watercraft manufacturer American Honda Motor Co. estimates the changeover would cost the company about $2.4 million.
Squires says, too, that adopting a 17-digit number would put the U.S. HIN out of synch with that of the European Union and other trading partners, and would frustrate trade. “The 17-digit HIN is not really a viable solution,” she says. “The cost is prohibitive, and it would have a real impact on international trade.”
She says boating, finance and insurance industry representatives met with the Coast Guard and state boating law administrators Aug. 11 to talk about the insurance crime bureau collecting recreational boat information from the industry similar to the way it collects information about automobiles, and giving the Coast Guard and state marine police agencies access to that information. That project is still very much in a preliminary stage.
“We’re hopeful that they’ll be able to do that,” says Squires.
After 15 years of advocating for a 17-digit HIN, Messmann says this is promising. “It’s not going to be something perfect, but for a guy who has been fighting [for] this for years, I was thrilled with this [proposed] compromise,” he says.
This article originally appeared in the October 2008 issue.