Key facts
- US domestic shippers are urging thorough reviews of Jones Act waiver requests.
- Concerns exist that the Department of Defense's final approval authority could undermine the domestic maritime industry.
- A new requirement mandates MARAD consult with DoD on vessel availability before issuing waivers.
- Shippers must prove no Jones Act-compliant vessels were available for US-to-US shipments.
- The waiver, initially for national security, is also used by refiners to reduce costs.
The US domestic shipping industry is calling for stringent reviews of Jones Act waiver requests, fearing that recent extensions grant the Department of Defense (DoD) final approval authority, potentially harming the domestic maritime sector. Shippers expressed disappointment with the waiver's extension on August 10, highlighting concerns that the Maritime Administration (MARAD) must now consult with the DoD regarding vessel availability before issuing waivers. This new stipulation requires companies using foreign tankers for domestic shipments to prove that no compliant US vessels were available. The Jones Act waiver, which permits foreign-flagged and owned vessels to transport goods between US ports—a role typically reserved for US-flagged, owned, and crewed ships—was first issued on March 17 for national security reasons and later extended for 90 days. However, the domestic maritime industry has criticized some voyages conducted under the waiver, arguing they do not serve national security interests. The waiver was initially intended to ensure adequate fuel supply for US airfields and military installations during the conflict with Iran, but it has also benefited US refiners by reducing their transportation costs. Jennifer Carpenter, president of the American Maritime Partnership, urged the Trump administration to rigorously assess the national defense justification for each waiver request and to confirm the availability of US vessels before permitting foreign ships to carry cargo between US ports. She noted that many justifications provided under the existing waiver have been generic, with some shipments even leaving a placeholder for the cargo type. Matthew Paxton, president of the Shipbuilders Council of America, emphasized that future waivers must be strictly based on national security to protect the industry's progress. Aaron Smith, president and CEO of the Offshore Marine Service Association, warned that exceptions to the Jones Act can be manipulated and that a market-availability test is only effective if independently verified by the government. He believes that without such rigorous review, the current approach could effectively become a full waiver, further damaging the American maritime industry. Concerns also extend to MARAD's capacity to conduct these market availability tests. As of August 9, MARAD was still establishing contacts with vessel operators to assess US-flagged capacity, reportedly asking an industry group for assistance in updating its contact and vessel information. Sources familiar with the matter suggest the DoD might issue waivers irrespective of vessel availability. The American Petroleum Institute, however, praised the administration's decision to extend the waivers.