U.S. Extends Jones Act Waiver Another 90 Days, Adds U.S.-Flag Vessel Availability Test

The Trump administration has extended its emergency Jones Act waiver for another 90 days while substantially tightening the process for using foreign-flag vessels in domestic trades, including a new requirement that U.S.-flag shipping capacity be checked before individual voyages are authorized.

U.S. Customs and Border Protection said the Department of Homeland Security approved the second extension of the waiver, originally issued March 17 at the request of the Department of War. The latest extension takes effect August 17 and runs through November 15.

Under the extension, covered cargo must be loaded aboard a vessel before the waiver expires at 11:59 p.m. Eastern Time on November 15.

The more significant change, however, is how foreign-flag voyages will be approved.

Beginning August 17, companies seeking to move covered cargo aboard a foreign-flag vessel must submit a “Vessel Availability Request” to the Department of War and the Maritime Administration before beginning the voyage.

The request must include details including the vessel and operator, voyage dates, loading and discharge ports, cargo and quantity, shipment frequency and an explanation of why the transportation is in the interest of national defense.

MARAD will then conduct a market survey to determine whether a coastwise-qualified vessel is available to carry the cargo. U.S.-flag operators will generally have 24 hours to respond to the survey.

The Department of War will use the results to determine whether the individual foreign-flag voyage is covered by the waiver. If a coastwise-qualified vessel is available, that vessel will instead be given the opportunity to perform the transportation.

The change effectively transforms what had been a broad emergency waiver into a voyage-by-voyage process in which domestic operators are given an opportunity to compete for the cargo before foreign tonnage is authorized.

The Jones Act, formally Section 27 of the Merchant Marine Act of 1920, generally requires cargo transported between U.S. points to move aboard vessels that are U.S.-built, U.S.-owned and coastwise qualified. Federal law allows the navigation laws to be waived under certain national defense circumstances.

The March waiver was issued amid disruptions to global energy markets stemming from the conflict in the Middle East and disruption to shipping through the Strait of Hormuz.

The administration has already extended the waiver once, while gradually narrowing how it can be used. The latest changes mark the most substantial effort yet to steer eligible cargo toward the domestic fleet while retaining foreign vessels as a fallback when U.S. tonnage is unavailable.

CBP also issued an updated list of products potentially eligible under the waiver beginning August 17. The list includes more than 32,000 Harmonized Tariff Schedule entries, including categories covering soybean oil and ethanol.

Those commodities have already moved aboard foreign-flag vessels under the waiver, according to MARAD reports reviewed by gCaptain.

The records show three ethanol movements, including two shipments of undenatured ethanol and one of denatured ethanol, as well as a shipment of crude degummed soybean oil.

One filing covering a 134,971-barrel ethanol movement between Galveston and Houston said Valero had been in contact with the White House and CBP and had received assurances that shipments of ethanol for gasoline blending between Texas hubs were within the intent of the waiver.

Another filing involving soybean oil described the cargo as a renewable feedstock used to produce renewable diesel.

MARAD’s reporting data show the waiver has been used extensively since March. The latest spreadsheet of completed movements contains 220 reported voyages involving cargoes including crude oil, gasoline, diesel, jet fuel, renewable diesel, ethanol, ammonia and other energy products.

Foreign-vessel operators using the extended waiver will continue to be required to notify CBP of authorized movements and provide vessel, cargo, carrier and port information.

Federal law also requires vessel owners or operators and waiver applicants to report details of completed foreign-flag voyages to MARAD within 10 days of completion.

The new availability test follows criticism from U.S. maritime interests over the breadth of the waiver and concerns that foreign vessels were being permitted to carry domestic cargo even when Jones Act tonnage could potentially perform the work.

The revised system puts MARAD directly into that determination before a voyage begins, requiring it to test the domestic market and giving coastwise-qualified operators a short window to offer available vessels.

The waiver itself remains grounded in national defense authority. MARAD notes that DHS may waive the navigation laws at the request of the Secretary of War when the Secretary considers a waiver necessary in the interest of national defense to address an immediate adverse effect on military operations.

The result is a waiver that remains available through mid-November, but with a considerably higher hurdle for companies seeking to use foreign ships in U.S. domestic trades.

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