Jones Act waiver enters new phase with fewer products and voyage-by-voyage review

The Trump administration’s extended Jones Act waiver took effect Monday under a significantly narrower process designed to give eligible U.S. vessels priority over foreign ships.

The Department of Homeland Security approved the second 90-day extension at the request of the Department of War, according to U.S. Customs and Border Protection’s Updated Guidance No. 4, CSMS #69519766. The extension began at 12 a.m. Eastern time on Aug. 17. To qualify, covered cargo must be loaded aboard an authorized vessel by 11:59 p.m. Eastern time on Nov. 15.

The Jones Act generally reserves transportation of merchandise between U.S. points for vessels that are U.S.-built, U.S.-owned and properly documented for coastwise trade. Its requirements are codified principally at 46 U.S.C. §55102. Federal law permits navigation requirements to be waived for national-defense reasons under 46 U.S.C. §501.

The administration initially issued the waiver on March 17 in response to energy and commodity disruptions associated with the war involving Iran. It granted a first 90-day extension beginning May 18, allowing foreign-flag vessels to carry listed products between U.S. ports through Aug. 16. CBP’s guidance for that extension required advance notice but did not subject every proposed voyage to the domestic-vessel market test now in effect.

Domestic vessels get first opportunity

Under the revised procedure, a shipper considering a foreign-flag vessel must submit a “Vessel Availability Request” to the Department of War and the Maritime Administration before beginning the voyage. CBP is copied for situational awareness.

The submission must identify the vessel, flag, owner, operator and carrier; the loading and discharge ports and dates; the cargo, quantity and applicable tariff and hazardous-material codes; the frequency of shipments; relevant charter-party dates; and the reason the voyage serves national defense.

MARAD will then survey the market for an available coastwise-qualified vessel. Unless MARAD specifies otherwise, domestic operators will have 24 hours to state whether they can collect the cargo within the required period. The Department of War will review the survey results and determine whether the existing waiver applies to the proposed voyage.

Inclusion of a commodity on the government’s product list no longer gives a shipper an automatic route to foreign tonnage. The proposed voyage must also pass the vessel-availability review and receive affirmative authorization.

The 24-hour period is the response window for domestic operators, not a guaranteed approval time for the shipper. CBP’s guidance establishes neither an overall decision deadline nor automatic approval if the agencies do not respond within a specified period.

Holland & Knight attorneys warned that the process could add time to voyage planning and require greater coordination among cargo interests, vessel operators and federal agencies.

Practical issues may include conditional vessel charters, load-date changes and responsibility for delay or cancellation costs if a domestic vessel becomes available or foreign-vessel authorization is denied. Holland & Knight’s earlier legal analysis also advises waiver users to preserve voyage and contractual records because of post-voyage reporting and potential enforcement exposure.

Product coverage reduced

The government also substantially reduced the list of potentially eligible products. Politico reported that the list fell from more than 600 product classifications to fewer than 250.

The previous waiver covered approximately 659 categories, including petroleum, natural gas, coal, ammonia, fertilizer inputs and related chemicals, according to the Cato Institute’s tracker based on MARAD filings.

Most petroleum products and fertilizers remain on the revised list. Politico’s review of MARAD records indicates that many deleted categories, including coal and certain organic chemicals, had not generated significant waiver traffic. The numerical reduction may therefore be larger than its immediate commercial effect.

Foreign-vessel operators that receive authorization must still comply with CBP entry and cargo-reporting procedures. The vessel owner or operator and the party requesting the waiver must also report the completed voyage to MARAD within 10 days, as required by federal law. MARAD publishes those filings on its domestic-shipping and Jones Act waiver page.

Compromise leaves both sides with concerns

The revised system follows sustained pressure from U.S. vessel operators, shipbuilders, maritime unions and lawmakers who opposed another broad extension. In a June letter, more than 50 House Republicans asked Trump to allow the waiver to expire, arguing that prolonged access to foreign vessels would weaken American maritime employment, shipbuilding and national-security capacity. Read the congressional letter.

The American Maritime Partnership contends that the earlier waiver displaced cargo that American vessels or other domestic transportation modes could have handled while producing little measurable benefit for consumers. Its calculations and conclusions represent the domestic industry’s position and remain disputed by waiver supporters. AMP’s statement and supporting argument.

Energy interests take the opposite view. The American Petroleum Institute has described Jones Act waivers as a practical means of adding shipping flexibility during supply disruptions and has called for a more predictable waiver process. API’s position.

The new regime is a compromise. Energy and agricultural shippers retain access to foreign capacity, but for fewer commodities and only after a domestic-vessel check. Jones Act operators gain advance notice and an opportunity to claim the cargo, although the waiver itself will remain in force for another three months.

The first MARAD market surveys and voyage determinations under the new system will show whether the review redirects shipments to American vessels, delays cargo movements or continues to authorize substantial foreign-flag activity.