U.S. Shipping in U.S. Waters
The purpose of this website is to reinforce the importance of the coastwise laws and to explain the Maritime Administration’s role when exemptions are requested. The site also acts as a platform were MARAD can post required notices related to such exemptions.
Domestic waterborne transportation is safe, reliable, efficient and an established mainstay of America’s national transportation system. This service is provided by U.S.-flag coastwise qualified vessels that provide essential services among ports, coastlines and almost all states and territories -- including Alaska, Hawaii, and Puerto Rico.
Each year, throughout this thriving trade, tens of thousands of vessels transport over a billion tons of cargo, with hundreds of ferry operators transporting millions of passengers; contributing billions to our nation's economy through freight and passenger revenue, taxes, and private investment.
This trade is critical to our economy and national defense to ensure both reliability of domestic service and sealift resources in the event the U.S. needs to deploy internationally in a contingency.
To ensure the survival of this key industry, Congress has passed a series of laws reserving waterborne domestic trade to qualified U.S. vessels. The broadest of these laws in terms of amount of cargo carried and vessels in service is the Jones Act, which, strictly speaking, is the merchandise trade statute applying to domestic cargo only.
However, the term “Jones Act” or “Jones Act laws” is often colloquially extended to other legislated provisions as well, such as the Passenger Vessel Services Act, and other laws supporting the U.S.-flag commercial fleet. One must remember that each such law is a separate provision, with differing rules and regulations regarding exemptions for foreign vessel use.
The Jones Act
The most far reaching of the coastwise trade statutes, is the Jones Act (46 U.S.C. § 55102), a section of the 1920 Merchant Marine Act that strictly speaking, only applies to merchandise being transported by water between U.S. points. The law requires that this cargo is to be shipped solely aboard vessels that are U.S.-built, U.S.-citizen owned, and, registered in the U.S., which means crewed by Americans. This encourages a strong U.S. Merchant Marine for both economic security and national defense by fostering a U.S.-flag fleet that can contribute to our financial wellbeing, and act as a sealift resource for the transportation of supplies in time of contingency.
The Jones Act Waiver Processes 46 U.S.C. § 501
An often-asked question is “can the U.S.-owned, -built, -crewed, - registered requirements of the Jones Act be waived to allow foreign-flag vessels in some circumstances?” The answer is yes, however, Jones Act exemptions are rare as the only basis for an exemption is “interest of national defense.” There are two types of Jones Act waiver request processes, one for the Secretary of Defense and one for non-Defense entities.
It is important to note that regarding both processes the final issuer of any Jones Act waiver is the Secretary of Homeland Security. The Maritime Administration does not issue Jones Act waivers.
For waivers requested by the Secretary of Defense (SECDEF), under 46 U.S.C. § 501 (a), U.S. Customs and Border Protection (Customs) has been delegated the authority to waive the Jones Act immediately as the SECDEF is the Federal authority on “interests of national defense”, the only grounds for Jones Act waivers.
For all other (non-Department of Defense) waiver requests, the Secretary of Homeland Security is only authorized to grant a waiver if it is considered necessary in the interest of national defense under (46 § 501(b)).
Consequently, when a waiver request is submitted, the Department of Homeland Security screens civilian entity requests and makes a rapid assessment regarding whether there is sufficient “interest of national defense” to proceed.
If the waiver application passes the test for sufficient “interest of national defense”, the Maritime Administrator is formally consulted regarding the availability of qualified United States flag capacity to meet the national defense requirements. The Maritime Administrator is also directed to provide advice regarding how the coastwise qualified U.S.-flag fleet can be enabled to meet the national defense needs. With these formal determinations onboard, the Secretary of Homeland Security makes the final Jones Act waiver decision.
There are other actions involved in the waiver process as well. The Maritime Administrator must inform the Secretary of Transportation when formal advice is issued, and post non-availability advice on the Maritime Administration website. There is also a reporting requirement for recipients of such waivers. Therefore, in cases where such determinations are made, and reports are received, MARAD will meet its public posting requirements as per the below:
Non-Availability Determinations and Foreign-flag Voyage Reports
According to 46 U.S. Code § 501(b), the Maritime Administration is publishing Jones Act Waiver related non-availability determinations on its website. Per section 501(b), the following non-availability determinations have been made by the Maritime Administrator:
In addition, 46 U.S. Code § 501(c) provides that, not later than 10 days after the date of the conclusion of the voyage of a vessel that, during such voyage, operated under a waiver of the coastwise laws issued by the U.S. Department of Homeland Security, the owner or operator of the vessel shall submit to the Maritime Administrator a report that includes certain information. That section further requires the Maritime Administrator to publish such reports to MARAD’s website within 48 hours of receipt. The following foreign-flag voyage reports have been submitted to the U.S. Department of Transportation’s Maritime Administration pursuant to the section:
|Shipper||Owner/Operator of Vessel||Vessel Name||Flag of Vessel||Port of Loading||Load Date||Port of Discharge||Discharge Date||Date Voyage Information Reported to MARAD|
|Valero Marketing and Supply Company||Sifnos Shipping Corp.||NAVE TITAN||Panama||St. Charles, Louisiana||5/11/2021||Stapleton, New York||5/21/2021||5/24/2021|
|CITGO Petroleum Corporation||Heroic Columba Inc.||FORRES PARK||
Hong Kong, China
Lake Charles, Louisiana
|5/13/2021||Linden, New Jersey||5/28/2021||5/28/2021|
MARAD also administers the following, highly specialized exemption programs that allow the use foreign vessels domestically under exacting circumstances and conditions:
Small Vessel Coastwise Endorsement Eligibility Determination. 46 U.S.C. § 12121 authorizes MARAD to administratively exempt the U.S.-build requirements of the Passenger Vessel Services Act (for domestic passenger transport) on a case-by-case basis for foreign-built small passenger vessels carrying 12 passengers or less. Approximately 150 granted a year.
Launch Barge Exemption Program. On extremely rare occasions, the launch of an exceptionally large oil rig or offshore platform requires the use of a foreign-built launch barge. 46 U.S.C. § 55108 allows MARAD to make determinations allowing the use of these launch barges when no U.S.-built launch barge is available or technically capable. No new exemptions have been requested or granted in recent years; one exemption was granted in 2014.
Anchor Handling Exemption Program. Similar to the Launch Barge Program, MARAD is authorized to make determinations under P. L. 111-281 allowing the use of foreign anchor-handling vessels (used to position mobile offshore drilling units) if no U.S.-flag vessels are available. This specialized MARAD program only applies to operations in the Beaufort Sea and Chukchi Sea, adjacent to Alaska. As petroleum development companies have curtailed exploration and production in these areas, there have been no new exemptions granted since 2015.
Aquaculture Program. Per the enactment of the Coast Guard Authorization Act of 2010, codified at 46 U.S.C. § 12102, the Secretary of Transportation has the discretionary authority to issue exemptions allowing documented vessels with registry endorsements or foreign flag vessels to be used in operations that treat aquaculture fish to protect aquaculture fish from disease, parasitic infestation, or other threats to their health when suitable vessels of the United States are not available. The Secretary has delegated this authority to the Maritime Administrator. MARAD has recently been granting approximately four exemptions of this type per year.
Oil Spill Vessel Response Vessel (OSRV) Agreement. The Maritime Administration entered into a Memorandum of Agreement with the U.S. Coast Guard, the Environmental Protection Agency, and the State Department on July 29, 2010 to expedite requests for exemptions for foreign OSRVs pursuant to 46 U.S.C. § 55113. The Maritime Administration’s role in this process is to assess the marketplace and determine U.S.-flag OSRV availability before a decision is made to use a foreign vessel. This exemption process was used in DEEPWATER HORIZON Oil Spill Response.
U.S. Customs and Border Protection, an Agency of the U.S. Department of Homeland Security has the responsibility for enforcing the coastwise laws, including the Jones Act, and can impose fines and penalties on violators. If you think you have witnessed a Jones Act violation you are encouraged to report it to:
The Jones Act Division of Enforcement (JADE)
U.S. Customs & Border Protection
Office - (504) 670-2074
For questions about Domestic Shipping or any of the above programs, contact the Office of Cargo and Commercial Sealift.