Report: Some Foreign Ships Aren’t Reporting Jones Act Waiver Voyages

In a new review of federal records and port call data, Bloomberg discovered that at least a dozen foreign-flag tankers have engaged in U.S. coastwise trade without registering their activity with the Maritime Administration, as required for using the Trump administration's ongoing Jones Act waiver. 

Under the national-defense waiver, energy cargoes can be moved between U.S. points by foreign-flag ships. The waiver is renewable and has been extended out until November 15. It is among the longest and broadest exemptions from Jones Act in modern memory, and is strongly opposed by U.S. domestic shipping interests and by Congressional leaders. 

Bloomberg's review of AIS and port call data turned up at least 12 foreign ships that have operated in coastwise trade during the waiver period without notifying MARAD of their cargo and their voyage. All operated on voyages out of the Gulf Coast refining region, the hub for most of the waivered activity. 

Under 46 U.S.C. § 501(c), vessel owners and operators are required to report any waivered activity to MARAD within 10 days after a voyage. The reported information includes the vessel name and flag, owner and operator, ports of call, cargo carried, and an explanation of why the waivered voyage was in the interest of national defense. These reports are compiled and posted on MARAD's public website.

"It’s outrageous that foreign operators are not reporting their movements under the waiver. Reporting is specifically required by law, which was emphasized in the U.S. Customs and Border Protection notice of the waiver. It begs the question of what other U.S. laws – like immigration, taxation, and labor – are not being followed by foreign vessels using the waiver," sad Jennifer Carpenter, president of the pro-Jones Act American Maritime Partnership. "It’s time for the administration to end the waiver, and it’s also time for Congress to conduct vigorous oversight of the waiver process."

Supporters of the Jones Act say that the waiver is undermining the domestic-shipping business model and weakening sentiment for investing in new, made-in-America ships. Without the cabotage market created by Jones Act protection, low-wage foreign operators can compete on price with high-wage American operators in domestic U.S. trade – a situation not found in trucking, rail or aviation, only in maritime shipping.