The U.S. Department of Homeland Security (DHS) has waived the Jones Act to allow a foreign shipping company to move domestic fuel supplies to help shore up fuel supplies on the U.S. East Coast.
“In the interest of national defense, I have approved a temporary and targeted waiver request to an individual company,” DHS Secretary Alejandro Mayorkas said in a statement late Wednesday.
“This waiver will help provide for the transport of oil products between the Gulf Coast and East Coast ports to ease oil supply constraints as a result of the interruptions in the operations of the Colonial Pipeline. The decision to approve the waiver was made after careful consideration and consultation with interagency partners across the federal government. The Departments of Transportation [DOT], Energy and Defense were consulted in order to assess the justification for the waiver request and ensure the approval of the waiver is in the interest of national defense,” Mayorkas said.
In remarks at the White House on Thursday, President Joe Biden said his administration will “grant additional waivers if necessary,” and they will remain in place until the pipeline’s service is fully restored.
The Jones Act requires that all domestic shipments between U.S. ports be carried on U.S.-flagged vessels that are built, owned and crewed by American shipyards, owners and mariners, respectively.
The decision to issue the waiver was based on an assessment of available U.S. tankers made by DOT’s Maritime Administration, as well as a review by DHS of requests made by foreign companies that can show there is insufficient capacity on Jones Act-qualified vessels to carry fuel to the affected region.
“The Jones Act is vital to maintaining the strength of the American shipbuilding and maritime industries by requiring all maritime cargo transport between U.S. ports to occur on U.S.-flagged vessels,” DHS further noted. “When U.S.-flagged vessels are not available to meet national defense requirements, the Department of Homeland Security may grant a waiver to the Jones Act only if the proposed shipments are in the interest of national defense and after careful evaluation of the issue.”
Issuing waivers that sidestep U.S. ships is always controversial, however, even in emergency situations that affect U.S. domestic supply chains.
Mike Roberts, President of the American Maritime Partnership, which lobbies in support of companies that own Jones Act-qualified vessels, said the law should not be waived unless responding to an urgent national security need that cannot reasonably be met with American ships.
“The American Maritime Partnership does not object to the targeted approach of the administration, but strenuously encourages all policymakers to hold accountable those who seek to benefit from any waiver to avoid undermining American jobs and consumers,” Roberts said in response to the waiver.
- Colonial Pipeline announces restart; operations coming back Wednesday
- US considering foreign tankers to move domestic fuel supplies
- Tanker rate boost from pipeline cyberattack could be fleeting
Click for more FreightWaves articles by John Gallagher.
Future of Supply Chain
JUNE 21-22, 2023 • CLEVELAND, OH • IN-PERSON EVENT
The greatest minds in the transportation, logistics and supply chain industries will share insights, predict future trends and showcase emerging technology the FreightWaves way–with engaging discussions, rapid-fire demos, interactive sponsor kiosks and more.