Twelve foreign-flagged tankers have been operating in U.S. coastal trade without reporting their activities to the U.S. Maritime Administration (MARAD). These tankers have engaged in trade along U.S. shores under a Jones Act exemption.
Jones Act Exemptions and Their Conditions
Jones Act exemptions allow foreign vessels to transport energy cargoes between various points in the United States. This exemption, which has been extended until November 15, is considered one of the most comprehensive exceptions to the Jones Act in contemporary history and has faced severe criticism from U.S. domestic transportation interests and congressional officials.
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Failure to Report and Its Consequences
Investigations based on AIS data and ship arrivals and departures show that at least 12 tankers have engaged in commercial activities along U.S. shores, but none of them have reported their activities to MARAD. These vessels primarily operate from the Gulf of Mexico refining area, which is the main center for exempted activities.
According to 46 U.S.C. § 501(c), ship owners and operators are required to report any exempt activities to MARAD within 10 days of the voyage. Reported information includes the ship's name, flag, owner and operator, ports of entry and exit, cargo carried, and explanations for the exemption related to national interests.
Jennifer Carpenter, President of the American Maritime Partnership, expressed concern over the lack of reporting of activities, emphasizing that this raises questions about compliance with other U.S. laws, including immigration, tax, and labor laws. She also called for an end to the exemption and stricter congressional oversight of the exemption process.
Supporters of the Jones Act argue that this exemption undermines the domestic transportation business model and reduces investment sentiment in domestically produced vessels. Without the cabotage market created by the protections of the Jones Act, foreign operators with lower wages could compete with American operators who earn higher wages in the U.S. domestic trade.
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