US trade officials' implementation of a case-by-case review of Jones Act waiver requests since mid-August has cut in half the number of international vessels approved for domestic US shipping, according to sources, although a significant lag in waiver reports is obscuring the data.
The more thorough review of requests for waivers from the law that limits US port-to-port shipping to US-built, -owned and -operated ships has led to only about half of all Jones Act waiver requests being approved since the revised process started, two industry sources familiar with the matter told Argus. This compares to a near-blanket approval extended previously to any shippers requesting the waiver since it first went into effect 17 March.
US refiners, who have used the waivers extensively to move crude and products between domestic ports, are now seeing some denials because of the new requirement that they prove a Jones Act ship is not available, according to sources, but many are still getting approved.
The US Maritime Administration (Marad) database where authorized Jones Act waiver movements are posted lists 255 voyages in total so far this year, including 30 posted since the start of the new review process on 17 August. But all of the voyages in the database as of 16 September loaded prior to the new process starting, meaning the tougher standards were likely not applied to them, denying the market of a clear picture.
"We're all a little bit in the dark as far as an official loop closing" Jennifer Carpenter, president of the American Maritime Partnership, an industry coalition that represents domestic maritime interests, told Argus. "We know there have been approvals and denials, but we don't yet have visibility on which ones."
Gauging how many waivers have been approved is also difficult due to a 10-day lag between when a ship granted the waiver offloads its cargo and when the waiver is reported by US officials, according to Aaron Smith, president of the Offshore Marine Service Association.
In one example, oil major Chevron provisionally hired a Panama-flagged tanker, the Nave Perseus, to load high sulfur vacuum gasoil on 24 May for what should have been a less-than-two day voyage from El Segundo, California to San Francisco. But the vessel did not discharge the cargo at nearby Richmond, California, until 12 July, Vortexa data show.
Yet the May loaded voyage is the second most-recent entry in Marad data because the projected discharge date provided was between 8 August and 2 September, putting its official report due date as 12 September.
The case-by-case waiver process "is an improvement over a blanket waiver" according to Carpenter, but waivers can still discourage investments in US' domestic maritime revitalization efforts.
"Nothing kills investment more than uncertainty and the current system seems designed to breed uncertainty for the domestic maritime industry," Smith said.
