Seatrade-Maritime: What is required for a Jones Act waiver request

Published by Seatrade-Maritime

The second extension of the ongoing Jones Act Waivers took effect on 17 August. This time however, approvals won’t be automatic and the US Maritime Administration (MARAD) will now conduct inquiries to determine whether qualified vessels could be available for proposed cargo moves.

The law firm Holland & Knight (H&K) has been providing detailed information on required on submissions from “member[s] of the trade community who consider conducting transportation on a foreign-flag vessel between two US ports”. Waiver requests submitted to MARAD and the US Department of War must include:

• 
  name (including IMO Number) and flag of the vessel
• name of the owner and operator of the vessel (and country)
• name of the carrier
• dates of the voyage
• any relevant ports of call and applicable dates, including place of lading, port of lading, date of lading, place of unlading, port of unlading and date of unlading
• description of the cargo carried, including commodity and relevant HTS code and hazmat code, if applicable, and quantity of the units to be shipped per shipment
• frequency of the shipment
• explanation as to why the voyage is in the interest of national defense
• any other information the Maritime Administrator determines necessary, including but not limited to special shipping or stowage requirements, date of the charterparty, lay days in the charterparty and load date in the charterparty

While media reports regarding the revised information required under the new extension emphasize the national defense explanation, most of the Waiver request submissions under the prior – including those for coastwise movements of crude oil, already included templated language generally alluding to a need to ensure that US military facilities were adequately supplied with fuels. At least one move, for liquid fertilizer into the US Gulf from Puerto Rico referred to “the continuity of US agricultural and food supply.”

What is new in the extension that commenced on 17 August and runs through to 15 November it is the survey that will then be conducted following a Waiver request with MARAD contacting owners of Jones Act qualified vessels to ascertain whether any ships might be available for the proposed cargo move. H&K explains that: “Upon receipt of a vessel availability request, MARAD will conduct a coastwise-qualified vessel market survey to determine the availability of coastwise-qualified vessels to conduct the proposed transportation. Unless otherwise specified by MARAD, coastwise-qualified vessels must respond to MARAD’s market survey within 24 hours.”

The initial request, with vessel availability responses received within the 24 hour time-frame (if any), are then forwarded over to the Department of War for their review. If the Waiver request passes muster, then cargo interests will be given an “all clear” to charter the vessel.

As the second Waiver extension was kicking in, requests for information regarding vessel availability were sent to owners of qualified Jones Act ships were circulated concerning

• 300,000 barrels of petrol from Pasadena, Texas into two terminals in Puerto Rico
• 220,000 barrels of residual fuel from New Orleans into New York area and Philadelphia terminals
• 700,000 barrels of heavy fuel from Seabrook, Texas to multiple terminals in Delaware Bay

Confirmation of these moves, and voyage details on waivers granted for these requests, along with others submitted under this extension, is not yet available.

The information posted by MARAD has not been perfect. Consider the Liberian-flagged LR2 tanker Aqualegend, which had been issued a waiver in mid-July for a late July loading at Corpus Christi, Texas referencing a short coastwise trip with discharge at the P-66 terminal at Nederland, Texas. According to the report on the USDOT website, the 629,000 barrel cargo of West Texas Light Crude, originating in the Permian Basin, was loaded at the Ingleside Terminal in Corpus. Missing from MARAD’s reporting was the same vessel’s voyage upcoast from Nederland, and its subsequent discharge at the P-66 Bayway refinery in New Jersey- after awaiting berth availability at the Ambrose anchorage for several days.

Meantime, information on ship tracking websites suggests that the tanker is ballasting down to Corpus Christi- perhaps for a repeat lifting.