If the maritime industry had any doubts about Washington’s support of the Jones Act, they got all the reassurances that they needed this week when DOT Secretary Anthony Foxx reiterated the Obama administration’s strong support for the 1920 cabotage law that many say keeps the American shipping business afloat.
“You can rest assured of this department’s fierce, fierce support of the Jones Act,” Foxx told industry leaders gathered to discuss formation of a National Maritime Strategy at the U.S. Maritime Administration headquarters. His comments, which echoed remarks made last month before the American Waterways Operators (AWO) convention in Washington, D.C., were met with enthusiastic applause from the audience.
The Jones Act requires that ships hauling cargoes between U.S. ports must be built in America, owned by U.S. citizens and crewed by U.S. mariners.
Affirmation of the law, which has been under attack lately for hampering commerce and inflating the costs of shipbuilding, is a top priority for the waterways industry and other maritime sectors as they seek to influence the contents of this emerging national strategy.
Since January, Marad has been holding meetings across the country to gather ideas and priorities for this new initiative, which will guide the industry’s future. The session held Tuesday in Washington, D.C., focused on domestic shipping, ports and shipbuilding. In April, Acting Marad Administrator Paul “Chip” Jaenichen traveled to St. Louis, Nashville, Tenn., and Paducah and Frankfort, Ky., to learn more about inland waterways transportation.
“Our biggest challenge is the certainty of federal policy,” Thomas Allegretti, AWO president, said during a panel discussion at the Washington event. “One example is the administration’s support of the Jones Act. The president has spoken of his support. We also need this from cabinet officers and all the agencies. At times there seems to be a disconnect between policy and actions within an agency. Such uncertainties are difficult for our industry.”
Allegretti said inland operators want to make sure that a national maritime strategy includes strong words of support to retain and enforce the Jones Act.
The industry has been concerned by a number of efforts to secure waivers to the Act that would allow foreign-flagged vessels to carry cargo between U.S. ports. The federal government granted waivers in 2012 to boost flows of fuel into the Northeast after Hurricane Sandy disrupted energy deliveries. And in February, the state of New Jersey unsuccessfully sought a Jones Act waiver in order to replenish its depleted supply of road salt.
Jaenichen, the Marad administrator, said in an interview Tuesday that “there will always be attacks against the Jones Act. There will always be this chatter. But if there’s a collective action, engagement or lobby, we haven’t seen it yet. Until then, we don’t have to worry.”
He blamed inconsistent positions about the Jones Act among different government agencies on officials who are uninformed about the law’s impact. “The administration supports the Jones Act. That isn’t the issue. It’s the education of new people — of political appointees on how (the law) impacts energy, national defense, commerce. Sometimes we have to educate them.”
Efforts to both protect and weaken the Act seem to arise when energy markets get hot. There is a national debate emerging, for example, about whether LNG exports should be carried by Jones Act vessels. An effort in Congress to require that LNG exports be transported by ships built at U.S. yards was recently rejected, but lawmakers agreed to study the impact of such a requirement, leaving the issue open for another time.
At the urging of Jones Act supporters, Congress has also tightened the conditions under which waivers can be granted. In addition to the requirement that waivers can be approved only in cases of national security, Marad must determine that there are no qualified U.S.-flag vessels available and identify actions that could be taken that would help qualified U.S-flag vessels meet this need.
