If you work in shipping, you may have heard of the Jones Act in the USA.. The US government’s decision to waive it in March 2026 brought it back into mainstream conversation.. Here is what it is, why it was waived, and what that means..
What is the Jones Act..??
The Jones Act, which refers to Section 27 of the Merchant Marine Act of 1920 (P.L. 66-261), prescribes that only vessels built in the United States, owned by US citizens, flagged in the US, and crewed by Americans can carry cargo between US domestic ports, including Hawaii, Alaska, and Puerto Rico..
The law has been in place for over 100 years and covers all ship and cargo types.. containers, tankers, dry bulk, and barges on inland waterways.. If cargo moves by water between two US points, the Jones Act applies..
How does it work in practice..??
A foreign container ship from Rotterdam can call New York, Savannah, and Miami on the same voyage.. That is perfectly legal.. It is discharging international cargo at each port, and the movement is international trade..
What it cannot do is pick up a loaded container in New York and deliver it to Savannah.. That is domestic coastwise trade, and it requires a Jones Act qualified vessel..
Once loaded containers of imports are discharged from a ship at a US port, Jones Act-compliant vessels must be used if the cargo is transshipped by water to other US ports.. Transshipment of international containerised cargo by feeder ships is prevalent abroad but the practice does not exist in the United States.. Instead, essentially all movement of containers between ports in the contiguous United States occurs by truck or train..
Why does it exist..??
Two reasons get cited most often.. Economic protection and national security..
On the economic side, the idea is to protect American shipbuilding, American seafarers, and American maritime businesses from foreign competition.. A foreign-flagged operator running cheaper crews under lower regulatory standards would easily undercut any US carrier on price.. The Jones Act prevents that..
On the national security side, the argument is that the US needs a functioning domestic fleet and a trained pool of merchant mariners that can support military logistics in a crisis.. Both arguments have merit, but both also have serious holes in them..
The pros and cons of the Jones Act
The case for it (pros) is real.. It keeps US shipyards open, sustains maritime training programmes, and ensures some level of domestic sealift capability.. Without it, American coastal waters would be open to any foreign-flagged vessel with no obligation to meet US safety, labour, or environmental standards..
The case against it (cons) is equally real.. US-built ships cost several times more than equivalent vessels built abroad, and those costs pass straight through to consumers.. Hawaii residents are estimated to pay around $1.2 billion a year in higher costs attributable to the Jones Act.. Container shipping from the US mainland to Puerto Rico costs roughly double what it costs to ship the same box to a nearby foreign port that is actually further away..
The fleet has also been shrinking despite the law being in place.. According to MARAD data, the Jones Act container fleet stood at around 23 vessels as of 2023.. In a global container fleet of over 6,000 ships, that is a fraction of 1%..
What does the 2026 waiver mean..??
While the Jones Act intends to maintain a merchant marine to serve as a military auxiliary in times of war or national emergency, Congress has also authorised waivers in the interest of national defence.. The executive branch has previously used this provision for fuel resupply after natural disasters.. It is under this same provision that the 2026 waiver was issued..
US and Israeli military operations against Iran commenced on February 28, 2026, under Operation Epic Fury, effectively closing the Strait of Hormuz, a critical waterway through which approximately one-fifth of global oil and LNG supplies transit.. With global supply disrupted and the small Jones Act fleet unable to compensate, the administration needed to open up additional vessel capacity quickly..
On March 17, 2026, the Department of Homeland Security issued a 60-day waiver at the request of the Department of War.. Confirmed by CBP via CSMS #68096516 on March 19, 2026, the waiver covers at least 659 product categories, including crude oil, refined petroleum products, natural gas, fertiliser, and coal, allowing foreign-flagged vessels to carry these commodities between US ports until 11:59 PM EDT on May 17, 2026..
White House Press Secretary Karoline Leavitt stated the waiver was issued to “mitigate the short-term disruptions to the oil market as the US military continues meeting the objectives of Operation Epic Fury..”
Will it bring fuel prices down..??
Modestly at best.. Analysts estimate the waiver might offset price increases by somewhere between 3 and 10 cents per gallon.. The real problem is a closed strait carrying over 20 million barrels a day of global supply.. No amount of domestic shipping flexibility fixes that..
What the waiver tells us
The Jones Act can only be waived through one legal provision.. national defence under 46 U.S.C. § 501(a).. The law provides no mechanism for an economic waiver.. So whatever the underlying reason, every request must go through that door..
Hurricanes Harvey, Irma, Katrina, Rita, Sandy, Maria………… and now a war.. Every serious supply shock in recent memory has required that same door to be opened..
The question that remains unanswered is why a law that needs to be suspended every time it is genuinely tested, is considered fit for purpose the rest of the time, when cargo moves more slowly and more expensively because of the very constraints it imposes..
This current waiver expires May 17, 2026.. That question will still be there on May 18..
