News / Jones Acts Relaxes Rules on Foreign Tankers

Jones Acts Relaxes Rules on Foreign Tankers

02 November 2022 - by - in Industry News
ship carrying cargo

ship carrying cargo

The recent storm in Puerto Rico has led to changes in the Jones Act for the first time in decades. These controversial changes can make a huge impact on the United States shipping industry. Here are the new changes to the Jones Act and how it can impact your business if you rely on domestic freight shipping services. 

What is the Jones Act?

The Jones act was originally passed as The Merchant Marine Act of 1920. It is a protectionist law that regulates maritime shipping throughout the United States. This law requires any cargo traveling by sea between two U.S. ports to sail on an American-owned ship that was built in the United States and crewed by a majority of United States citizens. 

The idea behind this act was to boost America’s shipping industry in the wake of the First World War. This act is credited with supporting around 650,000 jobs in the shipping business while providing $150 billion in economic activity. However, this act is not without its drawbacks. There are many critics of the Jones Act and several changes have been made throughout the years. 

What are the Pros and Cons of the Jones Act?

One of the main benefits of the Jones Act is that it supports American shipbuilding and Merchant Marine, which was needed after the end of World War One. It also holds shipping companies to high standards for both compensation and work conditions. It upholds American protectionism, which is discussed as both a pro and a con. 

The biggest con of the Jones Act is that it limits the domestic ocean trade in the United States due to the high cost of shipping. It is far too expensive for places like Puerto Rico, so these territories are isolated in trade. There is also a limit to travel advancement for cruise and passenger ships in the United States. 

Changes to the Jones Act

In recent months, President Biden and his administration have approved temporary waivers to boost supply shipments to Puerto Rico in the wake of Hurricane Fiona. These waivers make it possible for foreign vessels to operate in Puerto Rican ports if there are no U.S. vessels available. 

The hope is, these waivers will allow the necessary supplies to reach Puerto Rico, aiding them in their recovery process. Naturally, there are proponents for these waivers. The American Maritime Partnership (AMP), whose members include U.S.-flag vessel owners and operators, shipbuilders, and repair yards, have opposed the waiver. They believe the U.S. was pressured to approve these waivers due to reports that foreign-flagged BP tankers have been anchored off Puerto Rico’s coast, unable to enter the port due to the Jones Act restriction. 

How These Changes Will Impact Your Business

For businesses in the United States, this relaxation of the Jones Act will likely not have much impact. However, there is a chance it helps protect businesses in the wake of the hurricane. By allowing foreign tankers to help aid in the rebuilding process, American tankers can be used elsewhere. It seems shortsighted to worry about logistics following a devastating hurricane, but this is how interconnected the logistics industry is. 

A hurricane in Puerto Rico can cause massive disruptions in shipping lanes around the world. By easing the strain on American tankers, the already overextended maritime fleet will be less relied upon. Still, in the wake of this hurricane, you should be prepared for delays in shipments across the country. 

Do You Need Help With Your Logistic Needs?

The logistics industry can be incredibly unpredictable. If your business relies on time-critical shipping, it’s important to keep up with news, including terrible storms hundreds of miles away. If you don’t have the time to keep up with the ups and downs of the logistics industry, our team at Trifecta Transport is here to help! We can handle all of your logistic needs so you don’t have to worry about it! Please contact our office for more information.