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Domestic Shipping

U.S. Shipping in U.S. Waters

Domestic waterborne transportation is safe, reliable, efficient and an established mainstay of America’s national transportation system. U.S.-flag vessels provide essential freight and passenger services between ports, coastlines and almost all states and territories -- including Alaska, Hawaii, and Puerto Rico. Each year, tens of thousands of vessels transport over a billion tons of cargo, with hundreds of ferry operators transporting millions of passengers, contributing billions to our nation's economy through freight and passenger revenue, taxes and private investment. With support from key federal legislation and U.S. Customs and Border Protection, MARAD ensures that only U.S.-flag vessels (or foreign-built vessels approved through a Jones Act waiver) are moving United States products and people. 

The Jones Act

A majority of U.S. domestic shipping regulations are driven by the Jones Act (46 U.S.C. § 55102), a section of the 1920 Merchant Marine Act that requires merchandise being transported by water between U.S. points (even if they exit and re-enter international waters) travel in vessels that are 1) U.S.-built 2) U.S.-citizen owned and 3) registered in the U.S. This encourages a strong U.S. Merchant Marine for both economic security and national defense by fostering a U.S.-flagged fleet for domestic shipping operations that can also be leveraged for U.S. interests during war or emergency.

Enforcement

U.S. Customs and Border Protection (known widely as "Customs") has direct responsibility for enforcing the Jones Act, but MARAD will first attempt to line up a U.S.-flag vessel before/if Customs allows the shipper to use a foreign vessel so long as it does not impede national interests or defense. Here is the typical process:

Scenario A. A shipper wants to move something anywhere in U.S.-controlled waters for the purposes of U.S. domestic trade, and for whatever reason, they intend to use a foreign-built ship.

  1. Shipper contacts Customs and requests permission to use a foreign-built ship
  2. By law (46 U.S.C. § 501), MARAD is the Federal agency that helps the shipping public locate qualified and available U.S.-flag vessels for domestic (and international) cargo. MARAD searches the U.S.-flag domestic shipping fleet for a vessel that meets the specific request/need.
  3. MARAD makes an official Jones Act availability determination and reports it to Customs
  4. Per the Defense Authorization Act of 2013, MARAD also publishes their determination to the Federal Register within 48 hours
  5. Customs informs shipper of qualified and available vessel, and shipper uses that vessel or forfeits right to ship
  6. If there are no suitable vessels, shipper can recieve a waiver pending Customs review and approval

Scenario B. It has been discovered that a shipper moved something in U.S.-controlled waters for the purposes of U.S. domestic trade but did not use a U.S.-flag vessel OR did not obtain a waiver OR was denied a waiver and still used a foreign-built vessel. Any of these scenarios will result in significant financial, political and/or nautical movement penalties. For details, contact the Office of Cargo and Commercial Sealift.

Waivers

If a U.S.-flagged vessel cannot be procured, the shipper must obtain a waiver to operate in U.S. waters or complete the requested shipping action. MARAD administers the following waivers: 

  • Small Vessel Waiver. Title V of 46 U.S.C. § 12121 authorizes MARAD to administratively waive Jones Act U.S.-build requirements on a case-by-case basis for foreign-built small passenger vessels designed to carry 12 passengers or less. Visit our Small Vessel Waiver Program page for more information.
  • Launch Barge Waiver. On extremely rare occasions, the launch of an exceptionally large oil rig or offshore platform requires the use of a foreign-built launch barge. 46 U.S.C. § 55108 allows MARAD to make determinations allowing the use of these launch barges when no U.S.-built launch barge is available or technically appropriate. Contact the Office of Cargo and Commercial Sealift for more information.
  • Anchor Handling Waiver. Similar to the Launch Barge Program, MARAD is authorized to make determinations under P. L. 111-281 allowing the use of foreign anchor-handling vessels (used to position mobile offshore drilling units) if no U.S.-flag vessel is available. This specialized MARAD program only applies to operations in the Beaufort Sea and Chukchi Sea, adjacent to Alaska.

Questions?

For questions about Domestic Shipping or any of the above programs, contact the Office of Cargo and Commercial Sealift.

Updated: Friday, June 21, 2019