Lucy Marvin's Maritime Musings: Jones Act Waiver Sparks Domestic Maritime Capacity, Supply Chain Debate
Editors' Note: Lucy is the newest member of The Commission Blog editorial team and joins Holland & Knight to bolster our maritime, rail and road efforts as a part of the Public Policy & Regulation Group and Federal Government Affairs Practice. As FMC Managing Director during the Biden and second Trump Administrations, Holland & Knight has turned The Commission Blog over to Lucy to share her invaluable insights each day during the week of July 20, 2026. These efforts kick off Holland & Knight's celebration of the FMC's 65th anniversary on August 12, 2026, with an industry event (more details to follow).
Although the FMC does not administer the Jones Act or issue national defense waivers, the Jones Act waiver debate is directly relevant to many Commission stakeholders.
The Trump Administration's temporary waiver of the Jones Act in response to energy and agricultural supply disruptions associated with the conflict in Iran has renewed debate over the role of the domestic shipping policy during military operations. Initially granted in March 2026 and subsequently extended through August 16, 2026, the waiver permits qualifying foreign-flag vessels to transport certain cargoes between U.S. ports, which is transportation that ordinarily must be performed by vessels that are U.S.-built, U.S.-owned, U.S.-flagged and predominantly U.S.-crewed. (For more detailed information on the Jones Act, see Holland & Knight's previous alert, "Jones Act Waiver Issued in Response to Iran Conflict: Legal Analysis and Implications," March 20, 2026.)
The Trump Administration maintains that the additional vessel capacity will help move fuel and other commodities more quickly and ease the growing affordability concerns of many Americans, especially with respect to energy prices. The domestic shipping industry's response to the continued waiver has been fierce. Industry representatives and a bipartisan group of lawmakers have argued that prolonged or broadly structured waivers undermine the domestic fleet and industrial base that the statute is intended to protect.
Enacted as part of the Merchant Marine Act of 1920, the Jones Act has for more than a century served as a central pillar of U.S. maritime policy. Supporters emphasize that it sustains domestic vessel operators, shipyards, mariners, ports, equipment manufacturers and related transportation and logistics businesses, while preserving commercial vessels, skilled personnel and shipbuilding capacity that may be available to support military sealift and national security needs. These objectives closely complement the Trump Administration's U.S. Maritime Action Plan (MAP), which calls for increased domestic shipbuilding capacity, investment in U.S. shipyards and workforce development, along with reduced dependence on foreign maritime supply chains. Opponents, however, contend that the law restricts vessel availability, unnecessarily raises domestic transportation costs and disproportionately affects energy consumers and noncontiguous jurisdictions such as Alaska, Hawaii and Puerto Rico. They argue that greater access to foreign-built and foreign-flagged vessels could increase competition, lower freight costs and provide additional supply chain flexibility, especially during market disruptions.
The FMC implications are meaningful. When foreign-flag vessels enter domestic trades, they may compete with or complement international services that already call at U.S. ports, potentially altering freight rates, cargo volumes and terminal utilization in ways the FMC is charged with monitoring. The waiver also raises questions about how changes to the domestic fleet could affect the competitive balance among ocean transportation intermediaries who may need to adjust their service offerings and carrier relationships in response to shifting vessel availability. Additionally, stakeholders who participate in FMC proceedings – including shippers, carrier associations and port authorities – are often the same parties engaged in legislative and regulatory debates over Jones Act policy, underscoring the overlap between domestic and international maritime regulation.
From a longer-term perspective, the waiver debate intersects with the Commission's ongoing efforts to promote supply chain efficiency and resilience. The Ocean Shipping Reform Act of 2022 expanded the FMC's authority to address practices that disadvantage U.S. exporters and promote the flow of agricultural goods through the nation's ports. A prolonged or recurring reliance on Jones Act waivers to address domestic shipping constraints could signal structural capacity gaps that affect the broader ocean transportation network. This is a concern that resonates with the Commission's mission to ensure a fair and efficient international ocean shipping system.
Given the ongoing military activity in the Persian Gulf, which continues to put pressure on key international shipping lanes, the balancing of these competing policy objectives will likely continue at least in the short-term. Holland & Knight is closely monitoring the waiver, along with any decisions concerning its extension or expiration and related developments under the MAP.