President Donald Trump has extended the Jones Act waiver for another 90 days, adding temporary maritime capacity on U.S. coastal and Puerto Rico energy trades even as analysts put the direct pump-price effect at 'pennies per gallon,' according to FreightWaves.
Why the waiver was extended
The Jones Act requires U.S.-built and U.S.-crewed ships to carry cargo between U.S. ports. The waiver lets international companies transport gas, fertilizer and other commodities between U.S. ports at market rates, FreightWaves reported. The Trump administration has framed the move as an effort to generate positive economic news amid rising prices and inflation ahead of the mid-term elections.
The waiver first took effect on March 17 and was extended in May. By August 10, the national retail average gasoline price had eased to roughly $4.01 per gallon, about 48 cents below the late-May level. FreightWaves reported that analysts do not attribute that decline primarily to the waiver, limiting its direct effect to pennies per gallon because of high international tanker rates and relatively small volumes shipped under the exemption.
What the numbers show
The waiver has added marginal supply-chain flexibility, especially on Gulf-to-West Coast cargoes. Argus estimated a savings of just 6.6 cents per gallon versus Jones Act tanker transport on that lane. FreightWaves cited Cato Institute analysts Colin Grabow and Scott Lincicome on the waiver's broader cargo footprint since March:
Since March, the waiver has unleashed domestic commerce that the Jones Act previously prevented, with more than 54 million barrels of energy products moving between U.S. ports on 200-plus voyages (and counting). In most cases, these voyages took place on vessels with no connection to U.S. adversaries like China and supplied American companies with American energy products that would've otherwise been imported at a much higher cost (if at all). These waiver shipments have exposed glaring gaps in the Jones Act fleet, including a lack of appropriate vessels to transport products such as bulk propane and asphalt, while delivering nearly 15 million barrels to the West Coast and enabling extraordinary new flows of American propane to Puerto Rico.
| Metric | Figure |
|---|---|
| National retail gasoline average, Aug. 10 | ~$4.01 per gallon |
| Decline from late-May level | ~48 cents per gallon |
| Estimated Argus savings, Gulf-to-West Coast | 6.6 cents per gallon |
| Energy products moved under waiver since March | 54 million barrels |
| Waiver voyages | 200-plus (and counting) |
| Barrels delivered to West Coast | ~15 million |
Shipper and operator implications
For ocean and intermodal operators, the main takeaway is lane-specific relief rather than a broad repricing of U.S. domestic fuel shipments. FreightWaves reported the waiver appears to have added marginal supply-chain flexibility, especially for Gulf-to-West Coast cargoes, and opened new propane flows from the U.S. mainland to Puerto Rico. At the same time, the waiver sends a mixed message to domestic shipping interests, since President Trump has made revitalization of U.S.-flag shipping and shipbuilding a centerpiece of his domestic policy proposals.
The Cato analysts described the waiver as a band-aid, saying its economic and security benefits would scale from broad, long-term reform or repeal of the Jones Act. Pro-business interests have attacked the law, claiming its protectionist measures artificially inflate prices. Shippers should treat the current exemption as temporary: the extension lasts 90 days, and the volumes moved so far have been concentrated in energy products, meaning the waiver's direct impact on freight rates is limited.
Watch list
FreightWaves' report leaves several factors to monitor over the next 90 days: whether the waiver's voyage count moves beyond the 200-plus figure reported as of August; whether pump prices continue their roughly 48-cent slide from late May without the waiver being the primary cause; and how the administration balances the extension with its stated domestic shipbuilding agenda. The mid-term elections remain the political backdrop, with the waiver originally positioned as economic relief during a period of rising prices and inflation.
Sources:
