Waiver Windfall: California, the Islands and Farm Country Emerge as Early Winners from the Jones Act Suspension

Four months into the longest suspension of the 1920 cabotage law since 1950, federal voyage data show Gulf Coast refiners, West Coast motorists, Puerto Rico, Hawaii and Alaska — and increasingly fertilizer buyers — capturing the gains, while the U.S. maritime industry tallies the costs and Washington debates what comes after Aug. 16.

By the numbers: foreign-flagged ships have moved more than 31 million barrels of fuel and chemicals between U.S. ports in the waiver’s first ~90 days, across 650-plus eligible commodity categories — 45 voyages by 35 foreign tankers in the first 50 days alone. The waiver expires Aug. 16 unless extended again.

The backdrop

When Operation Epic Fury — the coordinated U.S.–Israel strike on Iran launched Feb. 28 — closed the Strait of Hormuz and pinched off roughly a fifth of global oil and nearly a third of seaborne LNG, the Department of Homeland Security did something no administration had done at this scale in 75 years: on March 17, at the Pentagon’s request, it suspended the Jones Act nationwide. The 1920 law requires cargo moving between U.S. ports to travel on U.S.-built, U.S.-flagged, U.S.-crewed vessels. The waiver — initially 60 days, extended another 90 on April 24 and now set to lapse Aug. 16 — threw open domestic water routes to foreign ships across some 650-plus commodity categories, from Bakken crude to anhydrous ammonia.

What followed amounts to the largest natural experiment ever run on the century-old law, and the voyage reports operators must file with the U.S. Maritime Administration give an unusually clear ledger of who has cashed in.

Winner No. 1: California and the West Coast

No place has benefited more. Of the first 45 waiver voyages logged, 21 touched California — including eight purely intra-state movements — as foreign tankers shuttled roughly 1.59 million barrels of fuels from Gulf Coast ports (Corpus Christi, Houston, Port Arthur, New Orleans) to a state that normally leans on Persian Gulf imports and pays the nation’s highest pump prices. That 50-day total was about four times what moved by water on that route in all of 2025 (~401,000 barrels). Jet fuel even moved East Coast–to–West Coast for the first time in roughly two decades.

Winner No. 2: The Gulf Coast — and two familiar names

More than 70% of waiver shipments originated on the Gulf Coast, turning Texas and Louisiana ports into the loading dock for the rest of the coastal U.S. Phillips 66 used foreign-flagged tankers to move Bakken crude from the Gulf to its New Jersey refining system, displacing international grades it would otherwise import; Chevron told investors it was using the flexibility to move supplies “from where they exist to where they’re desperately needed.” Notably, none of the tonnage moved on Chinese or Russian ships — flags of choice through mid-May were Singapore, Japan, Switzerland and the U.S. itself.

Winner No. 3: The places the Jones Act hits hardest

The waiver’s most striking routes are the ones that simply did not exist before. Bulk propane reached Puerto Rico from Houston and Philadelphia — arriving at San Juan and Tallaboa in volumes that exceeded the island’s previous six years of waterborne receipts combined. Hawaii took gasoline cargoes from Texas; Alaska imported jet fuel from Louisiana; fuel even crossed the Great Lakes from Ohio to Wisconsin. For the noncontiguous states and territories — long the loudest complainants about the law’s cost premium — the waiver has been a live demonstration of what supply lines look like without it.

Winner No. 4 — the late arrival: agriculture

For farm country, the waiver started as an energy story and is ending as an input-cost story. The commodity list always included fertilizers, and the tracker shows at least three voyages of anhydrous ammonia moving to farmers by water. But the bigger development came in late June and early July, when President Trump paired the shipping waiver with an emergency declaration suspending duties on Moroccan phosphate fertilizer. USDA now estimates the Jones Act relief alone could cut phosphate fertilizer prices by as much as 22%, and pegs potential farmer savings from the combined actions at $1.82 billion annually. And on July 1, USDA Secretary Brooke Rollins went a step further, announcing $500 million for a new Fertilizer Investment & Expansion for Long-Term Domestic Supply (FIELDS) program — a successor to the Biden-era Fertilizer Production Expansion Program, which USDA says achieved only 6% of its stated goals — offering awards of $15 million to $150 million for shovel-ready nitrogen, phosphate, potash and sulfur plants, with applications due Aug. 15. It amounts to an acknowledgment that waivers relieve symptoms while the underlying import dependence remains.

Row-crop producers — corn, soybeans, wheat, barley — stand to gain most, and farm groups have been effusive. “It’s absolutely positive across the spectrum for all of agriculture in the United States,” Maryland Farm Bureau president Jamie Raley said. For a sector staring at tight margins into the 2027 crop year, a double-digit cut in phosphate costs would be one of the few input-side breaks available.

The ledger so far

Documented gains under the waiver, March 17 – mid-July 2026:
 

Sources: MARAD voyage reports via Cato Institute; AEI; Reason; USDA; Forbes.

Who’s paying — and the fight ahead

The waiver’s losers are the constituencies the Jones Act exists to protect. The American Maritime Partnership says every foreign voyage displaces “American shipowners, American mariners, and American shipyards,” and industry advocates cite roughly 500,000 U.S. maritime jobs at stake. A Navy League-commissioned study countered the consumer-benefit narrative, putting the waiver’s effect on gasoline prices at a fraction of a cent per gallon — evidence, critics argue, that suspending the law does nothing about the real bottleneck, which was the Strait of Hormuz itself.

Waiver advocates read the same data the other way: if a 90-day suspension quadrupled traffic on the Gulf-West Coast route and opened supply lines Puerto Rico had never had, the law was suppressing that trade all along. A 2024 study put annual consumer savings from repeal at $769 million; the Atlantic Council notes the protected fleet has shrunk from 434 oceangoing ships in 1950 to 93 today even with the law intact, alongside a shortfall of more than 1,800 mariners. Reform proposals now circulating would drop the U.S.-built requirement while keeping U.S.-flag, -crew and -ownership rules — a middle path that would let operators buy modern foreign hulls (U.S. yards charge up to five times world prices) while preserving American crews.

Bottom line: the clearest beneficiaries to date are, in order, California fuel consumers, Gulf Coast producers, the noncontiguous territories and states, and — since the fertilizer actions of early July — American row-crop agriculture, with foreign tanker owners collecting the freight. Whether any of it persists depends on what Washington does before Aug. 16: let the waiver lapse, extend it again, or use the episode as the opening argument for the first structural rewrite of the Jones Act in a century.