Sunday, July 1, 2018

The Jones Act: A Burden America Can No Longer Bear

Excluding tankers, the ships in the Jones Act fleet currently average 30 years old, fully 11 years older than the average age of a ship in the world merchant fleet of other developed countries.

Groups favoring the Jones Act tout the fact that a Jones Act vessel, the Northern Lights, participated in support of military operations in 2003 - but the fleet's contributions do not appear to have gone beyond this lone ship.

The military, according to the Congressional Research Service, prefers ships with speed and versatility that can "Unload diverse cargos in shallow harbors lacking shore-side cranes." Jones Act shippers, in contrast, prefer vessels that operate at slower, more fuel-efficient speeds, are specialized for a particular type of cargo, and are designed to operate in modern port facilities.

Increasing specialization within the commercial shipping sector has reduced the likelihood that military requirements can be met by Jones Act ships.

After Hurricane Maria hit Puerto Rico in 2017, President Trump admitted to being hesitant to grant a Jones Act waiver because "a lot of people who work in the shipping industry don't want the Jones Act lifted." Trump agreed to a mere 10-day waiver, which was not enough time for a Norwegian ship to transport 53 containers of aid from New Orleans to Puerto Rico, or for a Dutch vessel, owned by Greenpeace, to carry supplies to the beleaguered island.

While the Jones Act reduced the supply of ships and drove up the costs of waterborne shipping, it increased demand for road transport, presumably driving up the prices of trucking and rail.

The 75 percent ownership rule has been in place since the Jones Act's beginning and has its origin in the Shipping Act of 1916, when foreign interests were buying up U.S. ships during WWI. The origin of the crew requirement remains unclear.

https://www.cato.org/publications/policy-analysis/jones-act-burden-america-can-no-longer-bear 

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