Singapore: Jones Act Savaged

by Michael Hansen, Hawaii Shippers Council, November 6, 2015

The online maritime publication Splash 24/7 reported on November 5th in an article entitled, “Jones Act savaged,” regarding an online poll conducted by their sister publication Maritime CEO known as the “MarPoll” which asked about U.S. Jones Act cabotage. Nearly two-thirds of respondents said that the Jones Act doesn’t serve its purpose.

Splash 24/7 is published by Singapore headquartered Asia Shipping Media (ASM). Founded in 2012 by shipping media veterans Grant Rowles and Sam Chambers ASM is now the parent of a host of media brands. ASM states “Splash 24/7 provides the latest incisive, exclusive maritime news, plus interviews and in-depth analysis on global maritime, shipping media and much more.”

Key excepts:

The Jones Act, the 95-year-old cabotage laws that govern US waters, has come in for savage criticism from our readers. In the latest MarPoll, the quarterly online topical survey carried on this site for sister title Maritime CEO, 65.2% of the 400 plus respondents so far believe the Jones Act is not fit for purpose.

The legislation has been under the spotlight lately following the sinking on October 1 of the 40-year-old El Faro boxship, a US flagged vessel belonging to American owner, Tote.

“The Jones Act is clearly dangerous for shipping with a 40-year container vessel remaining in service. Furthermore, at the insane price of $150m for a 50,000 dwt product tanker built in the US, the business model is not a commercially sustainable without the US government’s misguided support,” one respondent to our survey commented.

Another voter claimed: “The Jones Act is counter-productive and a main reason why the US Merchant Navy has declined to almost nothing.”

There were, however, plenty of supporters to the legislation.

“If anything the Jones Act should be enhanced with laws to include both subsidies and training for US shipbuilders and mariners. This will provide jobs and help with infrastructure to promote a better America,” argued another reader.

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Oslo: National security division shows why Jones Act is a touchy subject

by Michael Hansen, Hawaii Shippers Council, November 6, 2015

The Oslo-based international maritime publication TradeWinds published on November 6, 2015, an article entitled “National security division shows why Jones Act is a touchy subject” reporting that opposition to eliminating the U.S. build requirement of the Jones Act is largely based upon the national security argument that the country must maintain its shipbuilding industrial base.

Key excerpts:

Proponents say elimination of the US-build requirement would create more US mariner jobs, while supporters — and the Obama administration — say the country needs its shipyards

We have written in these pages that it is impossible to fully capture the Jones Act, the US cabotage law that is both embattled and firmly entrenched in a debate over free trade versus protectionism. After all, it is a law aimed primarily at meeting the needs of the US national defence. But what if a debate was held that focused solely on that national security lynchpin as the most controversial element of the law?

Some shipping industry stakeholders say they do not oppose most pillars of the Jones Act and question only the US-build requirement. For example, members of an ad hoc group of those seeking reform, which includes the likes of Heidmar founder Per Heidenreich and former ExxonMobil shipping chief Bob Curt, challenge the very national security arguments at the heart of this mandate.

Meanwhile, Jones Act supporters, who are opposed to any changes to the text of the law or weakening of its application, point to two key defence benefits of the current US cabotage regime.

And it works to ensure that by supporting a shipyard industrial base, there is a market for commercial ship orders during the troughs of military ship-construction projects, they argue.

But supporters of changing the Jones Act say removing this US-build requirement will actually increase the number of US-citizen mariners by making it cheaper to build vessels, opening demand for more US-flag ships, for example, in the bulker and tanker trades.

“The size of the US merchant marine would explode without the US-build requirement, adding thousands of high-paying, steady jobs and getting thousands of trucks off our crowded highways,” said Curt, a retired chief executive of shipowner MLR Petroleum, former managing director at Nakilat and a former general manager of ExxonMobil’s marine-transport division.

The Hawaii Shippers’ Council (HSC) is advocating a waiver to the US-build requirement for Hawaii, Alaska, Puerto Rico and Guam on grounds that these non-contiguous states and territories suffer from higher shipping costs because of the Jones Act. HSC president Mike Hansen contends that most major US yards build only military vessels.