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Tuesday, January 26, 2016
Jones Act: “Diffuse costs and concentrated benefits”
By Michael Hansen @ 1:24 AM :: 4459 Views :: Jones Act

From Mike Hansen, Hawaii Shippers Council, January 25, 2016

A video was posted to YouTube on January 22, 2016, showing Jack P. Suyderhoud, Professor of Business Economics and Director of the MBA Program, Shidler College of Business, University of Hawaii at Manoa, answering a question about the Jones Act during a general roundtable discussion.

Prof Suyderhoud makes the well-known observation that Jones Act cabotage protections for the domestic maritime industry create “diffuse costs and concentrated benefits” that make it difficult to change politically. That is that the costs of Jones Act cabotage are borne broadly throughout the economy, while the benefits are highly concentrated for those employed and invested in the industry.

That is certainly true when looking at Jones Act cabotage on a nationwide basis, but the noncontiguous jurisdictions – Alaska, Guam, Hawaii and Puerto Rico – are disproportionally impacted by the costs due to the complete reliance on ocean shipping for domestic surface transportation.

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