Professor finds the Jones Act lessens shipboard safety

by Michael Hansen, Hawaii Shippers Council, September 25, 2017

The Cato Institute’s Regulation Magazine published in its Fall 2017 edition, the article, “Does the Jones Act Endanger American Seamen?,” reporting that the high costs imposed on the domestic maritime industry by Jones Act cabotage lessens work place safety on board ship for U.S. seafarers.

The author of the article is Thomas Grennes, Professor of Economics, Emeritus, Poole College of Management, North Carolina State University.

Key excerpts:

Requiring Americans to use American-built ships on domestic routes increases shipping costs in the short-run and reduces innovation and slows growth in the long-run. In addition, the Jones Act makes the American-flagged fleet older and less safe than it would otherwise be. Instead of producing a stronger merchant marine, the Jones Act has contributed to a smaller and older domestic shipping industry with more dangerous conditions for American seamen.

Marine insurers have a powerful incentive to investigate the determinants of shipping risk, and their trade group, the International Union of Marine Insurance, has compiled data indicating that older ships have had more frequent accidents. Signee nations of the Paris Memorandum of Understanding on Port State Control, an international agreement on ship inspections, collect data on inspections of ships in ports and frequency of detentions of unsafe ships.

Their latest data for July 2017 indicate that U.S. ships ranked 36th out of 42 relatively safe countries. In safety, they ranked below all the Western European countries and Japan and China.

Because Jones Act-compliant ships are so expensive, domestic shipping companies delay replacing them, making the American fleet much older than the foreign fleet. Subjecting American seamen to greater danger is an unintended consequence of U.S. shipping policy.

PDF: Does the Jones Act Endanger American Seamen?