Rep. Case Introduces Three Noncontiguous Jones Act Reform Bills 

by Michael Hansen, Hawaii Shippers Council, Dec 20, 2019

U.S. Representative Ed Case (D-HI-01) introduced three Jones Act reform bills that would apply to the noncontiguous jurisdictions and trades of the United States, which collectively would result in a comprehensive change in the regulatory regime.

The Jones Act is the common name for the body of domestic maritime laws known in American jurisprudence as the coastwise laws of the United States and internationally and generically as maritime cabotage.

The noncontiguous jurisdictions of the United States embraced by the Jones Act (i.e., coastwise laws of the U.S.) are the States of Alaska and Hawaii and the Territory of Puerto Rico. Among other things, the Jones Act requires that commercial vessels to engage in domestic trade must be domestically registered and built and owned and crewed largely by U.S. Citizens.

There are four noncontiguous jurisdictions not embraced by the Jones Act.

The Territory of Guam is subject to maritime cabotage requiring vessels registered in the United Sates (i.e., U.S. flag vessels) but not domestically built and owned.

The three United States territories are fully exempt from any maritime cabotage are American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI) and the U.S. Virgin Islands (USVI).

Rep. Case’s innovative approach includes three separate bills.

First, the “Noncontiguous Shipping Relief Act” would exempt the noncontiguous jurisdictions of the United States from the Jones Act / the coastwise laws of the United States. This would primarily apply to Alaska, Hawaii and Puerto Rico.

Second, the “Noncontiguous Shipping Reasonable Rate Act” would amend the provisions of Interstate Commerce Commission Termination Act of 1995 applicable to ocean freight regulation in the noncontiguous common carrier trades by the Surface Transportation Board (STB). The current ocean rate regulatory standard, known as the “zone of reasonableness,” is so vague that it has resulted in virtually no enforcement. The new Act would tie noncontiguous ocean freight rates to international levels. This would apply to all ocean common carriers operating in the noncontiguous trades.

The Noncontiguous Shipping Competition Act, which rescinds the Jones Act wherever monopolies or duopolies in noncontiguous Jones Act shipping develop.

The first bill would reduce the ocean shipping companies’ capital and operating costs and the second place a hard cap on ocean freight rates. The third bill would be a failsafe alternative.

Link: Ed Case News Release 

MATSON RESPONDS--Hawaii-headquartered Jones Act operator Matson issues comment

ML: … Hanging Hawaii’s higher costs of living on shipping ignores what local economists and journalists have consistently found over the years, which is that shipping costs are just one of many cost factors that go into local pricing of consumer goods and represent a small fraction of price differences between Hawaii and the mainland.

The reason the Jones Act has had such strong bi-partisan support in every Congress and administration in modern times is because it is important to homeland security and national defense, as well as the security of service to remote communities like Hawaii and Alaska, from an economic standpoint. The importance of being able to rely on critical supply line transportation is easy to take for granted but hard to overstate.

The Jones Act also supports more than 650,000 jobs in the U.S., including thousands here in Hawaii …. 

LINK: Matson Statement Regarding Proposed Jones Act Legislation

read … Hawaii Congressman introduces Jones Act amendment measures 

CB: Rep. Case Wants To Reform The Jones Act