The hits keep coming for America’s ball-and-chain maritime Jones Act

from Grassroot Institute of Hawaii, June 16, 2024

The arguments in favor of this archaic, blatantly protectionist federal law are losing credibility with each passing day

Here are just a few of the news items and commentaries that have been published recently suggesting it is time to either update the Jones Act for the 21st century or retire it to the ash heap of history.

>> In The National Interest on June 3, writer Brent Sadler wrote that “as a maritime nation we have fallen far.” In his article titled “America is a maritime mess,” he said: “Change is needed, but because of the century of market distortions created by the Jones Act, a maritime Hippocratic oath of ‘do no harm’ is required ….”

>> In a May 13 post on X, Colorado Democratic Gov. Jared Polis urged repeal of the Jones Act as one of three ways to “successfully reduce inflation.” The other two were “drop tariffs” and “create bipartisan fiscal commission (the signal alone will help reduce inflation).”

>> On May 7, Cato Institute trade policy analyst and Grassroot Scholar Colin Grabow wrote about how the Jones Act has contributed to the troubles of Washington state’s ferry system, which according to the Seattle Times canceled over 3,500 sailings last year and is reliably operating just 15 of its 21 vessels.

In comments that could apply to Hawaii’s experiences with ferry systems, Grabow identified the Jones Act and the 1886 Passenger Vessel Services Act as the primary problems, since both require that vessels transporting goods or passengers, respectively, between U.S. ports must be built in the U.S., where they typically cost multiple times more than ships built overseas. Such restrictions, Grabow said, mean that “[Washington State Ferries] — in fact, all U.S. ferry systems — must provide service with one hand tied behind their backs.”

In addition, he said, the two protectionist maritime laws also require that most of the crews consist of Americans, which in today’s labor market is difficult to achieve. Indeed, Grabow said, a January report from Washington’s Department of Transportation pointed out that the state’s ferry system faces “severe staff shortages that are unprecedented in its 70‐year history.”

>> Also in May, CleanTechnica writer Michael Barnard wrote that “shifting freight to water in North America runs headlong into the combination of the Jones Act and the shift of heavy industry like shipbuilding to Asia. … The Jones Act’s noble intent to maintain a merchant cargo fleet that would serve as wartime logistics as it did in World War One [has] failed and … the act should be abandoned.”

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Jones Act reform increasingly popular as law's effects become better known

Almost every day, there are articles and studies being published that illustrate why this protectionist maritime law needs to be updated

from Grassroot Institute, June 1, 2024

Public sentiment has been growing nationwide for reform of the Jones Act, which has been a drag on Hawaii's economy since before Hawaii was a state.

The 1920 federal maritime law restricts the shipping of goods between U.S. ports to ships that are U.S. built and mostly owned and crewed by Americans — and almost every day, articles and studies are being published that highlight the harm the law has done to the U.S. economy and national security.

Among recent articles, longtime Alaska resident and CPA Bradley Shaffer wrote in the Alaska Beacon last Friday that reforming the "obsolete and antiquated" Jones Act would immediately result in lower freight costs for Alaska residents and benefit Alaska's state-owned ferry system, since the state would be able to "replace vessels cheaper and faster, saving the state of Alaska hundreds of millions of dollars and improving service with modern vessels."

Shaffer said reform would even benefit the maritime unions and shipping companies that are "obsessed" with protecting the Jones Act "because allowing vessels to be purchased from more efficient and less-costly international shipyards would mean there could be more vessels and union membership."

He said "a growing, modernized fleet would be a win for the country’s national security. More of everything means the political world gets to bolster their resumes. In other words, win, win. Oh yes, the public would finally get their due."

You can read Shaffer's entire commentary here.

At the other end of the continental U.S., in Pittsburgh, Ed Walsh, blog editor for Juris Magazine published by the Duquesne University School of Law, wrote earlier this month that the Jones Act has been holding back that city's economic potential.

"Pittsburgh’s rivers," he noted, "give it a natural connection to most of the United States, allowing it to ship and receive large industrial goods like coal or steel more easily." He said two facts contribute to this:

"First, it is 10 times cheaper to ship goods over water than it is over land. Second, the Mississippi-Missouri-Ohio river system includes over 6,000 miles of navigable water. … Historically, this has allowed Pittsburgh companies to transport goods farther for cheaper than other cities. But none of this has been allowed to work to Pittsburgh’s advantage for the last 100 years because of the requirements of the Jones Act.

"Therefore," Walsh wrote, "Congress needs to change the Jones Act so that it can be easier for goods to be shipped between places in the United States. This would allow Pittsburgh and other cities to use their water resources to be important economic nodes in the interconnected American economy."

You can read Walsh's entire commentary here.