Repeal the Jones Act
The Jones Act was back in the news this winter in New Jersey as road crews struggled to overcome a shortage of rock salt to clear the roads.
The shortage was a result of the Jones Act, which prohibits foreign ships from transporting goods from one U.S. port to another. It was widely reported that New Jersey could not transport 40,000 tons of salt from Maine in time to respond to the storm because the salt would have arrived on a foreign-flagged ship.
Acting Maritime Administrator Paul Jaenichen argued that there was little the federal government could do: “The Merchant Marine Act of 1920 is very clear in terms of what is required to get a waiver of the Jones Act, and that is that you have to make a national security finding either by secretary of defense or the secretary of the Department of Homeland Security. Salt doesn’t necessarily rise to the level of national security.” New Jersey’s state Assembly responded by voting 73-0 to urge Congress to give the federal government authority to waive the Jones Act whenever the health or safety of U.S. citizens is endangered, in addition to when national defense is at stake.
New Jersey’s unsafe roads are the most recent in a long line of penalties imposed on Americans by the Jones Act. States like Maryland import salt all the way from Chile on foreign-flagged vessels. Those states would benefit from the freedom to ship U.S.-produced salt from Louisiana on foreign-flagged vessels, too. The same is true for transportation of other products, including petroleum.
Defenders of the Jones Act assert that it is needed to protect U.S. security interests. But during the first Gulf War, the Jones Act was deemed “an impediment to the movement of critical military resources” and suspended.
The Jones Act is particularly destructive to Americans who live in places like Puerto Rico and Hawaii who are separated from the continental U.S. by oceans. A report from the Federal Reserve Bank of New York found that it costs twice as much to ship a 20-foot container from the East Coast to Puerto Rico as it does to send the same shipment a comparable distance to Dominican Republic.
One reform proposed by the Hawaii Shippers Council would allow Alaska, Guam, Hawaii and Puerto Rico to ship goods on foreign-built vessels, while leaving the rest of the Jones Act in place. That certainly would represent an improvement over the status quo.
Even better would be a total repeal of this costly special-interest legislation.
Jay Van Andel Senior
Policy Analyst in Trade Policy
The Heritage Foundation
Keep the Jones Act
The Jones Act received a lot of media attention after New Jersey Transportation Commissioner Jim Simpson blamed the law last month for blocking a shipment of road salt needed to replenish the state’s supplies.
His department launched a full-scale attack against the Jones Act. References in the media to a “94-year-old law” implied that its age somehow discounted its legitimacy. Our national interest doesn’t have an expiration date, and the Jones Act serves U.S. interests now as much as ever.
While New Jersey’s transportation department was focused on blaming the Jones Act, the U.S. maritime industry was doing everything it could to get the salt to New Jersey and quickly identified a U.S.-flag vessel to tackle the job. It has been suggested that Mr. Simpson used the Jones Act as a scapegoat and deflected blame for the department’s planning failures on the “federal government,” and “Washington bureaucrats,” which are pretty easy targets.
Regardless of whether his comments were calculated for that effect or were simply an expression of frustration from someone under significant pressure to protect the people of his state, it vilified a maritime law that didn’t deserve to be blamed for the salt shortage.
In order to judge the value of the Jones Act, it is essential to understand its benefits. The law ensures that the U.S. has sufficient shipbuilding capacity to construct and maintain our Navy along with a commercial fleet capable of transporting cargo during wartime.
The Jones Act also provides safety, environmental, and homeland security benefits. The U.S. Coast Guard sets a high bar for U.S. companies and mariners that operate U.S.-flag vessels.
The U.S. is not the only country that limits coastwise transportation to its domestic fleet. A majority of the world’s nations have similar rules on the books, and U.S. vessels are excluded from servicing those trade routes. The Jones Act has driven a shipbuilding boom across the U.S. larger than anything we’ve seen in the past two decades, especially in the construction of container ships, tankers, and offshore service vessels.
Without the Jones Act, this trend would immediately reverse itself, the value of capital investments would evaporate, and U.S. shipbuilding capacity, its commercial fleet, and skilled mariners would soon disappear.
The New Jersey Department of Transportation should have followed Gov. Chris Christie’s lead when he said that the focus should be on getting additional road salt to the state instead of playing the blame game.
New Jersey’s two U.S. Senators, Robert Menendez and Cory Booker, issued a statement reminding the public of the security and economic benefits that the Jones Act provides. They also cautioned that better planning and communication could have prevented the salt shortage and should be exercised going forward instead of blaming a law critical to America’s national, economic, and homeland security.
I couldn’t agree more.
President and CEO
Offshore Marine Service Association
New Orleans, La.