The Jones Act is an ‘expensive luxury’
The respected U.K. maritime research and analyst group Drewry Shipping Consultants said in its Nov. 17, 2013, Container Insight Weekly that the Jones Act is “an increasingly expensive luxury.” Drewry also validated Hawaii Shippers Council estimates that U.S. shipbuilding costs are four to five times that for building a comparable ship in South Korea or Japan.
The Drewry comments were prompted by the Nov. 6 order placed by Matson with Aker Philadelphia Shipyard for a pair of 3,600-TEU capacity containerships for delivery in 2018 for the astounding price of $209 million each. Drewry said, “Comparable sized vessels could be built in Asia today for less than a fifth of that price.”
Drewry believes that “U.S. consumers will, no doubt, be concerned at the increasingly high price of protecting U.S. domestic or coastal traffic for U.S.-flag ships only.”
The Hawaii Shippers Council has been alerting the residents of the noncontiguous jurisdictions to this same message for several years. The noncontiguous jurisdictions — Alaska, Guam, Hawaii and Puerto Rico — are most affected by the federal cabotage laws because they are completely dependent on ocean shipping for interstate surface transportation and do not have access to other modes of surface transportation such as railroad, road trucking and pipeline.
In its editorial statement under the heading “our view” following the news article, Drewry stated, “As the political need for the Jones Act is much diminished, and most of its foreign trade is already carried in non-U.S.-flag vessels, there are strong commercial and environmental arguments in favor of its repeal.”
The Hawaii Shippers Council has advocated for its noncontiguous trades Jones Act reform proposal that would exempt the noncontiguous trades from the U.S.-build requirement of the Jones Act, which Drewry aptly explained is no longer tenable as the Jones Act shipbuilding industry is so uncompetitive.
Michael N. Hansen
Hawaii Shippers Council