What The Hell Is The Jones Act?

That time again…the Old Professor’s Classroom…..to learn something does not hurt in anyway.

Before we start…..I think it might be helpful to the understanding of the question to give a little background into the Act.

The Merchant Marine act of 1920 was designed to create a safe network of merchant mariners within the U.S. after World War I, in reaction to the U.S. fleet being destroyed by the German navy. The Jones Act requires all goods shipped between U.S. ports to be transported by U.S. vessels (and operated primarily by Americans).

It calls for providing the nation with a merchant marine that can transport goods between U.S. ports, increase national security during war times, and support a U.S. maritime industry. This nearly century-old law has been amended several times, most recently in 2006.

While much of the current attention on the Jones Act is focused on foreign shipping regulations, the law also contains important information about the maritime industry’s responsibilities regarding safety and well-being of crew. It safeguards the rights of sailors from being exploited, requiring compensation for injuries due to negligence by their employers. It requires employers to maintain safe environments and provide medical care, and also sets standards for vessel maintenance, safety equipment such as lifeboats, and crew qualifications, training and licensing. And, this all-encompassing law has something to say about the environment too, requiring all U.S. ships to comply with EPA regulations.

Now you have a grasp on what the Act entails….we can move onto the debate that is raging (well maybe not raging but intense)……

There is a debate raging on whether the Act has seen better days and should be revoked…..

First a more Libertarian look at the Act…..

For nearly 100 years, a federal law known as the Jones Act has restricted water transportation of cargo between U.S. ports to ships that are U.S.-owned, U.S.-crewed, U.S.-registered, and U.S.-built. Justified on national security grounds as a means to bolster the U.S. maritime industry, the unsurprising result of this law has been to impose significant costs on the U.S. economy while providing few of the promised benefits.

This paper provides an overview of the Jones Act by examining its history and the various burdens it imposes on consumers and businesses alike. While the law’s most direct consequence is to raise transportation costs, which are passed down through supply chains and ultimately reflected in higher retail prices, it generates enormous collateral damage through excessive wear and tear on the country’s infrastructure, time wasted in traffic congestion, and the accumulated health and environmental toll caused by unnecessary carbon emissions and hazardous material spills from trucks and trains. Meanwhile, closer scrutiny finds the law’s national security justification to be unmoored from modern military and technological realities

https://www.cato.org/publications/policy-analysis/jones-act-burden-america-can-no-longer-bear

A short con video for the Jones Act…….

Ask a Founder if the Act should go……

During the first Congress in 1789, Alexander Hamilton led the passage of legislation that required trade between U.S. ports to be conducted by U.S.-flagged vessels, which mirrored the laws of most major countries at the time. This forerunner of the Jones Act nurtured the nation’s fledgling maritime industry and provided a pool of U.S. ships, crews, and shipbuilders that could support the country in a conflict. Even free market theorist Adam Smith contended that England’s own similar statutes were “the wisest of all the commercial regulations” given their vital defense role.
Hamilton’s goals still apply today. The domestic U.S. commercial fleet provides some of the ships, and 40 percent of the mariners needed to move military cargoes during a crisis. U.S.-flagged and operated ships also keep foreign vessels and crews off America’s interior waterways and lessen adversaries’ ability to gain control of commercial sea links between the Continental United States and Hawaii, Alaska, or island territories. Furthermore, the Jones Act’s U.S.-build requirement sustains shipyards the government depends on for episodic construction of military ships and ensures ship construction capacity is available in the United States to replace wartime losses.

https://www.realcleardefense.com/articles/2020/07/04/end_the_jones_act_ask_alexander_hamilton_115438.html

The con has been stated…..now the pro…..

One hundred years ago today, President Woodrow Wilson enacted a law that would become known as the Jones Act. Its purpose was to help the U.S. shipping industry recover after World War I. Yet few could have predicted how vital it would become to our national security and economic prosperity a full century later — especially during a pandemic.

The Jones Act requires that all vessels carrying goods between two U.S. points be American-built, -owned, -crewed and -flagged. This policy provides stability to the U.S. maritime industry and helps to sustain 650,000 American jobs, resulting in $150 billion in economic benefits each year. Most importantly, the Jones Act advances our national security by helping maintain a vibrant domestic shipbuilding industry and maritime workforce. Our shipbuilders supply the military with warships, and U.S. mariners play a key role in transporting military personnel and equipment overseas in times of crisis.

https://www.defensenews.com/opinion/commentary/2020/06/05/why-the-jones-act-is-still-needed-100-years-later/

There you have both sides and I would like to hear from my readers on whether the Jones Act should stay or should it go.

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5 thoughts on “What The Hell Is The Jones Act?

  1. I have no opinion either way, as I had never heard of it. Most shipping in the world is ‘foreign registered’, to avoid complications of tax for the ship owners, and various international shipping restrictions on some countries. Many UK merchant ships are actually registered in Panama. I suspect there is some huge ‘watery con’ being played out, but don’t know enough about maritime law.
    Best wishes, Pete.

    1. A lot of these tankers are registered in Liberia for tax purposes…..there is a debate around repealing the Jones Act…..I just wanted people to know what is being said and done on their behalf. chuq

  2. Reblogged this on It Is What It Is and commented:
    I’m very much aware of the Jones Act!! It’s been strangling Puerto Rico since its inception!! … “For nearly 100 years, a federal law known as the Jones Act has restricted water transportation of cargo between U.S. ports to ships that are U.S.-owned, U.S.-crewed, U.S.-registered, and U.S.-built. Justified on national security grounds as a means to bolster the U.S. maritime industry, the unsurprising result of this law has been to impose significant costs on the U.S. economy while providing few of the promised benefits.”

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