This article covers what I think is the most overlooked impact of the Jones Act. Everyone else seems to only focus on the economic impacts of keeping or repealing the Jones Act, but this one also covers the purpose of the Jones Act, and how thoroughly it has failed at it. We may have the most advanced ship designs, especially with nuclear powered submarines and aircraft carriers, but if we end up in a war where they would pay a major role, we have effectively zero capability of ramping up their production or crewing them.
Fewer trucks and freight trains. That affects economic interests, some of them quite powerful. (Maritime shipping is 2 and 3x more than rail and trucking, respectively.)
Also, potentially, cars. The lack of a drive-on drive-off ferry in e.g. the San Francisco Bay Area is in large part due to the inflated costs of American ferrybuilding. I believe when Hawaii tried creating its ocean-class ferries, it paid a multiple of what a foreign ferry provider paid for the same ferry. Because the American one had to be built at one of our obsolete shipyards.
The main downside is that with greater shipping, you’ll deal with foreign ships crewed by foreigners with little or no regulation. So Liberian flag of convenience, owned by some mysterious Cypriot company, with Italian officers and Filipino sailors.
They likely don’t meet most environmental and other standards that we like to see.
You’ll also get NIMBY pushback as harbor areas are now mostly fancy apartments. Pearls will be clutched with pallets being unloaded along the Embarcadero in SFO.
A huge majority of ships that trade in US ports are already foreign owned and crewed. So that isn’t an issue.
As to environment and safety the US have what is called Port State Control. The short of it is that your flag state doesn’t matter, you still have to follow US rules and be subject to US inspection in national waters.
The Jones act only applies to voyages with no international component, which is vanishingly few trips these days. Part of that is the jones act, but the other part of that is that there just isn’t much reason to ship between US ports. There isn’t a ton of goods that need to get between LA and Seattle, say.
The Jones Act is the reason there is such low utilization of the waterways that are one of the most valuable geographic treasures of North America. There is good reason to ship between US cities where it can be done, it can presently be done for about 1/3 the cost of rail, and 1/5 the cost of truck.[1]
A repeal of the Jones act would help reduce the wear and tear on our highways and railways. It would lower overall costs, and reduce greenhouse emissions. There are also economies of scale that would likely kick in with increased shipping.
Valuable for how long, though? With the hydrological cycle changing and causing deluges in places and drought in others, those waterways might not be navigable in 50 years.
> There isn’t a ton of goods that need to get between LA and Seattle, say.
I don't know if that's really true. There's not enough to justify Jones act ocean shipping between those ports, because rail and road are viable. But ocean shipping vessels routinely stop and both ports on one voyage and if they could legally transport cargo between US ports, I expect they would.
There's a lot of trade in physical products between Washington and California. Agreculture and aerospace are a big part of both economies.
There’s a ton of potential traffic. Even now, there’s a ton of barge traffic between NYC and Albany and points between on the Hudson River. I could easily see cost effective routes between Baltimore and Boston that would bypass congested highway and road corridors.
So why is it a big deal if those have to be American ships? You can't piggyback those transfers on international ships which are going that route anyway
No I mean that must be the core of what the problem is. There is a non-American ship which is going approximately the same way you want stuff shipped, but it can't do the job because of this Jones Act. Either the ship was not built in the USA, or is not staffed by Americans or not registered as American. But how important is that, in the big picture.
No I mean that must be the core of what the problem is. There is a non-American ship which is going approximately the same way you want stuff shipped, but it can't do the job because of this Jones Act. But how important is that, in the big picture.
For the continental US, it forces frieght to rail and road. Rail and road work pretty well, but some elsewhere in the thread says rail and road cost a lot more than ocean shipping. I'm sure that only works for some goods, and some routes; rail and road shipping would continue to be in high demand. We also have some navigable rivers that could be used for more freight, but probably not big container ships, so I don't know that repealing the Jones act helps there.
But for Hawaii and Puerto Rico, it's a much bigger deal. Their access to goods made in the US is highly restricted, because the US shipping fleet is so limited. In theory, the Jones act would support US shipbuilding and US ship operation by providing a profitable domestic market, and these US operators could use those profits to help them compete in the world market for shipping. What has happened instead is US ship operations are so uncompetitive that they only operate in the Jones act space, and there's not enough business there to justify building ships that are comparable with international standards.
What I'm trying to say is if the US had a fleet of Panamax container ships, even if that fleet was a small part of the global fleet, they would regularly go between US ports on their voyages (as international ships do) and they would be able to take US bound cargos at costs comparable to international cargo; although probably with some markup because not every cargo ship can take it.
But there are no US Panamax ships, because they're not competitive internationally, and there's not enough demand that it makes sense to build a large enough shipyard to build them.
The same thing applies to the two other major classes of ocean shipping; tankers, and roll-on/roll-off car ships.
Shipping these goods with smaller vessels means more costs for everything and makes island living much more expensive. Disaster recovery in Puerto Rico is also frequently delayed by the Jones act, although limited time exceptions are often made.
> you’ll deal with foreign ships crewed by foreigners with little or no regulation
The Jones Act requires "that all goods transported by water between U.S. ports be carried on ships that have been constructed in the United States and that fly the U.S. flag, are owned by U.S. citizens, and are crewed by U.S. citizens and U.S. permanent residents." The main problem is the domestic-construction requirement.
Release the construction completely. Open up ownership to non-adversary countries. U.S. flag only for freshwater, U.S. and friendly flags for saltwater. U.S. and friendly crews for any. You've simultaneously created a small economic boom in logistics, will eventually pass along the lower costs of maritime transport to consumers and reduced emissions by switching to a more-efficient mode. (Possibly, too, increased the competitiveness and TAM of American shipbuilders.)
This article covers what I think is the most overlooked impact of the Jones Act. Everyone else seems to only focus on the economic impacts of keeping or repealing the Jones Act, but this one also covers the purpose of the Jones Act, and how thoroughly it has failed at it. We may have the most advanced ship designs, especially with nuclear powered submarines and aircraft carriers, but if we end up in a war where they would pay a major role, we have effectively zero capability of ramping up their production or crewing them.
> This would be offset by only small losses to a small number of private interests.
Okay, but there must be downsides too?
> there must be downsides too?
Fewer trucks and freight trains. That affects economic interests, some of them quite powerful. (Maritime shipping is 2 and 3x more than rail and trucking, respectively.)
Also, potentially, cars. The lack of a drive-on drive-off ferry in e.g. the San Francisco Bay Area is in large part due to the inflated costs of American ferrybuilding. I believe when Hawaii tried creating its ocean-class ferries, it paid a multiple of what a foreign ferry provider paid for the same ferry. Because the American one had to be built at one of our obsolete shipyards.
The main downside is that with greater shipping, you’ll deal with foreign ships crewed by foreigners with little or no regulation. So Liberian flag of convenience, owned by some mysterious Cypriot company, with Italian officers and Filipino sailors.
They likely don’t meet most environmental and other standards that we like to see.
You’ll also get NIMBY pushback as harbor areas are now mostly fancy apartments. Pearls will be clutched with pallets being unloaded along the Embarcadero in SFO.
A huge majority of ships that trade in US ports are already foreign owned and crewed. So that isn’t an issue.
As to environment and safety the US have what is called Port State Control. The short of it is that your flag state doesn’t matter, you still have to follow US rules and be subject to US inspection in national waters.
The Jones act only applies to voyages with no international component, which is vanishingly few trips these days. Part of that is the jones act, but the other part of that is that there just isn’t much reason to ship between US ports. There isn’t a ton of goods that need to get between LA and Seattle, say.
The Jones Act is the reason there is such low utilization of the waterways that are one of the most valuable geographic treasures of North America. There is good reason to ship between US cities where it can be done, it can presently be done for about 1/3 the cost of rail, and 1/5 the cost of truck.[1]
A repeal of the Jones act would help reduce the wear and tear on our highways and railways. It would lower overall costs, and reduce greenhouse emissions. There are also economies of scale that would likely kick in with increased shipping.
[1] https://waterways.arkansas.gov/education/why-waterways/
Valuable for how long, though? With the hydrological cycle changing and causing deluges in places and drought in others, those waterways might not be navigable in 50 years.
If the Mississippi, or any of our navigable rivers, dries up we will have far bigger problems. In all likelihood the US will not exist.
> There isn’t a ton of goods that need to get between LA and Seattle, say.
I don't know if that's really true. There's not enough to justify Jones act ocean shipping between those ports, because rail and road are viable. But ocean shipping vessels routinely stop and both ports on one voyage and if they could legally transport cargo between US ports, I expect they would.
There's a lot of trade in physical products between Washington and California. Agreculture and aerospace are a big part of both economies.
Exactly. It’s not a big deal.
There’s a ton of potential traffic. Even now, there’s a ton of barge traffic between NYC and Albany and points between on the Hudson River. I could easily see cost effective routes between Baltimore and Boston that would bypass congested highway and road corridors.
You are correct for the lower 48 states, but there is definitely a need for shipping to Hawaii and Puerto Rico.
So why is it a big deal if those have to be American ships? You can't piggyback those transfers on international ships which are going that route anyway
> why is it a big deal if those have to be American ships?
It's cheaper to fly shit there than deal with financing the delays and cost of American-built ships.
> can't piggyback those transfers on international ships which are going that route anyway
Why not? Works for other Carribean and Pacific islands.
No I mean that must be the core of what the problem is. There is a non-American ship which is going approximately the same way you want stuff shipped, but it can't do the job because of this Jones Act. Either the ship was not built in the USA, or is not staffed by Americans or not registered as American. But how important is that, in the big picture.
No I mean that must be the core of what the problem is. There is a non-American ship which is going approximately the same way you want stuff shipped, but it can't do the job because of this Jones Act. But how important is that, in the big picture.
For the continental US, it forces frieght to rail and road. Rail and road work pretty well, but some elsewhere in the thread says rail and road cost a lot more than ocean shipping. I'm sure that only works for some goods, and some routes; rail and road shipping would continue to be in high demand. We also have some navigable rivers that could be used for more freight, but probably not big container ships, so I don't know that repealing the Jones act helps there.
But for Hawaii and Puerto Rico, it's a much bigger deal. Their access to goods made in the US is highly restricted, because the US shipping fleet is so limited. In theory, the Jones act would support US shipbuilding and US ship operation by providing a profitable domestic market, and these US operators could use those profits to help them compete in the world market for shipping. What has happened instead is US ship operations are so uncompetitive that they only operate in the Jones act space, and there's not enough business there to justify building ships that are comparable with international standards.
What I'm trying to say is if the US had a fleet of Panamax container ships, even if that fleet was a small part of the global fleet, they would regularly go between US ports on their voyages (as international ships do) and they would be able to take US bound cargos at costs comparable to international cargo; although probably with some markup because not every cargo ship can take it.
But there are no US Panamax ships, because they're not competitive internationally, and there's not enough demand that it makes sense to build a large enough shipyard to build them.
The same thing applies to the two other major classes of ocean shipping; tankers, and roll-on/roll-off car ships.
Shipping these goods with smaller vessels means more costs for everything and makes island living much more expensive. Disaster recovery in Puerto Rico is also frequently delayed by the Jones act, although limited time exceptions are often made.
> you’ll deal with foreign ships crewed by foreigners with little or no regulation
The Jones Act requires "that all goods transported by water between U.S. ports be carried on ships that have been constructed in the United States and that fly the U.S. flag, are owned by U.S. citizens, and are crewed by U.S. citizens and U.S. permanent residents." The main problem is the domestic-construction requirement.
Release the construction completely. Open up ownership to non-adversary countries. U.S. flag only for freshwater, U.S. and friendly flags for saltwater. U.S. and friendly crews for any. You've simultaneously created a small economic boom in logistics, will eventually pass along the lower costs of maritime transport to consumers and reduced emissions by switching to a more-efficient mode. (Possibly, too, increased the competitiveness and TAM of American shipbuilders.)
Hurts unions involved in ships/shipping because they have a vested interest in keeping the system as inefficient and shit as possible.