For nearly 100 years, the United States (U.S.) has been enforcing the Jones Act, a maritime cabotage law that has aided the American shipbuilding industry at the expense of thousands of businesses who face higher costs as a result. 

The Jones Act is derived from Section 27 of the Merchant Marine Act of 1920 and states that all goods that are transported in the U.S. between U.S. ports must be done so on ships American owned, American crewed, American flagged, and built in the U.S. Supporters tell a common story about the history of the Jones Act—Congress initially passed the Jones Act in order to protect the American shipping and rail industry while bolstering American maritime security. Though Jones Act supporters may not necessarily be wrong, the actual language in the Jones Act was never debated in the Senate Commerce Committee nor on the Senate floor. The true background behind the Act is that Senator Wesley Jones of Washington was able to insert his namesake language into the Merchant Marine Act of 1920 while he was the Chairman of the Commerce Committee to benefit his state, support Western railroads, and insulate his constituents from the foreign shipping industry. Now, with the Jones Act nearing its 100th anniversary since being signed into law, how does it continue to affect the U.S.?

As of late, shipbuilders, ship owners, and a number of labor unions that represent shipbuilders and seamen are the major beneficiaries of the Jones Act. The shipbuilding industry states that the Jones Act supports over 500,000 shipbuilding jobs. Military support for the Jones Act is derived from the Jones Act providing a strong shipbuilding industry and ships that could be used to aid in the military’s sealift capabilities. Additionally, in a time of war, the military would prefer using American ships and crew to support our nation instead of having to rely on foreign ships and crew. 

Though the arguments of military importance and job security in support of the Jones Act are valid, simply observing the glaring issues with the law proves that the Jones Act is unnecessary, dated, costly, and restrictive, especially with an evolving U.S. fleet more adapted to globalism.  Currently, the U.S. fleet consists of 97% less oceangoing Jones-compliant ships than it had in 1960. The U.S. lacks some ships in its flagged fleet, including liquified natural gas (LNG) tankers, of which the U.S. has none, with no plans to purchase any in the future. This creates barriers for American LNG customers in places like Massachusetts and other Northeastern states who are unable to purchase LNG from other U.S. states and instead must resort to purchasing LNG from Russia. The lack of a pipeline to transport America’s ever-growing LNG supply nationwide in theory should have resulted in states importing American LNG through their ports, but the lack of LNG tankers in combination with the Jones Act results in the current costly logistical nightmare in place.

Aside from the operational issues caused by a dearth in Jones Act-compliant ships, using Jones Act-compliant ships to move goods between U.S. ports costs over twice as much as shipping on a foreign-flagged vessel. For those who believe they can simply purchase a U.S. built ship to be in compliance with the Act, they will face four to five times the cost of purchasing a ship from overseas since the relative cost of an American ship is far higher. This financial disparity contributes toward many east coast states purchasing road salt from Chile instead of places like Louisiana since shipping costs alone make up such a large part of transporting goods on the few Jones Act-compliant ships available.

Places in the non-contiguous U.S., such as Alaska, Hawaii, and Puerto Rico, are still under the jurisdiction of the Act, which makes importing goods from the mainland U.S. extremely expensive. In fact, the Grassroots Institute of Hawaii found that shipping costs are a major contributor to the high cost of living in Hawaii, 12% higher than the next highest state, Connecticut. As an example of higher shipping costs, the cost of shipping a container to the U.S. mainland from Hawaii costs 1001% more on a Jones Act ship than a foreign vessel, which is not allowed. Puerto Rico faces a similar effect of high costs; a 2010 study found the island lost $537 million per year due to the Jones Act. For an Alaskan to hire an American crew to ship goods from Alaska to California, it may cost ~$11,500, while hiring a foreign crew would only cost ~$2,000. The U.S. International Trade Commission found that waiving the Jones Act in Hawaii, Alaska, and Puerto Rico would create an economic gain of $5 to $15 billion.

The national defense argument for the Jones Act may be in good faith, but in reality, the U.S. military already relies on foreign-built ships for sealift capability since foreign ships are far cheaper and more widely available. For instance, during the Persian Gulf War, the U.S. military only chartered one-fifth of its ships domestically due to the lack of military utility of current Jones Act-compliant oceangoing vessels. Additionally, the Jones requirement of a U.S. crew to operate the Jones Act ships currently is unsustainable for a long-term military sealift strategy—the U.S. Maritime Administration found that the number of mariners available to crew ships were “barely sufficient.” The Congressional Research Service also notes that “Congress directed the Department of Transportation and the Department of Defense to develop a national sealift strategy,” even though they still have not issued it, showing how serious the military may be in regards to supporting the Jones Act’s potential national security benefits. 

Congress and the President need to realize that the Jones Act is harming the American economy and is costly for all Americans who consume goods moved between U.S. ports. Just as it had done in 1936 exempting the Virgin Islands, and eventually American Samoa and the Northern Mariana Islands, Congress needs to evaluate the true economic costs of the Jones Act because it has consistently impeded hurricane relief efforts. The most inefficient components of the law include requiring waivers to uphold the government’s national security duties, restraining innovation in the shipbuilding industry, and forcing some Americans to rely on other nations to acquire goods that are plentiful elsewhere in the United States.