Criticism of costly Jones Act becoming more common

Almost every day, there are articles and studies being published that illustrate why this protectionist maritime law needs to be updated

Public sentiment has been growing nationwide for reform of the Jones Act, which has been a drag on Hawaii’s economy since before Hawaii was a state.

The 1920 federal maritime law restricts the shipping of goods between U.S. ports to ships that are U.S. built and mostly owned and crewed by Americans — and almost every day, articles and studies are being published that highlight the harm the law has done to the U.S. economy and national security.

Among recent articles, longtime Alaska resident and CPA Bradley Shaffer wrote in the Alaska Beacon last Friday that reforming the “obsolete and antiquated” Jones Act would immediately result in lower freight costs for Alaska residents and benefit Alaska’s state-owned ferry system, since the state would be able to “replace vessels cheaper and faster, saving the state of Alaska hundreds of millions of dollars and improving service with modern vessels.”

Shaffer said reform would even benefit the maritime unions and shipping companies that are “obsessed” with protecting the Jones Act “because allowing vessels to be purchased from more efficient and less-costly international shipyards would mean there could be more vessels and union membership.”

He said “a growing, modernized fleet would be a win for the country’s national security. More of everything means the political world gets to bolster their resumes. In other words, win, win. Oh yes, the public would finally get their due.”

You can read Shaffer’s entire commentary here.

At the other end of the continental U.S., in Pittsburgh, Ed Walsh, blog editor for Juris Magazine published by the Duquesne University School of Law, wrote earlier this month that the Jones Act has been holding back that city’s economic potential.

“Pittsburgh’s rivers,” he noted, “give it a natural connection to most of the United States, allowing it to ship and receive large industrial goods like coal or steel more easily.” He said two facts contribute to this:

“First, it is 10 times cheaper to ship goods over water than it is over land. Second, the Mississippi-Missouri-Ohio river system includes over 6,000 miles of navigable water. … Historically, this has allowed Pittsburgh companies to transport goods farther for cheaper than other cities. But none of this has been allowed to work to Pittsburgh’s advantage for the last 100 years because of the requirements of the Jones Act.

“Therefore,” Walsh wrote, “Congress needs to change the Jones Act so that it can be easier for goods to be shipped between places in the United States. This would allow Pittsburgh and other cities to use their water resources to be important economic nodes in the interconnected American economy.”

You can read Walsh’s entire commentary here.

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