July 17, 2015
People who have heard of the Jones Act (Merchant Marine Act of 1920) generally are aware that its stated purpose is to maintain a strong U.S. merchant marine industry. Drafters of the legislation hoped that the merchant fleet would remain healthy and robust if all shipments from one U.S. port to another were required to be carried on U.S.-built and U.S.-flagged vessels. Unfortunately, things haven’t worked out very well.
The protectionism of the Jones Act has given the United States the type of merchant marine that would be expected from a sector that has been cut off from market forces for close to a century. Instead of being a global powerhouse, the U.S. merchant fleet has become a minor player. In 1955 the 1,072 ships in the fleet accounted for 25 percent of global tonnage. Today the 191 vessels account for 2 percent of the world total. Those vessels primarily carry cargoes from one U.S. port to another, along with government-generated exports, such as military equipment and food aid.
Not surprisingly, shipping goods on a U.S.-flagged vessel is a high-cost proposition, which explains why the U.S. fleet simply can’t compete in normal global commerce. A 2011 study by the U.S. Maritime Administration (Marad) showed that the average daily operating costs for American vessels were roughly three times higher than comparable vessels registered in other countries....
Read the full article at the Cato Institute: The Jones Act Strikes Again