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It’s time to repeal the Jones Act
- paulsutter 4y agoFees for non-US ships might be a compromise that helps the opposing side get more comfortable with a repeal
- eru 4y agoTaxation (or fees) are in general less bad than outright bans.
- netfl0 4y agoSome things are more important than price efficiency.
- flyingfences 4y agoSuch as?
- bob1029 4y agoUser experience is the biggest one that keeps popping up in my head.
- adventured 4y agoWe'd want to know - to as detailed of an extent as possible - the scale of the trade in question. How much economic efficiency are we giving up, and for what exactly?
- pilgrimfff 4y agoI'm 100% with you. We have to keep the money flowing away from taxpayers and towards corporate interests.
- wcarron 4y agoThat's inevitable. What is preventable, however, is having taxpayer money flow out of the country to foreign corporate interests. As an American, I'd rather get screwed by an American company than one from, well, a whole host of other countries.
- pilgrimfff 4y agoI agree. We need more American (TM) companies with no competition. In every industry, there should be a Comcast sitting on top collecting rents.
- wcarron 4y agoReally? That's a grossly uncharitable interpretation of what I said. How abominable of you, Socrates.
- eru 4y agoMoney that flows out of the country is essentially free. The Fed targets inflation. They'll just print more money, if the foreigners want to sit on it.
- missedthecue 4y agoWhat if the the Americans screw you for 8x the cost (number the article uses), and you get a smaller inferior ship in return? Why not go with the foreign product at that point?
- JAlexoid 4y agoPointlessly protectionist law. What's worse - it hurts primarily other americans... like most protectionist laws.
- shagie 4y agoIt's protectionist - yes. Pointless... there's good reason for it when it was written. The domain is cabotage ( https://en.wikipedia.org/wiki/Cabotage https://en.wikipedia.org/wiki/Cabotage ). Note that many countries have cabotage laws of one sort or another.
- JAlexoid 4y agoIt's pointless, because it failed miserably to do anything. It failed to account for the fact that most of internal US freight transport is ground or air. It lived in some ideal world where Florida to New York is cheaper to deliver via freight ship, than a rail line. At the time of drafting it was already based in an imaginary world.
- shagie 4y agoOther laws cover air and land transport. Try taking a Ryanair or Air China flight from New York to San Francisco. Try getting CP Rail to deliver from Florida to New York or Bison Transport to deliver from Minneapolis to Houston. The Jones Act covers foreign carriers between US maritime ports. There are indeed problems with it and the amount of investment that the US, as a nation, has invested and retained in building and staffing ships that could be complaint with the Jones Act. It goes both ways - and the problem is not solely with the law.
- JAlexoid 4y agoGeneral laws, requiring that business conducted in US is conducted with residency laws taken into account is not the same as everything listed in Jone's Act.
- scarier 4y agoAlso the Foreign Dredge Act [1]… [1]https://en.m.wikipedia.org/wiki/Foreign_Dredge_Act_of_1906 https://en.m.wikipedia.org/wiki/Foreign_Dredge_Act_of_1906
- eej71 4y agoA recent post from the Cato Institute shows that their push to repeal the Jones Act seems to have touched a nerve inside the U.S. Maritime Administration (MARAD). "Almost at the end of the 41‐ page document is what appears to be a set of recommendations related to a March 2020 meeting of the Marine Transportation System National Advisory Committee (MTSNAC)’s International Shipping Subcommittee. Among them: “Charge all past and present members of the Cato and Mercatus Institutes with treason.” https://www.cato.org/blog/charge-all-past-present-members-cato-mercatus-institutes-treason https://www.cato.org/blog/charge-all-past-present-members-ca...
- kevinventullo 4y agoSlight nitpick, but I think it’s worth pointing out that MARAD, a federal agency, is a distinct entity from MTSNAC, a collection of industry folks who made the treason comment.
- Spooky23 4y agoTypical Cato drama. Since when do they care about consumers? The amortized cost of a $100M US cargo ship vs a $30M ship from India or whatever is peanuts. The United States is the worlds pre-eminent maritime power. You need ships and the industry to support ships to maintain that. We also don’t want ships operated with the oversight of nations like Liberia in our coastal waters. The treason statement is dramatic, but there’s a legitimate point there… we enjoy the benefits of owning the water, and weakening that dominance to satisfy some phoney baloney principles will hurt the interests of the United States.
- deleted 4y ago[deleted]
- xxpor 4y ago>We also don’t want ships operated with the oversight of nations like Liberia in our coastal waters. What are you talking about? There's tons of those already, they just can't go between 2 US ports directly.
- andjd 4y agoNote also that that the act requires that the ships be flagged in the US and staffed by 75% US workers. This means they're subject to US minimum wage laws, and there's a smaller labor pool to draw from, so there are additional costs that raise the price of each voyage, not just a higher upfront capital cost. Additionally, since there are far fewer firms that can compete for these routes, I would expect that the margins on Jones act compliant shippers is much higher than the industry norm.
- shagie 4y agoAs an aside - the complete list of all Jones act ships can be found at https://www.maritime.dot.gov/sites/marad.dot.gov/files/2021-04/DS_USFlag-Fleet_2021_0316_Bundle.pdf https://www.maritime.dot.gov/sites/marad.dot.gov/files/2021-... Using that information, it would be possible to find out where all of them are right now. There's only 96 ships... 57 of them are tankers... and note that this also has implications for natural gas in New England this winter ( https://www.wsj.com/articles/new-england-risks-winter-blackouts-as-gas-supplies-tighten-11665999002?st=7fege4p9mve85vx&reflink=desktopwebshare_permalink https://www.wsj.com/articles/new-england-risks-winter-blacko... ) because they typically get some LNG from international sources and that is going to be tighter this winter... so you need to get it from Texas instead, but the pipelines ( https://costcontrolassociates.com/blog/natural-gas-problems-northeast-pipeline-constraints-weather-risks/ https://costcontrolassociates.com/blog/natural-gas-problems-... ) are at or near capacity and so you need to ship instead... but that gets into Jones act again.
- kotlin2 4y agoIt's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country. This was basically neo-liberal orthodoxy until the mid 2010s, by which point it was clear that lowering costs by offshoring labor had hollowed out the middle class in America. Money has a multiplyer effect. Each dollar spent is received by someone who then goes on to spend a part of that dollar and so on. So if you take dollars and send them elsewhere, that multiplyer effect is dampened. Things may be cheaper, but the economy is worse overall. Also, as the article itself states: > [The Jones act] aims to promote and maintain the American merchant marine fleet for commercial and defense purposes. The act has nothing to do with making things cheaper. Any earnest proposal to repeal the Jones act should address how the goals of the act can be met in other ways.
- frankus 4y agoHistorically the US has favored protectionism over subsidies, but my understanding is that subsidies are almost always a more economically optimal way of ensuring that strategically-important domestic industries are able to survive.
- actually_a_dog 4y agoThen the "free market" zealots would just be crying about subsidies instead of tariffs and regulatory barriers. There's really no winning this battle.
- actually_a_dog 4y agoI love how the only reply to this is to mash the down arrow. Never change, HN, never change.
- missedthecue 4y agoEternally subsidizing massive shipbuilding infrastructure as an insurance policy against WW3 seems beyond silly in my view. And remember, it has to be massive shipbuilding infrastructure or you're not doing any good. Having one or two shipyards that aren't very good at shipbuilding does zero if you need to suddenly build a lot of ships locally for "national security" which seems to be the argument of the pro-jones act commenters.
- PuppyTailWags 4y agoI wanted a bit of education outside this, so Wikipedia tells me the Jones act declares that cargo between US ports must be on US-flag, US-created, largely US-crew, US-owned ships. The Lexington Institute, a center-right thinktank focused on domestic security policy, has claimed(June 2016) it strengthens border security and reduces terrorism. I guess my question is: how much is a stronger border security and terrorism reduction worth, economically?
- robalfonso 4y agoIt’s not just those issues. The original Impetus for the jones act was to keep a strong merchant marine for war time, so we subsidise the us merchant fleet so that if we had need during war they would exist. I find this difficult because my outlook for those kinds of conflicts indicates it’s not necessary to have such a fleet, but if you need it, it’s too late to decide. Those ships are a multi year build. I would think some flexibility and also some accounting of exactly how many us merchant boats we’d need should inform changes to the Jones act.
- WorldMaker 4y agoThat original "impetus" also changed dramatically due to technology shifts in the very next war after the Jones Act was enacted: naval combat shifted in World War II dramatically towards the favor of aircraft carriers and submarines. A merchant marine fleet doesn't need submarines (they don't have much cargo room, do they?) and maybe there's some crazy way that an aircraft carrier deck could double as a modern shipping container deck, but why go to all that expense? The last war that merchant marines truly mattered to war was World War I and "iconic" moments like the merchant fleet at Dunkirk.
- darkarmani 4y ago> so that if we had need during war they would exist. How would we use a US merchant fleet during war? Maybe I just don't understand how that fleet would be useful in a war. Does the US merchant fleet really have military grade vessels and military grade weapons systems?
- sokoloff 4y agoI definitely support the notion of allowing "shipping from foreign ports to multiple American ports in sequence." (Shipping from China to Port A, Port B, and Port C in sequence, while allowing off-boarding only of cargo in ports A and B.) Allowing foreign-flag carriers to ship general cargo among American ports is not something I have a strong opinion on (but I generally am not inclined to permit it).
- matthewowen 4y agoThat is already how it works. Transpacific eastbound ships typically call at LA/Long Beach, Oakland, and Seattle before returning to Asia. They just can't pick up cargo at any of those stops and then drop it off at another US port (they can and do pick it up and take it to Asia)
- sokoloff 4y agoThen why is Puerto Rico complaining that the Jones Act is causing high prices in Puerto Rico for foreign-sourced goods? Are those complaints just invalid / based on a completely wrong premise?
- matthewowen 4y agoI think the generous claim would be that given that Puerto Rico has a manufacturing dominated economy, if foreign flagged vessels could pick up goods there and take them on to the USA, they would be more likely to build routes that included them. Eg you could go through the Panama Canal, stop in PR to drop off goods from Asia and pick up goods from PR, and then continue on to Savannah/Charleston/Newark. I'm personally skeptical of that.
- SaltySolomon 4y agoBecause if they 'import' things like food or an amazon package from the mainland they can only use Jones Act vessels which drives the costs up crazy.
- teddyh 4y agoIt seems to me that the Jones Act is a tariff on the activity of shipping itself. Unless one wants to argue the globalist stance that all tariffs should be abolished, the Jones Act should be examined with a careful eye to what it prevents, not only what costs it incurs. I.e. if the Jones Act was repealed, would all shipping suddenly be done by foreign actors, who, by virtue of being cheaper, would have a virtual monopoly on (and insight into, and control over) all shipping within the US? Maybe this might not actually be bad, but such consequences should be considered.
- eru 4y agoThat 'globalist' stance is eminently sensible. Tariffs should be unilaterally abolished: no need to wait for the other guys to stop hitting their head against a wall, you can stop today. Ie no need to wait for free trade agreements. Just declare unilateral free trade.
- teddyh 4y agoIf that was done, all workplace safety and employment security laws would stop being useful and become mostly only a financial drain on all domestic businesses, as foreign countries without such laws and restrictions could offer cheaper goods and services by exploiting and endangering their employees. Also all child labor laws. Most domestic businesses would, by force of price competition, be made to buy from, and outsource their jobs to, wherever it was cheapest. Since this outcome might still technically protect domestic workers and children, but would leave them destitute and out of work in a destroyed economy, it is reasonable to argue that this outcome should be avoided.
- eh9 4y agoI’m from Puerto Rico and people there have been fighting for this since I can remember. This disproportionately hurts the poorest people there the most. Groceries are already exorbitantly expensive, doubly so because of this misguided act. Never mind the fact that Puerto Rico is in the middle of recovering from a Cat1 hurricane that nearly took the island out for a month (power outages still ongoing). While the island should have been prepared for that, it was still in the middle of recovering from Maria (a cat 5 hurricane in 2017). How much slower has relief been because of the jones act? How much longer can we keep subjecting people to colonialism?
- ceejayoz 4y agoFormally exempting overseas territories like Puerto Rico seems to me a reasonable compromise.
- ch4s3 4y agoBut why do it at all? There's no evidence that the Jones Act has worked. The US ship building industry lags far behind places like South Korea that churn out bigger, better, and cheaper ships on a faster basis. South Korean ship builders aren't poorly paid either, they just have to compete on a global market.
- ceejayoz 4y agoI'm all for repealing it, but politics is frequently about compromises. Start with the most obvious need, prove the world doesn't explode when you do.
- ch4s3 4y agoI see your point, but a half measure is likely to stick around just as long as the Jones Act. If congress wants to phase it out and give some no interest loans to ship builders to modernize, then I guess I'm fine with that.
- tablespoon 4y ago
- Gwypaas 4y agoThe Jones Act is a problem and a blessing. It ensures a US maritime industry, albeit tiny. Still, due to lack of competition, it has left the US maritime industry so far behind the world standard that the minute it is removed, the entire sector will go bankrupt from international competition. The Decline of the U.S. Merchant Marine | What's Going on With Shipping? https://www.youtube.com/watch?v=kJn0bCWx_9g https://www.youtube.com/watch?v=kJn0bCWx_9g
- bombcar 4y agoEh, all international shipping will collapse the moment the US Navy stops being the oceanic police for everyone for free.
- Gwypaas 4y agoHow come? What is this disaster mindset? Even Ukraine and Russia agreed on how to open grain corridors from Odesa. https://en.wikipedia.org/wiki/Black_Sea_Grain_Initiative https://en.wikipedia.org/wiki/Black_Sea_Grain_Initiative
- bombcar 4y agoBecause the US Navy patrols the waters and keeps piracy down. The areas it doesn't patrol are infested with pirates. It costs quite a bit to do this, and if the US Navy steps back other countries will have to step up.
- Gwypaas 4y agoCan you point to research showing this? Except outside Somalia 10-15 years ago when the international community stepped in. Piracy is mostly handled by local governments and is hugely dependent on their strength and international cooperation. https://www.imo.org/en/OurWork/Security/Pages/Piracy-Reports-Default.aspx https://www.imo.org/en/OurWork/Security/Pages/Piracy-Reports...
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- mperham 4y agoThe Cato Institute is a conservative think tank. Repealing Jones would effectively kill a huge amount of the US maritime industry and related jobs. Literally offshoring those jobs to foreign ships and wage slave crews. Just like we offshored union manufacturing jobs to China in the 80s and 90s. We can discuss ways to make it more efficient but keeping jobs onshore has very real benefits. It's the core of our middle class.
- photochemsyn 4y agoI think the operational description of the Cato Institute is that of 'neoliberal ideologue', not necessarily 'conservative' or 'liberal' (not that those two latter terms have much meaning anymore, there more like keys to rather mutable dictionary entrys whose meaning fluctuates with the daily political intrigues). Neoliberal is a bit easier to define, it's basically the notion that international pools of capital should be liberated from the restrictions imposed by the persistence of nation-states.
- eru 4y agoThe Jones act has already made sure that the US maritime industry is tiny.
- JAlexoid 4y agoConsidering that CATO has been blamed to be liberal, conservative and everything under the sun - they've had a very consistent view on many issues, that opponents come up with labels to try to smear them.
- yourapostasy 4y agoPass on this "analysis". I'd rather speak with actual merchant mariners with 4+ decades experience in the industry and reams of data of actual merchant marine businesses and a bunch of other stakeholders like shipbuilders, DoD, municipality water utilities techs who have to deal with the industry on the coal face, ecologists, marine biologists, etc. to find out where the real skeletons lie in a scrap-vs-support discussion of the Jones Act. This kind of pablum that passes for "analysis" thrives upon readers not bringing externalities into the picture. When you lossy compress these types of decisions into a unidimensional pricing metric, the blowback from overlooked information always comes back to bite you in the ass after the ones who can monetize the externalities have long since absconded with the money and saddled the rest of us in taxes with the clean up bill. I'm completely open to scrapping the Jones Act and in fact my personal inclination is to scrap it. Once I find where the externality debt the authors were so desperate to hide is buried, and priced that into the full evaluation, like any balanced business decision should be made. After seeing up close first-hand the disaster that is Chinese food biosecurity, I'm not at all impressed with these capitalism über alles boosters who are not putting forth a proposal in good faith, instead just putting in a negotiating ploy. We see this all the time in our profession where someone blithely ignores technical debt of all kinds to meet a metric, grab their bonuses, and jet out the door before the business realizes they've been conned.
- bombcar 4y agoJust update the Jones Act so that the only vessels allowed to dock at US ports are US vessels or vessels coming from the flagged country. So if a ship from China wants to dock, it better be a US or China vessel.
- eru 4y agoThe Jones act mostly puts limits on shipping within the US. Do you want to add even more restrictions?
- bombcar 4y agoThere exists almost no US-other country shipping that is US flagged. The problem is that these foreign flagged vessels can pay slave wages to what are sometimes literal slaves, and we take advantage of it. So yes, restricting the vessels that can use US ports even more will help US-flagged shipping.
- eru 4y agoRestricting people's employment opportunities doesn't make them better off.
- 8note 4y agoIt would eliminate the specific concern that a ship can't stop by PR on its way to another port. It would make those restrictions more consistent between mainland and island US ports
- eru 4y agoA ship that docks at any US port can't stop by any other US port on its way. Doesn't matter whether any of the ports involved are in Puerto Rico or otherwise. So it's already very consistent (if stupid..), ain't it?
- andjd 4y agoI think it's a fair criticism of the jones act that it hasn't delivered on its goals of keeping a vibrant commercial shipbuilding and shipping industry in the US for the purpose of supporting our military in case of war. Is seven active shipyards sufficient if we need to mobilize a war effort? Do ships matter as much to logistics in modern warfare? Is our domestic production capable of building trans-oceanic capable ships when international shipping is not protected? Similarly, the costs of the act are not evenly distributed, with Puerto Rico and Hawaii particularly burdened by higher shipping costs.
- thehappypm 4y agoRepealing the Jones Act would be great for the US economy. It is an artificial constraint on internal trade, and trade is the single most useful tool for prosperity. It does not achieve its goal. Its goal is to ensure internal trade is not foreign dependent. However, what really happens is domestic trade is replaced by international trade! A great example is liquid natural gas in Massachusetts. Massachusetts cannot buy LNG from sellers in the US because there are no Jones Act compliant ships that carry LNG. So we buy from Trinidad instead. Literally billions of dollars flowing out of the country because of this regulation.
- IceHegel 4y agoThis would be a win for capital over labor. Make your own conclusions.
- zeroonetwothree 4y agoDisagree. It would be a win for labor over capital.
- eru 4y agoIt would be a win for both labour and capital. A win of diffuse interests over concentrated interests.
- akavi 4y agoThis would be a win for the millions of laborers that don't work in maritime shipping over the capital owners of the (~100 odd) jones act ships.
- missedthecue 4y agoIt would be a win for hundreds of millions of Americans who buy products that are shipped between ports. It would be a huge win for Americans in Hawaii, Puerto Rico, and other US islands. It would be a loss for people employed building these vessels and it would be a loss for the companies that profit on building them. This is not a huge number of people. As other people have mentioned, the issue is that the Jones Act has very clear advantages for the people who benefit from it, and it generally imposes very diffused costs on the people it hurts, even though the costs are very real. This is the issue with all tariffs.
- photochemsyn 4y agoSo when will Cato just go full-on globalist neoliberal and demand that weapons production should not be a national concern? Maybe we can contract out production of F-35 engines to China, and close that plant in Vermont that Congressperson Bernie Sanders lobbied so hard for? Or maybe ULA's production facility in Alabama, a gift to Congressperson Richard Shelby, could be moved to Honduras to take advantage of the cheap labor costs? Yes, higher domestic labor costs mean less profits to distribute to the entities that finance the Cato Institute. Regardless, regional realities mean that shortening supply line for critical necessities is a wise move in an increasingly unstable world (that instability being due to well-known factors like resource starvation, climate destabilization, population pressure, etc.). This doesn't mean that well-regulated global trade isn't a benefit to all partners, it just means that trade in things like luxury items (whose loss from local economies doesn't cause critical failures) is quite different from trade in fundamental necessities (whose loss does). As far as the Jones Act, here's a good counterargument to Cato: https://www.defensenews.com/opinion/commentary/2020/06/05/why-the-jones-act-is-still-needed-100-years-later/ https://www.defensenews.com/opinion/commentary/2020/06/05/wh... To imagine life without this law, consider the risks we would face if foreign-owned companies were allowed to conduct our domestic trade during this pandemic. Foreign companies would be able to influence the flow of domestic goods and resources that are keeping our economy afloat. Thousands of now-secure American jobs throughout our shipbuilding and maritime workforces would be threatened, and foreign governments could gain even more undue leverage over our economy.
- eru 4y agoMost other economies don't have the equivalent of the Jones Act. Did they have a worse experience in the pandemic?
- photochemsyn 4y agoRepealing the Jones Act in particular is really about outsourcing the construction of ship-building to places like China and India to get the cheapest labor rates and maximize profits. The well-known scarcity of medical supplies during the pandemic is part of the broader trend of neoliberal globalization. > "Among ocean-going commercial ships, worldwide 2,873 are under construction and China is building 1,291 of them while the U.S. is building only 8 (as tracked by the shipbroker BRS Group). The other leaders are Japan with 697 and South Korea with 475, both also heavily-subsidized, although less than China’s mega-billions. Other nations subsidize the building of commercial ships, including India and France. But the U.S. discontinued its shipbuilding subsidies decades ago." https://townhall.com/columnists/ernestistook/2020/04/23/china-could-gain-the-most-if-the-us-ended-our-jones-act-n2567498 https://townhall.com/columnists/ernestistook/2020/04/23/chin... Note the above article has a kind of 'fear China' theme, but the reality is that the US oligarchs in the shipping industry would be the immediate primary beneficiary, in terms of profit margins and overall labor/material costs. Of course, if the US economy and state goes belly up, they'll run off to hidey holes in New Zealand, Singapore, Switzerland or similar.
- carry_bit 4y agoAccording to this article, New England is risking winter blackouts due to strong LNG demand in Europe and the Jones Act making delivery of domestic supplies nearly impossible: https://www.wsj.com/articles/new-england-risks-winter-blackouts-as-gas-supplies-tighten-11665999002 https://www.wsj.com/articles/new-england-risks-winter-blacko...
- nluken 4y agoThere's a much easier long-term solution to this problem: electric heating, powered by electricity from Hydro-Québec. Unfortunately, the LNG industry has lobbied hard to block transmission lines, but it would make a huge difference should the lines eventually be built.
- elteto 4y agoAs one (very wise) commenter here on HN once said, you have to prefix “We would like you to believe that…” to the title of publications like this. “We would like you to believe that it’s time to repeal the Jones act.”
- deleted 4y ago[deleted]
- gadflyinyoureye 4y agoI pointed asked Yolo on a call why won't we repeal this. Gave him my contact information. Never. Never! heard back on this. It's idiotic that we require this process.
- matthewowen 4y agoAlthough I do think that elements of the Jones Act make sense to repeal (the shipbuilding aspects are an example of something that has really bad outcomes on the whole), I think there are also aspects that ought to be retained and enhanced. It is true that foreign owned vessels can't move goods between US ports. These vessels sail under flags of convenience and are crewed by poorly treated Filipino sailors earning a pittance. Do we really want to move _more_ shipping to them? It seems appropriate to me that cargo between US ports should be effectively regulated. I would hate for the outcome of a repeal to be yet more abusive labor practices.
- pg_bot 4y agoI'm no fan of the Jones Act, I think it should be repealed in its entirety. However, there is a political reality that several special interests are united in keeping the law on the books. I think a better solution would be to amend the Jones Act to remove the American built requirement. I'm fine with American flagged and crewed ships if we want to ensure that we have available merchant marines. (which we don't have now) However, there is no such thing as an "American built" ship anymore. The ships we "build" in the USA have had their design and critical components outsourced. The only thing we do is assembly, and that is the easiest part of shipbuilding to ramp up in a war. You can sell this plan to the defense department by stating that you will actually have ships and crew members if you need them. Right now almost the entire fleet of Jones Act ships is reaching their end of life and there is a point which we will reach soon where they will go extinct.
- maherbeg 4y agoA straight forward fix would be a gradual repeal. Start with foreign territories and Hawaii allowing for non-US vessels. Then in the US allow for 10% of all traffic to be serviced by an international company, and keep increasing that until some X% that allows for a US maritime industry and international competition.
- manv1 4y agoRepealing this will be difficult, because you have a small focused organization supporting it, and you have a large, diffuse, and distractible public. And those maritime guys are hardcore union guys, which will make Democratic support a given. The only reason it has a chance to pass now is because the repeal may reduce costs for millions of consumers. If it's hurting home heating oil customers in New England then the NE delegation may get behind it. That'll put them against every state that's contiguous to water (including inland waterways). I'd put the chance of it passing at 15% unless something exciting happens.
- missedthecue 4y agoThere have been significant issues building offshore wind farms because the speciality ships used to construct these behemoths are not built by US shipyards. There have been some discussions of sailing these vessels all the from from Europe and operating them out of ports in Canada to get around the Jones Act, but the inefficiencies are obvious. Perhaps democrats could be persuaded into abolishing this rule on the basis of furthering green energy efforts.
- cr1895 4y ago>There have been some discussions of sailing these vessels all the from from Europe and operating them out of ports in Canada to get around the Jones Act Not mere discussions. This has already happened (Dominion Coastal Virginia demo project) and will continue to happen. JA support is really bipartisan…some dems are fully on board with continuation and even further strengthening of the Jones Act.
- maxwell 4y agoFor context, it looks like there are only 32 wind turbine installation vessels in the world as of early 2021, and the first Jones Act-compliant wind turbine installation vessel is currently being built: https://www.theverge.com/22296979/us-offshore-ships-wind-boom-installation-vessels https://www.theverge.com/22296979/us-offshore-ships-wind-boo... Instead of taking on national security + environmental pollution risks and further empowering foreign industry by repealing the Jones Act, we should invest in U.S. shipyards and continue to investigate assembling wind turbines at port and bringing out to sea mostly intact: https://crew.udel.edu/industrializing-offshore-wind-power-generation https://crew.udel.edu/industrializing-offshore-wind-power-ge...
- tablespoon 4y ago> Before I do, let me say that I am forever grateful for the tremendous work that scholars at the Cato Institute have done—and continue to do—to expose the Jones Act’s many flaws. ... A special mention goes also to Scott Lincicome who, more than anyone, has made fighting the Jones Act hip on Twitter. > Other scholars have worked on this effort, of course. For instance, in 2018 the Mercatus Center published a piece by Thomas Grennes called “An Economic Analysis of the Jones Act” urging the reform of a law that “imposed large losses on American consumers.” My Mercatus colleagues Alden Abbott and Andrew Mercado also recently published a policy brief that delineates the negative economic effects of the Jones Act This looks like typical free market libertarian dogma, so color me unconvinced. Especially since the reasoning seems all about consumer prices, which libertarians seem to often forget are not the only policy priority. > The Jones Act is a 102-year-old federal measure that aims to promote and maintain the American merchant marine fleet for commercial and defense purposes. To achieve this goal, it restricts the waterborne transportation of cargo within the U.S. to vessels that are U.S.-flagged, U.S.-built, at least 75% U.S.-crewed and at least 75% U.S.-owned. The concrete results are that a foreign ship can enter a U.S. port to drop off its foreign cargo, it can even from there sail to different U.S. ports to drop off other foreign goods, but it is not allowed to pick up any domestic goods in a U.S. port and bring those goods to another U.S. destination if it doesn’t meet the four conditions listed above. Personally, I think it's probably time to strengthen the Jones Act. It seems written for a time where a larger fraction of American sea trade consisted of domestically-produced goods. Now that we've unwisely outsourced much of our manufacturing ability, so maybe it should be modified to also mandate a certain percentage of all cargo, foreign and domestic be transported by US-flagged, US-built, US-crewed, US-owned ships. That should increase US sea transport capacity, and the greater volume should help drive down the costs of US-build ships.
- jmyeet 4y agoHard pass. This is no different to any other neoliberal effort to move more profits to the capital-owning class by offshoring more jobs under the mirage of reducing costs to consumers by paying people in the third-world peanuts. The US (and the EU) are able to use their significant market power to benefit consumers and workers by imposing regulation on those who want access to their markets. Access to the US financial system is one way the US can impose its will (for better or for ill) on foreign financial institutions, as one notable example. This article makes no mention of "flags of convenience" and that really gives the game away at the agenda of the neoliberal thinktanks that produced it. Maritive law is complicated. A big factor is what flag a ship flies under. Often commercial shiping will fly under a flag of a country that has next to no worker protections so countries like Liberia and even Mongolia (yes, land-locked Mongolia) ostensibly operate large commercial shipping fleets. To further escape any liability form, say, spilling millions of barrels of oil this will be further complicated by a corporation registerd in a different country operating the ship flying a flag of yet another country. The US is a huge destination for commercial shipping. The US thus has a ton of power to require certain standards of the ships that want to visit its ports and the conditions the crews operate under. Under no circumstances should we give this up for the false promise of neoliberal cost-cutting.
- JAlexoid 4y agoHow about you actually read the damn article and the law, before writing this?
- crisdux 4y agoI am passionate about this issue because I think the US is failing to leverage an extremely valuable asset that could help bring manufacturing back to the states, reduce highway traffic and cut co2 emissions. I believe the biggest infrastructure change the US could do is invest in a comprehensive inland terminal network. Europe is doing this. They have been working on strengthening hundreds of inland terminals. Check out this example linked below on google of terminal in Basel, Switizerland - literally in the middle of the continent[1]! Below is also a proposed project in Cincinnati, Ohio that never gained traction because of the issues with the Jones Act[2]. Imagine if every city along the Mississippi river network had a terminal like this. I want to stress that the real use of an inland terminal network like this isn't only for delivering finished goods from outside the US to the interior of the country. The real value is to further integrate manufacturing transportation networks between US states, Canada and Mexico. I think this opportunity will fail to be realized because of our dysfunctional politics in Washington and too many powerful lobbies. [1] https://www.google.com/maps/place/Swissterminal+AG+COBI/@47.5515469,7.642522,691m/data=!3m1!1e3 https://www.google.com/maps/place/Swissterminal+AG+COBI/@47.... [2] https://www.soapboxmedia.com/devnews/0605queensgateterminals.aspx https://www.soapboxmedia.com/devnews/0605queensgateterminals...
- JAlexoid 4y agoThere's a big difference - US actually has a highly efficient rail freight network.
- Retric 4y agoThe US’s rail network isn’t that different than the EU’s. The average freight rail trip in the EU are much shorter which makes rail less competitive relative to trucks. That has nothing to do with the rail network and is instead a function of EU’s economy. The difference in utilization largely comes down to geography and politics. America’s flyover states and high population coasts just fit rail really well.
- JAlexoid 4y ago> The average freight rail trip in the EU are much shorter which makes rail less competitive relative to trucks. Which makes rail freight in US much more different, doesn't it? We cannot discount competitiveness when comparing rail networks in economics context. The fact that US rail freight is so much more efficient makes any argument for internal water based transport much less sound.
- mlb893 4y agoThe USA has a prime example of what would happen if they removed the patriot act, that is shipbuilding industry in Canada. The industry need doesn't sustain itself at those costs and Canada's cost for labour are much lower than the US's. We are trying to reboot the industry here and I am not kidding when I say it will take 2-4 decades so I can only imagine what the US will lose if they give up the Jones act.
- WorldMaker 4y agoThe US already lost the vast majority of its shipbuilding industry. Jeffboat was one of the few US manufacturers the Jones Act tried to protect and Jeffboat went bankrupt and shut down for good in 2018. (Jeffboat was an historic shipbuilder going back to the golden years of the steamship.)
- mmcconnell1618 4y agoThe Jones Act in combination with the Passenger Vessel Services Act (1889) also forces foreign-flagged cruise ships (which is basically all of them) to stop at a foreign port even if they loop back to the same starting US port or all passengers will be charged a fee of several hundred dollars. A Seattle to Alaska to Seattle cruise will need to stop in Canada, even for an hour, just to avoid the extra fees. Starting at one US port and ending at another requires a stop at a "distant" foreign port which makes it difficult from cruise lines to offer routes like Los Angeles to Hawaii. https://thepointsguy.com/guide/what-is-the-jones-act-for-cruise-ships/ https://thepointsguy.com/guide/what-is-the-jones-act-for-cru...
- pstrateman 4y agoThe obvious and easy solution is to be US flagged.
- valarauko 4y agoObvious, yes, but not necessarily easy. It would also have to be US manufactured, US crewed, and majority US owned.
- unethical_ban 4y agoI'm ambivalent about cruise ship manufacturing location, since it is a niche and luxury activity. Having read the conditions working on those ships though, the US ownership and crewing doesn't bother me. If the purpose of the Act is to ensure US independence in maritime shipping, why should cruise lines be affected? Even supporters of the Act could probably justify an exemption. I'm talking out of my butt, though.
- valarauko 4y agoCruise ships are affected by the Passenger Vessel Services Act of 1886, not the Jones Act. Similar to the Jones Act, it seeks to protect the US passenger vessel industry.
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- throwaway81523 4y agoI had to read in a ways to find out what the Jones Act is. It says that maritime cargo traffic in internal US waterways has to be carried by US-flagged vessels. Repealing it means e.g. that Panama-flagged vessels could carry the cargo instead. The article starts out saying that the importance of repealing it has been propounded by the Cato Institute and by Lawrence H. Summers. So that says what the Act is, and who wants to repeal it. I figured at that point that my curiosity was satisfied.
- raldi 4y agoIt’s much more restrictive than that, which is why there are basically no carriers that meet its requirements. It’s just not financially feasible. From Wikipedia: It 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.
- Maursault 4y agoThanks. I'd like to know exactly what foreign maritime traffic the Cato Institute and Lawrence H. Summers think can successfully navigate internal US waterways.[1] Freeing stuck ships can cost upwards of $1B, not to mention the ecological threat of discharged ballast, inviting wholesale invasion of snakehead and worse. [1] https://www.nytimes.com/2022/04/17/business/chesapeake-cargo-ship-stuck.html https://www.nytimes.com/2022/04/17/business/chesapeake-cargo...
- MoreSEMI 4y agoAFAIK, internal waterways does not literally mean inside the US. Internal means routes between US ports. A foreign vessel could still sail between two deep water ports for example, if the act were repealed.
- Maursault 4y agoDoes the nomenclature exclude water routes within the US, and only refer to coastal port to port routes? If not, you have constructed a straw man.
- kilolima 4y ago"...the real concentration story exists in monopolized markets around the country where the Jones Act has eliminated competition and shielded local firms from international market forces... This conclusion is shared across ideological lines." Shielding local markets from the race-to-the-bottom of international market forces sounds like a good thing. But does this prove that neoliberalism is the main creed of both political parties? The Jones Act insures strong regulations for crew, safety, and environment on ships entering at least some US ports, and helps to maintain a strong merchant marine which is critical for our thallasocracy and projecting global sea power.
- nmz 4y agoThis is simply outsourcing. We know what happens when you outsource. You cannot simply export an industry and then expect to have more money flowing in the nations economy at the end of the day, will the company be richer? sure, but the individuals who actually make that currency flow will be less. This is what happens in a lot of states that are fighting just so there's an amazon or any industry inside of it. To implement this in a national scale is extremely dangerous. Completely decimating the economic import/export balance of any nation.
- julienb_sea 4y agoThe Jones Act limits intra-state transit of goods. Trade efficiencies create new economically viable business opportunities, which in this context are definitionally domestic. Outsourcing the ships used for intra-state transit would unlock new domestic opportunities which ultimately grow the domestic economy. There are also acute more significant benefits. Transportation of natural gas by sea would allow better utilization of domestic gas production, as opposed to what currently happens, where states not connected by pipeline have to import gas internationally.
- gernb 4y agoIf you're sympathic to these types of ideas you might find these entertaining https://www.youtube.com/watch?v=5hwuRkJMo_4&list=PLBuns9Evn1w9XhnH7vVh_7C65wJbaBECK https://www.youtube.com/watch?v=5hwuRkJMo_4&list=PLBuns9Evn1... Sometimes I am and sometimes I'm not but I still find them entertaining
- miguelazo 4y agoStopped reading as soon as they quoted Lawrence Summers.
- theptip 4y agoZvi is tackling Jones Act repeal: https://thezvi.substack.com/p/announcing-balsa-research https://thezvi.substack.com/p/announcing-balsa-research. One interesting point he makes is that it can be cheaper to simply buy out the special interests; in this case, can we support the shipbuilder unions and manufacturing capacity by committing to increase direct navy contracts in some way? The general argument being that the special interests capture some value X, and the diffuse costs borne by society are Y, and Y >> X. So if we just pay ~X from some other pot, we still come out ahead as a society. Put differently, is there a more targeted way of achieving the original goals of the Jones Act, without distorting the markets and raising costs as much? It seems likely.
- ouid 4y agoSince cato is a PR firm for corporate interests, and nothing more than that, it has no incentive as an organization to support anything that genuinely provides for public wellbeing. Some other think tank will do that work. It stands to reason, then, that Cato is lying in some essential way. Since they are arguing that the Jones act is agaisnt the public interest. The most obvious such way that this might be true is that requiring an american workforce requires large retailers and logistics companies to pay more to their employees. This obviously serves American interests by preventing, in aggregate, the very wealthy to avoid redistributing their wealth as much by expatriating it. Additionally, repealing the Jones act is an attempt to increase unemployment which drives wages down in aggregate. Sure, in a well built system of government, protectionism is usually a bad thing, but right now it is serving to stanch the flow of money to the capitalist class, whom Cato universally represents.
- EGreg 4y agoI lost about $700 due to the Jones Act. What happened was that my friend had booked a cruise for us, that sailed out of Orlando. But I couldn't join them in Orlando. "No worries," I thought, "I'll just meet up with the ship at the very next stop" -- which I did, I took an uber there. We had done the same with MSC cruises in the Mediterranean -- missing the ship in Rome and taking a train up to meet it in Civitavecchia. Well, as I got on the ship, they said I owe $700 or so. I was really wondering why! Turns out that unless the ship drops off the passenger at the exact same US port as they picked them up, it is considered that the ship is "transporting cargo" and therefore has to pay taxes. I asked whether I could be dropped off at the port I got on: no. I asked whether I could get off in the Bahamas and fly back: no. (Well, yes but I'd still owe the money). So, I had to pay. The ship otherwise risked getting fined for not paying its tax.
- VLM 4y agoI'm not sure we even have to think about it. Whenever the sophistry is mostly name dropping "deep state" authorities whom all agree its a great idea, its certain to screw over everyone not at the top of the pyramid. Its like that every time, and this is not likely to be an exception.
- upsidesinclude 4y agoHaven't we collectively learned the lesson, globalization makes for an extremely vulnerable world. It's an entire infrastructure and skill base which is being maintained. When the need arises the government can cause growth. They can't cause knowledge. There are skilled workers and organizers that make shipbuilding happen, likewise a skilled workforce of engineers, navigators and shiphandlers that know how to operate vessels. These things take years or decades to master. Articles like this are just more globalist rhetoric pitched in with some neocon export-your-slavery. The Jones Act rant is tired.
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