The Jones Act Law: A Protectionist Measure for the U.S. Shipping Industry

The Jones Act, also known as the Merchant Marine Act of 1920, is a federal law that regulates maritime commerce in the United States. It requires goods shipped between U.S. ports to be transported on ships that are built, owned, and operated by U.S. citizens or permanent residents. It also supports the development and maintenance of the American merchant marine for commercial and national security purposes. Additionally, it extends the Federal Employer’s Liability Act to seamen, allowing them to sue their employers for negligence in case of work-related injuries.

The Jones Act was enacted by the United States Congress to stimulate the shipping industry in the wake of World War I when America’s dependence on foreign ships to transport soldiers and supplies to Europe exposed its vulnerability to future conflicts. The law has been defended by its supporters as a vital measure for national security and economic development, but it has also been challenged by its critics as a costly and outdated regulation that harms consumers, businesses, trade, the environment, and national security.

In this article, we will examine the history and goals of the Jones Act, the requirements and restrictions it imposes on ships transporting goods between U.S. ports, the waivers and exemptions it allows in certain circumstances, and the criticism and controversy it generates in the U.S. policy debate. We will also discuss the potential benefits and drawbacks of repealing or reforming the Jones Act for the U.S. shipping industry and the American economy.

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History and Goals of the Jones Act

The Jones Act was introduced by Wesley Jones, the U.S. Senator from the state of Washington, who designed the legislation to give his state a monopoly on shipping to Alaska. It was enacted by the United States Congress to stimulate the shipping industry in the wake of World War I when America’s dependence on foreign ships to transport soldiers and supplies to Europe exposed its vulnerability to future conflicts.

The main goals of the Jones Act were:

To revitalize the U.S. maritime shipping industry, which had been depleted after World War I.
To support the shipping industry and prevent the United States from relying on foreign-built ships.
To generate jobs and business revenue for the U.S. shipbuilding and maritime sectors.
To provide vessels and infrastructure that the armed forces could use in a time of war.

According to the American Maritime Partnership, a coalition of maritime interests that supports the Jones Act, the law supports 650,000 American jobs and generates $150 billion in economic activity each year.

Requirements and Restrictions of the Jones Act

The Jones Act imposes several requirements and restrictions on ships transporting cargo between two U.S. ports. These include:

The ships must be owned by U.S.-based companies, with over 75% of the ownership stake held by U.S. citizens.
The ships must be built in U.S. shipyards and registered in the U.S.
The ships must be operated by U.S. citizens or permanent residents, with at least 75% of the crew being U.S. citizens.
The ships must comply with U.S. laws and regulations regarding safety, environmental protection, labor standards, and taxation.

These provisions effectively prohibit foreign involvement in domestic waterborne trade, creating a protectionist barrier for the U.S. shipping industry.

Waivers and Exemptions of the Jones Act

The Jones Act allows for some waivers and exemptions in certain circumstances. These include:

The Secretary of Defense can request waivers in the “interest of national defense” if there are no available or suitable U.S.-flagged vessels to meet military or emergency needs.
The Secretary of Homeland Security can grant waivers for non-defense purposes if there are no available or suitable U.S.-flagged vessels to meet an urgent need or if it is necessary for national security reasons.
The President can grant waivers in case of a national emergency or a major disaster declaration.
Some U.S. territories and possessions are exempt from the Jones Act, such as Guam, American Samoa, Northern Mariana Islands, and US Virgin Islands.
Some types of vessels are exempt from the Jones Act, such as fishing vessels, research vessels, dredges, barges, and offshore supply vessels.

Waivers and exemptions are usually granted on a temporary basis and are subject to review and renewal.

Criticism and Controversy of the Jones Act

The Jones Act has been criticized by various groups and individuals for its negative effects on consumers, businesses, trade, the environment, and national security. Some of the main arguments against the Jones Act are:

It increases the cost of shipping goods between U.S. ports, as U.S.-flagged vessels are more expensive to build and operate than foreign-flagged ones due to higher labor, material, and maintenance costs.
It reduces competition and innovation in the shipping industry, as foreign shippers are excluded from domestic markets and U.S. shippers face less pressure to improve efficiency and quality.
It harms states and territories that rely on imports from the mainland U.S., such as Hawaii, Alaska, Puerto Rico, and others, as they have to pay higher prices for goods or resort to foreign sources.
It contributes to environmental pollution and greenhouse gas emissions, as it encourages more use of land-based transportation modes such as trucks and trains that consume more fuel and emits more carbon dioxide than waterborne modes.
It undermines national security interests, as it reduces the availability and diversity of vessels that can be used for military or emergency purposes.

Efforts to repeal or reform the Jones Act have failed, mainly due to the lobbying and political influence of the maritime interests that benefit from the law, such as shipbuilders, shipowners, unions, and lawmakers from coastal states.

In conclusion, The Jones Act is a century-old law that aims to protect and promote the U.S. shipping industry. It imposes strict requirements and restrictions on ships transporting goods between U.S. ports, creating a protectionist barrier for domestic maritime commerce. The law has been defended by its supporters as a vital measure for national security and economic development, but it has also been challenged by its critics as a costly and outdated regulation that harms consumers, businesses, trade, the environment, and national security. The Jones Act remains a controversial and contentious issue in the U.S. policy debate.

Frequently Asked Questions (F&Qs)

How did the Jones Act affect Alaska?

The Jones Act has affected Alaska as both a territory and a state since the law was enacted more than a century ago as Section 27 of the Merchant Marine Act of 1920. The law’s sponsor, Republican U.S. Sen. Wesley L. Jones of Washington, was eager to protect shipping companies based in his state from losing business to foreign ships and Canadian railroads, so he included Section 27 and inserted wording to specifically benefit his constituents at Alaska’s expense.

Alaska is heavily dependent on waterborne transportation for its survival, yet a federal maritime law known as the Jones Act limits competition among cargo carriers, driving up prices for imports and exports and contributing to the state’s high cost of living.

What was the Jones Act and why was it important to the resolution of American conflict in the Philippines?

The Jones Act was formally known as the Philippine Autonomy Act of 1916. It was a statute announcing the intention of the United States government to “withdraw their sovereignty over the Philippine Islands as soon as a stable government can be established therein.” Congressman William Jones authored the bill which replaced the Philippine Organic Act of 1902.

Does the Jones Act apply to Hawaii?

Yes, the Jones Act applies to Hawaii. The 1920 Jones Act requires that all cargo transported between U.S. ports be on ships that are U.S. flagged, built, and mostly owned and crewed by Americans. It is well known that the act adds to Hawaii’s high cost of living. The Jones Act ensures 13,000 jobs for Hawaii families.

What is the Jones Act quizlet?

Quizlet is a website that provides study materials for students. It has a set of flashcards on the Jones Act which can be used to study the act.

What is the argument for the Jones Act?

The Jones Act is a federal law that requires U.S. ships to be used when transporting goods between U.S. ports. The act affects Hawaii, which relies on imports, by increasing the cost of shipping and living. The act also supports the creation of jobs and national security for Hawaii residents. Proponents of the Jones Act argue that it is essential for U.S. security. There are two main arguments for the security aspect of the Jones Act. The first argument is that the Jones Act supports a U.S.-based merchant marine. The underlying goals of the Jones Act are to encourage the development of a national fleet, support national defense, strengthen the American maritime industry, and fuel economic growth.

What are the negatives of the Jones Act?

The Jones Act increases the costs of goods by prohibiting the use of less expensive foreign options. It also leads to quicker deterioration of land-borne transportation infrastructure, by incentivizing the use of trucks and railroads for shipping, contributing as well to greater fuel consumption and pollution. Exporters are some of the biggest critics of the Jones Act. Hawai‘i companies hoping to ship goods out of state are paying higher costs because of the Jones Act