Time to rethink Jones Act shipping rules

Published on Friday, 22 December 2017 21:54
Written by Bloomberg View

For all the flaws of the Jones Act - the 1920 legislation requiring that all maritime commerce between U.S. ports take place on ships owned, built and crewed by Americans - there’s no faulting its professed goal. The U.S. needs a thriving maritime sector, for both economic and military reasons.

The best way to achieve this is to lift the Jones Act’s protectionist blanket. Granted, that’s not so simple, because the act is part of a complex regulatory and legal web. But some straightforward steps could bring immediate benefits.

First, grant at least a five-year waiver of the act to Puerto Rico. This would speed the island’s recovery. It would also test how best to regulate foreign-flag carriers, and provide data to show exactly what the act is costing.

Next, scrap the act’s “build-in-America” provision, as Senator John McCain and others have proposed. The global glut in container ships makes now a good time to replace the aging Jones Act cargo fleet with cheaper, cleaner vessels.

Also, allow foreign-flag ships sailing from and then onward to foreign ports to deliver cargo to more than one U.S. port on a given coast. This would stimulate coastal commerce overall.

Make U.S. coastal shipping more efficient with new infrastructure and smarter regulation.

Undoing the Jones Act will be disruptive. Workers who lose their jobs should be compensated. But U.S. aircraft and automobile manufacturers make better products because of foreign competition, and its railroads and trucking industry have done well since deregulation.

The success of U.S. coastal shipping should be measured not by the U.S. vessels and sailors it employs but by its contribution to the overall U.S. economy.

On that score, the Jones Act is a failure. It has outlived whatever rationale it once had. Enough is enough.

Posted in New Britain Herald, Editorials on Friday, 22 December 2017 21:54. Updated: Friday, 22 December 2017 21:57.