The Jones Act: A Burden America Can No Longer Bear - or - What is the Jones Act? Separating Fact from Fiction.

Editor's Note:  I really wasn't aware of this part of our commerce laws, until I posted Peter Zeihan'ss article, "Mexico: Triumph Over Geography".  and for the most part I think it's nothing more than protectionism, but then again, maybe not, and maybe it should protect commerce in this way.  I don't know.   Either way, I've not had the opportunity to really go over, analyze it, think about it and read the historical impact, pro and con.  So, I've posted two articles that represent arguments against and for.  Choose for yourself.  RK

June 28, 2018 By Colin Grabow, Inu Manak, and Daniel J. Ikenson

How an archaic, burdensome law has been able to withstand scrutiny and persist for almost a century. 

For nearly 100 years, a federal law known as the Jones Act has restricted water transportation of cargo between U.S. ports to ships that are U.S.-owned, U.S.-crewed, U.S.-registered, and U.S.-built. Justified on national security grounds as a means to bolster the U.S. maritime industry, the unsurprising result of this law has been to impose significant costs on the U.S. economy while providing few of the promised benefits.

This paper provides an overview of the Jones Act by examining its history and the various burdens it imposes on consumers and businesses alike. While the law’s most direct consequence is to raise transportation costs, which are passed down through supply chains and ultimately reflected in higher retail prices, it generates enormous collateral damage through excessive wear and tear on the country’s infrastructure, time wasted in traffic congestion, and the accumulated health and environmental toll caused by unnecessary carbon emissions and hazardous material spills from trucks and trains. Meanwhile, closer scrutiny finds the law’s national security justification to be unmoored from modern military and technological realities.

This paper examines how such an archaic, burdensome law has been able to withstand scrutiny and persist for almost a century. It turns out that, as in so many other cases of rent seeking, there is an asymmetry of motivations among those who benefit from the Jones Act’s protections and the vastly greater number who bear its costs. The protected domestic shipbuilding industry has a captive market from which it benefits handsomely and seeks to preserve by promoting fallacious arguments about the law’s necessity to national security, while the vast costs are dispersed across the economy in the form of higher prices, inefficiencies, and forgone opportunities that few people can even tie to the cause. That so many federal agencies and congressional committees have at least partial jurisdiction over different facets of the Jones Act also helps to explain its longevity. Lastly, this paper presents a series of options for reforming this archaic law and reducing its costly burdens........... To Read More...

What is the Jones Act? Separating Fact from Fiction. 

Sep 29, 2017 By CHARLIE PAPAVIZAS, Partner @ Winston Strawn LLP


The active 2017 hurricane season has put a spotlight on the “Jones Act,” a section of the Merchant Marine Act, 1920. The issuance of Jones Act waivers after Hurricanes Irma and Maria is receiving much attention, but like most information circulating during a crisis, much of it is inaccurate. So what is the Jones Act? And why does it matter so much?

The Jones Act regulates U.S. domestic maritime commerce by restricting the transportation of “merchandise” between points in the United States to U.S.-flag vessels built in the United States and owned and operated by U.S. citizens. U.S.-flag vessels are registered and operated under U.S. law and are generally required to have U.S. citizen crews.

Following are some facts about the federal statute.

The Jones Act is not a World War I creation.

The law we call the Jones Act is a section (section 27) of the Merchant Marine Act, 1920. Senator Wesley Jones, a Republican from the State of Washington, was the Act’s chief sponsor. The main purpose of the Merchant Marine Act, 1920, was to deal with a huge surplus of vessels that the U.S. had built in WW I, which were costing the government a fortune to maintain and operate, and were no longer needed. The section of the law that we call the Jones Act was largely an afterthought, and Senator Jones stated in the Congressional proceedings that section 27 was not intended to make substantive changes in existing law.

Restricting U.S. maritime commerce to U.S. vessels did not start in 1920.

Restricting U.S. domestic maritime commerce to U.S. citizens has been the law of the land since 1789. The third act of the Republic (before Congress established any department of the U.S. Government) imposed a tariff on all domestic cargo movements, with foreign ships paying a tariff eight times greater than the U.S. ship tariff. In 1817, Congress changed the law more or less to the way it is today—and was prior to the Merchant Marine Act, 1920—restricting U.S. trade to U.S. ships. The Jones Act has changed over time since 1817, but the main principle of reserving U.S. domestic maritime commerce to U.S. citizens has remained consistent.........To Read More....