Should Puerto Rico and Hawaii be exempt from the Jones Act? Would being exempt help or hurt their economies?
It wouldn’t change a damn thing. If, for the sake of the argument, ditching the Jones Act resulted in a reduced shipping cost who here thinks shippers would pass the savings along when they know the market will bare a higher price?
Ditching the Jones Act will only increase foreign shipping corporate profit, not make a roll of toilet paper any cheaper for the consumer.
Similar to what’s been happening in the airline industry with falling fuel prices. The airlines are not passing the savings on to consumers. They are mostly passing the savings on to their shareholders (as that is their legal and moral responsibility).
These questions are for a class project, if there were no unions to show support for the Jones Act would it still exist?
Dont be talking that common sense round here! We need to argue about the Jones Act ad nauseum so that mainstream media can quote our ramblings as fact…
Let vessels do a usa 2 stop rule if one is in either place.
As has been mentioned earlier, does ANYONE really believe that ANY Savings would be passed down to the Consumer?
Time and time again we have all heard about how moving XYZ Company / Factory offshore would LOWER Prices. I would love to see a couple examples of this, it has ever happened.
Companies are in Business to make money for their Owners / Stockholders and any savings would be passed along to them FIRST and if there as enough savings than maybe the consumer would see a savings. Any saving to the Consumer would most likely be SO small that you would have t look real ha find it!
The Jones Act will not be changed.
Foreign ships are allowed to call at as many US ports as the want to, and they usually do. They just cannot load cargo at a US port for discharge at another US port.
30 years ago I asked why a can of beer was so expensive in Kodiak (almost three times as expensive as Seattle). I was told “high shipping costs.” The next time I was in the Sealand office at Kodiak. I asked for a quote for shipping a container of beer from Seattle to Kodiak. The freight rate worked out to about a nickel per can.
In Anchorage, the rule of thumb is that freight adds an average of about 8 to 10 percent to the cost of most things (fresh milk and eggs are much more). When you consider that Anchorage has no sales tax, but Seattle has a high sales tax, the cost of goods should be about the same. But lots of merchants charge a a high mark up and blame “high shipping costs.”
If the Jones Act fleet were eliminated, merchants in Alaska, Hawaii, and Puerto Rico would probably raise prices and blame it on the high cost of the foreign ships they must use.
I can see a chicken or the egg situation, purely hypothetical of course.
Hawaii is a state; they’re subject to the Jone’s act. Don’t like it? Shoudln’t have become a state. If Puerto Rico wants to see their support dwindle to bare basics and nearly be soveriegn, then ok, no Jone’s act. See how quickly it fixes all of their issues (it won’t).
I’d love to live in Manhattan or Boston’s back bay, but can’t afford it. Same goes for those who say Hawaii etc is too expensive: don’t live there.
good article, with sources thoroughly cited: http://www.klgates.com/files/Publication/98eba0b5-41ec-4d0d-8f8d-a111146a7fe5/Presentation/PublicationAttachment/eb4353ac-8df8-401f-977f-af4f1a5ee48c/JMLC_Jan%202015.pdf
A foreign-flag vessel could not carry America’s domestic commerce, regardlessof the Jones Act, unless it were to: 1) pay federal and state taxes; 2)employ U.S.-citizen crews; 3) withhold payroll and income taxes for thosecrews; 4) comply with federal and state labor standards; 5) allow its crews toorganize; and 6) meet federal and state workplace-safety standards, to namebut a few of the applicable requirements. Of course, a foreign-flag vessel thatcomplies with those laws no longer operates under the laws of a foreign flag,and the cost “savings” disappear.118
Although it is human nature to advocate for points of view through the use
of strong, precise, and authoritative statements, those who confidently claim
to have calculated a “cost” of the Jones Act are, regretfully, speaking about
uncertain things with certainty. In attempts to support repealing or relaxing
the Jones Act, these critics compare foreign shipping rates with Jones Act
shipping rates, but fail to account for additional U.S. laws that would apply
to the hypothetical foreign vessel operating in domestic trade. These include
laws of considerable consequence and cost—like tax and labor laws—that
would necessarily impact the operating costs of those foreign shipping companies.
Jones Act critics also fail to account for laws that Congress or federal
agencies would subsequently amend or extend to foreign vessel operators
should they be allowed to operate in the American domestic trades to preserve
policy interests. Finally, Jones Act critics attempting to assign a cost
to the Act have failed to address whether, if lower shipping rates were ultimately
achieved, the benefits would be passed along to shippers and consumers.
Statements depicting a specific Jones Act cost differential based on a
comparison of foreign and domestic rates or operating costs are deceiving
and make good sound bites. However, it is imperative to remember that the
GAO, the government’s independent federal investigative agency, has now
reviewed the Jones Act three times over the last thirty years and found that
“precise, verifiable estimates of the impact of the Act are not available.”161
Comparing Jones Act shipping rates to international shipping rates to determine
a “cost” is indeed comparing apples to oranges, and the results provide
no credible information for critiquing the Jones Act.
Also keep in mind that only a small percentage of freight into either of those places is Jones Act cargo. A majority of the cargo going in to those remote locations would see zero savings if the Jones Act was eliminated and the little amount of cargo effected would likely be so marginally affected as to not be noticed by consumers. (If the sellers pass on the freight savings at all…)
[QUOTE=Capt. Phoenix;174668]Also keep in mind that only a small percentage of freight into either of those places is Jones Act cargo. A majority of the cargo going in to those remote locations would see zero savings if the Jones Act was eliminated and the little amount of cargo effected would likely be so marginally affected as to not be noticed by consumers. (If the sellers pass on the freight savings at all…)[/QUOTE]
In Alaska, most of the refined petroleum products that are shipped in are refined in Asia and come by foreign flag tanker. All the minerals going out, go by foreign flag bulker. A lot of fish goes out on foreign flag ships. Most of the rest is by US flag. I’m not sure about Hawaii and Puerto Rico, but I expect most of it is also US Flag. Maybe Walmart gets enough containers to justify a foreign flag ship port call in Hawaii.
NYK has direct service from Hawaii to Asia. That seems to make more sense.
If the Jones Act fleet were eliminated, merchants in Alaska, Hawaii, and Puerto Rico would probably raise prices and blame it on the high cost of the foreign ships they must use.[/QUOTE]
Not only that but the fact is that diluting the cabotage element of the Jones Act for one or two special interests will do far greater damage to the nation as a whole.
This reminds me of comment to or about Petain in France, he was condemned for being more concerned about a few Frenchmen that he was about France.
Like someone else wrote, if living in Puerto Rico or Hawaii to too expensive, leave or change your lifestyle, don’t undermine the entire national economy just so you can buy cheaper beer.
[QUOTE=tugsailor;174681]I’m not sure about Hawaii and Puerto Rico, but I expect most of it is also US Flag. Maybe Walmart gets enough containers to justify a foreign flag ship port call in Hawaii.[/QUOTE]
I’m fairly certain that a vast majority of the ship traffic in Puerto Rico at least is foreign flag.
It wont change anything. Alaska is a state and puerto Rico is a territory which is covered under the Jones act. As of now the jones act is causing everything to go back into the US economy instead of going to some foreign economy where it would only help that country where it would help make the cost cheaper to make ships but the consumer price wont change at all