In consideration of the case ‘for’ further amendments of the Jones Act or abolishing and draw up new Merchant Marine Act :
see links :
June 28, 2019
Policy Analysis
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These are pretty good articles.Thanks for posting them.
But it seems to be a little skewed one way.
It definitely should be revamped to keep up with the times, as it is now originally rather old.
But ultimately I think the intent of “U.S.-built, U.S.-owned, U.S.-flagged, and U.S.-staffed” as the core concept should not be changed.
Expensive shipyards here in the states are becoming a major problem no doubt. I’ve not done one S/Y in the USA in the past 10 years, due to astronomical cost compared to someplace like Sembawang. I’ve always liked the workers there, but damn, that’s a fuggin hard life to be employed by a Singaporean S/Y.There are some pretty questionable things being done there too, as Im sure anybody whos been there would agree. Some of those guys are getting $20 a day, working every day for the past 15 years…Not Okay. But then again its not all that simple… right?
I also have a few friends from Australia that had a sort of equivalent to “Jones Act” that has been slowly eroded to nothing. To my knowledge the mariners can no longer get the jobs that the Bangladeshi mariners will do as smiling “indentured servants”.
This is an International industry and we as Americans are in competition with some very low paying flag states, with different standards of acceptable living and working conditions.
Personally, Ive never felt overpaid for what Ive been doing for so many years. American shipping HAS to be protected some how by a Merchant Mariner Act.
Revamp - Absolutely
Abolishment - Not as long as I can do something about it.
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Both of those articles have been discussed on here ad nauseum.
The TL:DR
The El Faro being old and shitty wasn’t caused by the Jones act as all competing vessels are subject to the same build requirements. It was caused by being on a very competitive run with low profit margin, in which case even foreign flagged ships would be old shitboxes.
The Cato Institute is an extremely biased source (pro big business, anti worker) and their analysis (intentionally?) omits important cost factors.
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The articles made vague promises of cheaper goods to consumers which to my knowledge have never eventuated and neglected to inform you of who the main beneficiaries would be from the repeal of the Jones Act.
As one who worked in just about every sector of shipping I saw how structured supply lines, GPS systems and quick and easy movement of experts made knowledgeable sea staff redundant. The last refuge of seafarers receiving a living wage living in a first world country was the oil patch.
The horse is gone leaving only something good for growing roses. I made sure that my children did not consider a seagoing career.
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No point to be made from these facts; just something to ponder.
US Airlines fly Airbus, Embraer, Bombardier, etc airplanes…flown by USA Citizens with cabotage laws. Many airline pilots (at least at the majors) make significantly more than US Mariners. Imagine what it would be like if only USA made planes were allowed.
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Imagine what it would be like if there were only one Maritime officers Union and all sailing officers had to be a member.
Something like Nautilus?
How does that get more ships built and more US maritime deep sea jobs?
Crewing ships is a variable cost. Building new ships is a huge capital cost. The former is easily addressed once the new ships are in place.
It doesn’t, it addresses the pay issue you brought up.
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The pay “issue” is a little more nuanced. Only a small percentage of airline pilots make the “big money”. And many times, they don’t reach that (due to seniority) until they are in their 40’s or 50’s. It is very possible, if not normal, for somebody to be sailing master/chief by their mid 30’s (if they want to and are not a dumbass).
There are also multiple airline pilot unions…and not all are union (jet blue was non-union for a long time).
Regardless, the point is that the lack of new airplanes is not the limiting factor in airline pilot job creation. If all planes had to be made in the USA and the factories did not compete on the world market, it is likely a Boeing would cost 4x+ what other planes cost.
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The US Build requirement is a killer. Jones act needs to be updated to allow foreign built ship and tie the coastwise endorsement to reflag and a minimum US manning requirement.
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I’m starting to come around on this too. But how to not run our shipyards out of business? Having shipyards capable of building ocean going vessels is a national security issue. How about this:
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MARAD, recognizing the need to renew the Ready Reserve Fleet, goes on the world market and buys ships. Could be brand new ships, or preferably, wait until there’s a downturn and get second hand ships on the cheap. These ships would be of mass produced design, typical PCTC, container, bulk, and tanker ships. The size of the ships would be as such to meet DOD requirements for transiting canals, not over x feet of draft, not over y feet of length to allow for access to a larger majority of ports, etc.
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When the ship gets to the US, it is re-flagged and designated as “cabotoge compliant” meaning it can engage in what we now call Jones Act trade. Then, put the ship up for charter bids. US owned companies can bid on chartering the ship and using it in a Jones Act trade with a full US crew. In the charter, it specifically allows for the US Govt. to cancel the charter and reclaim the ship in a time of war. This keeps the ship moving (and not rusting away at anchor) and also ensures a larger base of trained and experienced US mariners. Charter also specifies the 5 year drydockings must be done in a US yard (with appropriate negotiation about sharing costs on that). Income from chartering the ships goes toward the program to help offset costs.
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If no acceptable bids are received, the ship is sent to a US shipyard where it is modified for more useful military service. This could include converting a container ship into a con-ro and adding huge cranes up top (like what was done to the SL-7s), or whatever work is necessary to convert a pure civilian ship into one ready for military sea lift service. At that point, it is still available for charter, but if not, it goes to the RRF anchorage. The goal would be to minimize ships in this status. Ideally only the most specialized types that aren’t really usable for commercial service.
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Institute a 25 year exemption for the USWC to Hawaii and FL to PR trades (and maybe others). Matson, Pasha, and Tote shouldn’t be penalized for the huge investments they just made in renewing their fleets with pure Jones Act compliant vessels.
Not the ideal scenario for US shipyards, but some work (5 year drydockings and conversion work) is better than none.
Have Marad buy back the current updated jones act fleet to utilizing in the RRF. Hawaii, PR and Alaska shouldnt be penalized to keep Matson, Pasha, Crowley and Tote Afloat.
Id like to see a study on ownership of US yards. I wouldnt be surprised if most are foreign owned/backed. Maybe make a flag requirement that the 5 years need to be done in US yards. Then force the US yards to specialize and compete in the global market.
That would work too. Certainly not right to change the rules after the fact and punish a company for playing by the rules and making a $1billion dollar investment (in Matson’s case).
Either way, govt. intervention is going to be required to get the ball rolling. Pure supply/demand and cost/reward economics have shown this to be a dead issue until something changes.
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Maybe this article in The Hill will help?:
PS> They forgot AMFELS in Brownsville, which is now also building commercial vessels for the Jones Act trade and is the only US yard building Offshore Drilling Rigs (although they haven’t delivered one since 2016)
That yard is owned by Keppel O&M in Singapore, another Singapore Gov. affiliated company.
From The Hill link:
Congress should fix the Jones Act so that U.S. shipbuilders and ship users can all buy the best-made products at the best prices, regardless of where they are made. That commonsense approach works for the rail transport, air transport and highway transport sectors, each of which is characterized by low U.S. trade barriers and a thriving domestic manufacturing base. It would work for water transport, too.
Is there any other sector that is required to buy “Made in USA” vehicles?
Built or assembled in the US? As the article clearly states there isn’t much that is US made that goes into so called "US built " ships.
How much of the steel used that is made in the US is not mentioned, but it may not be all that much either. Import of shipbuilding steel is still allowed, as long as it is not “bent”, or otherwise processed. (??)
The tariff on foreign steel only allowed US manufacturers to raise their prices to match I believe?
Getting rid of the US build requirement wouldn’t save consumers in those places enough to be statistically significant. Getting rid of Jones Act protections completely would likely be barely noticeable.
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I don’t think anybody is advocating just “getting rid of the Jones Act” without replacing it with a new Act that would still protect domestic trade for US flagged ships with US crews. (PR, Hawaii. Alaska and Guam maybe not. That is trading in international water, although with US ports in both ends)
The scaremongery about “3rd world villagers” manning tugs on the Mississippi River is just that, scaremongering. It will never happen.
PS> Other countries have cabotage laws, but they are updated from time to time to reflect modern reality.
No one on this thread is, my point was that if scrapping the entire Jones Act would be hardly noticeable for the consumer then the build requirement alone wouldn’t be noticeable at all. That was in rebuttal to him saying Hawaii and PR are being “penalized”…