Hawaiian Conngressman Wants To Modify Jones Act

https://finance.yahoo.com/news/hawaii-congressman-wants-modify-jones-211434706.html?bcmt=1

From the article:

“There are plenty of international cargo lines who could and would compete for a share of that market. Yet in Hawaii’s case only two U.S-flag domestic cargo lines — Matson and Pasha— operate a virtual duopoly over our lifeline and they do not act as an effective market check on each other,” said Case.


This mantra that “Foreigners are willing to do it so much cheaper” & “American workers are hurting the consumers” is pretty much the same lines that the Democrats & media took up against Trumps defensive stance on the trade war for steel workers, appliances manufacturers & solar panel manufacturers. Let’s see how those same politicians & media fall in on the battle of the Jones Act.

Tic-toc, tic-toc, tic-toc…

He acts like all (or even most) of the cargo going in to Hawaii is Jones Act cargo. I wonder if he’s lying or if he’s been lied to and just didn’t bother fact check.

My 2 questions are these:

1.) What “share” does he think foreign workers/companies will end up with considering foreigners will work for pennies on the dollar compared to American workers & don’t give a damm for decent working conditions?

2.) With all the capitalists in the US trying to make a profit anyway they can, has he given any deep thought into why there’s only 2 companies still in business in that market? He never considered they are working at near community service margins already & the only way someone can beat them in the race to the bottom is to eliminate American workers & companies all together.

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obvious to the rest of the world Hawaii should be the place the Jones act allows 1 of the 2 stops in USA ports.

Hawaii became a state in 1959 because 90+% of the population voted for it. The Jones Act was enforced then, even more so than today. It costs extra to live on an island. I have NEVER seen consumer prices go down because transportation cost came down. I have see corporate profits go up due to decreased shipping costs.

There will NOT be any changes to the Jones Act.

Hawaii and Puerto Rico have beat this anti-Jones Act drum almost constantly for 50 years. Once in awhile, Alaska joins in. It has never gotten any traction, nor will it.

What you are saying is true. When the Jones Act is finally killed or whittled down to nothing we won’t see the Dollar Tree & General Dollar stores change their names to the 95 cents stores. All money saved will be given to CEO’s, board members & stock holders. Nothing to very little will be given to the consumers. But considering the position & misinformation spread by the media, most politicians & even members on this forum against our most recent trade war & feeble attempt to inact pro-protectionism policies we can expect the death of the Jones Act to be ushered in with great applause.

There are plenty of ships that make a stop in Honolulu to discharge cargo before continuing on to the mainland US.

Yes, the Jone’s Act needs some modifications, but the cabotage rules don’t.

so Jones act already allows 2 stops in USA?
load ( to foreign ports) and discharge?

Non-Jones Act ships can discharge foreign cargo in any number of ports. We used to call Honolulu often for discharge then on to USWC or USEC to discharge the rest of the load. Sometimes half a dozen ports.

Jones Act prohibits discharge of cargo in a U.S. port that was loaded in a U.S. port. Lots of foreign flag container ships running up the coast discharging/loading at multiple ports. Just can’t discharge cargo in a U.S. port that was loaded in a U.S. port. Cargo loaded in multiple U.S. ports must remain aboard for foreign discharge.

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so there is no problem

Already, Walmart buys their cheap plastic crap in China and ships it directly to Honolulu on foreign ships. So do others.

Canadian lumber and Canadian made “American” cars could be shipped directly from Vancouver to Honolulu on foreign flagships.

If Jones Act ships were truly expensive, only military cargo would come on them. Everything else would be foreign sourced and come on foreign flag ships.

Well it look like Jones Act hatred is a bipartisan, equal opportunity thing. I gave this guy a piece of my mind when the story broke. I told him he was trying to destroy my job, a good paying American tax-paying job.

The Jones Act does not significantly add to the cost of goods transported. This is a myth pushed by politicians who are trying to score brownie points with the electorate. The cost of goods brought to a remote area is determined by many factors. It does not help that Hawaii (and PR) are tourist destinations. That factor alone raises the cost of everything and is the fault of your local business culture. If you can’t afford to live in paradise, move away- others have.

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Reducing labor cost to Chinese wages on a 3200 TEU ship such as those Matson has going to Hawaii will reduce the final cost tenths of a cent per good contained in the containers. The retailer does not have 1/10 of a cent on his cash register so how are they to pass on these savings to the consumer in Hawaii? Why does no one ask these simple questions when a congress critter comes up with this BS? The only ones who will benefit from those 1/10th of a cent are the big importers who likely pay for the think tanks and lobbyists that come up with this crap .

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Ed Case only knows what he is told. He’s not lying. Though I suspect, he didn’t fact check either.

Most all these “Anti-Jones Act” stooges are spoon fed the info by Mike Hansen and another guy that runs a “grass roots” conservative organization to turn many things here in Hawaii around. His name is Hawaiian and I won’t bother to write it as most couldn’t say it properly anyway.

Obviously, they are conservatives and support republicans. I’ve no issue with their political affiliation (I’m a conservative here in Hawaii, imagine that??). But their position on the JA is flawed, always has been, aways will be.

Frequently their public statements about ANYTHING concerning shipping is laced with simply stupid commentary that is not factually true, grossly ignorant of how our industry works, or full of incorrect assumptions based on … nothing they know or understand about the maritime transportation industry, whether it is unique to Hawaii or internationally.

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This is perfect example of why these ANTI-Jones Act guys are frequently wrong in their public commentary.

There is a finite amount of cargo that comes into Hawaii every week. Roughly, it’s a few thousand containers. NOT including auto or breakbulk cargo, nor am I counting cargo brought in by east-bound carriers shipping direct from Asia. I’m specifically talking about the Jones Act Trade, originating on the US west Coast to Hawaii as a final destination.

There are currently two primary container liner carriers in this trade; Matson and PASHA/Horizon Lines. Before PASHA bought out Horizon Lines, there were obviously three liner runs.

In addition to these carriers, Sause Bros and Aloha Marine Cargo run twice a month barges from the west coast bringing in primarily construction material. For the record, Sause and AMC arrive fully loaded and are busy with cargo, as far as I can see.

Ed Case (and others) who think that there are "… plenty of international cargo lines who could and would compete for a share of that market … " truly do not understand our trade.

  1. There is a finite amount of cargo each week to bring in.
  2. There is relatively little growth year on year
  3. Two liner carriers handle ALL the cargo that is “available to carry” and it is inconceivable how another (or two or three) other foreign carriers can find more cargo to bring in, at a lower unit cost and break even, much less make a profit, in competition against existing US carriers.
  4. I’ve always stated, if a foreign flag could come in here and operate, how long do you think it would take for them to operate at such a low ball rate structure as to run US Flag ships out of business, and then summarily raise rate sky high once they have captured our market?? A 15 year old i high school economics class can tell you that.

Why is that concept so hard for adult politicians and lobbyists to understand?

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Interesting string of comments here.

Hawaii’s trade is largely ONE WAY and most everyone outside our industry simply hasn’t been able to figure that out. Ed Case included.

Putting in terms that everyone else can understand … imagine if you wanted to fly to Hawaii for a vacation. You go online to buy one way ticket and you have to pay DOUBLE the price. Why? Because you have to pay for a plane to fill up with passengers and fly to Honolulu. After unloading all the passengers, it turns around and flies back ‘empty’ to go and get more people that want to fly to Hawaii.

Sounds ridiculous right? Well it is. In reality, we all know the aviation industry has the luxury of a “round trip” demand constantly. People FLY INTO Hawaii and then after their vacation is over, they FLY OUT of Hawaii.

The maritime transport industry isn’t so lucky.

Most all cargo comes westbound into Honolulu from 5 major west coast ports. Upon completion of discharging loaded containers, the same ships back load EMPTY CONTAINERS TO RETURN TO WEST COAST PORTS. Yes, the same ships that arrived yesterday with a ‘full load’ of containers on deck, are now leaving with the same ‘full load’ of containers on deck, but this time those containers are empty.

No revenue.

No profit.

No money being earned by carrying empty space.

It’s confusing to most everyone here.

Thus, what “international carrier” would want to come in and engaged in a trade that is ONE WAY?? If I were a foreign shipowner, I would rather keep my ships employed in a trade where they are running between ports as much as possible carrying for profit revenue cargo, paying me to offset my costs for operating at sea.

To be clear, there are two carriers that operate DIRECT SERVICE from ASIA each week (almost). They are ONE and APL. A frequent statement made by anti-Jones Act proponents is that “…everything from Asia goes to the west coast first. Then it gets shipped here!”

First, that simply isn’t true. Second, those ships arrive into Honolulu with an amazing amount of open deck space, in other words, hardly any cargo at all. I find that interesting. I wonder how they make money. But few people in Hawaii (I mean business people) seem to know that’s even an option for them. When I meet people that want to discuss this shipping issue, they are always STUNNED by the fact there actually are direct routes from Asia to Honolulu.

It’s as if I told them there really is life on Mars. They almost don’t believe me.

Car carriers from Asia stop east bound in Honolulu to discharge autos. Usually around 250 units, They’re here for about 4 hours and depart. While most continue to Mexico then Panama (on their way to east coast), a few will go to our west coast (Benicia) and discharge Asian autos. They sometimes back load US made autos and continue on to Portland or Tacoma to discharge and (maybe?) backload more US manufactured autos or rolling stock.

This confuses people again about the loading and unloading between US ports, I know.

The Jones Act is a policy of national importance. It has merit that touches on job security, national defense, and shipyard viability. YES! There are problems with the “outcome” of the Act. But the solutions will never be found in changing or eliminating the policy or law.

Resurrecting our US flag fleet, making us (as a nation) and our ships more competitive to move cargo on, and creating an environment where are shipyards continue to grow and do more work … that will only come from changing the plethora of rules, regulations and other policies that are to be found in our tax code, environmental agencies, and other PUNITIVE LAWS that put the US like other western countries, behind the 8 ball and trying to match 3rd world businesses.

Yes, that may never happen. But it truly is in our own interest. Guys like Ed Case, and many others, want to change our laws to the benefit of other countries like China. Why???

He need to learn to change our own laws to benefit our own citizens, labor, shipyards, and business in our own maritime industry. Doing this will put us in a better position to continue keeping our US fighting forces supplied with whatever they need all over the world, whenever they call upon us, civilian mariners, for help.

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They wouldn’t. They would load cargo for Hawaii along with foreign bound cargo and stop in Hawaii on their way to Asia.

That’s being tried by APL now. The jury is still out on that verdict. Specifically, my earlier point is, there’s little cargo (total) to steal away from other carriers that will make running here from US West Coast discharging and then backloading empties, then on to … where? Guam? Like Matson? Even less cargo available there. Straight to Asia? Now you’ve increased your schedule time compared to your competitors. So why should shippers send cargo with you?
APL going north to Dutch Harbor out if Honolulu, then to Asia. A brutal run for ship and crew.
Lower rates? Remains to be seen.
Horizon did this run for years before folding. They even tried it in non-Jones Act ships for awhile. Couldn’t do it.
Matson is doing it and successfully in competition against foreign ships ONLY because east bound leg is fastest available out of China.
Everyone else went BIG.
Matson stayed small with faster ships and shortest voyage. Amazing.

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