WorkBoat: Jones Act debate continues after 100 years

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How about we place a condition that he does “insert improbable act here” with a donkey first?
The Jones Act has issues, but I dread the day the Isis Tug Company is hauling barges full of TNT past my house.

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From the link:

EDUCATION PROCESS

Getting people to understand cabotage law requires continual education, he said, citing social media as the culprit for misinformation about the Jones Act. “So many people jump at the first thing they hear.”

He’ll ask someone planning to take their kids to Disney World if they can fly Aeroflot or some other foreign carrier there to Orlando, Fla., and they don’t know why they can’t. “It’s because of cabotage,” he tells them.

U.S. law prohibits foreign airlines from taking passengers between domestic points.

“The Jones Act benefits from tremendous bipartisan support in Congress,” Paxton said, “but there’s external interest groups that attack the Jones Act. Those are real attacks and we take them seriously.”

Except we do fly to Disney on Airbus or Bombardier planes…cabotage is good and applies to both airlines and shipping. US build requirement only applies to ships.

This pits ship builders against mariners. Getting rid of the USA build requirements would generate a lot of jobs on the water and eliminate jobs on land.

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I agree with you but…is there really evidence that such a change in the law would really produce “a lot of jobs on the water?

Is coastal trade backing up in ports because of a lack is coastwise vessels? Would even a cheaper built foreign vessel be able to compete with US truck and rail rates and schedule (it’s a just-in-time World now).

I can see where vessels or tonnage might be replaced one for one and I can see how those replacement costs would be lower for owners but rebirth of the US merchant marine. I doubt it.

Ask yourself who really benefits. Better they bring back CDS and ODS type programs and fund them. Financial types have no interest in a healthy industry just in their greed. It’s never enough.

USA ships and USA sailors both cost too much vs. the rest of the world. Getting rid of the expense for USA built ships would surely increase the number of them. Am I wrong?
Of course the national security aspect of being able to build our own ships goes down the drain, so there is that :frowning:

The US built rule only applies to Jones Act trade. You can build all the ships you want in foreign yards and flag them US and employ US mariners (I’ve worked on a few) you just can’t carry cargo from one US port to another.

I think the volume of trade / cargo determines the number of bottoms required. If this is in balance right now why would they build net more bottoms. It might spur a replacement program but increase the total? Maybe it’s too nuanced for me.

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Cheaper boats = lower rates = cargo going by ship/barge instead of truck or rail? Maybe??

Boeing is the largest USA exporter by dollar value. It competes head-to-head with foreign built planes. American Airlines/Delta/etc all have a choice when it comes time to purchase planes. Should shipping companies not have the same choices?

Absolutely agree. Ships are a huge capital cost and reducing that cost by 50% will absolutely have a flow-down to make the industry more competitive. So it would be good for mariners. It would also be good if U.S. could increase longshoremen efficiency or reduce cost of cargo handling.

Im not sure allowing a Panamanian mate to come here and take my job for 1/3 of what my current wage is will be good for mariners. Thats what will happen if you allow owners to foreign flag vessels. Why pay Americans when you can put a foreign flag on your tugboat and pay the Honduran ABs 50 bucks a day?

What are you on about? No one said anything about getting rid of requirement for US flag required by jones act or the American crewing requirements. The point is if you make it easier for maritime companies to make the business case, there just may be more opportunities for American sailors and even possibly better pay.

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Nope.

The cost of construction (or rather the cost of financing construction) is certainly an element and a barrier to operating US ships, but it’s not the only one and even without the cost of a US build ship, significant cost differentials occur, most notably crew and other operating costs.

And you don’t have to take my word for it. We have an ongoing situation where non-US build vessels operate under US flag, it’s called the Maritime Security Program. This is a subsidy program basically to incentivize owners to have US flag ships in service, especially with a military usefulness (which is basically container and roro and heavy lift). They get 5 million dollars a year for each ship to offset unique cost challenges for US ships. This is in addition to cargo preference for US government cargoes. So much for the issue of whether US build provisions are barriers or that removing them would change things. Even without the build problems It takes direct subsidy (payments) and indirect subsidy (cargo preference) to get people into it.

Whenever this Jones Act stuff comes up, people on this forum view it from a mariner perspective and that’s certainly understandable and it’s easy to see the hopefulness, like if this one thing changed our lives as mariners would improve! Maybe some jobs would appear, I don’t think they would, certainly not in the numbers that would matter. The number one ship type that would get bought and built foreign in the event of repeal of the build provisions would be barges! Not a lot of mariner jobs would get created, but all US barge production yards, supporting industries and indirectly involved employment (trade schools and such) would be decimated. Possible mariner jobs versus certain significant losses to communities.

And traffic by water wouldn’t go up, people would still use the model of US transportation now, which has been shaped by the cost differentials with or without US build—why do you think there are so many barges around? No crew. And truck and rail dominate—a subject previously discussed, it won’t get low enough a price point by this build issue to challenge. It would do lasting irreversible damage to a large sector of people who rely on US shipbuilding, even in its current, more modest state.

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I am on about the original point of the thread, where the discussion was eliminating the Jones act. If you do that, and eliminate the requirement for vessels to be flagged US, you lose jobs. Or was that not what this is about? In the title of the article it mentions ditching the Jones Act.

Ok - I was thinking more along the lines of improving the Jones Act. I don’t like the Jones Act because as a piece of policy it is not achieving any of its goals. Yes, I completely get your point about not eliminating cabotage. But what else can we do that will improve our plight, not just maintain status quo.

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I hear you.

Here is a fairly recent and reasoned comment on the Jones Act from a well known source:


It is about removing the parts of the Jones Act that is obsolete, not about keeping the parts that is strictly about cabotage.

Nobody is advocating having foreign flag ships with foreign crew trading on the Mississippi River, or anywhere else in US domestic trade. (No ISIS tugs full of terrorists towing barges loaded with explosives past anybody’s front porch)

The Cato institute is a right wing, pro business, anti worker think tank.

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According to that one documentary I saw it was a pig not a donkey.

Perhaps it is, but are is this excerpt from the link invalid?

That Boeing prospers in the absence of a domestic-build requirement is particularly noteworthy given the many similarities between the airline and shipping industries. Both are subject to cabotage restrictions, with foreign-registered airlines prohibited from transporting passengers or goods within the United States (with a limited exemption for Alaska).53 Like Jones Act ships, U.S.-registered airlines are also required to have at least 75 percent U.S. ownership. Furthermore, airlines play a key role in U.S. national security, with commercial aircraft often relied on in times of war to transport military personnel. In the Persian Gulf War, for example, more than 60 percent of the troops and 25 percent of the cargo airlifted were carried aboard civilian airliners.54 In 2003 nearly 500,000 troops were transported via the Pentagon’s Civil Reserve Air Fleet program.55

Yet, despite this critical national security role, there has been no serious effort to impose a domestic-build requirement on U.S. airlines. This is perhaps because there is a recognition that such a mandate would impair the ability of U.S. airlines to acquire the aircraft needed to build their fleets and compete in a cost-effective manner. The pressure of international competition benefits the U.S. aircraft manufacturing industry by forcing it to constantly improve and innovate. A domestic-build requirement would reduce those incentives, leaving U.S. aircraft manufacturing in a weakened position.

Productivity comparisons between shipbuilding, aircraft, and auto manufacturing are illuminating. According to the Commerce Department, output per employee in shipbuilding rose by 45 percent from 1977 to 1998, while over the same period auto assembly output per employee increased by 117 percent and aircraft assembly output rose 88 percent.56 Were the U.S. shipbuilding industry able to achieve similar productivity gains, it would reduce the cost of U.S.-built ships. This, in turn, would increase the number of vessels built and the number of U.S. mariners who crew them.

Useful lessons may also be found in the examination of shipbuilding sectors from other highly developed countries. Norway and Finland, for example, do not have domestic-build requirements and they have less onerous cabotage restrictions than the United States.57 These two countries have a combined population that is nearly 30 times smaller than that of the United States, yet they feature shipbuilding employment that is only seven times smaller.58 Furthermore, both countries have internationally competitive shipbuilding segments—offshore service vessels and fishing vessels in the case of Norway,59 and cruise ships and icebreakers in the case of Finland (the country produces 70 percent of the world’s icebreakers).60