Is the Jones Act Good or Bad for the Cargo Shipping Industry
Should the U.S. repeal the Jones Act (Merchant Marine Act of 1920) and allow foreign built vessels to create a viable alternative “marine highway” for domestic moves?
Issues to consider are existing stats on barges that move within our nations waterways. For example, the barge service between New York and Albany operating between ’03 and ’06 cost the government $5.3 million in subsidization. They moved 8,486 containers which cost $625 per container. Now, during that time the cost to truck the same container cost about the same (it is higher now, closer to $8-900). But if there isn’t a significant cost savings, it is not worth it because of the slow and unreliable transit time.
But if the Act was not repealed, how can more vessels be allowed into this market? The cost to build a vessel in the U.S. is 3 to 4 times more than building in other countries. Out of the 42 existing Jones Act compliant vessels now in operation, including 27 container ships and 15 RORO vessels, 24 were build before 1984, and nearing their retirement age.
So the question is, can this be a viable option to reduce costs domestically, and at the same time ease congestion with trucks and the rail across the country and thus reduce carbon emissions?
I would think that our Government that has promised to create “Green” jobs and plans to spend $4 trillion this year can figure out how to do this economically, but we all know it is the private sector that will eventually do this.
Key Takeaway – The Jones Act is outdated and we need to repeal it in order to cut costs and save the environment.
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