The US Naval Institute focused on the Jones Act, providing an insight into what it is, what’s its history and whether it is successful. Generally, the Jones Act is a federal law that regulates maritime commerce in the United States. The Jones Act only applies to domestic U.S. trade. It has no impact on vessels transporting cargo to or from another country.
- built in the United States;
- documented under the laws of the United States;
- owned by U.S. citizens;
- never sold to a foreign citizens.
The Jones Act got its name from its sponsor Sen. Wesley Jones (R-Wash.) and is part of the Merchant Marine Act of 1920.
According to USNI’s Dana Merkel, during World War I, the US didn’t have enough merchant vessels to supply US troops and its allies. Thus, Jones commented that before the war ‘shipping could be done more cheaply by others, and so we had none.’
The US had a hard time building and manning enough ships to support the war effort.
According to Jones, the 1920 Merchant Marine Act was intended to build up and maintain an adequate American merchant marine. A strong merchant marine was viewed as necessary for future commercial growth, national defence, and ensuring worldwide peace and safety.
USNI highlights that although the majority of countries have laws reserving domestic trade for their own citizens, called cabotage laws, the US has some of the strictest ones.
Can the Jones Act be waived?
Although waivers against the law are possible, they are rare. The Jones Act can be waived by the Secretary of the Department of Homeland Security, only under the condition that ‘it is necessary in the interest of national defence.’
Waivers are not possible simply due to lack of availability of Jones Act qualified vessels. They have been made to meet urgent Department of Defence domestic transportation needs, and to allow prompt response to domestic needs in the event of catastrophe, war or substantial disruption to U.S. energy supplies.
Is it successful?
The Jones Act regulates only domestic trade. It has not resulted in a bustling internationally trading American merchant marine. According to Maritime Administrator Mark Buzby, a retired Navy rear admiral, only 81 internationally trading vessels sail under a U.S. flag. Of those 81, 60 receive stipends to remain U.S. flag as part of the Maritime Security Program.
In addition, the US Merchant Marine isn’t able to meet the demands of a sustained sealift.
As USNI highlights, US flag vessels are imposed to higher operating and maintenance costs, higher taxes, and more stringent requirements, in comparison to foreign flag vessels. Thus, higher costs apply to Jones Act and non-Jones Act US flagged vessels.
