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Repeal the Jones Act to Grow the US Shipping Industry

Repeal the Jones Act to Grow the US Shipping Industry

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By Dr. Wallace A. Burns, Jr.
Faculty Member, Transportation and Logistics Program, American Public University

A few years after WWI, Congress passed the Merchant Marine Act of 1920 (a.k.a. the Jones Act) to protect a fledgling U.S. shipping industry and its sailors. The Act’s provisions included:

  • All goods shipped between U.S. ports must be transported on ships under the U.S. flag.
  • The ships must be made in the U.S., owned by U.S. citizens, and operated by U.S. citizens and permanent residents.
  • Qualifying sailors who were hurt or become sick while performing their duties must be compensated.

Sounds good, right? In 1920, this law was considered avant-garde, because it protected shippers, workers and consumers.

Start a transportation and logistics management degree at American Public University.

But in today’s low-margin global shipping environment, the Jones Act is harmful to both U.S. global shipping competitiveness and U.S. consumers. For covered seamen, worker protections are better provided by newer laws and the precedent from favorable court rulings in areas where Jones is ambiguous — for example, in defining seaman status and determining length of service requirements.

Seaman and many other maritime workers not covered by Jones — such as those who work on docks, piers and terminals — receive added protections from the Longshore and Harbor Workers Compensation Act, amended in 1984. This act provides for the payment of compensation, medical care, and vocational rehabilitation services to employees who have become disabled from on-the-job injuries that occur on covered U.S. navigable waters or in adjoining areas customarily used in the loading, unloading, repairing, or building of a vessel.

The Jones Act Is Now Stunting the US Shipping Industry

The Jones Act’s global protectionism has inarguably stunted the U.S. shipping industry. For example, its arcane prohibitions prevent foreign vessels from transporting passengers between ports or places in the United States.

Jones also prohibits foreign-built, foreign-owned, or foreign-flagged vessels from engaging in coastwise (defined as along, following, or connected with the coast) trade within the United States. These limitations do little to protect U.S. shipping and raise costs on consumer goods.

Jones Act Proponents and Opponents

Jones Act proponents and opponents are entrenched in their own points of view. Opponents representing consumers who benefit from the price of goods want the Jones Act repealed to decrease shipping costs, lower prices and lessen the strain on government budgets.

But proponents of the Jones Act — including navy yards, defense firms, shipping industries and longshoremen — say that keeping the current law will likely reduce the number of U.S. maritime jobs while lowering shipping costs. That last point has a limited outlook at best.

The Benefits of Repealing Jones

By repealing Jones, U.S. global competitiveness should increase significantly, which would produce more shipping jobs and reduce the price of consumer goods. That situation would be a win-win for both the shipping industry and the consumers it serves.

To provide an historical perspective, both the trucking and shipping industries took off in the early 1900s. U.S. trucking was unencumbered by the equivalent version of the Jones Act, which benefited an unshackled trucking industry, its operators and customers.

U.S. shipping, on the other hand, has had this Jones Act anvil around its neck for a century. Consequently, the Act has stunted U.S. global shipping competitiveness and artificially raised the costs of consumer goods.

The Jones Act, including its now-harmful protectionism and worthless worker protections, should be fully repealed. In my opinion, it should now be sent to the dustbin of history.

About the Author

Dr. Wallace A. “Rope” Burns is an Associate Professor and Transportation and Logistics Management Lead in the School of Business at American Public University. He also consults as a logistics specialist for multiple Department of Defense agencies, including the Defense Logistics Agency, U.S. Army Europe, U.S. Army Corps of Engineers, and the U.S. Air Force Space Command. 

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