Issue in Focus
Mar 08 2019
When Hurricane Maria hit Puerto Rico a few years ago, you probably saw pictures of shipping containers stranded at United States ports waiting to be delivered to survivors there.
One of the reasons those containers couldn’t get to Puerto Rico is because of a 1920 law that was designed to promote a civilian merchant marine fleet that could “serve as a naval or military auxiliary in time of war or national emergency.”
This Merchant Marine Act, otherwise known as the Jones Act, requires that all goods shipped between United States ports must be transported by ships built in the U.S., registered in the U.S., owned by U.S. citizens, and crewed primarily by U.S. citizens.
This policy is great for American shipping companies, but it is terrible for American consumers in remote places like Alaska, Hawaii, and Puerto Rico. The Cato Institute estimates that after accounting for the inflated costs of transportation and infrastructure, the forgone wages and output, the lost domestic and foreign business revenue, and the monetized environmental toll, the annual cost of the Jones Act is in the tens of billions of dollars. And that figure doesn’t even include the annual administration and oversight costs of the law.
The United States is the top producer of liquefied natural gas (LNG), yet in order for the energy source to reach the New England region, Hawaii, and Puerto Rico, maritime shipping is often the only transport option. Unfortunately, the United States has NO U.S. flagged LNG specialty carriers that are compliant with the Jones Act. This has forced these constrained locations to import natural gas from international producers. Last year, a Russian natural gas tanker traveled 4,500 miles from Russia to deliver natural gas to Boston to meet its energy demands. Puerto Rico often has to import its natural gas from countries like Trinidad and Tobago while Puerto Rico’s nearby neighbor, the Dominican Republic, will import natural gas from the United States.
Moreover, this law has made it unnecessarily difficult for hurricane victims to get the relief supplies they so desperately need.
It has become routine for presidents to waive the Jones Act in the wake of natural disasters. President Bush waived the Jones Act after Hurricane Katrina, and President Trump waived the law after Hurricanes Harvey, Irma, and eventually Maria as well.
But the president shouldn’t have to waive this World War I-era relic after every natural disaster. The United States has long had an adequate navy that can provide for national security without an auxiliary merchant marine force.
That is why I introduced the Open America’s Water Act of 2019 this week, which would repeal the Jones Act and allow all qualified vessels to engage in domestic trade between U.S. ports.
It is long past time to repeal the Jones Act entirely so that Alaskans, Hawaiians, and Puerto Ricans aren’t forced to pay higher prices for imported goods—and so they rapidly receive the help they need in the wake of natural disasters.