Shipping article(s)
January 20, 2015

Arizona Senator John McCain has taken action which could repeal the US Merchant Marine Act of 1920, better known as the Jones Act. The law regulates, among other things, maritime commerce between US ports.

Under the Jones Act, all goods transported by water between US ports must be carried on US-flagged ships which were constructed in the United States, owned by US citizens and crewed by US citizens and permanent residents. The law affects not only the US state of Hawaii, but also routes including Alaska, Guam and the Northern Mariana Islands.

The Hawaii Shippers Council (HSC) has recently lobbied for a partial reform of the bill, saying that requiring only US-built ships to serve the non-contiguous trades has resulted in older vessels and higher prices for consumers.

“Our proposed reform would exempt non-contiguous domestic shipping trades from the US build requirement of the Jones Act for large oceangoing self-propelled ships only,” said Michael Hansen, president of the HSC.

Hansen told Saipan’s Marianas Variety newspaper that by changing the build requirements of shipping vessels required in the Jones Act, the economics of the trades would change substantially, noting that a large oceangoing ship constructed in the US is five times the cost of a similar ship built in South Korea, and that the high cost of domestic ship construction in America has created a shortage of ships for the noncontiguous trades.

McCain filed an amendment to the controversial Keystone Pipeline Bill seeking to repeal the act on January 13, calling the act “an antiquated law that has for too long hindered free trade ... and raised prices for American consumers.” US lawmakers frequently attach unrelated amendments to pending legislation as a strategy to approve matters of interest to special interest groups.

US-based shipbuilders quickly struck back. Matthew Paxton, president of the Shipbuilders Council of America told the Daily Press of Newport News, Virginia, that McCain’s proposal would be fatal to some shipbuilders. “Some of the smaller commercial shipyards would just close their doors. They don’t posses the cash reserves,” he told the newspaper.

– Gregory Glass

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