The Jones Act and Other U.S. Maritime Cabotage Laws

GOAL: Strict adherence to all existing maritime cabotage laws, as they play a crucial role in America’s national, homeland and economic security.

BACKGROUND: Section 27 of the Merchant Marine Act, 1920, mandates that all cargo moving between U.S. ports be carried in vessels that are crewed by Americans, built by Americans, and owned by Americans. Section 27 is generally referred to as the Jones Act. Other laws and statutes apply the same ground rules to carrying passengers, towing, dredging and salvage in U.S. waters.

The United States is far from unique in reserving its domestic waterborne commerce to vessels crewed and owned by nationals and built domestically.  Most sophisticated trading nations have cabotage laws applied to aviation, maritime, rail, and trucking for their domestic commerce, and the U.S. is no different.

BENEFITS TO THE NATION: Total Jones Act commerce routinely tops 1 billion tons and 130 million passengers each year. Nationwide, the Jones Act fleet has more than tripled in size since 1965 to 40,000-plus vessels and has quadrupled its productivity. The cabotage laws further ensure the United States has the ships, skilled mariners, and shipyards needed to supply American troops during a national emergency. The Navy terms the law “vital to our National Security.”

BENEFITS TO GREAT LAKES REGION: The cabotage laws are, first and foremost, guarantees that domestic waterborne commerce is carried in vessels built to the world's highest safety and environmental protection standards and manned with crews whose skills and expertise are certified by the U.S. Coast Guard. Further, by guaranteeing a level playing field among the various transportation modes, Great Lakes Jones Act operators have been able to assemble the world’s largest and most diverse fleet of self-unloading vessels without one penny of Federal subsidies, either direct or indirect. For example, one iron ore cargo delivered in a 1,000-foot-long Jones Act “laker” keeps a major steel mill in operation for more than four days. A single coal cargo in a 1,000-footer produces enough electricity to power a metropolitan area the size of Greater Detroit for a day.

ACTION: Oppose any legislation to amend or repeal existing cabotage laws. Oppose blanket waivers such as those instituted following hurricanes Katrina and Rita. Oppose inclusion in any trade agreements. While exemptions to the Jones Act are allowed during national emergencies, peacetime exemptions for commercial vessels must not be permitted. If an economically viable trade develops that requires a new type of U.S.-flag vessel, there will be fierce competition for the business without changing the cabotage laws.