2012 Position Paper
The Jones Act and Other U.S. Maritime Cabotage Laws
GOAL: Strict adherence to all existing 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. A U.S. Maritime Administration survey found 54 nations, including Canada, have cabotage laws that, like the Jones Act, are expressly meant to promote a national-flag fleet.
BENEFITS TO THE NATION: Total Jones Act commerce routinely tops 1 billion tons and 130 million passengers each year, yet the freight charges total less than 1 percent of the nation's transportation bill. Nationwide, the Jones Act fleet has more than tripled in size since 1965 to 39,000-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. Absent the Jones Act, the U.S. would have been hard-pressed to reliably supply its troops during the war with Iraq. More than 7,000 American merchant mariners have been needed to move arms and materiel to U.S. troops in Iraq. On the busiest day of Sealift - March 24, 2003 - there were 167 U.S.-Flag ships moving to and from the war zone. For these and other reasons, every Administration has endorsed the Jones Act. As a candidate, Barack Obama declared "America needs a strong and vibrant U.S.-Flag Merchant Marine. That is why you can continue to count on me to support the Jones Act & and the continued exclusion of maritime services in international trade agreements." 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 4-plus 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, especially any based on the false premise the law impeded clean-up efforts after the oil spill in the Gulf. Also oppose blanket waivers such as were 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.
