No Need to Fib About Jones Act Burden

But what really hurts is when critics of this harmful 1920 federal maritime law get their facts wrong, too.

One of the most common mistakes Jones Act critics make is to assert that the law prevents foreign ships from transporting goods from foreign ports to U.S. states or territories such as Alaska, Hawaii, Puerto Rico or Guam.

For example, a faculty member at the University of Maryland Global Campus-Hawaii recently published an otherwise excellent commentary critical of the Jones Act that stated:

“Foreign ships, especially those from Asia, our closest trade partners, cannot deliver goods directly to the islands [of Hawaii]. Instead, carriers must often reroute cargo through West Coast ports, doubling or tripling costs for Hawaii consumers … for everything from groceries to gas.”

This would be damning of the Jones Act if it were true. But it’s not.

In fact, foreign ships from Asia and elsewhere may indeed deliver goods directly to Hawaii, and they often regularly do, especially for bulk industrial products, including fuels.

Foreign ships also regularly visit multiple U.S. ports on a single voyage, unloading imports and picking up exports.

What they cannot do, under the Jones Act, is transport cargo between U.S. ports. Only ships that are U.S. flagged and built, and mostly owned and crewed by Americans may engage in such trade. That’s the real constraint, and it matters greatly for Hawaii.

Take the French carrier, CMA CGM. Its service from Asia calls first in California before continuing on to Honolulu. But because of the Jones Act, it cannot load goods from the mainland on that westbound stop and carry them to Hawaii — even though it is already headed there.

That ban is a gift to Matson and Pasha, the only companies operating Jones Act-compliant containerships to Hawaii, by keeping out competitors. But it’s a costly burden for island consumers and businesses.

The Jones Act’s restrictions on competition, coupled with the requirement to use ships that cost approximately five times more to build, and around four times more to operate than their foreign counterparts, result in some of the world’s most expensive shipping.

For a state as reliant on ocean transport as Hawaii, the consequences are clear: a higher cost of living, made worse by a law that should have been repealed or reformed long ago.

Yet still too often we hear from its defenders that the Jones Act is essential to America’s national security; is responsible 650,000 jobs; contributes $150 billion in “annual economic impact”; keeps foreign ships out of America’s inland waterways; actually helps, not harms, U.S. states and territories that rely on waterborne transportation; and many other well-worn shibboleths.

Given the Jones Act’s clear burden, it is little wonder that its defenders regularly bend the truth when speaking about the law. Jones Act critics, however, have no need to distort matters. For them, facts and the truth are clear assets.

But those critics need to make sure they are stating the facts. If not, defenders of the law — despite their own willful trafficking in falsehoods and unsubstantiated claims — will use any errors of their critics to attack and dismiss their credibility.