Embed Size (px)
Citation preview
2
The Jones Act – The real natural disaster: An analysis of the Merchant Marine Act of 1920.
By
Joseph Morales, B.A.
A Thesis Submitted to the Department of Public Policy and Administration
California State University Bakersfield
In Partial Fulfillment for the Degree of
Master of Public Administration
Spring 2018
Copyright
By
Joseph Morales
2018
The Jones Act- A Real Disaster: An analysis on the Merchant Marine Act of 1920.
By
Joseph Morales, B.S.
This thesis or project has been accepted on behalf of the Department of Public Policy and
Administration by their supervisory committee:
Thomas Martinez, Ph.D. Committee Chair
I~
3
4
MEMORANDUM
Date: 4/6/2018 To: 115th United States Congress From: Joseph Morales Re: Amendment to annul the Merchant Marine Act of 1920 (Jones Act). Recommendation: It’s clear that the U.S. shipbuilding industry has continued to decline over the last decade; despite it being, so called “protected” by this law. The concepts "Made in the USA" and "U.S. owned and operated" don’t hold the same meaning as they did several decades ago. Nowadays, supply chains and abrupt changes of ownership within a corporation have made this law obsolete, costly and a burden for those in noncontiguous areas. Thus, this study recommends, adhering to Senator McCain’s request, by now passing an amendment to annul the Merchant Marine Act of 1920. By repealing the Jones Act, not only will our economy benefit, without hurting our national security, but it will also ensure all Americans in noncontiguous areas, including my family in Puerto Rico, will receive immediate assistance, when the next natural disaster hits.
Background: The Jones Act’s original purpose was to address 3 main goals: 1) Establish the merchant marine; 2) Establish a sealift capacity; and, 3) Maintain the shipbuilding and maintenance capacity in the U.S. To accomplish this, the Jones Act requires all U.S. carriers, to only use U.S. flagged ships to carry U.S. cargo among U.S. ports. This means that the ships must be built by Americans, owned by Americans, and crewed by Americans. The law states that only U.S. carriers who use Jones Act qualified ships, which must be registered under the U.S. flag, can conduct business of transporting material between U.S. ports. These goals seem like a good idea, but unintended consequences of its stipulations have hurt many Americans in Alaska, Hawaii, Guam and Puerto Rico. The requirement that vessels must be built in America has caused an increase in the cost of goods for these smaller secondary ports due to lack of competition. The lack of competition in the US shipbuilding industry and in ocean carriers has driven up the cost of new ships. American shipyards only produce 2 ships a year compared to Japan, China and Korea which produces 90% of the world’s large vessels. Of the 7 major U.S. shipyards, only 3 are producing large commercial ships. This creates inefficiency and increases costs for building new ships up to 5x the cost it takes a country in Asia to build a comparable ship. Rationale: U.S. ports not connected to the mainland are bearing most of the shipbuilding costs because carriers are forced to charge higher prices to recoup the costs of building a Jones Act ship. Why is it that consumers in Alaska, Hawaii, Guam and Puerto Rico, who only make up 2% of the country’s population, are forced to pay a higher percentage of costs for their food, electricity and services, compared to Americans on the mainland? The answer lies in the fact that the Jones Act has failed to achieve its goals. It does not have a strong merchant marine, it does not have a strong sealift capacity, nor has it maintained a respectable shipbuilding capacity in the U.S.
5
Table of Contents Chapter 1: Introduction ................................................................................................................... 6
Statement of the problem ............................................................................................................ 9
Purpose of the study .................................................................................................................. 10
Importance of the study ............................................................................................................. 11
Chapter 2: Literature Review ........................................................................................................ 12
Origins of the Jones Act ............................................................................................................ 12
Goals of the Jones Act ............................................................................................................... 13
Supporters of the Jones Act ....................................................................................................... 13
Opponents of the Jones Act ....................................................................................................... 14
Reform history........................................................................................................................... 15
Chapter 3: Analysis of the Jones Act ............................................................................................ 17
Costs of the Jones Act ............................................................................................................... 18
Advantages of the Jones Act ..................................................................................................... 19
Disadvantages of the Jones Act ................................................................................................. 20
Economic impact of Jones Act on non-contiguous ports .......................................................... 21
Alaska .................................................................................................................................... 21
Guam ..................................................................................................................................... 22
Hawaii .................................................................................................................................... 23
Puerto Rico ............................................................................................................................ 24
Examples of Economic Inefficiencies ....................................................................................... 27
Cattle shipment from Hawaii to U.S. mainland..................................................................... 27
New Jersey’s costs to get salt to treat its roads ...................................................................... 27
Puerto Rico’s energy crisis and continuing blackouts ........................................................... 28
Chapter 4: Conclusions and Recommendations ........................................................................... 30
Recommendations ..................................................................................................................... 31
Policy Recommendations ...................................................................................................... 31
Research Recommendations .................................................................................................. 34
Appendix A ................................................................................................................................... 36
References ..................................................................................................................................... 37
6
Chapter 1: Introduction
The Merchant Marine Act of 1920, also known as the Jones Act, is a United States
federal law that was introduced by Senator Wesley Jones after World War I. This law was
established to provide for the promotion and maintenance of the American merchant marine. It
was also passed with the intention of preserving national interests and providing for national
defense. Among its many purposes, the Jones Act regulates maritime commerce in US waters
and between US ports. Section 27 of the Jones Act requires that all goods transported by water
between US ports must be carried on US flag ships that were built in the US, that are owned by
US citizens, and that are crewed by at least 75% of US citizens (PBS, The Jones Act, 2017).
The Jones Act is a law that was created during a time when naval warfare, along with the
nation’s strategic interests, meant to have a strong merchant marine. This idea is what led
Congress to promote the American shipbuilding industry with a "restrictive protectionist
scheme" (Kashian, 2017). Protectionist not because it protects the American people, nor its
economy, but because it protects special interest groups that lobby to retain the law. Supporters
of this law say that the Jones Act is necessary for national security and that it saves jobs, which is
why there are strong unions that support it. However, recent research and analysis of the Jones
Act has demonstrated that it does not have a huge impact on the job market, nor that it is
necessary for our national security.
Although it was intended to keep American shipbuilding prosperous, many shipyards
have closed, and the US flagged fleet has shrunk and continues to be on the decline.
For most Americans, the Jones Act is a forgotten and confusing piece of legislation that was
established after World War I. But as citizens of Hawaii, Guam, and Puerto Rico, among others
7
can attest, it has had a far greater effect on our economy and cost of living than most people
realize (Kashian, 2017).
For example, in the aftermath of hurricane Maria, Puerto Rico, a US territory, is dealing
with horrifying devastation. We have heard through media outlets that their recovery is bound to
be long and difficult. Some say it will take up to 6 months or long to completely restore the
island’s power grid. So why not open the ports to emergency-supply-laden foreign boats? Plenty
of boats, which could be deployed for that task, come and go to the US, but there is one big
problem: The Jones Act does not allow it.
We know that under this law, all the transportation of goods between US ports must be
done by US vessels only. This means that ships from other countries can’t transport supplies
between US harbors. That limits the number of available emergency-supply-laden boats that can
transport, even in unusual, extreme situations such as the one going on in Puerto Rico right now.
So why didn’t the government grant a full waiver of the act to help Puerto Rico if they
did so for Texas and Florida? The Homeland Security Department says that under law, it can
only waive the Jones Act for purposes of national security, and that the potential cost savings of
lifting the law “is not material to our decision-making.” This becomes a major problem that has
yet to be addressed.
The Jones Act was created to address 3 main goals, which were to: 1) Establish the
merchant marine; 2) Establish a sealift capacity; and, 3) Maintain the shipbuilding and
maintenance capacity in the US. To accomplish these goals, the Jones Act requires all US
carriers, who are the companies that own and operate ships in the US, to only use US flagged
ships to carry US cargo among US ports. This means that the ships must be built in the US,
owned by US citizens and crewed by US citizens. The law states that only US carriers who use
8
Jones Act qualified ships, which must be registered under the US flag, can conduct business of
transporting material between US ports.
These goals seem like a good idea, but unintended consequences of its stipulations have
hurt many US citizens in Alaska, Hawaii, Guam and Puerto Rico. The requirement that vessels
must be US built has caused an increase in the cost of goods for these smaller secondary ports
because of lack in competition. The lack of competition in the US shipbuilding industry and in
ocean carriers has driven up the cost of new ships. The US shipyards only produce 2 ships a year
compared to Japan, China and Korea which produces 90% of the world’s large vessels (1,000-
ton gross ships). Of the 7 major US shipyards, only 3 are producing large commercial ships. This
lack of competition reduces efficiency and increases costs for building new ships up to 5x the
cost it takes a country in Asia to build a comparable ship (Kashian, 2017).
Consequently, US ports not connected to the mainland, are bearing more of the
shipbuilding costs because carriers are forced to charge higher prices to recoup the costs of
building a Jones Act ship. Why is it that consumers in Alaska, Hawaii, Guam and Puerto Rico,
who only make up 2% of the country’s population, are forced to pay a higher percentage of costs
for their food, electricity and services, compared to consumers in the mainland? The answer lies
in the fact that the Jones Act has failed to achieve its goals. It does not have a strong merchant
marine, it does not have a strong sealift capacity, nor has it maintained a respectable shipbuilding
capacity in the US.
The President of the Grassroot Institute, Keli’i Akina, Ph.D., said it best when describing
all the problems with the Jones Act. He said, “The Jones Act has backfired on all of its goals. It
has hurt American shipping, hurt our military, and hurt families who struggle to pay for the high
price of protectionism. The Jones Act cost Hawaii, Alaska, Puerto Rico and Guam billions of
9
dollars, but it’s likely that the nation suffers even higher costs.” He continued, “The Jones Act
has raised prices for American consumers and distorted the U.S. economy for almost 100 years.
It’s time to fix the problems associated with this outdated law and welcome a new era of
economic prosperity and trade" (Kashian, 2017).
For these reasons and more, I believe that abolishing the Jones Act should be considered,
either a full repeal or partial reform, which can not only improve our nation’s economy, while
keeping our borders safe, but can also save a lot of lives that desperately struggle to survive
against natural disaster devastation at home.
Statement of the problem
The Jones Act original intent was to strengthen the US ship building industry after World
War I. Its 3 main goals have been to have a strong merchant marine, establish a sealift capacity,
and maintain a shipbuilding and maintenance capacity. However, the problem is that, nearly 100
years later, these goals are no longer realistic. Stipulations under the act have been stifling to our
nation’s growth because it eliminates cabotage, which is the opportunity to compete with foreign
energy producers within the United States. Lack of competition means that some areas, like
Puerto Rico, must pay doubles the price for inefficiency (McCown, 2016).
We know that US ports that are not connected to the mainland rely heavily on ocean
shipping to import most, if not all, of their goods and services. However, a lack of competition
among shipyards has increased the costs to build new Jones Act ships, which has put carriers in a
position to charge higher prices to consumers. In consequence, a loaf of bread in these areas
costs consumers over $4 and a gallon of milk costs them over $6, compared to what consumers
pay on the mainland. Consumers in Hawaii, Alaska, Guam and Puerto Rico are seeing these
10
higher costs in their food, electricity bills (because petroleum must be imported) and in their
basic goods and services. But ask yourself, why do these people who only make up 2% of the US
population, must pay a higher percentage of cost than US consumers on the mainland?
Therefore, I believe it is important to analyze the Jones Act by shedding light on the
effects it’s had on our country, to see if it has achieved its main goals or not, and if so, to what
extent and to what impact it’s had on the U.S. economy and its consumers, to arrive to a
conclusion of whether it should still be a valid law or whether it should be terminated.
Purpose of the study
The purpose of this study is to analyze the Jones Act (Merchant Marine Act of 1920), to
assess if it has achieved its main goals and to measure what type of impact it’s had on the US
economy, specifically that of Alaska, Hawaii, Guam and Puerto Rico. This analysis will lead us
to see if the Jones Act law is still relevant in the 21st century and hopefully bring us to a clearer
conclusion to see if it is now time to bring this law to an end. This study will also evaluate the
unintended consequences brought upon by the Jones Act, such as lack of competition, loss of
jobs, higher costs of goods for consumers, and will analyze the type of impact this law has had
on US consumers and the shipbuilding industry. It will analyze if repealing or reforming the law
can have any influence on US national security and defense. The following categories will be
analyzed regarding the Jones Act to determine what are the advantages or disadvantages of the
law, and what type of impact it has had to the following areas:
Commercial ship building industry
National Defense and Merchant Marine Force
Consumers, employment, and economy.
11
Economies of Alaska, Guam, Hawaii and Puerto Rico; with emphasis on the
current state of crisis in Puerto Rico post Hurricane Maria.
This report examines existing research on the Jones Act to gain a clearer perspective on
how it has succeeded (or failed) in its objectives. This study assesses the effect the Jones Act is
having on the economic crisis in Puerto Rico. This analysis will help assess if the Jones Act
should be reformed, completely repealed, and/or if there are any alternatives that should be in
place of this law.
Importance of the study
Recently, our country has experienced several record-setting natural disasters all in a
matter of weeks. These disasters have left many people in Texas, Florida, and the Caribbean,
without basic needs like food, drinking water, and medicine. Some areas have been devastated
and left without power. If there's no power, there's no food, if there's no food there's illness, and
as a result, chaos and crime.
That is why I feel it is important, through this study, to shed light on how this old
protectionist law known as the Jones Act has negatively impacted our country, mainland and
territories. It is important for the reader to be aware that the Jones Act costs the nation billions of
dollars, at the expense of both consumers and select industries. This study will manifest that the
Jones Act is distorting the U.S. economy, endangering the U.S. merchant fleet, and risking the
lives of millions of people.
12
Chapter 2: Literature Review
Origins of the Jones Act
The Merchant Marine Act of 1920, also known as the Jones Act, is the foundation for
protectionist cabotage laws that govern American shipping. The purpose of the Jones Act was to
end the coast wide waivers that permitted use of foreign flagged ships. These waivers were
granted during World War I when many U.S. ships were requisitioned for the war, leaving many
secondary ports without ships. The Jones Act was also designed to create a safe network of
American jobs for merchant mariners in the years following World War I. This law was passed
into Congress, by Republican U.S. Sen. Wesley Jones of Washington, with the intention of
preserving national interests and providing for national defense by supporting a U.S. merchant
marine (Kashian, 2017).
Section 27 of the act was designed to cut off competition from Canada and to look out for
U.S. security. Many American politicians and military personnel were concerned after the U.S.
fleet was destroyed by the German navy in World War I. This concern led to the fear that the
country would fall behind at sea if its naval power was not strengthened during peacetime. A
strong and healthy commercial shipping fleet, known as the merchant marine, was viewed as a
key point in improving national defense. The Los Angeles Times hailed this law as an “America
first shipping law that would unshackle commerce and make shipping vessels 100% American"
(Pearce, 2017). The Jones Act doesn’t apply to cargo shipped between the mainland states and
the U.S. Virgin Islands, but it does affect Alaska, Guam, Hawaii, and Puerto Rico, whose 3.4
million residents get a large portion of their goods via container ships from the mainland.
13
Goals of the Jones Act
The main goals of the Jones Act are to strengthen national security by establishing the
merchant marine, establishing a sealift capacity, and maintaining a strong American shipbuilding
industry. Establishing a strong merchant marine was meant to ensure that the U.S. would have a
fleet of ships that could carry domestic and foreign commerce to and from U.S. ports.
Establishing a strong sealift capacity meant that in time of war or emergency, the U.S. Navy
could call on the merchant ships to help carry necessary supplies to strategic positions (PBS, The
Jones Act, 2017).
To accomplish all these goals, the act requires U.S. carriers (companies that own and
operate the ships) to use only U.S. flagged ships to transport U.S. cargo among U.S. ports. These
ships must be built in the U.S., owned by Americans and operated by American sailors. This also
means that only carriers who use Jones Act qualified ships can only conduct business of
transporting goods between U.S. ports if they are registered under the U.S. flag. Ships that do not
meet these qualifications cannot, after unloading their cargo, pick up another U.S. cargo to
deliver to another U.S. port. Foreign flagged ships can only unload their cargo at U.S. ports and
can only pick up foreign cargo to deliver to a non-U.S. port. To achieve these goals, the rules are
enforced by several federal agencies, including the Coast Guard and Federal Maritime
Commission.
Supporters of the Jones Act
Advocates of the Jones Act say that the legislation is of strategic economic and wartime
interest to the U.S. Like all protectionist laws, the Jones Act is supported heavily by a small
group, the U.S. shipbuilders and maritime transport companies, because it keeps prices high and
foreign competition low. These companies and their associations have lobbied to Congress for
14
years, arguing that eliminating the law would hurt the U.S. shipping industry. Supporters argue
that the Jones Act is an “essential component” of national security policy, and that shipbuilding
is a “foundational component of American manufacturing” (Hirono, 2015). Supporters, such as
Democratic Senator Mazie Hirono from Hawaii, argue that the Jones Act:
a) Ensures national security by providing reliable sealift capacity in times of war.
b) Ensures our ongoing viability as an ocean power by protecting American ship builders.
c) Promotes national security and American job creation, AND,
d) Provides well-paying jobs to nearly half a million Americans.
Opponents of the Jones Act
Detractors of the Jones Act argue that the legislation is “protectionist” and “outdated.”
They say that the Jones Act has resulted in far higher costs for transporting cargoes between U.S.
ports. Senator John McCain has long advocated to repeal the Jones Act and in January of 2015
stated, “I have long advocated for a full repeal of the Jones Act, an antiquated law that has far
too long hindered free trade, made the U.S. industry less competitive, and raised prices for
American consumers” (PBS, The Jones Act, 2017).
Those who against the Jones Act argue that there is a misconception when it comes to the
loss of jobs if this law is removed, because there are only 3 shipyards producing Jones Act ships.
This means that the number of jobs that would be lost is not significant like its being portrayed
by its supporters. Opponents of the Jones Act, and those who are suggesting reform, such as Dr.
Keli’i Akina, President of the Grassroot Institute of Hawaii, argue the following:
15
a) Let American companies buy foreign ships from allies. Military does it, airplane
industry does it. Why can’t we do it with ocean ships?
b) Responsible for worst oil spill in U.S. history. How does it help the environment?
c) If it really is about “national security” why doesn’t U.S. mainland pay for it instead of
passing on costs to Alaska, Guam, Hawaii and Puerto Rico?
d) Repealing/Reforming JA will increase competition which will then bring upon
innovation and lower consumers costs throughout (Akina, 2017).
Reform history
Many shipper representatives, along with the legislatures of Alaska, Guam, Hawaii and
Puerto Rico have long been opponents of the Jones Act and have concluded that the protectionist
law imposes significant net losses on the U.S. economy. Rob Quartel was a former maritime
commissioner that started the Jones Act Reform Coalition in 1995. This coalition supported a
bill, introduced by Senator Brownback in 1998, that proposed allowing foreign-built ships to do
business on US coastal waters, but still requiring them to carry US flags and crews (Hansen,
2016).
Senator John McCain, chairman of the Senate Armed Services Committee, who also
opposes the Jones Act and has continuously said that the Jones Act adds no value to our national
security. In 2010, he submitted a bill to repeal the Jones Act and introduced an amendment to
the Keystone Pipeline bill in 2015 that would exempt carriers from using American-built ships
(Shultz, 2015).
16
In 2010, the Hawaii Shippers’ Council introduced the Noncontiguous Trades Jones Act
Reform bill, which has now been introduced into the governments of Alaska, Guam, Hawaii and
Puerto Rico. This bill would retain all the other features of the Jones Act for coastal vessels but
would exempt carriers from noncontiguous regions that use other ocean ships to use JA ships.
This type of exemption that would exclude some or all shippers from the “Made in the USA”
requirement seems to have the “strongest economic justification among the proposed reforms”
(Hansen, 2016).
17
Chapter 3: Analysis of the Jones Act
The purpose of this study is to analyze in depth the Jones Act (Merchant Marine Act of
1920), to find out if it has achieved its main goals, and to measure what type of impact it’s had
on the US economy, specifically that of Alaska, Hawaii, Guam and Puerto Rico. This analysis
will lead us to see if the Jones Act law is still relevant in the 21st century and hopefully bring us
to a clearer conclusion to see if it is now time to bring this law to an end. This study will also
evaluate the unintended consequences brought upon by the Jones Act, such as lack of
competition, loss of jobs, higher costs of goods for consumers, and will analyze the type of
impact this law has had on US consumers and the shipbuilding industry. It will also analyze if
repealing or reforming the law can have any influence on US national security and defense. The
following categories will be analyzed regarding the Jones Act to determine what are the
advantages or disadvantages to the law, and what type of impact it’s had on the noncontiguous
port area:
Commercial ship building industry
National Defense and Merchant Marine Force
Consumers, employment, and economy.
Economies of Alaska, Guam, Hawaii and Puerto Rico; with emphasis on the current
state of crisis in Puerto Rico post Hurricane Maria.
In this report, I have attempted to collect existing research on the Jones Act to gain a
clearer perspective on how it has succeeded (or failed) in its objectives. With this study, I would
like to emphasize the current effect the Jones Act is having on the economic crisis in Puerto
18
Rico. This analysis will help me conclude if the Jones Act should be reformed, completely
repealed, and/or if there are any alternatives that should be in place of this law.
Costs of the Jones Act
The Jones Act, also known as the Merchant Marine Act of 1920, adds costs by preventing
cargo from being transported between two ports in the U.S. unless it’s done on an American-
built ship. The ship must also be U.S. flagged, at least 75% owned by Americans, and at least
75% crewed by Americans. This prohibition on the use of foreign ships is a form of protection,
like an import quote or tariff. For each dollar that ship builders and operators gain, consumers
and other end-users lose more than one dollar. This results in a net loss to the economy. Under
this law, higher shipping costs are imposed from one American port to another American port.
An example of this is shipping a barrel of oil which would only cost $2 if shipped to Europe
from Texas but would cost $6 if shipped to Boston from Texas. This is costing the petroleum
industry more than $158 million every year, according to the Jones Act report released by the
Grassroot Institute of Hawaii. The report titled, The Jones Act in Perspective, shows that
industries across the country could save millions of dollars if the Jones Act were to be repealed
or reformed, including the water sector ($1.5 billion), chemicals ($103 million), air
transportation ($91 million), steel ($50 million) and lumber ($32 million), (Kashian, 2017).
The Jones Act may also have an effect in the higher price of gasoline, soon, because
many oil firms who previously had an exemption from the Jones Act for certain operations, now
want to be removed by the U.S. Customs and Border Protection. The removal of this exemption
could cost the oil industry $4.3 billion, and cause a loss of 30,000 jobs in 2017, according to a
study by the American Petroleum Institute (API). However, the larger impact would be $90
billion in lost gross domestic product, affecting states like Texas, Louisiana, Alabama, and
19
Mississippi hard, according to the API study, which also showed that the Jones Act imposition
could lead to a reduction of 500,000 barrels of oil and natural gas production every day (Calash,
2017).
The Jones Act is affecting many industries across the country in different ways. For
example, regarding the timber industry, the Jones Act makes it almost impossible to ship lumber
from Seattle to New York, because of the high costs. In the road salt industry, states like
Pennsylvania are importing road salt from Chile and Mexico rather than buying it from nearby
mines in Ohio and Louisiana. In consequence, American companies are getting beat by foreign
competitors on business deals because of our shipping costs are much higher. Another example
of this is U.S. steel plants who, desperate for scrap metal, avoid deals with American sellers
because of the high shipping costs (Frittelli, n.d.).
Advantages of the Jones Act
The following points are advantages of the Jones Act as argued by its supporters, mainly
the shipping industry and maritime companies (Hirono, 2015).
1. Shipbuilding is a major job creating industry. According to the Maritime
Administration, there were 107,000 people that were directly employed by roughly 300
shipyards across 26 states in 2013.
2. Additionally, shipyards indirectly employed nearly 400,000 people in the country.
3. The law requires U.S. flagged ships to be built in the U.S., bringing good paying jobs
to the middle-class.
20
4. American’s shipbuilding industry is on the rise. Congress needs to create and keep
manufacturing jobs in house. According to the Navy League, about 15 tanker ships are
being built in the U.S., which will join the U.S. flagged fleet soon.
5. Every American seaman is vetted by TSA and the Coast Guard.
6. If repealed, it will undermine our national security because the Jones Act provides
ships and crews to the Department of Defense in times of war.
Disadvantages of the Jones Act
Those who are against the Jones Act argue that the law is “antiquated” and that is does
more harm than good to U.S. consumers and the economy. The following points are
disadvantages of the Jones Act, as seen by many of its opposition (Akina, 2017).
1. Creates lack of competition among ship building companies. Also creates lack of
competition between ocean carriers that serve the secondary ports.
2. Cost of goods is much higher due to lack of competition, especially for smaller
secondary ports such as those in Alaska, Guam, Hawaii and Puerto Rico.
3. U.S. shipyards only producing 2 ships a year (1,000 gross ton ships).
4. There are only 7 active shipyards in the U.S. and of those 7, only 3 produce large
commercial ships.
5. This artificial ship shortage reduces efficiency and increases costs for building new
ships up to 5x the cost it takes a foreign country to build a ship.
6. U.S. ports not connected to the mainland bear most of the shipbuilding cost burden
because they rely heavily on ocean shipping. These higher prices are then passed down to
the consumers.
21
7. Consumers of non-contiguous port areas like Alaska, Guam, Hawaii and Puerto Rico,
are stuck paying a higher % of shipbuilding costs. These higher costs are factored into
basic goods and services such as food and electricity.
Economic impact of Jones Act on non-contiguous ports
Alaska
The Jones Act has also been harmful to Alaska since being introduced in 1920 by Senator
Jones. It forced the only two Canadian steamship lines out of the Alaskan market. The surviving
lines serving Alaska were both based in Senator Jones’s home state of Washington, which
proved beneficial to Jones’ constituents at home, but not to the Alaskan citizens who at the time
couldn’t vote (Riley, 2016). Alaska has been a major producer of oil, and oil shipped to
California or Hawaii must be transported on more expensive Jones Act ships. Its Jones Act
compliant fleet consists of 10 ships, which primarily operate between Alaska and California
(Frittelli et al, n.d.).
The Jones Act has caused Alaskan crude production to decline by 46% over the last decade,
including the Jones Act crude oil fleet. As a result, Alaskans receive less for their oil while
consumers in California and Hawaii are stuck with the higher costs (GAO, 1988). These higher
costs will become more important as the Arctic northern route opens. This is due to the warming
of the Arctic which has already increased the demand for icebreakers, which the Coast Guard
does not have. However, icebreakers would be available from Norwegian and Russian operators
if the Jones Act allowed it.
22
Guam
The Jones Act requires that all goods shipped from the U.S. mainland to Guam and/or
any other noncontiguous port must be transported in a U.S. carrier, manned by a U.S. crew, and
registered under the American flag. However, other U.S. jurisdictions such as American Samoa,
the U.S. Virgin Islands and the Commonwealth of the Northern Mariana Islands are fully
exempted from the restrictions. Although the Mariana Islands are still forced to pay full Jones
Act freight rates because the goods transported from the U.S. mainland must come through
Hawaii and/or Guam.
Therefore, many business and political leaders in Guam figured that it would be the best
time to push for an exemption from the Jones Act, when President Trump temporarily issued a
waiver for Puerto Rico to facilitate hurricane aid shipments to the island. One of those leaders
advocating exemption from the Maritime Marine Act of 1920 was Bobby Shringi, chairman of
the board for the Guam Chamber of Commerce. Shringi stated, “It’s more than the adverse
impacts during times of disasters, as our residents pay dearly at the registers because of the
Jones Act daily. With the recent decision of Delta Airlines to end services on Guam, what truly is
needed are changes towards cabotage laws in general” (Losinio, 2017, para. 3).
Senator William Castro from Guam hopes to use the situation in Puerto Rico, where
President Trump granted a temporary exemption of the Jones Act, as a case study to analyze the
potential impact of repealing the Jones Act. Castro stated, “I hope that this serves as a case
study, where we may be in a better position to see how the natural market can respond to the
need to transport/transship when that restriction is lifted,” he said. He added, “It was designed
to protect.... It was after the war and they didn’t have the natural market to be able to transship
goods or transport people, and they were concerned. There was an issue of national security and
23
national transportation” (Losinio, 2017, para. 7-8). Senator Dennis Rodriguez also weighed in
on the issue and believes that to reach a solution to the Jones Act restrictions, it is important to
get the attention of the president. Rodriguez stated, “The Jones Act has been hurting us for so
long. We have every day struggles because of the Jones Act — the high cost of food, of
everything. We have to bring everything in” (Losinio, 2017, para. 12).
Hawaii
Hawaiians have become captive consumers of this “protectionist” law, partly because of
its great distance from the U.S. West Coast and because of its inability to use other modes of
transportation that are used on the mainland. An example is how one could ship a 40-foot
container from Los Angeles to Honolulu for $8,700 using a Jones Act–compliant ship, but the
same container could be shipped from Los Angeles to Shanghai would ship for only $790 using a
foreign ship (Slattery et al, n.d). Higher transportation costs such as these have caused the
Hawaiian sugar growers to be at a disadvantage in the US mainland market, relative to growers
in other countries such as the Philippines and Latin America. In consequence, the last sugar
plantation on Hawaii closed its sugar operation last year (Hansen, 2015).
Due to the Jones Act, Hawaii bears higher costs for food, all imports, and energy costs
which are highest among the 50 states. Although Hawaiians try to also use ferries to travel
among the islands, these are also more expensive because of the Jones Act requirement to buy
American-built ferries. This confirms a recent poll that suggests that 84% of all people in Hawaii
want reform or repeal of the Jones Act. There is, however, a bill that has been placed before the
state legislature (NTJAR) requesting exemption from the section of the Jones Act requiring the
purchase of American-built ships. Currently, Hawaii has put a waiver through Congress allowing
24
Norwegian cruise lines to operate ships in Hawaii, which has brought more jobs, opportunities of
tourism, and economic growth (Hansen, 2016).
Puerto Rico
The Jones Act has contributed to the current economic disaster in Puerto Rico when the
island defaulted on its debt. A 2010 study at the University of Puerto Rico concluded that the
island lost $537 million per year because of the Jones Act (FRB of NY, n.d.). Therefore, Puerto
Ricans are forced to pay more for imports and receive less for exports. Puerto Rico consumers
must pay higher prices for goods transported by Jones Act ships because shipping companies
pass on their higher transport costs to consumers the same way they would pass on a sales tax.
The negative effect the Jones Act has had on Puerto Rico as a developing regional trading
center is great. “Between 2000 and 2010, the volume of 20-foot containers shipped through
Puerto Rico declined by more than 20 percent, while volume more than doubled in nearby and
smaller Jamaica, which is not constrained by the Jones Act” (FRB of NY, n.d.). In their study of
Puerto Rico growth, Susan Collins and her coauthors noted that Puerto Rico was losing out to
Jamaica as a regional trading center. They recommended that “the United States could assist the
island’s development as a regional business center by exempting it from these transportation
restrictions” (Collins et al, n.d.). These unfavorable transport costs have been imposed on a
territory that is much poorer than the rest of the United States, and the economic crisis has
resulted in a massive outmigration to the contiguous US states (Grennes, 2017).
25
According to a study from the Federal Reserve Bank of New York, shipping a container
from New York to Puerto Rico cost $3,063, while shipping it to the Dominican Republic, cost
only $1,504, and only $1,607 to Jamaica (FRB of NY, n.d.). Because of the high costs to
transport petroleum, the price of electricity in Puerto Rico is higher than all other 48 contiguous
states. In consequence, Puerto Ricans have begun to import goods from Canada instead to avoid
the premium costs forced by the Jones Act. Puerto Ricans seeking relief from the Jones Act point
to the nearby U.S. Virgin Islands, who have been exempt from the Jones Act since 1922
(Grennes, 2017).
Another example of this market distortion was highlighted by a Government
Accountability Office report in 2013. This report manifested how the majority of Puerto Rico's
petroleum needs were met by imports from South America, instead of closer U.S. mainland
sources, because of the higher shipping costs to transport the fuel in a Jones Act ship (Ghei,
2017). The effect of this policy on Puerto Rico became very clear when hurricane Maria hit the
island because Puerto Ricans urgently needed fuel and other critical supplies which they couldn’t
receive on time because they had to wait for transport until a waiver to the requirements of the
Jones Act was in place.
The people of Puerto Rico should not be at the mercy of the President of the United
States to determine what devastation is and what is not, nor must wait through a process so that
the government can determine which situation warrants a waiver and what does not. We must
recall New Jersey’s 2014 waiver request to remember that a waiver does not solely depend on
the needs of the suffering people or on the damage caused by natural phenomena. Following a
heavy storm set of blizzards, the state of New Jersey applied for a temporary waiver of the Jones
Act, but it was denied. Congress said that the reason for denying the waiver was because it was
26
not considered to be relevant to "national defense." The salt the state needed, took several weeks
to arrive, instead of a matter of days which could have been the case if the Jones Act waiver was
granted (Ghei, 2017).
We know that the U.S. shipbuilding industry has continued to decline over the last
decade; despite it being protected by the law itself. The concepts "Made in the USA" and "U.S.
owned and operated" don’t hold the same meaning as they did several decades ago. Nowadays,
supply chains and abrupt changes of ownership within a corporation make this law obsolete,
costly, and a burden that’s not needed, especially for noncontiguous areas. By terminating the
Jones Act, not only will Americans benefit from it, but it can also ensure the citizens of Puerto
Rico that immediate help will be on its way when the next hurricane hits.
Hurricane recovery efforts in Puerto Rico did receive a lift when the U.S. government
temporarily granted a 10-day waiver of the Jones Act. With this waiver in place, several foreign-
flagged ships were able to transport essential supplies to the island, including food and fuel.
However, every time a waiver is granted, the unseen costs of the Jones Act are manifested, and
we cannot keep believing that impactful benefits will arise in the future that will offset the high
costs of the Jones Act. These high costs are ridiculous and unnecessary, especially for the
residents of noncontiguous areas such as Alaska, Hawaii, Guam and Puerto Rico, Hawaii, and
Alaska, to justify keeping this law afloat. That is why I recommend for our government to
investigate serious reform of this outdated law, or to consider repealing it completely, erasing it
from existence.
27
Examples of Economic Inefficiencies
Cattle shipment from Hawaii to U.S. mainland
One example of how inefficient the Jones Act is to the U.S. economy is the cattle
shipping industry in Hawaii. One of those companies is Parker Ranch, which is one of three
cattle ranches on the Big Island of Hawaii that ranks in the top 25 nationally for cow herd size. It
is home to 9,000 cows, but about 5,300 of them need to be shipped to the U.S. mainland to be
slaughtered. “Shipping is a concern anytime you have to ship cattle that far. On the mainland,
trucking is one of those necessary evils—the less you must do the better,” says Keoki Wood,
Parker Ranch’s livestock operations manager (Betchel, 2015). To reduce costs associated with
the Jones Ac, Parker Ranch prefers shipping their cattle on 747 cargo planes to the mainland.
The process starts by loading up the calves into specially designed 8' x 10' boxes known as
“cattle carriers”. Only about 20 boxes can be carried on a plane, which equivalates to a load of
100,000 lbs. (Betchel, 2015).
Even though the costs to transport cattle via plane can be very expensive, especially
during the holidays, cattle ranchers seem to prefer this idea instead of paying the astronomical
costs of shipping their cattle on a Jones Act compliant ship. Not only is cost a problem, but the
availability of Jones Act vessels as well. Other ranchers have decided to ship their cattle via sea
to Canada and then ship from Canada down into Washington because it was less expensive than
to ship directly from Hawaii to the U.S. mainland.
New Jersey’s costs to get salt to treat its roads
According to a 2014 news report in New Jersey, the state had to spend about $1.2 million
to have road salt shipped to Port Newark from Maine, which was about $700,000 more then what
it would have cost them if the U.S. Govt. granted a temporary waiver of the Jones Act.
28
“Shuttling 40,000 tons of salt over four trips by barge between Searsport, Maine, and Port
Newark will cost $1.2 million compared with the $500,000 New Jersey would have spent if the
cargo ship Anastasia S. had been permitted to take the load to New Jersey, Simpson said today
after a meeting of the New Jersey Turnpike Authority” (Staff, 2014).
A temporary waiver of the Jones Act would have permitted a foreign vessel to deliver the
salt needed for the state of New Jersey to treat its roads. This cost would’ve been around
$500,000 so it would’ve made economic sense. That is what the state transportation
commissioner was trying to argue. However, a spokesman for the Department of Transportation
blamed the state of New Jersey for poor weather preparation saying that they have “ignored the
reality of their winter season” (Staff, 2014). In addition, there was another instance where the
state of New Jersey could not get any road salt at all from Maine because there were no Jones
Act vessels available to transport the material, even though there was about 40,000 sitting there
at the port.
Puerto Rico’s energy crisis and continuing blackouts
Although there has been a huge boom in gas and oil production in the United States, it is
still 2-3 times cheaper to transport these energy sources to Canada and Europe than it is to the
island of Puerto Rico. Puerto Rico is extremely dependent on oil for their transportation needs,
but guess what, it is also very dependent on it for its power grid as well. The majority of Puerto
Rico’s electrical power grid comes from oil. Puerto Rico imports lots of its oil from other
countries instead of the US because it is much cheaper. Yes, it would be better for Puerto Rico to
rely on natural gas produced by US, to power its electrical grid, but it can’t because it’s more
expensive to ship under the Jones Act.
29
We have witnessed the current economic situation in Puerto Rico as many of its islanders
are still suffering widespread outages due to their weakened power system that hasn’t been aided
by the U.S. Government. New production oil will NOT come to US if Jones Act is still in place.
We need to allow other vessels to come in to bring in new energy production. Increased costs to
Puerto Rico, an island that’s going bankrupt and has no money, who’s had to cut their purchase
of fuel supplies, who is still without power (around 20%), and experiencing continued blackouts,
is unfair. This is all because the Jones Act does not allow foreign ships to come deliver fuel/oil to
the island. We hear about multi-million-dollar contracts given to small start-up businesses that
were supposed to go help restore an electrical system that has been crippling for years, and only
made worse now by Hurricane Maria. Does not anyone see that the island is in a massive debt
and needs energy sources such as fuel and oil? Why not open the ports to allow foreign vessels to
come in and deliver these sources? These are questions that we need to address and bring up to
congress when it comes to the economic inefficiencies caused by the Jones Act.
30
Chapter 4: Conclusions and Recommendations
The irony of the Jones Act is that it was never intended to protect the maritime industry.
The Jones Act is in fact not the Merchant Marine Act of 1920. It is a separate bill that was placed
under the Merchant Marine Act that was introduced by Senator Wesley Jones at the time. I
wondered and asked myself, why did Senator Jones insist on creating this law and found through
research that he did it to protect his railroads from competition from foreign ships. The law was
never intended to promote national security or strengthen the American fleet, it was intended to
move cargo off ships and on to railroads, which Wesley Jones owned. It was to protect what he
had invested in the railroad industry.
So why keep an outdated law that was created not for the purpose which is stands for? Is
it red-tape? Is it government regulations that are keeping this law in place and holding back the
American economy? There is absolutely no benefit from this law that is now affecting our free
trade and transportation of energy. Does it prevent foreign flagged ships from entering the
Mississippi River or the Great Lakes to transport goods? No. This law is not even supported by
the US Navy nor the US Coast Guard as they must rely and wait on waivers to get foreign
flagged ships to help during emergency situations.
The Jones Act has destroyed the American international fleet and the domestic debearded
fleet and has destroyed 60-70k jobs. The bulk of costs to keep the Jones Act alive fall on all
American citizens, but the bulk of benefits (political money given) are only enjoyed by a small
number of powerful shipyard/shipbuilding industries. The leaders of these industries along with
the lobbyists and political personnel that support this law should be ashamed of themselves.
There are thousands of Puerto Ricans who have lost their homes and jobs on the island due to
31
Hurricane Maria who still don’t have access to emergency-laden supplies nor energy to power
their homes because there are no people to unload the cargo still stuck on the ships to this day.
This is a 100-year-old law that was established at a time when we didn’t have airplanes.
However, it is still standing and preventing the recovery of many American lives. Hurricane
Maria wasn’t the real natural disaster; the Jones Act was. That is why I believe that now is the
time to do something about this, to repeal this law, to save thousands of families including mine,
while the world enjoys of an economic upswing.
Recommendations
The Jones Act is a piece of legislation that is outdated for this day and age. It is a section
in a very old law, so old that 2 months after it was signed into law under the Merchant Marine
Act of 1920, the 19th amendment was established giving women the right to vote. This tells us
that it is time to let go of this law. When the cost to ship something to another country is less
than the cost of transporting goods within your own country, there’s a problem. Therefore, I
suggest that certain changes need to be done to the legislation to address this problem.
Policy Recommendations
First, this study is not opposed to a strong maritime industry, but instead recognizes the
value of a competitive international fleet. However, we are nowhere near that. That is why I
recommend the following alternative reforms to be considered to address the inefficiencies of the
Jones Act.
1. Repeal the act permanently:
This measure of reform might be extreme to some political parties and actors,
but this change would eliminate the economic loss that has burdened our
country for the past several decades. This will give all Americans free access
32
to the best shipping rates and means of technology at no net cost to our
economy. This would also allow domestic disaster responders to have access
to plenty to ships in times of emergency.
2. Reform the act going forward:
It is recommended that; the U.S. eliminate the U.S. build requirement. Not
only is it cheaper to build ships abroad, but the U.S. can buy several hundred
big ships off the world market which are currently at their lowest price in
decades. This cost is also much lower than the cost to build our own ships
inland. The government can then reflag the vessels that have been purchased,
registering them under the U.S. flag. Supporters of the law argue that this
change can impact hundreds of thousands of American shipyard and ship
repair jobs directly and indirectly. However, this is misleading as there are
only 2-3 major shipyards in the U.S. that specialize in building the big cargo
ships. One of them in San Diego (NASSCO) spends more than 50% of their
resources building ships for the Navy. The other main yard in Philadelphia
(AKER) only builds commercial ships. By looking at the data in their
websites, we can see that less than 5,000 workers are employed by these two
shipyards combined (Frost, 2016). We should weight these possible job losses
with the billions of dollars that taxpayers must pay to these shipyards, directly
and indirectly. If these changes can be made to the law, then the U.S. would
have a fleet of ships that can compete under market price against international
fleets.
33
3. Allow temporary exemptions:
One recommendation under this reform would be that; all regions be
exempted from all features of the Jones Act for a certain timeframe. For
example, if all regions were to be exempt from all Jones Act regulations for a
period of 5-10 years, this would provide the necessary data to future
researchers to be able to determine the relative costs between U.S. built ships
and foreign ships operating in American waters.
Another recommendation under this reform would be that; only certain areas,
non-contiguous regions such as Alaska, Guam, Hawaii and Puerto Rico, be
allowed full exemption of the Jones Act. This is what several congressmen
such as John McCain have been trying to fight for in Congress. This would
keep most of the law intact, but at least would allow the economies of these
areas to build themselves back up, lowering prices for their consumers, and
have the necessary supplies in times of emergency.
4. Leave as is:
This is not a proposal I recommend as inaction from Congress on this law will
continue to negatively impact many American citizens indefinitely.
These are changes that I feel are necessary to make us more competitive in the maritime
industry. However, the challenges faced are that the supporting actors of the law which are the
shipyards and shipbuilding industries pay lots of political money to congressmen to support this
outdated law. They will not allow any changes to be made to the Jones Act. That is why the only
34
other alternative is to abolish this law. By repealing this policy and erasing it from existence, the
points I have recommended can be successfully attained.
Don’t let the small number of Jones Act supporters overstate that we need to “Make
America Great Again” by supporting the Jones Act which enhances national security and
promotes a strong fleet. During the Gulf War in 1991, most of the ships that were used were non-
Jones Act compliant ships, meaning they were foreign flagged. The number of U.S. sailors has
decreased tremendously throughout the years from 60,000 in 1955 to about 1,100 now. The
Jones Act has not made us the #1 largest fleet in the world, we are not even in the top 20. We are
the 25-26th largest fleet in the world that is weakening as the years go on. Only 2-3 big shipyards
exist now and every country in the world, except 4, do not have a law like the Jones Act.
Therefore, I believe the policy recommendations I have presented should be strongly considered.
Research Recommendations
In addition to the policy recommendations presented above, additional research is
recommended regarding this important topic. Although this study argues that the Jones Act is a
very old piece of legislation and an outdated law established after World War I, there is not
enough research available regarding this topic. The Jones Act has recently come into scrutiny
because of the ongoing devastation in Puerto Rico caused by Hurricane Maria. This topic
touched heart as there is still family of mine dealing with the ongoing crisis on the island. Crisis
that in my belief could’ve been aided if the Jones Act did not exist. By crisis, I don’t mean the
natural devastation caused by Hurricane Maria; that was inevitable. I’m talking about the
economic crisis that happened afterwards, when all of 3 million American citizens had trouble
receiving aid and the necessary supplies to survive because of the shipping restrictions enacted
by this law.
35
Most if not all the research used was from current event articles and news publications
from the media, board meetings, documentaries, etc. That was the challenge faced with this
thesis, which provided a limited paper. However, this is an ongoing topic that I believe can be
expanded upon by future students who can accumulate more research as the years go on to shed
more light on this topic. Who knows if the law will survive another natural disaster? What if this
policy finally gets repealed within a year? These are questions that need to be investigated more
in depth. More research needs to be complied from the ongoing situation in Puerto Rico as the
situation worsens in the country. Other in depths topics to research within this topic are the
reasons why this law is still in place and who are the prevailing actors responsible for keeping
this law afloat. These are some of the questions that cannot be answered completely in a limited
paper but can be further expanded upon by future students who will have more data available to
them as the years go on.
36
Appendix A
CSU Bakersfield Academic Affairs Mail S10p: 24 DOH Room 108
9001 Stockdale llighway Bakersfield. California 933 Il- l 022 Onic~ of Grants. Research. and Sponsored Programs (GRaSP)
Chandra Commurl, Ph.D. Department of Public Administration
Scientific Concerns
Steven Gamboa, Ph.D. Department of Philosophy and
Religious Studies Nonscientific Concerns
Grant Herndon Schools Legal Service
Community Issues/Concerns
Roseanna McCleary, Ph.D. Department of Social Work
Scientific Concerns HSIRB Chair
Nate Olson, Ph.D. Department of Philosophy and
Religious Studies Nonscientific Concerns
Isabel Sumaya, Ph.D. Department of Psychology
Research Ethics Review Coordinator and HSIRB Secretary
Tommy Tunson, DBA Community Issues/Concerns
Marianne Wilson, Ph.D. Department of Psychology
Scientific Concerns
(66 1) 654-223 1 (661) 654-3342 FAX www.csub.edu
California State University, Bakersfield: FWA00013908 Human Subjects Institutional Review Board
Date: February 7, 2018
To: Joseph Morales, Student Investigator, Public Policy & Administration R. Steven Daniels, Faculty Advisor, Public Policy & Administration
cc: Roseanna McCleary, IRB Chair
From; Isabel Sumaya, University Research Ethics Review Coordinator
Subject; Master's Thesis Project 18-03: Not Regulated Research Status
Thank you for bringing your Master's Thesis Project, " It's Now Time to Sink the Jones Act : A Policy Analysis Report on the Merchant Marine Act of 1920," to the attention of the IRB/HSR. On the form "Not Human Subjects Research Acknowledgement Form" you indicated the following;
I want to interview, survey, systematically observe, or collect other data from human subjects, lor example, students in the educational setting. NO
I want to access data about specific persons that have already been collected by others (such as test scores or demographic Information]. Those data can be linked to specific persons [regardless of whether I will link data and persons in my research or reveal anyone's identities]. NO
Given this, your proposed project will not constitute human subjects research. Therefore, it does not fall within the purview of the CSUB HSIRB. Good luck with your project.
If you have any questions, or there are any changes that might bring these activities within the purview of the IRB/HSR, please notify me immediately at (661) 654-2381.
Thank you.
Isabel Sumaya, University Research Ethics Review Coordinator
The California State University - Bakersfield- Channel Islands- Chico · Dominguez Hills- East Bay- Fresno- Fullertlln- Humboldt· Long Beacll- Los Angeles- Maritime Academy Monterey Bay · Nonhridge · Pomona · Sacramento · San Bernardino · San Diego · San Francisco · San Jose · San luis Obispo · San Marcos · Sonoma • Stanislaus
37
References
Bechtel, Wyatt. “Shipping Cattle to the Mainland.” AgWeb - The Home Page of Agriculture, 21 Apr.
2015, www.agweb.com/article/shipping-cattle-to-the-mainland-wyatt-bechtel/.
Calash. (2017). Economic Impacts of Proposed Modification and Revocation of Jones Act Ruling
Letters Related to Offshore Oil and Natural Gas Activities. The American Petroleum Institute
(API). Retrieved from http://www.api.org/~/media/Files/Policy/Exploration/Economic-Impact-
Analysis-CBP-Rulings-Report.pdf
Collins et al, Restoring Growth in Puerto Rico.
Contributor, K. A. (2017, April 10). How the Jones Act drives up the cost of food and gasoline for
millions of Americans. Retrieved from http://thehill.com/blogs/pundits-
blog/international/328025-how-the-jones-act-drives-up-the-cost-of-food-and-gasoline
Editors, T. (2017, November 01). Editorial: Why Is This Law Still on the Books? Retrieved from
http://www.weeklystandard.com/editorial-why-is-this-law-still-on-the-books/article/2010290
Federal Reserve Bank of New York (FRB of NY), An Update on the Competitiveness of Puerto Rico’s
Economy
Frittelli et al., U.S. Rail Transportation of Crude Oil
Frittelli, Cargo Preferences for U.S.-Flag Shipping
Frost, Donald. “Impact of the Jones Act Build American Requirement > Hawaii Free Press.” Hawaii
Smallest Firearms Industry in USA > Hawaii Free Press, Aug. 2016,
www.hawaiifreepress.com/ArticlesMain/tabid/56/ID/18240/Impact-of-the-Jones-Act-Build-
American-Requirement.aspx.
38
General Accounting Office [now Government Accountability Office], The Jones Act: Impact on Alaska
Transportation and U.S. Military Sealift Capability, September 30, 1988.
Ghei, N. (2017, October 06). The Jones Act Is an Unnatural Disaster. Retrieved from
https://www.mercatus.org/commentary/jones-act-unnatural-disaster
Grennes, T. (2017, May 2). An Economic Analysis of the Jones Act. Retrieved from
https://www.mercatus.org/publications/economic-analysis-jones-act
Hansen, Michael. “Jones Act Shackles Puerto Rico; No Jones Act Frees Jamaica to Grow Its Economy,”
Hawaii Reporter, February 13, 2013.
Hansen, Michael. “Will the Jones Act Cause Hawaii’s Last Sugar Plantation to Close?”; Leroy Laney
and Ken Schoolland, “Jones Act Unfairly Hurts Hawaii while Jeopardizing Security of U.S.,”
Honolulu Star-Advertiser, December 6, 2015.
Hansen, Michael. Hawaii Shippers Council “US Ships Built 2000–2016” (Table HSC-877) and
“Shipyards Comps May 26, 2016” (Table HSC-876), email message to author, December 5,
2016.
Hirono, M. K. (2015, January 16). “Hirono Speaks Out for American Jobs & Shipbuilders, Fights
Against Amendment That Dismantles Jones Act.” Retrieved from
https://www.hirono.senate.gov/press-releases/hirono-speaks-out-for-american-jobs-and-
shipbuilders-fights-against-amendment-that-dismantles-jones-act
Hunter, “Jones Act a Lifeline for Puerto Rico and Even Bigger Booster for U.S. National Security.”
Kashian, R., Pagel, J., Brannon, I., & Kent, J. (2017). The Jones Act in Perspective: A survey of costs
and effects of the 1920 Merchant Marine Act (K. Akina & M. Blom-Hill, Eds.). Retrieved from
http://www.grassrootinstitute.org/2017/04/the-jones-act-in-perspective/
39
Losinio, L. (2017, October 17). Guam business, political leaders push for lifting of Jones Act. Retrieved
from http://www.mvariety.com/cnmi/cnmi-news/local/99341-guam-business-political-leaders-
push-for-lifting-of-jones-act
McCown, B. A. (2016, February 25). Keeping Up with The Jones Act: Inconsistent Trade Policy
Hinders Economic Growth. Retrieved December 10, 2017, from
https://www.forbes.com/sites/brighammccown/2016/01/19/keeping-up-with-the-jones-act-
inconsistent-trade-policy-hinders-economic-growth/#3719e307457e
Munoz, Tony. “McCain Takes Dead Aim at U.S. Maritime,” Maritime Executive, January 18, 2015.
PBS, The Jones Act (2017). Retrieved from http://www.pbs.org/video/the-jones-act-fp0pqn/
Pearce, M. (2017, September 27). What is the Jones Act, and why does Puerto Rico want it gone?
Retrieved from http://www.latimes.com/nation/la-na-jones-act-20170927-story.html
Riley, Bryan. “The Jones Act: Protecting Special Interests, Not America,” Heritage Foundation, June 15,
2016
Schultz, Chris. “The Jones Act: Outdated or Vital?”, Law Street, January 22, 2015
Slattery et al., “Sink the Jones Act.”
Staff, Star-Ledger. “Salt Shipment to NJ Costs $700,000 More by Barge than by Ship,
Transportation Chief Says.” NJ.com, NJ.com, 25 Feb. 2014,
www.nj.com/union/index.ssf/2014/02/post_23.html.
