The Obscure Maritime Law That Ruins Your Commute
Illustration by Matt Chase / The Atlantic. Source: Getty.
“Ship American” might sound nice in theory. This is what it looks like in practice: not shipping much of anything in America at all.
What with everything going on in the world, stewing over an obscure, century-old maritime law might seem odd. But the Jones Act really does warrant such consternation. It’s not just a terrible law that hurts you, me, and everyone we know—especially if they live in Puerto Rico or drive to work on the East Coast. It’s also a cautionary tale against government industrial policies, which can have unintended consequences far beyond higher prices or budget overrun.
The Jones Act, formally known as Section 27 of the Merchant Marine Act of 1920, was ostensibly intended to ensure adequate domestic shipbuilding capacity and a ready supply of merchant mariners and ships in times of war or other national emergencies. Today, it requires that any domestic waterborne shipping of goods be conducted on vessels that are built, owned, flagged, and crewed by Americans. As a result, the U.S. has one of the most (if not the most) restrictive shipping systems in the world.
By effectively barring foreign competitors from transporting goods between U.S. ports, the Jones Act has predictably inflated the cost of shipping and shipbuilding in the United States. That’s the law’s seen cost, which many of its supporters acknowledge but claim is necessary for ensuring a thriving industrial base and sufficient supply of ships and mariners. But the unseen costs do the most notable damage and thus swamp any alleged benefits.
First, let me put the direct costs in perspective: We’re not just talking about a few extra bucks here and there. Building a container ship in the United States costs up to five times as much as it does abroad, and transporting crude oil on a Jones Act tanker can cost three times as much—an ever-expanding price differential driven by decades of insulation from foreign competition.
Read the rest of the article on the Atlantic