AMP Fight Off Jones Act Attack

The American Maritime Partnership (AMP) disagrees with the findings of the recent report published by the Alliance for Innovation and Infrastructure’s (Aii) entitled Jones Act: Protectionism v. Global Trade.

The report called the Jones Act outdated, especially as the United States is entering new global markets and removing outstanding barriers to trade.

Under the almost a century-old act, vessels travelling between two US ports need to be US built, owned, flagged and operated by a crew of 75 percent American citizens.

Furthermore, the report claims that roughly six dozen Jones-Act required vessels are in operation today adding that these ships have not been subject to competition. What is more, based on the report, the act drastically increases transportation costs to island territories, leading into higher costs of living and higher energy prices in islands such as Hwaii and Puerto Rico.

Finally, the Alliance concludes that amending this legislation would strengthen US place on the international stage through competition and global trade.

“The publication is littered with fabrications intended to mislead policymakers and we demand a retraction of the report,” said Tom Allegretti, Chairman of AMP.

“It is shocking that a nonprofit organization led by former senior members of the U.S. military would produce such a factually inaccurate report and take such a myopic view of an important national security issue.”

Among the report errors the AMP Chairman referred to the claim that there are “about six dozen Jones Act-qualified vessels” in operation, stressing that there are approximately 40,000 vessels in the Jones Act fleet.

According to the report, the U.S. International Trade Commission (ITC) has estimated that the Jones Act costs the nation USD 656 million annually. The APM said that the ITC has completely backed away from that estimate (made in 2002) and now says it cannot calculate the cost of the Jones Act, if any. The ITC changed its position after the U.S. Government Accountability Office (GAO) reviewed the ITC’s findings and called them “uncertain,” “undeterminable,” “incomplete,” and “unverifiable.”

Furthermore, AMP Chair claims that the domestic maritime industry faces intense competition among itself, foreign shipping companies, railroads, pipelines, trucks, and airlines.

“The result is a highly innovative fleet that, with 40,000 vessels and an estimated 500,000 related jobs, is the envy of the world. The domestic fleet is a world leader in innovation, from the invention of the shipping container—called the invention that “made the boom in global trade possible”—to the recent construction of the world’s first LNG-powered containerships,” AMP said.

“What the report appears to miss is that the Jones Act does not involve global trade. By definition, the Jones Act is limited to 100% U.S. domestic commerce—transportation between two points in the United States. The report recommends allowing foreign crews to engage in 100% domestic commerce outside of American laws, which is not allowed in any U.S. industry; there is no reason it should be allowed in shipping. It would certainly save costs to allow foreign shipping crews to operate in U.S. domestic commerce at third world wages—as it would in refining or any other U.S. industry—but no Congress is likely to allow that any time soon.”