There are many obscure laws out there that affect our communities, however there are few as impactful on West Coast communities than the Jones Act, also known as the Merchant Marine Act of 1920.
First, a quick definition of a somewhat rare term. “Cabotage” is the shipping of goods by water to and from ports within the same nation. For example, shipping goods by sea from San Francisco to San Diego, or from Atlanta to New York, or even from Juneau, Alaska to Honolulu, Hawaii is cabotage. Shipping via a river or lake is also included in cabotage, so routes from, for example, Minneapolis to Baton Rouge on the Mississippi River, or from Toledo to Buffalo on Lake Erie are also included.
The Jones Act, which seems innocuous at first glance if not beneficial to U.S. shipping companies, reserves U.S. cabotage to only U.S.-owned companies sailing U.S.-made ships that are U.S. crewed.
With such a star-spangled law, you may be wondering what could possibly go wrong, but in truth the unintended consequences of the Jones Act have ranged from increased carbon emissions and traffic congestion to a dangerously weak merchant marine industry and a direct impact on military readiness that has endangered our troops.
The Jones Act was originally introduced in an attempt to improve war readiness after World War I, when the Merchant Marines (The United States’ civilian private-sector crews) were largely enlisted into the war effort as they were key to transporting raw materials and some even saw combat due to strategic piracy efforts by central powers.
Sen. Wesley Jones introduced the act back in 1920, and I will be first to point out that there are some good parts of the law that should be maintained, as it also defines some of the Seaman’s Rights.
The cabotage requirements, however, have had a marked impact on the U.S. shipping industry. Today, there are only a handful of shipyards that actively produce ships, and most of those, ironically, are foreign-owned. U.S. made ships cost six to seven times the average cost internationally, and only about 2 percent of the United States’ intrastate shipping is done via ship. In Europe, which allows for cabotage to be serviced by any ship registered to an E.U. nation, over 40 percent is done by sea.
What’s causing this? In addition to the extreme expense of buying a United States-built ship, the monopolies that exist that have formed due to the restrictive nature of the cabotage industry have complete control over pricing. Lack of competition has caused costs to skyrocket over the last 100 years. In addition, the vast majority of U.S. flagged ships have unionized crews, who are only able to demand what they demand because there is no competition.
Most major cities in the United States were built because of their access to water shipping, whether its all the Midwest built up along the Mississippi and its tributaries, or coastal cities that are centered around ideal natural ports like San Francisco, New York and Los Angeles, yet cabotage has been effectively ruled out as a form of transport.
Rather than employing cabotage in the logistical chain, most companies use rail and trucking to transport their product, despite the obvious higher cost of having one driver per trailer or the logistical challenges mounted by sharing the rails with passenger trains.
States and territories that are geographically isolated are particularly hurt, like Puerto Rico, Hawaii, Guam, and Alaska, who cannot switch over to trucking and instead must pay the exorbitant costs of cabotage to get basic commodities and consumer products.
Despite the protectionist nature of the law, it actually favors importation over self-sustainability. Rather than using a natural supply chain like grain barges, many livestock farmers import their feed because it is cheaper to obtain.
In the logistics industry, the entire goal is to maximize load and minimize trips, yet when a foreign ship comes to say, the Port of Seattle, and unloads half of the load with the intention of unloading the other half at say, the Port of Stockton, it is illegal to load the empty half of the capacity with goods going to Stockton. The Jones Act creates a capacity utilization issue.
We could significantly affect the amount of traffic we face in this nation and eliminate a tax that we all pay that is baked into the cost of products. That tax, by the way, isn’t benefitting us as Americans.
Rather than accomplishing the intention of the Jones Act, which was to increase the number of U.S. flagged and U.S. made ships, companies have instead reacted the textbook way that they should when they benefit from a protectionist law; by sitting back and not innovating to keep competitive internationally.

Devon Minnema represents Dixon’s 4th District on the Dixon City Council. He is a pre-law student and has previously worked in the logistics industry. For more information on this topic, message or visit his official Facebook page.

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