Dietmar Temps

U.S. News


The Jones Act is Sinking American Shipbuilding

The Jones Act is killing the U.S. maritime industry. Two or three commercial vessels are built in the U.S. per year, take three years to build, and have a capacity of less than a fifth of the largest capacity commercial vessels worldwide. The Netherlands and Norway produce more than eight times as many ships as the U.S. at one-third of U.S. costs while paying workers twenty to forty percent more. This path for our maritime industry is unsustainable.

The Jones Act harms U.S. shipbuilding, the merchant marine, and our national security. Its citizenship and domestic building requirements should be repealed. These reforms are necessary to revitalize shipbuilding and the growth of the merchant marine and to improve our national security and economic output.

The Jones Act requires that ships operating in U.S. waters be built, owned, and operated by U.S. citizens. This law has wide-ranging effects such as incentivizing the transportation method of goods, what U.S. citizens can afford to buy, and the labor conditions of 650,000 Americans in the domestic maritime industry. Its defenders claim it preserves national security by enhancing the number of U.S.-flagged ships, their experienced crewmembers, and shipbuilding and repair infrastructure. Its impact regrettably has been the opposite.

For the average American, there would be significant savings for goods and energy. Expanding the number of non-Americans in U.S. flagged crews would decrease transportation costs. American consumers would have a lower financial burden passed down to them by the shipping companies as domestic shipping becomes more cost-effective. With a larger supply of freight ships and tankers, shipping costs would drop for everyone. Those in Alaska, Hawaii, and Puerto Rico could save up to fifty percent on goods.

Domestic-build restrictions harm U.S. shipbuilding. They strangle its ability to adapt and modernize. The U.S. International Trade Commission found that foreign shipyards are 40 years ahead of American ones in productivity, construction techniques, tooling, materials, and automation.

Reforming the Jones Act would enable domestic shipyards to update, innovate, and improve the quality of ships they produce for a lower price. As shipyards update, the demand for U.S. shipbuilding services and capacity would increase as economies of scale take effect. U.S. shipyards would gain incentives to lower costs to innovate, grow, and expand.

Reforming the Jones Act would lower costs and increase the number of U.S. Navy and merchant marine ships built per year. It would rejuvenate shipping and increase the U.S. share of the world’s commercial fleet. The U.S. Navy could reach its goal of a fleet of between 398 and 512 manned ships and unmanned vessels, cheaper and faster. Decreasing the costs of ship construction would save taxpayer dollars. The U.S. Navy would be more self-sufficient, opting to buy American-made ships and parts, rather than continuing to buy them from abroad, strengthening our national security. With more competition from foreign shipbuilders, domestic shipyards would construct more ships, requiring more people to build and crew the growing merchant marine fleet. The Navy would have greater sealift capabilities since more Jones Act-compliant ships would be available.

Now, it will be argued in Congress, and maybe even the White House that this modification would put Americans out of work and compromise our national security. That is not true. Fossil fuel companies made similar arguments against the global transition to green energy. As demand for domestic shipping increases so will economies of scale. Upgrading shipyards, improving shipbuilding, manning ships, and buying parts made in the U.S., would create more American jobs than those that could be lost. If the Jones Act had worked, we would not be outsourcing shipbuilding parts, relying on foreign-made ships in our Navy, or retaining a small supply of merchant mariners. The Jones Act has put our national security at risk.

We must revive our maritime industry to demonstrate that we can build ships like any other maritime state. Removing the citizenship and domestic building requirements of the Jones Act will promote American shipbuilding and the growth of the merchant marine. These reforms will improve our national security and economic output. By acting now, the U.S. can ensure that it remains a strong maritime country and will be a leader in global shipping for years to come.