Monday, April 2, 2012

Worthwhile US Security or Inflated Freight Costs? - You Decide

Is Jones Outdated Protectionism or Essential Defence Mechanism?
Shipping News Feature

US – The growing wave of objections to the Jones Act which we mentioned in our article last month has brought a retort from the Navy League of the United States, unsurprising in its defence of the protection of native vessels and crews. Both the Act and the League are around a century old and are designed solely to ensure employment for American staff on US registered freight and other vessels trading between home ports.

The League’s attitude is that the Jones Act is essential to U.S. economic, homeland and national security which critics say is outdated and outmoded and that economic interests are actively damaged by the legislation which has led to lack of competition, is protectionist and has tripled costs for freight carried on feeder vessels and the like. By contrast the League says:

“Shipbuilding, ship repair and ship modernization create well-paying jobs for thousands of workers and, when added to the equipment and material supply companies, add a large number of jobs to the U.S. work force.

“The Jones Act and Passenger Vessel Act, which are important to economic and national security because they protect critical national infrastructure and provide added sealift capacity through the VISA, an expanded pool of trained and experienced mariners to crew U.S. government-owned sealift assets and help sustain the U.S. shipbuilding and repair industrial base that is vital to the U.S. Navy and Coast Guard.”

The Navy League’s Annual Maritime Policy Statement is produced by the Navy League Maritime Policy and Resolutions Committee and approved by its board of directors and is entitled ‘ Maritime Primacy and Economic Prosperity’ and can be read in full HERE.

The League says its first priority is to defend democracy whilst its critics say the Act achieves precisely the opposite effect through restrictive practices and uses the defence and patriotism arguments to protect the vested interests which lie behind both the League and its biggest supporter, the American Maritime Partnership.

The policy statement says the Jones Act is critical to the long-term sustainability of the U.S. fleet, noting that without commercial capability, the U.S. government would be required to provide significantly more funds to build a replacement fleet and infrastructure while losing the pool of highly qualified Mariners needed to sail these vessels. James Henry, President of the Transportation Institute and Chairman of the Board of Directors of the American Maritime Partnership commented:

“We are pleased that the Navy League supports the Jones Act and understands the essential role the law plays in creating jobs and protecting our homeland. The Jones Act makes America more secure economically and militarily by maintaining a skilled merchant marine that supports our military while providing nearly 500,000 American jobs.”

A study by PricewaterhouseCoopers commissioned for the Transportation Institute says the restrictions of the Jones Act sustains nearly 500,000 jobs, $29 billion in labour compensation, and more than $100 billion in annual economic output whilst those who pay the inflated bills for the privilege say this is nothing more than a tax on free enterprise and an outdated legislation which costs billions in extra charges for consumers.

Photo: Senator Wesley Livsey Jones of Washington father of the 1920 Merchant Marine Act.