The Merchant Marine Act of 1920, commonly known as the Jones Act, is the fundamental law of the U.S. maritime industry. On the 97th anniversary of the enactment of the Jones Act, here are five things you should know about this key piece of legislation.
(1) The Jones Act is a cabotage law.
Cabotage is the trade between two ports within the same country. The Jones Act applies certain restrictions to vessels that can participate in cabotage, or coastwise trade. The principles of the Jones Act date back to the early formation of the United States, with the Tariff Act of 1789, which required all coastwise trade to be conducted on American vessels.
(2) To be a Jones Act vessel, there are specific requirements.
To qualify to participate in the Jones Act trade, a vessel must be built in the United States, flagged (or registered in the United States), be owned by a company with 75% U.S. ownership, and crewed by 75% American sailors. These requirements under the Jones Act create a stable investment climate for the maritime industry. The intent of the Jones Act was to create a reliable domestic shipping industry to support commerce, serve as a military auxiliary during times of war or national emergency, and support the shipbuilding industry.
(3) The Jones Act is a creator of American jobs.
The Jones Act supports 478,440 American jobs1. These jobs range from the captains on the ships, to the longshoremen at the ports, as well as the truck drivers who deliver the goods to the stores and individuals who use them. This number includes 82,040 jobs in the shipbuilding industry that are directly supported by the construction of Jones Act ships.
(4) The Jones Act is an economic driver.
The Jones Act produces $100 billion in economic output for the U.S. annually. American jobs in the U.S. maritime industry are routinely high paying; maritime academies consistently have the highest return on investment and highest earning graduates with an average yearly salary of $80,000 per year.
(5) Jones Act ships serve in times of national and international need.
American ships and American mariners have a strong and lengthy history of serving the U.S. and the world during times of need. In the immediate aftermath of 9/11, American vessels in the vicinity of Manhattan participated in the largest boatlift in history, transporting half a million people off the island in only 9 hours. During Operation Enduring Freedom/Iraqi Freedom, a Jones Act vessel operated by Tote served on charter to the Military Sealift Command from 2000-2003, conducting 25 trips to the Gulf to assist with the transport of supplies for rebuilding in Iraq and the return of war materials to the United States. After the Haiti earthquake, Crowley ships served in the earthquake relief and assured cargo delivery to the collapsed ports.
The Jones Act is a significant contributor to the national economy, homeland security, and national security. Because of these reasons, it has strong bipartisan support at all levels of government. To learn more about the Jones Act, visit: https://transportationinstitute.org/jones-act/
1These data are from a PwC study, Contributions of the Jones Act Shipping Industry to the US Economy in 2011, commissioned by Transportation Institute in 2014.