Following World War I, the Merchant Marine Act attempted to regulate cabotage—the transport of products between ports within a nation’s domestic boundaries—by foreign transport operators. Today, more than 45 nations restrict cabotage to protect their national security, support their ship manufacturers, and maintain employment in these industries. The three main elements of the Merchant Marine Act—better known as the Jones Act—address these concerns by requiring: at least 75 percent U.S. vessel ownership; at least 75 percent of the crew to be U.S. citizens or permanent residents; and the vessels to have been built or rebuilt in the United States. Only qualified ships are permitted to transport cargo between U.S. ports, including those in Hawaii, Alaska, Guam, and Puerto Rico.
National Security and Unintended Outcomes
The Jones Act recognizes the vital necessity for a robust reserve fleet to be at the disposal of the U.S. Navy. The American Maritime Partnership defends the act, reporting the size of the fleet at around 40,000 American-built vessels, Jones Act–related job income at $41 billion, and a roughly $154 billion contribution to gross domestic product. In 2019, a PriceWaterhouseCoopers study found the act helps maintain about 650,000 jobs. It is not surprising, then, that the greatest support for the act is found within the industry’s unionized workers and shipbuilders who have been insulated from foreign competition.
However, despite a goal of securing the reserve fleet, over time the Jones Act has had the unintended consequences of reducing the size of the militarily useful U.S.-flagged fleet and the number of U.S.-based shipbuilding businesses. Most of the Jones Act–compliant vessels are barges and tugs vital for inland trade; the act’s limitations are evident in the mere 92 eligible ships displacing more than 1,000 tons, highlighting a shortfall in large support vessels deemed militarily useful.
Criticism of the Jones Act is not restricted to its protectionism. It imposes limitations that, in times of a federally declared emergency, can make crises worse. For example, when Hurricane Maria struck Puerto Rico in 2017, relief was delayed so long that the U.S. Department of Homeland Security was forced to waive the qualified transport requirement and allow a nearby Russian-flagged tanker to supply the island with vital energy resources. Critics also assert that the act leads to higher shipping costs, especially for residents of states and territories outside the continental United States that rely heavily on intercoastal maritime transport.
For good or ill, the Merchant Marine Act of 1920 remains pivotal in the discussion of U.S. maritime policy and naval strategy. By enforcing strict regulations on vessel ownership, crew nationality, and shipbuilding, it preserves the integrity and security of the nation’s shipping industry. And, the American Maritime Partnership argues, the Jones Act protects against China’s ambition to dominate U.S. trade and shipbuilding.
