Steve Forbes’ Jones Act Blunder
Steve Forbes wants Congress to deep-six the Jones Act by sending it down to Davy Jones’ locker or, better yet, slamming it into a Titanic iceberg. The Chairman of Forbes Media wants to throw some 650,000 Americans employed by the U.S. maritime industry – not to mention the millions more employed in supporting activities like shipyard and factory workers, terminal, warehouse and logistics personnel, truckers, and railroad employees – onto the unemployment lines where they will lose not just their jobs but health care benefits, homes, savings and their self-esteem.
Forbes wants to eliminate the 100-year Jones Act and uses a lot of facts in his effort at persuasion in a recent op-ed, “A Law That Deserves to Hit an Iceberg". It’s the latest in a long line of attacks on a law that is the bedrock of the U.S. maritime industry - none of which have succeeded.
And for good reasons: the Jones Act works. It creates jobs. It shields U.S. workers from unfair foreign competition. It provides for a robust and reliable merchant marine and merchant fleet. And it provides a critical line of defense in times of war.
The U.S. has 12,000 navigable miles of inland waterways and 95,000 miles of coastline where Jones Act vessels can transport cargo to every corner of America. Throughout the last year and a half of COVID-19 closures and lockdowns, this industry has persevered, and it continues to deliver the goods.
Forbes says the most pronounced distortions of the Jones Act are in places like Puerto Rico, where petroleum products and other goods delivered on coastwise-qualified vessels can cost significantly more for consumers and businesses. Yet, a report commissioned by the American Maritime Partnership concluded that the cabotage rules of the Jones Act have no impact on retail prices or the cost of living in Puerto Rico. Two-thirds of supplies to Puerto Rico arrive on foreign ships.
“Just in Time” Commerce
The Jones Act is really “just in time” to meet U.S. economic needs during the ongoing pandemic, which has exposed our massive dependence on foreign shipping. Foreign-flag operators transport 97 percent of all U.S. foreign trade. Losing the Jones Act at this place and time would cede our domestic maritime economy to foreign-flag operators, making us more vulnerable during times of crisis.
“Just in time” commerce has failed the global economy, and Americans are feeling the effects now in everything they purchase. Clogged supply chains are happening around the world, not just in Southern California. If anything, we need more Jones Act vessels that we can depend on to deliver the goods.
National Security Concerns
Forbes neglects the importance of the Jones Act in ensuring the nation’s national security in times of war or crisis. U.S.-flagged vessels are essential to transport military equipment and personnel abroad when needed, a job they do so well. Without a suitable blue water fleet, we would be entirely dependent on foreign vessels in times of need.
Forbes should also understand that foreign vessels don’t belong on America's inland waterways. Do we want Russian tugs and barges transporting goods between New Orleans and St. Louis? I don’t think so.
The Jones Act ensures that only coastwise-qualified ships and workboats can transport goods throughout U.S waterways. The 40,000 vessels that comprise the Jones Act fleet do that job superbly well, moving a billion tons of cargo annually – or roughly a quarter of the nation’s freight – along the inland waterways, across the Great Lakes, and over the oceans to Hawaii, Alaska, Puerto Rico and the U.S. territories.
Baby with the Bathwater
In exceptional cases, when Jones Act waivers are needed – as they were during Hurricanes Irma and Maria – they are granted. But this is not the time to throw out a law that has served the country well for 100 years and has the support of almost every segment of American society. Let’s not throw out the baby with the bathwater!
Tony Munoz is the publisher and editor-in-chief of The Maritime Executive Magazine.