The Jones Act restricts competition and insulates shipping companies and unions from the need to innovate and lower costs. Is now the time to repeal the Act?
Officially known as the Merchant Marine Act of 1920, the Jones Act requires that all goods and people moving by water from one American port to another travel on American-built, American-owned, American-manned ships. The act’s original proponents argued that it was essential to national security, since it helped preserve a maritime fleet that could support the country’s armed forces and supply the nation during wars. Over time, American shipping interests and powerful maritime unions also became fierce defenders of the act, believing that it protected American jobs. Their defense has largely succeeded. Only in emergencies like Hurricanes Katrina and Sandy does the federal government occasionally suspend the Jones Act to get goods flowing more quickly and cheaply. Those brief pauses reveal how much better the market would work without the act.