Jaenichen: The Jones Act Moves Industry and America’s Economic Prosperity

U.S. Maritime Administrator Paul “Chip” Jaenichen speaks at Tradewinds’ Jones Act Shipping Forum held October 8th in New York City. Photo (c) Dept. of Transportation

By Paul “Chip” Jaenichen, U.S. Maritime Administrator

Our very first Congress singled out the domestic U.S. Merchant Marine as essential to our economy and national defense. That is why, from the beginnings of this nation, they took steps to secure the U.S. Merchant Marine fleet from foreign flag competition in coastwise domestic maritime trade.

Senator Wesley L. Jones sponsored the Merchant Marine Act of 1920 – better known now as the Jones Act. For 94 years, that law has remained the cornerstone of U.S. maritime policy, a policy that was the center of discussion at yesterday’s 2nd Annual Tradewinds Jones Act Forum.

There, I joined maritime industry experts and stakeholders in recognizing that, while some sectors of America’s economy have seen operations and jobs shift to countries abroad, this hasn’t been the case for our maritime industry.

Instead, the Jones Act, which requires that any cargoes being shipped by water between U.S. ports be transported on a vessel owned by a U.S. company, crewed by U.S. mariners, and manufactured in a U.S. shipyard. That U.S. shipbuilding requirement has stimulated investment in the privately-owned U.S. companies that run shipyards and operate the vessels that employ the best-trained crews and merchant mariners in the world. So much so, employment opportunities for mariners to crew our U.S.-flagged fleet on are vast.

For example, supply boats, tankers and tank barges are in high demand to move shale oil – a new, abundant cargo source – between American coastwise ports. As a result, U.S. shipyards are experiencing the greatest volume of shipbuilding activity in more than three decades. Today, there are over 30 large, self-propelled, ocean-going Jones Act eligible tankers, articulated tug-barge units and container ships either under construction or on order at U.S. shipyards.

The demand for Jones Act vessels is supporting 117 shipyards actively building ships as well as 200 shipyards currently engaged in vessel maintenance and repair. Additionally, our domestic shipbuilding industry continues to modernize and maintain Federal vessels for the Navy, Coast Guard, and National Oceanographic and Atmospheric Administration. In total, all of this activity combined contributes more than $36 billion to our national economy.

That’s why this Administration has invested more than $150 million to increase the competitiveness and efficiency of U.S. shipyards through MARAD’s Small Shipyard Grant program. We know that increased production at our shipyards means good, middle-class jobs for Americans who not only build, but also operate these vessels.

The United States became a maritime power even before we became a nation, and for over 230 years, marine transportation has remained a top priority for the United States. For this reason, this Administration remains committed to the Jones Act, as all administrations have since it was passed.

This article originally appeared on the U.S. Department of Transportation’s Fastlane blog.

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