See
The Jones Act Strikes Again by Daniel R. Pearson of Cato. Excerpts:
"People who have heard of the Jones Act (Merchant Marine Act of 1920)
generally are aware that its stated purpose is to maintain a strong U.S.
merchant marine industry. Drafters of the legislation hoped that the
merchant fleet would remain healthy and robust if all shipments from one
U.S. port to another were required to be carried on U.S.-built and
U.S.-flagged vessels. Unfortunately, things haven’t worked out very
well.
The protectionism of the Jones Act has given the United States the
type of merchant marine that would be expected from a sector that has
been cut off from market forces for close to a century. Instead of
being a global powerhouse, the U.S. merchant fleet has become a minor
player. In 1955 the 1,072 ships in the fleet accounted for 25 percent
of global tonnage. Today the 191 vessels account for 2 percent of the
world total. Those vessels primarily carry cargoes from one U.S. port
to another, along with government-generated exports, such as military
equipment and food aid.
Not surprisingly, shipping goods on a U.S.-flagged vessel is a high-cost
proposition, which explains why the U.S. fleet simply can’t compete in
normal global commerce. A 2011 study by the U.S. Maritime
Administration (Marad) showed that the average daily operating costs for
American vessels were roughly three times higher than comparable
vessels registered in other countries."
"Several years ago a group of North Carolina livestock producers took
steps to deal with the challenge of procuring a steady supply of
competitively priced feedstuffs. They banded together to build a
facility for unloading cargoes of grains or soybean meal from
ocean-going vessels at the port of Wilmington. Wilmington Bulk LLC
provides a cost-effective entry point for water-borne cargoes, which
helps to assure abundant feed supplies for North Carolina farmers.
Instead of being limited to sourcing grains and soybean meal in the
Southeast or Midwest of the United States, those products now can be
procured from anywhere in the world.
But why not simply ship corn from the Midwest to Wilmington by
water? Waterborne transport of bulk commodities generally is less
expensive than moving them via rail or truck. The United States already
has a highly sophisticated system for transporting agricultural
commodities from the Midwest to the Gulf of Mexico that uses the
Mississippi River and its tributaries. This country long has been the
world’s largest exporter of grains and soybeans. The majority of those
exports move down the river system before being loaded onto ocean
vessels near New Orleans. Why not just contract with an ocean-going
dry-bulk vessel to make the relatively short trip (approx. 1600 miles)
from Louisiana to North Carolina instead of the much longer trip
(approx. 4500 miles) from the port of Santos in Brazil?
Yes, the Jones Act makes the perfectly rational plan of moving
Midwestern grain by water to North Carolina economically infeasible.
Recall that there are only three dry-bulk vessels in the U.S.-flag
fleet, and that the daily cost of chartering those vessels would be
roughly three times higher than international rates."
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