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Colin Grabow

@cpgrabow

17 Dec

@JoshuaSteinman

Per @JoshuaSteinman's suggestion, here's a 🧵 about the Jones Act. The term "Jones Act" typically refers to Section 27 of the 1920 Merchant Marine Act, which restricts domestic waterborne transport of goods to vessels that are US-flagged, built, & at least 75% US-owned & crewed.

Background: US maritime protectionism didn't begin in 1920. When Congress passed the 1789 Tariff Act among its provisions were discriminatory duties on shipping. Foreign ships could transport goods between US ports but were subject to much heavier duties than US vessels.

In 1817 An Act Concerning the Navigation of the United States was passed restricting domestic waterborne transport to US-flagged ships. And to be US-flagged, ships had to be US-built (as well as crewed and owned, I believe). The JA is a direct descendent of this law.

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Colin Grabow

@cpgrabow

23 Nov 20

https://twitter.com/USGAO/status/1329818060425981954

"shipments of U.S. crude oil by Jones Act tankers and barges from the Gulf Coast to the East Coast fell by 57% in 2016, according to EIA data. At the same time, imports of foreign crude oil to the East Coast rose by 35%"

#EndTheJonesAct

https://twitter.com/USGAO/status/1329818060425981954

This can't be explained without the Jones Act. When faced with expensive domestic shipping, it makes more sense for East Coast refiners to buy foreign than domestic.

More on that here: ft.com/content/b1ea86…

Also note: "approximately 80% of the Jones Act fleet was built between 2007 and 2016, and since such vessels have a lifespan of approximately 30 years, it is unlikely that there will be a need to build new tankers in this decade given the decrease in demand."

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Colin Grabow

@cpgrabow

10 Jun 20

To the extent the Jones Act provides a national security benefit, it's the mariners from the 98 ship fleet that could be used to crew sealift ships in time of war.

Barring WWIII, the ships (77 of which are "militarily useful") themselves would mostly remain in domestic trade.

So how many mariners are we talking? 3,380 per this recent report: csbaonline.org/uploads/docume…

If the Jones Act imposes a billion dollars in costs annually, that's ~$295,000 per mariner. $5 billion in costs annually means nearly $1.5 million per mariner.

@JosephEStiglitz

On a related note, recall that @JosephEStiglitz says a White House analysis placed the cost per job for the Jones Act at around $250,000: npr.org/transcripts/55…

Read 8 tweets

Colin Grabow

@cpgrabow

11 Oct 19

@CRS4Congress

Earlier this year @CRS4Congress released a report about the Jones Act (everycrsreport.com/files/20190517…) that amounted to a searing indictment of the law. Now the Jones Act lobby is using their Hill attack dogs to have it removed from circulation: maritime-executive.com/editorials/op-…

@CRS4Congress

@CRS4Congress It's pretty easy to understand why. If I were part of the JA lobby I wouldn't want people to know about the high cost of U.S. commercial shipbuilding either (note the extensive footnoting):

#EndTheJonesAct

@CRS4Congress

@CRS4Congress I wouldn't want people to know that U.S. shipyards themselves have argued that the high cost of shipbuilding is detrimental to the U.S. fleet, one of the things the Jones Act is supposed to promote:

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