The Jones Act, officially known as the Merchant Marine Act of 1920, is a century-old piece of legislation that continues to shape the US maritime industry to this day. Since its signing, the law has significantly influenced the American maritime industry, affecting the cost of goods and even disaster relief efforts. As a part of the maritime industry’s support system, Armoda works with vessels affected by this law. In this article, we will cover the Jones Act, its history, and how it impacts today's US maritime industry.

History of the Merchant Marine Act of 1920, aka The Jones Act

The main objective of the Jones Act was to revitalize the US shipping industry. After World War I, the industry faced several challenges, like replacing ships that had been lost in the war effort, a transitioning economy going from wartime to peace, and competition from foreign shipping companies. Pre-war trade routes were disrupted, and the demand for shipbuilding plummeted from wartime highs to minimal levels.

Even then, the shipping industry was vital to the US economy and national defense. For this reason, lawmakers decided to foster and protect the industry. Revitalization of the industry was crucial to maintaining sovereignty over trade routes, ensuring defense capabilities, and supporting the economy. The Jones Act was created to ensure that the US had a robust and competitive merchant marine capable of supporting these efforts. 

The Merchant Marine Act (Jones Act) was introduced by US Senator Wesley Jones and signed into law by President Woodrow Wilson on June 5, 1920. Its purpose and goals were clearly stated in section 861, titled 'Purpose and Policy of the United States':

“It is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency, ultimately to be owned and operated privately by citizens of the United States; and it is declared to be the policy of the United States to do whatever may be necessary to develop and encourage the maintenance of such a merchant marine, and, insofar as may not be inconsistent with the express provisions of this act, the Secretary of Transportation shall, in the disposition of vessels and shipping property as hereinafter provided, in the making of rules and regulations, and in the administration of the shipping laws keep always in view this purpose and object as the primary end to be attained.”

The act stipulated the formation of a US Merchant Marine to carry all domestic maritime trade to achieve these goals. This part of the act established that any cargo traveling between two US ports is required to sail on American-owned and American-built ships, with a crew made up of mostly US citizens. The act was designed to protect the US shipping industry and allow it to grow following the war without interference from foreign companies.

To help further this goal, the act established the United States Maritime Commission in 1936. The commission would work to ensure the expansion and maintenance of the United States' foreign and coastwise trade and determine the requirements of vessels to provide adequate, regular, and permanent service. They would also oversee the sale and charter of vessels to US citizens to encourage the growth and maintenance of a US merchant marine for national defense and commerce growth.

The commission was abolished in 1950, and its mandates were divided between the US Federal Maritime Commission, the US Maritime Administration, and the US Merchant Marine Academy.

The Jones Act Today

In recent years, the Jones Act has come under scrutiny, with groups and organizations arguing for its removal. The arguments against the act focus on the economic impact the restrictions have on the US shipping industry.

Arguments Against The Jones Act

Detractors of the Jones Act today center their criticism around its economic impact and restrictions on shipping. It is argued that the Jones Act mandates significantly increase the cost of shipping, which is passed on to consumers. They point out that US-built ships are more than four times as expensive as foreign-built ships and more expensive to operate. They specifically call out the lack of Jones Act-compliant LNG tankers currently in operation, which raises national security risks. Additionally, by excluding foreign shippers from waterborne commerce between US ports, domestic shippers can charge higher rates, impacting consumers and the cost of living, particularly in places in the non-contiguous US, like Hawaii and Puerto Rico.

These points suggest that the Jones Act may have unintended negative consequences on the US economy and its ability to respond to national security needs. However, it's important to consider the arguments in favor of the Jones Act to understand the full scope of the debate today.

Arguments In Favor of The Jones Act

Proponents of the Jones Act today point out that the act provides stability to the US maritime industry, supporting approximately 650,000 American jobs and generating $150 billion in economic benefits annually. They believe that the act is crucial for maintaining the US shipbuilding industry and maritime workforce, arguing that if the act were removed, the number of US shipbuilders and maritime workforce would dramatically decline. They also believe that the act provides protection from foreign influence over the control of the flow of materials and goods within the US.

These arguments suggest that the Jones Act significantly safeguards national interests, economic stability, and job security.

The Future of the Merchant Marine Act

The debate over the Jones Act is far from over. As the US maritime industry keeps evolving, discussions about the Act’s relevance and impact are likely to persist. Some policymakers advocate for reforms to address economic and security concerns, suggesting modifications rather than a full repeal. For instance, proposals to allow limited foreign competition or to modernize the fleet with government support aim to balance the need for a robust maritime industry with economic efficiency. The future of the Jones Act will depend on finding a balance between protecting national interests and fostering a competitive, efficient maritime industry. As discussions continue, stakeholders from all sides will need to engage in a thoughtful debate to shape policies that best serve the nation’s needs.

Despite the ongoing debate, the Jones Act remains a crucial piece of legislation that shapes the US maritime industry. To learn more about maritime and shipping industry policies, check out our article on how portable accommodation modules get certified.