Understanding the Jones Act

The Jones Act (Section 27 of the Merchant Marine Act of 1920) is a cornerstone of U.S. maritime law that requires goods transported between U.S. ports to move on ships that are U.S.-built, U.S.-owned, U.S.-flagged, and crewed predominantly by U.S. citizens. Enacted after World War I to rebuild the domestic merchant fleet and protect national security, the law remains influential — and controversial — in domestic trade, energy logistics, and the economies of non-continental U.S. jurisdictions.

Key takeaways
* The Jones Act requires U.S.-built, owned, flagged, and crewed vessels for cargo moved between U.S. ports.
* It was designed to support the U.S. maritime industry, national defense, and maritime jobs.
* Critics say it raises shipping costs — especially for Hawaii, Alaska, and Puerto Rico — while supporters cite jobs, industrial capacity, and security benefits.
* Waivers can be issued in emergencies or for defense needs; final authority rests with the Secretary of Homeland Security.
* Passenger transport is affected by a related law (the Passenger Vessel Services Act), which restricts foreign-flagged vessels from carrying passengers directly between U.S. ports.

History and purpose
* Enacted in 1920 as part of post‑World War I efforts to restore and maintain a U.S. merchant marine.
* Aimed to ensure a viable domestic shipping industry for commercial and national‑defense needs, sustain shipbuilding capacity, and preserve maritime jobs.

Core requirements
A vessel transporting cargo between two U.S. ports must:
* Be built in the United States.
* Be U.S.-owned (generally more than 75% U.S. ownership).
* Be U.S.-flagged and documented.
* Carry a crew with a U.S. citizen majority.

Waivers and exceptions
* Temporary waivers can be granted in emergencies (for example, natural disasters) to allow foreign-flagged ships to provide urgent supplies.
* The Secretary of Homeland Security has final authority to approve waivers. The Secretary of Defense can request waivers in the interest of national defense.
* In 2020, Congress limited the federal government’s authority to issue long-term waivers except when needed to address an immediate adverse effect on military operations; other waivers are reviewed case-by-case.

Economic impact and controversies
Cost impacts
* The Act is widely viewed as protectionist and typically raises domestic shipping costs. Remote U.S. jurisdictions that depend on maritime imports — notably Puerto Rico, Hawaii, and Alaska — are most affected.
* Studies and reports have estimated significant cost differentials between U.S.-flagged and foreign-flagged carriers (varying by cargo type). One 2019 analysis placed additional annual costs to Puerto Rico in the range of about $1.2 billion (roughly $374 per resident) and reported carrier cost differentials from roughly 29% to as high as 89% depending on cargo.

High-profile examples
* Emergency waiver: After Hurricane Fiona in 2022, the U.S. government issued a waiver to allow a non‑U.S. flagged ship to transport fuel to Puerto Rico amid a critical shortage.
* Energy and trade: The 2022 U.S. ban on Russian oil highlighted logistical constraints for distant states such as Hawaii, where reliance on foreign tankers or non‑U.S. shipping arrangements can be limited by cabotage rules.

Arguments for and against
Supporters argue:
* The Jones Act sustains domestic shipbuilding and ship-repair capacity, which is important for national defense.
* It preserves maritime jobs and supports port-related industries.
* Maintaining a U.S. merchant fleet provides strategic sealift capability in crises.

Critics argue:
* It increases costs for consumers and businesses, particularly in island and remote states and territories.
* It limits competition, leading to higher freight rates and potential inefficiencies.
* Economic burdens fall disproportionately on territories like Puerto Rico.

Passenger vessels
* Passenger transport between U.S. ports is governed by the Passenger Vessel Services Act of 1886, which similarly restricts foreign-flagged vessels from carrying passengers directly between U.S. ports. This affects cruise itineraries and requires foreign-flagged cruise ships to include a foreign port stop on domestic-roundtrip routes.

Conclusion
The Jones Act remains a contested element of U.S. maritime and economic policy. It continues to serve strategic goals by supporting domestic maritime capacity and jobs, but also imposes measurable costs on shipping and trade within the United States — costs that are most acute for non‑continental states and territories. Policymakers weigh these tradeoffs when considering waivers, reforms, or preservation of the law.