Tuesday, September 23, 2014

The Jones Act Is Irrelevant to Merchant Marine Shipbuilding

A picture is worth a thousand words and in this case even more.

So much is being discussed about the value of the protection that the Jones Act offers to U.S. shipbuilding.  What shipbuilding?  U.S. shipbuilding is less than 1% of the world share!

This is clearly illustrated in the picture above from an article in The Economist. The graph clearly shows that after 1985, the U.S. shipyard merchant marine building supply is practically zero. Japan, South Korea and China provide almost the entire ship building supply.

U.S. shipyards are kept busy with U.S. Navy work and the occasional small order by a U.S. shipper.  Like the recent one by Matson Navigation who in order to comply with the U.S. built requirement of the Jones Act agreed to pay $418 million for two modest container ships that would have cost less than half this amount if they were built in S. Korea. As a direct result of the Jones Act, the people of Hawaii received a direct punishment in the order of $200 million on this transaction alone.

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