Advocates For Consumer Rights

THE JONES ACT

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What is “The Jones Act” and why should you care?

A unique non-partisan collaboration joins Hawai`i, Alaska, Guam and Puerto Rico to seek a “slim exemption” from the Jones Act. Read the history of the Jones Act, AKA “The Merchant Marine Act of 1920” HERE

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OUR CO-FOUNDER RALPH NADER has been encouraging politically active citizens throughout America, regardless of political persuasion, to identify issues we can all agree on and collaborate to create positive change for the better. To do otherwise would only contribute to the ongoing counter-productive political lethargy we now find in many state and county governments and in Congress.

Reforming the once-obscure and extremely-complex Jones Act aka “the Merchant Marine Act of 1920” is one of those issues all should agree on once informed, certainly in Hawai`i where we import 90% of our food and virtually everything else.

ATTENTION ENVIRONMENTALISTS: You have to wonder why the many rough estimates on the additional cost of all goods shipped by ocean into Hawai`i and the other noncontiguous states because of the Jones Act run from 2% – 20%. Why the great disparity? Because we just don’t have credible published research. The one single research piece in the Hawai`i State Legislative Reference Bureau is dated “1996”! The Economic Research Foundation (UHERO) at the University of Hawai`i has nothing. Why is this so?

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THE REASON anyone concerned with climate change and air quality should be encouraging an open debate leading to a better understanding of The Jones Act lies in the fact that any ship, tugboat or barge carrying cargo between U.S. ports must be American-built; the so-called “Jones Act fleet.” So what?

The cost of acquiring newer fuel efficient U.S. built vessels is five times that of Japanese, Chinese or Korean shipyards. Read the background research HERE. Suffice to say, the U.S. is saddled with an aging commercial merchant fleet with many old, inefficient diesel engines routinely billowing forth a veritable witches brew of toxic emissions as they traverse the vast network that comprises America’s waterways.

Inland_navigation_systemThis includes not only our U.S. territorial ocean waters, but also America’s many navigable rivers, lakes and canals — 25,000 miles of commercial inland waterways — mostly in the Eastern half of the country. More HERE.

According to Wikipedia, “The International Maritime Organization (IMO) estimates that Carbon dioxide emissions from shipping were equal to 3.3% of the global human-made emissions in 2007 and expects them to rise by as much as 72 percent by 2020 if no action is taken.”

“Of total global air emissions, shipping accounts for 18 to 30 percent of the nitrogen oxide and 9 percent of the sulphur oxides.” There are approximately “100,000 transport ships at sea, of which about 6,000 are large container ships” — which some say emit a disproportionately large amount of these toxic emissions.

WHY ARE WE BEING DENIED THE DEBATE?

Can we not at least do the needed research that would tell us exactly how much money this 1920 law adds to the cost of a roll of toilet paper, diapers, food, construction materials and all the rest of Hawaii’s imported goods? 

We find it disheartening that Hawaii’s U.S. Representatives Tulsi Gabbard & Mark Takai and Senator Mazi Hirono immediately dismissed Senator John McCain’s recently proposed Jones Act amendment out-of-hand. On January 16th, Senator Hirono made a floor speech opposing the amendment and on January 20, Reps. Gabbard & Takai signed this letter opposing it. They all seemingly refuse to even take a casual look at any proposal that would alter the Jones Act.

While Hawai’s Senior Senator Brian Schatz adamantly supported the Jones Act during his 2015 reelection campaign, he has remained uncharacteristically silent on the McCain amendment. There is much speculation as to why.

Which leads us to wonder why this predisposed opposition? Simply put, like everything else political in nature, “campaign contributions” and “vested interests” such as Matson and Crowley Maritime. A local and national public debate on The Jones Act is long-past due and seemingly, a debate that the public will have to demand. At the moment, it’s being stifled by the special interests and their minions.

People must form their own conclusions about such complicated issues and we are working here to provide enough information about The Jones Act to aid the average consumer in this seemingly daunting process. Ultimately, change will come only after enough of America’s voting consumers band together to force action. Otherwise, the status quo will remain just that.

Senator McCain is saying the Jones Act in its present form is costing Hawaii Consumers over 20% more for anything shipped in by ocean freight; everything from steel and oil to toilet paper, diapers, cereal and rice. If not true, at the very least, Hawaii’s Congressional team should be working to disprove McCain’s statements. To do nothing more than regurgitate the status quo mantra against investigating even minor Jones Act reforms — as are being put forth by local and national reformers is disingenuous at best.

Find posted HERE, the through analysis of Senator McCain’s proposed amendment from Hawai`i based Michael N. “Mike” Hansen, President of the Hawaii Shippers’ Council (HSC). The HSA is “a business league organization (IRS 501-c-6) incorporated in 1997 to represent cargo interests known as ‘shippers’ who tender goods for shipment with the ocean carriers operating in the Hawaii trade.”

RELATED MEDIA STORIES

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Jun 13, 2014
The Hawaii Shippers’ Council president is making progress
in his quest for a Jones Act exemption
By Mark Coleman

Michael Hansen isn’t asking for much.

After all, as president of the Hawaii Shippers’ Council, it’s not like he’s seeking repeal of the entire federal Jones Act, also known as the Merchant Marine Act of 1920. He just wants a slim exemption from the federal maritime provision — specifically from Section 27 of the Act, which regulates “transportation of merchandise between points in United States in other than domestic built or rebuilt and documented vessels.” Read the complete story HERE.

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Aug 23, 2014
Candidates open to federal shipping changes
Aiona would seek an exemption to the Jones Act; 
Hannemann would host talks on the issue
By Derrick DePledge

Former Lt. Gov. James “Duke” Aiona said Friday that he is open to a Hawaii exemption to the Jones Act, the federal maritime law that protects the domestic shipping industry from foreign competition, hoping that the change will help lower the state’s high cost of living. The Republican candidate for governor said he would work with Alaska, Guam and Puerto Rico to urge Congress to grant states and territories exemptions to the federal law, specifically the provision that requires ships that move goods between United States ports be American made.  Read more HERE.

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March 14, 2014
Hawaii, Alaska, territories team up on Jones Act
By CATHY BUSSEWITZ
Associated Press

HONOLULU — Lawmakers from Hawaii, Alaska, Puerto Rico and Guam are teaming up to pressure the U.S. government for relief from a maritime law passed in the 1920s.  The Jones Act was designed to protect the domestic shipping industry. It states that only ships made in the U.S. and flying the country’s flags can deliver goods between U.S. ports.  That means that a cargo ship filled with goods from China can only make one stop in the U.S. at a time. It can’t stop in Hawaii to exchange goods before heading to Los Angeles.  More HERE.

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May 21, 2013
Should Hawaii Be Exempted From The Jones Act? Lawsuit Says Yes
By SHERLEY WETHERHOLD

Lawyer and former U.S. Senate candidate John Carroll thinks he knows what’s behind Hawaii’s social and economic ills, and he’s going to keep suing the federal government until he gets rid of it. Carroll, a five-term legislator, four-term representative, Big Island rancher and attorney has sued the United States of America for the second time in hopes of exempting Hawaii from the Merchant Marine Act of 1920. Better known as the Jones Act, the statute requires all ships traveling between U.S. states to be manned, built, owned, and flagged by Americans. Critics say the regulations inflate the cost of shipping, which makes everything from eggs to electricity more expensive.  More HERE

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Feb 08, 2013
Matson’s profit soared in fourth quarter
Higher container volume in Guam contributed to $15.6 million in earnings for the shipping company
By Andrew Gomes

Matson Inc. lifted its profit in the fourth quarter to cap a strong year of earnings driven largely by higher shipping rates in China and a windfall of extra shipping volume in Guam. The Honolulu-based ocean cargo transportation firm reported Thursday that its fourth-quarter profit surged to $15.6 million from $1.6 million in the same period a year earlier. Profit for all of last year was $45.9 million, up from $34.2 million in 2011.  More HERE.

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JANUARY 7, 2013
Jones Act Reform Movement Picks Up Steam
By CIVIL BEAT STAFF

Lloyd’s List, a leading publication that covers the maritime industry, is calling for the U.S. to suspend controversial Jones Act rules for Hawaii, Alaska and Puerto Rico. The Jones Act requires that vessels that move commercial cargo between U.S. ports be U.S. built, owned, flagged and crewed. Critics say this cuts down on competition and therefore leads to higher costs for consumers. The U.S. Government Accountability Office is scheduled to release a report in February that looks at the cost of the Jones Act has had on Puerto Rico. In an editorial, Lloyd’s calls on Congress to give a waiver to the U.S. territory as well as Hawaii and Alaska if the report finds any detrimental impacts.

“Many critics of the Jones Act, including Lloyd’s List, hope that the GAO will provide evidence that can be used to persuade Congress to scuttle the U.S.-built requirement of the Jones Act as it applies to Puerto Rico — and further to Hawaii and Alaska — under a so-called sunset waiver. …
“Any action that weakens the protectionism of the Jones Act will ultimately be to the long-term benefit of U.S. shipping — no matter what the medium-term gain to individual U.S. companies and yards.”

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January 1, 2013
EDITORIAL
How the Jones Act Blocks Natural Disaster Relief

To get gasoline flowing in the New York area after Hurricane Sandy, President Barack Obama temporarily suspended the Jones Act, a statutory relic of the post-World War I era that bars foreign ships from carrying freight between U.S. ports. Within days of the president’s action, gasoline prices declined and filling-station lines, which had required police patrols to keep the peace, soon disappeared. That raises a question: Should the Jones Act still be on the books?  More HERE.

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March 19, 2012
The Jones Act is a Critical Energy Issue
by Michael Hansen

Failure of the Obama Administration to approve construction of the Keystone XL Pipeline is not the only transportation bottleneck negatively affecting domestic U.S. energy production, supplies and pricing. Another critical impediment to energy transportation is the Jones Act.

A provocative article appeared on March 7th in the U.S. News and World Report blaming the Jones Act for causing East Coast refineries to close. Gregg Laskoski, a petroleum analyst for GasBuddy.com, wrote, “The Jones Act is what prevents the U.S. energy industry from shipping Canadian crude from Texas up to the Northeast where it is badly needed.”  Laskoski explained East Coast refineries are closing because they are importing foreign crude oil based upon higher Brent pricing that costs $20 more per barrel than West Texas Intermediate (WTI). More HERE.

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June 27, 2010
Time to Ship out?
Congressman Djou revs up the debate on a Jones Act waiver for Hawaii
By Lee Catterall

The BP oil disaster in the Gulf Coast is spilling over, politically, to Hawaii, with rhetoric raising the profile of the Jones Act, the maritime commerce law that requires all shipping of goods between U.S. ports to be transported via U.S.-flagged ships, crewed by Americans.

Hawaii’s freshman Congressman Charles Djou and other Republican colleagues are inserting the 1920 law into the public conversation over the spill cleanup—even though it is being misconstrued.  More HERE.

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WashingtonPost

June 25, 2010

EDITORIALS
The Jones Act ship law has outlived its usefulness

THE JONES ACT is a vestige of the post-World War I years, when the vulnerability of U.S. shipping to German U-boats was still fresh in the public’s mind. To maintain a “dependable” merchant fleet for the next “national emergency,” Congress restricted coastal shipping between U.S. ports to U.S.-built vessels owned by U.S. citizens; related laws require U.S. crews. The Jones Act may or may not have achieved its original purpose, but shipping businesses and labor unions love the way it shields them from foreign competition.  More HERE.

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