Jones Act Explained: Why the U.S. Has Temporarily Suspended Its Century-Old Shipping Law?

Recently, the federal government has decided to suspend the 1920 Jones Act. This law prohibits any international shipment to American ports unless that ship is American-owned, built and crewed. 

Supporters of the act state that it protects American jobs, while opponents say it drives up the cost of goods due to the lack of competition in the shipping industry. 

The suspension also raises concerns about whether there should be more flexibility in applying this law during national emergencies or if there should be cooperative reform with these laws.

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What Is the Jones Act?

The Jones Act requires goods moved between two U.S. ports to be shipped on an American-built, owned, and manned vessel. 

This law was designed to grow the U.S. shipping industry as well as establish a sufficient labor workforce needed for the U.S. Government to protect against potential threats to national interests and guarantee the efficiency of the economy.

Why Was the Law Suspended?

The temporary suspension was put in place to ensure there are enough supplies available for immediate delivery. 

Restrictions placed on the use of vessels to distribute goods would restrict the number of available ships during emergency situations such as hurricanes or low/empty fuel that cause delays in transporting critical supplies for consumers.

By temporarily waiving the Jones Act, the U.S. government has enabled ships of a foreign flag to distribute products from one domestic port to another. 

This increases the total number of available vessels and allows companies to meet their delivery obligations much faster, especially during times when there are significant interruptions to infrastructure or demand is higher than usual.

What Happens Next?

While the average timeframe for the suspension is generally short-term and specific to the situations that created the temporary suspension, it can create a cycle whereby the waivers allow for repeated use and, therefore, increased momentum towards other changes to the Jones Act or its repeal.

As the U.S. starts to respond to new aspects of global trading and the changing face of supply chains around the world, the future of the Jones Act is unclear. 

It is an issue that balances competing interests between the global marketplace and our domestic priorities of supporting American jobs and maintaining an economy.