Century-old Jones Act faces fresh criticism over US shipbuilding decline

A century-old US shipping law is once again at the centre of debate, with the New York Post arguing that the Jones Act has failed to strengthen America's commercial shipbuilding industry and is instead driving up costs, weakening domestic maritime capacity and creating national security risks.

In a recent opinion piece, the newspaper contends that the law, officially known as the Merchant Marine Act of 1920, has produced outcomes opposite to those originally intended. The legislation requires that cargo transported between US ports be carried on vessels that are built, owned, crewed and flagged in the United States, with the goal of supporting the country's merchant marine and shipbuilding sectors.

However, the high cost of constructing ships in the United States has made domestic maritime transport significantly more expensive than alternatives such as imports or overland freight. As a result, demand for US-built cargo ships has declined while shipbuilding costs have continued to rise.

The newspaper notes that the US commercial fleet operating under the Jones Act has shrunk to just 92 vessels, while domestic shipbuilding has dwindled to only a handful of cargo ships produced annually. By comparison, the New York Post says China now builds more than 4,000 vessels each year.

The opinion piece argues that these trends have contributed to the closure or decline of American shipyards and created shortages of qualified mariners. It also claims the United States, despite accounting for roughly one-quarter of global economic output, now produces less than 1% of the world's commercial ships.

The New York Post further argues that the legislation has increased transportation costs for consumers, particularly in non-contiguous US regions such as Puerto Rico, Hawaii and Alaska, which rely heavily on maritime freight.

One example cited by the newspaper is the market for liquefied natural gas (LNG). It argues that the shortage of Jones Act-compliant LNG tankers has made it cheaper for New England to import LNG from overseas than transport domestically produced gas by sea—an outcome the publication describes as contrary to the law's protectionist objectives.

Beyond its economic impact, the New York Post also questions whether the Jones Act has fulfilled its national security purpose. The newspaper argues that the decline of the US commercial fleet has limited the country's maritime transport capacity, noting that the US military has at times relied on chartered foreign vessels to move troops, equipment and supplies during overseas operations.

The publication warns that such dependence could become more problematic during a prolonged conflict in which access to allied commercial shipping might be disrupted.

To support its argument, the New York Post cites Jennifer Chen of Balsa Research, who says domestic shipbuilding has declined steadily throughout the century since the Jones Act was enacted. According to the newspaper, this long-term trend suggests the legislation has not succeeded in preserving a competitive American shipbuilding industry.

By Sabina Mammadli