U.S. domestic maritime carriers must continually remind Congress of the ongoing benefits of the Jones Act protections for the business, Matson Navigation President
Matthew Cox told a business audience in Southern California.
Cox said the Jones Act trade produces billions of dollars a year in taxes and creates jobs for more than 500,000 Americans, but the regulatory protection faces ongoing challenges from critics that would undo the law.
The Jones Act reserves the domestic ocean trade for U.S.-owned companies that operate America-flagged vessels built in U.S. shipyards and staffed by American merchant mariners. The act covers the domestic offshore lanes such as Hawaii and Alaska as well as the coastal trade and inland waterways.
Critics argue the decades-old law results in higher freight rates in domestic maritime transport because it keeps out lower-cost foreign-flag operators.
The most recent challenge came last year when some members of Congress and others said wrongly that the Jones Act provisions interfered with clean-up after the oil spill in the Gulf of Mexico. Cox told the Propeller Club of Los Angeles-Long Beach Wednesday critics maintained this stance even though Coast Guard Adm. Thad Allen repeatedly stated the Jones Act in no way impeded clean-up efforts.
Many Jones Act supporters were among the members of Congress who lost their seats in the 2010 mid-term elections. The domestic maritime industry responded with an educational program that details its contributions to the national economy.
Cox said the team has gone “legislator to legislator” with the message that the domestic industry has a fleet of 40,000 vessels and barges, supports 500,000 jobs, has an annual economic impact of $100 billion, pays $11 billion in taxes and provides $29 billion a year in wages and other compensation.
Jones Act carriers also specialize in serving unique economies such as the islands of Hawaii and Guam. For example, Matson recently transported an entire circus, including elephants and giraffes, to Hawaii, Cox noted.
Cox said Matson anticipates five to 10 years of growth in the Guam trade as the U.S. transfers some 8,000 servicemen and their families to Guam as part of an agreement between the U.S. and Japan to close the base in Okinawa.