Merchant Marine Act of 1920

Merchant Marine Act of 1920

Other short titles	Jones Act
Long title	An act to provide for the promotion and maintenance of the American merchant marine, to repeal certain emergency legislation, and provide for the disposition, regulation, and use of property acquired thereunder, and for other purposes.
Enacted by	the 66th United States Congress
Effective	June 5, 1920
Citations
Public law	66-261
Codification
Acts repealed	Emergency Shipping Act, 1917; Rate Emergency Act, 1918; Shipping Act, 1916, § 5, 7, 8;
Legislative history
Signed into law by President Woodrow Wilson on {{{signeddate}}}

The Merchant Marine Act of 1920 (P.L. 66-261), also known as the Jones Act, is a United States federal statute that provides for the promotion and maintenance of the American merchant marine.^[1] Among other purposes, the law regulates maritime commerce in U.S. waters and between U.S. ports. Section 27 of the Jones Act deals with cabotage and requires that all goods transported by water between U.S. ports be carried on U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents.^[2] The act was introduced by Senator Wesley Jones.

Laws similar to the Jones Act date to the early days of the nation. In the First Congress, on September 1, 1789, Congress enacted Chapter XI, “An Act for Registering and Clearing Vessels, Regulating the Coasting Trade, and for other purposes”, which limited domestic trades to American ships meeting certain requirements.^[3]

The Merchant Marine Act of 1920 has been revised a number of times; the most recent revision in 2006 included recodification in the U.S. Code.^[2] In early 2015 Senator John McCain filed for an amendment that would essentially annul the Act.^[4]

The Jones Act is not to be confused with the Death on the High Seas Act, another United States maritime law that does not apply to coastal and in-land navigable waters.

Objectives and purpose

The intention of Congress to ensure a vibrant United States maritime industry is stated in the preamble to the Merchant Marine Act of 1920.^[5]

Cabotage

Cabotage is the transport of goods or passengers between two points in the same country, alongside coastal waters, by a vessel or an aircraft registered in another country. Originally a shipping term, cabotage now also covers aviation, railways, and road transport. Cabotage is "trade or navigation in coastal waters, or the exclusive right of a country to operate the air traffic within its territory".^[6] In the context of "cabotage rights", cabotage refers to the right of a company from one country to trade in another country. In aviation terms, for example, it is the right to operate within the domestic borders of another country. Most countries enact cabotage laws for reasons of economic protectionism or national security.

The cabotage provisions relating to the Jones Act restrict the carriage of goods or passengers between United States ports to U.S.-built and flagged vessels. It has been codified as portions of 46 U.S.C. ^[7] Generally, the Jones Act prohibits any foreign-built, foreign-owned or foreign-flagged vessel from engaging in coastwise trade within the United States. A number of other statutes affect coastwise trade and should be consulted along with the Jones Act. These include the Passenger Vessel Services Act, 46 USC section 289 which restricts coastwise transportation of passengers and 46 USC section 12108 restricts the use of foreign vessel to commercially catch or transport fish in U.S. waters.^[8] These provisions also require at least three-fourths of the crewmembers to be U.S. citizens. Moreover, the steel of foreign repair work on the hull and superstructure of a U.S.-flagged vessel is limited to ten percent by weight.

Seamen's rights

The U.S. Congress adopted the Merchant Marine Act in early June 1920, formerly 46 U.S.C. § 688 and codified on October 6, 2006 as 46 U.S.C. § 30104. The act formalized the rights of seamen.

It allows injured sailors to make claims and collect from their employers for the negligence of the ship owner, the captain, or fellow members of the crew.^[9] It operates simply by extending similar legislation already in place that allowed for recoveries by railroad workers and providing that this legislation also applies to sailors. Its operative provision is found at 46 U.S.C. § 30104), which provides:

"Any sailor who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law, with the right to trial by jury, and in such action all statutes of the United States modifying or extending the common-law right or remedy in cases of personal injury to railway employees shall apply..."

This allows seamen to bring actions against ship owners based on claims of unseaworthiness or negligence. These are rights not afforded by common international maritime law.

The United States Supreme Court, in the case of Chandris, Inc., v. Latsis, 515 U.S. 347, 115 S.Ct. 2172 (1995), has set a benchmark for determining the status of any employee as a "Jones Act" seaman. Any worker who spends less than 30 percent of his time in the service of a vessel on navigable waters is presumed not to be a seaman under the Jones Act.

An action under the Jones Act may be brought either in a U.S. federal court or in a state court. The right to bring an action in state court is preserved by the "savings to suitors" clause, 28 U.S.C. § 1333.^[10] The seaman-plaintiff is entitled to a jury trial, a right which is not afforded in maritime law absent a statute authorizing it.

Effects

The Jones Act prevents foreign-flagged ships from carrying cargo between the US mainland and noncontiguous parts of the US, such as Puerto Rico, Hawaii, Alaska, and Guam.^[11] Foreign ships inbound with goods cannot stop any of these four locations, offload goods, load mainland-bound goods, and continue to US mainland ports. Instead, they must proceed directly to US mainland ports, where distributors break bulk and then send goods to US places off the mainland by US-flagged ships.^[11] Jones Act restrictions can be circumvented by making a stop in a foreign country between two US ports, e.g., Anchorage–Vancouver–Seattle.

Puerto Rico

Studies by the World Economic Forum and Federal Reserve Bank of New York have concluded that the Jones Act hinders economic development in Puerto Rico.^[12]

In March 2013, the Government Accountability Office (GAO) released a study of the effect of the Jones Act on Puerto Rico that noted "[f]reight rates are set based on a host of supply and demand factors in the market, some of which are affected directly or indirectly by Jones Act requirements." The report further concludes, however, that "because so many other factors besides the Jones Act affect rates, it is difficult to isolate the exact extent to which freight rates between the United States and Puerto Rico are affected by the Jones Act." The report also addresses what would happen "under a full exemption from the Act, the rules and requirements that would apply to all carriers would need to be determined." The report continues that "[w]hile proponents of this change expect increased competition and greater availability of vessels to suit shippers' needs, it is also possible that the reliability and other beneficial aspects of the current service could be affected." The report concludes that "GAO's report confirmed that previous estimates of the so-called 'cost' of the Jones Act are not verifiable and cannot be proven."^[13]

In the Washington Times, Rep. Duncan Hunter spoke to the need for the Jones Act and why it is not to blame for the island's debt crisis. "With or without such an effort, it's imperative not to conflate the unrelated issues of Puerto Rico's debt and the Jones Act, and to fully grasp the importance of ensuring the safe transport of goods between American ports. There must also be acknowledgment of the dire consequences of exposing ports and waterways to foreign seafarers."^[14]

US shipbuilding

Because the Jones Act requires all transport between US ports be carried on US-built ships, the Jones Act supports the domestic US shipbuilding industry.^[15][16] Critics of the act describe it as protectionist, harming the overall economy for the sake of benefiting narrow interests.^[17][18] With protectionism as its competitive advantage, the need for innovation and cost efficiency is greatly reduced. They also argue that even if the ultimate goal is to support the US shipbuilding industry, the Jones Act is an ineffective way to achieve this goal, as it drives up shipping costs, increases energy costs, stifles competition, and hampers innovation in the U.S. shipping industry.^[19] As a result, U.S.-built and flagged vessels lose part of their competitiveness in international markets. Ships built to satisfy the Jones Act have been found to cost three times as much as those built in foreign shipyards,^[20] and the most expensive Jones Act ship is the tanker Liberty Bay.^[21]

National security^[22]

According to shipbuilder-funded lobby groups, the Jones Act is vital to national security and plays a vital role in safeguarding America's borders.^[23][24] The Lexington Institute stated in its June 2016 study that the Jones Act plays a significant role in strengthening U.S. border security and helping to prevent international terrorism.^[25] Rep. Duncan Hunter (R-CA), who has been lauded by the U.S. shipbuilding industry for his consistent support of their economic interests,^[26] has written that the Jones Act is important to protect America's national security.^[27]

A 2011 study by the Government Accountability Office (GAO) found there are approximately 5 million maritime crew entries into the United States each year, and “the overwhelming majority of seafarers entering U.S. ports are aliens.”^[28] The GAO said that while there are no known examples of foreign seafarer involvement in terrorist attacks and no definitive evidence of extremists infiltrating the United States on seafarer visas, “the Department of Homeland Security (DHS) considers the illegal entry of an alien through a U.S. seaport by exploitation of maritime industry practices to be a key concern.”^[28]

Waivers

Requests for waivers of the Act and its provisions are reviewed by the Department of Homeland Security on a case-by-case basis, and can only be granted based on interest of national defense. Historically, waivers have only been granted in cases of national emergencies or upon the request of the Secretary of Defense.

In the wake of Hurricane Katrina, Homeland Security Secretary Michael Chertoff temporarily waived the coastwise laws for foreign vessels carrying oil and natural gas from September 1 to 19, 2005.^[29][30]

In order to conduct an emergency shipment of gasoline from Dutch Harbor, Alaska, to Nome in January 2012, Secretary of Homeland Security Janet Napolitano granted a waiver to the Russian ice class marine tanker Renda. ^[31]

The Secretary of Homeland Security issued a temporary conditional waiver of the Jones Act for the shipment of petroleum products, blending stocks and additives from Gulf Coast Petroleum Administration for Defense District (PADD 3) to the New England and Central Atlantic Petroleum Administration for Defense Districts (PADDs 1 a and 1 b, respectively) for 12 days from November 2 to 13, 2012, following widespread fuel shortages caused by Hurricane Sandy.^[32]

See also

• Flag of convenience
• Passenger Vessel Services Act of 1886 similar law concerning passenger transportation between US ports.
• Seaman status in United States admiralty law

References

Further reading

• Sethi, Arjun, The Merchant Marine Act of 1920: The Impact on American Labor (2005).
• Congressional Research Service Report RS21566 The Jones Act: An Overview.

External links

• Text of the Merchant Marine Act of 1920 (Jones Act)
• University of Virginia Law Library, The Shipping Act and Merchant Marine Act 1920

Laws relating to the United States Merchant Marine
1870s	Shipping Commissioners Act of 1872
1880s	Dingley Act
1890s	Maguire Act of 1895 White Act of 1898
1910s	Seamen's Act
1920s	Jones Act Death on the High Seas Act of 1920
1930s	Merchant Marine Act of 1936
Current	Title 33 CFR Title 46 CFR