For many Americans, the experience of driving on a coastal highway like Interstate 5 in California can be a nightmare of dodging massive trucks hauling cargo between US cities. In Europe, not so much.
That’s because for decades, European nations have turned to the sea rather than the road to transport goods across the continent. In fact, over 40% of Europe’s domestic freight is shipped along so-called motorways of the sea. In the US, a measly 2% of domestic freight distributed among the lower forty-eight states travels by water, even though half the population lives near the coast.
One big reason why is an obscure law, enacted right after World War 1, called the Jones Act, which preserves a monopoly for US-built, owned and operated ships to transport goods between US ports. The monopoly was designed to support the American merchant marine. It was thought that allowing foreign vessels to move goods between US ports would hurt American shipbuilding and lead to a decline in ship ownership, putting the country at risk during wartime. It was also designed to ensure that the US had ample ships to conduct international trade.
The problem is the legal maneuvering didn’t much protect the US shipbuilding industry. The costs are so prohibitively high, the US builds very few ships, having long ago ceded the industry to Korea, China and Japan. In 2011, there were just five public shipyards in the US and 20 private ones. According to a recent study, there are some 171 privately-owned US flagged ships today. Just 93 of them are Jones Act-eligible.
But the Jones Act has had an impact, just not the one that was intended, for it made shipping between US ports extremely expensive. So expensive, in fact, that some Hawaiian ranchers still fly cows to the mainland rather than having them loaded and shipped on boats. Those high costs not only make the goods Americans buy more expensive, they’ve pushed ever more freight on to trucks, significantly increasing highways congestion, intensifying air pollution and further degrading the country’s infrastructure.
According to a report from Tufts University, the Jones Act restrictions significantly increase the cost of stuff Americans buy, from Florida oranges, to coal from West Virginia and grain for livestock in California. Largely because of the Jones Act, getting oil from Texas to Boston costs three times as much as getting it from Europe. The U.S. International Trade Commission estimated that repeal or amendment of the Jones Act could save the US between $5 and $15 billion.
“The Jones Act remains a fundamental roadblock to large scale coastal shipping between US ports,” said Rockford Weitz, Director of the Fletcher Maritime Studies Program and co-author of the Tufts’ study.
According to Weitz, there are significant lost opportunities to building coastal shipping routes in the US that would relieve the roads of thousands of trucks. Trucks account for just 10% of vehicle miles traveled on US highways, but they cause over 75% of the total maintenance costs, according to the Federal Highway Administration.
For the residents of Hawaii, Alaska and Puerto Rico, all of which depend heavily on shipping, the Jones Act has been particularly burdensome. Puerto Rico recently declared bankruptcy and the Jones Act has played a role in the island’s inability to meet its debt obligations. In Hawaii, a gallon of milk can cost $8 or more, more than three times what it generally costs on the mainland.
There have been several efforts over the years to repeal or amend the Jones Act, mostly to no avail. One fierce critic of the act is Arizona Sen. John McCain, who has called it “an antiquated law that has for too long hindered free trade, made US industry less competitive and raised prices for American consumers.”
Proponents of the Jones Act, including the American Maritime Partnership, a coalition of interests who benefit from the law, say that it preserves jobs and protects national security. The group, which includes various maritime unions like the International Longshore and Warehouse Union, has proven a formidable force in preventing changes to the Jones Act.
“The shipyards of America provide an element of our defense industrial base that we would be a much weaker nation without,” said Tom Allegretti, chairman of the American Maritime Partnership.
Opponents of the act, like Sen. McCain, suggest that the group is merely being protectionist. “The power of this maritime lobby is as powerful as anybody or any organization I have run up against in my political career,” said Sen. McCain after his 2014 effort to repeal the act was voted down.
But let’s get back to traffic. American commuters spend an extra 6.9 billion hours and purchase an extra 3.1 billion gallons of fuel every year because of traffic congestion. Along the country’s coastal highways like the I-95, I-5, and I-10, the average commuter spends more than 50 hours a year in traffic.
Meanwhile, the country’s current infrastructure can barely handle the traffic (both freight and passenger) plying the roads. Roads and bridges groan and crumble beneath the ever-growing burden put on them to haul goods and people up and down the coastal highways. The American Society of Civil Engineers 2017 Report Card said that the nation’s infrastructure, consisting of its roads, dams, airports and water and electrical systems, needs $4.6 trillion of investment to bring it up to twenty-first century standards. They gave the current state of the country’s infrastructure a D+.
According to the Tufts study, many of the coastal routes hit hardest by traffic congestion could be circumvented by ships. Shipping is vastly more efficient, safer and less polluting than transport by trucks. According to Weitz, a total repeal of the Jones Act is unnecessary, and, given the power of the various supporters of the act, not politically viable currently. But a single amendment allowing American companies to purchase ships abroad could have a significant impact. There are no similar restrictions on any other form of transportation. Trucks and planes that carry cargo are regularly purchased from other countries.
Moving trucks on to the ocean is not a panacea that will solve all of the US’s traffic woes, says Weitz. But the extent to which it can get a significant portion of them off the coastal highway routes, he says, could make a big difference.