The military strategy of the United States relies on the use of U.S.-flagged ships and crews and the availability of a shipyard industrial base to support national defense needs, according to a recent study on the Jones Act by the Government Accountability Office. Most importantly, a strong and vibrant maritime industry helps ensure the United States maintains its expertise in shipbuilding and waterborne transportation.
The domestic American maritime industry strengthens U.S. national security at zero cost to the federal government. The domestic maritime fleet provides capacity and manpower that the armed forces can draw upon to support U.S. military operations. American ships, crews to man them, ship construction and repair yards, intermodal equipment, terminals, cargo tracking systems, and other infrastructure are available to the U.S. military at a moment’s notice in times of war, national emergency, or even in peacetime.
How does America’s domestic maritime industry contribute to the nation’s overall economy (jobs, etc.)?
The Jones Act fleet and domestic maritime industry supports nearly 650,000 American jobs, which pump more than $150 billion into the nation’s economy annually. Five indirect jobs are created for every one direct maritime job, which results in more than $41 billion in labor compensation.
The nation’s domestic shipbuilders are a key part of America’s maritime industry, and delivered more than 1,200 vessels in 2012, which represented more than $20 billion in domestic investments. In 2013, U.S. shipyards entered into contracts for hundreds of new vessels, including the construction of state of the art oil tankers and first in the world LNG powered containerships. U.S. shipyards are also leading the way in innovation with the construction of offshore oil and gas support and dynamic positioning vessels.
The 40,000 vessels operating in the domestic trades moves 1 billion tons of cargo every year, which plays an important role in relieving congestion on the nation’s crowded roads and railways.
How does the Jones Act and its fleet of American-owned, American-built, and American-crewed vessels boost America’s homeland security?
The Jones Act ensures that the vessels navigating our coastal and inland waterways abide by U.S. laws and operate under the oversight of the U.S. government. A recent report by the Lexington Institute noted that without the Jones Act, DHS would be confronted by the difficult and very costly task of monitoring, regulating, and overseeing all foreign-controlled, foreign-crewed vessels in internal U.S. waters.
There is no evidence that shows the Jones Act contributes to the higher cost of goods. The cost of goods is affected by a host of supply and demand factors, and as GAO has acknowledged, the impact of Jones Act shipping costs on the costs of consumer goods “is difficult, if not impossible, to determine with precision.” Foreign vessels operating in domestic commerce would likely be required to comply with a host of U.S. laws – taxation, immigration, labor, etc. – the same laws that apply to any business operating in the U.S.
America’s maritime industry is investing billions of dollars to help the country prosper from the new energy economy, creating thousands of jobs for Americans and bolstering national security. New U.S.-flag vessels will soon join other infrastructure currently being built and upgraded, including pipelines, terminals, rail cars, and refineries. These new vessels will provide millions of barrels in new transportation capacity when our nation needs it the most. And the industry will continue to respond aggressively to increased transportation demand as a result of the shale oil boom, just like other major industries.
Currently, America’s domestic maritime industry moves tens of million of barrels of crude oil and petroleum products throughout the United States, according to the U.S. Energy Information Administration. That number is only expected to grow because transporting cargo on our nation’s waterways is one of the most cost-effective and efficient ways to move crude oil and petroleum products.
Without American maritime, the U.S. would be completely dependent on foreign owned and flagged vessels for the transport of all waterborne commerce in and around the country. A strong and vibrant maritime industry helps ensure the United States maintains its expertise in shipbuilding and waterborne transportation. A cautionary lesson surrounds Great Britain, which has seen its maritime industry outsourced and the global influence of its naval forces drastically reduced.