The Jones Act is Dead! Long Live the Jones Act

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So our latest dispatches determine with conviction that half of America’s Jones Act cargo fleet is every bit as creaky as you think 40-year-old ships might be.

After all is said and done, it comes down to this:

An assessment of risk by a professional agency shows that 15 of the 34 Jones Act cargo ships are rated “amber” or uncomfortably above the cut-off mark for “green” safe status. (Green is really an average weight of risk for the world fleet of cargo ships.)

And two more of the ships are rated “red” — a risk ranking so serious that the rating agency generally suggests intervention might be considered.

So it is that predicable time when the Cato Institute and other free-market enthusiasts rush in with a coup de grace that kills the Jones Act.

After, all the decades old law has done little to fortify the merchant marine and increase shipbuilding facilities. The number in both areas have plummeted over the years.

The Jones Act reserves coastal trade only to ships built in the US crewed by Americans. The result has not been a fleet assuring military strength but a decrepit bunch of often unsafe rust buckets. Lax inspection has permitted them to keep sailing but many are twice the age when most ships are retired.

And Cato does indeed have some good points. The whole system is just imploding upon itself because there is no real free market competition and innovation. And no incentive to modernize.

But what may be happening here could also mean the reverse.

Stay with us.

The old fleet is now so decrepit that the Coast Guard will near certainly usher the old ships to the scrap yard in the years immediately ahead, all thanks to tougher inspection standards following the loss of the SS El Faro.

When did something like this last occur?

In the domestic tanker trade.

This Jones Act-protected tankers once also comprised a rickety parody of a modern fleet. But disastrous oil spills and stiff liability forced a reckoning — the requirement of double hulls

Faced with a dwindling fleet, the owners and operators had no choice but to rebuild, and though the current fleet isn’t perfect, it is improved.

Cargo ship operators and owners now face a similar challenge — and opportunity. The Coast Guard has slammed the door on rust buckers. That’s one incentive. Higher fuel standards are another.

The military is a third. The Pentagon now must seriously consider major new programs to support a modern merchant marine. Studies show it has lost the cargo ship capacity to wage a “peer” based war with another major power.

True, there is some thought that the “Build America” Jones Act should be scrapped and foreign vessels should be bought. But that approach would forfeit maintaining any sort of ship building skills and infrastructure in the country.

Moreover, buying foreign flag ships and then laying them up until war time, does little to make a Ready Reserve truly ready. Building new merchant ships that can serve in regular commercial service and in military service too when needed is a far more optimal solution. The ships are ready. As are the men and women who serve as crew and officers.

That for sure is not free enterprise. But military institutions generally aren’t. The merchant marine is a hybrid, of course, but of enough military strategic importance that the Jones Act should perhaps be given one more last trip before the scrap yard.

So there is this chance. Perhaps the last chance. But it’s a chance that American shipbuilders, owners and operators and military sealift should take — to see if for the first time the Jones Act can actually work.

News Items and Summaries:

Congrats Fred Calicchio!
Dom’s brother keeps the faith.

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Project Lighthouse: New Study of US Jones Act Ships Finds Some with “High-Risk Probability for Severe Accidents and Casualties” that “Require Immediate Action to Control the Potential Hazard…”

Four Years After the Loss of the SS El Faro, the Coast Guard has Forced a Reckoning Over America’s Rust Bucket Merchant Marine and Sent Shivers Through the Military “Unready Reserve”

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MT6Y7F Capt. Jason Neubauer, center, the Coast Guard Marine Board of Investigation chairman, questions a witness Monday, Feb. 13, 2017, during week two of the final S.S. El Faro MBI hearing in Jacksonville, Florida. Neubauer, along with other members of the panel, queried various witnesses during the hearing sessions to obtain information crucial to their investigation into the S.S. El Faro sinking in October 2015. U.S. Coast Guard photo by Petty Officer 2nd Class Anthony L. Soto

The Conception Chief Coast Guard Officer Has a Reputation for Being Courteous to All — and Investigating Everything

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So Long to an Unsung Heroine of the Marine Electric

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