The Jones Act

When we think of ocean freight shipping, we often picture an ocean container transported between two international locations. However, especially in the US, ocean freight shipping is also used for domestic-to-domestic shipments within US ports.

The Jones Act has been the main law that regulates domestic port-to-port shipments within the US. Also known with the Marine Merchant Act, it has profound impact on shipping, and all US shippers should be well aware of that. Basically, the Jones Act mandates that domestic port-to-port cargo can only be transported on vessels that are made in the United States. That includes everything from manufacturing, ownership and operation of the vessel. The law even dictates about the crewmembers being mostly US citizens. And the Jones Act essentially bans many foreign vessels from partaking in domestic port-to-port ocean freight trade in the US. Because of the trade within the US ports, it is the US Coast Guard that monitors and acts as the police for this type of trade.

The container shipping industry, including many freight forwarders, constantly reflect on the impact of the Jones Act – both the pros and the cons. The positive impact from the Jones Act is the US jobs created as a result. In addition, the Jones Act helps improves national security. The negative impact is the rising cost of fuel. Many opponents of the Jones Act suggest that the law is responsible for higher gasoline prices. They suggest that if the Jones Act was repealed, then we might see lower gasoline rates.