Howard's Business Report: Jones Act - Hawaii News Now - KGMB and KHNL

Howard's Business Report: Jones Act

(HawaiiNewsNow) - Some of the candidates for Neil Abercrombie's House seat are making an issue of the Jones Act, and from what I've read they're getting some facts wrong. So here's a Jones Act refresher course.

One of the few trade protectionist federal laws we still have, the Jones Act aims to make sure there is at least some vestigial U.S.-flagged maritime shipping, so in war time there are ships the military can count on.

The law basically says only a U.S.-flagged vessel can sail between two U.S. ports.

So a foreign carrier like Maersk can't haul goods here from Oakland or Long Beach.

One candidate says this creates a monopoly. Another says a free market would be better.

First, it's not a monopoly. Three rivals shippers haul freight here by sea using Matson, Horizon Lines and Pasha. The first two have containerships and haul vehicles. Pasha hauls vehicles only.

Would it be better if foreign lines could compete with these lines? Some of the time. Other times it would be worse. Basically you would have foreign lines stepping in when market conditions suited them and abandoning us when it didn't.

Shipping costs are the least of most shippers' worries. Frankly, it would be easier to get supermarkets to buy only local produce.

 

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