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Jones Act: The Ultimate FAQ Guide

If you have any question about Jones Act, you will find the answer right here.

So, keep reading to learn more.

What Is The Jones Act?

The Jones Act

The Jones Act

 It is an act created by the United States federal government to control and manage maritime commerce.

The Jones act is the one that provides the rules of trade and also determines which vessels can engage in that trade lawfully.

The Jones act requires that American citizens’ shipping between U.S. ports is done on ships constructed, owned, and ran.

What Is The History Of The Jones Act?

The Jones Act was introduced to the Senate by Senator Wesley R Jones from Washington State. On June 4, 1920, it was approved by the House and Senate.

On June 5, 1920, then-president Woodrow Wilson enacted it into law.

Since then, the Jones act has been through many amendments and revisions. The latest revision was in the year 2006, which involved remodifying the United States Code.

Why Was The Jones Act Created?

The main reason for creating the Jones Act was to ensure that the United States maritime industry remains safe, active, and dynamic.

This act came as a reaction to World War 1 where the German navy destroyed the United States fleet.

The Jones Act seeks to provide the U.S. with reliable maritime resources ready for shipping goods between the country’s ports.

Help grow the marine industry and ensure national security in times of war.

The Jones Act is vital in national security and defense and for the continued prosperity of America’s maritime trade.

Why Is The Jones Act Important?

Some of the important benefits of the Jones Act are:

  • The Jones act guarantees American citizens of reliable water transport at all times.
  • Vessels engaging in trade are American-built, owned, and operated; safety standards are assured.
  • The jones act ensures that American mariners remain employed and trained as one of its requirements. These jobs include ship crews, construction and maintenance of vessels, and other management jobs.
  • In times of war and emergencies, the jones act ensures that the U.S. has sufficient merchant mariners and vessels to aid in military operations.
  • The jones act subject’s revenue generated by domestic carriers to taxes while those owned by foreigners are not.

How Does The Jones Act Advance U.S. National Security?

The Jones act plays a critical role in advancing national security, especially in times of war or national emergencies.

It helps ensure that America maintains its political power, economic strength, and national security in the maritime industry.

With the Jones Act in place, America has reliable access to vessels and workforce at any given time.

The Jones Act vessels act as a naval auxiliary in times of war and national emergencies.

The Jones Act restrictions on vessels allowed in U.S. ports further advance National Security as they oversee. Hence they are indeed up to the set American rules and regulations.

What Are The Underlying Goals Of The Jones Act?

The underlying goals of the Jones Act are as follows:

  • Ensure the growth and development of national maritime vessels and support national defense- in times of war or national emergencies.

American ships readily provide the resources and workforce to help military operations.

During World War 1, before the Jones Act was enacted, the U.S. government was struggling with shipbuilding to support the war.

It was one of the underlying issues that brought up the Jones Act to be.

  • Build up the United States maritime trade and set off economic growth. The Jones Act provides about 650,000 Americans with employment and generates approximately $150 billion annually in monetary value.

Which Industries Are Supported By The Jones Act?

The Jones Act supports a variety of industries, for instance:

  • Crude oil and petroleum
  • Iron core, coal limestone
  • Farm and food products
  • Chemical and allied products
  • Steel and other construction materials
  • Shipbuilding industries

How Did The Jones Act Come About?

During a meeting in 1789, Congress’s initial proposition was to encourage American vessels for shipping through discriminatory tariffs and taxes.

However, at that time, U.S. sailors and shipbuilders were among the best in the world regarding cost and quality.

It is argued that the U.S. ships were so competitive that encouraging their use was cost-free.

Congress had to think beyond low cost and think matters national security. In times of war, such vessels would be used as a naval auxiliary.

There had to be laws to ensure their availability in service to the national interest.

By the mid-1800s, the U.S. shipping laws had become even more restrictive. This, in turn, made shipping less competitive and difficult.

The Come About Of The Jones Act 1919

The Come About Of The Jones Act 1919

In 1919, Senator Wesley Jones from Wesley State. The chairman of the Senate Commerce Committee commenced a series of hearings on the United States maritime industry.

In early 1920, a proposal was made to govern domestic water transport eliminating less expensive means of transportation to Alaska.

This proposal and language are what formed the basis of the Jones Act. On June 5, 1920, the proposals were folded into the 1920 Merchant Marine Act as section 27, otherwise known as the Jones Act.

The Jones Act was passed by the Senate and signed into law by the president.

Why Was The Jones Act Created?

The jones act was created mainly to revive the American maritime industry, which had been badly affected by World War 1.

When creating this act, Congress intended to ensure that national defense and security were provided for.

The jones act was to ensure the proper and continued growth of both foreign and domestic maritime commerce.

It was also to ensure that the United States have suitable and sufficient vessels. To serve or offer back up to military operation in times of war or national defense.

Where Does The Jones Act Apply?

The jones act applies to territories like Hawaii, Puerto Rico, Alaska, and all other ports in the U.S. mainland.

The Jones Act, Hawaii

The Jones Act, Hawaii

What Are The Requirements For Vessels Carrying Goods Between U.S. Ports?

The main requirements for vessels shipping goods between U.S. Ports are as follow:

  • Vessels must belong to United States citizens or be controlled by U.S. citizens with 75% ownership.
  • They must have been constructed or assembled on American soil.
  • Vessels should have their registration done in the U.S.
  • At least 75% of the maritime crew should consist of American citizens.
  • They must be US-flagged.

Vessels shipping goods between Us ports are expected to fulfill these requirements before legally participating in the trade or other maritime activities.

The Jones Act excludes territories like Guam and requires that vessels be at least possessed and operated by U.S. citizens. But not necessarily built or rebuilt in the United States.

How Does The Jones Act Restrict Vessels Entering Puerto Rico?

Any vessels can get into Puerto Rico under the Jones Act. However, it requires that shipping between two U.S. ports be done by ships constructed and operated by American citizens.

The jones act further restricts vessels going into Puerto Rico by ensuring shipping from the island to the U.S. mainland.

It is done using expensive and protected ships instead of just regular ones.

Based on data collected by a financial consulting firm John Dunham and Associate.

The difference between the cost of a U.S. vessel and a foreign vessel is 62% and 57%.

According to the report, Puerto Rico’s lost economic value is approximately $1.2 billion.

This makes products shipped from the U.S. mainland expensive and thus raising Puerto Rico’s overall cost of living.

What Is The Jones Act Specifications On Seamen’s Rights?

The Jones Act Specification

The Jones Act Specifications

The jones act indicates that sailors and seamen can make claims and should be paid for damages or injuries obtained at work.

The jones act requires employers to compensate seamen for injuries suffered from the negligence of the ship’s owner. Any other action by the captain or crew members is also considered.

The Jones Act further specifies that any worker who spends less than 30% of their working on a vessel is not considered a seaman.

Therefore, they cannot file a lawsuit for damages.

A person who spends over 30% time serving on a vessel is a seaman and sue their employer for claims.

Suppose a seaman is injured in the line of duty. They have up to three years to file a lawsuit from the time of the injury.

If a seaman does not file the lawsuit within that specified time, the court may dismiss the claims.

Can The Jones Act Be Waived?

The jones act can be waived temporarily if the Secretary of Defense makes a request. If it’s a national security case or if there is a national emergency.

Historically, the Jones Act has been waivered several times in the wake of natural disasters like hurricanes.

The Department of Homeland Security is the body that is in charge of reviewing Jones Act waivers.

In the past, the Jones Act has been waivered in times of natural disasters like hurricanes and other national security instances.

Some instances where the Jones Act have been waivered are:

  • In 2005, Michael Chertoff, the secretary of Homeland Security. Temporarily waived the Jones Act ships transporting natural gas and oil from 1st to September 9 that year. It was in the wake of Hurricane Katrina.
  • In 2012, when Hurricane Sandy hit and gave rise to fuel shortages. A temporary waiver of the Jones Act was issued to help curb these shortages.
  • On 2017 September 8, a temporary Jones Act was issued due to Hurricanes Irma and Harvey. The waiver was to help deal with the effects of these hurricanes.
  • In 2017, President Trump gave a temporary Jones Act waiver to Puerto Rico after Hurricane Maria hit them.

Why Was The Jones Act Waived For Hurricane Harvey And Irma, And Did It Help?

Hurricane Harvey heavily affected the Texas Gulf Coast’s oil supply system. Texas being the main distribution hub for petroleum products in the U.S., Hurricane Harvey led to a fuel supply shortage.

As a result, a temporal waiver was issued by Trump that allowed foreign ships to transport fuel-related products.

The release was to help cover the shortages and gaps that were brought about by the hurricane.

It is reported that approximately eight vessels took advantage of the waiver for both Harvey and Irma hurricanes. It is safe to say that the waiver did provide relief to the damage caused by the hurricanes.

What Are The Two Types Of Jones Act Waiver Requests?

The two types of Jones act waiver requests process are; one for the secretary of defense and the other for non-defense entities.

However, it is essential to note that the Secretary of Homeland security is the final. The maritime officials do not have the authority to issue Jones Act Waivers.

Secretary of Defense – Secretary of defense has been given authority under the constitution to make the Jones Act waivers in national security and protection matters.

Non-defense entities – Department of homeland security must evaluate if the waiver request is in the interest of national defense to go ahead with it.

If there is enough interest in national defense, the secretary of homeland security makes the final decision on the waiver of the Jones Act.

Does The Jones Act Apply To Airlines?

The Jones act may apply to airlines. However, many United States courts have proved it difficult to determine which cases it applies to and which it does not.

The Jones Act Apply To Airlines

The Jones Act Apply To Airlines

What Are The Concerns Of The Jones Act?

There has been criticism about the shipping cost implications brought about by the Jones Act.

However, their labor cost can explain the difference between the U.S. and other foreign shipping costs. Taxation systems are working conditions and other factors.

Generally, American citizens have access to higher working and living conditions.

Companies and workers in the U.S. have to meet set national safety and compensation regulations.

American employees, suppliers, and vendors have to pay American taxes strictly.

These extra costs impact shipping costs put Americans at a disadvantage with their foreign counterparts.

Who does not require to spend all that?

Suppose the Jones Act was recalled, the U.S. would experience a significant loss in maritime jobs.

It would be such a huge blow to the economy as thousands of jobs would be lost.

Shipyards would stop production, making the shipping industry collapse.

The U.S. government has to oversee that the Jones Act fleet is intact. And is not threatened by foreign competition to continue benefitting from the economic benefits it yields.

What Is The Economic Impact Of The Jones Act?

The Jones Act helps boost various sectors of the U.S. economy. It dictates that vessels be built or rebuilt in the U.S. shipyards.

Shipowners need to take their vessels for regular inspection, maintenance, and monitoring.

The Jones act contributes to the American economy beyond ship-related operations. For instance, shipbuilders buy materials for construction from domestic companies, thus impacting the economy positively.

These shipbuilding activities offer employment to Americans who spend their wages, generating more income for the economy.

Other economic cost implications associated with the Jones Act include:

  • Transportation costs for vessels under the Jones Act are double those of ships not subject to the Jones Act.
  • One of the requirements of the Jones Act is an all or higher percentage American crew. It makes costs of operating ships is subject to the Jones act 2.7 times higher.
  • The prices of ships constructed in the United States are two to four times higher than the average vessel built elsewhere.

How Does The Jones Act Influence Higher Shipping Rates?

As a result of the specifications and restrictions of the Jones Act, the U.S. endures overall high shipping costs.

Transport of goods between U.S. ports is off-limits to foreign vessels. Therefore, domestic shippers incur very high shipping rates for the vessels they use.

Demand for shipping services goes down when the shipping rates go up.

This, in turn, causes reduced demand for purchasing vessels by shipping companies and reduced employment opportunities for merchant mariners.

The Jones Act Influence On Higher Shipping Rates

The Jones Act Influence On Higher  Shipping Rates

Who Is Responsible For The Jones Act Enforcement?

It is the responsibility of the Department of Homeland Security and U.S. Customs and Border Protection to oversee the enforcement and implementation of the Jones Act.

These two bodies have the authority to impose penalties and fines on violators of the Jones Act.

The department of Homeland Security is also in charge of issuing waivers for the Jones Act.

If you witness a Jones Act violation, you are encouraged to report it to the following address:

The Jones Act Division of Enforcement

U.S. Customs and Border Protection

Office-(504)670-2074

jonesact@cbp.dhs.gov

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