NCPA - National Center for Policy Analysis

Shipping Law Is Costing Americans Money

December 8, 2014

A largely unknown law from 1920 is raising prices for American consumers across the country. The Jones Act requires all shipping vessels transporting goods domestically to be built in the United States and owned by Americans, and the vast majority of the crew (75 percent) must also be American citizens. According to the Heritage Foundation, the law is costing the U.S. economy money:

  • It costs four times as much to purchase an American-made shipping tanker than to purchase a foreign tanker.
  • The American economy loses $200 million annually because foreign ships are banned from transporting cargo between American ports.
  • It costs twice as much for a Jones Act ship to transport a 20-foot container of goods from the East Coast to Puerto Rico than it would to transport those same goods on a foreign ship to the Dominican Republic.

Moreover, the Jones Act is raising energy prices for U.S. consumers: gasoline costs up to 15 cents per gallon more than it would absent the Jones Act. In fact, foreign ships can transport oil for one-third the cost of a Jones Act ship. The Heritage Foundation notes that Hawaiians pay exceptionally high energy costs (almost twice the amount paid by the state with the second-highest energy prices), partly due to the Jones Act. Because the island gets 75 percent of its energy from petroleum, it has to use expensive Jones Act ships to get its oil.

Source: "The Jones Act's Costly Impact," Heritage Foundation, December 4, 2014. 


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