What Is the Jones Act?
The “Jones Act” commonly refers to Section 27 of the Merchant Marine Act of 1920. It requires that merchandise transported by water between U.S. ports (domestic “cabotage” movements) be carried on vessels that are U.S.-built, U.S.-owned, U.S.-flagged, and crewed and operated by U.S. citizens or permanent residents. The law is a protectionist maritime statute intended to preserve an American merchant fleet and related maritime capability (Investopedia; Congressional Research Service).
Key Takeaways
– The Jones Act (Section 27, Merchant Marine Act of 1920) regulates domestic waterborne commerce: only U.S.-built/owned/operated ships may move cargo between U.S. ports. (Investopedia)
– It was enacted to strengthen U.S. shipping capacity after World War I and to support national security and maritime jobs. (CRS)
– The Act raises shipping costs to non-continental U.S. areas (Hawaii, Alaska, Puerto Rico), where additional freight price differences vs. foreign-flagged carriers have been estimated at tens of percent. (Investopedia; John Dunham & Associates)
– Waivers are possible in limited circumstances (e.g., emergency fuel deliveries to Puerto Rico after Hurricane Fiona), but long-term waivers are tightly constrained since 2020. (DHS; CRS)
The History and Impact of the Jones Act
– Background: Sponsored by Sen. Wesley Jones and enacted in 1920, the law was part of broader post‑World War I efforts to maintain a U.S. merchant marine and shipbuilding base. It addresses cabotage—domestic shipping rights. (Investopedia; CRS)
– Economic impact: Supporters say it sustains U.S. shipbuilding, maritime jobs, and surge sealift capability useful for defense. Critics say it raises freight costs, increases consumer prices in island and distant states/territories, and constrains shipping options. Several government and private studies document higher freight rates for Puerto Rico and other island markets relative to foreign-flagged competitors. (CRS; John Dunham & Associates; Investopedia)
Important (policy/legal contours)
– Scope: The Jones Act applies to cargo movements between U.S. ports. It does not apply to foreign‑to‑U.S. imports/exports that originate or terminate abroad. (Investopedia; CRS)
– Passenger travel: The Jones Act’s cargo rules do not apply to passengers, but the Passenger Vessel Services Act (PVSA, 1886) imposes a related restriction on passenger-only transport between U.S. ports by foreign-flagged vessels; foreign-flag cruise ships must include a foreign port on itineraries between two U.S. ports. (U.S. Customs & Border Protection; Investopedia)
Objectives Behind the Jones Act
– National security: Maintain an indigenous merchant marine, shipbuilding capacity, and trained mariner pool to support military sealift and national defense in war or crisis. (CRS)
– Economic/developmental: Protect U.S. maritime jobs, shipyard employment, and related industrial base.
– Regulatory control: Ensure U.S. jurisdiction and compliance with U.S. safety, labor, and security standards on domestic voyages.
Key Requirements of the Jones Act
– Vessel construction: Vessel must be built in the United States.
– Ownership: Vessel must be U.S.-owned (subject to specific ownership and documentation requirements under U.S. maritime law).
– Crewing and operation: Vessel must be crewed and operated by U.S. citizens or lawful permanent residents.
– Route: The rule applies to goods transported between U.S. ports (including territories and possessions). (Investopedia; CRS)
Conditions for Jones Act Waivers
– Emergency waivers: The government can temporarily waive Jones Act requirements in certain emergency or hardship situations—e.g., to allow non-U.S.-flagged vessels to move critical fuel or relief cargo to a U.S. territory after a natural disaster. (DHS statement; Investopedia)
– Legislative tightening: In 2020 Congress limited authority to grant long-term waivers; long-term waivers generally are not authorized except in narrow situations (for example, if required to “address an immediate adverse effect on military operations”). Other waivers are reviewed case-by-case. (CRS)
– Common trigger factors: acute supply-chain disruption, disaster-related fuel/food shortages, or other urgent public‑health and safety needs have been used as bases for temporary waivers. (DHS; Investopedia)
Controversies and Criticisms Surrounding the Jones Act
– Cost burdens: Studies and market comparisons have shown sizable shipping-cost differentials between U.S.-flagged and foreign-flagged carriers—estimates vary by cargo and route but can be large enough to materially increase prices for consumers and businesses in remote U.S. markets. A 2019 analysis cited differentials of about 41%–62% for bulk cargo and 29%–89% for containerized freight to Puerto Rico; one estimate put annual extra costs to Puerto Rico near $1.2 billion (~$374 per resident). (John Dunham & Associates; Investopedia)
– Economic development: Critics argue the Act raises the cost of living and doing business in territories and imposes fiscal stress; proponents counter that repeal would damage U.S. shipbuilding, national security, and maritime employment. (Investopedia; CRS)
– Emergency politics: Waiver decisions can become politically charged during disaster response (e.g., waivers after hurricanes). (DHS; Investopedia)
– Energy/security tradeoffs: During geopolitical disruptions (e.g., restrictions on Russian oil), critics say the Jones Act can limit available shipping options to distant U.S. markets and complicate sourcing decisions. (White House fact sheet; Wall Street Journal; Investopedia)
How Does the Jones Act Affect Puerto Rico?
– Direct effect: All cargo moving between U.S. mainland ports and Puerto Rico must be on Jones Act‑compliant vessels, which are more costly than many foreign-flag options. That increases the cost of fuel, food, construction materials, and other imports shipped from the mainland. (Investopedia; John Dunham & Associates)
– Quantified impacts: Estimates cited in reporting and studies show freight differentials and aggregate additional annual costs (e.g., the ~ $1.2 billion figure and per-resident estimate) though estimates vary by methodology and assumptions. (John Dunham & Associates; Investopedia)
– Emergency relief: In disaster settings (e.g., Hurricane Fiona, 2022), the federal government has granted temporary waivers to permit non-U.S.-flagged vessels to move fuel and relief supplies when needed to avert shortages. (DHS statement; Investopedia)
How Does the Jones Act Affect Cruise Ships?
– Passenger rules: The Jones Act itself regulates cargo, not passengers, but the Passenger Vessel Services Act (PVSA, 1886) prohibits foreign-flagged vessels from transporting passengers directly between two U.S. ports without including a foreign port stop. Because most cruise ships fly foreign flags, most itineraries that begin and end at a U.S. port must include a foreign port to comply. Failure to comply can lead to penalties or itinerary changes. (U.S. Customs & Border Protection; Investopedia)
How Long Can a Waiver of the Jones Act Be Implemented?
– No general long-term waivers: Since a 2020 change, Congress eliminated broad authority for the federal government to issue long-term waivers except when necessary to address an immediate adverse effect on military operations. Most waivers now are temporary and assessed case-by-case based on specific, time-limited emergency needs. (CRS; Investopedia)
– Practical length: Typical waivers granted for disaster response are time-limited to the period necessary for relief and recovery; the precise duration depends on the waiver terms and evolving circumstances (e.g., sufficient fuel deliveries, restoration of supply chains). (DHS statements; Investopedia)
Practical Steps (Who to do what — concise, actionable guidance)
For federal/state/territorial policymakers
1. Pre-plan waiver criteria and process: Establish clear emergency waiver protocols and decision timelines so relief is not delayed by legal uncertainty. (Use DHS/Maritime Administration guidance as model.)
2. Conduct cost-benefit analyses: Regularly assess the economic and security tradeoffs of the Jones Act for specific routes/markets; document the marginal cost impacts and national-security benefits.
3. Support domestic capacity: If maintaining U.S.-flag capability is a policy goal, invest in shipbuilding, mariner training, and port infrastructure to reduce cost gaps over time.
4. Consider targeted policy tools: Instead of outright repeal, explore subsidies, tax incentives, or targeted exemptions for high-cost, remote routes if desired.
For ports, shippers, and businesses
1. Optimize logistics: Combine cargo, use intermodal options, use hub-and-spoke routings, or consolidate shipments to reduce per-unit freight premiums.
2. Contract strategies: Negotiate longer-term contracts with U.S.-flag carriers to lock in rates; seek volume discounts or collaborative shipping pools among shippers to improve economics.
3. Prepare waiver requests: For emergency needs, document shortages, alternative options, and the precise scope of requested relief to expedite administrative review.
4. Local sourcing and inventory: Where feasible, increase local inventories or diversify supply sources to buffer against Jones Act constraints during disruptions.
For residents and advocacy groups
1. Track impacts with data: Advocate for transparent freight-cost and price-impact data from government or independent analyses to inform local policy.
2. Petition and plan: In disaster zones, pressure and work with local officials to request waivers quickly when critical supplies are at risk.
3. Promote local resilience: Support policies that build local production and strategic stockpiles for essential goods.
For emergency managers and planners
1. Include maritime contingencies: Incorporate Jones Act considerations in disaster logistics planning and stockpile strategies well before emergencies occur.
2. Pre-identify noncompliant but available vessels: Know the fleet landscape so waiver applications can cite clear capability gaps and delivery timelines.
3. Coordinate multiagency: Ensure DHS, FEMA, state/territorial authorities, and ports coordinate rapidly for any waiver and relief shipping operations.
The Bottom Line
The Jones Act is a longstanding U.S. maritime statute intended to preserve U.S. shipbuilding, merchant shipping capacity, and national security by requiring U.S.-built, -owned, and -crewed vessels for cargo movements between U.S. ports. It imposes higher costs for certain routes—particularly to non-continental states and territories such as Puerto Rico—and has sparked debate over economic burden versus strategic benefits. Emergency waivers are possible but, since 2020, long-term waivers are narrowly constrained; most relief is temporary and case-by-case. Policymakers and stakeholders can reduce friction by clarifying waiver procedures, investing in domestic maritime capability, and adopting pragmatic logistical and policy measures tailored to high-cost routes.
Sources and further reading
– Investopedia, “Jones Act” (Dennis Madamba) — https://www.investopedia.com/terms/j/jonesact.asp
– Congressional Research Service, “Shipping Under the Jones Act: Legislative and Regulatory Background” (summary and report)
– Department of Homeland Security, Statement on Jones Act Waiver for Puerto Rico (DHS press release)
– John Dunham and Associates, “The Jones Act: The Legacy of Economic Ruin For Puerto Rico”
– U.S. Customs and Border Protection, “The Passenger Vessel Services Act” (Sept. 2019)
– U.S. Maritime Administration, “Domestic Shipping”
– White House, “FACT SHEET: United States Bans Imports of Russian Oil, Liquefied Natural Gas, and Coal”
– Wall Street Journal coverage on energy and Jones Act issues
If you’d like, I can:
– Summarize the main costs/benefits with a short table for a policy memo.
– Draft a sample emergency waiver request checklist for territorial officials.
– Provide citations/links to the full CRS report and the John Dunham study.