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Is It Time To Sink The Jones Act?

When the topic is the ongoing congestion at the L.A. and Los Angeles ports, Any port in a storm, Slow boat from China, or Ship of fools might each be an appropriate headline. 

The situation has been so bad for so long that last month, hoping to get things moving, the Biden Administration called for 24/7 activity at the ports to move product off the ships and into the stores in time for the holiday selling season.

And while recent reports show some progress, according to Marine Exchange, just under 180 ships were at the ports of LA and Long Beach, with the vast majority of them waiting their turn to dock and unload.

Lifeloom

Threats to fine ocean freight carriers taking too long to unload are still floating in the air, but in my opinion, $100-a-day fines for these big boys amounts to pocket change.

By now, we’ve all heard the reasons for the backlog. 

The list included Covid-19, labor shortages, shortages of trucks and drivers, too few dock workers, a disruption of the global supply chain, spiking consumer demand, etc.

But  as they love to say on the Home Shopping Network, “but wait….there’s more.”

Since I am phrase-borrowing, let me remind you of this one, too. “We have met the enemy and he is us.”

We may be taking on water at our West Coast ports due to a mix of some recent and not no recent legislation.

In California, for example, the state’s AB5 law, passed last January, essentially redefined some workers previously listed as independent contractors. Simply put, AB5 redefines the employment status of some workers formerly classified as “independent contractors,” and reclassifies them as employees. 

According to industry observers close to the ports, this has put the brakes on many California-based independent truckers—now labeled as employees—who might have previously stepped up to help.

Here’s another major roadblock…and one that I haven’t heard much talk about…The Jones Act.

Ever hear of it? The Jones Act (named after Senator Wesley Jones, the legislator who sponsored it) was passed in 1920 and was put forth to protect and support American merchant marines, sailors, and a ship’s crew.

Nothing wrong with that, right? 

Right. But, as I warned earlier, “Wait. There’s more.”

The Jones Act (actually Section 27 of The Merchant Marine Act of 1920) requires that any goods shipped by water between two points in the U.S. must be transported on a U.S.-built, U.S.-flagged, and at least 75% U.S.-crewed vessel. 

The result, many observers argue, is that it makes it less expensive to ship goods from Asia than it does from state to state here.

Citing energy as just one example, a recent story in Forbes commented that, “East and West Coast refiners find it’s cheaper to get oil from foreign sources instead of from the U.S. itself. It’s cheaper for New England to get natural gas from Trinidad and Tobago or even Siberia than from the U.S. Gulf Coast.”

With that in mind, let me float this one by you: Let’s forget about sinking the Bismarck. Maybe it’s time to sink the Jones Act along with other legislation that is directly or indirectly putting our ports at risk.

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