Coast Guard chief: Repealing Jones Act jeopardizes U.S. fleet

1/15/15 12:17 PM EST
The commandant of the Coast Guard waded into the congressional fight over the Jones Act on Thursday, arguing that repealing it would jeopardize the U.S. fleet of trade vessels.

“That for me is a real consequence, if we have foreign flagged vessels doing coastalized trade, what are the safety standards, what are the maritime pollution … standards, how are they in compliance with the same standards that we apply to our U.S. fleet?” Adm. Paul Zukunft said at the Surface Navy Association’s National Symposium in Crystal City, Va.

“I think, at the end of the day, it will put our entire U.S. fleet in jeopardy, where our fleet of roughly 80-plus international U.S.-flagged vessels will rapidly go to zero,” he said. “And then in a time of crisis, who are we going to charter to carry out our logistics? … Very difficult if we don’t have a U.S. flagged ship.”

Sen. John McCain (R-Ariz.) is seeking to attach an amendment to the Senate’s Keystone XL pipeline legislation that would repeal the Merchant Marine Act of 1920, known as the Jones Act, which requires that goods shipped between U.S. ports be carried by vessels built in the country and owned and operated by Americans.

The new Senate Armed Services chairman argued the policy is “antiquated,” and raises costs for U.S. consumers by placing unnecessary restrictions on trade vessels.

Zukunft didn’t hesitate to list what he viewed as negative consequences of repealing the policy, but he said he didn’t want to get in the middle of the congressional fight.

“We deal with the consequences of how these policies play out, and I’ve found it very prudent to just deal with the consequence and not find myself the salami between those two slices of bread on these policy decisions,” he said.

There are a number of stakeholders in the Jones Act battle, but first and foremost is the U.S. shipbuilding industry, Zukunft said.

Shipbuilding advocates are fighting back against McCain’s push, including the Navy League, which argued that repealing the Jones Act would lead to a reduction in the number of ships built in U.S. shipyards. The Navy League also said repealing the law would lead to increased costs for Navy and Coast Guard vessels, which are built in the United States where the trade protections mean shipyards have lower overhead costs.

There are now about 15 tanker ships under construction that will be U.S. flagged ships, increasing the fleet size by more than 20 percent, he said. And much of that increase is due to demand for U.S. export ships, which would decrease if the Jones Act is repealed, he said.

Jones Act has been good for Texas, America

Houston Chronicle
By Dean Corgey
Updated 08:22 p.m., Tuesday, April 17, 2012

“For nearly 100 years, labor and management, industry and government, and Democrats and Republicans have respected the vision of Andrew Furuseth that seamen are entitled to basic rights – and among the most basic of rights is the right to a job. As Furuseth liked to say, “Freedom and equality is a flower that grows in strife and amongst danger.” We are certainly in strife and amongst danger, so maybe it’s time to let the flower we know as the Jones Act grow. That will be good for Texas and good for America!”  [Dean Corgey]

A founding father of our union was a mariner, a Norwegian immigrant and labor activist named Andrew Furuseth. He lived in a time, much like today, of social, political and economic upheaval at the end of the Gilded Age of the robber barons and the dawn of the Progressive Era of great reformers such as President Theodore Roosevelt.

At the turn of the 20th century, seamen had few legal rights and suffered abuse unimaginable today, including inhumane conditions, forced labor, beatings and imprisonment. In 1915, Furuseth testified before Congress and spoke these immortal (in our industry) words: “You can put me in jail but you cannot give me narrower quarters than as a seaman I have always had. You cannot give me coarser food than I have always eaten. You cannot make me lonelier than I have always been.”

This powerful statement helped give birth to the American maritime labor movement and the eventual passage of the Seamen’s Act of 1915 and the Jones Act of 1920. Furuseth is credited as a driving force behind these bills, with the support of Sen. Wesley Jones, R-Wash., Robert M. La Follette, the great progressive Republican senator from Wisconsin, and President Woodrow Wilson. The Seamen’s Act established basic working and living conditions for merchant mariners, and the Jones Act implemented a workers’ compensation system for seamen similar to the railroads. More importantly, the Jones Act introduced cabotage provisions requiring for the first time that domestic cargo be carried on vessels that are owned, built and crewed by Americans. These laws changed forever American seagoing life and transformed our domestic maritime industry into an innovative, cost-effective and secure transportation system that bolsters our nation’s security.

Leaders from both sides of the aisle understood the importance of maintaining a fleet of vessels to provide good jobs and economic security in peacetime and a pool of qualified personnel to man those vessels and defend the homeland in a time of war. The Jones Act always has enjoyed broad bipartisan support in Congress, the White House and the military and has been instrumental in the massive sealifts of World War II, Korea, Vietnam, Grenada, Panama, Kuwait, Iraq and Afghanistan, as well as the humanitarian efforts in Haiti and Japan. In each instance, the U.S. Merchant Marine has never missed a sailing and has performed with distinction and professionalism in the face of sacrifice and peril.

Texas has a proud maritime history and many know that a major factor in the victory of World War II was Texas crude refined in Port Arthur, Houston and Corpus Christi and transported to the European and Pacific theaters on Jones Act tankers crewed by fearless American sailors. Many of these ships were torpedoed and the crews paid the ultimate price. We were able to win by maintaining a steady supply of fuel as the enemy ran out, thanks to the Jones Act.

Texas is America’s premier maritime state, with more tonnage moving through our ports than any other – much of it on Jones Act vessels. Our state has benefited from Jones Act-related investments by shipowners, and many thousands of Texans depend on Jones Act-related employment, both at sea and ashore. To his credit, Texas Gov. Rick Perry is an ardent supporter of the Jones Act, as was President George W. Bush.

On the national level, the Jones Act fleet consists of 40,000 vessels engaged in domestic waterborne commerce representing an investment of $30 billion. The industry moves a billion tons of cargo and 100 million passengers yearly, generating $100 billion in annual economic output. This has created 500,000 American jobs with a yearly payroll of $29 billion and $11 billion in taxes per annum. The Jones Act fleet provides reliable service to markets such as Alaska, Hawaii and Puerto Rico, which depend on waterborne commerce for their very existence.

Our domestic fleet is invaluable to our homeland security and border protection; our companies and crews are regulated by the U.S. Coast Guard and by federal law enforcement agencies. Our domestic maritime industry is clearly vital to our national, economic and homeland security.

Unfortunately, we have recently seen a disturbing trend of anti-Jones Act rhetoric based on false information, including calls for blanket waivers and outright repeal. It seemed to begin with the Deepwater Horizon disaster in 2010, continued with the Strategic Petroleum Reserve waivers in 2011 and the politicization of cabotage in Puerto Rico and the current efforts of the American Petroleum Institute to seek waivers to move fuel from the Gulf Coast to the Northeast. In each case, the facts do not bear out the claims of those who seek to destroy a law that has served this state and country well.

In this time of economic uncertainty, high unemployment and threats of terrorism, we should be talking about expanding, not chipping away at, the Jones Act. Real opportunities for growth are on the horizon for the domestic maritime industry. Refineries are closing in Pennsylvania, New Jersey, St. Croix and Aruba. Refining capacity is being concentrated in Texas and Louisiana, with Houston being the leader. Domestic crude and natural gas from shale operations and the eventual Keystone Pipeline will produce increased prospects for coastwise movements of refined products and LNG to the East Coast and Caribbean.

Serious consideration is being given to the creation of a “marine highway” network to distribute containers coming from an expanded Panama Canal in a safe, efficient and green manner to coastal destinations. This all equates to good jobs that are sorely needed by young folks graduating from maritime training facilities and veterans returning from Iraq and Afghanistan.

For nearly 100 years, labor and management, industry and government, and Democrats and Republicans have respected the vision of Andrew Furuseth that seamen are entitled to basic rights – and among the most basic of rights is the right to a job. As Furuseth liked to say, “Freedom and equality is a flower that grows in strife and amongst danger.” We are certainly in strife and amongst danger, so maybe it’s time to let the flower we know as the Jones Act grow. That will be good for Texas and good for America!

Corgey is vice president, Gulf Coast Region, of the Seafarers International Union.

Re: Time to Rethink the Jones Act

The Washington Post printed an editorial last week “The Jones Act Ship Law Has Out lived it’s Usefulness“. Click on the link to view the article and the numerious comments in favor of our position.

The Metal Trades Department response to this editorial is below.

To the Editor

Re: Time to Rethink the Jones Act

What the Washington Post snidely dismisses as “protectionism” others among us see as national security. The United States is of necessity, a maritime nation separated from much of the globe by two oceans. Contrary to your concerns over the negative effects of the Jones Act on “free” trade, it seems clear to the Metal Trades—and the men and women that we represent who build and repair ships—that a lack of enforcement of the Jones Act has starved America’s shipbuilding industry into near extinction: with only six major private shipyards employing fewer than 50,000 workers nationwide.

Particularly worrisome about your concerns on “free trade” is the fact that American shipbuilding accounts for less than 1% of the commercial ships built world-wide. At the end of WWII American shipbuilding dominated the world’s shipbuilding. Now, we are so statistically insignificant to the point that we are not accounted for at all by the world’s shipbuilding industry. “Protectionism?” You bet! What is wrong with protecting America from economic disaster? Protecting a vital strategic national defense industry?  What do you think South Korea and Communist China are doing?  They heavily subsidize their strategic industries. They have government policies that promote their ship financing and manipulate their currency values to make it cheaper to purchase and finance a ship purchase from them. We don’t do anything like that for any of our industries. Compare apples to apples and America’s workers can compete on a level playing field with anyone, anywhere.

As the U.S. shipbuilding industry withers, America becomes even more dependent on other nations that do not necessarily care about our welfare not only for goods that we no longer manufacture, but also on the delivery of those products to our shores. And, if we are not building commercial vessels, we will no longer have the skills or capacity to produce military vessels. Any nation that cannot build its own defensive weapons systems is not a world power and totally dependent on the dominant nations.

Communist China and South Korea are the world’s largest shipbuilders. Do you want us to place an order for a nuclear submarine from Communist China? How about Putin’s Russia? I hear that they may have some Oscar class subs for sale.

It is beneath deplorable that critics of the Jones Act choose to exploit the Gulf oil spill as yet another excuse to attack the efficacy or the relevance of the Jones Act. As you well know, the Bush Administration waived Jones Act regulations on offshore drilling on behalf of the oil industry.

Furthermore, a healthy and profitable private shipbuilding industry would be a viable employment alternative to the Gulf region’s current dependence on the offshore oil industry. American shipbuilding is the last vestige of the heavy manufacturing industry left in the USA. Would you kill the very last free ranging buffalo? Anyone can kill jobs- you want to kill ours so badly. Why don’t you just send yours overseas as well.