This segment of What’s Ahead concludes that the century-old Jones Act—which stipulates that any cargo transported between two American ports must be carried in ships that are American built, owned and crewed—should be deep-sixed.
American-made cargo vessels cost significantly more than those made in foreign shipyards. The result is that shipping patterns are seriously—and expensively—distorted, which explains why retail items in Alaska, Hawaii, Puerto Rico and Guam are artificially more costly.
The act is also especially harmful to the energy sector.
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.
Drowning the Jones Act would cut waterborne shipping costs in the U.S. by 50%. Doing this would add $135 billion to American economic output.