The Obscure Law that Killed U.S. Maritime Shipping
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- Опубліковано 19 тра 2023
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At an economics class prof told me that the US is simultaneously overregulated and unregulated
That is a really interesting topic, rather it so social or state regulation. I am writing about that topic for my thesis, but it is social regulation. Elders in Korea is overregulated and under regulated. This leads to suicide.
Do this does not seem like overregulation it seems like protectionism that is so bad that it handicaps yourself and pushes people to seek alternatives rather than to go through the costs.
Interestingly poetic given the fragmented nature of a federal republic.
Schrodinger's regulation
overprotective against foreign threats and underprotected from themselves
In Spain we call It privatizing the benefits - socializing the losses
The jones act is a great case study for the broader us political and economic system. There are hundreds of clauses in laws passed through the decades that have very small negative impacts on America, but benefit specific industries or groups greatly. Which is why they exist the companies that benefit will fight hard to keep these laws while the average American doesn’t even know they exist.
If you think Jones Act has very small negative impact, you seriously need to study more
Today, most primary defenders of the Jones act are unions groups who work on constructing and operating those 100 ships...
I've always thought that the United States was captured by lobby groups, which is why it's much less efficient than other first world countries in areas like shipping, health, etc. Even things like copyright (the Mickey Mouse Life Extension Act), have been absurdly influenced by politicians who rely on the lobby groups for funding. The 'robber barons' of a century ago are now huge companies, but they still distort the economy in a similar way. The only way to fix it would to be properly restrict political donations as other first world, English speaking countries do (Australia, Britain, etc.). But we all know that the lobby groups are so powerful they would never allow that to happen.
@@alexanderchenf1 - the impact is distributed across the population. On a per-person basis, it's very small compared to the impact it has on those working in the industry. Worse for the country as a whole, but better for a few.
@@UserNameAnonymous Merchants especially franchise merchants have national standard prices. They have to adjust their national standard prices across the board in order to compensate regional price hike due to truck transportation. If Jones Act is repealed, much of the truck transportation is replaced by much cheaper domestic maritime transport, then we can expect those national standard prices to drop substantially. For example, if a lock sold by Home Depot is $10 a piece nationwide, after the repeal, it could be lowered to $8 a piece.
The Jones act also caused a lot of trouble for Puerto Rica after a hurricane a few years ago. There weren't Jones act compliant ships ready to ship emergency relief materials. It slowed down recovery and later rebuilding. There were foreign ships nearby ready to ship aid to them too and Puerto Rican was begging Congress to let them through.
Hello fellow John stossel viewer
@@ieaatclams I haven't watch John Stossel since the early 2000s when he was still on ABC and the hurricane I was referring to was very recent.
The problem with your example is that Puerto Rico neither had, nor has a problem with fuel at their ports. There was an issue getting that fuel into the interior of the country, but ships can't really help with that. This was especially true last Sept. when a BP chartered tanker was sent from Houston to Puerto Rico without the standard notification and knowing full well that this was a Jones Act trip. They then complained, very publicly, that the Jones Act was preventing them from delivering the fuel. What didn't make those "news" stories, was that a tanker loaded with fuel IN PUERTO RICO was departing to Jamaica (I think) to deliver fuel. Those two tankers passed each other.
Although I like Stossel, that episode was just another in a recent spate of public anti-Jones Act propaganda directed by those that would see American ships, shipyards, and sailors be eliminated in the pursuit of greater profit. This would be at the cost of American security and jobs. Who benefits besides shipping companies? China for the most part. They are the largest shipbuilders in the world now and are taking marketshare from S. Korea and Japan. The US no longer even registers.
So, the Jones Act needs updating no doubt. It is around 100yrs old, but removing it would leave the US very vulnerable and eliminate jobs and an industry at a time when US ships and sailors may well be needed as 'challenges' in the Pacific rise.
Don't be fooled by corporate propaganda. And if you are actually interested in the shipping industry, the channel "What's Going On with Shipping" would be a better source.
it is estimated that the Act costs the average Puerto Rican family more than $1000 a year in added cost of living.
@@who2u333 who it benefits? Oh, I don’t know, maybe tons of US businesses that suddenly can much easier operate within their country, source and sell domestically? Just because US shop makers are bas at their business does not mean everyone else in the US has to suffer
US crews and safety standards are so much more important that having the ship be US built. If they allowed Korea, Japan and EU, then there would be so many more US flagged vessels and US citizens working on them. This one change would result in many more American jobs in shipping. Why hasn't this been done yet??? It seems so dumb to me.
Man there isn’t enough people for the current ships 😂 fym
The issue is that China, Korea and Japan build 95% of the world's ships and China alone builds 47%. They are attempting to run China put of business. The EU builds barely very little.
@@wgowshipping The EU mostly focuses on cruise ships nowadays.
@@Croz89 and special ships like dredgers, dive support, offshore construction ships.
Because the only people who care enough to lobby politicians are the freight companies who benefit from it
The Jones Act seems like great example of protectionism gone wrong. Can we even get more restrictive than built, crewed, owned & flagged by Americans.
Usually such non-sensical laws happen when incumbent interests carve laws suiting them via lobbying.
Feel like a lot of the pushback may come from trucking companies or the auto industry in general who would see their sales and profits go down when more products get shipped instead of driven
The main argument and reason the Jones act was written was to protect US security. The economy wasn't really in mind, and at the time - WW1 - you had a consistent issue of foreign powers coming to American shores arbitrarily, notably Germans.
"protectionism gone wrong" implies that protectionism can ever go right, which it can't
@@dirtcrazykid9674It can. Japanese protectionism allowed their early factories and machine founderies to face less competition while they learned and grew from local profits. Untill they could focus on exports abroad while facing almost no challenge at home. It very much is the cause why japan could grow its famous brands.
@@dirtcrazykid9674 well never say never, if Taiwan didn’t protect its industries then China could’ve infiltrated it without a shot fired. Complete non-protectionism works only in a world with absolute security.
As an Alaskan, there’s nothing obscure about the Jones Act or the Passenger Vessel Service Act.
As somebody from Hawai'i, this is a true statement. Honestly, just requiring the vessel to be owned, crewed, and flagged in America should be enough. And it would make Guam, Hawai'i, and Alaska major economic advantages for the US in transpacific trade that would greatly benefit their economies. Not to mention reducing costs of goods for the above and Puerto Rico.
@@TheCoyote808
No. You will have to allow foreign crews to some degree. You will also have to have a certain amount of ships built in the US.
@@zaco-km3su The need for American crews is not a significant hindrance because of the ratio of crew members to the amount of cargo. Think about how many containers you can pack onto a modern container ship. A giant container ship only needs a crew of a dozen or so people. Contrast that with how many truck drivers you would need to move those containers via highway. The cost of American crews adds mere pennies per ton of cargo per day. The inherent cost efficiency of water-based transport vs land-based transport swamps out the effect of those more expensive crews.
The Jones Act’s real hurdle is the need for American-built vessels.
As a fellow Alaskan.. sup from the Mat-Su Valley :D
As a fisherman in Bristol Bay, AK it is crazy to see our salmon headed and gutted, shipped to china, filleted, and then shipped back to the US. along the way tons of Russian fish are mixed into the stock, the fillet quality is denigrated, and tons of time on a perishable product is added since it's so hard to ship it directly to Seattle
As someone who ships containers full of goods internationally for their job, it is noticeable that America has a different way of shipping things. When I am dealing with India, it isn't uncommon for my containers to be shipped by sea from a small port near the factory to a larger port in a major city, and then moved onto a larger container ship for long distance ocean travel. This is not possible in America. In America, if I need a good moved from one area to another, then I need to book railway space or a trucker. This isn't a large inconvenience, but it is definitely one. It just makes the process different when moving cargo around America than other country. It definitely is also an additional cost, that much is obvious. It is just impossible for me to know how much extra I am paying in the American market for domestic railway instead domestic ocean freight. I simply have no one who could give me a quote on the difference because no one can offer a service that doesn't exist.
you ship goods from India to America? Can yoy tell me more about your job plz (bcz I am intrested in learning about jobs so that I can choose one and go in that field)
@@weirdoze Just look up jobs in the merchant navy.
@@ArawnOfAnnwn I think he works in commercial shipping not in merchant Navy.
@@weirdoze Merchant Navy is the fancy title for commercial shipping, like a janitor nowadays is a "Sanitation Engineer".
@@rednecktek2873 you are goddamm right
It makes life so much more expensive in Hawaii because it triples transportation costs. 90% of food has to be imported, construction materials are imported, etc. All of that subject to this arcane law.
You have cows on the island to supply beef. Funny, the video producer somehow thought they ship that beef to the mainland.
At that point it becomes cheaper just to import from outside the US
I would have thought an indigenous Hawaiian would be of the ilk, buy Hawaiian. I am not Hawaiian, yet I think given the opportunity you should push the Americans back into the ocean and free Mauna Kea back to Pele. Maybe not so indigenous, but more American than Hawaiian.
@@couttswso quit the white savior shit ya bum. He’s complaining about a current issue, not a long-term one. And Hawaii couldn’t sustain itself economically without the massive amount of American investment and tourism, just look at the rest of the pacific islands. You’ll see the only ones that aren’t dirt poor are colonies.
@@nobodyspecial4702bruh
I remember learning about the Jones Act in the aftermath of the hurricane that hit Puerto Rico 6 or 7 years ago. The Jones act made it difficult to bring in emergency relief supplies from mainland USA. If I remember correctly, they temporarily suspended the Jones Act for awhile, but then allowed it to be reinstated.
Suspending an Act of Congress for an emergency is within reason. Failing to allow the emergency to end, and thereby unilaterally undoing an Act of Congress without a countermanding Act, or Judicial Review declaring the Act illegal, is how you get dictators.
The PR thing was BS. I was there on a jones act vessel. My company increased the amount of vessels going there. I also saw a ton of non american ships there
Oh shit I guess that's when most of us learned about it
I remember a few years ago there was a really bad winter on the east coast. And they couldn't get salt for the roads even though large stockpiles existed only a few hundered miles away. And the Jones Act had something to do with the fact that they couldn't just ship all that salt and they had to wait longer for other salt.
The problem is they didn’t want to pay! There are lots of tugs and barges to move cargo like salt up and down the east coast. There is someone in every harbor on the east coast that would have taken the job. But we have to get paid a decent wage for this kind of work it’s hard, dangerous, and skilled work. Whoever was trying to move the salt was trying to screw us American merchant mariners out of work and had foreign ships bring salt from overseas to screw a fellow American. Next time you buy a car or any other product think of this! Or maybe you don’t care (that is until you are out of work because your profession gets offshored). Ever time you purchase a foreign product or hire a foreign service your putting a fellow American out of business and costing people jobs. We’re not talking about a minimum wage job either but a good paying middle class job!
The Jones Act is an example of how special interests have so much control in Washington. Sadly because of so many political pressures, it almost never even gets brought up in congress and any bill to repeal it entirely gets lost in commitee no matter what party is in charge as there are special interests on both sides of the isle that are hellbent on keeping the Jones Act around.
The Jones Act should be repealed by Congress to encourage ships built in America. All luxury ships fly a foreign flag but indirectly own by American investors.
I work in offshore wind installation.
The Jones Act is also what prevent the US from having any offshore wind parks. The first ones will be built soon but can only be installed near canada’s coast with some loopholes because there are not any American ship capable of doing the work needed to install offshore wind.
We can’t even get some legislators on board with regular wind turbines, the GOP screamed for years how turbine are murdering Billions of birds a year. America is in an alternate reality.
Good. Wind energy is such a farce it's not even funny. Those giant ugly wind turbines don't work for crap, break easily, and are currently unrecyclable! Why not use better methods? Wind doesn't work.
@@jabzilla21 The bullshit you write sadly can't be used to produce methane.
@@jabzilla21 What on earth are you on about?
If they don't work, where did the UK get 26.8% of it's electricity from last year? Why is it the cheapest form of electricity generation? Why is the world building it like crazy?
And which infinitely recyclable alternative are you about to suggest? Solar? Nuclear? Or are you a fossil fuel brain who suddenly cares about recycling?
Couldn’t USN Seabees also assist in the construction and use their own ships?
Excellent video! It is truly absurd that the Parker Ranch cannot even ship their beef from The Big Island to Oahu.
Lobbying this the biggest problem in America
yes im from germany an there is the same problem, lobbying is just a other word for corurption
It happens everywhere. You’re absolutely right.
Lobbying is basically legal bribery. A company can basically pay a senator to write a law for them. It completely goes against the concept of "Government of the people, by the people, for the people". Of course lawmakers are never gonna remove a law that lines up their pockets, so lobbying will stay legal forever.
Call it what it is - bribery.
By rights, it should be actively outlawed. But messing about with democracy is embedded in murica. Look at today -2023 - communism just around the corner.
I remember the Jones Act becoming a real issue after Hurricane Maria. The US wasn’t able to ship relief to its own territory so everything had to be flown to Puerto Rico.
The issue was the internal distribution of fuel in PR and not the Jones Act.
ua-cam.com/video/PmLqteYviD0/v-deo.html
TIL: The US has 4% of world population but 21% of beef consumption!
It does represent the purchasing power of an average American citizen.
I didn't know this either, but then again, I'm not too surprised
That’s incredibly sad
US also consumes same proportion of oil and other stuff.
Just means the average American can afford way more than any other citizen.
Well every country outside India is going to eat more that their percapita of beef because Hindus don’t eat beef
It also represents the unhealthy food culture of America. This explains why half the country is obese.
As someone from Hawaii, thank you for shining a light on this issue. This law inflates our already expensive cost of goods and has contributed to so many people leaving our state.
The Grassroot Institute in Hawaii did an in-depth study on the impacts of the Jones Act on Hawaii’s economy.
And finally, it’s important to note that not only do certain corporate interests support the Jones Act, but also union interests.
Thanks so much, I have a Logistics exam on Tuesday next week and watching your well researched videos always adds value and and practical depth to my degree 🙏 Keep up the excellent quality!
May I suggest this as a counter point.
ua-cam.com/video/94WxkwLJMok/v-deo.html
We should also consider how this endanger the American naval force. If we still want a great navy, we NEED a competitive ship building industry.
People who complain about the Jones Act ignore that without it there would be no shipyards left in the US. San Diego is the home port for the US Pacific fleet and all their service is done there in the GD NASSCO shipyard. Remove the Jones Act, that shipyard closes and then the navy has no repair facilities on the entire west coast.
@@nobodyspecial4702 that means either the navy should buy out the ship yard or that shipyard deserve to be closed, don’t we live in a free market society? hypothetically speaking, removing the jones act could create more ship yards and more American manufacturing job we have been losing since 2000s. Better ship building and make American supply chain stronger.
@@kevinw4267 The Navy isn't in the business of building ships, it's only in operating them.
The Jones Act doesn't prevent new shipyards from opening, it actually keeps the ones that exist today from closing because it gives them a reason to exist. No Jones Act, no ships built in the US. It's really that simple. The US can not compete with Asian shipyards on an economic level so removing the act would mean there is no reason to produce ships in the US anymore.
@@nobodyspecial4702 how about Italian? They also build ally ships. Economy of scale is a thing, you know? So what, we just abandon millions of Americans, let them get drugged up and commit crimes?
@@nobodyspecial4702 perhaps the navy should become more involved in the business of building ships.
Econclips made an excellent video on how government creates monopolies. Basically they over regulate and make it near impossible for new companies to enter the market.
Here in canada we’re seeing that with housing. With insane fees and waiting times mixed with limiting what can even be built on a plot of land. It’s no wonder why housing and rent prices skyrocketed.
Exactly, can also see it for IBM pushing for massive regulation of AI - easy for them to since it will mean they have less competition
The Jones act is also partially why electricity is so expensive in New England
How so, if you don't mind me asking?
@@utuberme1 it's likely referrin to natural gas prices. Is forced to buy more expensive LNG from abroad rather than from the Gulf Coast or something.
@@chinguunerdenebadrakh7022 No. There are natural gas pipelines extending from Texas to New England. There's no reason to use freighters to move it.
@@nobodyspecial4702 Heartland institute also wrote this in 2018 (not the most savory people imo, but this doesn't seem egregiously wrong):
"Utilities used Russian gas instead of cheaper, domestically produced natural gas because state governments in the Northeast have blocked various efforts to expand natural gas pipelines in the region, and federal rules, primarily the Jones Act, make transporting domestic American commodities and energy on ships more difficult and expensive."
@@nobodyspecial4702 "No. There are natural gas pipelines extending from Texas to New England. There's no reason to use freighters to move it." The existing natural gas pipelines can not meet New England winter demand. Environmental groups are actively block any expansion to the pipelines.
It seems to me that the worst clause of the Jones Act is that the ship needs to be _built_ in America. If the point is the make sure that America has a reserve fleet in times of need, does it really matter if it was bought on the international market, so long as it is owned and operated by Americans?
If a ship is built foreign then purchased and operated by a US company it can very easily get a waiver to bypass the Built In clause. It's a boiler plate form.
Fantastic video! I knew nothing about this subject! One of my favorite channels!
This was an absolutely amazing video. Thank you so much for this!
Passing this along to a good friend of mine who is a maritime lawyer for the DHS Customs Office.
I remember a few years ago NJ ran out of road salt, and they could not get more because of the barge it was on. They had to transfer it to a different barge, before they could use the salt.
Cabotage is also an issue in Malaysia & the imbalanced development between East & West Malaysia. The problems hinge on the designation of Port Klang, located along the Straits of Malacca on the western side of the Malay peninsula, as the main container hub port in Malaysia, through which all international cargo traffic must pass. It weakened distribution channels for local players in Sabah and Sarawak, Malaysia’s eastern states on the island of Borneo. The privileged position of Port Klang has led to increased freight rates to these eastern regions, which has in turn led to overpriced consumer goods. This is further exacerbated by poor management and the federal government’s lack of prioritization of eastern Malaysia’s economic development.
There is a similar problem in Turkey. There was even a Turkish politician naming cabotage "sabotage" 😃
Thats mostly because of depth of water and capacity to take bigger ships
give sabah and sarawak to indonesia. problem solved.
@@rizkyadiyanto7922 make it independent
I’m always so impressed by the topics you cover and the quality of your vids.
So thrilled when I receive a notification post from you. Truly the best channel on UA-cam
Such high quality videos tell us why we absolutely love this channel so much. ❤
Remove the need of the ships to be built in the US but keep the requirement of them being owned and staffed by Americans, and exclude oversea territories and Alaska from the law, so they can use any available service to ship goods to and from the mainland.
Fixed it.
the problem is literally the opposite. Who in his right mind would go to work for 40-50k per year away from home enclosed in a vessel in the middle of the ocean 24/7. Get real. In the meantime imagine how many chinese goods were bought instead of US goods in the USA simply because of shipping costs.
Requiring only americans to work on these ships doesn't make it any better and "ownership" is mentioned in the video as sliding scale. If you wanna keep regulations on the shipping industry, which don't already exist for trucking and rail, then it requires a much deeper look.
Can't wait until the next loophole pops up.
It's better to repeal the whole damn act. At least, Section 27, since that is the part that started all of this.
they still have a problem to staff them, we don't have enough trained seamen
@@kingace6186 repeal the act and the us shipping industry plummets even more with thousands losing jobs and shipyards
Great presentation. Keep up the good work.
15:19 the voiceover says "The coastguard will seize your ship if it has a foreign built hull, but not if it has a foreign built engine"
At the same time, the graphic on-screen lists hull as "Can be foreign built", and the engine as "cannot be foreign built".
One of these has to be wrong...
I was wondering the same thing!
as long as your stell superstructure is less the 1.5% foreign
That street analogy is happening in real life here in San Diego... Would be a great video
Hello, just had a question regarding the average grams per ton-km of freight at 9:24.
The URL in the source documents leads to a 404 not found. I'm curious about it since everywhere I try to look, I see a 1 to 4 energy CO2 emission difference between truck and ship freight transport, whereas your graph seems to indicate a much larger difference. Could you please indicate the source document or explain the exact numbers you've found? Thank you very much!
good information! thanks
There have been quite a few Jones Act videos on UA-cam over the past few years and I almost didn't watch this one since I thought I already knew all about it, but this video provides a lot of additional context that others missed. The "closed left highway lane" analogy is a waste of time in the video but the rest if excellent. Thumbs up Polymatter.
I’m so glad to see people are starting to talk about the Jones act.
And yet they fail to understand it. It's not about giving preference to US businessmen or protecting jobs. Today, it is in place purely to ensure that there are ships flagged in the US, owned by US corporations and crewed by US citizens so that the government can call them to serve in times of need. Without the Jones Act, there would be no US merchant marine vessels that do anything other than catch crabs in Alaska.
can't say I'd cross the ocean on a vessel without life boats!!
Great video, PolyMatter team!
Excellent presentations.
Please let every member of congress see this. What a huge wasteful loss for near nothing, it's infuriating how self inflicted this wound is.
The problem is whoever congress member that propose this gonna be called unpatriotic by the opposing party.
republicans control the states of the Mississippi River system, which would benefit the most, and have for a long time. if they didn't want to keep it like this, they'd kill it. so much for deregulation.
@@BayuAH Just need two from opposing sides to do it together.
It's a loss for sure, for the american consumer. But the money is not lost; it is going somewhere. The Jones act is a huge boon for the entire industries of air, rail, and road cargo transportation, who are the beneficiaries of this policy because they pick up the business that would otherwise have gone to domestic water transport and charge more because it is more expensive and because there is one less option. And those industries lobby members of congress and have them on the payroll to make sure the Jones act remains in place. It's not the members of congress who you must look to change this, because they and the practice of lobbying are the most critical part of the problem to begin with.
I don't imagine it would do much good for Congress to see this video, as if we could then expect them to act. They won't act so long as the public does not pressure them to act, and the public can only pressure them to act based on their own understanding of the issue. For that reason, I think what would be far more important than Congress seeing this video would be everyone else seeing it.
I can understand the criteria, but I don't see why the ship/crew/documentation can't be green lit after a thorough inspection by the Coast Guard. That will create jobs in the Coast Guard, and those costs will be paid for multiple times over by a more dovish American shipping industry. Unless there is a factor I am missing, in which case I'll happily listen.
The factor you're missing is labor union influence/special interests/corruption.
@@IndependenceCityMotoring better than some pockets of rich people shooting their own feet as well as everybody else
@@imsohandsome #whataboutism ...two wrongs dont make a right.
Having merchant ships flagged and operated by US carriers helps TREMENDOUSLY in a time of war, humanitarian crises and Or evacuation. Our merchant fleet is small compared to our navy and size of our country. This law helps keep at least some shipyards in business and a reserve fleet of vessels that help sealift etc in time of war. The law needs updating but it’s core values I agree with. Hope this helps a little.
@@seanpruitt6801 ironically, protectionism lowers production as there's no reason to innovate. If we want more ships, make them compete, don't coddle them.
really good content. thamk you!
Great one👍👍👍👍👍
By the way, I believe you swapped around Hull and Engine at 15:16, since Hulls are not allowed to be foreign, and Engines are, but they're in the opposite categories.
US airlines can buy from Airbus, Canada, etc but only US airlines that must be controlled by US citizens are allowed to offer beginning and ending internal US domestic flights - Cabotage. Foreign airlines can't set up domestic routes and are limited to inbound and outbound international flight. Lufthansa can't offer a flight starting with picking up pax in NY and those pax ending their trip in Dallas for example. Wonder what bottom-dollar Ryan Air could offer US bargain hunter domestic customers and top service-award winning foreign airlines could offer compared to the US utility level service airlines.
It is common worldwide.
Which would be a much, much better way of regulating the shipping industry than the current Jones Act.
The only thing that is somewhat uncommon about the US’ regulation of passenger flights is that a foreign airline can’t fly a passenger between two US airports connecting in a foreign country. So, you can’t book and JAL or ANA flight from Guam to the mainland via Tokyo. To be fair, there aren’t many other examples where the law is relevant. Outside of the European common aviation market, almost no countries allow domestic flights to be flown by foreign carriers.
@@andrewlechner6343 Right, at least our airlines could still buy and fly an EU-built Airbus.
@@doujinflip airbus has factories in US
Great video!
Jones Act is protectionism first and foremost and like lots of laws, especially those that protect certain industries, they are difficult to undo because of political ramifications.
Complaints about it are almost entirely done by people lacking the intelligence to understand what they are complaining about. The Jones Act exists today for one reason, to ensure that there are US flagged and owned ships because the US Navy does not have sufficient transport capabilities to support a large scale military action. They call up the merchant marine to provide the necessary shipping in war time.
@@nobodyspecial4702 Support for it is often almost entirely people lacking intelligence on the economic impact it has and that there are other options that could address these concerns...such as those discussed in the video.
@@Homer-OJ-Simpson Considering how much of what he claims in the video is unsupported opinion, like claiming that the Jones Act is why ships are NOT being built in the US why would anyone bother watching the whole thing. Ships wouldn't be built in the US at all if there as no Jones Act because there would be no reason not to purchase a Korean made ship that costs a fraction of the price. There's no "competitive" market in US shipyards because there is no way to compete against Asian shipyards and only one significant commercial shipyard left. Eliminating the Jones Act won't suddenly change world economics and make US ships cheaper to produce, it would only ensure that no more commercial ships at all would be built in the US. He might make some valid points towards the end but the lack of validity from the onset doesn't make it worth wasting 20 minutes of my life. There are far more intelligent and accurate ones regarding the Jones Act than this.
@@nobodyspecial4702 By denying American businesses access to the best shipping options, the Jones Act boosts transportation costs. Shipping oil from Texas to the Northeast costs three times more than shipping oil from Africa to the Northeast, an extra cost paid by U.S. consumers. For every $1 gained by U.S. sailors, shipbuilders and carriers as a result of the act, U.S. consumers lose more than $1, resulting in a net loss.
The Jones Act is also bad for the environment. More expensive U.S. vessels mean the U.S. shipping industry has fallen behind in terms of innovation: Companies hang onto older, less fuel-efficient and more dangerous ships rather than updating or retiring them. Older fleets mean more pollution and energy use. High waterborne transportation costs also divert freight from ships to trucks and trains, which are more polluting too.
@@nobodyspecial4702 Two studies have confirmed what observers of the Jones Act have known for years - that the century-old federal maritime law has long been harmful to Puerto Rico’s economy.
One of the studies, conducted by John Dunham & Associates, found that the Jones Act has prevented the creation of 13,250 jobs and $1.5 billion in annual economic growth, representing $1.1 billion in higher prices, $337.3 million in wages, and $106.4 million in lost tax revenues.
The other, conducted by Advantage Business Consulting, looked specifically at U.S. territory’s food industry and estimated that the Jones Act equaled a 7.2 percent tax on food and beverages alone, or about $367 million extra for island residents.
“Individually, families pay $300 more or $107 per person for food and beverages,” said ABC economist Vicente Feliciano.
Actually, the US is now a net oil exporter, producing *more* than we use. Peter Zeihan, who I believe fans of this channel would probably love, mentions the fact a lot (and he's the person from whom I first heard about the Jones Act and it's infuriating limits on our maritime commerce).
this is not true. If you use google first 15 results will be wrong but the fact is that US produce 12 million barrels a day and consume 20.
@@steffengustavsen9678add in that a decent amount of imports come from canada(and due to our monopoly position we get very fair rates) then you can lower that number even more. Idk. Small contention
Peter Zeihan is an American chauvinist though. His understanding of the rest of the world is rather limited.
Glad to see a larger channel talking about the Jones Act
Awesome! super cool and interesting video. hopefully we can fix this for the future
2:34 it's important to note that in this case, there was a ban on american oil exports until Obama lifted it in 2015.
@~18:15, better lifeboats may have helped, but the captain of the El Faro also piloted his ship recklessly close to the eye hurricane Joaquin. It's an interesting and tragic story.
Brick Immortar had a great video on it. Highly recommend it.
@@KellAnderson bingo, I couldn't remember the channel name thanks
Weird, you’re telling me that when you remove competition, your only option becomes ridiculously expensive and unusable? Weird, it’s almost like when supply goes down and demand goes up, prices rise.
This was really eye opening,
If you clicked on this video knowing it was going to be about the Jones Act you deserve a veterans discount
This is absolutely insane
Excellent! Thank you!
@~20:20 Even though two of the three biggest ship builders are close allies, they both locate in an area where future conflicts likely occur. Their ship building abilities will certainly be heavily impacted should conflicts occur in the west pacific.
Then it would make sense to stock up now, yes? Especially since we are obligated to come to their defense if the third country gets a little frisky.
Most ships are built in Europe or South Korea where labor costs aren't much lower
china builds roughly 45% of the world's tonnage, an japan and south korea build another 35-40%.
There is an economy of scale that offsets the costs. Korean shipyards are absolutely massive compared to the rest of the world. The commercial shipyard in the US can handle 5 hulls at a time in various states of completion with only 1 drydock and 1 floating drydock for ship maintenance with a water frontage of a couple hundred meters. Ulsan in Korea has 10 large size drydocks spread over 4 kilometers of frontage.
By EU companies perhaps, but in South Korea.
I'm glad even Polymatter is aware of the urbanist movement. Can we get an induced demand stroad to my 15 minute city debate?
I realised that it takes roughly a scoop of ice cream to get from the trainstation to home (purchased close to the trainstation)
Solution: Instead of requiring companies to use american built ships exclusively, require 15% of the fleet of domestic shipping companies to be american built ships. This reduces the dependency on foreign shipping and essentially super charges domestic shipping demand. If you want to use cheap foreign ships, you gotta prop up the domestic ship building market too. It is expensive, yes, but way less expensive than the current system and essentially subsidizes a very expensive domestic market.
One of the best UA-cam channels imo
I didn't think a video about maritime shipping would make me so angry
Does the Jones Act apply to a private person or company? Can the cattle rancher buy and operate his own ship only used for his company to avoid the Jones Act?
The rancher will still need to register the ship to a country. Therefore the law still applies.
The problem is that ocean shipping needs giant ships to be economical. A sailboat with a few cows on it would be dramatically more expensive per cow than even going through the roundabout Hawaii to Vancouver maneuver from the video.
From a quick googling, a panamax ship costs over $100 million and costs $9 million per year to operate.
@@haxney You wouldn't need a Panamax ship for this but it would still be ineffizient
Same thing in Australia. Just about all ships working our waters got faced off shore due to labour costs
i love this channel
At 15:28 the video audio says the Hull cannot be foreign built but the engine can but the video shows the opposite on the slide
Apathy and complacency will be the downfall of America.
Great video
This has to be the best video you have made. I need more people to see this 👍
Now I'm thinking about moving to the USA to start a thriving donkey caravan business.
"Take, for instance, oil"
US foreign policy position succinctly summarized 🤣
Looks like you need Freedom!
@@heidirabenau511 those Are m aoil fields are crying out for democracy, light beer
The sentence in the video you're quoting immediately proceeds to suggest the exact opposite. Like c'mon.
@@SacredDaturana ...it was literally a joke? Like c'mon.🤦🏻♂️
@@dancoroian1 Well yeah, I'm saying it was a bad one.
How can they just sit there and think "Yup, nothing wrong"
7:58 All these shots are gorgeous
Cruise ships are registered offshore and so are big yachts registered offshore. US taxes, employment regulations, and maritime regulations are not wanted.
There's ONE cruise ship that's compliant with the Jones Act - Spirit of America IIRC, that's able to do a Hawaii cruise. It was built to serve a need, because there are no foreign countries anywhere close that can be sailed to by a foreign flagged and crewed vessel. All those Alaska cruises that start in Washington or California and visit Alaska MUST have a stop in Canada included, otherwise, it would be subject to Jones Act restrictions.
Cruise ships fall under the Passenger Vessel Service Act of 1886 and not the Jones Act.
@@wgowshipping Which passes on the fee to the passengers, so it's not really impacting the cruise ship industry.
Polymatter discovered Zeihan I see. 😂
Some of his previous China videos made me suspect so haha
Railroads also have been hurt vis-a-vis over the road trucks or barges for domestic travel. Government policies among other factors have arbitrarily made many trips more expensive by train. Now, the flexibility of trucks versus trains means the railroads will likely never have the market share they did 100 years ago, they could have much more than they do as well.
Where did you get the cinematic videos of USA please tell
Sorry you get it from Gettyimages(thanks for description) but what did you search specifically please do tell
Looks like Sal Mercogliano is gonna have to make another video about this.
Better Call Sal! 😂
@whatisgoingonwithshipping Sal straighten this guy out!
The Jones act I think made sense when there were more US shipyards as a way to try and ensure the yards stayed open. But as economic forces have closed the vast majority of US commercial shipyards, it has outlived it's usefulness.
Read what you wrote and seriously think about it.
The only reason ANY shipyards remain in the US today is entirely due to the Jones Act.
15:15 You said the coast guard will seize if the hull is foreign-built, but then put the hull in the section for CAN be foreign built. Which is it, the chart or what you said out loud?
I never knew that. Didn't even think it would be possible to create such a messy system.
Hopefully, we'll see this featured on Last Week Tonight.
I think they did in an episode on Puerto Rico
Finally the Jones act is being talked about more. Here's hoping it and other bad laws are repealed.
Not at least making an exception for Alasaka, Hawaii and Puerto Rico is simply insane.
It seems like there are two separate issues... one is that we have an inefficiency in transportation, but I know we once also made a lot of ships. We have expensive labor, it's true, but there are plenty of countries that have strong ship construction industries that also have high labor costs- Finland, Norway, the Netherlands, France, Germany, South Korea, and Japan for instance.
I can understand, geopolitically, why we might not want some countries operating large shipping concerns in the U.S., but if we allowed allies to build and operate them that would at least fix the transportation portion of the problem. We might give some tax breaks to try to get our shipyards back on their feet, so they could scale up. Just fixing the shipping portion of it would do a lot of good, and probably help a lot of regions get back on their feet, but that still leaves us without big shipyards. Maybe the solution is to get the government to build some shipyards and get in the ship building business. If the industry gets back to the scale where it can stand on its feet would could slowly privitize it.
Who doesn't love a good government give away? If nothing else, politically, you'd think we'd at least be able to get exemptions for non-contiguous regions.
a simply fix would be to remove the American built clause, and possibly the American flagged clase, but enforce a clause that makes the ships have to be built to "American Safety Standerts" and the company that owns the ship must prove its owned 75 percent by American shareholders and pay a yearly operational tax. This would still protect American markets but would make it much more simpler for a company to start up and buy a ship to run interstate trade and lower the cost to entry and cost to run
Part of the Jones act is ensuring there's a merchant marine during war. American built is the only way to guarantee we can replace sunk ships. American flagged is the only way the government can seize boats for the war.
There are international safety standards to which all ships are built by. Safety isn’t an issue. The issue with repeating the Jones act which is not mentioned in the video is the complete loss of American seamen. The Jones Act guarantees a well trained industry of American seamen. Without the Jones act all Americans are replaced with cheap foreign workers. Massive national defense and moral issue.
@@milojones9241 winch i said to remove the flagg and the built clauses but keeping the American crew clause.
Competition breeds innovation. Time to innovate.
@@thee-sportspantheon330 hard to innovate when you're being replaced by extremely cheap labor which is typically slave labor.
If you are interested in the opinion of an actual maritime expert here on youtube I recommend the channel "What is Going on With Shipping?" he has several videos on the jones act and has a more nuanced take on it. I like PolyMatter for its generalistic approach to different topics but here the lack of specialized knowledge on a topic shines through a little bit to much for me.
This, all day. Sal is great with this stuff and his show is a watch as it drops for me. He's a pro.
started following him on twitter - the only criticism is that his content is a bit too thicc 😂 It's fine for a mega enthusiast/someone intimately working with shipping but otherwise I couldn't recommend or share such content
He is often great but myopic on the Jones Act.
@@haakenhaakensen1569 Sounds like a realistic take if he's myopic on something. People should myopic on most things relating to government.
I would change the crewed and built part. US resident should work in the transportation, and allow to buy ship from overseas.
At 15:28, 'Hull' and 'Engine' are in the wrong columns
Every law needs to get reviewed starting from the jones act
@@saiv46 like which ones?
Nah man u need to protect American shipyards once they are gone they are hard to restaff and build infustructure.
If cattle on land produces ground-beef, shouldn't ocean shipped cattle be called *water-beef?* 😂
well, after shipping to Vancouver, surely they'd become Air Beef
@@1224chrisng Air beef. That's what I used to call flatus.
A cool follow on to this would be to study how Alaska's native landholder corporations work. Especially North Slope Burrow and NANA
15:12 - 15:16 Am I misunderstanding or is the graphic showing different information than the voice over regarding Hull and Engine specifically?
how much tropical forest was cut down to make that huge pasture??
None as far as I can tell, as it seems it is located in the area of steppe like grasslands inbetween the wet northeast and arid south west of the big island.
Well endowed landmass for sure! Look at the size of Florida!
It might also have to do with maintaining the US dollar hegemony or reserve currency. This system provides foreign investors with a marketplace to spend US dollars earned from their US Treasury holdings. Maintaining reserve currency status is worth the cost of such an odd piece of bureaucracy.
There is one exception to the Jones Act, a soviet built ship used by the US government and operated by civilians. That's the USNS Lance Cpl. Roy M. Wheat.
There have also been temporary exemptions to the Jones Act to accommodate unique situations of State government. For example, The State of Alaska needed to increase mainline ferry capacity to meet demand for sailings between Seattle and SE Alaska. With the time required to design and build a new ship of at least 4 or more years, the State of Alaska obtained a temporary exemption to the Jones Act so that a suitable surplus ship could be purchased from a European ferry operator. This ship was the Stena Britannica, purchased from Stena Lines. The ship was renamed as MV Wickersham, and was a top quality, fast and luxuriously fitted car ferry with an ocean rated hull design including stabilizers. When the new US built MV Columbia was ready for operation, the Wickersham was sold to a car ferry operation in the Mediterranean.
To a certain extent the Jones Act does make sense. It was probably meant to prevent the US domestic water-borne traffic being held hostage to external fleets (just think how Russia tried to strangle the EU by cutting oil and gas sales). However, the unintentional result has been to cripple water-borne internal trade. I would say that the act may need to be modified, but not necessarily repealed.
Keep the american owned part for security, just require ships be built to US standards for safety, and throw some taxes in for good measure to encourage but not require the other stuff. Problem mostly solved.
@@kingofhearts3185 The need for highly skilled, educated and experienced US merchant seafarers is as important as US shipyards, if not more so.