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The Jones Act comes under scrutiny as it turns 100

Interestingly, the Jones Act has been in the news lately and has become a central item of debate in the maritime industry. The act, which is now approximately 100 years old, was designed to protect domestic commerce.

Some people believe that the Jones Act does not help the shipping industry in America due to its highly restrictive wording. It requires ships to be owned, operated and built by Americans, which limits where ships can come from, who can use them and who can own them for trade in the U.S. They also have to be flagged as American vessels.

Keeping the shipping industry in America and for Americans has its benefits, such as providing Americans with jobs and preventing foreign interests in the industry. People who think the law should stay argue that removing it could allow other countries, like China, to take a larger role in the shipping industry in the U.S.

The Jones Act does, according to some, result in higher prices, inefficiencies and lost opportunities because of limitations imposed by law. Shipping costs, some claim, are artificially inflated, because there is no foreign competition. Additionally, the ships that are used come at a much higher price.

The high cost of shipping reduces demand. Reduced demand for shipping by water then positively influences other industries, such as the trucking, pipeline or rail industries, which can perform the jobs at lower rates.

The Jones Act continues to come under scrutiny, even though it has been in place for over a century. The debate is ongoing, but it may see changes in the coming months or years.