US oil tankers that comply with a 93 year old law (Jones act to protect US shipping industry from foreign competition) means costs are five times higher than buying ships from Asia. $200 million per ship instead of $40 million.
When large container ships filled with bicycles and sleeper sofas leave China for the U.S., they don’t stop in Hawaii to unload cargo bound for that state before continuing to Los Angeles or Seattle. Under a 93-year-old U.S. law, the Jones Act, only U.S.-made, U.S.-flagged ships can deliver goods between U.S. ports. If a Chinese ship stopped in Hawaii to drop-off cargo, and then picked up, say, a load of Hawaiian coffee, it could not unload that coffee in another U.S. port. Chinese-made goods to be sold in Hawaii are routinely unloaded on the West Coast, and then loaded back onto another U.S. ship for the 2,500 mile trip back to the island state.
For most of its existence it went largely unnoticed, and outside of wasting a lot of fuel and making products in Hawaii needlessly expensive, its impact on the broader U.S. economy was muted.
U.S. energy companies get squeezed by the act as they try to deliver record amounts of oil nationwide. By yearend the U.S. will produce about 8 million barrels of oil per day, up from an average of 6.5 million in 2012. Yet there are just 32 tankers and 42 barges eligible under the Jones Act to haul fuel along the U.S. Gulf Coast and East Coast, according to MJLF & Associates, a shipping brokerage in Connecticut.
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$2 to ship to Canada on a foreign ship but $6 per barrel to ship to the east coast of the US
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When large container ships filled with bicycles and sleeper sofas leave China for the U.S., they don’t stop in Hawaii to unload cargo bound for that state before continuing to Los Angeles or Seattle. Under a 93-year-old U.S. law, the Jones Act, only U.S.-made, U.S.-flagged ships can deliver goods between U.S. ports. If a Chinese ship stopped in Hawaii to drop-off cargo, and then picked up, say, a load of Hawaiian coffee, it could not unload that coffee in another U.S. port. Chinese-made goods to be sold in Hawaii are routinely unloaded on the West Coast, and then loaded back onto another U.S. ship for the 2,500 mile trip back to the island state.
For most of its existence it went largely unnoticed, and outside of wasting a lot of fuel and making products in Hawaii needlessly expensive, its impact on the broader U.S. economy was muted.
U.S. energy companies get squeezed by the act as they try to deliver record amounts of oil nationwide. By yearend the U.S. will produce about 8 million barrels of oil per day, up from an average of 6.5 million in 2012. Yet there are just 32 tankers and 42 barges eligible under the Jones Act to haul fuel along the U.S. Gulf Coast and East Coast, according to MJLF & Associates, a shipping brokerage in Connecticut.
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