Authored by Jonathan Helton of Grassroot Institute of Hawaii in association with Alaska Policy Forum
The PDF in its original form can be found here.
Executive Summary
Alaska is heavily dependent on waterborne transportation for its survival, yet a federal maritime law known as the Jones Act limits competition among cargo carriers, driving up prices for imports and exports and contributing to the state’s high cost of living, the sixth highest in the country.1 From its very beginning, the Jones Act has inflicted a heavy burden on Alaska. Jones Act reform or repeal would enhance shipping competition, help lower prices and generate substantial economic gains for the Last Frontier.
Introduction
The Jones Act has affected Alaska as both a territory and a state since the law was enacted more than a century ago as Section 27 of the Merchant Marine Act of 1920. The law’s sponsor, Republican U.S. Sen. Wesley L. Jones of Washington, was eager to protect shipping companies based in his state from losing business to foreign ships and Canadian railroads, so he included Section 27 and inserted wording to specifically benefit his constituents at Alaska’s expense.
Generally, the law requires that ships moving goods between U.S. ports be U.S. built and flagged, and mostly U.S. owned and crewed. It applies to all U.S. states and territories — though some U.S. territories have been granted exemptions2 — and can be viewed as a continuation of protectionist maritime policy that dates back to the earliest days of the United States.
One of the first acts of America’s first Congress was to impose tariffs on a host of imported goods. Those goods faced much higher rates if they were imported on foreign vessels instead of U.S. ships.3 Three decades later, in 1817, the use of foreign shipping in domestic commerce went from heavily discouraged to flatly prohibited, with the stated intent being to boost U.S commerce and ensure a supply of commercial ships should the need arise during wartime.4 Called “coastwise”5 or “cabotage”6 laws, these restrictions continued as the United States began acquiring territory outside the lower 48. They were extended to Alaska in 1868, after President Andrew Johnson bought the territory from Russia.7 In their early days, America’s coastwise laws had little effect on U.S. commerce, since U.S. ships were among the finest and least expensive vessels in the world.8 But as time progressed, economic protectionism took its toll. High U.S. tariffs on imported metals discouraged U.S. shipbuilders from transitioning away from wooden ships, which during the late 1800s were being superseded by ships made of steel and iron.9 By the time the United States bought Alaska, U.S. ships were technologically less efficient and costlier to build and operate than their foreign counterparts — a far cry from the country’s early days.10 It made sense for shipping companies to avoid buying them.
To the extent that they did buy costlier U.S.-built ships, they could — due to the lack of foreign competition — easily pass their costs on to the customers, both importers and exporters. In turn, many Americans devoted their creative energies to finding ways around the increasingly burdensome coastwise laws, which were responsible for increasing consumer prices in Alaska and hindering the state’s competitive advantage as a raw materials exporter.
For example, rather than use U.S. vessels to transport products from, say, Seattle to Anchorage, businesses started to hire foreign vessels to carry goods from Seattle to Vancouver, Canada — inserting a foreign port between Seattle and Anchorage, the two U.S. ports. From Vancouver, other foreign ships could complete the shipment to Alaska without violating America’s cabotage laws.11 Congress barred such workarounds in 1893,12 so some businesses started using railroads to move goods to Canadian ports, from which they could be transported by foreign ships to Alaska. Congress moved to close this alternative transportation route as well, through enactment of the Jones Act.13
Jones Act to the Rescue – of Special Interests
The Merchant Marine Act of 1920 was an attempt to reorganize U.S. maritime law following World War I.
Before U.S. entry into the war, in 1916, Congress had created the U.S. Shipping Board, which greatly expanded U.S. regulation of waterborne commerce. With the war’s end in 1919, Sen. Jones proposed the Merchant Marine Act of 1920 to amend the 1916 legislation, give the Shipping Board additional authority and address other maritime concerns.14
Those other concerns included helping U.S. ocean carriers such as the Alaska Steamship Co. and the Pacific Steamship Co.,15 both based in Seattle. These lines were losing business to a scheme that involved merchandise being shipped “from a point in the United States over a Canadian railway line and thence by water via a British vessel not authorized to carry freight or passengers between American ports to a port in Alaska.”16 So Sen. Jones included Section 27 — the section now known as the Jones Act — to prohibit such movements. It barred foreign ships from carrying cargo between domestic points “by land and water,” thereby eliminating the rail-to-ship routes for Alaska.17
But it didn’t bar rail-to-ship routes completely. Bowing to U.S. jurisdictions that had voting power in Congress, Jones inserted into Section 27 what is now known as the “third proviso,” which was enacted so as not to disrupt existing cargo movements over Canadian railroads in the Great Lakes region.18 The third proviso read:
“This section shall not apply to merchandise transported between points within the continental United States, excluding Alaska, over through routes heretofore or hereafter recognized by the Interstate Commerce Commission for which routes rate tariffs have been or shall hereafter be filed with said Commission when such routes are in part over Canadian rail lines and their own or other connecting water facilities”19</sup [emphasis added]
As the added phrase “excluding Alaska” suggests, Alaska — being a territory — had little power in Congress. It had one non-voting delegate in Congress, George Grigsby, a Democrat who served in the House. Grigsby spoke out against the act, but was unable to remove its onerous wording. In a speech he delivered in Juneau on Aug. 17, 1920, after the Jones Act had been enacted, Grigsby informed his audience: “I could not get Alaska exempted from the provisions of the bill because it was Senator Jones’ bill, and Senator Jones is from the state of Washington, and Senator Jones does not want Alaska exempted from the pro-visions of the bill.”20
He said Jones “was more powerful than I was. I didn’t fight with him. I did not incur his enmity; he has helped me since in other matters. If I couldn’t have my way about that, I simply had to let it go and trust for a chance of showing him where he is wrong at some future session.
“But Senator Jones’ interests are in Washington,” he continued. “His constituents, a large part of them, reside in Seattle, and Seattle does not want that Canadian competition, of course.”
In the end, Section 27 made it impossible for shippers in the Alaska trade to use Canadian rail-roads to bypass U.S. ocean carriers. As attorney Ivan Ascott wrote in 2004 in the Seattle University Law Review: “In particular, the infamous Jones Act created a monopoly for Seattle shipping companies that served Alaska, keeping prices for imports and exports artificially high.”21
The Territory Resists; the Empire Strikes Back
These high prices did not go unnoticed in the territory. The 1920 law fueled a backlash and prompted a lawsuit by Alaska Attorney General John Rustgard and the Juneau Hardware Co.
The basis of the case was an attempt by John Troy, U.S. collector of customs in Alaska, to confiscate merchandise that Juneau Hardware had purchased in Michigan and transported to Alaska via a Canadian rail line and foreign ship. The case, Alaska v. Troy, made its way to the U.S. Supreme Court after failing at the district level.22 Rustgard argued that the Jones Act violated Article I, Section 9, Clause 6 of the U.S. Constitution,23 otherwise known as the port preference clause:24
“No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.”
The Jones Act imposed a unique burden on Alaska by prohibiting its residents and businesses from using Canadian railroads in conjunction with foreign ships — a prohibition no state faced.25
“The Jones Act was clearly discriminatory,” wrote Claus-M. Naske, one of Alaska’s most prominent historians, in 1985.26 Nevertheless, in February 1922, the Supreme Court unanimously ruled against Alaska, with Justice James McReynolds writing that the term “state” occurred “very often in the Constitution, and, as generally used therein, it clearly excludes a ‘territory.’”27
While the lawsuit was making its way through the judicial system, Alaska delegate Daniel Sutherland tried unsuccessfully to reform the Jones Act in Congress. He pointed out that the change had hampered Alaska’s commerce. One Juneau sawmill, he said, saw its transportation costs more than double after passage of the Jones Act. The mill’s profit margin vanished and it had to close down.28
“There was an opportunity for Alaska to come into a little commerce,” Sutherland lamented, “but we were immediately closed off by reason of the clause in this act.”29
Alaska Comes In from the Cold, Sort of
The end of World War II ushered in a transition away from colonialism, as world powers slowly began relinquishing their overseas territories. For the United States, this meant statehood for Alaska and Hawaii. It also meant the end of the Jones Act’s “excluding Alaska” clause, which between 1920 and 1959 had hindered Alaska’s economic development.
In a 1955 speech, former territorial Gov. Ernest Gruening had condemned the law.
“Again and again have Alaska’s delegates sought to have the discriminatory clause in the maritime law repealed,” Gruening stated. “But each time the lobbies of the benefitting stateside interests have been successful in preventing any relief action.”30
He added that, “If Alaska were a state, the whole discrimination in the Jones Act would go out of the porthole.”
This prediction proved correct. Four years later, the federal Alaska Statehood Act replaced “excluding Alaska” with “including Alaska.”31 After 39 years of being treated differently under the Jones Act, the Last Frontier was now to be treated the same as any other state.
But even with the revised language, Alaska still suffered.
“The development of Alaska has been too long restrained by the inordinately high costs of water transportation,” Alaska Gov. William Egan told a U.S. Senate Subcommittee in 1963. “Transportation costs … can be lowered effectively and lastingly only so long as there exists a system of true competition.”32
As the Jones Act’s requirements prevented meaningful competition, transportation costs remained high. Two decades later, in 1982, the Alaska Statehood Commission estimated the Jones Act drained $225 million a year from Alaska’s oil industry, while costing other sectors of the economy $41 million.33
In 1986, the U.S. Department of Agriculture’s Forest Service estimated the Jones Act cost Alaska’s timber industry $4.77 million annually and suppressed employment.34 In 1988, the U.S. Government Accountability Office found that the law’s U.S.-build requirement alone cost Alaska about $163 million, equivalent to 2% of the state’s personal income at the time.35 The following year, as the U.S. House Committee on Merchant Marine and Fisheries was considering the proposed Intermodal Shipping Act of 1989,36 Alaska Gov. Steve Cowper beseeched its members to avoid adding more regulations that could further burden the state’s Marine Highway System.
“Commodity pricing in Alaska is extremely sensitive to changes in the water-carrier industry,” he testified. “Consequently, even a slight increase in the cost of shipping will have an undesirable cumulative effect on the purchasing power of every Alaskan consumer.”37
Fortunately, that bill was not enacted, but Alaska’s troubles with the Jones Act continued. Just after the turn of the millennium, U.S. Sen. Frank Murkowski of Alaska detailed how ships cost twice as much to con-struct in the United States than in foreign shipyards. Building an oil tanker in the U.S., he said, “costs about $200 million. You can build them in Korea for $100 million. … You have got to recognize the reality that this is passed on to the consumer.”38
In 2004, the Alaska Minerals Commission noted that “commodity shippers such as mineral companies in Alaska seeking new markets for their products are especially affected” by the Jones Act, since there were so few bulk carriers in the Jones Act fleet.39 Today, few has become none; the last Jones Act-qualified bulk carrier was scrapped in March 2021.40
Gone Fishin’
Theoretically, including Alaska in the “third proviso” should have minimized the Jones Act’s effect on Alaska, yet that has not been the case. Relatively little cargo has moved because of the exemption — and fear of political backlash is almost certainly to blame. In the early 1980s, for example, a company attempting to offer service between Alaska and the lower 48 using Canadian railroads and West German-flagged ships was stymied by the U.S. Federal Railroad Administration, with which it had to file rates. As it turned out, the FRA nixed the proposed route after U.S. Sens. Slade Gorton and Henry Jackson both from Washington state, expressed “their concern that the maritime industry and maritime labor would suffer from a diversion of cargo to Canada.”41
Subsequently, U.S. Rep. Don Bonker of Washington introduced legislation to repeal the third proviso.42 Approved by the House, the bill died in the Senate, but Washington state’s desire to maintain its hammerlock on the Alaska trade plainly had not abated.
Fast forward to 2021, and the third proviso again is a matter of controversy that has the health of Alaska’s economy at stake. In August, U.S. Customs and Border Protection slapped the state’s pollock industry with a $350 million fine for alleged Jones Act violations.43 This fine dwarfed the previous largest Jones Act fine of $10 million, which was leveled against Texas-based energy company Furie in 2017 — and also involved Alaska.44 As of early November 2021, it is not clear that Alaska’s pollock industry violated the law.45 The third proviso allows for goods moving between U.S. points to bypass the Jones Act if they are carried on a Canadian railroad for part of the journey. Fishing company American Seafoods Group had been using this clause for 20 years without legal interference to move fish via foreign vessels from Alaska through the Panama Canal to eastern Canada. There, the fish were offloaded onto a relatively short stretch of rail line, then trucked to the eastern U.S. market.
Perhaps because of political events at the federal level — with President Joe Biden publicly asserting his fealty to the Jones Act on numerous occasions46 — U.S. Customs only recently decided to take action against ASG and other companies involved in this clever Jones Act work-around. Several firms have sued the agency and the case awaits a decision. Should the pollock sector lose its access to this third proviso route, its expenses would skyrocket.
ASG President Inge Andreassen told Undercurrent News that “any alternative would result in nearly double the cost for transportation.”47
Dispersed Costs, Concentrated Benefits
Studies have shown that the costs of the Jones Act are dispersed nationwide, but citizens of states dependent on ocean transportation pay a premium. Recent research has estimated the law costs Hawaii and Puerto Rico $1.2 billion and $1.5 billion a year, respectively,48 while coastal states generally can attribute 2% to 3% of their shipping costs to the Jones Act.49
Alaska has more transportation options than Hawaii or Puerto Rico, but since it receives a substantial portion of its goods by water, it still suffers. In 2019, almost 2.5 million short tons of cargo were moved north by water from the lower 48 to Alaska, 23.4 million short tons were shipped south, and 5.7 million short tons were moved intrastate.50
Many of these goods were carried by Matson Navigation Co., which operates three Jones Act containerships in the Alaska-mainland trade. As of 2021, these ships are all 34 years old and will need to be replaced soon.51 Older vessels generally are less safe52 and less fuel efficient,53 leading to higher maintenance and operational costs, which ultimately contribute to higher consumer prices. By way of comparison, containerships in the international market are usually replaced after 25 years of service.54
The Jones Act’s U.S.-build requirement is the primary driver behind carrier replacement decisions. Since cargo ships can cost four to five times as much to assemble in the United States as in a foreign country,55 ocean carriers delay replacing their vessels.56 If the law’s build requirement were lifted, Matson, TOTE or even new shipping firms could purchase drastically lower-priced ships and Alaska would reap the benefits.
The consultants to the Alaska Statehood Commission actually recommended this back in 1982, stating: “Given the recent lifting of prohibitions on overseas-built vessels for U.S. subsidized trades, the State of Alaska may wish to consider an effort to obtain a waiver of the requirement to use vessels built in the U.S. and place less emphasis on changing the remainder of the Act.”57
Other proponents of that option include naval historians Andrew Gibson and Arthur Donovan, authors of the highly regarded 2000 book “The Abandoned Ocean,”58 in which they wrote: “Eliminating the domestic build requirement would expand the fleet engaged in coastal trade and make it more competitive.”59 Other prominent supporters of this policy include Michael Hansen, president of the Hawaii Shippers Council; North Carolina State professor of economics emeritus Thomas Grennes; Cato Institute policy analyst Colin Grabow; and Keli‘i Akina, president of the Grassroot Institute of Hawaii.60
In a competitive economy, it’s expected that companies would have the choice to buy less expensive ships from foreign manufacturers. But as it stands, with the build requirement acting as a massive barrier to potential competitors, shipping companies such as Matson are content to use older ships as long as they can and continue to profit handsomely from the Alaska trade. Perhaps not coincidentally, Matson is consistently more profitable than other companies in the marine transportation industry,61 and its executives are among the highest paid in the industry.62
Conclusion
The Jones Act has been a burden on Alaska’s economy for more than a century, from Section 27’s initial discrimination to the costly “equality” that has followed. The evidence is overwhelming and the proposition logically obvious that increased transportation costs lead to lower economic growth and reduced employment opportunities.
Few current legislators in Alaska seem to know it, but a 1984 state ballot measure approved by the Alaska voters directed the state’s governor “to seek repeal of federal statutes (the Jones Act) which re- quire the use of United States vessels to ship goods between United States ports.”63 Not only does that law appear to have been routinely ignored, these days Alaska’s congressional delegates generally defend the Jones Act64 — which seems counterintuitive when considering how the law harms so many of their constituents.
Alaska’s situation aside, the Jones Act has failed in its broader mission to protect the nation’s shipbuilding industry. As of mid-2021, the Jones Act-qualified fleet of large oceangoing vessels had plummeted to a mere 96, down from 257 in 1980.65
The good news is that there are several Jones Act reform bills in Congress, proposed by Sen. Mike Lee, R-Utah; Rep. Tom McClintock, R-Calif.; and Rep. Ed Case, D-Hawaii.66 The prospects for their success appear at the moment to be slim,67 but it certainly wouldn’t hurt if Alaska’s delegates were to sign on as co-sponsors.
At a minimum, scrapping the Jones Act’s U.S.-build requirement ought to be on the table. This would benefit not only Alaska, but the U.S. economy in general, by enabling more efficient and less costly waterborne transportation.
Endnotes
1 Scott Cohn, “These are America’s 10 most expensive states to live in,” CNBC, July 15, 2021.
2 The U.S. territories of Guam, American Samoa and the U.S. Virgin Islands have either partial or full exemptions. See John Frittelli, “Shipping Under the Jones Act: Legislative and Regulatory Background,” Congressional Research Service, Nov. 21, 2019, p. 5.
3 “Tariff of 1789 (Hamilton Tariff),” Federal Reserve Bank of St. Louis, p. 4, accessed Sept. 27, 2021.
4 Dennis Bryant, “History and Overview of U.S. Cabotage Laws,” MarineLink, Sept. 30, 2020; John Frittelli, “The Jones Act: An Overview,” Congressional Research Service, July 8, 2003, p. 1.
5 “What Every Member of the Trade Community Should Know About Coastwise Trade: Merchandise,” U.S. Department of Homeland Security, January 2009, p. 2.
6 “Cabotage,” Merriam-Webster’s Unabridged Dictionary, accessed Aug. 25, 2021.
7 Simat, Helliesen & Eichner Inc., “The Jones Act and its Impact on the State of Alaska, Volume II: Final Report,” study for the Alaska Statehood Commission, July 1982, p. 3.
8 Andrew Gibson and Arthur Donovan, “The Abandoned Ocean: A History of United States Maritime Policy,”University of South Carolina Press, 2001, pp. 57-58.
9 Ibid, p. 75.
10 Vincent Smith and Philip Hoxie, “The Jones Act in Historical Context,” American Enterprise Institute, June 2019, pp. 2-3; see also Gibson and Donovan, “The Abandoned Ocean,” pp. 49, 64, 75, 93.
11 Frittelli, “Shipping Under the Jones Act: Legislative and Regulatory Background,” p. 3.
12 Robert McGeorge, “United States Coastwise Trading Restrictions: A Comparison of Recent Customs Service Rulings with the Legislative Purpose of the Jones Act and the Demands of a Global Economy,” Northwestern Journal of International Law & Business, Vol. 11, Iss. 1, Spring 1990, p. 66.
13 Frittelli, “Shipping Under the Jones Act: Legislative and Regulatory Background,” p. 3.
14 Smith and Hoxie, “The Jones Act in Historical Context,” p. 4.
15 Michael Grace, “History of the Alaska Steamship Company, Seattle, 1895-1971,” CruiselineHistory.com, March 10, 2010
16 Solicitor General James Beck, “Motion to Advance,” September 1921, in “In the Supreme Court of the United States, October Term 1921: The Territory of Alaska and Juneau Hardware Company, Appellants, v. John Troy, Collector of Customs for the district of Alaska, No. 392,” in “Records and Briefs of the United States Supreme Court,” Vol. 258, Google Books, p. 2.
17 Jonathan Helton, “Jones Act closed loophole that could help Hawaii,” Grassroot Institute of Hawaii, Jan. 31, 2021.
18 Charlie Papavizas, “Jones Act “Third Proviso” in the News,” Winston & Strawn LLP, Sept. 2, 2021; see also “Repeal of the Third Proviso,” U.S. House of Representatives, Subcommittee on Merchant Marine, Committee on Mer-chant Marine and Fisheries, March 18, 1983, p. 220. Since 1920, the need for the third proviso declined. See the Statement of the Interstate Commerce Commission: “During recent years, little use has been made of the third proviso,” p. 226.
19 Papavizas, “Jones Act “Third Proviso” in the News,”; “Repeal of the Third Proviso”; and “United States Code: Merchant Marine Act, 1920,” 46 U.S.C.,” Library of Congress, §883, pp. 7741-7742.
20 Speech by George B. Grigsby Delivered at Juneau Aug. 17, 1920, published in The Douglas Island News, p. 5, under the subhead “Senator Jones Has Influence.” Grigsby also stated: “Seattle and the rest of the state of Wash-ington are with us, and want to help us and will work with us whenever it helps them also, but where our interests conflict with theirs, of course they are against us.” 21 Ivan Ascott, “The Alaska Statehood Act Does Not Guarantee Alaska Ninety Percent of the Revenue from Mineral Leases on Federal Lands in Alaska,” Seattle University Law Review, 2004, p. 1009.
22 “Alaska v. Troy,” Library of Congress, accessed Sept. 30, 2021, p. 103.
23 Ibid, pp. 102 and 109.
24 “Port Preference Clause,” ConSource, Quill Project, Pembroke College Oxford, accessed Nov. 1, 2021.
25 “Supreme Court of the United States, October Term 1921: The Territory of Alaska and Juneau Hardware Company, Appellants, v. John Troy, Collector of Customs for the district of Alaska, No. 392,” in “Records and Briefs of the United States Supreme Court,” Vol. 258, Google Books, pp. 8-11.
26 Claus-M. Naske, “A History of Alaska Statehood,” University Press of American, 1985, p. 100. See also Kirsten Pickard, “University mourns passing of Professor Emeritus Claus-M. Naske,” University of Alaska Fairbanks, March 11, 2014.
27 “Alaska v. Troy,” p. 111.
28 “To Amend Section 27 of the Merchant Marine Act of 1920,” Hearings Before the Committee on the Merchant
Marine and Fisheries, House of Representatives, Sixty-seventh Congress, First Session, on H.R. 6645. Oct. 28 and Nov. 3, 1921, p. 6.
29 Ibid.
30 Ernest Gruening, “Let Us Now End American Colonialism,” a speech delivered to the delegates of the Alaska Constitutional Convention, Nov. 9, 1955, republished by the University of Alaska, June 17, 2009.
31 “2958 — Pub. L. 85-508,” §883, Chapter 24, Merchant Marine Act, 1920, Library of Congress, p. 7742. See also “Public Law 85-508 —July 7, 1958: An act to provide for the admission of the State of Alaska into the Union,” Alaska’s Digital Archives, p. 351 (on slide p13).
32 William Egan, Letter to Sen. E. L. Barrett, Senate Subcommittee on Merchant Marine and Fisheries, Hearing on
S. 534, 88th Congress, Feb. 21, 1963, p. 170.
33 Simat, Helliesen & Eichner Inc., “The Jones Act and its Impact on the State of Alaska, Volume II: Final Report,”
p. 55.
34 Kristine C. Jackson and Charles W. McKetta, “Impacts of the Jones Act on the Alaska Forest Products Trade,” U.S.
Department of Agriculture, Forest Service, Sept. 1986, pp. 23-25.
35 “The Jones Act: Impact on Alaska Transportation and U.S. Military Sealift Capability,” U.S. Government Account-
ability Office, Sept. 30, 1988, p. 20.
36 US Congress HR2498, Intermodal Shipping Act of 1989, TrackBill, accessed Sept. 29, 2021.
37 Steve Cowper, Letter to Sen. Walter Jones, Hearings Before the House Subcommittee on Merchant Marine and
Fisheries, 101st Congress, June 15, 1989, p. 448.
38 “West Coast Gasoline Prices,” Hearing Before the Subcommittee on Consumer Affairs, Foreign Commerce and
Tourism, Statement of Sen. Frank Murkowski, April 25, 2001, p. 12. See also Colin Grabow, Tweet, March 2, 2021. 39 “Report of the 2004 Alaska Minerals Commission,” Alaska Minerals Commission, January 2004, p. 10.
40 “United States Flag Privately-Owned Merchant Fleet Oceangoing, Self-Propelled, Vessels of 1,000 Gross Tons and Above that Carry Cargo from Port to Port, Summary of Changes from 2016 Onward,” U.S. Maritime Admin-istration, April 15, 2021, p. 9. Note: The last Jones Act-qualified bulk carrier, the Texas Enterprise, owned by U.S. United Ocean Services, was moved out of the Jones Act fleet to be scrapped in March of 2021.
41 “Repeal of the Third Proviso,” p. 349.
42 Ibid, p. 220.
43 Colin Grabow, “Seafood Company Hit with Jones Act Penalties over Railroad to Nowhere,” Cato Institute, Sept. 8, 2021.
44 Alex DeMarban, “Furie agrees to pay $10 million in biggest-ever Jones Act fine,” Anchorage Daily News, Dec. 2, 2017.
45 On Sept. 28, 2021, a federal judge denied the pollock industry’s request to block the fine from going forward. See: Nat Herz, “Judge rejects Bering Sea seafood companies’ request to block penalties for alleged violations of federal shipping law,” KTOO, Sept. 30, 2021.
46 Scott Shackford, “Biden Administration Affirms Support for Protectionist Jones Act, Throwing Hawaiians, Puerto Ricans to the Sharks,” Reason, Jan. 27, 2021.
47 Jason Huffman, “Some Jones Act-compliant producers want to see US pollock sector punished,” Undercurrent News, Sept. 10, 2021.
48 “The Jones Act and Hawaii,” Grassroot Institute of Hawaii, accessed Aug. 25, 2021; Jonathan Helton, “More studies show Jones Act harmful to Puerto Rico,” Grassroot Institute of Hawaii, April 22, 2019.
49 William Olney, “Cabotage Sabotage? The Curious Case of the Jones Act,” University of Hawai’i at Manoa Department of Economics Working Paper No. 20-14, June 2020, pp. 4, 25.
50 “Waterborne Commerce of the United States 2019: Part 5 National Summaries,” U.S. Army Corps of Engineers, Institute for Water Resources, December 2019, Table 4-1.
51 “United States–Flag Privately–Owned Merchant Fleet Report,” U.S. Maritime Administration, p. 4.
52 Thomas Grennes, “Sacrificing Safety Is an Unintended Consequence of the Jones Act,” Mercatus Center, March 21, 2018.
53 “Puerto Rico: Characteristics of the Island’s Maritime Trade and Potential Effects of Modifying the Jones Act,” U.S. Government Accountability Office, March 2013, p. 15.
54 Jan Hoffmann, “Decarbonizing maritime transport: Estimating fleet renewal trends based on ship scrapping patterns,” United Nations Conference on Trade and Development, Feb. 25, 2020.
55 Colin Grabow, “Rust Buckets: How the Jones Act Undermines U.S. Shipbuilding and National Security,” Cato Institute Policy Analysis No. 882, Nov. 12, 2019.
56 Thomas Grennes, “Sacrificing Safety Is an Unintended Consequence of the Jones Act.”
57 Simat, Helliesen & Eichner Inc., “The Jones Act and its Impact on the State of Alaska, Volume II: Final Report,” p. 55.
58 Gordon Boyce, book review of “The Abandoned Ocean: A History of U.S. Maritime Policy,” EH.net / Economic History Association, September 2020.
59 Gibson and Donovan, “The Abandoned Ocean,” p. 303.
60 Michael Hansen, “Testimony of Michael Hansen on Guam Jones Act Resolution,” Grassroot Institute of Hawaii,June 26, 2013; this testimony was presented originally before several Guam Legislature committees on June 4, 2013. See also Colin Grabow and Thomas Grennes, “Against the Jones Act,” Truth on the Market, June 7, 2021; and Keli’i Akina, “Isle residents need relief from Jones Act burden,” Grassroot Institute of Hawaii, Aug. 15, 2021. June 26, 2013; this testimony was presented originally before several Guam Legislature committees on June 4, 2013. See also Colin Grabow and Thomas Grennes, “Against the Jones Act,” Truth on the Market, June 7, 2021; and Keli’i Akina, “Isle residents need relief from Jones Act burden,” Grassroot Institute of Hawaii, Aug. 15, 2021.
61 In Q2, 2021, Matson’s net margin for the second quarter of 2021 stood at 13.85%, compared to the average marine transportation company’s net margin of 12.47%. See: “Matson Profit Margin 2006-2021 | MATX,” Macro Trends, updated June 30, 2021; and “Marine Transportation Industry Profitability,” CSIMarket, accessed Oct. 5, 2021.
62 Greg Miller, “How much do shipping CEOs make? (Here’s their pay info),” FreightWaves, July 11, 2021.
63 “Alaska Reduce Transportation Regulation Initiative (1984),” Ballotpedia, accessed Sept. 4, 2021.
64 Patrick Tyrrell, “The Peculiar Case of Alaskan Senators’ Support for the Jones Act,” Heritage Foundation, May 9, 2019.
65 Josh Mason and Jonathan Helton, “Five Myths about the Jones Act,” Grassroot Institute of Hawaii, July 2021, p. 9; and “Annual Report of the Maritime Administration for Fiscal Year 1980,” U.S. Maritime Administration, July 1981, p. 16.
66 “McClintock, Lee Introduce Bill to Repeal Jones Act,” press release from U.S. Rep. Tom McClintock, May 14, 2021; “Case Re-Introduces Bills to Attack Key Driver of Hawai’i’s High Cost of Living,” press release from U.S. Rep. Ed Case, Jan. 14, 2021.
67 Huffman, “Some Jones Act-compliant producers want to see US pollock sector punished.”