Student Research

Revitalizing the U.S. Maritime Industry Through Changes to the Jones Act

Subject: This paper examines the current ailing state of the maritime industry in the United States; with a primary focus on the large tonnage ocean going vessels. Retaining a prominent maritime industry is a key component to the country’s well being. The maritime industry is the heart of commerce for the nation. It is a multibillion dollar industry that is essential to the daily economic stability of the nation, supports millions of jobs, and plays a critical role in national security during a time of need. Methodology: U.S. policies that govern the maritime industry are discussed including roots of origin, current state of the policies, and the effects they hold over the market. The past and present status of vessels involved in the U.S. maritime industry is profiled and compared to its foreign competitors. Recommendations are made to assist the struggling fleet in regaining its footing in the competitive international shipping market. Findings: The number of vessels using the United States as the flag of registry has gone from 20% in the 1960’s to less than 1% today. Data was gathered from U.S. and Foreign government sources, current maritime periodicals, and domestic and international shipyards and labor pools. The data provided in this paper shows two primary barriers to entry for the U.S. flagged market as major reasons behind this decline. The requirements that U.S. flagged vessels are built in the U.S. and must be crewed by U.S. citizens make it cost prohibitive for shipping companies to flag their vessels in the United States. These barriers are set in place by antiquated U.S. maritime policies; policies that were created to protect the industry now prevent it from being competitive. Conclusion: The U.S. maritime industry is in a state of disrepair and in jeopardy of disappearing. The diminutive presence the U.S. maintains in the maritime industry makes it an irrelevant player in the global shipping market. Failing to change the current system will allow the industry to deteriorate further to the point of extinction. This could have severe consequences on the economic stability and national security of the United States. Recommendations: The recommendation to aid the ailing industry is to amend existing maritime policies that prevent it from being successful. Removing the mandate that ships are built in the U.S. and modifying the crewing requirements will allow the U.S. to be a competitive flag state of registry. Changing these policies will significantly reduce the cost to own and operate a U.S. flagged vessel. This will increase the number of vessels sailing under the U.S. flag and revitalize an industry that is endanger of becoming extinct.

A Capstone Project submitted to the Graduate Faculty of the California State University – Maritime Academy in partial fulfillment of the requirements of the degree of Master of Science in Transportation and Engineering Management with a specialization in Transportation