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The U.S. Supply Chain Makes No Sense


Muda69

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1 hour ago, DanteEstonia said:

tHe mArKeT isn't going to change the fact that those boats can't get through the Panama Canal and reach the Eastern Seaboard. Getting rid of the Jones Act will not do anything at all for shipping costs. 

https://cei.org/studies/repeal-or-reform-the-jones-act/

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That is what has happened to the U.S. shipbuilding industry. Under the law’s supposed protection, the number of U.S. commercial shipyards has dwindled from 64 after World War II to barely one, Philly Shipyards, a subsidiary of a Norwegian company that uses South Korean designs and engines. It currently has no shipbuilding orders, and has begun to compete for Defense Department maintenance and repair contracts. Meanwhile, whole categories of ships, such as heavy lift, liquified natural-gas transport, and offshore construction vessels, are no longer made in the U.S. because of the Jones Act.[3] Any American who needs to use such a ship domestically must lobby Congress for a statutory exemption. 

Consequences for U.S. Commerce. The Jones Act’s proponents are fervent supporters of “buy American” but the law unintentionally favors foreign sellers over domestic ones. It is protectionism for foreign companies. Shipping rates on Jones Act routes are typically several times more expensive than rates in the competitive international market, especially in terms of cost per nautical mile travelled for a standard container. This is because federal law makes it almost three times more expensive to operate a ship domestically than internationally. The same shipping companies that charge nearly $3,000 to ship a container from Jacksonville to Puerto Rico charge half as much to ship that same container to nearby Dominican Republic.[4]

Consequences for National Security and Emergency Preparedness. The law has also failed its national security mission. The Defense Department prefers foreign transport ships because of their much lower cost, and the vast majority of the vessels chartered for sealift during the Gulf and Iraq Wars was foreign.[5] Even if U.S. commercial ships were affordable and available for military use, their military utility is fading fast: 21st century warfare requires transport ships that are fast and flexible, while the global maritime industry is heading in the other direction, with transport ships that are increasingly slower, bigger, and less maneuverable. As for national emergencies, every time one requires sealift the Jones Act needs to be waived so victims can get the relief they need from ships that are actually available.

Consequences for the U.S. Energy Sector. The impact of the Jones Act on American energy is particularly difficult to justify in today’s world of globally dominant North American oil production and falling prices. East Coast refineries are forced to import oil and gas from foreign countries while America’s own Gulf Coast suppliers drown in an ocean of cheap oil and gas, desperate for markets.[6] If it not for the Jones Act, America might be able to cut its imports of crude oil by half.  

Consequences for Puerto Rico. According to one study, the Jones Act is equivalent to a 64.6 percent tariff on domestic seaborne trade.[7] Puerto Rico, Hawaii, and Alaska can import whatever they want from America’s trading partners virtually tariff-free—but if they import anything from the mainland United States, they must pay a significant penalty. In some cases, the penalty is prohibitive: Puerto Rico is forced to get its energy from countries like Venezuela and Trinidad instead of from the United States. 

Recommendations. If reviving America’s shipbuilding and shipping industries ever became a national priority, the Jones Act would have to be repealed in its entirety. In the meantime, several reforms can be undertaken, including:

  • American-owned oceangoing vessels of all flags and origins—of which there are almost 1,000—should be exempted from the law so they can sail between American ports. This would essentially repeal the “American-build” requirement of the Jones Act, leaving the rest of it in place.
  • All energy shipments should be exempted from the Jones Act, so that American energy producers can ship directly to American consumers instead of having to ship to foreign countries while their potential American consumers have to find foreign sources to make up the shortfall. 
  • Shipping between U.S. ports and ports in Puerto Rico, Hawaii, and Alaska should be exempt from the Jones Act. 

For 100 years, the Jones Act has poisoned America’s maritime industry while imposing hidden costs on U.S. consumers. Its chief beneficiaries are foreign shippers whom the law in effect protects from American competition. Its only American beneficiaries are a small number of decrepit shipyards and shipping companies that depend entirely on the slow poison of its cartel restrictions, and the government officials who find short-term political benefit in subordinating the public interest to those special interests.

 

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10 hours ago, DanteEstonia said:

Looks like everyone's favorite Tory really did gut America. 

Hey @swordfish and @Impartial_Observer you got what you voted for. Enjoy your inflation.

Typical that a socialist like yourself supports government subsidies and heavy regulation in most if not all industries.

So you also believer the current wave of inflation was caused by Mr. Reagan ending subsidies?

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1 hour ago, Muda69 said:

Typical that a socialist like yourself supports government subsidies and heavy regulation in most if not all industries.

Just in our important industries. 

1 hour ago, Muda69 said:

So you also believer the current wave of inflation was caused by Mr. Reagan ending subsidies?

Yes, ultimately. 

1 hour ago, swordfish said:

OK Mr. Supply Chain expert/Trucker/School Teacher.......

Did you film at the Long Beach Container Terminal? Do you you have a TWIC? When you do, let me know, then you'll know. 

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19 hours ago, DanteEstonia said:

But my car was made in 2021.

What is your point you sick fuck?

Are you trying to impress me with your wealth you sick fuck?

Are you insinuating I can’t afford a year old Subaru you stupid fuck?

 I don’t drive a 20 year old truck you stupid fuck.

I’ve never had COVID you stupid fuck?

What is your fascination with me you sick fuck?

Congrats on your new Subaru, man I can only aspire to such heights!

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  • 2 months later...

More Jones Act madness:  https://reason.com/2022/10/19/somebody-in-the-shipping-industry-wants-opponents-of-the-jones-act-charged-with-treason/

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Is it treason to encourage lawmakers to strike down a century-old protectionist shipping law that shields a small number of U.S. businesses and workers from competition at the expense of American consumers? Of course not, but apparently, at least one member of a maritime shipping advisory panel thinks it is.

To wit: In documents the Cato Institute obtained from the U.S. Maritime Administration (MARAD) through the Freedom of Information Act, a set of recommendations from an advisory committee included a suggestion to "charge all past and present members of the Cato and Mercatus Institutes with treason." Their collective crime against the United States is simply advocating against the continued enforcement of the Jones Act, a.k.a. the Merchant Marine Act of 1920, which requires that ships transporting cargo between U.S. ports be American-made and owned and crewed by Americans.

The Jones Act is a deliberately protectionist law that shields domestic shipping companies from foreign competition. There are fewer than 100 Jones Act-compliant ships. The end result is that people who live in distant parts of America like Hawaii, Alaska, and Puerto Rico have to pay much more for goods (particularly fuel) to be shipped to them. It also makes a crisis (like a hurricane, for example) much more expensive to recover from.

For years, the Cato Institute and Mercatus Center have called for the repeal of this bad, anticompetitive law. But domestic shipping industry magnates (and the unions representing their workers) benefit financially by shutting the door on potential competition. The industry has the ear of lawmakers, a tremendous amount of power, and, it turns out, huge amounts of influence over the government agency that's supposed to be overseeing them.

The Cato Institute had been working for months to get responses to Freedom of Information Act (FOIA) requests from MARAD about some of their internal communications. They finally got MARAD to turn over some emails and memos. At the end of a 41-page collection of documents is a set of recommendations from the Marine Transportation System National Advisory Committee (MTSNAC). This is a federal committee under the umbrella of the U.S. Department of Transportation. These recommendations come from a March 2020 meeting encouraging support of the Jones Act. It calls for "Unequivocal support of the Jones Act" and adds:

Charge all past and present members of the Cato and Mercatus Institutes with treason. The President inform the Heritage Institute that he will personally disavow them if they continue to advocate against the Jones Act.

It should be obvious that it is not "treason" to advocate that lawmakers, using the democratic process, strike down an old law that protects a handful of special interests at the expense of the larger American public. That this would even appear in a list of recommendations from a government advisory committee, whether serious or not, is a red flag about who that agency serves.

Haley Byrd Wilt over at The Dispatch got the scoop on the story but was unable to get any information about where the treason recommendation came from. She did note that it was not included in the committee's final list of recommendations that year. People Byrd Wilt spoke to from the subcommittee either didn't remember the recommendation or theorized it was a joke.

Scott Lincicome, director of general economics and of Cato's Herbert A. Steifel Center of Trade Policy Studies, is one of the allegedly treasonous citizens the recommendation targets (he also writes a newsletter for The Dispatch). He tells Reason, "My initial reaction was, and I literally said it out loud, was, 'Holy shit.' Pretty stunning stuff."

Lincicome and Colin Grabow, a research fellow with Cato, have a blog post up explaining the background of their pursuit of these documents and a link to the documents themselves. Lincicome tells Reason that more documents will be posted in the next few days. He says that these documents will help further establish how much MARAD has essentially been captured by the maritime industry. It's supposed to be serving as industry oversight. But that's not what Lincicome sees.

"There is an established pattern of pro-Jones Act collusion between the maritime industry and the government agency charged with regulating them," Lincicome says. "It's not in any way subtle." He tells Reason that he has documentation showing MARAD officials and representatives from the shipping industry openly discussing in 2020 how to prevent ships that weren't compliant with the Jones Act from getting permission from the federal government to help deliver Liquefied Natural Gas (LNG) to northeastern states in response to increased demand due to frigid weather conditions. The Jones Act was amended that very year to change the waiver process to make it harder for the federal government to grant this permission, even during emergencies (except for military emergencies).

The absurd "treason" allegation is salacious, Lincicome says, but it's just the tip of the iceberg. The fact that this would be included in a list of recommendations intended to be treated seriously by the federal government is a symptom of a much deeper problem.

"This is the industry and the agency that regulates it working hand and glove together to squelch criticism of the law," he says.

Despicable.

 

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