As a result of the Jones Act, companies that manage cargo vessels may be more inclined to retrofit older ships rather than to construct new ones for their rounds. The Detroit Free Press recently reported on the shipping season in the Great Lakes, which is welcoming more newly built Canadian ships. According to this article, Canada's freight building activity has achieved a rate "unprecedented" for more than 50 years.
However, part of this boom for the has been due to the end of overseas shipbuilding taxes for Canadian companies. Some of the newer freighters are being constructed in China and Croatia, but American operations are not able to do this, as the Jones Act prohibits ships that were not built in the United States from moving cargo between domestic ports.
The source quotes writer Roger LeLievre on the limitations posed by this law and their impact on domestic shipping.
"It's so expensive to build a ship that the emphasis over the past couple of years has been to renew and refit the ships on the American side," LeLievre said. "You'll see new engines going in and new technology, such as scrubbers — older ships, but technology constantly being updated."
While senator John McCain attempted to oppose the Jones Act earlier this year, the Maritime Executive reported that shipbuilders were among those who challenged this measure. One reason the U.S. needs to keep its shipbuilding domestic, the source argued, is for security, especially in terms of trusting government ship projects to China. Another concern is the way outsourcing would affect American shipbuilding jobs in states like Louisiana and Florida.
An understanding of the Jones Act and its repercussions is essential for proper marine operations. Fisk Marine Insurance International offers multi-section insurance policies that allow clients to purchase boat insurance coverage to individually fit their industry and ships.