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Saturday, January 30, 2016
The Drama of the Jones Act Follies
By Michael Hansen @ 2:50 AM :: 4488 Views :: Jones Act

by Michael Hansen, Hawaii Shippers Council, January 29, 2016

The London-based Seatrade Magazine published on Friday, January 29, 2016, an op-ed “The drama of Jones Act follies” written by Barry Parker, President, BDP1 Consulting Ltd., a well-respected New York-based shipping finance consultancy, commenting on the controversy this week surrounding a report on the Jones Act.

There are two parties to the controversy. A Washington, DC, think tank, the Alliance for Innovation and Infrastructure (AII). They wrote a report released on January 19th that was highly critical of the Jones Act. However, it was filled with inaccuracies and outright errors. The Jones Act industry trade association, the American Maritime Partnership (AMP), took the opportunity to exploit the problems with the report and reject any calls for Jones Act reform.

The author of the Seatrade op-ed notes the problems with the Jones Act debate including inaccuracies perpetrated by both sides as demonstrated by the recent controversy.

Key excerpts:

It is impossible to prove whether the Jones Act is good or bad, any attempts at consultants’ studies invariable degenerate into preachy Gospel-like statements parroting back talking points from whichever side commissioned the particular economic study. This past week, a lively battle ensued between a group called The Alliance for Innovation and Infrastructure (against) and the American Maritime Partnership (in favour). Like (Donald) Trump with his media savvy strategies, the AMP, which describes itself as the voice of the domestic maritime industry, has clearly won this battle, as it lashed out hard at the way out-gunned AII, led by former military officers, according to the AMP.

This quote, bullet-pointed by opponents of the Jones Act before the tanker boom now in its second year, comes from Forbes, a one-time serious business publication, the only name brand business publication to pick up the AII’s article. Amusingly, the Forbes contributor who cites the AII report, misses the Jones Act start date by 100 years, telling readers “Much has changed in the last one hundred years, so it only makes sense to overhaul or at least revisit this relic from the early 19th Century.” Such an error is far more egregious than quoting tanker rates from 2013, illustrative of the sloppiness injected into this dialogue.

In this latest skirmish, the AMP demanded a retraction of the AII’s assertions, and cited more than a dozen of what it labeled as erroneous claims. Ironically, the AII report – describing a 2013 Congressional report, acknowledges the inability for commentators (from either side) to provide economic clarity on the issue. The U.S. government had said: “The ultimate conclusion of the report is that there are too many factors affecting prices and economic trends to attribute a significant blame to the Jones Act and that the effects of modifying the Act are uncertain.”

AMP, though bathed in talking points, at least gets the point that this discussion should be shifted beyond the realm of objective $ per ton and $ per day calculations; do not attempt to impose a layer of economics that is so riddled with holes as not to be seaworthy.

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