A controversial shipping law is swaying the price of gas | Hacker News Reader

A controversial shipping law is swaying the price of gas

freightwaves.com

100 pointsdEnigma190 comments

It is odd to me that no one is talking about the largest reason ships are not flagged as US.

Straight from the article:

"Today just 0.2% of all ships are U.S.-flagged. Many ships now fly under the flags of Panama, Liberia and the Marshall Islands — countries that allow ocean carriers to bypass a slew of safety regulations, labor laws and taxes. "

The US has basically regulated itself out of the shipping business. Think about that for a second and then wonder if the issue is really greed. The US regulations has made it insanely more expensive to have a US flagged ship.

How do we compete in a global market when the regulatory atmosphere is so lopsided?

> "Today just 0.2% of all ships are U.S.-flagged. Many ships now fly under the flags of Panama, Liberia and the Marshall Islands — countries that allow ocean carriers to bypass a slew of safety regulations, labor laws and taxes. "

> The US has basically regulated itself out of the shipping business. Think about that for a second and then wonder if the issue is really greed. The US regulations has made it insanely more expensive to have a US flagged ship.

> How do we compete in a global market when the regulatory atmosphere is so lopsided?

IMHO: pass a law that prevents ships that aren't required to follow reasonable standards for "safety regulations, labor law" from unloading cargo at US ports. That'll reduce the perverse incentives for these flags-of-convenience pretty quick.

The major law involved here that you claim is safety related is this:

All officers have to be US Citizens and

"(1)Except as otherwise provided in this section, on a documented vessel— (A)each unlicensed seaman must be—

(i)a citizen of the United States;

(ii)an alien lawfully admitted to the United States for permanent residence; or

(iii)a foreign national who is enrolled in the United States Merchant Marine Academy; and

(B)

not more than 25 percent of the total number of unlicensed seamen on the vessel may be aliens lawfully admitted to the United States for permanent residence."

What's interesting is that US Officers who meet standard international standards can serve on all these other ships / cruise ships flagged overseas and much more. But international crew cannot serve on a US flagged vessel, even one working entirely overseas.

So there is your reason why so few folks do US flag.

You could instead require safety (actual safety) and actual labor rules that simply applied to everyone, regardless of nationality. But nope, you've chosen to focus on citizenship instead.

We actually have an international standard for safety - STCW – Standards of Training, Certification and Watchkeeping for Seafarers. But your UK wiper (a very junior grade) with totally current STCW can't work on a us flagged ship AT ALL.

You’re making the assumption that all of the regulations are just, required and proportional.

If 1 additional person falls overboard every million man hours worked but everyone gets cheaper shipping, do I care? No, not really.

If your answer is yes, then do you care about the safety conditions of the factories of the goods being transported? How far are you willing to take this?

> You’re making the assumption that all of the regulations are just, requires and proportional.

> If 1 additional person falls overboard every million man hours worked but everyone gets cheaper shipping, do I care? No, not really.

If that's your problem, write your congressmen asking for the repeal of safety regulations because you want cheaper prices. However, that's totally orthogonal to the problem I was addressing with my proposal.

> If your answer is yes, then do you care about the safety conditions of the factories of the goods being transported? How far are you willing to take this?

Yes. Let's go for it and ban imports from those factories with shitty safety conditions, too.

A million hours is over a century. One death per million hours is substantially better than natural attrition.

You going to shut down every factory where someone has a stroke?

The point is that in a world of natural variation and risk, we draw a line somewhere and call the other side unacceptable and this side acceptable.

What we have presently is no line at all for foreign vessels; I happen to agree that it would be better to have the US one.

One in every three boat workers should die by falling overboard at some point in their 40-year career?

Sure, those specific numbers suck - point well made.

Is one death per 10,000 careers too many? One in a million? No regulatory scheme short of "no goods may be transported anywhere" is going to create the latter outcome, so you can either accept that a line must be drawn or accept that anyone who doesn't live on a farm must starve.

Inflation machine go brrrrr

If people aren't able to get out of poverty because the job never existed in the first place, are they really better off?

> Inflation machine go brrrrr

Memes: the internet's least persuasive from of argument.

> If people aren't able to get out of poverty because the job never existed in the first place, are they really better off?

Yeah. Just tax you and give them the money.

You don't provide a path forward, and only make fun of something that is true, inflation and the money printer are running rampant. As for taxing, wealth redistribution is a way forward.

Next time please think about what you write, your useless comments don't advance conversation.

> You don't provide a path forward, and only make fun of something that is true, inflation and the money printer are running rampant. As for taxing, wealth redistribution is a way forward.

No one's talking about printing money except you. Meme comments and other regurgitations will get the responses they deserve.

> Next time please think about what you write, your useless comments don't advance conversation.

LOL. If you were serious you'd have replied to the GGP.

   > If people aren't able to get out of poverty because the job never existed in the first place, are they really better off?

i think this is a false dichotomy: there is no universal law that says people in poverty must put up with abuse, slave wages and unsafe work environments in order to dig themselves out

Awesome! How do you plan to monitor and enforce this?

> If 1 additional person falls overboard every million man hours worked but everyone gets cheaper shipping, do I care? No, not really.

This is one of the most selfish comments I have read in a while. You don't even care. If your only goal is to be able to buy more stuff without any ethical consideration you are a danger for everybody else in other countries, in other states, or anybody that is not you.

Looking into three economic side, worse work conditions attract less people and jobs to vacant. Your conclusion very is simplistic.

It's easy to see why that looks "selfish," but it's less easy to see the distributed effects of higher prices, fewer jobs, and less efficient markets so that you can sit remote from all of it and declare yourself to be more ethical than your neighbor.

Everything has a price. You can’t have much of a society without creating risks of injury.

Do you care if the ship is crewed by slaves who were stolen from their homes?

Nope. It’s sad. Would you avoid buying Nike shoes because their factories have slave labor?

Yeah I would and do avoid that. And no, I’m not doing research to make maximally ethical decisions. I would greatly prefer if it were either outlawed or at least clearly labeled

> And no, I’m not doing research to make maximally ethical decisions. I would greatly prefer if it were either outlawed or at least clearly labeled

That’s a problem. A law doesn’t mean much unless people are both willing to uncover violations and also enforce the laws.

It is not feasible for an individual to stay maximally informed on all things. The perfect is the enemy of the good.

> It is not feasible for an individual to stay maximally informed on all things. The perfect is the enemy of the good.

You don’t have to be maximally informed.

What you haven’t convinced anyone is whether it’s at all possible for anyone to reasonably informed, to make enforcement possible.

What does it take to even uncover questionable labor and practices?

Can it be done without violating sovereignty? If not, should we? The consequences of an unenforceable law is worse than useless.

Thank you for invalidating any point you tried to make. My point, why worry about shipping when everything it’s transporting follows the same lax safety laws. First world society is largely supported on the backs of third world countries full of people working their arses off for little pay and no opportunity for betterment.

Slave children can mine the minerals in the electronics, slave labor can assemble them but by god, if a boat docks port with any crew that are unfairly treated!

Your whole comment is an example of letting the perfect be the enemy of the good, which is surprising because the GP literally brought that concept up.

If you have to solve all problems to solve any problems, you'll solve no problems.

"Regulations reducing MOB situations by one person per million man hours worked" are not the issue.

The issue is that cargo ships are lawless and working on one of these ships, you have zero legal rights.

Nothing prevents ship operators from engaging in stuff ranging from not providing adequate staff levels and PPE, to wage theft, to human rights abuses like retaining people's passports / denying them shore leave / consular access. Need medical care? Tough shit. Don't want to work 100 hours? Guess you're not getting lunch today.

Life for a lot of these guys is barely a step above indentured servitude. Nobody cares. The spice must flow.

If that is your take, then how about we repeal all the existing labor and safety records in the US, at least then we can get the economic benefit from having the jobs here.

You are assuming all regulations are reasonable. In the case of safety it is possible some are not reasonable. There is actually a level of safety vs risk we are willing to take for a given activity. ( Think actually getting into a car ).

Mike Rowe has a great take on this and it seems like an interesting way to look at risk intersections as they pertain to 'reasonable' regulations. Regardless if those regulations are safety, environment, financial, etc.

https://mikerowe.com/2020/03/walk-me-through-this-safety-thi...

Should we have regulations? Without a doubt. Can we regulate ourselves out of existence? Absolutely.

Empty shelves. Empty shelves everywhere.

And, necessarily, will mean I pay more for imported goods as a US citizen. No thanks.

You’re presenting price as though that’s the only relevant point.

I mean you can get an even better deal if you just stole all your neighbour’s stuff, if price is all that matters. Let’s just make that legal, and to hell with the side effects.

Any discussion about regulations has to actually involve the regulations and what they are trying to achieve. Maybe some of these are overzealous? Maybe the way it was implemented was crap (one sided while allowing others to circumvent), etc.

The way I see it in the workplace or any other facet of life: Any activity between two adults, where both adults are of sound mind and consent to the activity should be legal. If someone wants to sign up to work in a dangerous environment for $1/hr, so be it, as long as the risks and terms of payment were communicated and understood by both parties.

Theft is not consensual, therefore it wouldn’t be legal in a laissez-faire regulatory environment. Worker exploitation also would be illegal, if the employer broke the terms of their agreement with the worker.

The issues with that approach is that not everybody is well equipped with the ability to evaluate risk and price it accordingly. Furthermore, the employer typically has an information advantage over the employee, as they know how often the safety equipment is serviced/replaced, for example.

As such, it makes more sense to have an expectation of worker safety and that employees are not unnecessarily exposed to risks that are preventable and known to the employer.

You seem to be unaware of things like structural power imbalance and multi-agent coordination problems. One purpose of regulation is to avoid game theory traps that happen in environments like you describe.

What are the specific regulations you’re arguing against though? Regulations aren’t just about labour, but also externalities, like dumping chemicals in the water.

The Jones law cited in the article is about protecting local labour and manufacturing. Is that what we’re discussing or something else?

You already pay higher prices because of minimum wage, domestic regulations, and, to really hamfist it, laws against slavery.

The EU has already solved this one: you hand together with like-minded countries and set binding minimum regulations that all must abide by, then shut people who don’t comply out.

> How do we compete in a global market when the regulatory atmosphere is so lopsided?

Not everything is always a solely economic issue.

Without standards, it will just become a race to the bottom about who can cut the most corners, care the least about the environment, and accordingly, will end up doing the most damage to it.

It's also a ultimately greedy motive, so while greed might not play a role now, it would most certainly play one in a race to the bottom.

https://en.wikipedia.org/wiki/Flag_of_convenience, and more specifically https://en.wikipedia.org/wiki/Flag_of_convenience#Criticism

The only reasonable case made in this article is that the Jones Act should have been waived earlier for Puerto Rico after Hurricane Maria and that is an ongoing problem for Hawaii and island US Territories.

The Jones Act should be modernized, not scrapped.

>under the flags of Panama, Liberia and the Marshall Islands

Something tells me that if those are the only countries 'willing to compete' then competing is a deal with the devil.

Is the implied 'solution' here really that the US should ignore safety, environmental, tax & human rights regulations like these third-world preferred flag countries? Because that's why these places are preferred: not because we have regulations, but because they ignore them.

You talk as if the regulations are useless. I don't want these ships dumping waste into our oceans or using slave labor. Anti-regulation boils down to a global race to the bottom of companies looking to not pay for their pollution and misery.

You talk as though those ships don't still sail to US ports, as though you don't happily buy products from freight carriers who dump waste and use slave labour. Do you actually know what flag was on the ship that brought in your iphone or car? I'd be very impressed if so.

The regulation is clearly useless. Until you only allow certain ships to bring the masses their favourite new gadgets, which I doubt is going to happen in a modern democracy.

Harm reduction isn't useless.

Regulations so strict that nobody subjects themselves to them don't reduce the harm done to workers.

Of course relaxing our regulations is not the only solution here, we could go all-in and enforce our labor laws on any ship that wants to dock at an American port. Regardless, the status quo isn't doing anything to reduce harm.

My car was built in America and my iPhone flew over on a plane.

You might be surprised to know that a lot of parts on your american car are most likely produced in Mexico.

Presumably shipped by truck then

But if there are only 100 ships following these regs with 1000s of ships in our waters not subject to them, what's the point?

I think this is another example of how we need international regulations for global commerce to be better for humanity. A similar example is corporate tax, where if the US increases it even a small amount, companies will just find loopholes to get the revenue taxed in a cheaper country.

I suspect that even if we didn't have any of these labor regulations, shipping companies might still struggle to hire American workers because workers expect a higher standard from their employers. The problem isn't that we have regulations -- sure, some might be inefficient and ineffective, but there are lots of very important ones as well. The problem is that entities in other countries can exploit workers much worse. And for locations where where you might not have a lot of options, it's gonna be hard to say no.

Our consumerist economy has never really reckoned with the fact that our cheap products are only possible because the countries which manufacture and ship those products to us have cheap costs of living and (often) very poor labor conditions. As that changes and countries get more expensive to live and labor regulations improve, it'll be more expensive to manufacture and ship things.

This is obviously good for humanity overall, but it does mean that we'll pay more for products. It's not worth sacrificing human life just because America wants cheaper video game consoles, for example.

With a market that big, you don't need international regulation - just ban imports on products which are not manufactured or shipped according to the same standards. You'll see widespread adoption of them all over the world in no time.

The problem is that you'll also see the prices rise accordingly - after all, the main reason why everything has been outsourced elsewhere is cheap labor, and one of the reasons why labor is cheaper elsewhere is worse labor protections.

Nevertheless, we could have done that. The fact that we haven't, to date, is implicit admission that we don't actually care about labor abuse, so long as it happens out of sight.

That's the defeatist attitude they want you to have. Same reason they argue against taxing the rich or closing tax loopholes. The world's largest superpower has tools if we had the will, unfortunately lobbyists own our government.

That's 100 ships with better conditions than there would be otherwise. For me, that by itself is enough of a point (though there's more).

I think there's a valid conversation to have here regarding tuning solutions to fit a desired effectiveness target. An ideal solution that's circumvented 99% of the time can be worse than a mediocre solution that's circumvented 50% of the time when looking at the big picture.

Or, if you backed off certain regulations perhaps there could be 300 ships still with better conditions than all other ships. Far greater good overall.

What is the intersection where there becomes more bad ships and less good ships because we fail to see the tipping point?

Have we created a better situation or in our determination to be vastly superior in our regulatory manner have actually created more bad?

Couldn't G7 nations agree to only allow ships registered in those countries for trade between them?

I would like to make the distinction between law and regulation. Laws are passed by Congress and are part of the US Code. Regulations are created by the numerous regulatory bodies by unelected officials that we have not given authority to make rules that affect our lives. I believe that we should reject/ignore all regulations as we are only bound by laws passed by Congress.

But, the Jones Act is a proper law that tried to force a desired outcome when a better solution would have been to reduce regulation to make US flagged vessels competitive in a global market.

> I believe that we should reject/ignore all regulations as we are only bound by laws passed by Congress.

Wouldn't this be self-contradictory if a law passed by Congress tells you to follow regulations that are put in place by some unelected officials?

If someone has the power, he also has the power to delegate. I'm not 100% sure about US, but usually that's what parliaments do in regards to regulations and ministries — politicians delegate to subject matter professionals.

> Wouldn't this be self-contradictory if a law passed by Congress tells you to follow regulations that are put in place by some unelected officials?

Which is in fact generally the case. Congress passes a law that creates a regulatory agency and says what things they have power to regulate.

> If someone has the power, he also has the power to delegate. I'm not 100% sure about US, but usually that's what parliaments do in regards to regulations and ministries — politicians delegate to subject matter professionals.

Same in the US, with some limits which are described reasonably well in this [1] Wikipedia article.

[1] https://en.wikipedia.org/wiki/Nondelegation_doctrine

The problem is that regulatory bodies are part of the executive branch. Regulations they create are law in all but name. The executive branch does not have authority to create law. This is an abdication of authority, not delegation.

The US Code is ~60k pages. The Federal Register is ~220k pages. Both carry the full force of law with criminal and financial penalties.

We can't admit that, because then we'd have to look at all the other industries we shipped overseas to avoid oversight and taxes.

I feel like a lot of people admit that regulations and costs push industries overseas. These people are okay with the outcome. It's completely reasonable to eschew dirty or dangerous industries.

The entire western model of business for the past 500 years has involved shipping the crap work to other places around the world and figuring out how to extract the profits from it.

Yeah, except there's a huge amount of overlap between the people you're describing and the people who are also concerned about global warming and polluting the oceans. And when I say "concerned" I mean perceive it as an existential threat to all human life.

Oh yeah, and they're also concerned about how wages haven't kept up with inflation for the past 40 years.

The way the cruise ship industry gets around the Jones Act is by making stops in foreign ports.

Sometimes these are important stops for the cruise itself (ie: stop in a nice Caribbean port), and sometimes they're "Technical stops" -- ie: Prince Rupert BC :-)

It would be illegal for a foreign-flagged, foreign built, foreign-crewed cruise ship to leave an American port for an Alaska cruise, and then return to the same port, for example, without the convenient Canadian ports in between.

Cruise ships aren't affected by the Jones Act. They're covered by the Passenger Vessel Services Act instead (which is basically the same thing, only for passenger vessels rather than cargo vessels).

Most Alaskan cruises stop in Vancouver, BC instead. That way it also capitalizes on Canadian cruisegoers, and it's a pretty good (albeit similar to Seattle) stop.

I've looked at some alaskan cruises recently. They all stop there for like 2 hours. It's literally being used as a loophole.

It's literally being used as a place where people embark on their trip. It is a major source port for people boarding Alaskan cruises. The "loophole" is that you started somewhere else -- clearly the cruise should have started in Vancouver.

I would say "por que no los dos".

It's both a good hop-on point for Canadians, and also gets around the Jones act without seemingly random stops like Prince Rupert.

Realistically, if you're sailing out of Vancouver or Victoria, it makes little sense not to start a bit further south in Seattle. And if you're starting in Seattle and going to Hawaii or Alaska, you have to stop somewhere in between due to said act.

My wife/family and I went on three Hawaiian cruises, each of which dealt with this in a different way:

One was out of Seattle, and stopped in Victoria, BC. It was for a reasonably full day, and Victoria is a lovely place to visit, so I’d recommend this approach if you have the time and enjoy at-sea days.

One was in and out of Oahu on NCL America[1], a cruise line which is actually US–based, and which can therefore run itineraries that only stop in US ports. This is certainly the most time-efficient, and there is a corresponding premium. Recommended if you don’t have time for the Pacific crossing and/or you don’t enjoy at-sea days.

One was in and out of Oahu but made an enormous detour to a tiny, primitive atoll in the Republic of Kiribati. Not recommended.

Of all of the Alaska, Caribbean, Hawaii, and Pacific Mexico cruises we took, these were our favorites. We would usually rent a car in each Hawaiian port and spend the days touring the islands.

[1] See https://en.m.wikipedia.org/wiki/Pride_of_America, although we were on a different ship, I think the Pride of Aloha.

https://calexicochronicle.com/2021/09/18/millions-of-pounds-...

For a while it was being hailed as a clever hack around the Jones Act but then the CBP decided to issue fines. Not sure how it has turned out.

I find it interesting that we look at at the shipping operating costs, decide they are too high compared to other countries without breaking down which countries we are comparing to.

Doubly so since foreign shipping has a myriad of problems such as companies suddenly not paying their workers and abandoning their vessels to outright slavery.

Lastly, we keep talking about how minimum wage needs to be increased and how this would have minimum impact on prices. Yet here we are talking about how we should deregulate because the cost is too high.

The US just needs to require other countries' ships to meet higher standards as a condition of docking. As someone who lives in LA and has to breathe the disgusting smog that these foreign freighters belch for weeks near port, the last thing I want is for even MORE dirty ships to show up. But then, the LA and Long Beach port authority don't even enforce the rules they currently have that require the ships to plug in so that they don't just burn unfiltered fuel oil for days on end. We pay a HUGE price for the rest of the country to get their cheap consumer crap.

Freight shipping has always struck me as hardly improved for the sailors since medieval times.

There's no law on a ship -- after all, how are you going to call the police if the other sailors rob & beat you? The owners can abandon you in a foreign port without paying you, and there is literally no national authority that gives a shit. They can register the ship "under the flags of Panama, Liberia and the Marshall Islands" as people here said, which means... well, I'm not sure what all it means beyond "no regulations."

IANAL, but it seems to me that airlines and even freight airlines are not nearly as awful as shipping. Maybe maritime law should change to that legal regime.

The law of the ship is the law of the state whose flag flies over it

> The biggest is its stringent requirements, paired with a lack of federal funding, have ultimately sabotaged its own mission of maintaining a strong U.S. shipping industry that could service the country in times of war. Fewer than 100 Jones Act vessels are in operation today. Equivalent laws in Europe, for instance, allow ocean carriers to build overseas, even if the vessels are owned by European companies.

Fewer than 100 ships! 100! This entire law is subsidizing 100 ships! Less than 100 people are getting rich off of this.

So now we get the worst of both worlds - shipping is more expensive and the fleet we have for "times of war" is a joke.

There's also a small environmental consequence here - it's often cheaper to fly heavy cargo to and from water locked areas rather than just put it on a ship (which creates a fraction of the carbon per pound/mile).

Also worth pointing out that this was clearly designed to benefit a select few shipbuilders - most other countries are fine building domestic fleets with foreign built ships. Which makes complete sense. The issue here is not finding Americans to staff the boat, it's that we refuse to buy boats from Hyundai.

> This entire law is subsidizing 100 ships! Less than 100 people are getting rich off of this.

This assumes that each ship enriches only one person. How many shareholders own the companies that own the ships? And how many lobbyists are they paying to maintain the lucrative status quo? I'm sure that more than 100 people are getting rich off this, one way or another...

The article currently says "Fewer than 100 Jones Act vessels are in operating today, not including barges and tugboats". I don't know why your quote omits that.

While those are needed, they aren’t going to supply a lot of Americans in a time of war.

They may supply money to a few Americans the rest of the time though.

A lot of US to US traffic went on foreign owned barges which has been a real concern.

It’s not about the US declaring war on the owner, because then the bandages could be seized. However, if the owner’s country declares neutrality and decides that means they can’t move war material then the US ends up in a tough spot.

Those are river vessels.

Not all of them.

Entertaining trivia: The Space Shuttle main tank was manufactured at the Michoud Assembly Facility, somewhere near New Orleans, and transported to KSC by barge. In 1995, the tug lost power and nearly lost the barge and tank, but both were rescued by another ship. Which then claimed 50% of the cost of the tank as salvage fees. Many lawyers were entertained and kept in Rice Krispies, but I don't remember what the bottom line turned out to be.

https://www.orlandosentinel.com/news/os-xpm-1995-05-15-95051...

Ha! Found something...

https://caselaw.findlaw.com/us-5th-circuit/1392461.html

"'Twas a dark and very stormy night, November 14-15, 1994, and the situation looked bleak for the barge Poseidon. Caught in the clutches of Tropical Storm Gordon, Poseidon and her escort, the J.A. Orgeron, were without power and adrift. Driven on the gales of the tempest, the flotilla was swiftly approaching the Bethel Shoal; if they ran aground, the ships were sure to founder and be lost. Acutely aware of the danger, Orgeron's captain radioed for help. Alas, the Coast Guard was not in a position to mount a rescue. In despair, the captain made plans to release Poseidon and her valuable cargo, an external fuel tank for the space shuttle. Although this action would result in the certain loss of Poseidon and the tank, the captain hoped thereby to save Orgeron and her crew."

Not necessarily

Finn Falgout is an ocean-going tugboat owned and operated by Falgout Brothers Marine Company. Finn Falgout has been contracted by SpaceX since April 2020 to tow SpaceX droneships offshore in the Atlantic Ocean for operational missions and trials.

https://spacexfleet.com/finn-falgout/

> The Jones Act is one section of the Merchant Marine Act of 1920. During the early 20th century, Americans found the British and German ships they depended on for international commerce had ditched them to wage war. Congress decided to help fund a merchant marine for the United States with hefty subsidies. These payments dried up by the 1980s when former President Ronald Reagan halted the flow of taxpayer money to the shipping industry.

Perfect illustration of the "more efficient trade vs. national security" tension under discussion over in the "America needs supply-side reform" thread.

And if WW3 went hot today, we wouldn't be able to build enough ships anyway. Jones Act is utterly useless in that it causes a lot of pain without solving the problem it was designed to fix.

Huh? Are you saying it doesn't produce a small reserve of merchant shipping vessels?

This all or nothing thinking isn't helpful. Utterly useless? Some n ships is better than no ships.

I'm saying it would be better to buy higher quality ships at a lower price from places like Japan or South Korea (who are very good at shipbuilding) than to have a few struggling ship yards that only exist because a federal law outright bans competition from running them out of business.

I'm also pointing out that the national security argument doesn't hold water because being able to construct a small ship every couple of years is not going to be useful if we encounter a period where we need to build hundreds of vessels per year. We'd have to build that infrastructure from the ground up like we did in WW2. We'd have to do this whether or not the Jones Act is in place.

Therefore, I think it's better to scrap the Jones Act entirely. It's all cost, no benefit.

I do think it likely there's a big difference in ability to respond to a crisis between "we have some capacity and expertise, but need more" and "we have no capacity or expertise, and need more", but admittedly I don't know how crucial having the right knowledge & existing systems/processes to copy, is for spinning up new shipyards. I would expect "copy this shipyard and have the experts there train others" would go a lot faster and have far better outcomes than "build a shipyard from scratch with no easily-accessible reference or expert trainers".

That'd be the a big part of the argument for the value of preserving even a wildly insufficient level of manufacturing capability for certain vital goods, I'd expect—that is, it may not be necessary that the effect is to have a large and thriving shipbuilding industry, for it to still be worth it.

That’s very much the case, especially as wars destroy resources over time. Starting with a huge fleet of ships on day 1 isn’t that useful by year 5.

> I'm saying it would be better to buy higher quality ships at a lower price from places like Japan or South Korea (who are very good at shipbuilding)

What the last ~3 years have taught us is that a country should not have critical dependencies on another country. The keywords for the first part of the 21st century will be Deglobalization and aging societies, better buckle up.

I don't think having 200+ individual autarkies is going to produce net benefits for humanity. Really, the once in a century pandemic is worth having the other 99 years of high efficiency supply chains.

I think people's opinions on this are largely divided over whether they think the current ~75 years of peace (more or less—cold war's not a hot war, and limited proxy wars aren't world wars) between major powers is likely to continue. The pandemic was a tiny fraction as disruptive as a major war would be, and we struggled to handle that—if one expects a higher frequency of trade disruption in the coming decades than in the past few, reducing reliance on foreign trade might be a reasonable position.

The reserve is uselessly small. Crucially, if the line about ships having to be built in the US was repealed, the reserve would become a lot bigger.

The Jones Act has more than one requirement, and while some of them are useful, others very much are not.

Some sufficiently small n is indistinguishable from zero at the national scale. "Something is better than nothing" needs to be measurable and worth the cost, otherwise it's virtue-signaling.

If WWIII started I'm sure the US government would have no qualm about commandeering the ships in US harbours and/or US waters.

That’s helpful on day 1, not so much by year 6.

It’s vastly faster to start with a small team that knows how to build stuff and expand that team than it is to start completely from scratch. But you can only maintain that knowledge by actually building stuff.

So yes it’s inefficient in peacetime, but so is having the worlds most powerful military. It’s silly to spend that kind of money on a military and then leave easily exploitable weakness in our logistics.

Short term is all that'd be needed. The US economy turned into a war economy would have no problem churning cargo ships if needed.

Peacetime subsidies are only useful for capabilities that would be prohibitively costly or long to setup un time of war.

Time is just one dimension here, cost in peacetime is the other dimension.

Also the act aids not just in building ships but also managing, maintaining, and crewing them. The skills and lessons learned over time of a domestic industry vs a ~0.2% increase in boat shipping costs is worth considering. Especially as most do these costs relate to paying US workers and US taxes.

I wouldn’t expect WWIII to last that long. Plus ships are big expensive floating targets of no particular use in a total war between nuclear powers.

>I wouldn’t expect WWIII to last that long. People said the same about WWI and look how that ended up.

WWI was fantastically destructive war of 4 short years, which is very short for a war. 'People' always underestimate the cost of war when selling the idea to the public. Imagine if they were realistic then maybe we wouldn't go to war.

I'm not suggesting WWIII would be short because someone wins it, just that if a nuclear exchange happens there won't be enough left to keep fighting with.

It's not a given that WW3 would escalate into nuclear soon. All sides understand that once you go there, there's no way back. But there are still goals that can be achieved and territories that can be contested without resorting to nukes, and without making one's opponent desperate enough to do the same.

Of course, this presumes rational actors on all sides, which is very much not a given (esp. looking at Russia right now).

I think it’s unsafe to assume rational actors. Especially when Russians, Chinese and Americans are involved.

I don't think it's safe to assume, either. But it's definitely a possibility.

I think there is some ambiguity here.

An India vs Pakistan war could continue after a nuclear exchange as they don’t have that many nuclear weapons to glass each other and survivors would presumably want vengeance.

For the US it might take a reasonably effective missile defense system, but that’s not outside the realm of possibility.

I wouldn't classify India vs Pakistan as a world war. The primary nuclear belligerents would be US and Russia. I wouldn't trust the US military industrial complex to be honest about their missile defence capabilities and it worries me that the west is being so cavalier about possible nuclear war.

To be clear, I was suggesting an India vs Pakistan nuclear exchange could be part of a much larger conflict. WWII was called a world war because so many countries where involved and WWIII could similarly spiral even without a US vs Russia nuclear exchange.

Anyway, I personally don’t believe the US has a highly effective nuclear defense system, but even the possibility of such changes the calculus of war. The more bombs you need to send to each target the fewer targets you can hit. DC and NYC are presumably fucked either way, but Tuscaloosa Alabama could easily survive the second scenario.

It’s completely theoretical at this point, but coming up for plausible scenarios where the Jones Act ends up worthwhile doesn’t seem that difficult.

My expectation is the coming conflict will be between NATO and a Chinese Russian alliance. The US maintains its current standard of living based on cheap Chinese goods, cheap Russian energy (indirectly) and financialization. I expect that none of those things will survive such a conflict. Even if a city avoids getting nuked what life is left for them. Maybe they could get a job at Foxconn.

That’s a common misconception, just over 1/5th of US imports come from China.

The US is a net energy exporter.

Simply look at how much damage the Russian Ukraine war is doing to the US and that is relatively a minor skirmish that the US is not even directly involved with.

The Russian Ukraine war is doing approximately nothing to the US.

Tougher to do if you're not at war yet, but the countries pulling your (well, their) cargo ships away are.

Them and what navy?

I guess you can seize foreign-flagged ships as a non-combatant state, but I expect you'll become a combatant pretty soon, if you do too much of it. Nb these countries reducing availability of (their!) shipping capacity to the US during a war could include allies and neutral countries, not just enemies and likely enemies.

The article says there are less than 100 eligible Jones Act ships.

Oceangoing ships. There are thousands upon thousands of tugs and barges moving unfathomable numbers of bulk goods up and down the mississippi, along the intercoastal waterways every day.

Why can't the military take over this role?

It reads to me like it did OK until we cut the funding that made it work.

If you have to ban competition and send them taxpayer money, maybe that's a sign from god.

It's a sign that... national security is at odds with market efficiency. Of course doing things less efficiently costs money, and if you don't spend that money, it doesn't get done.

[EDIT] To be clear, I don't have a strong opinion on whether it remains a good idea to keep this act around.

There is no limit to inefficiency. Maintaining entrenched corporatist monopolies via corrupt regulatory capture is long run much worse for national security.

This is a pretty extreme position. That some inefficiency is necessary for national security reasons is about as close to settled as anything gets in economics/political-economy, though there's plenty of room to disagree over how much.

Inefficiencies beget inefficiencies. The money gained by those who benefit from the inefficiencies will be reinvested into developing more inefficiencies. Maintaining an efficient system requires constant vigilance.

The US is a precarious hegemon, for all of the inefficiency it has invested into the MIC it doesn’t seemed to have gained very much.

Only if your God is capitalism.

Not everything is about maximizing profitability. Efficient markets are pretty good at optimizing around steady-state systems, but they are profoundly bad at maintaining readiness for cataclysmic events. Yet cataclysmic events happen and we are obliged to prepare for them.

If we let corporations run everything, they'd sell of our medical stockpiles, build levees exactly one inch above the waterline, and sell all of our weapons to the highest bidder.

> If we let corporations run everything, they'd sell of our medical stockpiles, build levees exactly one inch above the waterline, and sell all of our weapons to the highest bidder.

I can’t tell if these were intended to be examples of things that have happened?

Capitalism is indeed the god, and the atheists and fence sitters find it a bit depressing.

One possible alternate way to get a lot of shipbuilding capacity on demand is to pay major overseas shipbuilders in allied countries to (a) build ships for within-US shipping and (b) devote some dedicated percentage of their production to the US in case of geopolitical emergency. The world's second- and third-biggest shipbuilders are Mitsubishi and Hyundai, both in closely-allied countries; surely there's some amount of money that would make them happy to help out. They're very good at making ships efficiently, much better than the US at this point.

If there was a geopolitical emergency that needed massive US shipbuilding efforts (ie. naval war over Taiwan) it seems obvious that Japanese and Korean shipyards would be smoking craters from Chinese medium range ballistic missiles. Assuming, as usual, that any Taiwan conflict doesn't escalate into nuclear war.

So any such agreement would be worth as much as the raw paper it was written on.

It's not even necessary that the shipyard be destroyed, just that the countries they're based in need shipyard output more than they need to honor their agreements with us.

Sourcing foreign ships for domestic use may be a good idea, but production-sharing agreements like that are worthless when it really matters. If you don't have physical possession of the productive capital (legal possession can be, and is, ignored when shit hits the fan, so that hardly matters) then you can't count on it in a crisis.

Raw paper would be worth more as that paper could still be used for other things.

The factories that built most of the equipment in WW2 didn't exist prior to WW2. They were built because of it.

I honestly do not understand how the mass mobilization of the US economy for war in the 1940s actually happened or operated.

Was it bottom up, with factories competing to make products (trucks, ammo) for lend lease? Basically government used tax payer money to become a big buyer of things, incentivizing companies to reorient towards making those things? And then when the US entered the war, the types of contracts offered changed.

Was it top down, with the government operating more like a command economy telling businesses what to make, and when? It wasn't a choice, it was a demand because the country is at war!

These are two guesses I have. My mental model is based mostly on the movie "War Dogs." I'm sure it's a mix of both bottom up and top down. Maybe with a mix of cocktail parties with important industry business people and important government people chatting about would is feasible sprinkled in.

I do not understand how the war time mobilization of the US economy actually happened. If anyone knows, I would appreciate a summary or a book recommendation. I think I have a topic for my next Wikipedia deep dive.

It was a top down centrally planned economy. The federal government set quotas for production and prices. This was made possible through the war production board which converted civilian companies to wartime use:

https://en.wikipedia.org/wiki/War_Production_Board

To expand, so there's more material on this page:

"Gasoline, meat, and clothing were tightly rationed. Most families were allocated 3 US gallons (11 l; 2.5 imp gal) of gasoline a week, which sharply curtailed driving for any purpose. Production of most durable goods, like new housing, vacuum cleaners, and kitchen appliances, was banned until the war ended.[1] In industrial areas housing was in short supply as people doubled up and lived in cramped quarters. Prices and wages were controlled."

From

https://en.wikipedia.org/wiki/United_States_home_front_durin...

It was very much top-down. Most of the production was nominally done by private contractors, but the federal government forced existing factories to be converted to war production, fronted the money to build new factories, directly built public housing for the factory workers, and fixed wages and consumer prices.

> existing factories to be converted to war production

And some amusing artifacts were produced as a result of that. For example, the M1 Carbine was manufactured among others by IBM, Rock-Ola, and the National Postal Meter Company. After the war, these became collector items of sorts, since the manufacturer name is prominent on all of them.

One example of top down mobilization was the mass manufacture of aircraft for World War II. This Fox Business video [1] shows how Roosevelt's advisors found the top industry guys to analyze the artisanal manufacture of B-17 bombers, design and build an assembly line factory, and mass produce the bombers at a rate of one an hour.

After the war, Ford made a promotional film, "The Story of Willow Run" [2], that shows the progression from soybean farm to aircraft factory, the redesign of the bomber for manufacturing, and the assembly line processes. The YouTube comments from factory worker descendants are fascinating.

[1] https://youtu.be/zBj4uD1ODO0

[2] https://youtu.be/p2zukteYbGQ

I think the difference is that the country was managed and run by a tight-knit kabal of ivy-league upper class people. It was a high-trust environment where someone could call up an acquaintance and just say "Bob, you need to change your factory over to tanks this week. Harry will send the schematics, and we'll figure out the fine grained details later." The origins of the CIA and FBI sound mind-boggling to modern ears. These days you only see that kind of high-trust procurement in the special operations community.

Obviously there are some serious downsides to having a cabal of rich white dudes who went to the same schools run the administration of the whole country, but things could change direction a lot quicker.

An good example is the former shipyard at Sausalito, CA.

We needed ships.

The government went in and built a huge shipyard. They hired private contractors, and built 24/7.

https://en.wikipedia.org/wiki/Marinship)

They needed workers. They hired Frank Loyd Wright to build huge buildings to house workers arriving mainly from the south.

The huge apartments went up very quickly.

There were few regulations. I imagine it was like the way China puts up huge projects.

After the war, a lot of the workforce moved on to greener pastures. America used to have a lot of good blue collar jobs.

The apartments are now used as Section 8 housing.

Jump ahead to today. The town of Sausalito didn't like looking at low income Anchor-Outs. They didn't mind when Paul Allen moored in then same spot for months though on his mega-yacht. The town basically hired some dig bat who was related to a town council member to spit out a study on the dangers these Anchor-outs are doing to the Ell grass in Richardson bay. The town used that "cooked" study to confiscate boats, and crush them. The low income people basically went from boat dwellers to living in tents in Dunphy Park. I'm sorry about my tone, but I don't like it when authorities abuse their power, especially when it comes to the low income.

And we dismantled that equipment and sold it to overseas shipbuilders, giving them a huge advantage.

And this would have happened Jones Act or not.

I believe the poster was addressing your "we wouldn't be able to build enough ships anyway", not whether the Jones Act affected our ability to rapidly increase our manufacturing capacity during WWII.

Because we adopted a centrally planned economy, not unlike the communist states we villified after the war ended and we resumed freemarket capitalism in this country. I don't see the U.S. successfully doing that again today with the way the political landscape is fractured and the overall view of government in the eyes of many.

Will WW3 be won by ships anyway?

Probably not but then war would certainly be lost without them.

If shipbuilding isn't even needed, the entire basis for the Jones Act existing is moot.

Paralleled by many cheap vs. reliable tradeoffs when people have been discussing supply chain fragility recently.

I asked Yoho to repeal it at a town hall. He said that he would get back to me. He did not get back with me. His initial support for it was to avoid harm to Florida’s ship builders. My follow up was why should we support an underperforming industry?

Is the Jones Act actually controversial? The only real complainers I see about it are businesses who are upset they can't fire their American crew and replace it with cheap foreign labor that doesn't have to follow US labor laws.

Yes. It makes everything in Hawaii painfully expensive.

Puerto Rico too.

Other negative side effects that I'm aware of:

    * disaster recovery efforts to Puerto Rico after hurricane Maria
    * cost of goods in Hawaii

Yes. It is dumb. My state needs to buy natural gas from Trinidad because we can’t ship it in from another state.

Is natural gas significantly cheaper from the U.S. than from foreign markets? It seems like a huge arbitrage opportunity if so.

Probably not, but it’s stupid nonetheless. It would be so much better to leave the money in the USA..

Your state can ship it in from another state, if they use american labor.

U.S.-flagged, U.S.-owned, U.S.-crewed, and U.S.-built.

Not one ship meets this criteria for LNG

"If they only paid a lot more money for the same thing" kinda makes his point though.

From what I've heard it's exceptionally painful and expensive for US overseas territories like Marianas, American Samoa, Puerto Rico, Hawaii.

It sounds like there could be a meaningful compromise that removed this requirement for Hawaii, Alaska, and the overseas territories while leaving the existing rules for the mainland states.

I mean, yes?

It makes everything slightly more expensive at the benefit of a small group of special interests.

> "Fewer than 100 Jones Act vessels are in operation today."

This is a ridiculously incorrect statement.

Yep. The accurate version of that statement would say that fewer than 100 ocean-going Jones Act vessels are in operation today. The others are much more numerous -- but also much less relevant to the military rationale behind the Jones Act.

Is even that true? Do you mean vessels that can go beyond coastal waters? Do you mean only cargo ships? There are more than 100 Jones Act vessels operating between ports in Florida alone.

(digging ... heh, there's a law office in Florida that specializes in Jones Act - https://www.anidjarlevine.com/areas-we-serve/florida/jones-a... and https://www.prnewswire.com/news-releases/americraft-marine-a... is also there)

As to the list of ships - https://www.maritime.dot.gov/sites/marad.dot.gov/files/pictu...

> United States Flag Privately‐Owned Merchant Fleet Report

> Oceangoing, Self‐Propelled Vessels of 1,000 Gross Tons and Above that Carry Cargo from Port to Port

Total ships: 179

Jones Act Eligible: 99

https://www.maritime.dot.gov/sites/marad.dot.gov/files/oictu...

https://www.statista.com/statistics/646259/us-flag-oceangoin...

https://sgp.fas.org/crs/misc/R45725.pdf

> The Jones Act applies to any type of commercial vessel. Recent controversies have concerned the oceangoing ship and offshore supply vessel sectors. The law also covers ships on the Great Lakes, river barges, harbor tugs, dredging vessels, and various kinds of passenger vessels. The Jones Act oceangoing ship fleet, in particular, has certain shortcomings compared to the merchant fleet desired by the drafters of the 1920 act as they described it in the aforementioned statement of U.S. maritime policy.

> As of March 2018, there were 99 oceangoing ships in the Jones Act-compliant fleet, employing about 3,380 mariners. The largest category of oceangoing Jones Act ships is tankers. Of the 57 tankers in the fleet, 11 carry Alaskan crude oil to refineries on the West Coast, 44 are medium- sized product tankers that mostly carry refined products along the Atlantic Coast, and 2 are chemical or asphalt tankers. The dry cargo fleet includes 24 small to medium-sized container ships, 7 ships that have ramps for carrying vehicles (known as roll on/roll off vessels), and 2 dry bulk vessels designed to carry such commodities as grain and coal in bulk form. The fleet also includes 9 relatively small general-cargo vessels supplying subsistence harbors along Alaska’s coast.

> Oceangoing, Self‐Propelled Vessels of 1,000 Gross Tons and Above that Carry Cargo from Port to Port

Okay, yeah, I believe there are that few vessels of that type and size. There are many more types of vessels. I operate a tugboat company. We have 4 Jones Act tugboats that move barges of cargo 500-2,000 tons at time (other tugs move much bigger barges). There are many more of these kinds of vessels. Claiming that there are only 100 is misleading.

More to the point of the article, lots of petroleum is moved on barges, not on self-propelled cargo vessels.

Exactly, the detachable towboat on the ocean-going barges classifies the vessel as non-self-propelled similarly to the less-seaworthy inland barges.

The full sentence goes "Fewer than 100 Jones Act ships are in operation today, not including barges and tugboats." Not sure if there was an edit to the article in the meantime or you quoted only part of the sentence. Seems like that statement is correct, judging by the sister comment, if maybe still somewhat misleading.

Too much common sense, but couldn't a replacement law just require _all_ ships not docking: to be scrapped, or overhauled, or for purely museum like use to comply with the current environmental and safety standards? There should probably be a warmup period for this where it's at first known, and then over time progressively larger fines are levied and then finally it's an outright ban.

We need to go back to not allowing domestic oil and gas to be sold on the international market. We only started allowing it 10 or so years ago. Keeping that oil here would have to help bring down our gasoline prices.

This thread is full of "market efficiency" versus "national security", but there is another aspect to it: "Many ships now fly under the flags of Panama, Liberia and the Marshall Islands — countries that allow ocean carriers to bypass a slew of safety regulations, labor laws and taxes."

Now, taxes are one thing, but it is likely the case that the whole world would be better off if those countries increased their safety and labor regulations. If you follow shipping disasters, you will quickly learn that international commercial shipping rates are kept artificially low by externalizing costs onto the crews, people exposed to the industry, and the environment.

It would also decrease the difference between Jones Act shipping and commercial shipping.

If you think "savings" from shipping or otherwise are going to trickle-down to consumers, you've learn nothing from the past decades of this country.

That's not how it works, it's not how any of it works.

Savings are pocketed as profit.

Fuel prices have no tie to reality, they are tied to greed.

If you look at crude prices to pump prices, and it is very clear this summer is a manufactured shortage.

https://www.theguardian.com/environment/2022/apr/28/gas-pric...

Reflexive downvotes because you disagree is a loser's strategy. Here is the data for you own lying eyes to review: https://www.macrotrends.net/2501/crude-oil-vs-gasoline-price...

More background https://www.bloomberg.com/opinion/articles/2022-05-09/crude-... "From 1985 to 2021, the crack spread averaged about $10.50 a barrel. Even between 2004 and 2008, during the so-called golden age of refining, the crack spread never surpassed $30. It rarely spent more than a few weeks above $20. Last week, however, the margin jumped to a record high of nearly $55. Crack margins for diesel and other petroleum products surged much higher. "

That is with the coordinated SPR release. But sure, believe it's the invisible hand and the Jones Act!

(This is a clarifying question, not an oppositional one) -- would a potential response to a gap between crude and pump prices be lack of refinery supply? How are we able to rule that out? Or is it completely obvious?

My understanding is that refinery capacity is a significant problem.

I would encourage you to dig into why that is the case.

Maybe because nobody is going to invest megabucks longterm to create capacity only needed in the short term? (and may not even be needed)

In the chart linked here [0], section "Gasoline stocks (million barrels) and days of supply" each Petroleum Administration for Defense District has had flat supplies, indicating no especial need for additional refining capacity. In "US Regular All Formulations Gas Price/Consumer Price Index for All Urban Consumers: All Items in U.S. City Average" [1] the CPI adjusted cost of gasoline is somewhat high but still below where it was 2011-2015.

https://www.eia.gov/petroleum/weekly/gasoline.php

https://fred.stlouisfed.org/graph/?g=p93w

According to wikipedia [1]

The newest large refinery built in the US was completed in 1976 in Garyville, Louisiana. Since then, while some existing refineries have expanded, new refinery construction has faced significant barriers in environmental regulation, permitting, and local political opposition.

1: https://en.wikipedia.org/wiki/Petroleum_refining_in_the_Unit...

Any company that could refine oil faster would be able to make a ton of money by doing so. Do you have evidence for this grand conspiracy? How do you suppose it avoids the usual free-rider problem?

Competition is the mechanism that lowers prices. No one can afford to pocket the difference. That's why despite airplanes becoming extremely fuel efficient over the last 50 years, ticket prices keep dropping.

Why don't airlines simply pocket the difference??

> Why don't airlines simply pocket the difference??

I think they did, AA has a market cap of $8B and they spent $12B on stock buybacks from '14 - '20. Looks like all other domestic airlines did similar.

> That's why despite airplanes becoming extremely fuel efficient over the last 50 years, ticket prices keep dropping.

I think they just rearranged their profit centers. Having good prices, flight coverage, loyalty program & interchange agreements are the core product offering but they'll happily use them as a loss leader for the revenue from their agreements like branded credit cards via Citi & Barclay.

A large market cap and significant profits don't imply large profit margins. Look at Walmart for example: their market cap is over $300B but their net profit margins are in the 2-3% range.

> AA has a market cap of $8B and they spent $12B on stock buybacks from '14 - '20.

In 2014 their market cap was $35B [0]. Pandemic aside, it looks like they are steadily winding down their business. That makes sense if the company doesn't see any opportunities for growth--shareholders can migrate to investments with upside. Despite market cap shrinking by 2/3 they kept earnings per share relatively flat.

https://www.macrotrends.net/stocks/charts/AAL/american-airli...

Without necessarily agreeing with the GP, flights are an elastic good and have a notion of an optimum price - airlines may have continued to make greater profits by making tickets more accessible. Fuel is relatively inelastic, and may have less pressure to lower prices to increase profitability.

It's possible to explain price fluctuations without competition, and large parts of the public don't have a lot of faith in competition as a market force.

Airlines certainly don’t make more profit with reduced ticket prices. If the oligopoly wanted to force consumers to pay premiums for tickets, they could, but the industry is largely competitive. The privatized airline industry is often a money pit. Even OTAs make a small fraction of their revenue from air travel.

The oil companies are price-takers, not price-makers. That is: the market for oil is competitive enough that no oil seller can unilaterally have much effect on the market price, and collusion between multiple sellers (most notably OPEC) hasn't had significant effects on price since the 1980s due to rampant defection among the member countries.

Oil prices are determined by the reality of how much oil is produced and how much is used. This is exactly what you would expect in theory from a global commodity market with many sellers and easy shipping, and it's what you see in practice. I'm not sure what gave you the opposite idea.

(Minor caveat: this argument applies to oil but not natural gas, since the latter is much harder to ship in a dense liquid form, and the markets for it are correspondingly smaller and more geographically local.)

You imagine that there's someone out there pumping oil who isn't doing it for greed? Greed is the one constant in the system. If fuel prices are going up, it's not because humans are suddenly more greedy than before.

> Fuel prices have no tie to reality, they are tied to greed.

Absolutely, greed is the only factor worth considering. But of course, greedy people can't just charge $300/gallon so no one would buy it. They do at least have to consider how much people are willing to pay.

And I guess how much it costs to acquire. And also I guess war makes it harder to acquire and more in demand.

And then deal with other greedy oil companies undercutting them. (Oops, wait, we just invented a completely rational market!)

If only they could do what the generous and benevolent US shipping industry did and ban all greedy competitors.

(I'm sorry, but the logic here is kind of hilariously weird to me.)

That’s ridiculous. If shipping prices are higher, production/distribution HAS to be more expensive. It’s not an option.

If transportation costs decrease, a business has an option to lower prices accordingly. If they pocket the difference, a competitor can sell for cheaper.

Your argument implies that transportation costs do not impact consumer price…think about that for a second.

Not my downvote, but,

When I was boarding tankers regularly, if you get hungry they are very generous with the food and I liked the US vessels especially well not just because they had a wider variety of familiar items 24/7.

When you think about it the big marine fuel terminals are scattered but concentrated in two different kinds of places.

The producers, and on the other hand the consumers.

>This is especially challenging for residents in Alaska, Hawaii and Puerto Rico, places where imported goods are more expensive because of Jones Act expenses.

The islands like Hawaii and Puerto Rico are consumers and have no option other than ships. Their docks are primarily "import" terminals even when the cargo originates in the US mainland.

And all goods are not gasoline.

On consuming islands every non-native consumer item has always been expensive because it's all "imported" by ship from somewhere. The Bahamas may not be US islands but imported things are high-priced like Hawaii since the Bahamas dollar is exactly tied to the US dollar by design. The Bahamas is not bound by the Jones Act but they always have higher gasoline prices than Hawaii, so there is that. There's no physical reason that shipping fuel from New Jersey to Palm Beach could not be accomplished with the exact same expenditure of labor & equipment compared to shipping from New Jersey to Freeport GBI. Interestingly, when the Bahamian refinery was operating on Freeport (using imported oil of course) they did not even make gasoline then, only other fuels.

Alaska is not quite like the others since it ships out so much crude oil but that is not gasoline. It is not an island either but it is also discontinuous with the US, and still about as remote as the US islands. The vast crude oil resource makes this location a net marine exporter though. But retail gasoline ends up about the same price as Hawaii.

There is a baseline cost to marine shipping and beyond that freight charges are a matter of distance & location.

Florida Man here to remind you the southernmost state's not too nearby either, and the further you go toward Miami, the greater the consumerism.

What would happen is that a constant movement of US-flag fuel tankers from New Jersey refineries would transport the fuel to the Florida ports of Jacksonville, Canaveral, Palm Beach, Everglades, Miami, and sometimes as far as Tampa, and that's not very close to New Jersey. The same major refining companies also supplied fuel shipped from Texas or Louisiana, sometimes to as far as Jacksonville. It still works quite a bit like this.

At the time, there were more Florida power plants burning fuel oil than there are now, and they were the same traditional kind of power plant that there were a lot of in Texas. However the retail price of electricity per KWH was literally twice as much in Texas as it was in Florida. And when you do the math, the power companies in Texas were able to obtain similar long-term bulk supply fuel pricing compared to Florida, but there was no marine shipping cost on top of that for the Texas electricity producers. Regardless, electric companies were making money in either place.

This was before utility deregulation had made as many inroads, and I can only attribute it to a Florida government attitude that had still retained its traditional consumer-protection approach more so than Texas. With 20-20 hindsight both have gradually reversed by now into more of a predatory government approach rather than protective role.

There's also the jet fuel which is B2B too, but the gasoline & motor diesel parcels are the shipboard liters that are intended for "eventual" retail sale, and of course that's ASAP after unloading the vessel.

As we know the retail price of gasoline in Florida has never differed very much from that in Texas. Since fuel can also be brought to Florida by rail or truck, that may have something to do with it, but they sure use lots of US-flag ships and ocean-going barges too so you would have to figure they have all been making money the whole time.

Among things that have swayed the price of gasoline even now, the Jones Act does not seem to have been one of them.

Looks like there's got to be somebody somewhere who would prosper greatly by repeal of the Jones Act, but it's probably not the vast majority of retail gasoline consumers served by US-flag fuel tankers now.

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