In the shipbuilding and shipping industry, maritime transport: protectionist policies are Counterproductive. This is highlighted by an analysis by the research institute American Cato Institute on the effects of the Jones Act, the 1920 U.S. law requiring the use of flagged ships U.S. and U.S.-owned in trips connecting American ports, ships which must also carry seafarers of U.S. nationality and be built in shipyards National. To support the thesis that the law produces effects negative impact on the U.S. economy and security, in its In the analysis, researcher Colin Grabow referred to a case paradigmatic: that of the container ship George II of the Californian company Pasha, which was built by a Louisiana Shipyard no longer operational, and delivered back in December 1980. Grabow notes that a 43-year-old container ship, long old even for the standards of ships operating under the 1920 Act, Normally it would have been recycled a long time ago. 'At the national level, - specifies the researcher of the Cato Institute - such ships are sent to breakers at an average age of about 27 years. But thanks to maritime protectionism and shipyards Chinese Who Help Maintain Old Fleet Ships U.S. national team, including the George II, in the coming years The ship will almost certainly continue to operate. It's a a result - Grabow points out - that does not make sense either from the point of view of from an economic point of view or from that of safety national level'.

"The fact that foreign ships are demolished more frequently and replaced with new ones. ships - notes the researcher - is a matter of simple economy: ships become more expensive to maintain and Use as they age. At some point, typically after the age of twenty and sometimes even earlier, an economic evaluation leads to the sale of the ship as scrap and the purchase of a new and efficient ship. On the other hand, the Jones Act ships are subject to a very different assessment. While the ships International flag flying can be purchased from overseas shipyards, the Jones Act of 1920 requires that ships engaged in internal trade are built in the Member States United. The difference in cost is huge. In 2022, for example - Grabow points out - three 3,600 TEU container ships have been ordered from a U.S. shipyard for $333 million all. In the previous year, meanwhile, the current price for a even larger container ship (4,250 TEUs) from from a foreign shipyard was $65.5 million. These Costs are a significant deterrent to modernization of the fleet. As the then CEO stated of a Jones Act shipping company in an interview with the 2005 - recalls the researcher - "as a result [of the cost relatively high shipbuilding in the United States], the ships in the Jones Act markets... are quite old." Recently, another CEO of the Jones Act stated that while the tankers of the international fleet are generally used for 20-25 years, those of the fleet of the Jones Act typically have a lifespan of 30-40 years. The The last 17 ships removed from the Jones Act fleet were aged average age of 43'.

Referring to the emblematic case of the George II, the Cato Institute researcher explains that, instead of demolishing the ship, «Pasha Hawaii has chosen to perform extensive upgrades, including the installation of a liquefied natural gas that will ensure the Compliance of the ship with international standards on Emissions. Certainly, he points out, this has cost expensive. Although the dollar figure has not been made public, the Jones Act's Matson Shipping Company revealed that the modernisation of its container ship Manukai, twenty years old, to run it on LNG will cost the company about $60 million. By way of comparison, two Brand new, slightly smaller container ships (1,450 TEUs vs. 2,378 TEUs for Manukai) with LNG propulsion systems were ordered last year from a shipyard foreign shipping for $49 million each. That may make upgrading to the LNG from Manukai, but that's less than a third of the price of construction of a container ship of similar size in a U.S. Shipyard'.

Grabow also notes that the 1920 Act does not prevent American shipowners of the Jones Act, to modernize their vessels, turning to foreign shipyards: "despite the fact that he is Pasha Hawaii and Matson are board members of the American Maritime Partnership, a Jones Act advocacy group that paints the law as a bulwark against China - explains the researcher - both The companies rely on this nation's shipyards to maintain and modernize their vessels. In fact, in 2019 the Matson officials gathered in Nantong, China, to celebrate The company's fiftieth ship repair at the shipyard state-owned COSCO naval plant. At this time, the Manukai is in Nantong for LNG upgrade, while the George II left the same shipyard after the modernization at the beginning of this month. In other words, the Jones Act shipping companies repair their ships in the low-cost Chinese shipyards and then use the savings to support a law that would prevent the use of shipyards in Allied countries to expand and modernise the national fleet of United States. All in the name of stopping China."

Grabow points out that this protectionist policy is unsuccessful in many respects: "First of all," he clarifies - the use of older vessels, which are expensive to modernise, and Maintain contributes to increasing ocean freight costs which are passed on to consumers. Secondly, the presence of of obsolete ships undermines the already limited military utility of the Jones Act fleet. In fact, the main aid program to ensure that commercial vessels are available to Armed Forces prohibits ships over 25 years old. In Thirdly, the use of old ships increases the demand for Repair in government-owned shipyards China, the very country with respect to which Jones' supporters ACT argues that the U.S. must remain vigilant."

'As an exercise in safeguarding the pension position - concludes Grabow - the Jones Act works very well. As a means to meet the economic and national security needs of the United States, however, the law is a wound self-inflicted."