U.S.-only shipping rule
praised, blasted

Backers and foes of the Jones Act
make their case before the Legislature

By Russ Lynch

The Jones Act of 1920 is an unjustified protection of a few profitable shipping businesses at the expense of consumers. Or it's a sound way to keep competition alive and maintain the reliability of vital U.S. shipping.

It depends who is doing the talking and Hawaii shippers, maritime unions and politicians heard both sides in two separate informational hearings at the state Capitol yesterday.

The Hawaii Shippers Council, an organization made up mostly of mainland-Hawaii freight users, kicked off first with the argument that the 1920 law's requirement that all shipping between U.S. ports must be aboard American-built, American-owned and American-crewed ships is anticompetitive.

Rob Quartel, a former member of the Federal Maritime Commission and president of the Washington-based National Jones Act Reformation Coalition, said he represents 50 trade associations that in turn represent a million businesses, all in favor of changing or abolishing the act.

Using slides, Quartel showed statistics that he said prove that the law limits mainland-Hawaii freight essentially to two companies -- Matson Navigation Co. and Sea-Land Service -- and drives up costs in Hawaii.

"A typical four-person Hawaii family requires a budget 40 percent higher than its counterpart in a typical U.S. (mainland) city," said Quartel.

While transpacific shipping costs, for shipping between Asia and the United States, have steadily declined, mainland-Hawaii shipping costs have steadily increased, he said.

His explanation: Matson and Sea-Land constitute an oligopoly, protected against competition by U.S. law, and any time one raises rates the other does too.

Quartel said that supporters of the Jones Act make their claim that the law has encouraged U.S. shipbuilding by counting barges as well as self-propelled ships.

"That's ridiculous. A barge is not a ship," he said.

It is too, in the modern merchant marine, said Neil Dietz, port agent for the Seafarers International Union, Port of Honolulu.

In the second session of the day, Dietz was one of a panel of shipping company and union representatives favoring the status quo.

Dietz said the Maritime Cabotage Task Force, Quartel's opposition at the national level, counted only very large barges, which are as big as or bigger than many self-propelled cargo ships, in its tally of the domestic fleet.

Counting the number of ships in the U.S. merchant marine is irrelevant anyway, Dietz said. He showed slides illustrating that one new U.S. containership like Matson's MV R.J. Pfeiffer, carries as much cargo as four containerships of the 1960s.

Because of efficiencies gained in protecting U.S. shipping from cream-skimming foreign competition, productivity has gained enormously, Dietz said. "One seafarer today delivers the same amount of cargo as 17 seafarers 30 years ago," he said.

The pro-Jones Act panelists said last month's report to Congress by the U.S. Department of Transportation found, among other things, that competition is alive and well in the Jones Act-protected Hawaii trade.

Taking inflation into account, the report said, mainland-Hawaii shipping rates in 1995 were only about 70 percent of their 1985 level.

Sen. Daniel K. Inouye and Rep. Neil Abercrombie submitted letters opposing interference with the act.

Quartel said his organization's bill to reform the Jones Act, which did not make it through Congress last year, will be reintroduced soon and has a much stronger chance this time.

Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Community]
[Info] [Letter to Editor] [Stylebook] [Feedback]

© 1997 Honolulu Star-Bulletin