Merchant Marine Act of 1920
The Merchant Marine Act of 1920 is a United States federal statute that provides for the promotion and maintenance of the American merchant marine. Among other purposes, the law regulates maritime commerce in U.S. waters and between U.S. ports. Section 27 of the Merchant Marine Act is known as the Jones Act and deals with cabotage. It requires that all goods transported by water between U.S. ports be carried on ships that have been constructed in the United States and that fly the U.S. flag, are owned by U.S. citizens, and are crewed by U.S. citizens and U.S. permanent residents. The act was introduced by Senator Wesley Jones. The law also defines certain seaman's rights.
The Merchant Marine Act of 1920 has been revised a number of times; the most recent revision in 2006 included recodification in the U.S. Code.
Many economists and other experts have argued for its repeal, while military and U.S. Department of Commerce officials have spoken in favor of the law on protectionist grounds. According to economists, the legislation reduces domestic trade via waterways and increases consumer prices.
The Jones Act is not to be confused with: the Death on the High Seas Act, or the Passenger Vessel Services Act of 1886.
History
Laws similar to the Jones Act date to the early days of the United States. In the First Congress, on September 1, 1789, Congress enacted Chapter XI, "An Act for Registering and Clearing Vessels, Regulating the Coasting Trade, and for other purposes", which limited domestic trades to American ships meeting certain requirements. Such laws served the same purpose as—and were loosely based on—England's Navigation Acts, which were repealed in 1849.The laws requiring that vessels transporting cargo domestically be U.S.-built, owned, and crewed, were temporarily suspended during World War I. The Jones Act of 1920 reinstated those ideas into law, and expanded restrictions regarding vessels used for cabotage in the United States.
1920 law
The Merchant Marine Act of 1920 was introduced by Senator Wesley Jones, chairman of the Senate Commerce Committee. He said the act was "an earnest effort to lay the foundation of a policy that will build up and maintain an adequate American merchant marine in competition with the shipping of the world."The intention of Congress was to develop a merchant marine for reasons of national defense and of growth of foreign and domestic commerce, as stated in the preamble to the Merchant Marine Act of 1920 as originally enacted:
Congress adopted the Merchant Marine Act in early June 1920 as, and it was signed into law on June 5, 1920, by President Woodrow Wilson.
1936 law
The Merchant Marine Act of 1936 was a major update to the law. Its purpose is "to further the development and maintenance of an adequate and well-balanced American merchant marine, to promote the commerce of the United States, to aid in the national defense, to repeal certain former legislation, and for other purposes."Specifically, it established the United States Maritime Commission, and required a United States Merchant Marine that:
- can carry all domestic water-borne commerce,
- can carry a substantial portion of foreign commerce,
- can serve as a naval auxiliary in time of war or national emergency,
- is owned and operated under the U.S. flag by U.S. citizens "insofar as may be practicable,"
- is composed of the best-equipped, safest, and most suitable types of vessels,
- consists of vessels constructed in the United States, and
- consists of vessels crewed with a trained and efficient citizen personnel.
The Act restricted the number of aliens allowed to work on passenger ships, requiring that, by 1938, 90 percent of the crew members be U.S. citizens. Although about 4,000 Filipinos worked as merchant mariners on U.S. ships, most of them were discharged in 1937 as a result of the law. The Act also established federal subsidies for the construction and operation of merchant ships. Two years after it passed, the U.S. Merchant Marine Cadet Corps, the forerunner to the United States Merchant Marine Academy, was established.
U.S. Representative S. Otis Bland was known as the "father of the Merchant Marine Act of 1936".
Law revisions
The Merchant Marine Act of 1920 has been revised several times. In 1940, Congress expanded the Jones Act to cover towing vessels. In 1988, Congress specified that waterborne transport of valueless material, such as dredge spoil or municipal solid waste, requires the use of a Jones Act-qualified vessel.The 2006 revision of the law included recodification in the U.S. Code.
Cabotage
Cabotage is the transport of goods or passengers between two points in the same country, alongside coastal waters, by a vessel or an aircraft registered in another country. Originally a shipping term, cabotage now also covers aviation, railways, and road transport. Cabotage is "trade or navigation in coastal waters, or the exclusive right of a country to operate the air traffic within its territory". In the context of "cabotage rights", cabotage refers to the right of a company from one country to trade in another country. In aviation terms, for example, it is the right to operate within another country's domestic borders. Most countries enact cabotage laws for reasons of economic protectionism or national security; 80% of the UN's member states with coastlines have cabotage law.The cabotage provisions relating to the Jones Act restrict the carriage of goods or passengers between U.S. ports to U.S.-built and flagged vessels. It has been codified as portions of 46 U.S.C. Generally, the Jones Act prohibits any foreign-built, foreign-owned, or foreign-flagged vessel from engaging in coastwise trade within the United States. A number of other statutes affect coastwise trade and should be consulted along with the Jones Act. These include the Passenger Vessel Services Act,, which restricts coastwise transportation of passengers, and, which restricts the use of foreign vessels to commercially catch or transport fish in U.S. waters. These provisions also require that at least three-fourths of the crew members be U.S. citizens or permanent residents. Moreover, the steel of foreign repair work on the hull and superstructure of a U.S.-flagged vessel is limited to ten percent by weight. This restriction largely prevents Jones Act ship owners from refurbishing their ships at overseas shipyards.
Seamen's rights
Congress adopted the Merchant Marine Act in early June 1920, formerly and codified on October 6, 2006, as. The act formalized the rights of seamen.The Jones Act allows injured sailors to make claims and obtain damages from their employers for the negligence of the ship owner, including many acts of the captain or fellow crew members. It operates simply by applying to sailors similar legislation already in place that allowed for recoveries by railroad workers. Its operative provision is found at, which provides:
The law allows U.S. seamen to bring actions against ship owners based on claims of unseaworthiness or negligence, rights not afforded by common international maritime law.
The United States Supreme Court, in Chandris, Inc., v. Latsis, 515 U.S. 347, 115 S.Ct. 2172, set a benchmark for determining the status of any employee as a "Jones Act" seaman. Workers who spend less than 30 percent of their time in the service of a vessel on navigable waters are presumed not to be seaman under the Jones Act. The Court ruled that any worker who spends more than 30 percent of their time in the service of a vessel on navigable waters qualifies as a seaman under the act. Only maritime workers who qualify as a seaman can sue for damages under the Jones Act.
An action under the Jones Act may be brought in either a U.S. federal court or a state court. The right to bring an action in state court is preserved by the "savings to suitors" clause, 28 U.S.C. § 1333. The seaman-plaintiff is entitled to a jury trial, a right not afforded in maritime law absent a statute authorizing it.
Under the Jones Act, maritime law has a statute of limitations of three years, meaning that seamen have three years from the time the injury occurred to sue. If an injured seaman does not sue within that period, their claim may be dismissed as time-barred.
Effects
The Jones Act prevents foreign-flagged ships from carrying cargo between the contiguous U.S. and certain noncontiguous parts of the U.S., such as Puerto Rico, Hawaii, Alaska, and Guam. Foreign ships inbound with goods cannot stop at any of these four locations, offload goods, load contiguous-bound goods, and continue to U.S. contiguous ports, although ships can offload cargo and proceed to the contiguous U.S. without picking up any additional cargo intended for delivery to another U.S. location.Puerto Rico
In June 2012, the Federal Reserve Bank of New York indicated that the Jones Act may hinder economic development in Puerto Rico, although a Government Accountability Office report found the effect of repealing or loosening is uncertain, with possible tradeoffs.In March 2013, the Government Accountability Office released a study of the effect of the Jones Act on Puerto Rico that noted, "Freight rates are set based on a host of supply and demand factors in the market, some of which are affected directly or indirectly by Jones Act requirements." The report further concludes that "because so many other factors besides the Jones Act affect rates, it is difficult to isolate the exact extent to which freight rates between the United States and Puerto Rico are affected by the Jones Act." The report also addresses what would happen "under a full exemption from the Act, the rules and requirements that would apply to all carriers would need to be determined." It continues, "While proponents of this change expect increased competition and greater availability of vessels to suit shippers' needs, it is also possible that the reliability and other beneficial aspects of the current service could be affected." The report concludes that "GAO's report confirmed that previous estimates of the so-called 'cost' of the Jones Act are not verifiable and cannot be proven."
In February 2025, Governor Jennifer Gonzalez-Colón announced a request by the government of Puerto Rico for a permanent exemption from air cabotage laws in Puerto Rico.