Maritime Jobs Ahoy

Maritime Jobs Ahoy

Just a few weeks ago, new data was published that described substantial economic returns for Indiana that have been generated by the Jones Act, a protectionist maritime regulation that has been a source of controversy throughout its history. Though it has critics, a new report from international auditing firm PricewaterhouseCoopers (PwC) suggests the act has been very good for Indiana.

According to PwC, activities surrounding the law produce about $3.9 billion for the local economy each year in addition to supporting tens of thousands of jobs.

 

Quick Rundown: What’s the Jones Act?

The Jones Act, which is section 27 of the Merchant Marine Act, requires vessels that transport goods between U.S. ports to meet four criteria:

  • Vessels must be owned by U.S. companies, controlled by U.S. citizens, and must have at least 75 percent U.S. ownership.
  • 75 percent of the crew must be U.S. citizens.
  • Vessels must have been built (or rebuilt) in the U.S.
  • Vessels must be registered in the U.S.

In other words, the act requires that transportation of merchandise between all U.S. points be reserved for vessels that are built, owned, crewed, and documented in the United states.

Supporters of the act feel it is essential for preserving the security of the domestic maritime industry. Critics say the act increases the cost of shipping to U.S. lands that depend on imports like Alaska, Hawaii, Puerto Rico, and others, and that it limits the number of vessels that can legally deliver goods, driving higher costs and reducing competition.

Despite the divided opinion, the numbers indicate good outcomes for Indiana’s economy.

 

How Does this Impact Indiana?

In PwC’s study, which was a private study conducted on behalf of the Washington DC-based Transportation Institute (TI) called “Contributions of the Jones Act Shipping Industry to the U.S. Economy in 2016,” researchers found that activity specifically relating to the Jones Act encompasses thousands of jobs and generates a multi-billion-dollar economic impact. The American Maritime Partnership (AMP) distributed several of the report’s key findings, which included the following:

  • “Indiana ranks #12 among all states in jobs related to the domestic shipping industry.
  • Throughout Indiana, [domestic shipping] industry employs more than 15,360 individuals, produces $3.9 billion for the local economy, and generates $874 million in worker income annually.
  • Between 2011 and 2016, domestic maritime employment in Indiana increased by 7,740 jobs.
  • 123,670 Jones Act-related jobs, or 20% of the national total, are based in Great Lake states.
  • $30 billion of the national Jones Act economic impact comes from the eight Great Lakes states.”

AMP also referenced a report from the U.S. Maritime Administration (MARAD) that expounded on further benefits. MARAD found that Indiana is an important shipyard state. Construction of commercial and military vessels produces a $446 million annual economic impact and more than $272.4 million in worker income for Indiana.

 

Hoosier Perspectives

In the interest of full disclosure, it’s important to note that both TI and AMP are major proponents of the Jones Act. Fortunately, announcements about this topic also contained local insights that provided a more direct translation for how the act impacts Hoosiers.

Congressman Pete Visclosky (D-IN) said, “I commend the initiative to quantify and demonstrate the essential contribution of the shipbuilding and maritime industry to the strength of our national economy and our national security. I have been a long-time supporter of the Jones Act and appreciate the dedicated work of the shipping industry in Northwest Indiana to grow our economy, and also remain dedicated to improving the environment. We must continue to do all we can to support good-paying shipbuilding and maritime job opportunities in the Great Lakes state of Indiana and throughout our nation.”

As to how local firms are impacted, Tom Wiater, president of Griffith-based Central Marine Logistics (CML), said, “Many of our team members are proud second and third generation CML mariners. All are reliant on the Jones Act requirement that cargoes moved between two U.S. ports be on American-owned vessels, crewed by U.S. citizens, and operated by American companies. Our vessels are constantly moving cargoes in and out of Midwest ports and driving Midwest jobs. Our business is growing, and we are annually investing over seven figures in the future of our fleet, and this is happening because the Jones Act protects American jobs and businesses.”

 

Keeping Things Local

Even though the Jones Act is a subject of debate between different points of view, a $3.9 billion impact for Indiana is tremendous for our economy, not to mention thousands of Hoosier households. The absence of this regulation would likely bring about big changes for a lot of workers and their families, and thus the notion that it exists to protect American jobs certainly has merit. At the very least, for Indiana and other Great Lakes states, the act appears to be doing its job well.

Category Features, Logistics