Segment 1 — The Cold Open

In the port of San Juan, containers bound for the mainland sit stacked while the few Jones Act–eligible vessels that still call are booked months ahead. A Puerto Rican grocer pays roughly twice as much to bring in rice and canned goods as a Florida distributor does for the same cargo, even though the distance is shorter by sea. The law that produced this result was written in 1920 with the explicit goal of preserving a merchant marine strong enough to carry troops and supplies in any future conflict.

Segment 2 — The Good Intention

After World War I, American policymakers watched foreign-flag ships carry the bulk of U.S. exports and worried that the nation would again be caught short of tonnage if another war broke out. Senator Wesley L. Jones of Washington, chair of the Senate Commerce Committee, introduced the Merchant Marine Act of 1920 to close the coastwise trade to any vessel that was not built in the United States, owned by U.S. citizens, registered under the U.S. flag, and crewed by American mariners. The measure enjoyed broad support from shipyard unions, naval officers, and both parties; it passed with little debate and was signed by President Wilson on 5 June 1920. At the time the logic appeared straightforward: a protected domestic market would keep American yards busy, maintain a pool of trained seafarers, and ensure that the government could requisition tonnage without negotiating with foreign owners. The act also contained a provision allowing the Shipping Board to waive its rules in wartime, underscoring that national-security capacity, not everyday commerce, was the central concern. Lawmakers had just lived through the scramble of 1917, when the United States had to charter foreign vessels and hastily convert passenger liners because domestic bottoms proved insufficient for the scale of troop movements to Europe.

Segment 3 — The Implementation

The Jones Act took effect immediately for trade between the contiguous states, Alaska, Hawaii, and Puerto Rico. In its first decade the protected trades did see new construction; Bethlehem and Newport News yards delivered several large passenger-cargo liners for the intercoastal and Hawaii runs. Proponents pointed to the steady employment of roughly 50,000 American seafarers in the early 1920s and to the fact that U.S. yards received orders they would otherwise have lost to British and German builders. Skeptics in the shipping press noted that the new vessels were already more expensive to operate than foreign-flag competitors, but the argument carried little weight while the memory of wartime shortages remained fresh. By the late 1920s the coastwise fleet appeared stable, and the law’s restrictions were extended without controversy to the newly acquired Virgin Islands. Early operators found that the requirement for American steel plate, American turbine engines, and American welders added layers of cost that foreign yards avoided through lower wages and established supply chains, yet those differentials were accepted as the necessary price of self-sufficiency.

Segment 4 — The Unintended Consequences

Over the following decades the protected fleet did not expand; it contracted. Between 1945 and 2020 the number of Jones Act–eligible cargo vessels fell from more than 1,200 to fewer than 100, most of them built in the 1970s or 1980s and now approaching or past the end of their economic lives. Because the act bars foreign-built hulls, replacement costs rose sharply; a new U.S.-built container ship can cost three to four times as much as an equivalent vessel built in South Korea or China. The arithmetic is straightforward: when every hull must be fabricated under U.S. labor rules, with U.S. Coast Guard inspections at each stage, and with domestic steel that itself carries higher input costs, the capital outlay per slot grows large enough that operators order fewer ships and keep older ones running longer. Ship operators responded by shifting cargo to trucks and rail wherever geography allowed, so that goods moving between the East and West coasts now travel overland rather than through the Panama Canal on American bottoms. For island economies the effect was sharper. A 2019 Government Accountability Office review found that the cost of shipping a forty-foot container from Jacksonville to San Juan was roughly double the cost of shipping the same container from Jacksonville to the Dominican Republic, even though the Dominican route is longer. Hawaii and Alaska reported similar mark-ups on fuel, building materials, and food. The second-order result was that Puerto Rican manufacturers lost ground to competitors in the Dominican Republic and Mexico who could use cheaper foreign-flag feeders. The third-order result was a smaller pool of American mariners; with fewer ships, the maritime academies graduate officers who often find work on foreign-flag vessels or leave the industry, reducing the very reserve of trained personnel the act was meant to protect. One might ask whether wartime requisition authority could still draw on a larger foreign fleet, yet the statute’s design deliberately narrowed the pool of vessels whose owners and crews the government could count on without negotiation.

Segment 5 — The Aftermath

Reform efforts have surfaced periodically. In 2013 and again in 2018, members of Congress introduced bills to allow limited foreign-built vessels in the Puerto Rico trade, but both measures died in committee after opposition from maritime unions and Gulf Coast shipyards. Temporary waivers were granted after Hurricanes Maria and Irma, yet the waivers were narrow and short-lived. The fleet continues to age; as of 2024 the Maritime Administration lists only 92 privately owned Jones Act cargo ships, most over thirty years old. Meanwhile, the U.S. military has increasingly turned to foreign-flag vessels under the Maritime Security Program to meet surge requirements, an arrangement that would have surprised the act’s original sponsors. No comprehensive redesign of the statute has occurred. Each waiver debate revisits the same tension: short-term relief for island consumers versus the long-term claim that any relaxation would further erode the domestic shipbuilding base the law was written to sustain.

Segment 6 — The Lesson

Shielding an industry from all external competition tends to raise its costs faster than its productivity, so the protected capacity can shrink even while the legal barrier remains in place. When the protected activity is also the one the policy claims to value most—here, a ready merchant marine—the contradiction becomes self-reinforcing. Policymakers facing similar choices today might ask whether the instrument they are reaching for will still produce the capability they need once every competitor has been removed from the market. The Jones Act’s history suggests that the answer depends less on the strength of the initial intention than on whether the chosen mechanism can adapt when the arithmetic of costs and demand changes.

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