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Time to Repeal the Jones Act?


In discussion with Michael Sencer, Senior Vice-president of Hidden Villa Ranch, and the EVP representative for Villa Rose, LLC, the operator of Waialua Egg Farm, it is apparent that the landed cost of feed contributes to high price and is a deterrent to greater consumption of eggs in Hawaii.  The principal reason for the disproportionate price of feed on the West Coast and in Hawaii relates to ocean freight rates attributed to the Jones Act. 


Introduced during the early 1920s following WWI, this legislation was intended to create self-sufficiency with respect to shipments between and among U.S. ports, especially in times of war.  The Jones Act specifies that shipments must be on vessels constructed in the U.S. owned by U.S. shareholders and manned by U.S. crews.  The Jones Act is an anachronism, since the U.S. does not have a maritime ship-building industry and the requirements of the Jones Act represent non-competitive advantages for both shippers and marine-trade unions to the disadvantage of consumers, especially in Puerto Rico and Hawaii.  By restricting competition, the Jones Act facilitates high prices verging on exploitation.  Although waivers are possible under emergency conditions such as recent hurricanes in Puerto Rico, they are seldom issued by the White House and are based on individual vessels. 


Repealing the Jones Act would allow foreign vessels to convey containerized feed from the West Coast to Hawaii at a cost lower than at present.  With competition from lower-priced U.S. mainland eggs, shelf prices for mainland and domestic production would be reduced, and consumption would rise, benefitting both the producers and consumers in Hawaii. Given vested interests and lobbying by domestic ocean freight companies and the seafarers’ union  prospects for change are currently remote.