Cutting Shipping Costs

Cutting Shipping Costs

Many ports around America are calling for a change in the law. The Jones Act was implemented in the 1920’s with the aim to reduce the number of stops a ship can make.  It has recently failed those it is there to protect and resulting in a very high cost for local transportation of goods.

A ship that has deliveries for America can stop at just one port.  This means they are unable to drop off their deliveries to other destinations while they are in America.

This has allowed an increase in the cost of goods and services, transporting these goods to their destination, often at inflated prices. It means some of the outlying areas are unable to receive goods at a reasonable cost, due to factoring the extra cost of transporting the goods from the one depot. The only ships allowed to make multiple stops around the country are American ships. While this supports a large homegrown work force, it can inflate the prices of goods and services, which have no choice but be imported.

This regulation is causing the cost of living in some of the remote areas, including Hawaii and Alaska, to rise excessively higher than other areas because they have little choice but to have supplies shipped in. A demonstration of this in the costs involved in shipping an item to China from America can cost as little as $790, but to transport the same container to Hawaii would cost over $8,000.

The problem the government has with changing this law is the implication it will have on the employment sectors in the docks; maybe this is why the regulations governing this law are slow to change.

However, reducing the cost of moving goods and services might have a positive effect and increase the amount of goods transported, balancing out the deficit. Further studies and the process for change is going to take time.