By Jayvee Vallejera
Another attempt to reform a federal law being blamed for inflating the cost of basic goods and medicines in far-flung corners of America could finally be the charm that would pave the way to lower shipping costs to non-contiguous parts of the United States.
Rep. Ed Case, joined this time by Guam Del. James Moylan, has once again reintroduced three legislative proposals in Congress to reform the century-old Merchant Marine Act of 1920—more commonly known as the “Jones Act”—in yet another try to ease the financial burden of residents in Hawai’i, Guam, Northern Mariana Islands, American Samoa, Puerto Rico, the U.S. Virgin Islands and Alaska.
This isn’t the first time the three bills were introduced in the U.S. Congress, but all earlier versions languished at the subcommittee level and were never acted on.
Case and Moylan said the Jones Act, which was initially created to boost the U.S. shipping industry, has created domestic shipping monopolies that artificially inflate the cost of critical goods in non-contiguous parts of the United States.
“Our three bills aim to end a century of federally-created, monopolistic, closed-market domestic cargo shipping to and from our isolated and shipping-dependent homes,” Case said.
Proposed bills• The Noncontiguous Shipping Relief Act, which exempts all noncontiguous U.S. locations, including Hawai’i and Guam, from the Jones Act;• The Noncontiguous Shipping Reasonable Rate Act, which would define the phrase “reasonable rate” to mean no more than 10 percent above international shipping rates for comparable routes; and• The Noncontiguous Shipping Competition Act, which rescinds the Jones Act wherever monopolies or duopolies in noncontiguous Jones Act shipping develop.The bills specifically target what Case and Moylan said is a key driver of the astronomically high costs of living in far-flung America: a small group of federally-protected shipping companies that dominate the domestic market.
The two lawmakers said these shipping companies are shielded from competition, “forcing us to pay far more for both shipping and goods than virtually anywhere else in the world.”
As the legislative process unfolds, support for these proposals could grow, particularly among residents of non-contiguous territories who have been advocating for change for years.
Case first introduced the Noncontiguous Shipping Relief Act in April 2023 during the 118th Congress.
He also introduced the Noncontiguous Shipping Reasonable Rate Act in December 2019 during the 116th Congress and again in the 117th and 118th Congresses.
Similarly, he introduced the Noncontiguous Shipping Competition Act in the 116th, 117th and 118th Congresses.
The bills were all referred to the Subcommittee on Coast Guard and Maritime Transportation and never reached the House floor.
The Jones Act, enacted 105 years ago, mandates that all goods transported between U.S. ports be carried on ships that are built, owned, and operated by U.S. citizens.
Originally intended to boost the American shipping industry, the law has inadvertently created a closed market that restricts competition and drives up shipping costs for isolated jurisdictions such as Hawaii, Guam and Puerto Rico.
As a result, residents of these areas have faced high prices for essential goods, contributing to a higher cost of living compared to their U.S. mainland counterparts.
Although international shipping has grown dramatically in the last quarter-century, far-flung areas of the United States are unable to take advantage of this because of the restrictions of the Jones Act. Case said less than 100 vessels are able to serve all domestic shipping needs for the entire country, “even though there is plentiful shipping outside the Jones Act bubble.”
“And those few U.S. flag cargo lines that remain have maneuvered the Jones Act to develop virtual monopolies over domestic cargo shipping to, from and within our most isolated and exposed locales—our island and offshore states and territories—that have no alternative modes of transportation such as trucking or rail,” he said.
Case cited the case of his jurisdiction, Hawai’i, which imports over 90 percent of critical products by ocean cargo. While several other international cargo lines could tap a share of the market, only two U.S. flag domestic cargo lines, Matson Navigation and Pasha Hawai‘i, can operate in the state,
That means these two companies “operate a virtual duopoly over our lifeline,” Case said.
Consequently, cargo prices are “going in only one direction—up, fast and repeatedly, despite a surplus of international shipping—and it is indisputable that there is no downward market pressure [that] would otherwise result from meaningful competition,” he added.
Accelerating cargo prices are being passed on to shippers, wholesalers, retailers, small businesses, mom-and-pop stores and, ultimately, families.
In a press packet announcing their proposals, Case cited a report the Grassroot Institute of Hawai‘i issued in 2020 called “Quantifying the Cost of the Jones Act to Hawai‘i,” which found that the law has resulted in an estimated 9,100 fewer jobs in Hawaii, translating to a loss of $404 million in wages.
Furthermore, families across all income groups in Hawaii would benefit from Jones Act reform, with those earning between $15,000 and $70,000 potentially seeing an annual economic benefit ranging from $78 million to $154 million, according to the report.
Also, it is estimated that annual tax revenues could go up by $148.2 million, which would circulate in and boost local economies.
“The Jones Act has unreasonably affected thousands of Americans living in the Pacific-most areas of the United States for years,” Moylan said. “Created long before Hawaii became a state or Guam became a modern territory, the Jones Act has punished both based on their location. This tyranny of distance is not a new challenge for us, so I am happy to lead this bill with my friend, Rep. Case.”
Case said the Jones Act doesn’t hold up to the reality of the modern world.
“These long-overdue reforms are of the utmost importance to our unique noncontiguous localities. …If the continent wants to keep the Jones Act for whatever reason…go ahead. But don’t expect us to pay through the nose for your privilege.”
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