The second part of the Jones Act legislation, and the one most controversial in public policy circles, is the so-called “cabotage” law. Put simply, a vessel must be built in the United States and crewed by a predominantly American crew to sail under the US flag. This is not a symbolic right; it entitles the vessel to move paid cargo or passengers from one US port to another. A foreign-flagged vessel has to pick up or drop off cargo or passengers at least one foreign port along the way. This why so many Alaska-bound cruise ships, almost all of which are foreign-flagged, begin or end their cruises in Vancouver.
The US is not alone in having these sorts of requirements. Mexico requires vessels under its flag to have at least 90-percent Mexican crew, compared to the US requirement of 75 percent. On the other hand, some “flag of convenience” states, such as Liberia or The Bahamas, allow anyone with the proper qualifications to sail on their vessels. Panama, for instance, has the largest merchant marine fleet in the world, with crews from a number of different countries.
These cabotage provisions of the Jones Act were meant to protect American jobs, both in shipyards and at sea. They have been chipped away at almost since they became law, mostly to fit specific situations, such as the 1978 provision allowing foreign-built hovercraft to operate in Alaska. I myself was captain of a large yacht that, while Australian-built, was registered in the United States. A now-expired law allowed the vessel to be re-flagged if the owners spent a certain percentage of the vessel's value into upgrades and repairs. The Jones Act was not completely thrown out the window in this case, though: the vessel still has to drop off or pick up its passengers at a foreign port; two other small vessel operators protested the awarding of a “coastwise” endorsement.
More recently, there have been attempts to allow foreign-flagged vessels to serve in the Gulf of Mexico offshore oil trade, in which the only intermediate stop is an oil-drilling platform. Many of these oilrigs are floating vessels in their own right and usually foreign-flagged, often in the Marshall Islands. Another area of contention is foreign-flagged gambling boats that never leave the dock. The local governments may permit gambling, but is the vessel itself in violation of federal cabotage laws? Stay tuned.
There is a site set-up that you can actually send an email (with a form letter that you can alter) to your Representative, both Senators, President Obama and the Commandant of the USCG urging them not to grant "exceptions", as they have been ever since Hurrican Katrina, for free. The site is http://www.JonesActQuestions.com. On the home page look at the top right and click the button that says "Action Alert". Plus the site has all the recent Jones Act decisions.
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