Jones act – emerging infrastructure links?

One issue of concern to me has been the relentless attacks on the Jones Act, a set of laws which reserve trade between US ports (on the mainland, and also Alaska, Hawaii, and US territories including Puerto Rico) for vessels built in the States, and registered/crewed by US “citizens.”

It is complicated and the debates quickly degenerate from the factual into the world of opinions, “what if’s”, and sometimes featuring heated emotions and raised tempers. While the ports are welcoming vessels of all flags, with varied international cargo origins and destinations, they also benefit greatly from shipbuilding, maintenance/ repair and other activities tied to Jones Act vessels.

In looking at history, it is evident that such activity has been greatly reduced compared to the 1970s and 1980s (mirroring a decline, as well, in military vessels). Yet increasingly, geopolitical concerns have been causing policymakers to take a fresh look at US security, and maritime readiness/capabilities are a part of that conversation. Potentially, after years of waning, local shipbuilding and related services could increase. Importantly, this comes at a time that trade flows may be easing- after a multiyear boom (brought about the pandemic, and subsequent shifts in cargo flows).

Yes, there are a lot of politics here. As these debates heat up and get vociferous, port planners (even those with calm demeanours) should keep a weather eye on such developments. Whether one supports the Jones Act or not, there are emerging tie-ins with “infrastructure” here, with maritime transportation seeing benefits in recent legislation.

Traditional funding sources, like the long-standing grants programme benefiting ports, have gained. Yet additional funding outlets are emerging, as well. As decarbonisation continues to be infused into conversations (a different theme than national security) – and allocations of funding – a group of new initiatives concerning “Hydrogen Hubs” sees the US Department of Energy (USDOE) set to spend roughly US$7bn on their development. If the concept advances, the hubs would promote new supply chains for movements of greener fuels including methanol and ammonia. It’s early days for such programs, but the ports (notably in the US Gulf Coast, but also, potentially, around the US East Coast) would see substantial benefits if the USDOE is looking in their direction when the final choices for hubs are made.

In terms of financial structuring, long-term contracts would likely be put in place for all aspects of the new energy infrastructures. And yes, that would also bring about incremental maritime activity (including newbuilds that would likely be trading domestically) right on our waterfronts.