Mercatus Report: Jones Act Endangers Sailors

El Faro was delivered in 1975, and it was required to follow the safety requirements of 1960 when it sailed in 2015.” – Mercatus Center report


According to mariners with recent experience sailing aboard the American cargo ship El Faro, it had holes in the deck and reliably leaked water into the cook’s room. In the words of one, it was an old “rust bucket” that “needed a death certificate” and “wasn’t supposed to be on the water.”

Tragically, those with the most recent experience on the SS El Faro have nothing to say. All 33 of them, including 28 Americans, perished when El Faro sank on Oct. 1, 2015. It slipped to the bottom of the Atlantic after taking on water, losing propulsion, and veering close to the eyewall of a category 3 hurricane while on its way from Jacksonville, Florida, to Puerto Rico.

Last December, after two years of investigation, the U.S. National Transportation Safety Board largely agreed with the sailors who knew the ship best, placing most of the blame for the tragedy on the 40-year-old vessel’s age and outdated safety features.

That’s the ruling on what happened to the El Faro. To find out why it happened, look to a report released in March from the Mercatus Center at George Mason University.

Sacrificing Safety is an Unintended Consequence of the Jones Act explains that the elderly, decrepit old ship was still making needlessly risky runs to Puerto Rico because of an even more ancient, outdated federal law.  

Signed into law by President Woodrow Wilson, the Merchant Marine Act of 1920 (aka The Jones Act) requires that any ship conducting trade between two U.S. ports (e.g., the state of Florida and the U.S. territory of Puerto Rico) must be registered and built in the U.S., and also mostly crewed by American sailors.

In theory, these restrictions are meant to ensure the U.S. military has sufficient cargo capacity in case of an overseas conflict. The reality is that the law has done just the opposite, resulting in a steep decline in the number of Jones Act compliant large cargo vessels because new American-built cargo ships are far more expensive than those built overseas.

The law’s most noticeable policy outcomes have been the much higher cost of living inflicted on Americans in Puerto Rico, Alaska and Hawaii, who must rely on goods shipped via Jones Act vessels; and the corporate welfare protection racket the law provides for overpriced American cargo ship builders.

Now the latest Mercatus study adds the decline in safety standards to the list of Jones Act liabilities.

The authors see the root of the problem as the high cost of building cargo vessels in the U.S.:

“According to recent estimates, American-built oceangoing ships cost five times as much as their foreign counterparts. Because of the higher cost of new ships, American shippers have delayed replacing older ships, and the American fleet has gotten older.”

In other words, if the Jones Act did not reserve domestic shipping routes for only American-built ships, then there would be no reason for any shipping company on the planet to ever purchase an expensive American-built vessel.

As a result, the Mercatus report says those who must purchase American-built ships delay doing so for as long as possible, with the El Faro representing an extreme example of this general trend:

“The average age of ships in the US fleet (33 years) is greater than the average age of ships in the foreign-flag fleet (13 years). At the age of 40, El Faro was even older than the average US-flag ship, and it was far older than the average age of international ships (23 years) that were recycled by shipbreakers from 2012 to 2015.”

Just as a newer automobile is expected to have a substantial safety advantages over a 40-year old model, the authors provide numerous reference points showing the age of a cargo ship is often inversely related to its ability to protect the crew:

  • “… marine insurers are reluctant to insure ships older than 20 years without extraordinary inspections or higher premiums.”
  • “National ship registries with good safety records, such as the one for the Marshall Islands, will not register ships older than 20 years unless owners provide additional information about the safety of the older ships.”
  • A comprehensive study of shipping accidents over the last 15 years revealed, “The average age of vessels lost was consistently above 20 years, and the average age of lost ships increased steadily over the sample period.”
  • U.S. safety regulations too often provide grandfather clauses exempting older vessels from modern requirements: El Faro was delivered in 1975, and it was required to follow the safety requirements of 1960 when it sailed in 2015.”
  • Modern cargo ships are required by the NTSB to use closed-top lifeboats to protect crews in rough water. The elderly El Faro was exempt from this standard and had open-top lifeboats when it sank.

The authors recommend partially or totally abolishing the Jones Act’s American–built vessel requirement, which would make it easier for Jones Act compliant carriers to purchase newer and safer cargo ships.


Additional information:

The Jones Act: How Congress Made Cows Fly

Hawaiian ranchers hoping to evade the high cost of Jones Act shipping have been driven to some very odd behavior.

Jones Act Corporate Welfare Should Be Abolished – Not Just Suspended

Puerto Ricans endure some of the highest prices imposed because of the Jones Act, and they’re the Americans with the least ability to pay.

An arcane American law protected by powerful interests is causing insane traffic jams

Shipping goods port-to-port up and down American coastlines is made artificially more expensive because of the Jones Act. The result is a bias toward sending more goods overland rather than over the water, and that means A LOT more trucks on American roads. Yup – The Jones Act even causes traffic jams.


Ken Braun is the director of policy and communications for Think Freely Media. He has served as a public policy and communications professional for four different free market policy organizations, and as a chief of staff in the Michigan Legislature. He has also been a freelance political columnist for one of Michigan’s largest newspaper chains. Ken can be followed on Facebook, and when he has something really clever to say he will even use Twitter.


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