Matson Fires Back at Anti-Jones Act Proposals

File image courtesy Matson

Published Dec 20, 2019 11:49 PM by The Maritime Executive

Congressman Ed Case (D-Hawaii) has introduced a set of three bills to modify the Jones Act's requirements for the non-contiguous states, including an anti-monopoly requirement.

The first, Case's proposed Noncontiguous Shipping Competition Act, would remove the Jones Act where there are monopolies or duopolies on routes between the U.S. mainland and America's outlying states and territories. 

"Those few U.S. flag cargo lines that remain have [created] virtual monopolies over domestic cargo shipping to and from our most isolated and exposed locales: our island and offshore states, territories and possessions,” Case said in a statement. "In Hawaii’s case only two U.S. flag domestic cargo lines . . . operate a virtual duopoly over our lifeline and they do not act as an effective market check on each other."

Alleging that higher-cost domestic shipping translates into higher prices for consumers in affected markets, Case called for some form of reform that would introduce market competition while sustaining national security. “Essentially, my bills are intended to lay out options for providing relief for our U.S. noncontiguous areas. We can resolve the issue in many ways, but we must change the status quo," he said. 

Case has also proposed two alternative bills: the first would exempt all non-contiguous states and territories from the Jones Act altogether, giving Hawaii the same status as the U.S. Virgin Islands and American Samoa. The second would cap shipping rates on non-contiguous U.S. voyages at no more than ten percent above international shipping rates on "comparable routes."

In a response statement issued Friday, U.S. carrier Matson disagreed with Case's perspective. 

"Shipping costs are just one of many cost factors that go into local pricing of consumer goods and represent a small fraction of price differences between Hawaii and the mainland," Matson said. "The reason the Jones Act has had such strong bi-partisan support in every Congress and administration in modern times is because it is important to homeland security and national defense, as well as the security of service to remote communities like Hawaii and Alaska . . . The Jones Act also supports more than 650,000 jobs in the U.S., including thousands here in Hawaii."