Salt shipment underscores frustration with Jones Act
The shortage of road salt in New Jersey soon could be alleviated, but the debate about the maritime shipping law that prevented the quick transport of an emergency shipment along the Northeast coast is likely to continue.
Severe winter weather caused road crews in the state to use up road salt faster than it could be replenished. The New Jersey Department of Transportation two weeks ago found a supply of salt at International Salt's terminal in Searsport, Me., and sought an exemption to the Jones Act from the U.S. Department of Homeland Security so it could arrange transport on a foreign-flagged vessel. An American-flagged vessel was not available for a month. When NJDOT couldn't get a waiver, it arranged for a tow-barge to ship the salt to the Port of Newark.
The Jones Act, a 1920's-era law aimed at protecting the U.S. maritime industry, requires that cargo shipped between U.S. ports be moved on U.S.-registered vessels that are built in the United States and crewed by Americans. The requirements make coastal moves more expensive because shipbuilding and crew costs are much higher in the United States than in many other parts of the world. Waivers can only be granted for national defense reasons, such as after Superstorm Sandy, and the U.S. Maritime Administration must first confirm that there are no qualified U.S.-flag vessels available to meet demand.
NJDOT expects the barge, which had to stop in Providence, R.I., on the way south because of bad weather, to arrive at Port Newark early this week, a spokesman said. The barge will have to make up to four round trips to deliver the 40,000 pounds of salt purchased by New Jersey because it lacks the same capacity as a large bulk vessel.
Meanwhile, a vessel arrived from Chile at Port Newark on Thursday with a regularly scheduled shipment of salt. International Salt of Clarks Summit, Pa., mines salt in Chile and transports it to bulk depots along the East Coast, including the one at Port Newark.
Don’t blame the Jones Act and federal bureaucracy for the shipment delay, the American Maritime Partnership, a pro-domestic maritime industry coalition of vessel owners and operators, unions, shipbuilders, and suppliers, said Friday. NJDOT should have filed its request sooner so MarAD would have had more time to identify U.S. vessels available to do the job since a waiver was never an option because “road salt is not a national defense issue,” it said in a FAQ document posted on its website.
“An American vessel was available and even on short notice is delivering the first of several loads of salt to New Jersey. With advanced planning, the salt would have gotten to New Jersey much sooner. With advanced planning, there are many other American vessels that may have been available to help transport the salt, shortening the delivery timeframe,” the American Maritime Partnership said.
At a transportation infrastructure summit hosted by the U.S. Chamber of Commerce on Thursday, Stephen Brown, vice president of federal government affairs for independent oil refiner Tesoro Corp., assailed the Jones Act as an anti-competitive drag on business.
"The Jones Act is a major component that holds free trade and free markets hostage, if you will," he said.
Tesoro's maritime arm operates three mid-size, U.S.-flagged tankers and seven tug-barge units under charter, mostly along the West Coast and Alaska, according to a slide presentation one of its officials made at the ASBA Cargo Conference in October.
"It costs more to move the same volume of product — gas, diesel or crude — from the Port of Houston to New York harbor than it does to the Port of Rotterdam. And it's not just a dollar more. It's a factor of three or four times more," Brown said.
"It's just shocking that you have members of Congress from East Coast states who oppose relaxing export bans [of oil or fuel] because they are worried about the impact on gasoline prices and what their constituents will pay, when they support the Jones Act that already imposes artificially high costs for these same products on their consumers day in and day out," he added.
"Our view is you can't have a debate on energy exports unless you are willing to face inconvenient truths like the Jones Act."
Congress needs to repeal the Jones Act, or at least make it easier to move fuel along the coasts as domestic energy production reaches historic levels, Brown said.
Jones Act proponents, including maritime unions and domestic carriers, say it is vital for U.S. national security to maintain a domestic merchant fleet. To date, there has been little political appetite to change the law.