The United States is currently building only 15 cargo ships, a stark contrast to the thousands being constructed in China and South Korea, according to recent analyses. Of the 15 U.S.-bound vessels, 12 are being built primarily in Korea. This limited output is attributed by critics to the Jones Act, a law enacted over a century ago.
The Jones Act mandates that goods transported between U.S. ports must be carried on American-built, American-crewed, and American-owned vessels. While intended to bolster the domestic shipbuilding and shipping industries, critics argue it has had the opposite effect, leading to a lack of competition and an industry that has declined over decades.
"We’ve had the Jones Act for a hundred years and through that entire time the rate of domestic shipbuilding has decreased decade over decade," said Jennifer Chen, primary researcher with Balsa Research, which tracks the industry. The Jones Act Index highlights what she describes as the dysfunctionality, inefficiency, and expense of U.S. domestic shipping under the act.
As a result, the U.S. possesses only 92 Jones Act-eligible vessels capable of carrying commercial goods. This scarcity drives up shipping costs significantly for routes to places like Puerto Rico, Hawaii, and Guam, where only U.S. ships are permitted. The cost per ton-mile for shipping from Long Beach, California, to Honolulu is approximately six times higher than the cost per mile from Shanghai to Los Angeles.
Furthermore, only four American shipyards possess the capability to construct large commercial vessels, with each shipyard's annual output capacity remaining stagnant at four to five ships per year since the 1980s. These shipyards include General Dynamics NASSCO in San Diego, Hanwha Philly Shipyard in Philadelphia, Seatrium AmFELS in Brownsville, Texas, and the former VT Halter Marine in Pascagoula, Mississippi.
Compared to international shipping, operating a Jones Act-eligible domestic tanker ship can cost between $86,000 and $91,000 per day, while an international medium-range tanker costs approximately $9,000 per day. Consequently, only about 3.9% of domestic U.S. freight is transported by water, compared to 28% within the European Union.
Experts also raise national security concerns, warning that the U.S. lacks sufficient domestic shipbuilding capacity to support its needs in a prolonged military conflict, especially if international shipping routes are disrupted by blockades.
Despite calls from the Trump administration to revitalize American shipbuilding, including proposals for a "Golden Fleet," experts suggest that moving beyond the Jones Act is necessary for substantial growth. A waiver of the Jones Act was issued by the Trump administration in March during the early days of the conflict with Iran, aimed at mitigating rising fuel prices.