The Jones Act

In response to a congressional request, GAO examined the effects of the Jones Act on Alaska trade to determine the: (1) economic costs of the act's requirement that only U.S. vessels carry cargo between points in the United States; and (2) impact of this requirement on achieving national defense objectives.

GAO found that: (1) the requirement increased annual transportation costs in Alaskan trade by about $163 million; (2) a new crude oil pipeline from California to Alaska could reduce the need for tanker transportation; and (3) the increased costs for Alaskan oil reduced Alaskan royalties and severance taxes by $37 million per year. GAO also found that: (1) U.S. military strategy relied heavily on the use of U.S.-flag ships to move military supplies abroad in case of war; (2) the U.S.-flag fleet declined from 1,050 ships in 1950 to 365 in 1987; (3) the number of positions for U.S. merchant mariners declined from 56,629 in 1950 to 10,376 in 1987; (4) although admitting foreign-built ships to Alaskan trade would probably not change the number of U.S.-flag ships in that trade, it might reduce the number of positions for U.S. merchant mariners; and (5) replacing existing ships with foreign ships would reduce the shipyard mobilization base.