The Jones Act—officially the Merchant Marine Act of 1920—is one of the most hotly debated laws in U.S. maritime policy. Enacted over a century ago to bolster national security and domestic shipbuilding, it now drives up costs by requiring all goods shipped between U.S. ports to travel on American-built, -owned, and -crewed vessels. Nowhere is the burden heavier than in noncontiguous states and territories like Hawaii, Alaska, Puerto Rico, and Guam, where residents depend on ocean freight for basic necessities. The law inflates prices on everything from food to fuel so much that the federal government often waives it in times of crisis to ease the strain. Seeking a more permanent solution, Representative Ed Case (D-HI) and Delegate James Moylan (R-GU) have introduced the Noncontiguous Shipping Relief Act to bring long-overdue relief.
The Jones Act was enacted to ensure that the U.S. maintained a robust merchant fleet in times of war and economic need. By mandating that only American-built and American-crewed ships can transport goods between U.S. ports, the law aimed to protect domestic shipbuilding and prevent reliance on foreign-flagged vessels. This protectionist approach has largely stultified U.S. shipbuilding, resulting in higher costs, reduced innovation, and a decline in the global competitiveness of the American maritime industry. Over a century later, the economic implications of this legislation have raised serious concerns, especially for places like Hawaii, Alaska, Puerto Rico, and Guam—regions that depend on ships to transport goods from the continental United States. Since U.S.-built ships are often far more expensive than their foreign counterparts and American crew wages are higher, shipping companies operating under Jones Act restrictions pass these costs on to consumers.
For the islands in Hawaii, Puerto Rico, and Guam, where nearly all goods arrive by ship, the higher cost of shipping translates to more expensive food, fuel, and household goods, contributing to some of the highest costs of living in the U.S. According to a 2020 study, the Jones Act cost the average Hawaii family $1,800 per year. This financial burden makes it harder for families to make ends meet and stifles local businesses that struggle to compete with mainland counterparts that enjoy lower logistics costs.
For example, the Kōloa Rum Company is currently contesting the Jones Act. The Pacific Legal Coalition argues, “by mandating that shipping between American ports must be only on American-flagged ships, the Jones Act puts the non-contiguous states at a severe and unconstitutional disadvantage. It restricts competition, limits economic opportunity, and drives up costs. American laws should work to the benefit of American businesses, but the Jones Act puts American business at a severe disadvantage on the world stage.” Kōloa’s CEO, Bob Gunter, states that “this lawsuit is about ending an unfair, outdated law that discriminates against the citizens of Hawaii and Alaska.”
Other U.S. territories, such as American Samoa, the Northern Mariana Islands, and the U.S. Virgin Islands also face economic challenges due to high transportation costs. These territories have received exemptions from the Jones Act. The Noncontiguous Shipping Relief Act would extend this existing exemption to the much more populated Hawaii, Alaska, Puerto Rico, and Guam.
Consider its application in Puerto Rico: only Jones Act-compliant ships can transport goods between the mainland United States and Puerto Rico. This means affordable, foreign-built ships cannot be used to deliver goods directly to Puerto Rico. As a result, shipping costs are higher, which drives up the prices of goods on the island. When Americans in noncontiguous areas pay significantly more for everyday necessities than those on the mainland, it creates an uneven and unfair economic playing field that reinforces systemic disparities in cost of living, business growth, and overall financial stability.
Recognizing these economic burdens, Case and Moylan have proposed reforms to ease the impact of the Jones Act on noncontiguous states and territories. Their bill would lower shipping costs and reduce the financial strain on both residents and businesses.
The idea behind this legislation is simple: more competition leads to lower prices. By lifting restrictions on who can transport goods, noncontiguous areas would no longer be at the mercy of an artificially limited and expensive shipping industry. This would not only reduce costs for essential goods but also foster economic growth by making it easier for businesses to transport products to and from the mainland.
Ultimately, the debate over the Jones Act and potential reforms like the Noncontiguous Shipping Relief Act is about more than shipping policy—it is about the quality of life for millions of Americans living outside the continental U.S. The cost of living in these regions is already higher than the national average, and outdated shipping laws only exacerbate the problem. Whether it is a carton of milk in Hawaii costing nearly twice as much as it does in California or businesses in Guam struggling to import raw materials at reasonable rates, the impact is felt across all aspects of daily life.
The Jones Act has been a defining piece of U.S. maritime policy for 105 years, but its economic burdens—particularly on noncontiguous states and territories—have become an increasing point of concern. While broader reform is needed for this antiquated law, Case and Moylan’s Noncontiguous Shipping Relief Act could help steer the first course toward relief for those hit hardest by its costs.