The Jones Act of 1920 and today’s gas prices

An article in the New York Times (March 11,2012) describes the impact of the 1920 Jones Act, that mandates use of US carriers, with US built ships and employing US cargo, for domestic cargo transport by sea. Thus, US oil that is moved to domestic destinations costs more to move using US based carriers, both because of lack of capacity and higher charges for transport. Thus, gas prices in the Northwest have not gone down as quickly as otherwise, even when US production in North Dakota has increased and West Texas intermediate crude prices are lower. Should the US suspend the Jones Act to lower gas prices ? Should attempts be made to require domestic carriers for all imported oil, to level the playing field ? Should smaller barge carriers be incented to expand capacity to increase competitiveness ?

About aviyer2010

This entry was posted in Operations Management, Service Operations, Supply Chain Issues, Sustainability and tagged , , , , , , . Bookmark the permalink.

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