Level playing fields don’t suit all

Malcolm Latarche
Malcolm Latarche

22 July 2016


Unless an operator regularly trades to the US, they may be unaware that the US authorities are beefing up enforcement of the Jones Act with the Customs and Border Protection Office of Field operations setting up a National Jones Act Division of Enforcement (JADE). The Jones Act is the US law on cabotage that requires any vessel operating between US ports to be US built, owned and crewed. It would appear that the main reason for the development is the number of non-US flagged vessels operating in the offshore sector in the Gulf of Mexico. Limiting the access to cabotage is one of the oldest forms of protectionism and can be found all around the globe even, despite regulation on competition law that ostensibly outlaws the practice, in the EU. The US action is quite clearly a response to the slowdown in offshore activity that has seen many vessels forced into lay up. That non-US vessels were working in the area before was no problem because then there was work for all but now it is a different matter. The world is surely heading into a time of increased protectionism that may well impact upon shipping which would prefer no restrictions on trading and free trade agreements to encourage trade volumes. On the other hand it could be argued that cabotage is no more than a desire for a level playing field that prevents operators with lower costs from gaining an unfair advantage and ship operators and their international bodies are always clamouring for a level playing field – especially when it comes to regulation. The idea that identical regulations should apply to all is quite a modern idea and arguably not one that actually benefits shipowners to the extent that some think it might. Take ballast water for example – ships that have restricted trading operations through choice may still have to install a system even if the only species they could transfer between locations are already found there. Or ECDIS – a ship that plies a regular route and has done for some time with a passage plan that never varies may still be obliged to pay for equipment, training and ENCs even if they may never be used. Universal standards may sound good in principal but are not always the best strategy for operation. Perhaps there should be far more exemptions than currently exist for shipping to operate profitably. There might then be more money to spend on the things that really do matter for individual vessels.