The movement of cargo between two points in the United States is governed by Section 27 of the Merchant Marine Act, 1920 (46 U.S.C. §55102). It is generally referred to as the Jones Act, in honor of its author, Senator Wesley Jones (R-WA). The Jones Act is the continuation of laws to encourage a national flag fleet and allied industries that date back to our nation's founding.

The other major cabotage laws and statutes are:

• Passenger Vessel Services Act (46 U.S.C. §55103)
• Dredging (46 U.S.C. §55109)
• Towing (46 U.S.C. §55111)
• Salvage (46 U.S.C. §80104)

The U.S. Merchant Marine, of which the domestic maritime industry is a vital part, is recognized as "The Fourth Arm of National Defense." A strong domestic fleet ensures the United States has 1) world-class vessels to meet sealift needs; 2) expert and experienced seafarers to man the U.S. government's organic surge sealift ships in times of national emergency; 3) a modern shipyard industrial base that is so critical to the nation's economic, military, and homeland security; and 4) intermodal transportation systems available for defense use through the Voluntary Intermodal Sealift Agreement ("VISA").

During Operations Enduring Freedom and Iraqi Freedom (2002-2010), U.S.-flag commercial vessels, including ships drawn from the domestic trades, have transported 63 percent of all military cargos moved to Afghanistan and Iraq. As important, the domestic fleet also provided fully half of the mariners needed to crew U.S. government-owned sealift vessels activated from reserve status. Those vessels carried an additional 35 percent of the total cargos delivered to the war zone.

The U.S. Navy's position is clear - repeal of the Jones Act would "hamper [America's] ability to meet strategic sealift requirements and maintain and modernize our naval forces."

Other facts that illustrate the domestic industry's contributions to national security include:

• 70 percent of the industry's oceangoing self-propelled vessels are militarily useful, a critical consideration, for 95 percent of the materiel our overseas forces require moves by water.
• The domestic oceangoing fleet represents 30 percent of all VISA capacity, 36 percent of all U.S.-flag commercial containerships, 35 percent of all U.S.-flag roll on/roll off ships, and 90 percent of all U.S.-flag product tankers.
• Vessels for domestic waterborne commerce represent 35 percent of all U.S. commercial shipbuilding opportunities for large, oceangoing vessels, which helps maintain the skills and shipyard capacity needed to build and repair military vessels.
• Nearly 9 out of 10 American professional mariners work in the domestic trades.

Overview of the Domestic Maritime Industry

With more than 40,000 vessels engaged in domestic waterborne commerce, it is clear that this commercial armada is as diverse as the nation it serves. These vessels represent an investment of nearly $30 billion.

Here are some more facts and figures that illustrate the size and scope of the domestic maritime industry:

• A billion-plus tons of cargo annually, with a market value of $400 billion.
• 100 million passengers annually ride ferries and excursion boats.
• 74,000 jobs on vessels and at shipyards.
• 500,000 jobs in total.
• $100 billion in annual economic output.
• $29 billion in annual wages spent in virtually every community in the United States.
• $11 billion in taxes per annum.
• $46 billion added to the value of U.S. economic output each year.

Major Cargos:

• Grain, coal, and other dry-bulk cargos and crude and petroleum via inland rivers.
• Iron ore, limestone and coal across the Great Lakes.
• Refined petroleum products along the East and Gulf coasts.
• Supplies for Gulf offshore operations.
• Merchandise and construction materials to and from Alaska, Hawaii, Puerto Rico, and Guam.

The domestic trades serve 41 states and 90 percent of the population.

America's domestic trades have been the birthplace of innovations that transformed waterborne commerce worldwide:

• Containerships
• Self-unloading vessels
• Articulated tug-barges
• Trailer barges
• Chemical parcel tankers
• Railroad-on-barge carfloats
• River flotilla towing systems

Click here to see a gallery of photos of vessels in the domestic trades.

Safety is another benefit that flows from U.S. laws regulating domestic waterborne commerce. U.S.-flag vessels are built and operated to the world's highest safety standards. And no other nation sets a higher standard for mariner credentials.

Level Playing Field

The companies that move cargo between our ports receive no subsidies. These companies succeed on their merits and competition is fierce. But it's a fair fight. Our laws - maritime, tax, and others - are applied equally to all, and knowing that everyone is playing by the same rules allows competition and innovation to drive the marketplace.

Domestic Shipbuilding Industry at the Heart of National Security

The Defense Department ("DoD") has consistently emphasized the military importance of maintaining a strong domestic shipbuilding industry, stating "[W]e believe that the ability of the nation to build and maintain a U.S.-flag fleet is in the national interest, [and] we also believe it is in the interest of the DoD for U.S. shipbuilders to maintain a construction capability for commercial vessels."

A study by the U.S. Department of Commerce, Bureau of Export Administration, reached a similar conclusion:

The U.S. shipbuilding and repair industry is a strategic asset analogous to the aerospace, computer, and electronic industries. Frontline warships and support vessels are vital for maintaining America's national security and for protecting interests abroad. In emergency situations, America's cargo carrying capacity is indispensable for moving troops and supplies to areas of conflict overseas. A domestic capability to produce and repair warships, support vessels, and commercial vessels is not only a strategic asset but also fundamental to national security.

Domestic Maritime Industry Makes Our Homeland More Secure

America can never be secure without secure waterways. Fortunately homeland security is enhanced by the requirement that domestic commerce be conducted in American vessels in full compliance with U.S. laws and under the consistent oversight of the U.S. government.

Today Customs, Immigration, Homeland Security and other agencies swarm over foreign ships entering our harbors, but there is considerable uncertainty about what laws would apply if these vessels were allowed into our domestic trades. There is no precedent. However, it is certain that the task of monitoring, regulating, and overseeing potentially tens of thousands of foreign-controlled and foreign-crewed vessels in internal U.S. commerce would be difficult at best and fruitless at worst. Our inland rivers and waterways and Great Lakes go to virtually every corner of the country. Repeal or modification of the key domestic maritime laws would make America more vulnerable and less secure.