The U.S. Disadvantage in International Shipping
Owners of U.S.-flag vessels don’t compete on a level playing field. July 17, 2023 11:01 am ET Cargo containers stacked on ships at the Port of Los Angeles, Oct. 20, 2021. Photo: Ringo H.W. Chiu/Associated Press A reader attributes the dearth of U.S.-flag vessels in the international trades to the Jones Act (Letters, July 11), a statute that, however effective it may or may not be in its aim of promoting U.S.-flag domestic shipping, applies not at all to international shipping. The lack of U.S.-flag vessels in international trade has a few causes. First is our legal system, which makes liability for injury to mariners more expensive in court, and results in a greatly increased cost of insurance of U.S. flag vessels. Second is the unionization of all who work on U.S. vessels, which causes the wage scale of their officers and crews to be a multiple of that of t
Cargo containers stacked on ships at the Port of Los Angeles, Oct. 20, 2021.
Photo: Ringo H.W. Chiu/Associated Press
A reader attributes the dearth of U.S.-flag vessels in the international trades to the Jones Act (Letters, July 11), a statute that, however effective it may or may not be in its aim of promoting U.S.-flag domestic shipping, applies not at all to international shipping. The lack of U.S.-flag vessels in international trade has a few causes. First is our legal system, which makes liability for injury to mariners more expensive in court, and results in a greatly increased cost of insurance of U.S. flag vessels.
Second is the unionization of all who work on U.S. vessels, which causes the wage scale of their officers and crews to be a multiple of that of their competitors. Third is our tax system, which requires ship operators controlled by U.S. citizens to pay taxes on all profits, wherever earned, whether or not brought back to the U.S.—a requirement almost unique to the U.S. Most countries don’t tax their citizens on unrepatriated funds, and the flags-of-convenience countries levy no income taxes on the owners of vessels under their flags unless they are domestically owned.
Owners of U.S.-flag vessels don’t compete on a level playing field. That is why there are so few of them in the international trades.
Robert L. Poster
New York
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