America’s federal Jones Act is old and in dire need of an update. Oceangoing U.S. ships sailing under the auspices of the Jones Act fleet are in a similar condition.
Now 101 years old, the Jones Act technically is Section 27 of the Merchant Marine Act of 1920, and requires that all ships transporting goods between U.S. ports be U.S. flagged and built, and mostly owned and crewed by Americans.
Its intent was to ensure national security by protecting America’s maritime industry from foreign competition. By almost any measure, however, the law has been a failure.
U.S. shipyards capable of building large oceangoing commercial ships have dwindled from 30 in 1953 to just four as of November 2021, and oceangoing Jones Act ships have declined in number from 257 in 1980 to just 96,1 less than 1% of all commercial oceangoing vessels worldwide.2
Worse — from an efficiency, cost and safety perspective — Jones Act ships are, on average, significantly older than most of their international counterparts, with the exception of oil tankers, which average 13.47 years old versus 18.87 internationally.3 The difference is largely due to the recent buildup of Jones Act tankers for the Gulf Coast-East Coast market, where the lack of pipeline capacity has necessitated the use of ships. The Oil Pollution Act of 1990’s double-hulled tanker mandate has also contributed to the lower age of Jones Act-qualified oil tankers.4
Even though these U.S. oil tankers are relatively young, there aren’t many of them — not enough to properly supply the East Coast’s demand for oil, at least. As the Colonial Pipeline hack in May 2021 demonstrated, oil companies simply do not have enough options for transporting oil, and the only short-term remedy to provide additional shipping capacity after the hack was for President Joe Biden to temporarily waive the Jones Act.5
Meanwhile, all of America’s oceangoing roll-on/roll-off ships, containerships and cargo ships are definitely outpacing their international counterparts in age. Jones Act container ships, for example, average 21.61 years old, versus the international average of 12.34. In Hawaii, the containerships operated by the two main Jones Act carriers, Matson and Pasha, average 16.5 and 41.25 years old, respectively.6
In the Great Lakes, the Jones Act fleet is in even worse shape. Until the launch of the Mark W. Barker earlier this year, no large ship had been added to the Great Lakes fleet since 1983.
“Put another way” said Jones Act analyst Colin Grabow, “the last time the Great Lakes fleet saw a new ship was the same year Michael Jackson unveiled the moonwalk and the first cellphone was released for commercial use.”7
Internationally, many ships are scrapped between the ages of 15 and 20.8 The average scrapping age for general cargo ships is 35.4; the average age of Jones Act general cargo ships currently is 36.8.9
In past years, the Jones Act fleet also included dry bulk carriers, but not anymore. The last one, the Texas Enterprise, was scrapped earlier this year at the age of 40.10
Even when multiple Jones Act dry bulkers existed, the relative lack of these ships and their high costs proved a problem for U.S. businesses, such as livestock producers in North Carolina, who opted to import corn from Brazil instead of shipping it from the U.S. heartland.11
One reason for the increased costs of older ships is that they have higher maintenance and repair costs.12 They also are more carbon-intensive than recently constructed ships.13 The U.S. Government Accountability Office noted in 2013 that “older vessels burn fuel faster and less efficiently compared to newer vessels, and the age of some of the Jones Act carriers’ vessels has contributed to increasing fuel costs.”14
But old ships aren’t just inefficient. They’re also dangerous.
For example, in 2015, the El Faro, a 40-year-old Jones Act containership, sank en route to Puerto Rico when it sailed into a hurricane. But the storm wasn’t the only problem the ship encountered. Economist Thomas Grennes noted that “the Coast Guard and the National Transportation Safety Board … found multiple factors that contributed to the sinking and loss of lives, but both agencies identified factors related to the age of the ship.”15
Former crew members told CNN that “the chief cook’s room was constantly leaking water” and that “the El Faro … needed a death certificate. It was a rust bucket.”16
Grennes also said academic research has found that the older the ship, the more likely it is to be involved in an accident. In fact, the Marshall Islands, a common flag of convenience registry, does not allow ships more than 20 years old in its registry — “unless owners provide additional information about the safety of the older ships.”17
Jones Act carriers, meanwhile, commonly keep their ships on the water well past the 40-year-old age of the El Faro. The last 12 Jones Act bluewater ships that were sold for scrap, for example, had an average age of 41.9 years. The latest ship scrapped, Matson’s Lihue, was a decrepit 50 years old — almost half as old as the Jones Act itself.18
By contrast, the average age of the largest fleet in the world, owned by shipping giant Maersk Line of Denmark, was just 9 years old in 2017. With the company’s acquisition that year of German-owned Hamburg Süd, that average actually improved, since Hamburg Süd’s ships averaged only 6 years old.19
The elderly Jones Act fleet is a natural consequence of the law’s U.S.-build requirement, which is problematic because Jones Act oceangoing ships cost between four and five times as much to construct as their international counterparts. This encourages ship owners to keep their vessels in service as long as possible.20
Both the Congressional Research Service and the Government Accountability Office have confirmed that the build requirement delays the purchase of newer ships.21
Let’s hope Congress doesn’t delay in reforming the domestic build requirement of the Jones Act, for the sake of economic freedom, efficiency and safety. _____________
Jonathan Helton is a research associate with the Grassroot Institute of Hawaii. _____________
Once every five years or so, the Hawaii Constitution asks our government officials to put together a Tax Review Commission. Its job is to “conduct a systematic review of the State’s tax structure, using such standards as equity and efficiency.”
To some people, it means it’s a chance to get in front of lawmakers and argue that we aren’t being taxed enough.
One of the proposals that the commission was urged to push was for the establishment of a “green fee.” As its proponents put it:
Visitor green fees are used all around the world to generate revenue to protect natural and cultural resources, create green jobs, and enhance the visitor experience. Visitor green fees are payments made by tourists, primarily to regulatory entities, with the explicit purpose of funding natural resource management. This policy approach, now implemented in dozens of geographies worldwide, offers a solution to offset visitor impacts to ecosystems, and provides a means to protect nature that communities and tourists alike depend on.
Last year, we wrote in this space that the kind of green fees that are imposed in foreign destinations aren’t imposed in any state of the United States – probably because such a fee would be unconstitutional. States have no right to burden the right of Americans to travel throughout the country, which means we can’t tax the entry or departure of mainland tourists. And there is another part of the U.S. Constitution that forbids States from discriminating against foreign commerce, because that is a task left exclusively to the federal government. So, we can’t impose such a fee on foreign tourists either.
To get around these restrictions, the proposal before the Tax Review Commission seeks to instead build on existing taxes and fees:
Using existing state Transient Accommodations Taxes or adding a TAT surcharge;
Implementing or increasing park and other user fees for outdoor activities;
Imposing general excise tax surcharges for certain visitor-related activities, services, and purchases; and/or
Some combination of these or other approaches.
The U.S. Constitution requires that if we kama’aina want to travel to another island and stay in a hotel, rent a car, or otherwise do touristy stuff, we are going to get whacked to the same extent as other tourists from other places. Is that what we want?
We also need to realize that most of our economy is based on tourism. When COVID-19 shut down our tourism, widespread pain and anguish was felt in our state between layoffs, business closures, and rent and mortgage defaults. Taxing tourism to death might have the same impact. “Now is not the time to visit the Islands,” Gov. Ige said in August because of our COVID surge. Jacking up the taxes on the tourism industry is like telling the tourists that there isn’t ever a good time to visit the Islands. Is that what we want?
So, before we go down the road to green fees or something like them, we should be asking ourselves if we really want to go there.
And by the way, Tax Review Commission, it’s questionable whether “finding new taxes” is in your job description when we have enough problems with the taxes we have.
Grassroot Institute of Hawaii calculations show there is plenty of room for the Legislature to break its habit of continually increasing taxes
HONOLULU, Dec. 23, 2021 >> Gov. David Ige’s fiscal 2023 general fund budget shows revenues are up $252 million more than last year,[1] but could be up to $1.7 billion more than that because of economic activity that has been generating more tax revenues than expected.[2]
The state’s incoming revenue is so great right now that the governor said this week he will not propose any new taxes this year.[3]
Members of the state Legislature might have other ideas about that, but the recent influx of federal aid and tax revenues shows there is plenty of room to work toward tax reduction, said Keli‘i Akina, president and CEO of the Grassroot Institute of Hawaii.
“Hawaii residents deserve some much-needed relief from the state’s exceptionally high cost of living,” said Akina. “It would be a shame if state lawmakers squandered this opportunity to give everybody a break from the usual fare of increased taxes, year after year.”
He said: “The governor might even wish to consider promising to veto any tax increases, period. And based on a recent poll the institute commissioned, I’m pretty certain most Hawaii residents would stand behind him for that.”[4]
According to the state Council on Revenues projections in September, state general fund revenues for fiscal 2023 were expected to grow at 4% compared with the previous year.[5] But for the first five months of fiscal 2023, the revenues have been flowing in at an “astounding” 27.3% higher rate than the year before, according to the governor[6] — or about $737 million so far, Grassroot Institute of Hawaii calculations show.[7]
The institute calculated that if the revenues continue at that pace, the total by the end of fiscal 2023 could be about $1.7 billion higher than expected. If they were to grow at even half that pace for the rest of the fiscal year, the total would be about $700 million more than the Council on Revenues predicted.[8]
The resulting revenue windfall would be in addition to the $1 billion of federal American Rescue Plan aid infused into the state’s fiscal 2022 budget, and the $286 million added to the fiscal 2023 budget.[9]
“The revenues are indeed ‘astounding,’” Akina said, “especially considering that most of it has come from a meager reopening of the economy. Imagine what could be accomplished if lawmakers and the governor were more focused on reopening all aspects of our economy.”
Akina added: “Lawmakers are sitting on a bonanza, and they should find ways to return unneeded cash to the taxpayers.”
While Ige’s proposed budget does not include a tax increase, there is no doubt several tax bills will surface once the legislative session begins next month.
Already, there are calls for new “revenue generation” tools.[10] The same day the governor released his budget, the Hawaii Tax Commission also released its biannual report in which it recommended a litany of new taxes.
Among other reforms, the commission suggested:
>> A $100 million carbon tax, to incentivize cleaner energy, 80% of the proceeds of which would be rebated to taxpayers.
>> Taxing public pension income to the tune of $50 million per year.
>> Creating a “Committee on Fiscal Responsibility and Sustainable Government Spending” to review the state’s taxing and spending policies.
>> Repealing certain little-used general excise tax exemptions.
But according to Akina: “Tax hikes were unnecessary last year, and they are unnecessary now. Lawmakers should reject any calls for more taxes on a public that largely opposes such measures.”
Akina referenced a survey conducted earlier this year for the institute by marketing research firm Anthology, which showed that 70% of nearly 1,000 Hawaii respondents believed their taxes were too high, and 81% opposed paying more.[11]
Editor’s Note: The world keeps on turning. In spite of the chaos of the last year, we’re moving forward and, whenever possible, even with a little panache. Kurt Stewart, our writer-at-large in Europe, recently bought a 230-year-old house in the center of Portugal. With the help of a European Union grant, he and his wife have embarked on a project for sustainable tourism. He’ll be bringing his insights to our readers in Hawaii and around the world, telling the stories that matter from his perch on the Iberian Peninsula as a regular feature to Hawaii Reporter.
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As we live through the Time of COVID, I can’t help but ponder our existence, which requires all 99,9% of my enlightened self (sadly, the remaining 0.1 percent is still missing).
There is the pall of death, or its counterfeit, hanging in the air, and lamentations, like those in the Tibetan book of the Dead (“Please guide all beings from this swamp of cyclic existence”!!) are heard from every shore and mountaintop. So, if the mind does turn to morbid thoughts from time to time, that is to be expected.
Anyway, this is just to segue to a recent fascination I’ve found with some of the poems of Emily Dickinson. A wonderful discovery, to be sure. I think the woman must have been some kind of mystic, or at the very least a person of exceptional inspiration writing as she did as a single woman in the mid-19th century. She had her finger on the pulse of death, often it appears because many of her some 1,780 poems deal with the subject of our ultimate exit, stage left.
One poem I’ll share with you here blew me to bits when I read it. The title of the poem alone astonishes – “I heard a Fly buzz – when I died”. How incredible – in a few words, she captures the strange absurdity that the singular event of death visits upon us. With breathtaking insight, she pins death to the wall like a moth specimen and invites us to examine its details. And she does so through the voice of the cadaver that is lying in its coffin at its own wake!
There is a line describing the fly, this uninvited visitor that buzzes around the deceased, which just floored me: “With Blue – uncertain – Stumbling Buzz -” a haiku-like perfect snapshot of this moment.
Here it is in its entirety – you may not see what I see here, or even react as I did. Poetry, as you well know, is in the eye of the beholder. But I share for sharing’s sake, as a fellow seeker who has also pondered the meaning of life, death and everything in between!
Bluebottle fly
The “Bardo Thodol”, the original Tibetan title for the work known as “The Tibetan Book of the Dead” means “between” and refers to the transitional period of the soul between death and rebirth. Maybe that’s what COVID is – an in-between stage for all of us in transition. Ask not for whom the fly buzzes, it buzzes for thee!
I heard a Fly buzz – when I died –
The Stillness in the Room
Was like the Stillness in the Air –
Between the Heaves of Storm –
The Eyes around – had wrung them dry –
And Breaths were gathering firm
For that last Onset – when the King
Be witnessed – in the Room –
I willed my Keepsakes – Signed away
What portion of me be
Assignable – and then it was
There interposed a Fly –
With Blue – uncertain – stumbling Buzz –
Between the light – and me –
And then the Windows failed – and then
I could not see to see –
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Kurt Stewart, our writer-at-large in Europe
Kurt Stewart is a writer, educator and entrepreneur who has been telling stories about the places he has lived and worked for more than 35 years.
After leaving his native San Francisco in 1981, he began his writing career in Paris where he wrote feature articles for Paris Passion magazine and USA Today. He later moved to Portugal where he taught in the School of Film and Television at the Universidade Católica Portuguesa in Porto. He spent several years in Malaysia working with the Ministry of Education training teachers in the public schools. While there, he wrote travel stories for the Hawaii Reporter. His latest venture involves country living in the heart of Portugal’s still undiscovered central region.
Editor’s Note: This is the first article in a series I’ve entitled “At Home and on the Range”. These pieces entail products and services that I think will be of particular interest to On Target readers in the coming year.
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How about a New Year’s Resolution that entails keeping lead out of your life? If you’re around firearms I can guarantee you, you’re around lead. So, unfortunately are plenty of other folks in this country who never even pick up a gun.
Uncovering news articles about elevated levels of lead in Americans is not hard to do. If you google “elevated levels of lead” as a search term there are numerous stories such as the tragic tale of Flint, Michigan. Of course, lead has been a ubiquitous ingredient in gasoline, paint and other products for years or for that matter, millennia. One theory has it, that lead, which was used in cooking vessels and other artifacts, was a cause of the decline of the Roman Empire.
There’s a credible theory that the Romans poisoned themselves with pottery that was lead-glazed, such as this 1st century mold-made flagon discovered in France (Gaul).
It’s still not a desirable thing to encounter in an intimate way.
Chronic exposure to lead at elevated levels, for both children and adults, increases the risk of hypertension, kidney disease, cognitive dysfunction, and adverse reproductive outcomes, according to public health officials. Even a slight elevation can lead to stunted development and a reduced IQ, according to the Centers for Disease Control and Prevention (CDC).
So where does that leave gun owners who shoot lead bullets? (Which means just about all of us).
Reloaders should be especially cognizant of encounters with lead.
According to a report from the California Department of Public Health’s Occupational Lead Poisoning Prevention Program, people employed with ammunition manufacturing, at ranges, gun repair shops, security training or even shooting instruction may be among those adults with the highest levels of lead exposure, with some having 40 µg/dL or greater, blood lead levels according to the report.
I’m not a public health doc but I don’t think it’s a gigantic leap of faith to believe that even the average gun owner who doesn’t take measures to protect him (or herself) risks acquiring unhealthy levels of lead in their system.
Hygenall makes a terrific hand soap that removes lead.The dispenser emits a foamy dollop that’s easy to apply.
There are some common sense things to prevent this.
• Don’t picnic at the range. Not a good idea to eat or drink while shooting. (I don’t see a lot of eating at Kokohead, with the exception of rangemasters who aren’t handling firearms). • Keep a pair of shoes dedicated for the range. • When cleaning your guns use disposal surgical type gloves which can be purchased inexpensively at Costco or at a drug store. • When you’re finished wash your hand with soap and cold water. Cold water keeps your pores closed, therefore reducing absorption. At an outdoor range keep a container of special lead-removal wipes such as LeadOff from Hygenall in your range bag.
The company also makes wipes that you can take in your range bag.
• After visiting the range, particularly an indoor range, change your clothing, shoes, etc and take a shower. • Don’t clean your guns on the kitchen table. • After cleaning your guns use a special lead-removal soap. Hygenall mades a LeadOff version of hand soap that’s excellent. • Reloaders should consider switching to plated bullets, which are less expensive than jacketed and in most instances, just as accurate.
The LeadOffOption
LeadOffremoves Lead Oxide (PbO) better than ordinary soap because it’s active ingredient, Isostearamidopropyl Morpholine Lactate (ISML) has a positive electrical charge and bonds with the PbO which is negative. Regular anionic soaps work by removing natural skin oil which containts the “dirt”.
PbO and other heavy metals do not clean off like dirt because the lead oxide sticks through a static charge on the skin. ISML has been used a long time in the formulation of cleansing products, shampoos, hair sprays and other hair products.
I use their surface cleaner to wipe down my bench on a regular basis.
They offer three products, Foaming Cleaning and Decontamination Soap in a convenient dispenser, a disposable wipe that comes in a canister (that you can slip in your bag) and a Wipe on-Wipe off, Non-Porous Surface Cleaner that is perfect for the reloading bench at home.
All have have a pleasant, non chemical smell that will remove any nasty odor coming from solvents and the like your hands or your bench.
I found them easy to use and just as importantly offered a sense of sense of security.
Wearing surgical gloves is ideal when you’re cleaning your firearms.
If you’re a devoted shooter and concerned at all that you might be exposing yourself to high lead levels, I would have your blood tested the next time you have blood work. It’s better to know in order to stay on top of things.
In the meantime, keep those surgical gloves on when you reload or clean your firearms and douse your hands with Lead-Off.
Honolulu, just like most of the other neighbor Island counties, has passed a 3% addition to the Transient Accommodations Tax (TAT).
It had to.
The State was giving it millions of dollars a year in revenue sharing, but in 2020 the Governor shut off the spigot using his emergency powers and in 2021 the legislature made that permanent. “We’ll keep the money permanently,” they said, “but you counties can enact a TAT of your own.”
Here in Honolulu, enactment of the county TAT was pretty much a foregone conclusion. But there was lots and lots of debate over earmarking the money. This much goes to the General Fund. This much goes to the Transit Fund (i.e., rail). The final version of the bill also sets up a special account in the general fund, which must be used to “mitigate the impacts of visitors on public facilities and natural resources, including the restoration, operations, and maintenance of beaches and parks,” and to “supplement, and not supplant, any funds regularly appropriated for those purposes.
May I suggest, though, that these debates are meaningless.
Suppose I had three bank accounts, one called “General,” one for “Vacation,” and one for “House Maintenance.” I dutifully put some money into each account every month, pay my house maintenance expenses out of the House Maintenance account, and pay other expenses out of the General account.
Then tragedy strikes! My spouse gets sick and has to go to the hospital. Because I don’t have a diamond-studded platinum health plan, the health insurance only pays a certain percentage of the hospital bill, leaving a good chunk for me to absorb. My mortgage is due in a few days, and my General account doesn’t have enough to pay it. Do I preserve the other two accounts, let the mortgage fall into default, and cringe while waiting for the foreclosure notice? Not a chance.
The Honolulu rail project is hitting some serious bumps in the track.
The wheels don’t fit the rails (or the rails don’t fit the wheels).
Someone forgot that there’s electric power needed to get a train moving – a lot of power –every time a train leaves a station, so that other customers on the power grid might be impacted if the trains simply pull power out of the grid without doing anything to protect the other users.
And now, HART needs to start building the rail track in urban Honolulu, which is going to be quite a bit more complicated, and may contain more surprises, than building in the suburbs or in rural areas.
These surprises may require more than the Transit Fund is going to have. Are we going to preserve the General Fund and the visitor mitigation (or whatever it’s going to be called) fund while letting the City & County of Honolulu go into default, wrecking its bond ratings in the process?
Although that decision may be made by future City Councils and not this one, we can bet that we won’t be worrying about the integrity of the special funds as much as we would be worrying about how to pay the City’s bills.
Which is why, when we are examining county council actions like this one, we need to pay more attention to the reality of the action (a new tax is being imposed) rather than the “earmarks” on that tax (which may become entirely meaningless once financial reality sets in). As voters and taxpayers, I suggest we be more watchful of what issues are threatening to give us even more cost overruns, and that we insist that our politicians who are (or want to be) in that office give us some action on those issues now.
During the past two years, when tourism in the Aloha State imploded, digital media was one of the few shining stars in our beleaguered economy. The Honolulu International Film Festival is a key component in expanding this sector.
By providing a watering hole for local film makers, writers, actors, and directors it has become a vital element to bring Polynesian themed works to the world.
Case and point were two films that premiered at HIFF last month.
Sina ma Tinirau (Sina and Tinirau) is an animated shot from Vilsoni Hereniko.
The first was an animated short, Sina ma Tinirau (Sina and Tinirau) from Vilsoni (aka Vili) Hereniko. a Honolulu-based filmmaker and Professor at the Academy for Creative Media at the University of Hawai’i. Vili, who hails from Rotuma a Polynesian outlier in the Fiji archipelago, says “Sina ma Tinirau is an ancient, oral tale that has endured the test of time because it embodies our sensibilities, worldviews, and aesthetics as Polynesians.”
It’s narrated in English with some (subtitled) dialogue in Rotuman, which lends an authenticity to the story.
A prince (Tinirau), who is cursed to become an eel, must win the love of a beautiful woman (Sina) to become human again. He gifts her with his body in the form of a coconut palm in a seductive display of courtship. The film is narrated in English with some dialogue in Rotuman, that is subtitled. This lends an authenticity to the story.
Vilsoni (aka Vili) Hereniko. a Honolulu-based filmmaker and Professor at the Academy for Creative Media at the University of Hawai’i
At first blush, it sounds like a conventional romantic love story between a man and a woman.
However, beneath the surface, there’s a lot more going on.
Hereniko explained, “Sina and Tinirau share an unconditional, Christ-like love exemplified by forgiveness. It’s as central to our culture as the Crucifixion of Jesus would be in the West.”
The myth also explores origins of the Polynesian tree of life (the coconut palm) and, as Hereniko explains, “Polynesian prejudice against black skin.” “Racism”, he said, “is not confined to one race.”
This particular legend was passed down from Hereniko’s father on his home island of Rotuma as a child. As traditional society in Fiji and the rest of the Pacific “modernizes”, this style oral transmission is diminishing so we are fortunate that Hereniko has leveraged technology and his own creativity to recreate the legend on film.
Sina attempts to protects her friend Tinirau (the eel) from her wrath of her brothers.
Hereniko’s exploration of Polynesian mythology is an eye-opener on many levels. His insights are of importance not only to local people or people of Polynesian ancestry but relevant to everyone. At the very least I could see Sina and Tinirau incorporated into the Department of Education’s curriculum.
Hereniko’s mission is clearly to make the wisdom of traditional Polynesia accessible to the rest of us.
The project, which was funded by grants from the University of Hawaii and European Research Council, was a collaborative effort between several UH faculty at the ACM and their animation students.
Return to Pukapuka
The other Polynesian themed work that hit home for me was The Island in Me, a documentary by Gemma Cubero del Barrio, a Spanish/American documentary director and producer. She takes us to Pukapuka, a remote atoll with four hundred inhabitants.
The film traces the lives of two women, Amelia Hokulea Borofsky and Johnny Frisbie, (both Honolulu residents) who lived there and return home after decades away. Borofsky, the daughter of anthropologist Robert Borofsky lived in Pukapuka in the mid 1970’s while Frisbie, daughter of author Dean Frisbie, was there in the late 1930s.
Johnny Frisbie, one of the subjects of “The Island in Me”, back in her birthplace, Pukapuka
Despite the difference in generations, the common ground of Pukapuka is key to their personal journeys. Amelia is anxious to find the key to her childhood trauma and Johnny needs to visit her brother, Charlie, who she hasn’t seen in 30 years, one last time.
We learn filmmaker Gemma Cubero del Barrio has her own reasons to visit Pukapuka, and as she explained to me, became a reluctant subject of her own film. (You’ll have to see the film to find out).
Cubero does a masterful job balancing a number of themes—memory, identity, trauma and motherhood just to name a few.
Perhaps the film’s highlight is the intimate portrait of Johnny, a formidable, wise woman and author in her own right. Her book Miss Ulysses of Puka-Puka, first published in 1948 (and recently republished) is an account of her life on Pukapuka. It was the first published literary work by a Pacific Islander author. Her life is the stuff of novels. During a hurricane her father literally tied her and her siblings to a Tamanu tree on the atoll of Suwarrow. The island, not more than 6 feet high was swept by waves and tying the kids to the tree saved their lives.
Gemma Cubero del Barrio, a Spanish/American documentary director and producer of “The Island in Me”.
The film is also a “South Seas” ethnography of sorts. We get up close and personal with the Pukapukans, at home, at church, fishing, and of course, husking coconuts. To her credit Cubero tells it like it is. There is no phony romanticism or sentimentality projected on the indigenous people.
As Cubero explained, Pukapuka is a complex place. However, what she came to realize was deceptively simple and genuine. “Pukapukans welcomed us,” she told me. What’s more she said, “they see thru you, and they are open hearted.”
She told me that the locals treated Amelia as a Pukapukan and her desire to return to the remote island was so “deeply rooted” and represented as genuine a sentiment as any Pukapukan. “She is so loved by them,” said Cubero,” because she represents their experience”.
Amelia Hokulea Borofsky, back to her roots in Pukapuka
Both Sina ma Tinirau and the The Island in Me were hatched, produced, edited, and created in the Aloha State.
It’s also of note that both films were nominated at HIFF for top awards–“Best Short” and “Best Feature”.
As Hereniko pointed out, “In the world of cinema, to be nominated on a very short list of selected films that the festival regards as the best, is a big deal!”. (His film also was awarded “Outstanding achievement in animation” award at the Los Angeles International Film Festival).
With HIFF as a launching pad, it’s clear Hawaii can be an incubator and a platform for Polynesian-themed digital media.
The upshot is that not only can Hawaii people produce films, they can produce award winning films.
It’s only the beginning.
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Top Photo: Pukupuka youth in a traditional wrestling match
Rob Kay, a Honolulu-based writer, covers digital media and is the creator of fijiguide.com. He can be reached at Robertfredkay@gmail.com.
Even before the COVID-19 pandemic, we were warned that lack of healthcare capacity in our state was a deepening problem. The last two years have revealed that things are even worse than we thought.
As I discussed in my Wall Street Journal commentary published last weekend — “Hawaii Is No Paradise if You Need Medical Care” — Hawaii’s healthcare crisis includes a growing doctor shortage, lack of specialty care in rural areas, high emergency room wait times and the fact that we have among the fewest hospital beds per capita in the nation.
These are problems that have been highlighted by the pandemic, but they did not pop up overnight. They are the result of decades of regulations and policy decisions, including high taxes, extensive regulations and Hawaii’s notoriously high cost of living.
According to Lisa Rantz, my guest on this week’s episode of “Hawaii Together” on ThinkTech Hawaii, many people are still waking up to the reality of the state’s healthcare shortages.
Rantz is the executive director of the Hilo Medical Center Foundation, which has been conducting a comprehensive study of community health needs. She noted that while the state has done “a great job” at ensuring that people have health insurance, “having health insurance does not equate to having access to healthcare.”
If anything, Rantz said, the numbers understate the depth of the healthcare crisis in Hawaii. While we usually hear that the state is short about 820 doctors, Rantz says that the real shortage, at this point, is over 1,000 physicians. And it’s not just more doctors that we need. The nursing shortage is also growing. Hawaii County has the third-largest nursing shortage in the country, followed by Maui at No. 5 and Kauai at No. 13.
The shortage of specialists has long been a problem on neighbor islands, where people have to fly to Oahu or the mainland for care. But now, even Oahu is starting to notice the effects.
“I think as we’ve seen more neighbor island folks getting care on Oahu, as our shortages increase across the neighbor islands, we’re starting to feel that on Oahu,” said Rantz. “When you call your doctor and they’re like, ‘Oh, you can’t get in for two weeks,’ or ‘We can’t see you for three weeks because we have appointments from neighbor island community members,’ then all of a sudden it hits home. I think as the shortage increases, we’re starting to see more of the impact on Oahu.”
The shortages restrict possible solutions to the problem. Rantz said that when speaking to legislators about the lack of doctors, they’ll suggest using nurse practitioners or physician assistants to provide primary care. But that won’t work when the shortage exists across all medical positions.
Why does this shortage exist?
Rantz says it’s the result of a “perfect storm” of factors, many of which will be familiar to anyone who has followed our “Why We Left Hawaii” series. The state’s high cost of living — including housing costs — is especially discouraging to medical students who are already struggling with heavy debt. Combine this with the high taxes and low reimbursement rates for doctors and it becomes very difficult to recruit young medical professionals to Hawaii.
In other words, the same problems that contribute to our state’s overall population loss are exacerbating our healthcare woes.
Clearly, the first thing that lawmakers ought to do is embrace policies that will reduce the overall cost of living, like lowering taxes and making more land available for residential development. But there are other reforms that could directly address our state’s healthcare capacity issues.
We could start by liberalizing Hawaii’s so-called certificate-of-need laws, which are among the strictest in the country. A study from the Mercatus Center found that states with certificate-of-need programs have 30% fewer hospitals per 100,000 residents and 13% fewer rural ambulatory surgical centers per 100,000 residents.
Rantz also singled out Hawaii’s low Medicare rates as a problem that could benefit from the attention of our congressional delegation. At the state level, she said, the general excise tax is a significant problem for private-practice physicians. Though most people perceive the GET as a small charge, it is imposed at every transaction level and ultimately totals two to three times more than its face value of 4.5%. Combined with the state’s low Medicare reimbursement rate, that leaves private-practice doctors in Hawaii scraping by with very low margins.
Rantz said that between the high cost of living and the GET, it is very difficult for Hawaii doctors to maintain a viable practice.
“We actually just lost three providers here in East Hawaii on Hawaii island that are closing up their doors and moving to the mainland, because they can’t make the numbers work. They just can’t do it,” she said.
If policymakers are serious about improving healthcare access in our state, addressing the GET and low Medicare reimbursements are just the beginning. Other avenues to explore include reexamining licensing laws, exploring the potential of public-private partnerships, improving telehealth and, of course, repealing or reforming the state’s CON laws.
What we cannot afford to do, however, is stick our heads in the sand and hope the problem will go away. If we want to be prepared for future emergencies, we need bold changes to encourage and facilitate the provision of healthcare. ____________
Keli’i Akina is president of the Grassroot Institute of Hawaii.This commentary was his weekly “President’s Corner” column for Dec. 11, 2021. If you would like to have his columns emailed to you on a regular basis, please call 808-864-1776 or email info@grassrootinstitute.org.
If you’re in downtown Honolulu and you’re driving past Restaurant Row, you’re likely to see a sign on the makai side saying, “Foreign Trade Zone No. 9.”
In this country, a foreign trade zone (FTZ) is a geographical area, in (or adjacent to) a United States Port of Entry, where commercial merchandise, both domestic and foreign, receives the same Customs treatment as if it were outside the United States. The zones help American businesses to be competitive in the global economy by reducing tariff burdens on the importation of foreign inputs and on exported finished products. Businesses can set up shop in the zone for loading, unloading, handling, storing, manipulating, manufacturing, and exhibiting goods and for reshipping them by land, water or air. Merchandise of every description may be held in the zone without being subject to tariffs (customs duties) and other taxes based on the value of the goods. This tariff and tax relief is designed to lower the costs of U.S.-based operations engaged in international trade and thereby create and retain the employment and capital investment opportunities that result from those operations.
The FTZ in Honolulu was established in 1966 at Pier 39 in Honolulu Harbor. It has since grown to include 13 sites and 2,600 acres.
So, what’s the current problem with the FTZ? Of course, it has to be a tax problem. It involves Hawaii General Excise Tax, and the question is whether it applies in an FTZ.
State law, HRS section 212-8, already makes clear that merchandise that is admitted into the zone and that is sold for use or consumption out of state is exempt from GET, Use Tax, fuel tax, liquor tax, and tobacco tax. (Tax still applies if the merchandise is sold to someone in the state.) But there has been some confusion over whether other activity performed in the zone is subject to state tax. For example, a factory in the zone that manufactures products for export breaks down, and a technician comes in to fix the broken machinery. Is the technician’s fee subject to GET?
For a while, the Department of Taxation was telling folks that the answer is no. They thought that a FTZ was a “federal enclave,” where the laws of the states just don’t apply. Washington, DC is one example. It was carved out of Maryland and Virginia, and neither state’s law applies there. Other federal enclaves include some federal courthouses, military bases, federal buildings, and national forests and parks.
The Department, however, recently had an epiphany. Eureka! FTZ’s are not federal enclaves!
After realizing its mistake, the Department did what a typical tax agency does: it started telling people it wanted back taxes for all open years. For most businesses that filed returns, the statute of limitations is three years. If a business “substantially omitted” income by failing to declare it even though it was claimed exempt, the Department can go back six years. If a business didn’t file returns, thinking they didn’t have to, the Department can go back to the beginning of time.
The Department, one can easily imagine, was licking its chops at the thought of millions of additional revenues it could bring in. Potentially affected taxpayers, meanwhile, began losing sleep.
Do we think that this is the kind of issue where the Department should let bygones be bygones and just make sure that the rules are clear going forward? Or are we all okay with the Department saying, “Well, we screwed up in the past, but our mistake doesn’t matter because the duly enacted laws say you owe the tax”?
Maybe it’s time for the Legislature to step in and run interference between an obviously hungry Department of Taxation and the taxpaying public.
The South Pacific Island nation closed its borders to international tourists in March 2020, and remained closed for nearly two years, reopening on 1 December 2021. During this period, all of us have had the opportunity to do some introspection. With a biblical plague at our doorstep we’ve had a chance to assess what’s really important in our lives. That’s’ where “Experience a Different Fiji”, the Savusavu Tourism Association’s new campaign, fits in.
Both Delia Rothnie Jones, who serves as Chairperson of the association, and her colleague Monica Laurence, a former Hollywood entertainment and Silicon Valley executive, reckon that it’s time to get back to basics. As Savusavu resort owners, Delia and Monica are in an ideal position to introduce visitors to the area’s natural wonders and connect them with local people.
I think they are on the right track and I believe you’ll enjoy hearing what they have to say.
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Rob: Now that tourism is opening, what protocols must be followed to get to Fiji and then, Savusavu?
Monica: Visitors over 18 must be vaccinated and test negative 3 days before flying. On arrival they must spend the first 3 days in a CFC (Care Fiji Commitment) accommodation, and have a Rapid Antigen test within 48 hours of arrival. Whilst in Fiji they are asked to download the Care Fiji app for contact tracing, and are further asked to avoid any areas that have low rates of vaccination – there are very few of these but some villages have resisted the vaccination. But generally visitors will be free to move around and enjoy the hospitality of a nation that has over 90% of the over 18 population vaccinated.
Getting to know Fiji: Bringing produce from the village to town. Bus station, downtown Savusavu
Rob: How did Savusavu businesses and restaurants weather the Covid tourism downturn? What about the vaccination process?
Delia: Fiji closed its borders to international tourists in March 2020, and remained closed for nearly 2 years, reopening this week, on 1 December 2021. With borders closed, there were two phases of Covid in Fiji. For the first year, there was no Covid in the community and Tourism Fiji was active in promoting Love Our Locals packages offering stays and activities at excellent prices. Savusavu ran a successful marketing campaign encouraging locals to “Come Overseas to Savusavu”. During this period the luxury resorts closed down, but the others stayed open with reduced staff hours, and managed to weather the downturn. The activity providers were harder hit although none of them have closed.
In the second phase the Delta strain entered Fiji via repatriation flights, and quickly spread through the community. This phase has been much tougher – inter-island travel was halted and there has been a significant downturn of business. To rebound, we focused our efforts on supporting the local health and welfare of citizens, while laying the groundwork for a global re-opening.
The Savusavu Tourism Association has been active in supporting the vaccination drive in our province. The Association teamed with local businesses to raise funds and organize transport and drivers for the hospital medical teams to get out to the remote areas.
Meeting local people is part of the Savusavu experience. Here locals get together to perform a meke, a traditional Fijian art form.
Here are some more figures behind the efforts of the last 4 months:
94 and 82.8: as of November 19, 94% of Cakaudrove’s population has received its first dose of the vaccination, and 82.8% has received its second dose. (Cakaudrove is the province in which Savusavu is located.)
20+: We have called on the services of over 20 individual drivers: Kiriata, Sarvan, Adi, Ally, Jay, Vijay, Soko, Deb, Delia, Tukai, Leanne, Suresh, Abed, Matthew, Nathan, Aundre, Paul, Ritesh, Sanjesh, Ledua….and very probably others who stood in when called upon.
15,000: One of those drivers, Kiriata, has been on full time duty throughout, and has covered over 15,000 kilometres in his vehicle.
113: The drive started on July 2 and finished last Sunday November 14: approximately 113 days (we didn’t go out on Saturdays but we did go out on many Sundays).
3,000: We used approximately 3,000 litres of fuel – the exact amount is impossible to calculate as some drivers donated their fuel, but we had roughly 2,400 from Total (paid for), a further 300 litres donated by Total, special contributions of 70 litres from Savusavu Hardware, and a fantastic weekly allowance of 200 litres from RPA.
Wasawasa Lodge, Inn, & Conference Center is a brand new property.
Rob: Anything new in town? Properties, eateries, cafes, new construction, etc.
Delia: Wasawasa Lodge and Restaurant has opened; it’s on the estate belonging to Namale but runs separately. It offers great accommodation and a restaurant with a beautiful view of the ocean, an ideal place for a meal just out of town.
Pettine Simpson at Vaga Gardens has turned her immense cooking skills to a pie business: once a week she delivers her chicken and beef pies to her customers all around Savusavu.
Ethan’s Coffee Heaven: a new coffee shop and restaurant.
Construction continues on Nawi Island; I don’t really have details but it’s all going ahead.
Rob: What’s happening with the creative/artistic community on Vanua Levu?
Monica: Only today (December 1) a pop-up market shop has opened.
A pop up art fair is now regular event in Savusavu.
The shop will be carrying items from a number of local artists: Lynne McLaren, Mayvian Popese Smith, Iretta Micskey, Asenaca Luisa, Katrina Brown, Anaseini Laweibau and Maria Simpson, and covers a range of media: acrylic paintings, fabrics, hand crafted jewellery, locally made villagers’ handicrafts, Katrina Brown’s beautiful mosaics and Lynne McLaren’s signature pieces of hand-crafted concrete.
Lynne is the driving force behind the project. “There are a number of us in Savusavu who sell our work on Saturdays, and we’ve been looking at ways to establish a more permanent display. This is a first step towards that: it’s a pop-up market for the month, using space generously provided to us by the non-profit organisation Love In Action (Fiji), and it will give us the chance to see what the market will bear in Savusavu.”
Lynne has also been travelling out to some of the farther flung villages of the district, encouraging the women to bring her their creations. “It’s not as easy as you might expect,” she says. “Many women in the villages have considerable responsibilities within the village and finding time to make mats or baskets or masi cloth for a market that is a long way from home is daunting for them. We’re trying to show them a path to economic opportunities but it will take time.”
Meanwhile, the artists of Savusavu will be bringing their items in and the shop opens on Wednesday December 1. It will be open from Tuesday to Saturdays from 9.30 – 2.30 each day, and could be the perfect place for you to find a rather special Christmas gift.
Monica: As we found ourselves without the option option to welcome international guests, wethought it the perfect time to tackle some projects and further enhance our guest experience.
Here’s what we did:
created an organic herb and veggie garden, including fresh tomatoes, green onions, mint, eggplant, cucumbers, lemongrass.
got creative in the kitchen and styled our menus, adding more dishes inspired by international chef Yotam Ottolenghi and a bit of playfulness like the morning “Pop-mosa”, a spin on the mimosa, but with an icy popsicle dunked in champagne.
upgraded our pizza oven and perfected thin crust pizzas inspired by a trip to Rome.
lovingly refinished the hardwoods and decks in the villa, stripping, sanding and returning the natural and gorgeous luster.
refurbished our fiberglass long boat, so it’s sparkling and ready for fishing and snorkeling excursions with guests.
teamed with a local conservation initiative to plant coral nurseries, making this unique underwater experience available to our guests.
explored the island of Vanua Levu, discovering new waterfalls and adventures to share with our guests.
became certified with the Care Fiji Commitment so we can welcome international guests.
Vista of Savusavu Bay from Tavola is stunning.
At the outset of the pandemic, we packed meals and delivered them to local families, along with notes of hope and encouragement. We feel most fortunate to live in our tight-knit and supportive community. This is a place of resilient and good-hearted people.
Rob: How did you end up in Savusavu and come to acquire Tavola?
Monica: I had the good fortune to be inspired and mentored by my uncle Richard Evanson. He was a maverick and eco-visionary who pioneered tourism in Fiji in 1980 and created the sustainable, 5-star, luxury private island resort Turtle Island. I spent a lot of time with my uncle, both learning and laughing, and over the years I came to think of Fiji as my soul’s home. Fiji is a natural and wild place where I feel free, creative and simply happy.
Accommodations at Tavola are both luxurious and minimalist.
I find those qualities allow me to be my best in life and in all my entrepreneurial endeavors. I wanted to share this special place with other creative visionaries, giving them a place to come home, rejuvenate and connect with what is true and meaningful in life. To power down in order to power up.
In all of Fiji, I chose the island of Vanua Levu for my quest as it is remote and still natural. Savusavu is called “the hidden paradise”, and that it truly is. We are less populated than the busy tourism destinations of Denarau, Mamanucas and Yasawas. We move with the rhythm of nature. We slow down. We chat. We laugh. We are present to the moment. So, I searched all of Vanua Levu before discovering Tavola Villa, an exquisitely designed, boutique resort stunningly situated on 8 private, waterfront acres overlooking Savusavu Bay. It felt like home, and that is exactly how I want my guests to feel.
Daku’s property is just steps away from Savusavu Bay.
Delia: We have remained open throughout the pandemic. In 2020 we welcomed many visitors from Suva, Nadi and other parts of the main island, and hosted a number of conferences with government agencies and NGOs and local groups. We are a fully CFC certified property and have now started to welcome back our first international guests.
We drew on our experience of running workshops to do a series of our own workshops and retreats. We brought over yoga teachers from the main island and held some successful 5 days retreats. Liti Miller, Fiji’s pre-eminent Zumba teacher, ran some high energy sessions which left us all breathless and happy.
We also offered a couple of wonderful one-day workshops to the local community: Angie Rakai-Niumataiwalu taught a day of fabric art, and Katrina Brown taught a mosaic workshop. Not only were these fun, and provided an income to the artists, but they also gave new skills to some of the women attending.
Shane Bower, a local sculptor, is a shining star of the Savusavu art community, which is supported by Daku.
Most did it as a hobby but a few have used it as a new source of income, and Angie in particular was so encouraged by its success that she spent the next 3 months running sold-out workshops across Fiji.
Our support for the local artists’ community has continued: last October (2020) we had an exhibition of local artists’ work which brought together a lot of the local community. Since then we’ve been involved with talking to various national arts’ bodies about an event for the North, although the clamp down on inter island travel has put that on hold.
Within the resort, we have re-furbished most of the accommodation and upgraded the central area which has the restaurant, lounge and swimming pool. We have also built a new two-bedroomed house on the estate which is for sale to anyone who falls in love with Savusavu – as so many do!
Rob: How did you end up in Savusavu and come to acquire Daku?
Yoga is a big deal at Daku.
Delia:I first came to Fiji as a tourist in 1988. I was driving across Vanua Levu with my husband in a hired car, and we came to a crossroads: straight on to Labasa or turn right to Savusavu? On little more than a whim, we turned right – and Savusavu has been part of our life ever since.
We stayed at Daku Resort which had only just opened – we were some of its first guests. In those days it was owned by the Anglican church. We loved it – and the following year we came back. It was then that the manager suggested we build a house on the property and gift it to the resort, but would have annual use of it for the rest of our lives. That house, built for US$14,000, still stands. We fell into a happy pattern of bringing the kids over for school holidays until 2004, when the property came up for sale. Concerned that we’d lose our house, we bought it! And that’s how we fell into the tourism business.
Since then, we have expanded the property, building new bures, improving the old ones, and adding villas with private pools.
Daku has a variety of accommodation including the above Beach House.
Rob: Do the two of you have anything else to add?
Delia & Monica: The Savusavu Tourism Association has been active in its marketing efforts and during 2021 has developed a campaign “Experience a Different Fiji”. As international travel resumes, we realize that many travelers will be looking for a way to enjoy nature and connect with the people of the country, seeing what makes them tick and embracing a different experience. It’s not the “Fly and flop” holiday that Fiji does so well; it’s a market seeking something more. We are ideally placed to offer that with our stunning scenery, soaring mountains, pristine reefs, vibrant village culture and inimitable friendliness. When we encourage people to experience a different Fiji, we’re encouraging them to step out of the easy packages and come to a place where they will connect with all those experiences that make it a deep, rewarding and resonating vacation that lives with you for years to come.
The Savusavu area is chock full of wonderful things to experience.
One other area worth mentioning:OceanVentures Fiji in Natewa Bay have a coral conservation project. They have established 10 rope nurseries on 5 reefs; 3 – 4,000 corals have been planted; the community engagement aspect of the project is a work in progress with varying levels of community participation.
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Delia Rothnie-Jones spent her twenties in London in advertising, her thirties and forties exploring the world with her husband (they covered over 80 countries) and bringing up her kids, and since then has tumbled into tourism. It was never a plan but has yielded fascination and fun. Daku Resorthas gone from being a tiny 8 room property to a thriving mid-range resort with 35 rooms. Delia has also developed Paradise Courses, vacations offering week-long art, writing and singing courses and yoga retreats, and occasional three week yoga teacher training courses.
Delia Rothnie-Jones
Monica Laurence is a serial entrepreneur and conscious explorer with a passion for life. After decades as a leader in global enterprises, Hollywood entertainment and Silicon Valley technology startups, Monica launched into hospitality withTavola Fiji, her luxe private villa and inspiring venue for creativity retreats. As well, Monica is the creator of Quantum Surfing, a community and creation method that teaches purpose-driven entrepreneurs to combine neuroscience, applied enlightenment and quantum mechanics to predictably create lucky outcomes and accelerate venture impact.
Monica Laurence
Getting there:Fiji Airways, the national carrier, has re-established weekly, direct service from Honolulu to Nadi.
1920 Jones Act needs an update, and so does the Jones Act fleet
By Jonathan Helton
America’s federal Jones Act is old and in dire need of an update. Oceangoing U.S. ships sailing under the auspices of the Jones Act fleet are in a similar condition.
Now 101 years old, the Jones Act technically is Section 27 of the Merchant Marine Act of 1920, and requires that all ships transporting goods between U.S. ports be U.S. flagged and built, and mostly owned and crewed by Americans.
Its intent was to ensure national security by protecting America’s maritime industry from foreign competition. By almost any measure, however, the law has been a failure.
U.S. shipyards capable of building large oceangoing commercial ships have dwindled from 30 in 1953 to just four as of November 2021, and oceangoing Jones Act ships have declined in number from 257 in 1980 to just 96,1 less than 1% of all commercial oceangoing vessels worldwide.2
Worse — from an efficiency, cost and safety perspective — Jones Act ships are, on average, significantly older than most of their international counterparts, with the exception of oil tankers, which average 13.47 years old versus 18.87 internationally.3 The difference is largely due to the recent buildup of Jones Act tankers for the Gulf Coast-East Coast market, where the lack of pipeline capacity has necessitated the use of ships. The Oil Pollution Act of 1990’s double-hulled tanker mandate has also contributed to the lower age of Jones Act-qualified oil tankers.4
Even though these U.S. oil tankers are relatively young, there aren’t many of them — not enough to properly supply the East Coast’s demand for oil, at least. As the Colonial Pipeline hack in May 2021 demonstrated, oil companies simply do not have enough options for transporting oil, and the only short-term remedy to provide additional shipping capacity after the hack was for President Joe Biden to temporarily waive the Jones Act.5
Meanwhile, all of America’s oceangoing roll-on/roll-off ships, containerships and cargo ships are definitely outpacing their international counterparts in age. Jones Act container ships, for example, average 21.61 years old, versus the international average of 12.34. In Hawaii, the containerships operated by the two main Jones Act carriers, Matson and Pasha, average 16.5 and 41.25 years old, respectively.6
In the Great Lakes, the Jones Act fleet is in even worse shape. Until the launch of the Mark W. Barker earlier this year, no large ship had been added to the Great Lakes fleet since 1983.
“Put another way” said Jones Act analyst Colin Grabow, “the last time the Great Lakes fleet saw a new ship was the same year Michael Jackson unveiled the moonwalk and the first cellphone was released for commercial use.”7
Internationally, many ships are scrapped between the ages of 15 and 20.8 The average scrapping age for general cargo ships is 35.4; the average age of Jones Act general cargo ships currently is 36.8.9
In past years, the Jones Act fleet also included dry bulk carriers, but not anymore. The last one, the Texas Enterprise, was scrapped earlier this year at the age of 40.10
Even when multiple Jones Act dry bulkers existed, the relative lack of these ships and their high costs proved a problem for U.S. businesses, such as livestock producers in North Carolina, who opted to import corn from Brazil instead of shipping it from the U.S. heartland.11
One reason for the increased costs of older ships is that they have higher maintenance and repair costs.12 They also are more carbon-intensive than recently constructed ships.13 The U.S. Government Accountability Office noted in 2013 that “older vessels burn fuel faster and less efficiently compared to newer vessels, and the age of some of the Jones Act carriers’ vessels has contributed to increasing fuel costs.”14
But old ships aren’t just inefficient. They’re also dangerous.
For example, in 2015, the El Faro, a 40-year-old Jones Act containership, sank en route to Puerto Rico when it sailed into a hurricane. But the storm wasn’t the only problem the ship encountered. Economist Thomas Grennes noted that “the Coast Guard and the National Transportation Safety Board … found multiple factors that contributed to the sinking and loss of lives, but both agencies identified factors related to the age of the ship.”15
Former crew members told CNN that “the chief cook’s room was constantly leaking water” and that “the El Faro … needed a death certificate. It was a rust bucket.”16
Grennes also said academic research has found that the older the ship, the more likely it is to be involved in an accident. In fact, the Marshall Islands, a common flag of convenience registry, does not allow ships more than 20 years old in its registry — “unless owners provide additional information about the safety of the older ships.”17
Jones Act carriers, meanwhile, commonly keep their ships on the water well past the 40-year-old age of the El Faro. The last 12 Jones Act bluewater ships that were sold for scrap, for example, had an average age of 41.9 years. The latest ship scrapped, Matson’s Lihue, was a decrepit 50 years old — almost half as old as the Jones Act itself.18
By contrast, the average age of the largest fleet in the world, owned by shipping giant Maersk Line of Denmark, was just 9 years old in 2017. With the company’s acquisition that year of German-owned Hamburg Süd, that average actually improved, since Hamburg Süd’s ships averaged only 6 years old.19
The elderly Jones Act fleet is a natural consequence of the law’s U.S.-build requirement, which is problematic because Jones Act oceangoing ships cost between four and five times as much to construct as their international counterparts. This encourages ship owners to keep their vessels in service as long as possible.20
Both the Congressional Research Service and the Government Accountability Office have confirmed that the build requirement delays the purchase of newer ships.21
Let’s hope Congress doesn’t delay in reforming the domestic build requirement of the Jones Act, for the sake of economic freedom, efficiency and safety.
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Jonathan Helton is a research associate with the Grassroot Institute of Hawaii.
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