Wednesday, February 19, 2014
From the Nothing Is Easy Department: Rock Salt
New Jersey is running out of rock salt to spread on snowy and icy roads during this unusually cold and stormy winter. As of early last week, the state Department of Transportation had used almost 50 percent more salt than in all of the 2013 winter season. New supplies are needed, and fast.
As salt has became alarmingly scarce, weather forecasters have forecasted several more winter storms within a couple weeks. Unfortunately, most rock salt is sourced in Latin America, too far for speedy shipping under the circumstances.
Then, felicitously, a salt company based at the Port of Newark reported that it had 40,000 tons of rock salt available in Searsport, Maine, and that an empty ship at the same port could get the salt to Newark in two days. The N.J. Department of Transportation bought the salt on Feb. 7.
Then a problem cropped up.
The empty ship in Maine is not a United States flagged ship. A 1920 federal law, the Jones Act, bans shipping to and from American ports by ships sailing other countries' flags. Into American ports, fine; out of American ports, also fine. But shipping between Maine and New Jersey is a no-go.
(The Jones Act's stated purpose was to assure that American cargo ships are available to support the military in time of war, but it seems to function mostly to protect domestic shipping companies. In fact, most cargo ships fly other countries' flags, often called flags of convenience, perhaps because those countries' legal requirements are lighter than those of the United States. Interest in the Jones Act was revived during the Gulf War in the 1990s, when there were not enough American shippers to support the American military effort. Since then at least a couple of major shippers, Maersk and APL Marine, have established U.S. subsidiaries that are American-flagged but generally regarded to be run out of Denmark and Singapore. Virtually every American president since 1920 has been an ardent supporter of the Jones Act.)
Faced with the Jones Act obstacle, New Jersey officials shifted their hopes to a second ship, American flagged, which was deployed from a port in a southern state only to be diverted off course well south of New Jersey by -- naturally -- a severe winter storm.
Last week, New Jersey asked the Department of Homeland Security and the U.S. Department of Transportation for a waiver of the Jones Act to allow the empty ship already at port in Maine to deliver the needed salt to New Jersey.
Here's what happened, according to the New York Times:
"On Tuesday (Feb. 18) Homeland Security officials said a waiver could be granted only if federal transportation officials confirmed that no vessels with United States flags were available to move the cargo, and if waiving the requirements of the statute was in the interests of national defense."
New Jersey is a blue state, and the national government at this time is also blue. So New Jersey's two Democrat senators, Robert Menendez and Cory A. Booker, stepped up and sent a letter to the federal agencies involved.
It said, "We urge your agencies to continue to assist the State of New Jersey to help procure and deliver rock salt for the purposes of public safety and security."
Strong language, that.
If I were a New Jersey Senator, I would drop by the offices of Transportation and Homeland Security to explain with some emphasis that the requested waiver was important to the safety of the citizens of New Jersey. I would schedule a couple five-minute phone interviews with New Jersey and New York newspapers to express indignation. That's what I would do. But what do I know?
New Jersey Gov. Chris Christie, a Republican, has kept his mouth shut on this one. As unpopular as he seems to have made himself with the Obama Administration, it is probably just as well.
So far, Homeland Security has not responded to the New Jersey waiver request. No doubt it will take a while to investigate thoroughly the "national defense interests" of sending a ship full of rock salt from Maine to New Jersey.
And the state of New Jersey, casting about for other solutions, has found a barge that conceivably could bring the salt to New Jersey. The barge no doubt is much slower than an actual cargo ship, and it can only carry 9,500 tons at a time. Completing the job by barge would take weeks. By that point, if the state is lucky, winter will be over.
Jones Act is a good example of the principle of unintended consequences. Intended to protect domestic maritime companies from low cost competition, its had the adverse effect of making the delivered cost of Asian products lower than the US alternative shipped from one port to the next. Especially for low value added cargo like rock salt.
ReplyDeleteWhat gets me is that most major international companies shipping with under flags of convenience want it both ways. They want the low costs and easier rules for Panama/Liberia. But when the Somali pirates come calling, its not the Liberian navy they expect to come to the rescue.