US oil tankers that comply with a 93 year old law (Jones act to protect US shipping industry from foreign competition) means costs are five times higher than buying ships from Asia. $200 million per ship instead of $40 million.
When large container ships filled with bicycles and sleeper sofas leave China for the U.S., they don’t stop in Hawaii to unload cargo bound for that state before continuing to Los Angeles or Seattle. Under a 93-year-old U.S. law, the Jones Act, only U.S.-made, U.S.-flagged ships can deliver goods between U.S. ports. If a Chinese ship stopped in Hawaii to drop-off cargo, and then picked up, say, a load of Hawaiian coffee, it could not unload that coffee in another U.S. port. Chinese-made goods to be sold in Hawaii are routinely unloaded on the West Coast, and then loaded back onto another U.S. ship for the 2,500 mile trip back to the island state.
For most of its existence it went largely unnoticed, and outside of wasting a lot of fuel and making products in Hawaii needlessly expensive, its impact on the broader U.S. economy was muted.
U.S. energy companies get squeezed by the act as they try to deliver record amounts of oil nationwide. By yearend the U.S. will produce about 8 million barrels of oil per day, up from an average of 6.5 million in 2012. Yet there are just 32 tankers and 42 barges eligible under the Jones Act to haul fuel along the U.S. Gulf Coast and East Coast, according to MJLF & Associates, a shipping brokerage in Connecticut.
$2 to ship to Canada on a foreign ship but $6 per barrel to ship to the east coast of the US
Railroads have been among the biggest beneficiaries of the restrictions. Tanker rail cars haul more crude now than at any time since the days of John D. Rockefeller’s Standard Oil.
Despite the complications the Jones Act creates, it’s fiercely guarded by the powerful labor unions, shipbuilders, and defense contractors that benefit from it. Without the act, many U.S. shipyards would have a hard time staying in business, unable to compete with cheap foreign labor. Even the cash-rich oil industry has been unsuccessful trying to persuade Congress to dial it back.
Similar laws and regulations make transit buses and trains cost at least twice times as much
* China, South Korea, and Japan all produce more fuel efficient buses than U.S manufacturers
* buses in Tokyo and Seoul are half the price of U.S buses and buses produced in China are even cheaper
* While cynics might question the quality of China’s buses, it is notable that wealthy and well governed Singapore is importing buses from China
* U.S. tax payers face a higher price for subsidizing urban bus services and U.S owners of the domestic firms that produce the buses gain some monopoly rents. They also pay more for the increased fuel costs of less efficient buses
* 80% of bus costs are paid for by the federal government
* only 1.5% of buses are imported but 50% of cars are imported
BART trains, and infrastructure (high speed rail) is way more expensive than in Europe and Asia because they chose to not use the international standard for trains. There are old railway regulations that are part of the problem.
BART will be buying up 1000 new rail cars in the coming years. BART pays about double for its railcars because they are not the standard gauge (different width). It is possible to re-gauge. The South re-gauged after the civil war.
BART extensions of 10 miles will cost over $2 billion and a 15 mile extension $3.2 billion.
So California tax payers overpay for transit (buses and trains) so that Unions and some companies get more money.
Meanwhile the whole economy is less productive because of increased traffic jams and the inability to afford a better public transportation system and highways.
Federal Railroad rule to protect mailman sorting mail on baggage cars makes passengers cars in the US too heavy and inefficient
The Federal Railroad Administration (FRA) has strict crash safety regulations for passenger railcars which trains in Europe—where passenger rail is well established and remarkably safe — do not have to meet. In order for railcars compatible with European regulations to meet FRA rules, they need to add significant bulk and weight, thus adding to both their manufacturing and operating costs.
The Federal Railroad Administration (FRA) safety regulations lock U.S. trains into antiquated standards based on 1945 technology.
FRA regulations require train undercarriages to withstand 800,000 pounds of force without permanent defamation, explains Edmondson in “Reducing Passenger Train Procurement Costs.” The purpose of this “buff strength” requirement is to ensure that train cars can resist the impact of other cars. That may have made sense in 1945 when the standard was implemented, but European and Japanese train design has taken very different directions since then. In Europe train cars are built with crumple zones in non-occupied areas, reducing the need for rigid buff strength of only 337,200 pounds. Not only are European cars just as safe, Edmonson asserts, but trains are lighter, allowing them to decelerate and stop more quickly, and they are less prone to “telescoping,” in which the force of a crash causes passenger cars to climb over one another with devastating effect.
As a result, American trains are more expensive to build, weigh twice as much, require more energy to move, wreak havoc on rail infrastructure built for lighter cars, degrade performance and cost more to operate. Perhaps worst of all, because European (and Japanese) train designs are effectively precluded from the U.S. market, foreign manufacturers anticipate shorter manufacturing runs and charge more per train.
Buff strength requirements as we know them date back to 1912. The US Postal Service had been using baggage cars as mail cars. To save time, employees would sort mail as the train ran its route. Unfortunately, the baggage cars offered little protection in a crash, and employees were often injured or killed.
In 1912, the Railway Mail Service Specification was published to address this problem. It required the undercarriage of postal cars to be able to resist 400,000 lbs. of force without permanent damage, later increased to 800,000 lbs. at the recommendation of the Association of American Railroads in 1939 and made standard in 1945.
European regulators take the opposite tack of the FRA. Rather than rigidly resist a crash, Europeans design trains to gracefully deform in a controlled manner under the UIC design standard EN 15227. Crash energy management (CEM) uses crumple zones which are designed to absorb the energy of a crash. Buff strenth in Europe is 337,200 lbs of force.
Specific bad laws that cost the US economy about 10%
People talk in generalities of special interests and laws hurting the overall economy and the regular citizen.
These are some very specific laws that have to be overturned.
The Jones Act – the shipping law (makes your oil cost more and every good that buy from overseas has shipping costs that are higher)
The law that prevents foreign sourcing of buses
The Railway law to protect mailman on mail sorting trains that no longer exist
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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