Jones Act marine vessels are a unique asset class with enormous financial upside potential.

If you want to get an above average return on investment while creating sustainable new American jobs, invest in Jones Act assets

There are a lot of discussions ongoing about the U.S. Jones Act and U. S. flagged Jones Act assets, or perhaps more accurately described as confusion, misinformation, and misconceptions surrounding Jones Act Assets. Below we discuss the most significant economic and operational advantages of investing in these vessels.

Why there is so much untapped potential?

American Jones Act vessels enjoy six significant, unheralded operating and tax advantages (which are unique to American-built and operating assets) for investors.  In detail they are:

1. Coastwise Trade – An American Jones Act vessel can move containerized and non-containerized cargos between any existing U.S. port, including offshore wind farm installations.
2. Depreciation – New Jones Act assets can be depreciated over a short ten-year period (other asset classes have a much longer depreciation schedule).
3. Capital Construction Fund – Net Income sequestered in a company sponsored Capital Construction Fund is not taxable if re-invested in new Jones Act tonnage.
4. Foreign Income Tonnage Tax Exemption – Net Income earned by an American Jones Act vessel in foreign trades are exempt from U.S. income taxes.
5. Foreign Financing Exemption – An American Jones Act vessel can be 100% financed by a foreign financial institution if the vessel is bareboat chartered on arms-length basis to an American Jones Act
6. Jones Act assets have first call on FEMA cargos

Now, because of the ages of certain portions of the Jones Act fleet and the absence of the new types of U.S. marine assets needed for new tasks, such as offshore wind farm installations, it’s a good time for the financial world to look at this “asset class” with renewed interest.

Time to Start Expanding the USA’s Fleet Again

The American Bureau of Shipping (ABS) has estimated that due to age and regulation changes, as much as 90% of certain asset classes will need to be renewed, refreshed, rebuilt or constructed entirely new.  This equates to tens of thousands of vessels.  Compared to the rest of the world, Jones Act assets are almost three times the age of the equivalent worldwide fleet, so it’s time to start shipbuilding again.

Further because the renewal of Jones Act fleets and national needs for non-military civilian support vessels, many of the smaller shipyards can be put to work and additionally, there will more employment in support industries. Also, the more vessels, the more mariners will be needed to sail them, as well as additional work in the ports that receive and send imports, exports, and new cargos that will migrate through our ports. All these endeavors will require additional manpower, which means additional American jobs.

If you want to get an above average return on investment while creating sustainable new American jobs, invest in Jones Act assets.