House Bill Pushes for 5-Year Jones Act Halt in Puerto Rico

Crowley Maritime US Congressman Gary Palmer and Congresswoman Nydia Velázquez have introduced a legislation which would provide a 5-year moratorium of the Jones Act in Puerto Rico as the island recovers from a series of devastating hurricanes. They said that the Puerto Rico Humanitarian Relief Act would provide relief from this burdensome regulation and allow Puerto Rico the opportunity to rebuild their island without added costs and delays caused by the requirements of the Jones Act. Puerto Rico has a long, difficult road ahead of it and the Jones Act will serve only to impede its physical and economic recovery. As the island struggles to rebuild, it should not be saddled with the burden of paying significantly more for construction materials and other goods, compared to the mainland, Velázquez said. She added that the latest legislation also requires a full study of the Jones Acts economic impact, so we have the empirical data to end this debate once and for all. According to a 2010 study at the University of Puerto Rico, the island loses USD 537 million every year due to the Jones Act. Additionally, a report from the Federal Reserve Bank of New York showed that it costs USD 3,063 to ship a twenty-foot container from the East Coast of the United States to Puerto Rico and USD 1,504 to ship the same container to the nearby Dominican Republic, a destination not subject to the Jones Act. However, American shipping industry executives earlier questioned the necessity of the Jones Act waiver as they told the House Transportation & Infrastructure Committee Democrats on October 3 that there were no foreign ships utilizing the previously set 10-day waiver to deliver cargo from the US mainland to Puerto Rico. Tote and Crowley, which operate two of the three receiving terminals in San Juan, informed that, to their best knowledge, there were no foreign vessel scheduled to utilize the waiver during the period up to October 3. Additionally, they informed that there have been no requirements for shipments from a US port to Puerto Rico that have not been met by the Jones Act carriers. Furthermore, when asked by Representative Rick Larsen whether there was a practical impact of extending the Jones Act waiver for Puerto Rico, which was in force through October 8, Totes CEO Anthony Chiarello said that it didn’t make sense to us why the waiver was put in place in the first place, so an extension of the waiver would make even less sense. Chiarello added that there isn’t a bottleneck of cargo to get to the island, the bottleneck is on the island. The Jones Act requires that all goods shipped between waterborne ports of the United States be carried by vessels built in the US and owned and operated by Americans.