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

Image Courtesy: 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 Act’s 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, Tote’s 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.” 

On October 9, Crowley Maritime informed that it plans to add 9 vessels, carrying between 2,500 and 3,000 loads, to ship cargo to the Port of San Juan in Puerto Rico next week. By the end of this week, the company will have offloaded more than 6,500 loads of FEMA and commercial cargo from 20 vessels since Hurricane Maria struck the island in late September.

Congestion on Crowley’s Isla Grande Terminal in San Juan “continues to be a challenge, though improvement has been realized.”

“The pace of loads being dispatched from the terminal and trucked out to locations on the island has gradually improved to near the normal rate of 400 to 500 loads per day. While this has helped clear some of the backlog, the additional volumes brought into the port have kept the total loads awaiting dispatch at more than twice the normal amount,” Crowley informed.

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.

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