Jones Act has only minor impact on hurricane relief

ELLSWORTH — Calls for its repeal notwithstanding, the Jones Act — a federal law requiring cargo shipped between U.S. ports be carried on vessels built and registered in the United States — is having little, if any, impact on Puerto Rico’s recovery from the ravages of the hurricane that devastated the island last month.

Category 5 Hurricane Maria struck Puerto Rico on Sept. 20 and completely destroyed the island’s electric power distribution system. As of last week, hundreds of thousands of island residents were still without power, potable water or habitable housing.

Amid complaints about the federal government’s slow response to the disaster, some critics laid at least part of the blame on the Jones Act, a federal law requiring that cargo shipped between U.S. ports, and between U.S. ports and Puerto Rico, be carried only in vessels built and registered in the United States.

Critics of the law complain that it raises the cost of goods shipped from the mainland to Puerto Rico (and to Hawaii, where the Jones Act also applies) and creates an artificial shortage of ships available to carry relief supplies, but the impact of the law on getting aid to Puerto Rico is less than clear.

On Sept. 28, the Department of Homeland Security issued a 10-day waiver of the Jones Act for shipments to Puerto Rico. The waiver was allowed to expire on Sunday. Earlier in the month, the administration issued a two-week waiver for Texas and Florida after hurricanes Harvey and Irma struck the Gulf Coast.

Supporters of the Jones Act say that the century-old law isn’t what’s slowing recovery efforts in Puerto Rico. The real problem, they contend, is getting supplies out of the ports and into the cities and countryside where they’re needed.

Four years ago, in response to a request from Congress, the Government Accountability Office (GAO) studied the impact of the Jones Act on maritime trade to and from Puerto Rico. In a March 2013 report, the nonpartisan office said at least seven Jones Act companies ran regular service between the mainland and Puerto Rico. Four of those companies primarily operate container ships, the other three use barges hauling containers or bulk freight, such as fuel. According to the GAO, “some” of the vessels used in the trade were “operating beyond their expected useful service life.”

Waiving the Jones Act requirements could, the GAO said, lead to significant competition from foreign ships in the Puerto Rico trade and serious economic harm to U.S. shipping companies and shipyards.

“Unrestricted competition from foreign-flag vessels could result in the disappearance of most U.S.-flag vessels in this trade, having a negative impact on the U.S. merchant marine and the shipyard industrial base that the Act was meant to protect,” the GAO report said.

Proponents of changes in the Jones Act argue that the ability to use lower-cost, foreign-built vessels might encourage existing carriers to modernize their aging fleets. TOTE Maritime, owner of the cargo ship El Faro, has already launched two new U.S.-built vessels for the Florida-Puerto Rico route. The risk, the GAO said, is that could “also reduce or eliminate existing and future shipbuilding orders for vessels to be used in the Puerto Rico trade, having a negative impact on the shipyard industrial base the Act was meant to support.”

Stephen Rappaport

Stephen Rappaport

Waterfront Editor at The Ellsworth American
Stephen Rappaport has lived in Maine for nearly 30 years. A lifelong sailor, he spends as much time as possible messing about in boats. [email protected]
Stephen Rappaport

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