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Domestic maritime industry sets the record straight on importance of the Jones Act to Puerto Rico recovery

The following is excerpted from an article released November 19 by the American Maritime Partnership, a coalition of which American Maritime Officers Service is a member and which American Maritime Officers supports.

WASHINGTON - The American Maritime Partnership - the voice of the domestic maritime industry - today issued the following statement to set the record straight on the importance of American maritime for Puerto Rico recovery and the capacity and capability of Jones Act vessels to meet Puerto Rico's present and future needs.

"While the American maritime industry was delivering cargo to the docks of Puerto Rico with relief supplies within hours of the hurricane passing, familiar opponents worked to fan debunked myths about our industry and the Jones Act. The fact remains the Jones Act does not add costs to Puerto Rico; it provides stability, jobs and reliable transportation of relief and recovery items to our families and neighbors in Puerto Rico. We support those who march for the well being of Puerto Rico, as we have been working for the same cause since the storm, but we need to march for what will help, not hurt, the island." - The American Maritime Partnership

The following statements address the false claims reported by media and those in opposition to the Jones Act.

Fact Check on False Reported Claims in Media:

Claim: The Jones Act prevents cargo from foreign vessels to reach Puerto Rico.

False. Any foreign vessel can call on Puerto Rico. The Government Accountability Office (GAO) noted in a 2011 report that two-thirds of the ships serving Puerto Rico were foreign ships. 55 different foreign carriers provided imported cargo to Puerto Rico in a single month, as cited as an example by GAO. Foreign shipping companies compete directly with the American shipping companies in an intensely competitive transportation market.

Claim: Import costs are at least twice as high in Puerto Rico as in neighboring islands on account of the Jones Act.

There is no study that supports this statement in any way. In fact, anecdotal evidence about rates indicates that the opposite is true. For example, one analysis shows it is 40% more expensive to ship goods from the U.S. mainland on foreign vessels to the U.S. Virgin Islands (not subject to the Jones Act) than on Jones Act vessels to Puerto Rico. Moreover, the cost of shipping accounts for a tiny fraction of retail prices on the island. Waiving the Jones Act would have no affect on retail prices in Puerto Rico.

Claim: Jones Act vessels lack sufficient capacity to reach communities impacted by Hurricane Maria.

In the immediate aftermath of the hurricane, one hundred percent of the island was without power, and roads were blocked by downed trees and debris. Goods are arriving to the island on vessels but bottlenecks on the roads are limiting arrival to the communities. The largest bottleneck is not getting goods to the island, but delivering goods once they arrive.
  • Domestic maritime companies have the equipment at their terminals to handle the throughput at the terminals without overwhelming the shoreside and inland infrastructure.
  • Domestic maritime roll-on/roll-off barges can immediately discharge cargoes while work is performed to restore power for cranes and other equipment.
  • Domestic maritime containerships can deliver cargoes from the S. mainland to Puerto Rico in three days.
Claim: A Jones Act waiver would add efficiency to the delivery of essential cargoes to impacted communities.

Because of infrastructure challenges, a Jones Act waiver could hinder, not help, relief efforts. A Jones Act waiver could overwhelm the system, creating unnecessary backlogs and causing confusion on the distribution of critical supplies throughout the island. Already there are logistical bottlenecks for Jones Act cargoes as a result of the inability to distribute goods within Puerto Rico due to road blockages, communications disruptions, and concerns about equipment shortages, including trucks, chassis, and containers.

Claim: The Jones Act adds significantly to the cost of goods in Puerto Rico.

Over the last decade, a parade of politicians and "experts" have attempted to estimate the so-called "cost" of the Jones Act in Puerto Rico. Because the estimates have been wildly contradictory, in 2012, Puerto Rico Delegate Pierluisi asked the GAO to determine the true "cost." The GAO studied the issue for more than a year and debunked the previous estimates. First, the GAO said there are far too many factors that impact the price of a consumer good to determine the supposed cost related to shipping, much less the Jones Act. Second, the GAO said, one could not truly estimate the cost unless one knew which American laws would be applied to foreign ships if they were allowed to enter the domestic trades, which would certainly increase the cost of foreign shipping.

Claim: Changing the Jones Act in Puerto Rico will help the island, especially considering its current economic crisis.

A GAO study on Puerto Rico listed a number of potential harms to the territory itself if the Jones Act were changed, including the possible loss of the stable service the island currently enjoys under the Jones Act and the loss of jobs on the island. Moreover, American domestic carriers are making some of the largest private sector investments currently underway in Puerto Rico by investing nearly $1 billion in new vessels, equipment, and infrastructure. They employ hundreds of Puerto Rican American citizens on the island and on vessels serving the market, providing highly reliable, low-cost maritime and logistics services. These private sector jobs and reliable services are important to the long-term recovery of the Puerto Rican economy and would be jeopardized by changes to the Jones Act.

About American Maritime Partnership

The American Maritime Partnership represents more than 400 U.S. maritime companies from Alaska to Puerto Rico. The domestic maritime industry is made up of more than 40,000 American vessels built in American shipyards, crewed by American mariners, and owned by American companies that operate in our waters 24-hours a day, seven days a week. The industry sustains nearly 500,000 American jobs, $28.9 billion in labor compensation, and more than $92.5 billion in annual economic output. The U.S. domestic maritime industry is a pillar of our nation's economic, national, and homeland security.


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