Interesting story re: Jones Act

I have seen discussions on here about the Jones Act so thought it would be of interest, especially where Puerto Rico is concerned.:

https://www.nytimes.com/2017/09/25/opinion/hurricane-puerto-rico-jones-act.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region&region=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=0

The Jones Act needs to go. It is sooooo outdated. Thanks for posting.

I have seen discussions on here about the Jones Act so thought it would be of interest, especially where Puerto Rico is concerned.:

 

https://www.nytimes.com/2017/09/25/opinion/hurricane-puerto-rico-jones-act.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region&region=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=0

Thanks for posting this very timely and informative article! (y) (y) (y)

The article mentions that there have been bills introduced to repeal the law but the shipbuilding industry wants to keep it. How much of a shipbuilding industry do we have in the US?

Very interesting & informative. Thanks for posting.

Allan

It's not just shipbuilding, but the entire shipping industry that is affected, since the Jones Act also protects coastal shipping itself.

America's domestic shipping industry is responsible for nearly 500,000 jobs and more than $100 billion in annual economic output, according to a recent PriceWaterhouse Cooper study for the Transportation Institute.

It's interesting that some US territories are exempt, and others are not. I wonder why.

Thanks for sharing the link.

Good luck to everyone in Puerto Rico.

Okay, I usually have to debunk misconceptions about the PVSA here on CC, or the misunderstanding that the Jones Act applies to passenger carriage, but I'll discuss the Jones Act now.

First off, in the wake of a natural disaster, the President can grant Jones Act waivers, which he did in the wake of hurricane Harvey (though that was only to keep a NOLA refinery moving product at full capacity, and only one foreign flag vessel was used). In the wake of Irma, there were 6 US flag Jones Act tankers stacked up waiting for the ports to open to bring in fuel. Why hasn't the President asked for a Jones Act waiver for Puerto Rico? No one has asked.

Not sure what source the Times used for the "rationale" behind the Jones Act, but suffice it to say that it had little to do with U-boats. Senator Jones was from Washington state, and was petitioned by the state's merchants who saw the lucrative business of supplying Alaska being taken by lower cost Canadian shipping. In order to stop this, he sponsored the Jones Act to limit coastwise trade to US vessels.

Not only does the shipbuilding industry support the Jones Act (and the industry does very well building Jones Act tonnage at 3-4 yards around the country), but the US military supports the Jones Act as a way to maintain the necessary infrastructure for national defense (shipbuilding, a pool of qualified mariners). The need for this was seen during the First Gulf War, when there were not enough US flag ships of the proper types to support the military in Saudi Arabia, and cargoes were shipped on foreign flag ships, until those ships declared they would not enter the war zone.

The Jones Act fleet supports nearly a half million jobs in the US (so those people pay US taxes, and spend their money in the US) and contributes over $13 billion to the US economy. Most people don't realize that the vast majority of the Jones Act fleet does not go to sea, but works the harbors, rivers, and Great Lakes of the US. Take away the Jones Act, and those operations now become foreign flag and no longer subject to the stricter USCG safety, training, and certification requirements placed on US flag vessels.

Now, whether or not the USVI should have an exemption to the Jones Act, I really don't think so. What the article doesn't mention is the other US territories exempt from the Jones Act are in the South Pacific, thousands of miles from the mainland US.

The article states that "any foreign flag ship that enters Puerto Rico must pay punitive tariffs, fees, and taxes". This is simply not true. It is true of a vessel that brings goods from the US to Puerto Rico, but ships bringing cargo from overseas are not subject to the Jones Act restrictions. So, major consumer product outlets, like the Walmarts and Walgreens that the article mentions, can get around the Jones Act by shipping directly from their overseas suppliers (let's face it, these US corporations don't get the majority of their stock from US suppliers, it comes from overseas) to Puerto Rico.

By all means, if it would get required aid to Puerto Rico to rebuild from Maria, grant exemptions to the Jones Act. Don't repeal it, or US waterways and ports will become far less safe.

It's not just shipbuilding, but the entire shipping industry that is affected, since the Jones Act also protects coastal shipping itself.

 

America's domestic shipping industry is responsible for nearly 500,000 jobs and more than $100 billion in annual economic output, according to a recent PriceWaterhouse Cooper study for the Transportation Institute.

Your data may be better than mine, I'm just going from memory from an earlier TI study.

Another thought on how the Jones Act is "strangling" Puerto Rico. AP Moeller Group, through its subsidiaries, mainly Maersk Lines, is a major player in the container shipping world. They have spent quite a lot of money to build Freeport, Bahamas, into a major container hub, capable of handling their largest ships which run from the far east (source of most "US consumer goods"). Freeport is used as a feeder hub, where the cargo from the large ships is broken down for smaller ships to carry the goods to wherever it is wanted.

Now, Walmart can bring a TV from China on a foreign flag ship to Long Beach, pay the customs duty on it, rail it to the US East or Gulf coasts, and then ship it to Puerto Rico on a US flag, Jones Act ship. Or, they can bring the same TV from China on a foreign flag ship to Freeport, transship it to another foreign flag ship and take it to Puerto Rico, and pay the same customs duty, and not have to deal with the Jones Act at all. I'm wondering how much of the Puerto Rican economy comes via Jones Act shipping.

Further, the article mentions that repealing the Jones Act would "open the island to international oil markets" crucial to operating the power grid. Puerto Rico is already open to international oil markets, as any ship bringing oil from overseas is not required to be on a Jones Act tanker. Venezuelan fuel oil (used on cruise ships and power plants) is virtually the same price as in Houston, and the shipping distance is 1/3 of that from Houston.

Your data may be better than mine, I'm just going from memory from an earlier TI study.

Thank you for the link to the article.

Very interesting reading.

Your data may be better than mine, I'm just going from memory from an earlier TI study.

 

Another thought on how the Jones Act is "strangling" Puerto Rico. AP Moeller Group, through its subsidiaries, mainly Maersk Lines, is a major player in the container shipping world. They have spent quite a lot of money to build Freeport, Bahamas, into a major container hub, capable of handling their largest ships which run from the far east (source of most "US consumer goods"). Freeport is used as a feeder hub, where the cargo from the large ships is broken down for smaller ships to carry the goods to wherever it is wanted.

 

I listened to the Director of FEMA speak this morning re: Jones Act and Puuerto rico. he said it was a very differrent situation ti for Florida as they had to bring the fuel to Floida from other states. Puerto Rico has supplies but not where they are needed. They want to get it to hospitals and , service stiations etc but the roads and infrastructure is in such horrible condition the fuel cannot be transported on road.. The fuel is availalbe but they have huge work to get to the people, to the places where it is needed.The press seems uunable or unwilling o repoert with more adcuracxy when and where there are Jones Act issuses. They canot eem to aread and grasp what the act says. and where it applies.

 

 

 

Now, Walmart can bring a TV from China on a foreign flag ship to Long Beach, pay the customs duty on it, rail it to the US East or Gulf coasts, and then ship it to Puerto Rico on a US flag, Jones Act ship. Or, they can bring the same TV from China on a foreign flag ship to Freeport, transship it to another foreign flag ship and take it to Puerto Rico, and pay the same customs duty, and not have to deal with the Jones Act at all. I'm wondering how much of the Puerto Rican economy comes via Jones Act shipping.

 

Further, the article mentions that repealing the Jones Act would "open the island to international oil markets" crucial to operating the power grid. Puerto Rico is already open to international oil markets, as any ship bringing oil from overseas is not required to be on a Jones Act tanker. Venezuelan fuel oil (used on cruise ships and power plants) is virtually the same price as in Houston, and the shipping distance is 1/3 of that from Houston.

Puuerto Rico has the fuel but not in place where it is needed. The infrastructure needs hueg amount ofwork on roads in order to tnansport the fuel that is "ON ISLAND to the hospals and service staionss where it is neede\d for the people to get access to it. If I understood him clearly, he said there is ample supply On island. not Jones c Act issue.

I listened to the Director of FEMA speak this morning re: Jones Act and Puerto rico. he said it was a very differrent situation ti for Florida as they had to bring the fuel to Floida from other states. Puerto Rico has supplies but not where they are needed. They want to get it to hospitals and , service stiations etc but the roads and infrastructure is in such horrible condition the fuel cannot be transported on road.. The fuel is availalbe but they have huge work to get to the people, to the places where it is needed.The press seems uunable or unwilling o report with more cdcuracxy when and where there are Jones Act issuses. They cannots eem toread and grasp what the act says. and where it applies

Puuerto Rico has the fuel but not in place where it is needed. The infrastructure needs huge amount ofwork on roads in order to transport the fuel that is "ON ISLAND to the hospitals and service staions where it is needed for the people to get access to it. If I understood him clearly, he said there is ample supply On island. not Jones c Act issue.

I listened to the Director of FEMA speak this morning re: Jones Act and Puerto rico. he said it was a very differrent situation ti for Florida as they had to bring the fuel to Floida from other states. Puerto Rico has supplies but not where they are needed. They want to get it to hospitals and , service stiations etc but the roads and infrastructure is in such horrible condition the fuel cannot be transported on road.. The fuel is availalbe but they have huge work to get to the people, to the places where it is needed.The press seems uunable or unwilling o report with more cdcuracxy when and where there are Jones Act issuses. They cannots eem toread and grasp what the act says. and where it applies

Puuerto Rico has the fuel but not in place where it is needed. The infrastructure needs huge amount ofwork on roads in order to transport the fuel that is "ON ISLAND to the hospitals and service staions where it is needed for the people to get access to it. If I understood him clearly, he said there is ample supply On island. not Jones c Act issue.

If the Jones Act exemption was only requested for fuel, then there may be ample reason to deny it, if the stocks on island are sufficient. I know that Yabucoa refinery (which was the last refinery on the island until it closed a few years ago, and is now merely an oil terminal) was directly under the eye of the storm, so there could be something of a shortage. I think there is sufficient Jones Act tankers to provide fuel oil (for the power plants) and diesel and gasoline for local generators to keep the supply adequate. What may be needed is an exemption for dry cargo ships to bring in food and construction materials.

The article linked in the OP was more about the Jones Act "strangling" the economy of Puerto Rico, than any immediate need due to the hurricane damage. As I said above, there are ways that cargo can be brought to PR without requiring Jones Act tonnage, both dry cargo and petroleum products, and if the cost of Jones Act shipping is that crippling to the PR economy, then folks should wise up and take advantage of these methods, and I don't believe that major corporations have not investigated or are not already taking advantage of them.

If the Jones Act exemption was only requested for fuel, then there may be ample reason to deny it, if the stocks on island are sufficient. I know that Yabucoa refinery (which was the last refinery on the island until it closed a few years ago, and is now merely an oil terminal) was directly under the eye of the storm, so there could be something of a shortage. I think there is sufficient Jones Act tankers to provide fuel oil (for the power plants) and diesel and gasoline for local generators to keep the supply adequate. What may be needed is an exemption for dry cargo ships to bring in food and construction materials.

 

The article linked in the OP was more about the Jones Act "strangling" the economy of Puerto Rico, than any immediate need due to the hurricane damage. As I said above, there are ways that cargo can be brought to PR without requiring Jones Act tonnage, both dry cargo and petroleum products, and if the cost of Jones Act shipping is that crippling to the PR economy, then folks should wise up and take advantage of these methods, and I don't believe that major corporations have not investigated or are not already taking advantage of them.

I am unqualified to argue Jones Act and the purpose of my post was to state what I heard the Director of FemA say in regard to the need the people have for fuel now.. What I wrote is what he said, this morning.

I am unqualified to argue Jones Act and the purpose of my post was to state what I heard the Director of FemA say in regard to the need the people have for fuel now.. What I wrote is what he said, this morning.

Thanks for your report, sail.

If this thread shows anything it is how complex many situations are. I heard a report from the port master who said there were containers of supplies and plenty of trucks, but the drivers can't be reached and/or cannot get to the port.

Thanks for your report, sail.

 

If this thread shows anything it is how complex many situations are. I heard a report from the port master who said there were containers of supplies and plenty of trucks, but the drivers can't be reached and/or cannot get to the port.

Interesting,

Shrimp. Thank you. It is complicated and like many casual cruisers, I know very little ab out it. ,

As in every argument there are two sides. Here is the American Maritime position:

http://gcaptain.com/american-maritime-industry-fights-back-false-claims-regarding-jones-act-relief-efforts-puerto-rico/

Dan

The Jones Act was waived today for Puerto Rico.

Thanks for your report, sail.

 

If this thread shows anything it is how complex many situations are. I heard a report from the port master who said there were containers of supplies and plenty of trucks, but the drivers can't be reached and/or cannot get to the port.

I too saw that report on the news this morning. The island is in such disrepair that the workers who can begin delivering needed supplies are simply unavailable. Also, as love the beach pointed out, the PVSA has finally been waived for traffic bound for PR. Thankfully I would guess. :)

I too saw that report on the news this morning. The island is in such disrepair that the workers who can begin delivering needed supplies are simply unavailable. Also, as love the beach pointed out, the PVSA has finally been waived for traffic bound for PR. Thankfully I would guess. :)

You mean Jones Act. PVSA is for passengers not freight.

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You mean Jones Act. PVSA is for passengers not freight.

 

 

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Doh! My bad. I meant the Jones Act. PVSA is what affects cruises and what is discussed here most often. :(

If the hospitals need fuel for their generators, would it be feasible to fly it to them with helicopters until the roads are passable.

This would also apply for emergency supplies.

I too saw that report on the news this morning. The island is in such disrepair that the workers who can begin delivering needed supplies are simply unavailable. Also, as love the beach pointed out, the PVSA has finally been waived for traffic bound for PR. Thankfully I would guess. :)

In truth, I would suspect that this Jones Act waiver will have about as much effect as the one for Irma, where exactly one foreign flag ship loaded domestic fuel from the Gulf coast and took it to Florida, after the storm, when the avowed reason for the waiver was to get fuel to the stranded motorists ahead of the storm. In the meantime, there were 6 Jones Act tankers stacked up outside the Florida ports with gasoline, diesel and jet fuel, just waiting for the ports to reopen. There are Jones Act dry cargo ships that are dedicated to the US to PR trade, and are waiting for clearance to bring cargo to the ports.

It is a silly law it should be cancelled.