Puerto Rico Wants to Change The Jones Act

Posted in Jones Act,Maritime Law on April 1, 2013

According to a General Accountability Office (GAO) analysis, Puerto Rico’s congressional representative wants to change the Jones Act to allow foreign vessels to transport liquefied natural gas (LNG) and other fuels from the U.S. mainland to the island. He’s also taking aim at agricultural products shipped on bulk cargo vessels.

In an article at Workboat.com:

The Maritime Alliance of Puerto Rico, which represents U.S.-flag carriers and labor unions, said the GAO study “determined the Jones Act does not increase rates or prices for the Puerto Rican consumer.”

Pedro Pierluisi, the official who requested the report, said, “The Jones Act is actually serving as a barrier to, not an enabler of, domestic trade.”

The effects of modifying the Jones Act for Puerto Rico “are highly uncertain,” the GAO said While proponents “expect increased competition and greater availability of vessels to suit shippers’ needs, it is also possible that the reliability and other beneficial aspects of the current service could be affected.

The report “has found that shipping prices have dropped dramatically over the last two decades and consumers have benefitted from regular, reliable service,” alliance secretary José F. Nazario said in a release.

The GAO’s cost-benefit report didn’t unequivocally conclude that the Jones Act alone hurts consumers or hinders the economy. Precise estimates of the effects of the act or any possible modification aren’t available, the GAO said, noting that many factors influence freight rates and product prices.

“The original goal of the act remains important to military preparedness and to the shipbuilding and maritime industries, but understanding the full extent and distribution of the costs that underlie these benefits is elusive,” the GAO said.

Blog post by Jones Act lawyer Gordon, Elias & Seely, LLP