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The Jones Act and Puerto Rico

The Jones Act and Puerto Rico

Of all of the issues plaguing Puerto Rico, from hurricanes to earthquakes, one of the most insidious has been the Jones Act. The Jones Act is part of the merchant marine act of 1920 and it requires goods shipped between ports in the United States to be done by U.S. owned, flagged, and U.S. built ships operated by at least 75% U.S. citizens. The law, intended to create and protect American jobs in the years after World War 1, also provided security to the nation during war times. 

The Jones Act has a unique effect on Puerto Ricans, particularly when faced with natural disasters such as Hurricane Maria. Under the Jones Act, any vessel can enter Puerto Rico (most through the port of San Juan, their major access point). 

However, when transporting between two U.S. ports foreign-flagged ships are prohibited. This is true of all U.S. ports with the exclusion of the U.S. Virgin Islands (which many have cited as being unfair to Puerto Rico). 

As a result of this law, even though it may be more expeditious or cheaper to receive emergency goods from a foreign source—rather than an American shipping port—the people of Puerto Rico are unable to accept these goods. Suspending this portion of the Jones Act would be a boon to Puerto Rico, not only in times of national disaster but in general by reducing the cost of transporting fuel and other supplies. The Jones Act requires Puerto Rico to receive shipments from the U.S. mainland rather than, for example, the nearby Dominican Republic where prices are significantly cheaper. This causes residents of Puerto Rico to pay shipping costs far higher than they might otherwise be.

This also drives up fuel costs for all Americans as oil shipped from the gulf coast to refineries on the East coast must be carried by U.S. flagships. 

Recently a shipment of high-priced liquefied natural gas (LNG) was imported from a foreign port in the Russian Arctic to a terminal in Boston rather than coming from elsewhere in the United States. This would have been significantly cheaper because there are no Jones Act tankers capable of carrying LNG. In many cases, foreign shipping needs like these drive up prices within the U.S. 

Defenders of the law insist that it protects the shipping industry from unfair competition, however, the price we pay to maintain the antiquated law has many suggesting that now is the time to repeal it for good.

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