Jones Act

Puerto Rico's Hurricane Recovery Just Got Even More Expensive

DHS ends waiver of protectionist shipping law that drives up costs.

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Water bottles
Loren Elliott/ZUMA Press/Newscom

Even though Puerto Rico has months of work ahead to recover from Hurricane Maria, the Department of Homeland Security will not extend a waiver that exempted the island from a nasty federal law that drives up shipping costs to the island.

The Jones Act—technically known as the Merchant Marine Act of 1920—requires that ships that travel from port to port in America and its territories be made in America and owned and crewed by Americans. This means that foreign ships bringing goods to import into America can stop in only one port, unless it travels to ports of other countries between stops.

There's more to the law than this particular part, but this part is a blatant federal protection racket for the American shipping industry. Studies have shown that it drives up the price of shipping goods to Puerto Rico, as much as doubling them when compared to costs to ship to nearby island countries that aren't affected by the law. It's also partly responsible for higher prices in Hawaii and Alaska.

When Hurricane Maria first approached, President Donald Trump's administration temporarily waived the Jones Act's shipping requirements for fuel only. Then after some hemming and hawing and bad publicity, they lifted the Jones Act for all shipping until Sunday. But the Department of Homeland Security says they won't extend the waiver any further.

The feds cannot simply waive the law for as long as they want. A DHS spokesperson tells the Huffington Post the waivers have to be related to national security matters and can't simply be implemented because restricting shipping costs more. Making sure that U.S. shippers can monopolize Puerto Rican shipments and charge more is almost certainly the point of the law in the first place.

That's why when the hurricane hit the island, I pointed directly to Congress to try to get rid of the law. That's unfortunately not going to happen, at least not in full. Sens. John McCain (R-Arizona) and Mike Lee (R-Utah) have introduced legislation that will exempt Puerto Rico and only Puerto Rico from the Jones Act (Sorry, Hawaii!). But the White House doesn't appear to be on board with the effort, and it's not really surprising given Trump's love of protectionist trade practices.

Small UPDATE: According to the Department of Homeland Security, 14 ships have notified the agency they were taking advantage of the waiver. Notifying the agency is voluntary, so the number may be higher.

Below, ReasonTV on why the Jones Act is bad and needs to be eliminated:

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21 responses to “Puerto Rico's Hurricane Recovery Just Got Even More Expensive

  1. Maybe Congress can suspend the Jones Act for two or three months, and after that period when people feel the difference in their pocketbooks there can be pressure to get rid of the nasty thing altogether.

    (reserving the power to exclude ships from hostile countries)

  2. Sens. John McCain (R-Arizona) and Mike Lee (R-Utah) have introduced legislation that will exempt Puerto Rico and only Puerto Rico from the Jones Act (Sorry, Hawaii!).

    What is Martha’s Vineyard, chopped liver?

  3. We must protect the longshoremen, the bar pilots, the linesmen, the ocean going captains, the tug operators, the jones act shippers, and the rest of the decimated(protectionist) american shipping industry because the previously mentioned groups have the most money to own congressmen.

    That and the unions created the weekend right?

  4. McCain gets behind a repeal if the law which sensically applies only in one place. How shocking that he wants his cake and eat it too.

  5. But Trump nominated Willett and Hillary would have been worse!

    MAGA!

  6. It is my understanding that there were NO foreign flagged shipments made to Puerto Rico while the Jones Act was waived. Also, you should really understand WHY the Jones Act remains needed. By all means, get rid of it. But the consequences of this will be the inevitable destruction of the US Merchant Marine fleet.

    1. If the U.S. Merchant Marine fleet can’t offer better, faster, cheaper service than someone else, they’ve kinda earned destruction.

      Be competitive and promote your advantages, and you’ll be fine. Your fellow Americans have no duty to pay to subsidize a pricey monopoly just so the Merchant Marines have jobs for life.

      1. #1, it’s Merchant Mariners

        #2, Do you know what the wages and working conditions are for foreign flagged vessel workers?

        #3, Do you want the state subsidized Chinese to transport our munitions around?

        1. Cue the violins.

        2. #1, don’t give a fuck

          #2, give zero fucks, I care about getting my merchandise and supplies as quickly and cheaply as possible

          #3, LOL, no1curr.

    2. There were, in fact, 14 (that came out in a release after I blogged this).

      1. I updated to link to the stats about the number of ships that were operating under the waiver.

    3. Because the US military really, really needs all 465 merchant marine ships if we ever get into a war. And we can’t just start comandeering foreign ships. I mean, that would be untoward.

  7. Why is it so expensive for ships to fly our flag?

    1. Jones act rules require an American manned crew onboard an American made ship. higher wages, higher construction costs due to onerous US ship building regs, higher compliance costs. It goes on and on.

      The definition of protectionism ruining a once vibrant american ship building industry.

      1. That seems to be more of protectionism to defend the regulations. You can regulate something all day but it will be moot if they have to cpmpeye with unregulated versions.

        1. We need more regulations to make the other regulations stick.

  8. The old “ending of a wavier” trick…what is a wavier?

  9. Exactly what percentage of aid is being restricted by the Jones Act?

    1. …and what percentage of aid is needed because of the Jones Act?

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