The Jones Act and Puerto Rico relief delivery costs

Posted on September 27, 2017 by aviyer2010

An article in the Wall Street Journal (September 26,2017) titled “Second-Class Puerto Rico” claims that given the Jones Act (which requires “use of vessels built, majority owned and operated by Americans” to transport between US ports i.e., US to Puerto Rico) the cost to ship from the US East Coast to Puerto Rico is twice that to ship to nearby Dominican Republic. The US administration has refused to waive the Jones Act for hurricane relief, thus adding to the cost of providing aid to assist the island. Should waiving the Jones Act be a priority to offer cost effective relief from the US, or should one expect relief goods to be routed through another non-US location to be cost effective albeit taking longer ? Will the existence of the Jones Act hurt US manufacturers wanting to supply to Puerto Rico and instead provide incentives for manufacturers in other countries ?

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This entry was posted in Capacity, Cost, logistics, Made in USA, manufacturer, Operations Management, ship, Supply Chain Issues, transport and tagged hurricane, Jones Act, Puerto Rico. Bookmark the permalink.

2 Responses to The Jones Act and Puerto Rico relief delivery costs

Shashank Chinnolla says:

September 28, 2017 at 9:32 am

As discussed in previous blogs the purpose of the Jones Act of 1920 was to build a vibrant United States Maritime industry. But 100 years from that time, today is a time when international trade is booming and implementation of Jones Act might actually act as a hindrance to its original purpose. And in times of natural disaster the purpose should be to provide humanitarian relief and not give priority to trade and economy. Hence there should be provisions made in the act for times like Puerto Rico wherein aid could be provided from international communities keeping in mind factors such as cost and time. As of Sep 28th 2017, President Trump has lifted the Jones Act for relief material provisions to Puerto Rico (https://www.usatoday.com/story/news/2017/09/28/trump-waives-shipping-restrictions-puerto-rico/711541001/)

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Bishal M Ojah says:

October 1, 2017 at 5:13 pm

The Jones Act was passed during world war -1 to protect US merchant ships which was targeted by German Navy. In course of time this law came towards protecting the rights of US sailors and protecting the US shipping industry from foreign interference and control which also contributes towards national security.
Even though waiver is allowed for Puerto Rico, the damaged road infrastructure inside that country made it very difficult for inland transportation of Oil and other products. Hence even though US shippers sent extra shipments to Puerto Rico, all products were hoarded up at the port waiting to be transported inside the country. Hence waiver was a not of much help in the country of Puerto Rico.

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