Wednesday, September 18, 2019
Hawai'i Free Press

Current Articles | Archives

Friday, April 26, 2019
More studies show Jones Act harmful to Puerto Rico
By Grassroot Institute @ 1:54 AM :: 1782 Views :: Jones Act, Cost of Living

More studies show Jones Act harmful to Puerto Rico

by Jonathan Helton, Grassroot Institute, April 22, 2019

Two new studies have confirmed what observers of the Jones Act have known for years — that the century-old federal maritime law has long been harmful to Puerto Rico’s economy.

One of the studies, conducted by John Dunham & Associates, found that the Jones Act has prevented the creation of 13,250 jobs and $1.5 billion in annual economic growth, representing $1.1 billion in higher prices, $337.3 million in wages, and $106.4 million in lost tax revenues.

The other, conducted by Advantage Business Consulting, looked specifically at U.S. territory’s food industry and estimated that the Jones Act equaled a 7.2 percent tax on food and beverages alone, or about $367 million extra for island residents.

“Individually, families pay $300 more or $107 per person for food and beverages,” said ABC economist Vicente Feliciano.

Feliciano and his team of researchers derived their estimates from data showing that transporting containers from the United States to Puerto Rico costs, on average, 2.5 times, or 151 percent more, than transporting from foreign ports. Specifically, “$3,027 from U.S. ports versus $1,206 from non-U.S. ports … after having made the corresponding adjustments for size of container and distance.”

There are three reasons Jones Act ships are more expensive to operate.

  • They must be U.S-built — and U.S-built ships are the most expensive in the world.
  • They must be 75-percent crewed by Americans, who are paid significantly higher wages than foreign sailors.
  • Their sailing routes are inefficient.

On the last point, transportation specialist John Frittelli explained in a 2017 report for the Congressional Research Service that Jones Act ships sail on “piston’” routes — “going back and forth between two ports instead of sailing on triangular routes that might improve vessel utilization.”

Using Puerto Rico as an example, Frittelli said Jones Act carriers are more heavily loaded on sailings from Florida to Puerto Rico than on the return trips. But if they could call at Caribbean island nations on those voyages, “they could amass more cargo before returning to Florida, thereby improving capacity utilization.”

A 2013 study by the U.S. Government Accountability Office found that Jones Act ships serving Puerto Rico typically return to the U.S. mainland with only 20 percent of their cargo capacity filled. Even a 2018 study sponsored by the American Maritime Partnership — an organization that supports the Jones Act — found that about 80 percent of the Jones Act market consists of southbound shipping.

Frittelli said Jones Act carriers could conceivably pick up cargo from international ports on their way back to the U.S. mainland, but their high rates discourage international shippers from using their services. With the volume of Caribbean shipping increasing, this represents a lost market for Jones Act carriers.

Foreign vessels are unable to solve the “piston” problem because they are not allowed to transport goods between U.S. ports at all.

Even U.S. manufacturers are harmed by this issue, because it makes their products cost more, whether in Puerto Rico, Alaska, Hawaii or Guam. The Jones Act is, in effect, a hidden tax that dissuades consumers in these locations from buying U.S. goods, incentivizing them, in turn, to buy foreign goods.

Known as “import substitution,” this concept has Puerto Ricans buying liquid natural gas, corn, potatoes and other products from foreign suppliers, instead of American suppliers, because it is too expensive to ship them in on Jones Act ships.

Instead of benefitting the U.S. economy broadly, the Jones Act causes losses for Puerto Ricans, U.S. mainland companies and — to some extent — the Jones Act carriers themselves.

The American Maritime Partnership continues to argue that the Act has not affected prices in Puerto Rico, and that there is no “freight rate premium” for Jones Act carriers that makes them uncompetitive. If that is the case, there should be no cause for the AMP to worry about possible Jones Act reform.

However, if the Jones Act really is imposing significant extra costs on Puerto Rico — and more and more studies show that to be the case — then undoubtedly its residents would be very happy to have something done about it, whether it be reform, repeal or exemption.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

808 State Update AM940

ABCDEFG Blog

ACA Signups Hawaii

ACCE

ALEC

Alliance Defending Freedom

Aloha Conservative Alliance

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii

AMVETS-Hawaii

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

Conservative Forum for Hawaii

CSIS Pacific Forum

DAR Hawaii

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Habele.org

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling

HIEC.Coop 

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube

HPACC

Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save the Plastic Bag

School Choice in Hawaii

SenatorFong.com

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT