DHS mulls Jones Act waiver for Puerto Rico

The U.S. Department of Homeland Security (DHS) is considering a request from a group of congressional lawmakers for a waiver to the regulations requiring domestic waterborne cargoes to move on U.S.-flag ships to Puerto Rico in the wake of Hurricane Maria.

   The U.S. Department of Homeland Security (DHS) is considering a request from a group of congressional lawmakers seeking a waiver to the longstanding law, known as the Jones Act, that requires domestic waterborne commerce to be transported on U.S.-flag ships to speed up deliveries of emergency cargo to hurricane-ravaged Puerto Rico, the department said Wednesday morning.
   Puerto Rico officials are concerned about decreasing fuel and other basic supplies for its population after Hurricane Maria devastated the Caribbean island last week. Jones Act waivers are traditionally requested by the Defense Department if there are national security threats or from U.S. shippers when there’s insufficient U.S.-flag vessel capacity.
   On Tuesday, Sen. John McCain, R-Ariz., also asked DHS to assess how a long-term waiver or full repeal of the Jones Act would impact recovery efforts of hurricane-damaged areas, including in Florida and Texas.
   “I am very concerned by the department’s decision not to waive the Jones Act for current relief efforts in Puerto Rico, which is facing a worsening humanitarian crisis following Hurricane Maria,” he said in a statement. “It is unacceptable to force the people of Puerto Rico to pay at least twice as much for food, clean drinking water, supplies and infrastructure due to Jones Act requirements as they work to recover from this disaster.”
   In July, McCain introduced legislation, the Open America’s Waters Act, to repeal the Jones Act (or 1920 Merchant Marine Act).
   “The protectionist mentality embodied by the Jones Act directly contradicts the lessons we have learned about the benefits of a free and open market. Free trade expands economic growth, creates jobs, and lowers costs for consumers,” he said at the time.
   DHS issued a one-week Jones Act waiver, with an additional week-long extension, on Sept. 8 and Sept. 13, respectively, to help facilitate deliveries of petroleum products to hurricane-impacted areas along the Gulf and East coasts. That extended waiver expired on Sept. 22.
   Before that action, the last time that a Jones Act waiver was issued by the federal government occurred in December 2012 to assist with the emergency delivery of petroleum products in the aftermath of Hurricane Sandy.
   Meanwhile, the U.S.-flag vessel industry said it’s been rushing cargo to Puerto Rico and has more than adequate capacity to handle the demand.
   Jacksonville, Fla.-based Jones Act carrier TOTE Maritime and sister company Tropical said they have just unloaded three ships in Puerto Rico containing goods, such as ice, water, fuel, generators and canned/dried food, for the island’s residents.
   The company is working closely with the American Red Cross and Federal Emergency Management Agency, as well as smaller relief organizations, to prioritize critical items.
   “Our ships have significant capacity and we want to use our resources to support the island,” said Tim Nolan, president of TOTE Maritime Puerto Rico. “Just one ship can carry the same amount of goods as nearly 2000 passenger planes – and we want to make sure every shipment, every ton, every container counts and helps the people of Puerto Rico.”
   On Monday, Crowley, another large Jones Act carrier, said it had delivered more than 3,000 loads of food, supplies and other cargo to its terminal in San Juan, with much more on the way in the days ahead.
   In addition, the company said it has already taken bookings for more than 2,700 container loads of relief cargo to Puerto Rico, St. Thomas and St. Croix. To handle the influx of cargo, Crowley’s logistics group has secured additional warehouse space in Puerto Rico to help process and expedite delivery of needed supplies.
   Crowley said it has also secured additional vessels for this cargo. Five new container deck barges with a combined capacity of more than 3,800 TEUs have been placed into service along with accompanying tugboats.
   “Much of the relief cargo is being funneled through Jacksonville, where the company’s logistics unit is taking cargo out of over-the-road trailers and transferring it to ocean containers prior to being loaded on a vessel,” Crowley said.
   Thomas A. Allegretti, chairman of the American Maritime Partnership, a trade group that represents the U.S. maritime industry, said the biggest problem is not the lack of U.S.-flag vessel capacity, but bottlenecks to distribution of the cargo from Puerto Rico’s ports to points inland.