American Maritime Partnership Defends Quality and Cost of Container Service to Puerto Rico

Cites General Accountability Office study supporting service quality and rates but disputes GAO conclusions about bulk shipping.

A General Accountability Office (GAO) study on the Jones Act in Puerto Rico disproves charges that the Act raises prices for consumers in Puerto Rico, according to the American Maritime Partnership (AMP).  Furthermore, it states that the U.S. domestic container shipping fleet has provided regular, reliable service while offering significant rate reductions.

“GAO specifically said, ‘[S]o many factors influence freight rates and product prices that the independent effect and associated economic costs of the Jones Act cannot be determined,’” AMP concluded. “GAO’s report confirmed that previous estimates of the so-called ‘cost’ of the Jones Act are not verifiable and cannot be proven. In fact, container shipping rates in Puerto Rico for American companies dropped as much as 17 percent between 2006 and 2010, according to the study,” said AMP, noting that the vast majority of cargo to and from Puerto Rico moves by container. “GAO said there is no guarantee that shipping rates would go down further if the Jones Act was changed.”

AMP also said the GAO report highlighted the national security benefits of the Jones Act.

“In fact, the study quoted the Defense Department and the U.S. Maritime Administration as saying the contributions of American commercial shipyards is more important than ever as the number of new military vessels being constructed is reduced by federal budget cuts,” AMP said. “American ship construction for Puerto Rico is important for national security because it ‘help[s shipbuilders] sustain their operations, as well as helps them to retain a skilled workforce and supplier base. Absent new orders, that workforce could be put at risk,’” GAO said.

AMP reserved its main criticisms for the GAO’s analysis of liquefied natural gas (LNG) and other bulk cargos in Puerto Rico.

“In contrast to its analysis of the container shipping market, GAO’s review of the LNG and other bulk shipping markets is anecdotal, incomplete, misleading, and one-sided,” AMP said. “In fact, there are already fully compliant American vessels available to transport LNG to Puerto Rico and, of course, others can be built in plenty of time. In addition there are special provisions of law that allow Puerto Rico to move LNG into the Commonwealth on foreign vessels from the U.S., and of course, LNG can be imported into Puerto Rico from overseas any time.”

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