In the aftermath of hurricanes that in 2017 pummeled the Houston area and a swath of southeastern Texas (Harvey), the Florida Keys (Irma) and Puerto Rico (Maria), the Trump administration issued short-lived waivers to a restrictive maritime shipping law.
In the case of Hurricane Maria, the Jones Act, also known as the Merchant Marine Act of 1920, was lifted for 10 days, clearing the way for faster delivery of relief supplies. Puerto Rican officials subsequently asked for an extension of some sort, arguing that they needed whatever help they could get to expand access to fuel, food and other staples.
Although President Donald Trump declined, asserting that extension wasn’t necessary for humanitarian relief, his administration is now considering a 10-year waiver to deliver natural gas to still-struggling Puerto Rico — and, possibly, nationwide.
Some observers predict that such a lengthy suspension would signal the beginning of the end for the federal law tailored to provide the nation with a merchant marine that can transport goods between U.S. ports as well as to help ensure a robust fleet in the event of military confrontation.
The Jones Act elicits mixed feelings here. On one hand, it drives up consumer costs in U.S. regions that are non-contiguous to the mainland, including Hawaii, Alaska, Puerto Rico and Guam. On the other, these places depend on reliable shipping.
Waivers with generous timelines should be issued if they can mitigate the consequences of natural disasters. And the Jones Act should be revisited for the sake of easing financial burdens shouldered by Hawaii and other far-flung places.
But the notion of scrapping the act entirely raises concerning questions about mid-Pacific vulnerability to the whims of market forces.
An estimated 15 percent of our food supply grows here; the rest arrives on container ships. An 11-day halt to deliveries could tap out groceries statewide. Also, while Hawaii is making strides in stepping up its renewable energy resources, most of our fuel is imported. Shipping is our lifeline.
The Jones Act requires vessels transporting cargo between two United States ports to be U.S.-flagged and built. Currently, then, if a foreign-flagged ship traveling from Tokyo to Los Angeles picks up U.S. cargo in LA, it’s not allowed to deliver it to Hawaii on the return trip because that cargo would be tagged as involving interstate travel, which is reserved for Jones Act vessels.
The libertarian Cato Institute sees the Jones Act as an unnecessary burden, as shipping costs tied to interstate travel and ship-building costs for U.S.-flagged vessels are much pricier than options involving foreign-flagged vessels — due, in part, to costs for domestic labor and operating older ships.
Regarding the proposed decade-long waiver for Puerto Rico, the institute has pointed out that none of the Jones Act-compliant large ships can carry bulk liquefied natural gas. That’s reason enough to put in place a temporary exemption.
Also under the law, American citizens or permanent residents must account for three-quarters of crew and ownership. This protectionist-focus hinders some elements of free trade, but it does support many shipping industry jobs based in the islands.
Right now, nothing prevents a foreign carrier from serving Hawaii from a foreign port, and some do. But, typically, stopping in Hawaii along the way to or from the U.S. mainland is viewed as unprofitable because Hawaii gets relatively small loads and is situated far from speedy Asia-North America trade lane waters.
In the absence of reliability, some say we could be left at the mercy of the cargo-delivery priorities of foreign-flagged ships.
While Hawaii could see some consumer-cost gains from tweaks to the law, the state also benefits from keeping much of it intact.