Sunday, October 22, 2017

No benefit from 10 day Jones Act exemption

By on October 6, 2017

The 10 day exemption to the cabotage laws that was granted by the United States government concludes on Saturday without the arrival of any ships beyond those that usually dock in Puerto Rico.

This was the information provided to the director of Port Authority, Omar Marrero, by the president of the Shippers. “We haven’t received any [international] ships as a result of the temporary exemption that was conceded,” informed the official to Caribbean Business.

Marrero explained that this could be an indication that all supply needs were duly met by the ships that normally operate on the island or that there wasn’t enough time to perform the necessary coordination for the exemption to have a real benefit.

The exemption allowed Puerto Rico to not only receive ships from the United States but also vessels registered in any other country or directly from any foreign port. The 1917 Jones Act requires that all merchandise shipped between the US and Puerto Rico be transported on American made and operated ships. The Virgin Islands are exempt from these statutes.

“This is crucial, particularly for gasoline. One of the immediate priorities is to have fuel, gasoline, diesel, for all of the island. For now we have enough, but we are limited by transportation logistics. At some point, getting enough gasoline on the island will be a problem, particularly in order to continue the principle functions of telecommunications, hospitals, drinking water and to function adequately,” the governor Ricardo Rosselló said when he announced the request to the federal government on Sept. 27.

Marrero pointed out that “this is the first time we have had an exemption of this nature—without any restrictions—which is also why we can probably conclude that we didn’t have enough time to see results.”

The official expressed that if Puerto Rico wants to request the total elimination of the cabotage provisions, a deep analysis of the results of these 10 days is necessary.

“The evaluation is important if we want to ask Congress for a permanent exemption from these laws. For that analysis it would be important to have at the table all entities with a stake in this topic in order to do a more complex evaluation,” Marrero said.

“The petition made by the governor was based on having an additional tool. At the moment and at the historic juncture where we are, we wanted to have all possible tools available; and it’s better to have those tools and not need them, than to need them and not have them,” he added.

It took 3 days for the port of San Juan to be able to receive merchant vessels after the hurricane. The first ships that arrived were those that were already on their way to the island before the storm hit. As the days passed, it became evident that there was a problem with transporting merchandise because of damages to supply distributors and issues with the distribution of diesel. This caused such a back log of containers that the government had to request the distributors and companies lift their containers or they would be bought by the State to be distributed.

At this point, 16 days after the hurricane, 1143 shipping containers were dispatch, versus the 1,400 the port of San Juan usually handles. Marrero informed that, with the exception of Mayagüez, all the island’s ports are already open.

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