Supply Chain News / Ocean / Ports

Cost of Jones Act Unproven

GAO says the Jones Act doesn’t raise prices for Puerto Rico consumers.

March 26, 2013
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A General Accountability Office (GAO) study on the Jones Act in Puerto Rico shows that the U.S. domestic container shipping fleet has provided regular, reliable service while offering significant rate reductions, according to the American Maritime Partnership (AMP), an industry trade group.

"GAO disproved charges that the Jones Act raises prices for consumers in Puerto Rico," AMP said in a statement shortly after the release of the report. "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.'"

"As such, GAO's report confirmed that previous estimates of the so-called 'cost' of the Jones Act are not verifiable and cannot be proven. The GAO report demonstrates that many of the most pointed criticisms of the Jones Act came from individuals or groups that did not offer data to back up their concerns. In many cases GAO cited allegations against the American fleet despite admitting that the claims could not be validated or verified."

AMP noted that, according to the study, "In fact, container shipping rates in Puerto Rico for American companies dropped as much as 17 percent between 2006 and 2010."

The group pointed out, "GAO said there is no guarantee that shipping rates would go down further if the Jones Act was changed."

Most satisfying, AMP said, was the finding that the American domestic fleet had provided reliable service in Puerto Rico.

"The GAO found that American domestic shipping companies have provided regular and reliable service that has been extremely beneficial to the economy in Puerto Rico and that changes to the Jones Act could result in a reduction in service to the Commonwealth," AMP said. "GAO said 'it is possible that the reliability and other beneficial aspects of the current service could be affected' if the law is changed."

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

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