[javert]

I live in Puerto Rico. I'm curious about the actual mechanics of how the Jones Act affects PR. For context, I'm against the Jones Act regardless of the exact effects it may or may not have---but I'm still curious about the mechanics.

For instance, I used to believe we couldn't get produce from the DR without it first going through a US port (typically Jacksonville).

But in reality, the Jones Act doesn't prevent ships from bringing DR produce directly to PR, even foreign ships.

I'd like to get a specific example of something economically useful that the Jones Act forbids.

For instance, you couldn't have a trade route by a DR ship that goes San Juan -> Ponce -> DR, if you want to be able to pick up goods in San Juan and drop them in Ponce. But is that really useful, anyway?

Perhaps allowing non-US ships to brings goods between Florida and PR would be the biggest gain of dropping the Jones Act? Because shipping would be much cheaper. Like the case in the article where it's cheaper to bring fuel to the Northeast from Africa than from Texas.

[hellojesus]

I think the issue is that a non-Jones ship going from DR to PR could then not continue on to another US port, which means that PR would have to have enough demand to unload the entire ship there or at another foreign port.

The issue really comes into play with the fact that a non-Jones ship couldn't stop at a US port on the way to another US port, and that really hurts smaller outlying ports that are between a foreign nation and mainland US.

[WorldMaker]

It's a bit of a further tangent, but my understanding is that this has a particular weird impact on cruise ship destinations and related tourism cash/investments. Because cruise ships aren't exempt from the Jones Act either and are often foreign flagged (many cruise ship companies are nominally headquartered in the Bahamas and fly Bahamanian flags on their ships), they also have to make sure that they alternate ports in the way that meets the Jones Act. They can't go from Florida or New Orleans straight to Puerto Rico without stopping somewhere else first (and with US sanctions still "weird" with Cuba the obvious stop isn't generally possible either) or travel directly between Puerto Rico and the USVI without a stop somewhere in between (such as DR).

This seems silly for a number of reasons. I know a bit too much about it because a cruise charter group I go on cruises with has wished for certain itineraries to make logistics easier (PR has better concert logistics than most other islands, for instance, if you are trying to set up a single day concert in a park), but there are too few available PR routes for the sake of variety precisely because some of those routes that might be desirable are basically illegal under the Jones Act. It's not a showstopper in this group's case, but it is silly.

[javert]

A non-US ship can go to PR and then another US port. From the article:

"The concrete results are that a foreign ship can enter a U.S. port to drop off its foreign cargo, it can even from there sail to different U.S. ports to drop off other foreign goods, but it is not allowed to pick up any domestic goods in a U.S. port and bring those goods to another U.S. destination if it doesn’t meet the four conditions listed above."

[hellojesus]

Thanks for the clarification. I was running off of memory from a Peter Schiff podcast where he talked about the Jones Act.

That is still an issue though. Those ships need to try and maximize on board cargo at every port. They have wasted dollars if they don't. There is zero reason for this law to exist except to prohibit free trade and stomp out domestic competition.

[JAlexoid]

It's pretty simple. PR isn't a major market, that means that delivering goods from US to PR isn't valuable enough to have economies of scale to kick in.

Add to that that most freight in The Lower 48 is ground(rail and road) - there's little demand for all American merchant fleet.

Low demand for services = low demand for new ships = older inefficient ships = high maintenance costs = lower profit or high prices = small markets get screwed (PR, Guam, Hawaii, etc)

[alistairSH]

Shipping Florida or Texas to PR would be where you see a benefit to PR. Currently, shipping an American-made good (car made in SC, maybe) to PR requires using the US merchant fleet, which is more expensive.

[JAlexoid]

Or uanavailable, because the ship rusted away...

[matthewowen]

The arguments I've seen are:

a) you would get more competition / lower prices on trade routes from the US to PR. b) foreign flagged vessels could stop in PR on their way to the US, drop off PR goods, and load PR manufactured goods.

It's hard to argue that those possibilities wouldn't have _some_ impact on CoL... but they wouldn't change the bigger reality that PR is an island that doesn't have any natural resources, imports 85% of its food, and is a second class entity within the country it belongs to.

[javert]

People say PR is a second class entity, but I think almost any US state would be far better off with Puerto Rico's deal.

PR gets to harvest its own taxes, whereas the other states are tax fiefdoms for the Federal bureaucracy. This is truly a superpower for Puerto Rico.

In return, PR doesn't get to vote for president, or have senators or congressmen. But I can tell you, all those are worthless. My state's representatives (when I lived in a state) served the Federal bureaucracy in practice, not the people of the state. They are cronies for their political parties.

I personally believe that PR's mediocre economic situation is because their own elites steal all the money they get (like the $80 billion or whatever they defaulted on), and because the vast majority of Puerto Ricans have already gone to the States, creating a massive brain drain. I do not believe it's because of the Jones Act or some other form of colonialism.

[cr1895]

>I'd like to get a specific example of something economically useful that the Jones Act forbids.

The Jones Act obliges some pretty absurd contortions and workarounds to construct offshore wind, of which many many gigawatts are planned to be built in the future off the coasts of the US. This directly increases risk, cost, complexity, and uncertainty compared to offshore wind development in other countries.

The highly specialized vessels which are capable to do this work are in very limited supply globally, and exceedingly few are (or will be) US-flagged and JA compliant. These are the heavy crane vessels, jack up vessels, precision rock placement vessels, cable lay vessels, etc of which practically nothing suitable exists in the US-flagged fleet. Some US vessels are being built (Dominion’s turbine installation jack-up or GLDD’s fall pipe vessel), however, these are absolutely insufficient on their own, and vastly more expensive (and uncompetitive elsewhere) compared to the rest of the global fleet.

[gnopgnip]

The Jones act restricts trips between US ports to US ships. So transport between San Juan and Jacksonville needs to be a US ship. It doesn't technically restrict ships between DR or another other foreign port and PR. But the Jones act prevents a ship going from DR to Jacksonville from stopping in San Juan along the way. San Juan isn't a large enough market, so it doesn't make financial sense to make a trip only there, or to stop in San Juan then another foreign port, then Jacksonville.

[javert]

According to the article, a foreign ship can stop at multiple US ports, as long as it only offloads. A ship can go from DR to Jacksonville and stop in San Juan on the way.