Crowley Defends Jones Act in Puerto Rico Hearings


By MarEx 2016-04-29 21:07:41

In a Senate hearing last week on the imminent financial crisis in Puerto Rico, Crowley Maritime's senior vice president and general council Michael Roberts spoke in support of strong, continued Jones Act protection for the U.S. merchant marine.

Crowley’s testimony comes at a time of congressional scrutiny for all aspects of the Puerto Rican economy. Multiple Puerto Rican institutions are unable to service their heavy debt obligations, jeopardizing quality of government services and utilities for the island's millions of residents. The island's Government Development Bank owes a payment of $400 million on Monday, and appears to have no way of making it. Its default could lead to systemic effects throughout the territory. About $800 million of a second, $2 billion payment due in July has constitutionally guaranteed priority – meaning that by law it must be paid, even at the expense of funding for everything from police and fire departments to roads and tapwater.

As Congress weighs the rights of bondholders – including local credit unions – against the basic needs of residents, some critics of the Jones Act have leveraged the more general debate into an effort to change America’s cabotage laws. 

“A few have taken this legislative activity as an opportunity to urge that a Jones Act exemption for Puerto Rico be included in the package,” Roberts testified. “They have offered no credible proof that such a change would help Puerto Rico, and we are confident it would do more harm than good both for Puerto Rico and for the country generally.”

“Such a change would put at risk the reliable, efficient service the Island currently receives, as well as hundreds of private sector jobs on the island, with no offsetting gains. It would also send a chilling message that would bring further investment in vessels built in U.S. shipyards to a standstill.”

Roberts cited Crowley's investment in Puerto Rico service, including $500 million in port facilities, two new con/ro vessels powered by LNG, and its employment of 250 people on the island. Crowley is the leading carrier between the mainland and Puerto Rico, with more annual cargo carriage than any competitor; it also has the longest history with Jones Act trade to the island, with service since 1954. 

In addition, Roberts highlighted Crowley’s efforts with the maritime industry and the U.S. armed forces to increase opportunities for veterans to obtain maritime jobs. The industry projects a strong need for qualified mariners during the next decade, and service members’ training can make them ideal candidates. However, veterans experience difficulties receiving the necessary credentials through the Coast Guard for maritime licensing.

“I think it’s a function of finding a way of helping veterans find jobs, fill a need in the commercial side, and get mariners who are needed for our national security sealift purposes,” he said. “It can be done.”