NEWSFLASH: GAO report analyzes Jones Act’s impact on Puerto Rico trade

   The Government Accountability Office Wednesday released a report on shipping between Puerto Rico and the United States and possible modification of the Jones Act requirement that vessels participating in the trade be registered in the United States, crewed by U.S. citizens, and built in a U.S. shipyard. 
   The report, prepared at the request of Pedro Pierluisi, Puerto Rico’s representative in the U.S. House, said “Shippers doing business in Puerto Rico that GAO contacted reported that the freight rates are often—although not always—lower for foreign carriers going to and from Puerto Rico and foreign locations than the rates shippers pay to ship similar cargo to and from the United States, despite longer distances.”
   However, the congressional watchdog agency added “data were not available to allow us to validate the examples given or verify the extent to which this difference occurred. According to these shippers, lower rates, as well as the limited availability of qualified vessels in some cases, can lead companies to source products from foreign countries rather than the United States.”
   GAO also noted “average freight rates of the four major Jones Act carriers in this market (Horizon, Sea Star, Crowley and Trailer Bridge) were lower in 2010 than they were in 2006, which was the onset of the recent recession in Puerto Rico that has contributed to decreases in demand.”
   GAO said the effects of modifying the application of the Jones Act for Puerto Rico are highly uncertain, and various trade-offs could materialize depending on how the Act is modified….