Connections Magazine

Summer 2016

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the case with calls to exempt the island from the Jones Act, a longstanding law requiring people and cargo moving between U.S. ports to be transported on U.S.-built, owned and crewed vessels. The argument that the Jones Act has somehow contributed to Puerto Rico's misfortune is flat out wrong and without any basis in fact. The most recent Government Accountability Office (GAO) study in 2012 concluded that there were far too many factors impacting the price of a consumer good to determine the supposed cost related to shipping, much less the Jones Act. And, the GAO said, one could not truly estimate the cost unless one knew which American laws would be applied to foreign ships if they were allowed to enter the domestic trades, which would certainly increase the cost of foreign shipping. I know for a fact that our shipping rates between Puerto Rico and the mainland are lower than they are between the U.S. and any other Caribbean island we serve with foreign ships. Exempting Puerto Rico from the Jones Act would actually harm, not help, the local economy. As the GAO pointed out, there is a significant possibility that the people of Puerto Rico would lose the frequent, direct, competitive and stable shipping services currently enjoyed. Exemption would also have a chilling effect on U.S. maritime investment, which currently exceeds $1 billion in new assets, infrastructure and jobs. Crowley alone is investing more than half of that in new environmentally friendly, LNG-powered ships, and in a new pier, cranes, and other terminal improvements in San Juan. There are hundreds of good, family-wage jobs being created from this unprecedented investment, both in Puerto Rico and on the mainland. And there are opportunities to add many more. Considering that about 65 percent of the containers being shipped northbound out of Puerto Rico are empty, there is a significant rate advantage for exporters, which should be a motivating factor to introduce competitive production capability on the island and grow jobs. Also, our expanded port and logistics hub in San Juan will offer improved connectivity with the Caribbean islands creating additional manufacturing and import- export opportunities for Puerto Rico. Aside from the economic benefits the Jones Act provides to Puerto Rico and the rest of the country as a whole (500,000 jobs, $100 billion in annual economic output and $29 billion in annual wages), the Act ensures there are U.S. ships, mariners and shipbuilding capability for our homeland security and national defense. There is nothing to gain and much to lose if the Jones Act is weakened. Such would be the case if Puerto Rico was exempted from the law, which is why it should never be allowed to happen. Sincerely, Tom Crowley From Tom Crowley Jr. Chairman and CEO Crowley Maritime The Jones Act As most of you know, Puerto Rico is in financial trouble and has been for some time. Faced with many years of a weakening economy, Puerto Rico's government did what governments tend to do in such situations — it borrowed money, not for investment, but to pay bills, hoping something would change and hard decisions could be avoided. But each year, the bills grew to pay debt and meet people's needs. The Puerto Rican government has now reached the point where it cannot possibly repay all that it owes. Something must change. Having served the island commonwealth for more than 60 years with transportation and logistics services, we are deeply concerned about the economic well- being of the island, and have supported congressional intervention to help the local government reestablish accountability. As with most crises, some people have looked to take advantage of the situation by advancing their agendas with false premises and misinformation. Such is

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