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Marianas Variety

AS PUERTO Rico Delegate Pedro Pierluisi prepares for legislation proposing exemptions to the Jones Act, Sen. Rory Respicio has put out a request for Guam Delegate Madeleine Z. Bordallo to push for Guam's inclusion in the proposal.

Respicio introduced Resolution No. 138 in May, which urges the Guam delegate to support reforms to the Jones Act, aka the Merchant Marine Act of 1920.

The Jones Act requires that all goods shipped from the U.S. mainland to Guam and other noncontiguous jurisdictions be transported in U.S. carriers manned by U.S. crews.

Respicio, after introducing the resolution, said Guam and the other jurisdictions affected by the Jones Act continue to feel the adverse impact on the cost of shipping goods due to the restrictions imposed by law, which is an antiquated piece of legislation passed in 1920.

Noncontiguous areas impacted by the law include Guam, Alaska, Hawaii and Puerto Rico. Other U.S. jurisdictions such as American Samoa, the U.S. Virgin Islands and the CNMI are fully exempted from the restrictions.

However, the CNMI still pays full Jones Act freight rates despite the exemption because U.S. goods come from the mainland via Hawaii and Guam. For this reason, Respicio is also encouraging Bordallo to reach out to the CNMI Legislature.

Respicio said Pierluisi intends to introduce the bill sometime this month. The proposal sets a "bulk shipping exemption for the domestic Puerto Rico trade," according to the senator.

The bill, he said, may also include an exemption from the U.S. build requirement for certain ships that carry cargo in the domestic Puerto Rico trade.


Hawaii is also seeking a reprieve from the Jones Act. Respicio said the Hawaii Shippers Council (HSC) has proposed several amendments to the Act that would make it more equitable.

In a public hearing for Resolution 138, HSC President Michael N. Hansen provided supporting testimony to the lawmakers.

The HSC is a business league organization incorporated in 1997 to represent the interests of the cargo owners, who tender goods for shipment with the ocean carriers in the Hawaii trade.

The organization believes the best approach to Jones Act reform for Hawaii and Guam is to include the other noncontiguous jurisdictions encompassed by the Jones Act, namely Alaska and Puerto Rico. This approach, Hansen said, would create a single, coherent cabotage regime applicable across the noncontiguous trades.

He also said the reform should include an exemption of the noncontiguous domestic trades from the U.S.-build ship requirement of the Jones Act.

The cost of building oceangoing self-propelled ships in the United States is now approximately four to five times the cost of constructing a comparable ship in Japan and South Korea, Hansen pointed out.

Respicio said Pierluisi may be cautious about supporting the HSC’s noncontiguous trades Jones Act reform proposal until Guam and other congressional members of the noncontiguous jurisdictions have joined in support of such measures.

“I urge you to make your voice heard in support of Puerto Rico’s proposal, and to also ask for inclusion of Guam in the coverage," Respicio said.

The Puerto Rico Chamber of Commerce, he added, is discussing the Jones Act issue but has not taken an official position. As the process moves along, the senator said there may be an opportunity to put the Puerto Rico Chamber in touch with the Guam Chamber of Commerce and start increasing support for exemptions from that source.