UPDATE July 3, 2013:  Although La Alianza Maritima de Puerto Rico (The Maritime Alliance of Puerto Rico) has not authorized release of their “Maritime Industry in Puerto Rico” report dated May 3, 2013,  an independent source has leaked the report to us.  Read >>> HERE

Puerto Rico Jones Act Industry’s report needs public review

by Michael N Hansen, Hawaii Shippers Council July 1, 2013

About a year ago the Jones Act industry in Puerto Rico commissioned a study of their trade that was completed in May 2013 by a prominent local economics consulting company.  While certain results of the study have been selectively released, the whole report has not been made available to the public thus avoiding a thorough and open review of the study..

The report was prepared by Estudios Tecnicos Inc., entitled “The Maritime Industry in Puerto Rico”, and dated May 3, 2013.  It was prepared for La Alianza Maritima de Puerto Rico (The Maritime Alliance of Puerto Rico), which is an industry trade association representing Jones Act ship operators and maritime unions in the domestic Puerto Rico trade. We understand the report is the property of the Alliance, which is withholding it from the public.

The Alliance is closely affiliated with the American Maritime Partnership (AMP), the primary nationwide Jones Act industry trade association.  The AMP was established in the mid-1990’s as the Maritime Cabotage Task Force to oppose the Jones Act Reform Coalition (JARC) led by Mr. Rob Quartel.

Mr. Jose Joaquin Villamil, President & CEO, Estudios Tecnicos, was the primary author and has been the public face of the report in Puerto Rico. Mr. Eduardo L. Pagan, Vice President & General Manager for Puerto Rico & Caribbean, Sea Star Line, LLC, is also Treasurer and primary contact person for the Alliance.  Mr. Pagan was apparently the person responsible for commissioning the study.

Sea Star Line, a subsidiary of TOTE Inc., is one of the five ocean common carriers now providing container services in the domestic Puerto Rico trade.  TOTE also operates ocean container services in the Alaska trade under the name of Totem Ocean Trailer Express.  TOTE is part of the privately-held, Seattle-based Saltchuk Resources Inc., group, which also owns: Hawaiian Tug & Barge / Young Bros. Ltd., an interisland ocean common carrier in Hawaii; Aloha Air Cargo, interisland air cargo carrier in Hawaii; Foss Maritime, a major U.S. West Coast tug and barge operator, and Northern Air Cargo, the major intrastate air cargo carrier in Alaska..

The results of the study were reported in two recent news articles published in May 2013 by Caribbean Business. Those two articles appear to be the only publically available source of information regarding the report.  The first article appeared on May 16, 2013, ”Jones Act leads to savings of $120.8 million”,written by Dennis Costa.  The second article was written by Alex Diaz,“This should end the debate (A tough act to follow; New study points to big gains from the Jones Act)”, which appeared on May 30, 2013.

Over the last weekend in June 2013, a web-based business magazine in Puerto Rico, News is My Business, published two opinion-editorial pieces regarding the Alliance report.  On Friday, June 28th, News is My Business published “Against the Jones Act” by Vicente Feliciano, President, Advanced Business Consulting.  Mr. Feliciano is based in San Juan and was critical of the Alliance report.  He correctly points out several problems with the report as it was described in Caribbean Business.

On Monday, July 1st, News is My Business published “The Jones Act” by Mr. Villamil, who extols the virtue of his report and states that the full application of the Jones Act provides great benefits to Puerto Rico, without really providing any data or substantial analysis.   Mr. Villamil’s point of view is understandable because he was commissioned by the Jones Act industry to write the report.

Based upon Caribbean Business’ reporting, it’s clear the Alliance wants the conclusions of their report to become the basis for public policy making in regards to the Jones Act and other domestic shipping regulations as they may impact Puerto Rico.  And, by extension, if generally accepted, the results of the Alliance report could also have implications, at least in part, on regulatory matters in the other noncontiguous domestic trades – namely, the Alaska, Guam and Hawaii trades.

If the Alliance wants their report to become a basis for public policy making, we must insist that the Alliance report become part of the public domain and subject to public and peer review.  Otherwise, we cannot see how anyone can seriously consider the report useful for public policy making purposes.

In addition to releasing their report, we also believe it would be very helpful if the Alliance would identify its membership in the interest of full disclosure.

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