On May 1, Puerto Rico Gov. Alejandro Garcia Padilla announced the country would default on a $422 million bond payment. The
announcement was a harbinger of more defaults this
year for the island nation that could amount to upward
of $3 billion on general-obligation bonds, setting in
motion one of the most serious crises ever faced by the
U.S. municipal bond market.
U.S. lawmakers, members of industry, and an array
of government and private-sector maritime stakeholders had been girding for the grim news well before
the official statement, staging a series of hearings and
meetings over the past several months on Capitol Hill
to address Puerto Rico’s economic troubles and how to
assist the U.S. commonwealth.
Still, in spite of its economic trials — and amid
rumors of a Jones Act exemption for Puerto Rico as
part of an economic relief package — leading U.S.
shipping companies with longstanding trade ties to the
island nation voiced steadfast support for its economy
and the need to maintain and expand the relatively
stable shipping trade there, which, in turn, strengthens
the U.S. domestic shipping industry.
As part of a series of hearings entitled “The State of the U.S. Maritime
Industry: Stakeholder Perspectives,”
Michael Roberts, senior vice president and general counsel for Crowley
Maritime Corp., said the following in
April 20 testimony before the Senate
Commerce, Science & Transportation
surface transportation and Merchant
Marine infrastructure subcommittee:
“Carriers in the [Puerto Rico] trade
have supported efforts by political
leaders on the island and on Capitol
Hill to develop a legislative package
that will help stabilize the economy.
In general, the carriers and other
mainland businesses interested in
Crowley is committed to an ongoing $500 million
investment in the Puerto Rico trade, which includes
plans to combine its facilities there into a single logistics
service center, amounting to one of the larger capital
projects on the island in the city of Guaynabo. The company also recently broke ground on a construction project for a new pier at its Isla Grande Terminal in San Juan.
In addition to Crowley’s investments, TOTE
Maritime has deployed two new ships in the Puerto
Rico trade that are the first liquefied natural gas-
(LNG-) powered containerships in the world.
For its part, Crowley is renewing its fleet with two
new LNG-powered ConRo (combination container and
Roll-On/Roll-Off) ships to be delivered in 2017-2018.
Puerto Rico’s Paradox
Amid the nation’s escalating debt crisis,
U.S. shippers are steady when it comes to island trade
By DAISY R. KHALIFA, Special Correspondent
Jones Act Debate
The debate in Washington over an economic relief package for
Puerto Rico has included a push to exempt the island nation from
adherence to the Jones Act.
n The Jones Act requires that all cargo shipped between U.S.
domestic ports be carried on vessels that are U.S. built, owned,
crewed and registered.
n The law does not prohibit foreign shippers from doing business
with Puerto Rico.
n Jones Act shippers have made significant investments in the
island and plan to continue to do so.