CSCMP's Supply Chain Quarterly
October 21, 2018
Forward Thinking

Trump's Jones Act waiver to aid Puerto Rico, Virgin Islands may not solve near-term problem

Stevedores want cash to move boxes, but many banks aren't open to provide it, says Kathy Fulton of the American Logistics Aid Network.

In a move designed to rush more emergency supplies to storm-ravaged Puerto Rico and the U.S. Virgin Islands, the Trump Administration today temporarily waived the 97-year-old Jones Act which bars foreign-flag vessels from serving U.S. trades. However, the problem isn't getting goods on the water, it's moving them inland once they arrive, according to the executive director of the American Logistics Aid Network (ALAN), a nonprofit group which connects logistics resources with organizations involved in disaster recovery efforts.

For example, an estimated 10,000 containers containing relief supplies are sitting idle at the Port of San Juan in part because stevedoring companies tasked with moving them require cash or money orders to do the work, Kathy Fulton said in a phone interview yesterday. However, most of the commonwealth's financial institutions have been unable to open due to the lack of power or because they have suffered physical damage from the devastating impact of Hurricane Maria, she said.

What's more, there is a shortage of trucks needed to haul the boxes because of a lack of fuel, the impassibility of many Puerto Rico's roads, and little hope of getting in touch with drivers because the island's communications systems have been badly compromised.

In the short term, the 10-day waiver of the Jones Act may do more harm than good if it stimulates further traffic flows and pushes even more boxes onto the port where they can't be moved, Fulton said.

Another problem for the islands, according to international aid executives, is that the U.S. has a dearth of tarps and tents because they are being used in recovery efforts following Hurricane Harvey, which crushed Houston and the Texas Gulf Coast, and Irma, which badly damaged the Florida Keys and the state's lower west coast. Most tarps and tents are produced abroad, but there aren't many direct sailings to and from Puerto Rico. In that scenario, the Jones Act could be beneficial should the equipment be shipped to a U.S. gateway such as Miami, placed aboard a foreign-flag vessel and then delivered to the islands, according to executives.

The flow of relief supplies into San Juan Luis Muñoz Marín Airport has been frustratingly slow due to lack of power on the airfield and extreme congestion that has reduced the number of landings to a trickle. Fulton said the airport should be regaining power over the next two days, which will open up more landing slots and get more supplies into the commonwealth.

International aid executives said relief efforts in Puerto Rico have also been hindered by what they say is a cumbersome customs bureaucracy.

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