Cabotage Laws and Maritime Monopoly over Puerto Rico

Cabotage — the restriction of maritime trade between domestic ports to national-flag vessels — has been applied to Puerto Rico since the Foraker Act of 1900, even before the more well-known Jones Act of 1920 formalized and strengthened the requirement.

The Law:
- All goods shipped between U.S. ports (including Puerto Rico) must travel on vessels that are:
- Built in the United States
- Owned by U.S. citizens or companies
- Crewed by U.S. citizens or permanent residents
- Registered under the U.S. flag
- This applies to all commercial cargo: food, fuel, building materials, consumer goods, medicine, etc.

Cost Impact:
- American-built ships cost 4-5 times more than comparable foreign-built vessels
- American crews cost significantly more than international maritime labor
- These costs are passed directly to Puerto Rican consumers
- Studies estimate the Jones Act adds 15-20% to the cost of goods in Puerto Rico
- The Federal Reserve Bank of New York (2012) found that shipping costs to Puerto Rico are roughly twice those to nearby Caribbean islands not subject to the Jones Act
- A University of Puerto Rico study estimated the annual cost to Puerto Rico at $1.1 billion

Specific Impacts:
- Food: Puerto Rico imports approximately 85% of its food. Jones Act shipping costs make food more expensive than it would be under free shipping.
- Fuel: All petroleum products arrive by Jones Act-compliant vessels. Energy costs in Puerto Rico are 2-3 times mainland average.
- Construction materials: Post-hurricane reconstruction is made more expensive by shipping cost premiums on building materials.
- Medicine: Pharmaceutical imports for the island's 3.2 million residents cost more due to shipping restrictions.

Political History:
- Multiple studies (GAO, Fed NY, UPRM) have documented the cost burden
- Waiver requests after hurricanes have been denied or delayed
- After Hurricane María, a temporary Jones Act waiver was granted for only 10 days
- Hawaii, Alaska, and Guam are also subject to the Jones Act, but Puerto Rico bears the heaviest burden due to its distance from mainland ports and high import dependency
- The American maritime industry lobbies aggressively to maintain the law

Colonial Dimension: No sovereign nation would voluntarily impose such restrictions on its own trade. The Jones Act exists because Puerto Rico is a territory whose economic policies are set by Congress, where Puerto Rico has no vote. The law benefits American shipbuilders and maritime unions at the direct expense of Puerto Rican consumers — a textbook case of colonial extraction.