Federal Court Halts Selective Implementation of Enhanced Cargo Inspections in Puerto Rico

By MarEx 2011-03-29 11:11:56

A U.S. District Court in San Juan issued a temporary restraining order on Friday in favor of Crowley Puerto Rico Services, Inc. The order prevents the Puerto Rico Ports Authority from beginning security inspections of Crowley's customers' cargo coming into the island from the U.S. mainland, while not inspecting the cargo of Crowley's competitors.

The Ports Authority eventually plans to inspect all cargo coming onto the island from the U.S. mainland. It is months away, however, from being ready to do so at facilities operated by Crowley's competitors. There are no plans to carry out similar inspections of cargo coming from foreign locations.

Crowley's concern is that conducting the inspections solely at Crowley facilities would not improve security and yet put Crowley at a severe competitive disadvantage.

"We very much support the Puerto Rico government's goal in trying to deter smuggling weapons and other contraband onto the island," said John Douglass, senior vice president and general manager of Crowley's Puerto Rico service. "But this is not the way to do it. Any contraband would simply be shipped from a foreign port, or on a different carrier from the mainland." He added that uncertainty over potential delays resulting from the inspection program will likely drive legitimate business to other carriers.

Mike Roberts, Crowley senior vice president and general counsel, noted that implementing the inspection program with a single domestic carrier would not significantly impact security, and added that such discriminatory treatment violates several legal standards.

"The important message for our customers is that cargo shipped with Crowley goes through the same security process as cargo shipped on any other carrier," added Douglass. "We have no choice but to make sure we are not singled out, so that if and when security screening is instituted, it is applied uniformly across all carriers."

Crowley, the number one carrier in the trade, has served the shipping needs of Puerto Rico since 1954, transporting more than 3 million units between the commonwealth and the U.S. mainland. Crowley also has helped to bolster the Puerto Rican export economy by transporting food, pharmaceuticals, rum and other consumer goods to U.S. mainland. In addition to cargo transport, Crowley also offers several value-added services on the island, including warehousing, trucking, LCL transportation and last-mile-delivery, as well as cargo consolidation, deconsolidation and cross-docking.