Passenger Vessel Services Act of 1886 - why?

[edmartin]

Now that congress has passed a temporary waiver of the PVSA so that Alaska cruise tourism can start again, I'm curious why this law is still necessary at all in today's world?

I've read several articles on why it came to be in the first place... so this isn't anything against Grover Cleveland! But we're in a different world on 2021 than we were in 1886.

The quick version of the PVSA says that ships flagged/registered in a foreign country can not transport passengers between 2 US ports without stopping along the way in a foreign port. So, for example, you normally could not sail from Seattle to Juneau without stopping in some foreign port (Canada) mid-cruise. As most cruise ships are flagged in a foreign country (e.g. DCL ships are registered in the Bahamas), this means pretty much all cruise lines are subject to this law.

Without getting into some of the exceptions to this law, I'd like to try to understand why this law still needs to exist today? Instead of the act of congress to do the exception this year to help out Alaska tourism, it seems to me the time has come to just do away with this law.

Again, this isn't 1886. I can kind of understand why President Cleveland decided to protect things this way 135 years ago. But in 2021, it's not like a free-for-all where a random foreign cruise ship can set up shop in a US port and operate however they want. This is a regulated industry in 2021 no matter what flag you fly.

The cruise industry has a lot of issues to deal with right now. But it seems to me that now might be the time to push for elimination of the PVSA.

 

[Capt_BJ]

you are looking only at the cruise industry but the law covers more ..... think of every ferry IN the US .... example the Cape May ferry to Delaware ... or even the Staten Island ferry system ..... the law protects these routes too ......

There are big powerful unions and lobby groups that want to protect jobs to man and build these boats .... 'important' as the US can't compete in the world of building ships anymore without the 'protections' ....

 

[edmartin]

you are looking only at the cruise industry but the law covers more ..... think of every ferry IN the US .... example the Cape May ferry to Delaware ... or even the Staten Island ferry system ..... the law protects these routes too ......

There are big powerful unions and lobby groups that want to protect jobs to man and build these boats .... 'important' as the US can't compete in the world of building ships anymore without the 'protections' ....

Fair point. But I'm pretty sure no foreign entity could just show up in NYC and start running their own Staten Island Ferry. My point is that we are far more regulated in 2021 than we were in 1886. Seaports are as controlled as airports.

I'm sure there are many realms that I'm not aware of. But as far as the passenger cruise industry is concerned, I think we need to look beyond 1886.

 

[Cheburashka]

Fair point. But I'm pretty sure no foreign entity could just show up in NYC and start running their own Staten Island Ferry. My point is that we are far more regulated in 2021 than we were in 1886. Seaports are as controlled as airports.

I'm sure there are many realms that I'm not aware of. But as far as the passenger cruise industry is concerned, I think we need to look beyond 1886.

For as much as it protects American business and workers, I support it. So many of our other industries have been outsourced in the name of unbridled free trade. I'm glad to have anything that's still American.

 

[Keyser]

I'm honestly curious and don't know the answer: can foreign airlines provide air service directly between two US cities? I don't think this actually happens, but I'm curious if it's allowed. I'm not sure US carriers can provide service within other countries, either. It seems ship-based travel might follow similar rules (but, at least you can fly on non-US built planes...).

For the cruise industry, for a variety of reasons, if they were to change the current law, they'd probably want to find a way to distinguish "leisure" travel (where I think a lot of people would be willing to relax this rule) from other ferry/transportation services (where I think a lot of people would oppose relaxing the rule).

 

[winterwhite]

I'm honestly curious and don't know the answer: can foreign airlines provide air service directly between two US cities? I don't think this actually happens, but I'm curious if it's allowed. I'm not sure US carriers can provide service within other countries, either. It seems ship-based travel might follow similar rules (but, at least you can fly on non-US built planes...).

For the cruise industry, for a variety of reasons, if they were to change the current law, they'd probably want to find a way to distinguish "leisure" travel (where I think a lot of people would be willing to relax this rule) from other ferry/transportation services (where I think a lot of people would oppose relaxing the rule).

Technically yes, but in practice it rarely happens for a number of reasons. The advent of code sharing in the late 80s effectively made the practice pointless, since domestic flights could then be sold as any airline and the actual administrating carrier could be domestic.

 

[Sykes]

I'm honestly curious and don't know the answer: can foreign airlines provide air service directly between two US cities? I don't think this actually happens, but I'm curious if it's allowed.

They cannot. The Chicago Convention is an international treaty that basically applies to planes more or less the same cabotage rules that apply to ships. There has been some liberalization since the convention was adopted in 1944, but generally speaking a foreign airline can't provide wholly domestic service. (Wikipedia has a really interesting article on "the freedoms of the air" as it relates to this topic and liberalization--most cruise lines operate under what would be considered the "7th freedom" in the airline paradigm, which isn't allowed in most cases.)

For example, prior to COVID, Cathay Pacific, a Hong Kong Airline, operated a flight that was Hong Kong->Vancouver->New York. They would have almost certainly preferred to fly Hong Kong->San Francisco/Los Angeles->New York, but they couldn't because they couldn't carry passengers on a wholly domestic segment. Similarly, United Airlines, a US carrier, flew San Francisco->Sydney, AU->Melbourne, AU, but it was illegal for passengers to fly only on the Sydney<->Melbourne segment--they had to fly onward from or to the US.

 

[HiStitch626]

Virgin Atlantic wanted to expand their flights in the United States and were not able to do so because of being foreign owned, so US based Virgin America was created. Virgin America was great while it lasted, but they were absorbed into Alaska Airlines back a couple of years ago.

 

[edmartin]

Great info & insight on airlines! Applying this "through the looking glass" to DCL... While the DCL ships are registered in the Bahamas, Disney Cruise Line's official HQ is Celebration, FL and (obviously) it is owned by the Walt Disney Company (official HQ in Burbank, CA). The company is US-owned and US-based. So the PVSA is applied to the registration of the cruise ship, not the company that owns it. I guess the parallel to the airlines would be if Delta registered one of their planes in the EU, then that particular plane would be subject to The Chicago Convention rules that Sykes mentioned. Really interesting!

 

[Starwind]

Great info & insight on airlines! Applying this "through the looking glass" to DCL... While the DCL ships are registered in the Bahamas, Disney Cruise Line's official HQ is Celebration, FL and (obviously) it is owned by the Walt Disney Company (official HQ in Burbank, CA). The company is US-owned and US-based. So the PVSA is applied to the registration of the cruise ship, not the company that owns it. I guess the parallel to the airlines would be if Delta registered one of their planes in the EU, then that particular plane would be subject to The Chicago Convention rules that Sykes mentioned. Really interesting!

My understanding is its even more complicated: to be a US flagged ship, the ship has to be registered in the US, be built in a US shipyard, meet US safety rules, and have a US crew.

SW

 

[cgolf]

So can they wave this for the cruise industry since there is almost no chance that a cruise ship will be built in the US in the near future? Who knows the flags of convenience may even end, not likely but never say never.

What drives me nuts is seeing a certain cruise lawyer, that fully understands why the ships are not flagged to the US, get people worked up on how unethical cruise lines are because they are flagged in another country. They also don't correct the people that complain that they should be flagged here. People like that could have some credibility if they would be honest about everything.

 

[sethschroeder]

I'm curious why this law is still necessary at all in today's world?

To protect US employees from basically being told that US labor law, safety requirements, and other aspects don't apply to them.

Fair point. But I'm pretty sure no foreign entity could just show up in NYC and start running their own Staten Island Ferry. My point is that we are far more regulated in 2021 than we were in 1886. Seaports are as controlled as airports.

Why couldn't a foreign entity start running ferry boats and other vessels? If there was some limitation where the crew couldn't stay on land you simply either have bunks on the ship or get a house boat of sorts.

Who knows the flags of convenience may even end, not likely but never say never.

Doubt it unless they were exempt of all US taxes and labor laws. Thats the whole point to begin with from my understanding why they do it to start with.

 

[edmartin]

The nuances of the law(s) are definitely interesting - and that's why I asked the original question... because I wanted to try to understand it better. Thanks for lots of great info! But maybe the real question is what is the economic reason that the PVSA still stands? Because if the businesses and/or economies impacted by this wanted to make a change... they would (or they would certainly fight for it). As the phrase goes, "follow the money". Case in point - 2021 cruises to Alaska. Canada is still closed to cruising. Alaska government (tourism) needs help. US Congress passes a temporary waiver to make it happen. And I think that's great! But the bigger issue isn't "temporary".

If you are the government of the Bahamas (for example), you set up a situation where US cruise lines have economic incentive to register their ships there. In return, the cruise lines agree to visit the Bahamas. Good for the Bahamas! And then DCL even leases an island (with another hopefully following) in the Bahamas for their cruises delivering jobs and other revenue. Good for them!

But I'm not sure the lobbying groups for the Bahamas (or Panama or other countries where cruise lines typically register their ships) are big enough to take on the US congress and the US-based cruise lines if they wanted to modify the PVSA. Is it really just as simple as the US-based cruise lines just don't care about itineraries that hop between only US (and US territorial) ports? I have trouble believing that. Wouldn't an east coast cruise from let's say Boston to Key West & back (with stops along the east coast) be fun? Same for the west coast. How about just the 4 US Virgin Islands out of Florida or Texas? Or how about San Diego to Hawaii?

 

[cgolf]

Doubt it unless they were exempt of all US taxes and labor laws. Thats the whole point to begin with from my understanding why they do it to start with.

It would be really tough to comply with US labor laws, especially the pay aspect. Our minimum pay would make many a lot more than they could make at home. That would be like me asking my WI employer to pay me the same as someone on west or east coast. Cost of living varies widely here as well, even southern to northern WI there is a difference.

 

[Capt_BJ]

if you'd like to read more about PVSA and the cargo companion Jones Act try gCaptain.com ... just put either into the search on their forums and you'll find plenty of discussion usually from folks in the industry ... many from OUTSIDE the US . . .

Example: https://forum.gcaptain.com/t/maritime-law-and-number-of-us-ports-foreign-vessels-can-do/637/5

 

[Sykes]

I guess the parallel to the airlines would be if Delta registered one of their planes in the EU, then that particular plane would be subject to The Chicago Convention rules that Sykes mentioned. Really interesting!

I don't want to get too far off topic (because I could talk about the regulation of airlines for hours at a time), but for airlines it's the ownership of the operator of the plane that really matters, not necessarily ownership of the plane itself. Under your scenario, Delta couldn't just register a plane in the EU, they'd need to operate it under a subsidiary that is controlled by and >50% owned by an EU entity, on a separate operating certificate overseen by the EASA (the EU's equivalent of the FAA). Flags of convenience in aviation are fairly newly controversial because of Norwegian Airlines practice of forming subsidiaries in relatively tax and labor friendly EU countries to provide domestic EU transportation. (Although their financial troubles has made that less of an issue lately.)

 

[sethschroeder]

Wouldn't an east coast cruise from let's say Boston to Key West & back (with stops along the east coast) be fun?

Wouldn't it be fun to pay 10%-25% of the cost at your local tourist destination as well? Fairly certain they could easily find people from outside the US to take those jobs if the US government allowed it.

The gap is only going to get larger with more push for state and federal minimum wage of $15.

The question would be could a Mississippi tour operator also be able to remove the requirement to follow various US laws and requirements? They would be no different than the Boston to Key West route.

Also I am 100% fine with increasing and fixing immigration but I don't think they should just be viewed as cheap labor that is not protected.

 

[Intr3pid]

Yes, it's an old piece of law that protects very little in the cruise industry. If it was protecting anything, you would see US operators building cruise ships today.

NCL, the owner of the only US-flagged, ocean-going cruise ship, constantly complains about how difficult it is to find 100% American crew to work on cruise ships. There are hardly any jobs needing protection.

Why have the cruise ship operators not pursued it?

1. There is very little demand for cruising between just the US ports (probably Hawaii excluded). Sure, it would be fun to sail from NYC to Key West once in a while, but you can't sink billions of dollars of shipbuilding, registration, and crewing into such seasonal trips.

2. Cruising has a competitive advantage against other forms of vacation travel when sailing out of Florida (or other southern ports) into the warmer Caribbeans waters. You can just drive to your cruise port - and you can do it all year round. You can also visit multiple beach destinations in one trip. Operating between US ports negates most of this advantage.

3. Cruise fares are one of the biggest draw. If you build ships in an inefficient US yard and pay inflated US wages to operate the ships, those fares will be history. Just compare the fares on NCL's Hawaii trips with those on their other ships. A big proportion of the US market is able to cruise today because of the low fares.

 

[DVC Doc]

Great info & insight on airlines! Applying this "through the looking glass" to DCL... While the DCL ships are registered in the Bahamas, Disney Cruise Line's official HQ is Celebration, FL and (obviously) it is owned by the Walt Disney Company (official HQ in Burbank, CA). The company is US-owned and US-based. So the PVSA is applied to the registration of the cruise ship, not the company that owns it. I guess the parallel to the airlines would be if Delta registered one of their planes in the EU, then that particular plane would be subject to The Chicago Convention rules that Sykes mentioned. Really interesting!

Not exactly true! Disney Cruise Line is actually Magical Cruise Company Limited d/b/a Disney Cruise Line and incorporated in London, UK. It is still a subsidiary of TWDC, but as you suggested the PVSA applies to the flag under which the ships sails.

 

[tvguy]

Now that congress has passed a temporary waiver of the PVSA so that Alaska cruise tourism can start again, I'm curious why this law is still necessary at all in today's world?

I've read several articles on why it came to be in the first place... so this isn't anything against Grover Cleveland! But we're in a different world on 2021 than we were in 1886.

The quick version of the PVSA says that ships flagged/registered in a foreign country can not transport passengers between 2 US ports without stopping along the way in a foreign port. So, for example, you normally could not sail from Seattle to Juneau without stopping in some foreign port (Canada) mid-cruise. As most cruise ships are flagged in a foreign country (e.g. DCL ships are registered in the Bahamas), this means pretty much all cruise lines are subject to this law.

Without getting into some of the exceptions to this law, I'd like to try to understand why this law still needs to exist today? Instead of the act of congress to do the exception this year to help out Alaska tourism, it seems to me the time has come to just do away with this law.

Again, this isn't 1886. I can kind of understand why President Cleveland decided to protect things this way 135 years ago. But in 2021, it's not like a free-for-all where a random foreign cruise ship can set up shop in a US port and operate however they want. This is a regulated industry in 2021 no matter what flag you fly.

The cruise industry has a lot of issues to deal with right now. But it seems to me that now might be the time to push for elimination of the PVSA.

I think the basic reason it remains on the books is because, until the pandemic, there were few or no problems created by it .
The first major problem came when Canada imposed the ban on cruise ships with more than 100 passengers through February 2022. And Canada made it clear there was no way they would reconsider easing the ban.