Non American flagged ships traveling from one U.S. port to another

[geonna]

Is it a Federal law that and non-U.S. flagged ship may not carry passangers from one U.S. port directly to another without a stop at a foriegn country first? I recently read this in the book "Devils and the Deep Blue Sea". (I think that's the title; it's out in the car right now). Anyone know anything about this? Thanks!

[JeannyCT]

As far as I know at least one port has to be in a country other than the USA. Think of all Alaska/Hawaiian cruises: most start in Vancouver or have a stop in Victoria, but do several stops in Alaska in a row; most travel to the Hawaiian islands and Kiribati/Fanning Island or another remote island.

[FrankenLouis]

True: As long as the non us ship calls at a non us port at some point on the cruise it is ok. It does not require it to be in any order, just as long as it hits a non us port on the trip.

[wrp96]

There is a federal law called the Passenger Service Act which prevents non-US ships from transporting passengers between two US ports unless they stop at a distant foreign port though. So what that means for almost all cruise ships is:

If you leave from one US port and return to that same US port, the ship only has to stop in any foreign port.

If you leave from one US port and go to another US port, the ship has to stop in a distant foreign port, which in the Caribbean generally means the ABC islands (Aruba, Bonaire, Curacao).

If the ship or even just a passenger violates this rule, then there are fines imposed, usually $300 per passenger.

[RuthC]

wrp96 summed it up nicely in a few short sentences. Clear and concise.
Thanks.

[geonna]

Thanks, wrp96, for that clear answer. I wondered why we could leave Port Everglades and go straight to Key West, but now I understand.

[jhannah]

This law needs to be repealed. It is crazy. Designed to protect US-built ships, who could it hurt these days?

Competition with the airlines? Please! People who need to get from NYC to Miami are going to fly or drive ... either mode quicker than taking a ship.

I think it would open up a whole new market for us consumers to have city-to-city accessibility. Imagine having a deluxe sort of ferry service between, say, Los Angeles and Seattle ... or Boston and Miami.

[kakalina]

We were told in Oct on the Veendam that the cruise associations in conjunction with cruise lines were working very hard towards having the Jones Act rescinded.

There is much more detailed information on this subject in a previous thread. Some searching by the OP should get the info needed.

[bruce-r]

I think it is also referred to as the Jones Act. HCL has the exception with their NCL America deal to sail the Hawaiian islands without a foreign stop. They had to agree to employ mostly Americans as crew, which seems like a challenge for them. None of their ships were American built.

[jhannah]

There is a difference in the two laws.

The Jones Act (aka Merchant Marine Act) is a United States (http://en.wikipedia.org/wiki/United_States) Federal statute (http://en.wikipedia.org/wiki/Federal_Government_of_the_United_States) that requires U.S.-flagged vessels to be built in the United States, owned by U.S. citizens, and documented under the laws of the United States. Documented means "registered, enrolled, or licensed under the laws of the United States." In addition, all officers and 75% of the crew must be U.S. citizens. Vessels that satisfy these requirements comprise the "Jones Act fleet".

The Jones Act also allows injured sailors (http://en.wikipedia.org/wiki/Sailor) to obtain damages from their employers for the negligence of the ship owner (http://en.wikipedia.org/wiki/Ship), the captain (http://en.wikipedia.org/wiki/Captain), or fellow members of the crew. It operates simply by extending similar legislation already in place that allowed for recoveries by railroad (http://en.wikipedia.org/wiki/Railroad) workers and providing that this legislation also applies to sailors.

The Passenger Services Act is a piece of legislation which came into force in 1886 relating to cabotage. Essentially, it says:
Foreign vessels shall transport passengers between ports or places in the United States, either directly or by way of a foreign port, under a penalty of $200 for each passenger so transported and landed.

Some exceptions have been made to the requirement of the Passenger Services Act. For example, Canadian vessels may transport passengers between Rochester and Alexandria Bay, New York. The law has had an interesting consequence with regard to the cruise ship industry within the State of Hawaii. Foreign-flagged cruise ships may carry passengers between ports in the Hawaiian Islands as long as no passenger permanently leaves the vessel at ports other than the origination port and the vessel makes at least one call at a foreign port. NCL has introduced new US-flagged Pride of Aloha and Pride of America to avoid this tedious 4 day at sea foreign-port call. Previously, with its foreign-flagged vessels, NCL needed to include a time-consuming detour to Fanning Atoll on its Hawaiian itineraries. And such journeys apart from the Islands are required for all foreign-flagged vessels.

[bruceh4]

The passenger services act is the reason you see HAL ships sailing from San Diego to Hawaii and back make a service call in Ensenda. Or again sailing from Seattle to Hawaii and returning to Vancouver. In this day and age the passenger services act is not needed. As Jim said it was to protect american ships. How many american cruise ships can you count on one hand! NONE:eek:

[noblepa]

The laws in question apply to American flagged vessels. I don't believe that the vessels must be American built. The NCL ships are American Flagged, which requires that the crew and officers be American and that they pay US minimum wages.

The laws apply to airlines, as well. For example, Lufthansa or Air France can fly from Europe to Chicago, with a stop for fuel in New York, but they can't take on any passengers in New York. A US airline, such as United or American is free to fly a French-built Airbus aircraft anywhere in the US, but Lufthansa can't fly a US built Boeing aircraft from one US city to another.

BTW, NCL owns the S.S. United States, built in 1952 and currently rusting away in Philadelphia. They claim that they want to use it in their American flagged fleet. She still holds the record as the fastest ocean liner ever built. Her top speed was about 45 mph. That's twice as fast as most cruise ships. Unfortunately, she hasn't gone anywhere under her own power since 1969.

Paul Noble

[RuthC]

The laws in question apply to American flagged vessels. I don't believe that the vessels must be American built. The NCL ships are American Flagged, which requires that the crew and officers be American and that they pay US minimum wages.
At least originally they had to be US-built. I believe that NCL had to have special legislation passed to allow them to have their non-US-built ships on the Hawaii itinerary.

[Navy_Chief]

BTW, NCL owns the S.S. United States, built in 1952 and currently rusting away in Philadelphia. They claim that they want to use it in their American flagged fleet. She still holds the record as the fastest ocean liner ever built. Her top speed was about 45 mph. That's twice as fast as most cruise ships. Unfortunately, she hasn't gone anywhere under her own power since 1969.

Hmmmm.....I wondered what ever happened to her. She was "Rusting Away" in Norfolk for the longest time. I remember seeing the news when they took her out of there, just had forgotten all about her.

[dougnewmanatsea]

Designed to protect US-built ships, who could it hurt these days?
In the cruise business, mainly NCL, but I think they'd probably be glad to switch their Hawaii ships to a foreign flag if they could do it, even though it would open up competition.

However, there is a lot of cargo traffic between US ports and as a result the shipping companies and unions are entrenched in favor of these laws.

Yes, I know that pasenger shipping and cargo shipping are covered by different laws, but if the Passenger Services Act were to be repealed, the shipping lines and the unions would see it as a threat to the Jones Act, so even though they wouldn't be directly affected by repealing the PSA, they would still fight it, and have fought it tooth and nail.

In the airline industry there are somewhat similar rules that require airlines to be US-owned, the aircraft to be registered in the US, and the crews to be US citizens. The main difference is that airlines are allowed to use foreign-built aircraft on domestic US flights.

I think it would open up a whole new market for us consumers to have city-to-city accessibility.
This would be fairly simple to acheive were it not for the requirement that the ships be built in the US... Really the biggest sticking point. This really is a case where nobody is being protected as there are no US shipyards with a clue how to build a cruise ship or a large ferry. Nobody has done it in 48 years!

But yet again it comes down to the opposition of the unions and the (cargo) shipping companies. Allowing foreign-built ships would be seen as a sort of "erosion" of these laws, and a step towards repealing them (which is probably true)... So again they will try to block it.

Back in the early 1980s a former NCL executive named Bruce Nierenberg convinced the Danish shipping company DFDS to start a European-style cruise ferry service between New York and Miami. It was a brilliant idea - except that the ferry would have to be foreign-flagged. Nierenberg convinced DFDS that they could get an exemption to the Passenger Services Act. Anticipating this, DFDS ordered a new ship, the SCANDINAVIA, from France and created a new company called Scandinavian World Cruises to manage the operation. Unfortunately, the Danes totally understimated the protectionist interests in the US and didn't get their legislation. Thus, they had to resort to using the new ship from New York to Freeport in the Bahamas, and then transferring passengers and cars to smaller ships to sail from Freeport to Miami. Unsurprisingly, this was a big flop and only lasted a few years before the SCANDINAVIA was recalled home to Europe. (Eventually she became the cruise ship STARDANCER, then VIKING SERENADE, and finally ISLAND ESCAPE.) Scandinavian World Cruises and the smaller ships were sold off to investors backed by the former DFDS executive Niels-Erik Lund, who had been appointed by DFDS to run Scandinavian World Cruises, and became the day gambling cruise line SeaEscape.

So the first and pretty much only experiment in European-style cruise ferry service ended very unhappily indeed, with huge losses for the unfortunate investors DFDS. Mr. Nierenberg went on to found Premier Cruises of "Big Red Boat" fame, then left to run Costa's US operations were he created the ill-fated American Family Cruises (the Premier idea taken one step too far), then back to Premier to try to salvage them after a disastrously unsuccessful merger (a valiant but ultimately unsuccessful effort), and finally, after watching Premier die despite his efforts to save them, he went off to run Delta Queen Steamboat for their new owners Delaware North Companies, after their previous parent foundered after 9/11. Now Delaware North have sold Delta Queen so I suppose Mr. Nierenberg is probably out of a job yet again, but the cruise industry always seems to have a place for Bruce Nierenberg.

As for the cruise ferry idea, I've always been enamored of it. I have always felt that, if a foreign-built ship could legally be used, cruise ferries could be very successful in the US.

[BruceMuzz]

Since the Passenger Services Act also applies to cargo ships and airlines, there would be fallout if the act was repealed.
The 2 remaining American Flag Cargo Ship Lines, CSX and Mattson, have a monopoly on sea freight between California and Hawaii. They charge about 10 times as much as their foreign competitors. Why? Because they can - thanks to the Passenger Services Act. Repeal the act and they are out of business tomorrow. But then the cost of living in Hawaii would drop substantially at the same time. That would put the few remaining American Unionized Merchant Mariners out of work permanently.

Five American Flag Airlines have a monopoly on Transpacific Flights between mainland USA and Hawaii - thanks to the Passenger Services Act. They charge only about twice as much as their foreign competitors would. If the Passenger Services Act was repealed today, United, Delta, American, Continental, and Hawaiian would be forced to compete on a level playing field with foreign airline companies - and they would lose. They would be out of business in a few weeks without the huge profits they now make on the transpacific flights.

I don't think "Dubya" is willing to sacrifice America's Airline companies in order to enhance our cruising experience.

[dhcoaster]

The Jones Act does allow a non US Flagged ship to leave a US Port, go nowhere, and then return to the same US port.

[dougnewmanatsea]

Since the Passenger Services Act also applies to cargo ships and airlines, there would be fallout if the act was repealed.
The Passenger Services Act only applies to passenger shipping.

The Jones Act applies to cargo shipping.

Five American Flag Airlines have a monopoly on Transpacific Flights between mainland USA and Hawaii
I can count eight - American, United, Delta, Northwest, Continental, Hawaiian, Aloha, ATA.

And again... Airlines are a different (but similar) law. When the airline industry came about, the laws regarding it were modeled after maritime law (which had been refined over centuries) which is why they are so very similar.

However, the law has nothing to do with Hawaii in particular but domestic traffic in general. Flights to Hawaii are expensive because of supply and demand... Not lack of foreign competition. Because of market conditions, domestic US flights are very cheap despite foreign competition, and despite high labor costs etc.

The push to keep these laws for the airline industry is a bit more widespread simply because they allow the government to keep very tight control on safety regulations. At least in theory, if foreign companies were allowed in, this control might be lessened. The reason air travel, despite being inherently more dangerous than any other type of transportation, is statistically safer than any other is the very strict safety standards that governments around the world force airlines to stick to. By keeping the airline industry in the US to an "exclusive club" of rigorously vetted US companies, the government can exert a lot of control. The situation is exactly the same almost everywhere else in the world - as of yet, the only major example I can think of where foreign airlines can fly domestic flights is in the EU where, for example, Lufthansa could fly domestic flights in France (if they wanted to).

Shipping is a bit different from the airline industry, but the basic principles are the same and most countries do require that domestic traffic be in vessels of their own flag. (The EU is again a very big exception.) This is by no means unique to the US; it's very common throughout the world. But a big cruise line or shipping line probably wouldn't have too much interest in opening up a new route solely within a small country - say, Belgium. The US, especially because of Alaska and Hawaii, is a different story.

My personal view is that despite the power of the various political interests (unions, shipping lines, airlines, etc.) these laws are bound to change sooner or later. I guess it will probably be later, not sooner, but when all is said and done, globalization marches on. Right now there is a battle in most countries between protectionism and globalization and in the end I think globalization will win out. It started a long time ago and at this point it is just too big to be reversed. To stop or reverse globalization would require a profound change of thought in dozens and dozens of countries around the world, simultaenously. I just don't see it happening. In 50 years (or maybe 20 years) the concept of national economies will be as obsolete and this whole discussion will seem as quaint as a manual typewriter...