Proposed changes to PVSA for Alaska

[Jim Avery]

With interest I have been following the proposal by Alaska's Senators to carve out a permanent waiver to the PVSA (Passenger Vessel Services Act).  The PVSA was put into US law over 100 years ago to protect the jobs of US sailors sailing on US flag passenger vessels.  An industry that basically no longer exists.  What is proposed is to exempt Alaska cruises by all flag lines from the sometimes onerous need to stop in a foreign port.  This really came to a head this past year with the Canadian decision to stop all cruise ship port calls due to covid.  Certainly within Canada's rights to do so even though it killed completely the chance of any Alaska tourism season.  If this passes as proposed, cruises from US ports to Alaska would be able to steam to and from Alaska with no need to make a technical stop in, say Vancouver.  I personally would like to see the PVSA act repealed in its entirety.  It protects virtually no US sailors anymore and adds restrictions and ultimately costs to US cruise passengers.  Without the need for a foreign port stop some very interesting new itineraries could be developed.  Hawaii r/t from the West coast ports without the ubiquitous Ensenada stop.  Another day in Hawaii?  Alaska cruises from any West coast port.  How about a US coastal cruise from NYC to New Orleans?  Maybe public awareness will increase the chances of this happening.  😎

[CurlerRob]

I'd agree, Jim. While the cities on the Canadian west coast have valid concerns about the tourism impact, full repeal would not prohibit the lines from stops in Victoria or Vancouver on the Alaska runs, just remove the obsolete requirement. I'd suspect that the Canadian cities would still be attractive ports for the lines and remain on the itineraries whenever possible. As you say, it opens a number of interesting other possibilities elsewhere (and I too can do without Ensenada every Hawaii circuit). 🍻🥌

[Heidi13]

Jim - It might even motivate Vancouver and Victoria to provide exceptional customer service to the cruise lines, rather than expect business to come their way because of US Cabotage Laws.

 

Back in my day on cruise ships, Vancouver had almost all the Alaska business, as Seattle is not as good an option for Alaska - longer transit, more open water passage, less time in Alaska, etc.

 

The cruise ships wanted additional berths in Vancouver, especially on weekends and Vancouver refused, using an excuse of all the berth space that was available mid-week. At the time they thought they could dictate schedules to the cruise lines. Result - at least 50% of Alaska cruises now are homeported in Seattle.

 

Sadly, 25 yrs later, we still have no new berths and have actually lost the back-up berth at Ballentine.

 

If PVSA is rescinded, hopefully Vancouver will wake up and provide the infrastructure to compete.

[dwlmg]

If anything happens, I think it would be limited to the Alaska trade. I am sure Viking would like nothing more than to be able to own the Viking Mississippi and not operate it for a US owner. If they owned it under a repealed PVSA, they could flag it foreign and not have to pay for an expensive American crew. I am sure the US maritime unions would fight the loss of jobs should the Viking Mississippi be able to sail with a foreign crew. I am not sure if there be an influx of foreign entities to compete with the small coastwise passenger vessels in the US. It could be another union battlefront.

[chengkp75]

Jim;

 

I will wholeheartedly disagree with you, on two points.  First, the history of the PVSA is not what most think of, protecting US jobs.  It was enacted when the various Steamboat Acts of the 1800's, which were enacted to make steamboat travel in the US safer (and which formed the Steamboat Inspection Service, the progenitor of today's USCG Marine Inspection Division), but which ended up having vessel owners reflag their steamboats foreign to avoid the safety measures.  The PVSA restored US control over domestic water passenger traffic.  At the time, the ships involved were built in the US, and even without the PVSA, the ships would still be built in the US, since they were not capable of ocean voyages, so could not be built overseas.  And, maritime labor was in its very infancy, most mariners involved were not organized at the time, and to this day the majority of PVSA (and Jones Act) mariners are not unionized.

 

Secondly, the PVSA does protect many US mariners (though as I said above, protecting those jobs was not the idea behind the PVSA, it was protecting the US public), those who are employed on passenger vessels (any vessel that carries more than 12 people for hire, as defined by the IMO), that everyone forgets about when they talk about the PVSA from a cruising viewpoint.  The PVSA fleet employs tens of thousands of US citizens, and adds all of the money generated by those vessels into the US economy, not that of the Philippines or Indonesia.

 

All I'll say about "interesting new itineraries" is that I suspect the very capable market analysts for the cruise lines have looked at this market, and decided that the effort to change the PVSA, and any further restrictions that a repeal might have on their operations is not in their best interest.  They lobbied for 10 years to get the exemption for Puerto Rico, and every attempt to start up this one way trade by the major cruise lines has failed within a year.

 

And, as for Sen. Murkowski's bill, if it held to the statements made in her press release, that this bill would "add jobs for US mariners in the cruise industry" it would be one thing, but the bill is the exact opposite.  Her press release is hyperbole at best, and downright lies at worst.  This bill continues to "deem" that foreign crew on foreign ships doing domestic routes can continue with only a crew visa, not a work visa.  Where is the incentive, anywhere in the bill, for the cruise lines to hire any US workers, let alone professional mariners.  The Alaska Tourism Recovery Act, at least had the good sense to say that the voyages were not foreign voyages for the purposes of the Tariff Act, so the ships lost their customs duty free status for supplies and spares brought in from overseas.  This bill takes that away, as I'm sure the cruise lines were quick to point out to Sen. Murkowski.  And, finally, the placing of the 1000 passenger lower limit on this exemption is disingenuous at best, and outright discrimination at worst.  She fully knows that all current US flag cruise vessels serving Alaska, and the ferry system, are all smaller than this, so she does not want to extend the benefits of foreign registry to those existing entities.

 

Had her bill kept to the promise of aiding US mariners, which would have entailed merely waiving the US built clause for Alaska ships, but requiring US flagging, then I could have wholeheartedly supported the bill.  I have no objection to losing the US built clause in either the PVSA or Jones Act, since our shipbuilding industry is not interested in commercial shipbuilding (they make way more milking the US government), and environmental concerns and local pressures eliminate any possibility of expansion of the US shipbuilding industry (added to the aging of the shipyard workforce (average over 60), as young American people don't want a dirty, hard job that doesn't pay a fortune.

[Jim Avery]

Hi Chief,

I always learn from you.  Your knowledge of maritime law as relates to US interests rivals or exceeds that of a number of maritime attorneys I have worked with.  Thanks for taking the time to put out the historical facts.  As a former professional mariner I was licensed under US laws and worked entirely on US flagged ships, such as they were in the '70s, '80s and early '90s. And paid attention mainly to the laws I was operating under at the time.  I agree with what you say, especially  your last paragraph.  My original post was a simple, layman's terms, speculation on the proposed changes.  I fully agree that no person in congress, either party-doesn't matter- create more mess than they solve with many exemptions, loopholes, tricks most of the time.  As someone who had the good fortune to know the liner United States when it was something other than a laid up wreck, it saddens me we have no real presence in the cruise/passenger industry any more. 

[chengkp75]

I knew you were a mariner, and it saddens me as well, the downfall of the US merchant marine.  It has been my quixotic quest, since I joined NCL in 2004, to get a US flag cruise industry going, but I am enough of a realist to know that unless there are restrictions on the ships operating out of the US, there will never be more than the POA, and I feel her days are numbered, as she ages.

 

What many confuse with the Jones Act and PVSA is the decline of the US merchant marine.  Yet, in fact, the Jones Act and PVSA fleets are as large as they ever were, but the US flag foreign-going fleet has been decimated by foreign competition.  Nothing in the Jones Act or PVSA apply to US flag ships that conduct international voyages.  Many people think that to be a US flag ship, you have to be built in the US, but that is only for Jones Act or PVSA trades.  I have worked on several US flag ships, container and RO/RO, that were built overseas, yet were US flag with all that entails.

 

Students of the US merchant marine will know that it is not the Jones Act that has ruined the US maritime industry, it is the Merchant Marine Act of 1936.  This act, by President Roosevelt, was aimed at preparing the US for a global war, WW2.  It created incentives to build ships in the US, and operate them as US flag.  The subsidies were in the amount of difference in cost between building in the US and building overseas the same ship, and operating that ship US flag or foreign flag.  I know you worked on ships that were receiving the operating subsidies, as all US ships were up until Reagan abolished them in the 80's.  These subsidies, while they did what they were intended to do in the 30's and 40's, when extended beyond the war, allowed shipbuilders, shipowners, and maritime labor to "game" the system.  Any increase in shipbuilding cost, like more expensive labor, was fine with both the shipyards and the owners, since the cost was passed to the US public through the subsidy.  The same with maritime wages, when a union requested higher wages, the shipowners were fine with it, since it was also passed to the US public.   This, however, stifled any incentive to innovation in shipbuilding, or ship operations, as can be seen by the US clinging to the steam turbine power plant over the far more efficient diesel that the rest of the world adopted after WW2.  No reductions in crew because automation was not researched.  No automation in shipbuilding.  And on and on.  The Jones Act, and PVSA, are not the culprits, as they had nothing to do with the subsidy structure.

[JRG]

27 minutes ago, chengkp75 said:

Students of the US merchant marine will know that it is not the Jones Act that has ruined the US maritime industry, it is the Merchant Marine Act of 1936.  This act, by President Roosevelt, was aimed at preparing the US for a global war, WW2.  It created incentives to build ships in the US, and operate them as US flag. 

 

What ruined the US Maritime Industry in its infancy was losing the 1-2 punch of FDR and Vice Admiral Howard L. Vickery,  who died of a heart attack in 1946.   He was the the mover and the shaker and the loss of his leadership,  coupled with the red-tape congressional oversighting into the building of Liberty and Victory shipbuilding,  which were NOT put out to contract overseas,  left the Merchant Marine floundering.

 

The incentive was first to build ships faster than subs could sink them first (for England) so they could be lent and leased to allies and then so that we could build them (Liberty and Victory ships) so that we could provide transportation for the war materiel and men and women needed to win the war.

 

Everything fell apart after Admiral Vickery died at the age of 53.    There is more to the history but at this moment in US shipbuilding it didn't have anything to do with what the what flag you were flying,  there was only one flag that mattered.  

 

 

 

 

Edited September 25, 2021 by JRG

[Cienfuegos]

I recall that many river barges and towboats are built in the Louisville KY / Jeffersonville IN  area.  That's a point not lost on Senator Addison Mitchell McConnell, I'm sure.

 

Many barge and boat builders up and down the rivers depend on Jones Act protections.

[JRG]

On 9/22/2021 at 7:16 AM, Jim Avery said:

I personally would like to see the PVSA act repealed in its entirety.  It protects virtually no US sailors anymore and adds restrictions and ultimately costs to US cruise passengers.  Without the need for a foreign port stop some very interesting new itineraries could be developed.  Hawaii r/t from the West coast ports without the ubiquitous Ensenada stop.  Another day in Hawaii?  Alaska cruises from any West coast port.  How about a US coastal cruise from NYC to New Orleans?  Maybe public awareness will increase the chances of this happening.  😎

 

I'm going to re-print part of your quote here as I think you have described it precisely.

 

Public awareness is a big part of encouraging the change.  With 5 bills now having been played, 1 unanimously passed,  3 in the hopper and 1 freshly introduced I see alot of legislative momentum and bi-partisan support (believe it or not).

 

The time is right to make the changes to the PVSA and finally free Willy.   Somebody please wake up the Rip Van Winkles of the world.