Jones Act ??

[twangster]

The PVSA and the Jones Act, which are both fully codified into US law so the names don't matter so much anymore, are complex in ways that are difficult even for lawmakers to grapple with.   Every so often someone in Congress is motivated to start down the road of updating these federal laws.  They quickly discovered how complex it is when they crack open pandora's box and all areas of law they entail including maritime law and international treaties try to explode out. 

 

As it relates to the cruise industry, the cruise industry isn't at all motivated to see these laws updated.  The cruise industry is quite happy making billions of dollars while avoiding US taxation working within the current framework of federal law in the US. 

 

They are well aware that updates will likely go beyond just making it possible for a select minor number of individuals to book a cruise that currently violates federal law.   Updates to federal law could very well involve substantial changes to the cruise lines business models because if Congress is going to go through all the effort to update these laws it won't stop at just making certain specific cruise itineraries possible.   

 

Furthermore in some cases updating the cabotage clauses that are the reason why select itineraries are not possible could have zero impact to unlocking all possible itineraries if immigration policy for foreign crew are not also updated and that by itself is a whole separate pandora's box.

 

Why would Congress invest so much energy to help foreign companies operating foreign ships who are doing everything they possibly can to avoid paying US tax?  All so 0.00001% of the US population could sail a different cruise itinerary?  We have much bigger problems to tackle.  

 

 

Edited September 26, 2023 by twangster

[lovetocruise/diamond]

13 minutes ago, Ourusualbeach said:

That sailing is perfectly fine.  Starts in Sydney ends in Seattle.  100% no issues, I had 2 clients do this exact itinerary this past May.

 

Yours wasn't as it started in LA and ended in Seattle....started in one US port ended in a different US port and did not visit a distant foreign port.

Thank you for clarifying in simple terms 

[chengkp75]

22 hours ago, Beachin2 said:

PVSA also applies to air travel, not just ships, so it's a bigger issue.

No, it doesn't.  The Civil Aviation Act is what applies to air travel, not the PVSA.  Different sections of the USC, but they do essentially the same thing.  Remember, there was no air travel when the PVSA was passed, and the definitions section of the USC defines "passenger vessel" as a ship, and does not include any mention of an airplane.

[chengkp75]

20 hours ago, Ret MP said:

I'm not sure about the cost of registering a cruise ship in the U.S. and its attached regulations/rules/laws.  But, wouldn't it be much easier if cruise lines that operate mostly out of U.S. ports were registered in the U.S. of A?

The US Maritime Commission, which is tasked with promoting US flag shipping has done a study of the cost differential between operating a ship (a cargo ship, not a cruise ship) as a US flag ship, or a foreign flag ship.  The overall operating cost for a US flag ship is 3 times that of a foreign flag ship, and the crew cost is 5 times.  The last point is vastly significant, when you compare the 20 person crew of a cargo ship to the 1000-2000 person crew on a cruise ship, and multiply that by 500%.

 

20 hours ago, Ret MP said:

Then they could open up a whole other type of cruising experience for many folks, embark in NYC, cruise to the Caribbean, a few get off and maybe embark more people in Key West, got to CocoCay, and then the ship continues back to NYC with the people that didn't get off in KW, for example.

The cruise industry has studied the demographics and found that most people from the US don't care about US ports on their cruises, which is why most cruises don't include more than one (the embark/disembark port).  CLIA has long stated that their members see no benefit to their bottom lines from any modification or repeal of the PVSA.

 

20 hours ago, Ret MP said:

Medical emergencies would not be an issue.  

Medical emergencies are generally not an issue.  CBP routinely grants waivers, if applied for, to the cruise lines for violations of the PVSA that are out of the cruise line's control, like weather cancelling the one foreign port, mechanical issues that cancel the foreign port, medical emergencies and deaths, and even weather that prevents flights from reaching the embarkation on time (if the flight is booked through the cruise line).

 

20 hours ago, Ret MP said:

I can only think of a few industries that require U.S. citizenship to be employed and they all have something to do with national security.

Again, you need to look at the PVSA as the passenger vessel act, not the cruise ship act.  By international law, a passenger vessel is any vessel that carries more than 12 passengers for hire.  So, the PVSA covers every tour boat, ferry, casino or dinner cruise boat, and large charter fishing boats, as well as cruise ships.  Think of the security issues if every one of these boats were to hire foreigners as crew.  US flag ships are vital to US national security, and this has been stated and restated for decades (actually ever since President Roosevelt signed the Merchant Marine Act of 1936) by the military, as US flag ships can be used to support our military, as they have since the founding of the country.  While the vast majority of this support comes from cargo ships, passenger vessels can be used to provide troop transport in times of war.  During Desert Storm, there were foreign flag vessels chartered by the US government, that refused to enter the war zone, while every US flag vessel owned or chartered by the US government delivered their cargo where needed.  An example of a civilian cruise ship being used for troop transport in modern times is the Queen Elizabeth II, during the Falklands War.

 

Is there a national security reason that US commercial airline pilots need to be US citizens?

14 hours ago, ngrund said:

New cruise ships haven't been US built in decades, all work is overseas, with no indication this work will ever come back to the US. If I recall correctly,a while back, Disney wanted to build a compliant ship, no one even submitted a bid on the job.

As I've stated many times in the past, and even industry leaders have agreed, there would not be a whole lot of heartache with repealing the "US built" clause of the PVSA or Jones Act, since the US has lost its technological edge in shipbuilding decades ago, and is primarily willing only to cater to the US Navy, where cost efficiency is a distant second concern.  However, the cost of operating the ship as a US flag vessel, which is what would be required, is what has stopped the cruise lines from petitioning to repeal the PVSA.  Remember, it took 10 years of lobbying to get the PVSA exemption for Puerto Rico (one way traffic between PR and the mainland US by foreign ships), and only one cruise line took up the regular use of this route, and it failed after a couple of years due to lack of passenger demand.  So, even at the lowered cost of operating as a foreign flag ship, PVSA protected passenger service is not the fountain of new revenue that many cruisers think it would be.

19 hours ago, ngrund said:

These outdated protectionist laws are no longer even fulfilling the intended purpose (if they ever did).

The hundreds of thousands of US citizens who are covered by the PVSA would beg to differ with you there.  You are looking at the act through the very narrow view of the large cruise ship industry.

 

19 hours ago, ngrund said:

NCL couldn't properly staff that ship after the Covid restart simply because US citizens were  not applying. Do a background check,grant a work permit and hire a qualified applicant from wherever.

Question.  How do you conduct a background check on someone from another country?  And, remember, that even the foreign flag cruise lines were having difficulty restaffing after covid.  But, that is an inconvenient fact that needs to be forgotten.  The foreign flag ships staffing issues still continue, but have been mitigated by the large pool of both positions available (hundreds of ships) and people wanting the jobs.  Remember, that an international crew cabin steward makes a nice middle class income in their home country, while the entry level positions on Pride of America, pay about what flipping burgers at MickeyD does.  The POA pays the lowest wages of any US flag vessel, from the dishwasher to the Captain. 

[Ret MP]

10 minutes ago, chengkp75 said:

The US Maritime Commission, which is tasked with promoting US flag shipping has done a study of the cost differential between operating a ship (a cargo ship, not a cruise ship) as a US flag ship, or a foreign flag ship.  The overall operating cost for a US flag ship is 3 times that of a foreign flag ship, and the crew cost is 5 times.  The last point is vastly significant, when you compare the 20 person crew of a cargo ship to the 1000-2000 person crew on a cruise ship, and multiply that by 500%.  

 

The cruise industry has studied the demographics and found that most people from the US don't care about US ports on their cruises, which is why most cruises don't include more than one (the embark/disembark port).  CLIA has long stated that their members see no benefit to their bottom lines from any modification or repeal of the PVSA.

 

Medical emergencies are generally not an issue. It may not be an ongoing/daily issue but tell that to the folks, et al, in another thread where they were charged ~$1,800.00 for getting of in Key West with a medical emergency and the hoops that they have/had to jump through to get the Waiver/refund/reimbursement, and so far just a promise.  CBP routinely grants waivers, if applied for <, to the cruise lines for violations of the PVSA that are out of the cruise line's control, like weather cancelling the one foreign port, mechanical issues that cancel the foreign port, medical emergencies and deaths, and even weather that prevents flights from reaching the embarkation on time (if the flight is booked through the cruise line).

 

Again, you need to look at the PVSA as the passenger vessel act I've never read the "Cruise Ship Act", whatever that is, so I don't know what you are talking about there, not the cruise ship act.  By international law, a passenger vessel is any vessel that carries more than 12 passengers for hire.  So, the PVSA covers every tour boat, ferry, casino or dinner cruise boat, and large charter fishing boats, as well as cruise ships.  Think of the security issues if every one of these boats were to hire foreigners as crew.  US flag ships are vital to US national security, and this has been stated and restated for decades (actually ever since President Roosevelt signed the Merchant Marine Act of 1936) by the military, as US flag ships can be used to support our military, as they have since the founding of the country.  While the vast majority of this support comes from cargo ships, passenger vessels can be used to provide troop transport in times of war.  Being retired from the U.S. Army, I think I know a little about troop transport.  During Desert Storm, there were foreign flag vessels chartered by the US government, that refused to enter the war zone, while every US flag vessel owned or chartered by the US government delivered their cargo where needed.  An example of a civilian cruise ship being used for troop transport in modern times is the Queen Elizabeth II, during the Falklands War.

 

Is there a national security reason that US commercial airline pilots need to be US citizens?  Hell yes there is! 

 

I could go on and on and answer most major issues that you have brought up.  But, I think you didn't fully appreciate that my post was basically a question of convenience for passengers, not the government, industry, or anything else other than passengers, with a few disclaimers (Albatross, Rules/Laws/Regulations, Cost, Hand greasing, and so on.  So, yes I know/knew that it is an impossibility.  But, I do appreciate it, and I mean it, your effort in explaining things, some I knew, some I didn't.  

[chengkp75]

15 minutes ago, Ret MP said:

But, I think you didn't fully appreciate that my post was basically a question of convenience for passengers, not the government, industry, or anything else other than passengers,

How much of a convenience for the passengers would it be to have the cruise fare likely doubled (as a minimum) for a ship registered in the US?  That is the point of my reply.

[Ride-The-Waves]

Cruise fares have more than doubled since the end of the "official" COVID pandemic (COVID remains a serious threat to health on board and ashore).  The "real" issue is taxation.  Foreign flagged ships, specifically cruise ships in this discussion, pay little to no US federal tax.  This despite the vast majority of passengers sailing from US ports are AMCITS and several cruise line corporations have equities traded on US stock exchanges.  The issue surfaced during COVID as cruise lines begged to be included in special Congressional fundings to mitigate COVID loses and were denied since they were not US entities.  The doubling or more of cruise fares and associated incidentals is effort by cruise lines to recapture losses experienced the past three-plus years.

[Ret MP]

1 hour ago, chengkp75 said:

How much of a convenience for the passengers would it be to have the cruise fare likely doubled (as a minimum) for a ship registered in the US?  That is the point of my reply.

The rising cost of cruising is largely due to government issues which we can't discuss on this forum.  I don't doubt the intent of your reply.  But, I only pointed out that it was a question about whether it would be a more convenient way to do business that would benefit customers/passengers.  

 

Side note:  Someone mentioned that the Jones/PVSA is too complex for the lawmakers to change/amend.  I say, if a law has become too complex to modify, repeal it and start over and make it more up-to-date.  Hell, we had a bill dealing with healthcare that was thousands of pages long and referred to thousands of other publications, I think we can write a new law from scratch if there was truly a desire to do so.

[chengkp75]

10 minutes ago, Ride-The-Waves said:

Cruise fares have more than doubled since the end of the "official" COVID pandemic (COVID remains a serious threat to health on board and ashore).  The "real" issue is taxation.  Foreign flagged ships, specifically cruise ships in this discussion, pay little to no US federal tax.  This despite the vast majority of passengers sailing from US ports are AMCITS and several cruise line corporations have equities traded on US stock exchanges.  The issue surfaced during COVID as cruise lines begged to be included in special Congressional fundings to mitigate COVID loses and were denied since they were not US entities.  The doubling or more of cruise fares and associated incidentals is effort by cruise lines to recapture losses experienced the past three-plus years.

While it may be true that cruise fares have increased a lot since the end of Covid, I can't say whether or not they have doubled.  But, that is due to outside influences, like the deep discounting the lines did to get people back onboard after Covid, the increase in demand for cruises, and the rising costs from worldwide inflation.  While taxation is one factor in the difference between US flag, and foreign flag, it is not the main one.  Crew costs, both wages and benefits like Social Security, is by far the largest cost difference.  Also, customs duty is a large item.  Everything that a foreign flag ship imports to the US, whether it is spare parts, hotel amenities, or food and alcohol, pays no import duty as it is "in transit" to a foreign ship.  And, as the fares for foreign flag ships have increased greatly, so have those on the POA, which still remains the highest cost cruises around.

 

The issue of cruise line taxation may have come to the attention of the cruising public due to Covid bail out attempts, it has been known for decades, and hotly debated in Congress just as long.

[not-enough-cruising]

16 minutes ago, Ride-The-Waves said:

Cruise fares have more than doubled since the end of the "official" COVID pandemic (COVID remains a serious threat to health on board and ashore).  The "real" issue is taxation.  Foreign flagged ships, specifically cruise ships in this discussion, pay little to no US federal tax.  This despite the vast majority of passengers sailing from US ports are AMCITS and several cruise line corporations have equities traded on US stock exchanges.  The issue surfaced during COVID as cruise lines begged to be included in special Congressional fundings to mitigate COVID loses and were denied since they were not US entities.  The doubling or more of cruise fares and associated incidentals is effort by cruise lines to recapture losses experienced the past three-plus years.

Cruise lines NEVER begged to be included in COVID bailout funding

 

The low amount of taxes paid is a reciprocal agreement between the USA and MANY foreign entities.  We don't tax some businesses operating here, and other countries do not tax American corporations operating there.

 

 Royal Caribbean paid about 3% of revenue to the federal government in the latest available filings. 55 of the Fortune 500 companies paid 0%. 

[bonsai3s]

13 hours ago, Ourusualbeach said:

That sailing is perfectly fine.  Starts in Sydney ends in Seattle.  100% no issues, I had 2 clients do this exact itinerary this past May.

 

Yours wasn't as it started in LA and ended in Seattle....started in one US port ended in a different US port and did not visit a distant foreign port.

Ken, earlier this year, we sailed from Brisbane to Hawaii, then Hawaii to Vancouver. (Quantum)

 

* Initially, we tried booking a third leg...Vancouver to Seattle (Alaska sailing)...NextCruise said we couldn't book the Alaska sailing in violation of PVSA. Were we given the wrong info? Thanks, E.

[Ourusualbeach]

9 minutes ago, bonsai3s said:

Ken, earlier this year, we sailed from Brisbane to Hawaii, then Hawaii to Vancouver. (Quantum)

 

* Initially, we tried booking a third leg...Vancouver to Seattle (Alaska sailing)...NextCruise said we couldn't book the Alaska sailing in violation of PVSA. Were we given the wrong info? Thanks, E.

Big shocker that next cruise gave you the wrong information.  You started in Brisbane.  That is all that matters.  you could sail as long as you like and end anywhere and you would not be in violation of the PVSA as the PVSA only applies to cruises where your initial embarkation port is a US port.

 

As I mentioned I had two clients (one on your sailing), that carried on and did the first Alaska cruise.

Edited September 26, 2023 by Ourusualbeach

[chengkp75]

17 minutes ago, Ret MP said:

Side note:  Someone mentioned that the Jones/PVSA is too complex for the lawmakers to change/amend.  I say, if a law has become too complex to modify, repeal it and start over and make it more up-to-date.

I would not say that the PVSA is too complex to change/amend, per se.  There are several problems involved.  First off, since you are now going to be involving foreign flag ships in domestic US traffic, you now have to abide by the strictures of international law, not just US law.  For example, even now, US law does not apply completely to foreign flag cruise ships, even when docked in a US port.  International law says that the "port state" (country where the ship is physically located) only applies when the "safety and well being" of the port state is threatened.  Otherwise, the laws of the "flag state" apply to "internal" situations onboard the ship.  An example, is in the SCOTUS case of "Spector v NCL", where the court decided that the ADA applied to foreign flag cruise ships to an extent.  The court ruled that in accordance with international law, unless Congress had specifically mentioned foreign flag cruise ships, that "internal policies and procedures" did not fall under the ADA.

 

This is called the "law of unintended consequences".

 

Another problem with amending the PVSA is again, that you are involving international law, since you would be trying to "redefine" what a "passenger vessel" is, which is an international legal definition.  This is if you are trying to "carve out" cruise ships from other "passenger vessels" covered by the PVSA.  Should you change the act to say that "only ships with over 1000 passengers can be foreign flag", then this would fall afoul of a constitutionality challenge in court from the likes of the Alaska Marine Highway, the Staten Island Ferry, and American Cruise Lines, who would say "we operate "passenger vessels as well, and would like the same cost savings from operating as foreign flag ships as you have granted to these ships", and they would win.  Think of every ferry, commuter boat, water taxi, duck boat, sightseeing boat, whale watching boat, casino or dinner cruise boat, or charter fishing boat in the US being able to change to foreign flag, no longer have to abide by USCG regulations, no longer have to have US crew, and no longer pay US taxes.

[nelblu]

44 minutes ago, Ret MP said:

Hell, we had a bill dealing with healthcare that was thousands of pages long and referred to thousands of other publications, I think we can write a new law from scratch if there was truly a desire to do so.

But the politicians themselves did not read it.🤣

[chengkp75]

35 minutes ago, not-enough-cruising said:

 Royal Caribbean paid about 3% of revenue to the federal government in the latest available filings. 55 of the Fortune 500 companies paid 0%. 

Was that amount listed as "corporate tax" or a "taxes"? (I don't care to read through the SEC filings to see)  CLIA has admitted in their statements about the economical impact of cruising on the US economy, that the vast majority of taxes paid by the member cruise lines in the US, are local property taxes on their buildings, and Social Security  payments for US citizen employees.

 

Under the reciprocal agreement you mention in the IRS tax code, all revenue generated by a foreign flag ship is tax exempt in the US.

[chengkp75]

22 minutes ago, Ourusualbeach said:

PVSA only applies to cruises where your initial embarkation port is a US port.

And the final disembarkation port is a US port.  Cunard crossings from NYC to England are not considered under PVSA.

[Ret MP]

6 minutes ago, chengkp75 said:

I would not say that the PVSA is too complex to change/amend, per se.  There are several problems involved.  First off, since you are now going to be involving foreign flag ships in domestic US traffic, you now have to abide by the strictures of international law, not just US law.  For example, even now, US law does not apply completely to foreign flag cruise ships, even when docked in a US port.  International law says that the "port state" (country where the ship is physically located) only applies when the "safety and well being" of the port state is threatened.  Otherwise, the laws of the "flag state" apply to "internal" situations onboard the ship.  An example, is in the SCOTUS case of "Spector v NCL", where the court decided that the ADA applied to foreign flag cruise ships to an extent.  The court ruled that in accordance with international law, unless Congress had specifically mentioned foreign flag cruise ships, that "internal policies and procedures" did not fall under the ADA.

 

This is called the "law of unintended consequences".

 

Another problem with amending the PVSA is again, that you are involving international law, since you would be trying to "redefine" what a "passenger vessel" is, which is an international legal definition.  This is if you are trying to "carve out" cruise ships from other "passenger vessels" covered by the PVSA.  Should you change the act to say that "only ships with over 1000 passengers can be foreign flag", then this would fall afoul of a constitutionality challenge in court from the likes of the Alaska Marine Highway, the Staten Island Ferry, and American Cruise Lines, who would say "we operate "passenger vessels as well, and would like the same cost savings from operating as foreign flag ships as you have granted to these ships", and they would win.  Think of every ferry, commuter boat, water taxi, duck boat, sightseeing boat, whale watching boat, casino or dinner cruise boat, or charter fishing boat in the US being able to change to foreign flag, no longer have to abide by USCG regulations, no longer have to have US crew, and no longer pay US taxes.

Yep, start from scratch, even international treaties would have to be amended/modified/deleted, and rewritten.  I'm not saying it's an easy task.  But, as I said, if a healthcare law can contain thousands of pages and references to thousands of other regulations/publications and so on, this can be done. Or how about the tax code?  

[Ret MP]

6 minutes ago, nelblu said:

But the politicians themselves did not read it.🤣

LOL

 

Do they ever?  

[chengkp75]

1 minute ago, Ret MP said:

Yep, start from scratch, even international treaties would have to be amended/modified/deleted, and rewritten.  I'm not saying it's an easy task.  But, as I said, if a healthcare law can contain thousands of pages and references to thousands of other regulations/publications and so on, this can be done. Or how about the tax code?  

So, you would try to get a majority of the 175 member nations of the IMO to agree to change the SOLAS treaty to allow the US to change their cabotage law, when many of those other nations also have similar cabotage laws to the PVSA?  You are trying to compare changing US laws with getting many nations, each with their own system of government, to change their laws to accommodate the US.  When a nation becomes signatory to a UN convention, like the IMO or SOLAS, they are required to pass laws into each country's statutes that have the exact same wording as the convention, so not only would all of these nations need to agree in the IMO vote, but would then have to change their laws as well.

[chengkp75]

10 minutes ago, Ret MP said:

I'm not saying it's an easy task

Continuing with the example of the ADA, SCOTUS stated that if Congress changed the wording of the ADA to specifically mention foreign flag cruise ships, then the ADA could be applied in its entirety to those ships.  In the 18 years since that decision, Congress has not even considered this.  And, I would say that the disabled lobby is far larger and more influential than the cruise lobby, so what makes you think Congress would even address this.  There have been many challenges to the Jones Act and PVSA over the decades, none have ever made it out of committee.

Edited September 26, 2023 by chengkp75

[Ret MP]

7 minutes ago, chengkp75 said:

So, you would try to get a majority of the 175 member nations of the IMO to agree to change the SOLAS treaty to allow the US to change their cabotage law, when many of those other nations also have similar cabotage laws to the PVSA?  You are trying to compare changing US laws with getting many nations, each with their own system of government, to change their laws to accommodate the US.  When a nation becomes signatory to a UN convention, like the IMO or SOLAS, they are required to pass laws into each country's statutes that have the exact same wording as the convention, so not only would all of these nations need to agree in the IMO vote, but would then have to change their laws as well.

I'm not trying to do anything, this started out as a question with disclaimers attached and later suggestions.  I don't have to be an expert in all, most, or anything involved to make suggestions.  I see an issue or experience and issue and I make suggestions.  Doesn't mean they are received, possible, or possible.  I'm not a negative kind of guy, I see possibilities.  I don't believe in "if it ain't broke, don't fix it" mentality or it's just too hard.     

Edited September 26, 2023 by Ret MP

[Ret MP]

5 minutes ago, chengkp75 said:

There have been many challenges to the Jones Act and PVSA over the decades, none have ever made it out of committee.

Exactly!

[alfaeric]

Some of the bad side effects is how our territories ship stuff. Like for Puerto Rico, everything has to go through the mainland, which not only hurts trade, it also hampers international aid after a disaster. This treats us citizens very badly. 

[chengkp75]

16 minutes ago, alfaeric said:

Some of the bad side effects is how our territories ship stuff. Like for Puerto Rico, everything has to go through the mainland, which not only hurts trade, it also hampers international aid after a disaster. This treats us citizens very badly. 

This is completely false.  Cargo can go directly from overseas ports to Puerto Rico, Hawaii, or the US Virgin Islands, just as it does to any mainland US port.  Now, whether or not there is a sufficient market for a ship to call at these locales is a different matter, and the flag of the vessel would have nothing to do with that decision.  In disaster relief, any "international aid" can come directly from the foreign country, direct to Puerto Rico, for instance, and the only thing that hampered relief supplies in Puerto Rico during hurricane Maria was the inability to clear the docks of existing containers to make space for the incoming relief cargo, not a lack of tonnage from Jones Act shipping.  With roads blocked, and no power to pump gas/diesel, trucks could not get to the ports to make room for the relief aid.  This is well documented, but ignored by enemies of the Jones Act.

[chengkp75]

1 hour ago, Ret MP said:

Exactly!

The IMO has been debating for about a decade so far as to whether disposal of vegetable oil (like from a deep fryer) is to be considered under "garbage" disposal regulations or "oily waste" disposal regulations.  This shows how fast things move there as well.