Is This Old Law Hurting America’s Cruise Industry?
PHOTO: Norwegian Cruise Line’s Pride of America, one of the few cruise ships not affected by the PVSA. (photo courtesy of Norwegian Cruise Line)
A recent Los Angeles Times op-ed article is shedding light once more on the Passenger Vessel Services Act that affects cruise travel within the United States.
While the article is relatively well considered, it does not take into account the entire picture.
First off, the Passenger Vessel Services Act of 1886 is often confused as the Jones Act among cruise travelers. In fact, the Jones Act—itself part of the larger Merchant Marine Act—just applies to the transport of goods between U.S. ports. It only allows U.S. constructed, registered, owned and operated ships to do so.
The Passenger Vessel Services Act is the traveling guest equivalent that prohibits foreign built and flagged cruise ships from sailing among domestic ports exclusively with people aboard.
The article paints the act poorly for defeating its original purpose.
At the time it was signed, President Grover Cleveland had intended to protect American jobs. However, nowadays, the vast majority of cruise ships are built overseas and registered to foreign countries. This is the case even for most American-based cruise companies.
Thus, in order for these ships to comply with the law, they must sail to at least one foreign port during an itinerary that leaves from the U.S. before returning. This is not too great a concern for cruises already featuring the international Caribbean, for instance. But those to Alaska or Hawaii must make a call on the likes of Canada or Mexico, respectively.
It’s a travel nuisance to be sure.
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The only mainstream exception is Norwegian Cruise Line’s Pride of America, which has been classified as built-in-America even though it was completed abroad and is registered in the States. It thus can sail exclusively intra-Hawaii with no restrictions.
The article claims that the act is now actually hurting American labor since so many affected domestic cruises must frequently bypass U.S. ports of call as well as embarkation ones. This does indeed harm local porters, tour operators, provisioners and more.
However, the article forgets to point out that cruise lines could alternatively build their ships in the U.S. and register them here as well in order to sail entirely within the country. Smaller operators do just this: American Cruise Lines is one such company that regularly constructs ships—albeit much smaller ones than even the aforementioned Pride of America—in the States and voyages only to and from.
The problem is that the U.S. is just not in the business of building mega cruise ships, which would make doing so here cost prohibitive. Cruise lines also choose to register their ships in other countries because of benefits more suitable to their operations.
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Either the global economy will have to offer enough incentive for cruise lines to begin building and registering here, or the Passenger Vessel Services Act might be better repealed as the original piece suggests. The situation is far more complex than initially presented, though.
With so many new ships being built now and international shipyards struggling to meet the demand, it’s actually possible that America could tool up and compete as a cruise shipbuilder.
It’s still a long-shot, but this then might turn the tide some on the Passenger Vessel Services Act.
In the short term, things are likely to remain the same. However, a revision of the act that takes into account the global reality as opposed to the original domestic intent would at least go a long way towards helping the U.S. economy and cruise industry.
This post first appeared on TravelPulse.