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PVSA Violation?


shanecindy21403
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To be fair, scottamiller said "repeal/amendment of the PVSA" and it is not unreasonable to suggest revisiting a law passed 130 years ago to see if changes could be made to better serve the country today. It's not an all or nothing question, and in particular passenger transport and cargo do not have be lumped together, nor do inland waterway services and ocean travel. And I would point out that pragmatic exceptions have already been made to the law, for example, allowing Canadian vessels to offer non-PVSA compliant services in border regions.

 

However, there have also been proposals in the opposite direction, trying to reinforce the PVSA and make it harder for cruise lines to get away with just a quick foreign stop. No one is under any illusion why so many cruise ships stop at Ensenada, for example, and there are those who see this as a violation of the spirit of the PVSA and would like to put an end to it (see here for an attempt by Homeland Security/CBP).

 

You got everything right except the last line. The impetus for the change came from NCL. NCL America felt that the foreign flagged ships from the mainland (Princess, HAL, Celebrity, Carnival & Royal Caribbean) were stealing passengers from their three US flagged Hawaiian based ships. So they got a Senator from Hawaii to help change the law. When it was pointed out that their rule change would hurt their own Alaskan round trips out of Seattle, they got a Senator from Alaska to make an exception for that route.

 

However, as it turned out, the rule changes would have hurt California, and the East Coast Canada cruises. The cruise lines offering the "technical" stop in Ensenada stopped doing a "technical" stop and actually visited for the day and pressure from California and other states mounted to prevent the rule change. Then NCL moved two of its three ships out of Hawaii (which never could support three ships) and we now have full stops in Ensenada and only one US flagged ship in Hawaii.

 

The PVSA is actually an easy rule to understand. However, there was so much miss information on Cruise Critic that confused people. Even John Heald (Carnival's senior Cruise Director) gave out wrong information to one cruiser. Finally, there was a thread that caught the attention of many people here at Cruise Critic and eventually, after the confused asked enough questions and obtained enough correct answers, more people (as evidenced by this thread) began to understand the working of the PVSA.

 

Here is the law ...

 

THE PVSA

 

Transportation of Passengers—46 U.S.C. § 55103

 

The PVSA (46 U.S.C. § 55103), provides that the transportation of passengers between U.S. points is reserved for coastwise-qualified vessels. Pursuant to section 55103, “a vessel may not transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel—

(1) is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and (2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 of [Title 46] or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.”

 

Consequently, foreign-flag vessels are prohibited from engaging in the coastwise trade. In addition, the same prohibitions apply to U.S.-flag vessels that do not have a coastwise endorsement on their document, i.e., are not coastwise-qualified due to being foreign-built or not having the requisite percentage of U.S. ownership.

 

The above comes from a place that is knowledgeable about the law, as it is the governmental agency responsible for its enforcement - the CBP (Customs and Border Patrol).

 

For those that want to know more, or read the above quoted text for themselves, here is a link to the eighteen page publication put out by the US Department of Homeland Security ...

 

http://www.cbp.gov/sites/default/files/documents/pvsa_icp_3.pdf

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Just FYI, Princess and HAL both had at least half-day (4-5 hours) stops in Ensenada years before NCL claimed that they were making just perfunctory stops.

 

NCL was prompted to change the law because they had those three ships but they were operated according to US laws and were very expensive as a result. NCL was having a hard time competing. The fact that they had management issues didn't help.

 

Why is the law still on the books? Because it still protects US shipping for which it was originally enacted.

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You got everything right except the last line. The impetus for the change came from NCL. NCL America felt that the foreign flagged ships from the mainland (Princess, HAL, Celebrity, Carnival & Royal Caribbean) were stealing passengers from their three US flagged Hawaiian based ships. So they got a Senator from Hawaii to help change the law. When it was pointed out that their rule change would hurt their own Alaskan round trips out of Seattle, they got a Senator from Alaska to make an exception for that route.

 

However, as it turned out, the rule changes would have hurt California, and the East Coast Canada cruises. The cruise lines offering the "technical" stop in Ensenada stopped doing a "technical" stop and actually visited for the day and pressure from California and other states mounted to prevent the rule change. Then NCL moved two of its three ships out of Hawaii (which never could support three ships) and we now have full stops in Ensenada and only one US flagged ship in Hawaii.

 

The PVSA is actually an easy rule to understand. However, there was so much miss information on Cruise Critic that confused people. Even John Heald (Carnival's senior Cruise Director) gave out wrong information to one cruiser. Finally, there was a thread that caught the attention of many people here at Cruise Critic and eventually, after the confused asked enough questions and obtained enough correct answers, more people (as evidenced by this thread) began to understand the working of the PVSA.

 

Here is the law ...

 

 

 

The above comes from a place that is knowledgeable about the law, as it is the governmental agency responsible for its enforcement - the CBP (Customs and Border Patrol).

 

For those that want to know more, or read the above quoted text for themselves, here is a link to the eighteen page publication put out by the US Department of Homeland Security ...

 

http://www.cbp.gov/sites/default/files/documents/pvsa_icp_3.pdf

 

I remember when NCL's Colin Vetch was trying to get the law changed to be more restrictive (apparently hoping that it would be too hard for the RTs to keep continuing -- those ships would have to spend half of the cruise in foreign ports, or something like that). And then when it was pointed out that the proposed change would outlaw the NCL Alaskan cruises out of Seattle, he tried to enlist the help of Senator Stevens to make it all about the Hawaiian cruises.

 

A few CC members, including me, left our pleas on the website for commenting. IIRC, I mentioned the economic harm it would have on west coast ports, including my home port. Chamber of Commerces for the west and east coast ports that would be affected also commented, as well as some mayors. The "guvernator" and the governor of Hawaii got together and met with VP Cherney, who, I believe, did get the change tabled.

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I have to say as a Vancouverite. Thank you for your aged and outdated laws because without it, Vancouver would not be the cruise ship hub it is. Ironic isn't it? A US law to protect shipping is singlehandedly responsible for Vancouver's booming cruise ship business

Edited by Cruise Junky
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I have to say as a Vancouverite. Thank you for your aged and outdated laws because without it, Vancouver would not be the cruise ship hub it is. Ironic isn't it? A US law to protect shipping is singlehandedly responsible for Vancouver's booming cruise ship business

 

While I can't argue with the conclusion that Vancouver benefits from the PVSA, I do find it ironic that you would call it an aged and outdated law, when Canada has a very similar cabotage law for coastwise trade.

 

And Chick, I've been down this before with you. When NCL applied to CBP to have the foreign flag ships meet the intent as well as the letter of the law by making the Ensenada stop be a valid port call, it was CBP who went further and added the requirement that foreign port calls make up 48% of the port call time (law of unintended consequences). NCL did not want this, and it would have negatively impacted their own Alaska itineraries, and they actually went to CBP to lobby against their own initiative.

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While as a lawyer I find the discussion passing interesting, is it really enlightening the folk? You violate the PVSA if:

 

You voyage remaining on the same ship to embark in one US port and debark from that ship in another US port without calling at a far foreign port in-between. The manner in which you booked the voyages is irrelevant, so if you book the Star from Seattle to Vancouver, get off, get back on, and journey on the Star to San Francisco, you've broken the PVSA.

 

Easy as pie.

Edited by Wehwalt
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While as a lawyer I find the discussion passing interesting, is it really enlightening the folk? You violate the PVSA if:

 

You voyage remaining on the same ship to embark in one US port and debark from that ship in another US port without calling at a far foreign port in-between. The manner in which you booked the voyages is irrelevant.

 

Easy as pie.

 

While that puts one aspect in a nutshell, you can also violate the PVSA by boarding a foreign flag ship in one port and returning to that same port with an intervening US port call, but without any foreign port call. The "cruise to nowhere" with only one US port, is an exception to the law. Also, carriage between Puerto Rico and the mainland US is exempt from the PVSA. So it's not quite that easy.

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While I can't argue with the conclusion that Vancouver benefits from the PVSA, I do find it ironic that you would call it an aged and outdated law, when Canada has a very similar cabotage law for coastwise trade.
I don't think it can be disputed that it is an aged law, although that is not in itself an argument against it. And it may be argued to be outdated for the USA, even if many other countries have similar laws. Each country has its own particular circumstances, and its decisions about its own laws should not be guided only by looking at what everyone else does and maintaining absolute tit-for-tat reciprocity in all cases.
(law of unintended consequences)
You are very fond of this expression, but it seems to me an empty pretext to choose inaction over action in all situations, because "you just never know what might happen" if you choose to act.
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I don't think it can be disputed that it is an aged law, although that is not in itself an argument against it. And it may be argued to be outdated for the USA, even if many other countries have similar laws. Each country has its own particular circumstances, and its decisions about its own laws should not be guided only by looking at what everyone else does and maintaining absolute tit-for-tat reciprocity in all cases.

You are very fond of this expression, but it seems to me an empty pretext to choose inaction over action in all situations, because "you just never know what might happen" if you choose to act.

 

I don't say that the law of unintended consequences should lead to inaction, but that given the government's track record, they don't tend to think things through enough to stop unintended things from happening.

 

The PVSA has been updated through the years (the exemption for the cruise to nowhere is an example).

 

However, given that US law is based on equal treatment for everyone, if the coastwise passenger trade were opened to foreign flag ships, then it would apply to ferries on Long Island Sound, the Washington State ferry system, the San Francisco bay ferries, the Cape May ferries, and all vessels in the US. While most would not go so far as to hire foreign crew (though that would be allowed) for the Lake Champlain ferry, they could avoid the costly requirements of USCG regulations, inspections, and USCG approved equipment. Would you want ships and boats carrying cargo and passengers throughout the US without adhering to USCG regulations? And those companies would not have to adhere to US labor laws, even if US citizens were hired as crew. The USCG inspects the Pride of America 4 times a year, mandatory, while their "goal" is to inspect foreign flag cruise ships twice a year, and most don't get more than once. And those inspections can only enforce the less stringent SOLAS regulations, not the USCG's own regulations.

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chengkp,

First off I was the one who asked about Japanese cabotage laws related to our recent 3 Japanese cruises and the need for stops in S. Korea or Russia. You were correct in that Japan has similar rules to the US.

As a side note the last of the cruises was affected by Typhoon Vong Phong and no foreign port was possible. I had a chance to talk to the Captain, and he told me they were able to negotiate a dispensation from any fines, although it was not automatic.

I don't want to hijack this thread, but a related issue is the ban on ships visiting Cuba.

My understanding is that under the Torricelli Law, any ship from any country that docks in Cuba is banned from putting in at the US for 6 months resulting in the loss of Cuban ports as possible Caribbean destinations.

You are obviously well informed on matters of maritime regulations, is this the specific restriction?

If so would it be possible for ships doing a Transatlantic (actual example- Island leaves FLL Mar. 21) to make a stop in Cuba, proceed to Med. for it's cruising season, and return as scheduled Nov. 6 Venice to FLL., and break no laws?

Thanks for any knowledge you have on this issue.

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While I can't argue with the conclusion that Vancouver benefits from the PVSA, I do find it ironic that you would call it an aged and outdated law, when Canada has a very similar cabotage law for coastwise trade.

 

 

I do think it's outdated. It needs to be looked at for the current situation and that includes a very large and lucrative cruise ship business.

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My understanding is that under the Torricelli Law, any ship from any country that docks in Cuba is banned from putting in at the US for 6 months resulting in the loss of Cuban ports as possible Caribbean destinations.

You are obviously well informed on matters of maritime regulations, is this the specific restriction?

If so would it be possible for ships doing a Transatlantic (actual example- Island leaves FLL Mar. 21) to make a stop in Cuba, proceed to Med. for it's cruising season, and return as scheduled Nov. 6 Venice to FLL., and break no laws?

Thanks for any knowledge you have on this issue.

 

Yes, but the part of the regulations about not carrying passengers to Cuba even if bound for a third country gives me pause. It might be read to bar the ship until 180 days after the last passenger who was aboard at the Havana call gets off. That could be a while. If, say, the Ocean Princess called at Havana right after they left FLL for the Pacific on 1/2/15, not being scheduled to return until 12/20 or thereabouts, it might get away with it.

 

I suspect it could be done but Princess is concerned about relations with the US government also public relations. Paying Cuba for the use of its cruise piers, piloting, etc. might violate the financial regulations as well.

Edited by Wehwalt
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I don't say that the law of unintended consequences should lead to inaction, but that given the government's track record, they don't tend to think things through enough to stop unintended things from happening.
I don't see any reason to believe that the government of 1886 or any of the governments that have since amended the PVSA had a better a track record. Which is why we expect successive governments to review existing legislation in light of today's circumstances. (I'm not saying that this is worth the effort in the case of the PVSA, but you seem to be making a more general point about trusting the government to do anything at all right…)

The PVSA has been updated through the years (the exemption for the cruise to nowhere is an example).

This was not an amendment voted by Congress (as was the case of the Puerto Rico exemption), but it is the interpretation of the law currently applied by CBP that cruises to nowhere are not coastwise voyages and are therefore beyond of the scope of the PVSA.

given that US law is based on equal treatment for everyone, if the coastwise passenger trade were opened to foreign flag ships, then it would apply to […]

It is obviously possible to open a part of the coastwide trade to foreign vessels without opening all of it. See the Puerto Rico exemption, again. In what way is that law based on equal treatment for everyone? Congress passes laws all the time that are "discriminatory" in the sense that some people or regions are affected (positively or negatively) more than others. So they could make changes to the PVSA applying only to voyages that leave US territorial waters, for example, and/or only to voyages that last over a certain number of days, etc. So that would keep all of the ferry services you mentioned under full US regulation. Again, I'm not saying this is a good idea, because IMO the cruise industry seems to be dealing pretty well with the PVSA as it is, and a tiny minority of passengers who can't do the B2Bs they want does not justify legislative action. But I suppose it would be possible.
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I don't see any reason to believe that the government of 1886 or any of the governments that have since amended the PVSA had a better a track record. Which is why we expect successive governments to review existing legislation in light of today's circumstances. (I'm not saying that this is worth the effort in the case of the PVSA, but you seem to be making a more general point about trusting the government to do anything at all right…)

This was not an amendment voted by Congress (as was the case of the Puerto Rico exemption), but it is the interpretation of the law currently applied by CBP that cruises to nowhere are not coastwise voyages and are therefore beyond of the scope of the PVSA.

It is obviously possible to open a part of the coastwide trade to foreign vessels without opening all of it. See the Puerto Rico exemption, again. In what way is that law based on equal treatment for everyone? Congress passes laws all the time that are "discriminatory" in the sense that some people or regions are affected (positively or negatively) more than others. So they could make changes to the PVSA applying only to voyages that leave US territorial waters, for example, and/or only to voyages that last over a certain number of days, etc. So that would keep all of the ferry services you mentioned under full US regulation. Again, I'm not saying this is a good idea, because IMO the cruise industry seems to be dealing pretty well with the PVSA as it is, and a tiny minority of passengers who can't do the B2Bs they want does not justify legislative action. But I suppose it would be possible.

 

First, let me ask what unintended consequences were caused by the original PVSA? Seems to me that it has done a pretty good job of preserving coastwise passenger transportation to US flag ships for quite some time.

 

However, the exemption of Puerto Rico from the PVSA states that the exemption will only last until there is a US flag service. So anyone with one small ship taking 200 people once a week between San Juan and Miami would force Carnival to stop all of its cruises (and anyone else's) between San Juan and Miami or New Orleans. This is what I mean by equal for everyone. Once a US flag service is established, the exception goes away. So, if you want to put that caveat on mainland cruises, what is to stop American Cruises from petitioning the courts that they provide US flag cruises from mainland US ports (regardless of whether they could handle the amount of passengers), so every foreign flag cruise ship should stop operation in the US.

 

And each time Congress puts a limitation on a law, how long does it take before someone challenges that limitation in court?

 

I'll be retiring in a few years, so go ahead and be my guest to repeal or modify the PVSA and Jones Act. We will become even more of a third world maritime power, and there will be more and more accidents, spills, and disasters as we go blithely down the slippery slope towards allowing everything that floats in the US to be flagged in Panama. That might actually help the cruise industry, since the more ships flagged in Panama, they may lower the canal fees.

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I'd say pumping $1 billion a year into BC's economy is an unintended consequence.

 

 

Sent from my iPhone using Tapatalk

 

Not when you consider that the leisure cruise industry was not even conceived of when the act was passed. What person in 1886 would pay good money to sail in a ship and return to where they started? So, something was invented over a hundred years later that gave Vancouver a financial benefit. On the other hand, now that there is a cruise industry, which is legally indistinguishable from other forms of maritime passenger service, with a repeal of the PVSA or Jones Act (because if one falls, the other will follow) or the opening of coastwise passenger service to foreign flag vessels, the predictions that I made above will happen in my lifetime. Since it is estimated by industry groups that the difference between operating a US cargo ship and a foreign flag ship is $3million/ship/year, once every ship operator in the country saw an opportunity to reflag, what would be the logic to not doing it?

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And yet you don't think it's an outdated law?

 

 

Sent from my iPhone using Tapatalk

 

Not when it continues to protect US coastwise trade. And as large as the cruise industry is to the US (though few salaries outside corporate headquarters, and little or no corporate tax), if you lump in all passenger service anywhere within the US together, I would venture that it would be quite considerable, and perhaps more important to the US economy.

 

Tell me the benefit to the US if the act was repealed. Other than taking business away from Vancouver, would significantly more people cruise a strictly US itinerary?

Edited by chengkp75
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While I can't argue with the conclusion that Vancouver benefits from the PVSA, I do find it ironic that you would call it an aged and outdated law, when Canada has a very similar cabotage law for coastwise trade.

 

And Chick, I've been down this before with you. When NCL applied to CBP to have the foreign flag ships meet the intent as well as the letter of the law by making the Ensenada stop be a valid port call, it was CBP who went further and added the requirement that foreign port calls make up 48% of the port call time (law of unintended consequences). NCL did not want this, and it would have negatively impacted their own Alaska itineraries, and they actually went to CBP to lobby against their own initiative.

 

But the full day stop in Ensenada wouldn't have been enough to mess up the Hawaiian RTs. NCL's prez wanted the RTs not to be feasible to the point that Princess, HAL, Celebrity, Carnival, RC would drop their Hawaiian RTs. And for a couple of years, some of the cruiselines did so.

 

So no matter who ever come up with the extended time (that half of the time spent in all the ports total would have to be in foreign ports), it was to NCL's benefit...until they learned the same rules would apply to the Alaskan and other itineraries, including Canadian/New England ones.

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But the full day stop in Ensenada wouldn't have been enough to mess up the Hawaiian RTs. NCL's prez wanted the RTs not to be feasible to the point that Princess' date=' HAL, Celebrity, Carnival, RC would drop their Hawaiian RTs. And for a couple of years, some of the cruiselines did so.

 

So no matter who ever come up with the extended time (that half of the time spent in all the ports total would have to be in foreign ports), it was to NCL's benefit...until they learned the same rules would apply to the Alaskan and other itineraries, including Canadian/New England ones.[/quote']

 

I don't believe Veitch ever believed the foreign flag west coast itineraries would ever become unfeasible. However, the full day stop in Ensenada would require one of two things: either the ship burns more fuel to get there sooner to allow for the longer stay, or the amount of time in Hawaii is cut short. Either of these things would have made the cruises less profitable to the foreign flag ships (fuel cost directly to the bottom line, and less time in Hawaii would deter guests). This was the goal. During the time that NCL had 3 ships in Hawaii, there was a 500% increase in cabin capacity going to Hawaii in foreign flag ships. No where else at that time, or in recent memory in any other market has there been such an increase in such a short period of time. Why did this increase happen? Because the foreign flag companies saw how high the fares were with NCL, and knew they could undercut that price significantly even on a 14 day cruise from the West Coast. This over supply drove the cabin prices down to the point where the US flag ships lost $172 million in the last year that 3 ships were there, and NCL was looking for legal means to make the playing field a bit more level.

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I'd say pumping $1 billion a year into BC's economy is an unintended consequence.

 

Not when you consider that the leisure cruise industry was not even conceived of when the act was passed.

That's precisely what makes it an unintended consequence…

 

Tell me the benefit to the US if the act was repealed. Other than taking business away from Vancouver, would significantly more people cruise a strictly US itinerary?

Again, we're not taking about repealing the act, if it still serves a useful protectionist function. But its intent is already so eroded when it comes to ocean cruising, what's left to protect there? Even when it comes to US-flagged ships, they have bent the rules to allow foreign-built ships to be coastwise-qualified (NCL America). What is the benefit of continuing to require round-trips with bogus 3-hour stops in Victoria or Ensenada? To answer your question, I think yes, there would be a lot of interest in one-way cruises between California and Hawaii, or between the US west coast and Alaska, or up and down the Atlantic coast, Gulf Coast, etc. And these cruises would be cheaper to operate (lower cruise fares, more passengers), create less work for CBP, and keep tourism dollars in US ports.
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That's precisely what makes it an unintended consequence…

Again, we're not taking about repealing the act, if it still serves a useful protectionist function. But its intent is already so eroded when it comes to ocean cruising, what's left to protect there? Even when it comes to US-flagged ships, they have bent the rules to allow foreign-built ships to be coastwise-qualified (NCL America). What is the benefit of continuing to require round-trips with bogus 3-hour stops in Victoria or Ensenada? To answer your question, I think yes, there would be a lot of interest in one-way cruises between California and Hawaii, or between the US west coast and Alaska, or up and down the Atlantic coast, Gulf Coast, etc. And these cruises would be cheaper to operate (lower cruise fares, more passengers), create less work for CBP, and keep tourism dollars in US ports.

 

Yes and no. With the NCL ship they have allowed a foreign built ship, but it still had to register in the US and has to follow US labor laws. So the only thing waived was the build requirement. I doubt the other cruise lines would be willing to register and crew ships uniquely for US only routes. It hasn't exactly been highly profitable for NCL in Hawaii.

 

The interest is probably more around the fringes then an overwhelming demand. If they were allowed to I doubt the cruise lines would get that much of an increase in passenger loads then they do now. It is more of a convenience thing then a major boost. Some of us find it annoying every once in a while but it does not make or break big ship cruising in the US.

 

On the other hand there are a number of businesses (river cruises, very small ship cruises, etc.) that are protected by the law. I am pretty sure that the cruise lines could probably get congress to modify the law if they would do what NCL did, but the cruise lines are not interested.

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Yes and no. With the NCL ship they have allowed a foreign built ship, but it still had to register in the US and has to follow US labor laws. So the only thing waived was the build requirement. I doubt the other cruise lines would be willing to register and crew ships uniquely for US only routes. It hasn't exactly been highly profitable for NCL in Hawaii.

 

The interest is probably more around the fringes then an overwhelming demand. If they were allowed to I doubt the cruise lines would get that much of an increase in passenger loads then they do now. It is more of a convenience thing then a major boost. Some of us find it annoying every once in a while but it does not make or break big ship cruising in the US.

 

On the other hand there are a number of businesses (river cruises, very small ship cruises, etc.) that are protected by the law. I am pretty sure that the cruise lines could probably get congress to modify the law if they would do what NCL did, but the cruise lines are not interested.

 

Further to the "bending of the rules" to allow a foreign built ship to work in the PVSA trade, you must remember that if NCL had not stepped up and suggested the deal, the US government would have been out hundreds of millions of dollars in loan guarantees to the shipyard in Mississippi, and would have been left with a half completed cruise ship hull that would have cost more millions to scrap.

 

And the true argument finally is said "lower cruise fares". This is what it is all about. As I stated before, it costs $3million more to operate a US flag cargo ship every year, with a crew of 20, how much more does it cost to operate a US flag cruise ship? Look at NCL's fares for Hawaii. If your true aim was to increase tourism revenue to the US, you would want the crew to be all US citizens who pay US taxes, and spend their wages in the US. Expanding payrolls have far more effect on an economy than mere tourist spending. But that would inflate cruise prices out of the reach of the general public, so we just can't have that.

 

For another thread, I went and looked at the number of vessels the USCG has detained, just this year, for violations of SOLAS requirements (not the more stringent USCG requirements), and it came to 98 for the year to date, including the Veendam in Boston, and the Caribbean Fantasy in San Juan, just this August. So, despite the media interest over the Splendor, Concordia, and Triumph, foreign flag ships, including cruise ships, continue to skip training and maintenance of safety equipment, causing the detentions, which are only caught by random inspections, to keep those same cruise fares down.

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