Passenger Vessel Services Act/Jones Act

[HALrunner]

Can anyone play devil's advocate for me as to why the PVSA/Jones Act should not be repealed? Does it provide any benefits to anyone involved? It seems like the cruise lines and fellow cruisers are only harmed by this antiquated law, I'm just wondering why it hasn't been repealed yet.

[klfrodo]

Ill wait for the expert to jump in. Calling @chengkp75

[CruiserBruce]

Running for popcorn. Always gets exciting!

[ontheweb]

2 hours ago, HALrunner said:

Can anyone play devil's advocate for me as to why the PVSA/Jones Act should not be repealed? Does it provide any benefits to anyone involved? It seems like the cruise lines and fellow cruisers are only harmed by this antiquated law, I'm just wondering why it hasn't been repealed yet.

I hope you realize those are 2 different laws. One applies to passengers while the other applies to cargo.

 

Except for the small window just post- Covid when Canada was not allowing ships and cruise lines still wanted to sail to Alaska, why do you suppose the cruise lines have not been lobbying for the repeal of the PVSA? And even then, they only wanted the one small exception.

[HALrunner]

I'm asking about the PVSA specifically, but wasn't sure if I would get any bites without including the term Jones Act. So glad to see it must be a hot topic if others are getting popcorn! 

 

Honestly, I'm asking for a high school student's assignment. He just thought I might know because we cruise frequently. When I think of PVSA, I think of the annoying port stop in Ensenada on Hawaii cruises. But I'm guessing it has more to do with foreign flagged ships, taxes, foreign worker wages/visa issues, etc than just adding a foreign port to an otherwise domestic itinerary?

I'm eager to learn and operating under the assumption the only stupid question is the one that isn't asked. 😉🤞 🫣 🍿

[HALrunner]

Ohhhh, now I am reading all sorts of excellent posts from ChengKP75 about this topic and hope he chimes in!

I recall him being so knowledgeable early in the pandemic about all sorts of nautical considerations many of us had never considered. 

[navybankerteacher]

As I recall, both acts were essentially intended to protect the U S merchant  marine interests by favoring US flagged ships and protecting them against foreign competition.  The difference between what US crew and foreign crew are paid is probably greater now than ever before - making US cruise passengers very interested in doing away with such protections - which permit ANY US shipping operations to exist.

 

A number of industries have been impacted by the differences in pay standards;  how many of you have recently purchased a television set or a camera which was made in the US?  Or how many New Yorkers have ridden in subway cars recently made in the US - as opposed to Japan (made from iron ore shipped from the Great Lakes - some of which was smelted with coal shipped from the Chesapeake Bay).

 

[chengkp75]

Okay, let's first get through a few historical misconceptions that sites like Wiki present regarding the PVSA and Jones Act.  While I understand that the Jones Act is not the focus of the OP's question, let me answer the last poster on it.  The Jones Act was sponsored by the Senator of that name from Washington state, and was because the Seattle shipowners saw the lucrative Alaska gold rush traffic moving to base out of Canada.  So, it had nothing to do with US shipbuilding, or US crews, but everything to do with who owned the ships and docks.  It has protected the US by requiring that all domestic US waterborne traffic be US flag, so that it falls under the jurisdiction of the USCG and their far stricter regulations on safety, training, documentation, etc, than foreign ships.  And, the Jones Act fleet today includes all tug/barge traffic on US rivers and in US harbors.

 

Now, to the PVSA.  The first point to be made is that the Act is the "Passenger" Vessel Services Act, not the "Cruise" vessel act.  This is important, since under maritime law, a "passenger vessel" is any vessel that carries more than 12 passengers for hire.  So, the regulations of the PVSA not only cover cruise ships with thousands of passengers, but also every single ferry boat, commuter boat, water taxi, dinner cruise, casino boat, tour boats like NYC's Circle Line, whale watching boats, and even larger charter fishing boats, as well as several smaller US flag cruise vessels.  Today, there are hundreds of thousands of US jobs, held by US citizens, paying US taxes that are supported by the PVSA US flag passenger vessel fleet, and hundreds of millions of dollars put into the US economy by the fleet.

 

Both the Jones Act and the PVSA apply only to domestic transportation (within the US) and not international transportation (from one country to another).

 

Now, as to why the PVSA was passed into law, lets say that the claim it was to protect US shipbuilding is false, since the types of vessels being regulated by the Act, at the time, were paddlewheel steam boats on US rivers and harbors, and not ships that would safely be built overseas and steamed across oceans to the US.  As to the claim that it was passed to protect US maritime labor, this is also false, as organized maritime labor was in its infancy at the time, the first US maritime labor union having been formed on the Great Lakes only 11 years before the PVSA passed, and the unions had no political clout.

 

So, why was the PVSA passed?  Safety.  In the mid 1800's, many steamboats were catching fire or having boiler explosions, killing thousands of passengers yearly.  Congress passed the Steamboat Act of 1838, followed by the Steamboat Act of 1852.  While both of these acts required increasing safety features (hydrostatic testing of boilers, licensing of pilots and engineers on steamboats), there was no enforcement mechanism.  So, the Steamboat Act of 1871 created the Steamboat Inspection Service, the ancestor of today's USCG Marine Inspection Service, which inspects not only US flag, but all foreign flag vessels that call at US ports for safety and environmental compliance.  The SIS enforced the provisions of the various Steamboat Acts, and this, of course, drove up the building and operating costs to the steamboat owners.  In retaliation, the steamboat owners started to reflag their vessels, that never left US waters, to various foreign nations, so they would not be subject to the SIS and the Steamboat Acts.  The PVSA was the answer to this, requiring that all domestic passenger vessels be US owned, US built, US crewed, and US flagged.  Therefore, they were forced to be subject to US safety laws.

 

To this day, the USCG administers safety, training, and documentation regulations that are far stricter for US flag vessels, than it can for foreign flag vessels.  International maritime conventions, like SOLAS, MARPOL, STCW, MLC, and others that nations sign on to agree to (and the US has signed on to most), require two things:  one, that the country pass the wording of the international convention into law in that country, and two, that the country cannot enforce any stricter laws on vessels of other nations, but they can enforce stricter laws on vessels of their own flag.

 

Take for example the training and documentation of a cabin steward on a cruise ship.  On a foreign flag cruise ship, the USCG can only determine that the crew member has passed an STCW approved "Personal Safety and Social Responsibility" course (4 hours).  All aspects of that crew member's duties in performing their assigned emergency duty are done onboard the ship.  On foreign flag cruise ships, the only crew that have extensive emergency training at approved training centers, are the deck and engine crew and officers (who make up about 10% of the total crew.  Conversely, on a US flag cruise ship, if a crew member has an assigned emergency station (so, the entire crew), they must have completed STCW Basic Training, at a USCG approved training center, which is a 40 hour course that includes hands on operation of lifeboats, and hands on firefighting.  This additional training of course increases the cost for the cruise line to hire US personnel, but gives a much better trained crew.

 

Now, why haven't the cruise lines lobbied for repeal of the PVSA?  They did lobby for an exemption for transportation between Puerto Rico and the mainland US.  That took over 10 years of lobbying to get passed, and only one cruise line ever started regular one way cruise itineraries between PR and the mainland, that lasted only about 2 years, and folded due to lack of passenger demand, yet it still remains on the books.  The cruise lines know that in order to get a repeal of the PVSA, they will have to accept laws placing them further under various US laws (USCG inspection, US labor laws, US tax laws) that would adversely affect their bottom line more than doing away with the foreign port calls, or even the "distant" foreign port calls would gain them.  CLIA has stated this publicly over the years.

[chengkp75]

7 hours ago, navybankerteacher said:

A number of industries have been impacted by the differences in pay standards;  how many of you have recently purchased a television set or a camera which was made in the US?  Or how many New Yorkers have ridden in subway cars recently made in the US - as opposed to Japan (made from iron ore shipped from the Great Lakes - some of which was smelted with coal shipped from the Chesapeake Bay).

The US Maritime Administration, which is tasked with supporting US flag shipping, has published what is actually damning evidence against US flag ships, stating that it costs 3 times as much to operate a US flag ship over a ship with a flag of convenience.  Of that higher total cost, crew cost is almost 5 times higher for US crew over foreign crew.  And, this is for a cargo ship where the crew is about 20, so you can imagine how expensive a US cruise ship crew would be when it numbers in the thousands.

 

And, in addition to the point this poster makes about the cost of the items manufactured overseas, remember that that item was shipped from overseas, as 80% of the world's economy is shipped by sea, and all on foreign flag ships.  Imagine if every ship in the world was required to pay US wages to their seafarers.

[chengkp75]

Further to the OP's question, if the PVSA were repealed, then virtually every passenger vessel operator in the US, like the NYC Circle Line ferry, Staten Island ferry, Washington State Marine Highway, San Francisco Bay ferry, all the way down to the small car ferries operating on Galveston Bay, would reflag to Panama, hire Panamanian crew, and stop paying corporate tax to the US.  And, that would just be one branch of the industry that would do this, all the types of vessels I mentioned above would do the same.

[Honolulu Blue]

13 minutes ago, chengkp75 said:

why haven't the cruise lines lobbied for repeal of the PVSA?  They did lobby for an exemption for transportation between Puerto Rico and the mainland US.  That took over 10 years of lobbying to get passed, and only one cruise line ever started regular one way cruise itineraries between PR and the mainland, that lasted only about 2 years, and folded due to lack of passenger demand, yet it still remains on the books.  The cruise lines know that in order to get a repeal of the PVSA, they will have to accept laws placing them further under various US laws (USCG inspection, US labor laws, US tax laws) that would adversely affect their bottom line more than doing away with the foreign port calls, or even the "distant" foreign port calls would gain them.  CLIA has stated this publicly over the years.

 

Thank you for your insight as usual.  I highlighted this portion because I think it's especially relevant to the OP's question and some of my thoughts on this matter.

[judycruiser]

I LOVE it CHIEF posts

[njhorseman]

4 hours ago, chengkp75 said:

Further to the OP's question, if the PVSA were repealed, then virtually every passenger vessel operator in the US, like the NYC Circle Line ferry, Staten Island ferry, Washington State Marine Highway, San Francisco Bay ferry, all the way down to the small car ferries operating on Galveston Bay, would reflag to Panama, hire Panamanian crew, and stop paying corporate tax to the US.  And, that would just be one branch of the industry that would do this, all the types of vessels I mentioned above would do the same.

Chief, while as always I appreciate and respect your knowledge and experience, I think you may be exaggerating the likelihood of government owned and operated ferry systems such as the Staten Island Ferry and Washington State Ferries reflagging to a foreign country such as Panama. Certainly the comment about not having to pay corporate taxes to the US is not accurate because as government agencies they don't pay corporate taxes. 

The Circle Line sightseeing boats are a different story as they are owned and operated by a for-profit corporation, not a government agency.

Edited May 2 by njhorseman

[chengkp75]

While you may be right about government agencies not going to foreign flag (though what would be the incentive to incur far higher operating costs by retaining US flag?), there are 190 private ferry operators in the US that would be likely to avail themselves of foreign flag.  Wouldn't any government agency avail itself of cost reductions if they were legal?  Who even looks to see what flag the Staten Island ferry is flying, or the port of registry?

 

Alaska Marine Highway (I misidentified), is having huge problems keeping vessels operating, and crewing them, and are cutting back on services, some of which are essential to rural areas in Alaska.  What would be the holdback to foreign flagging these vessels if the PVSA was no longer in force?

[njhorseman]

12 minutes ago, chengkp75 said:

While you may be right about government agencies not going to foreign flag (though what would be the incentive to incur far higher operating costs by retaining US flag?), there are 190 private ferry operators in the US that would be likely to avail themselves of foreign flag.  Wouldn't any government agency avail itself of cost reductions if they were legal?  Who even looks to see what flag the Staten Island ferry is flying, or the port of registry?

 

Alaska Marine Highway (I misidentified), is having huge problems keeping vessels operating, and crewing them, and are cutting back on services, some of which are essential to rural areas in Alaska.  What would be the holdback to foreign flagging these vessels if the PVSA was no longer in force?

The bad optics and negative publicity generated by a government agency operating foreign-flagged and foreign-crewed ships could be a political nightmare costing politicians their jobs. 

Unions representing the ferry workers would campaign against this.

Edited May 2 by njhorseman

[chengkp75]

27 minutes ago, njhorseman said:

The bad optics and negative publicity generated by a government agency operating foreign-flagged and foreign-crewed ships could be a political nightmare costing politicians their jobs. 

Unions representing the ferry workers would campaign against this.

And, how have the maritime unions done with maintaining a US flag foreign-going fleet?  Why are the vast majority of USNS ships (Marad owned and operated for logistical support of the DOD) foreign built?  Maritime labor has very little clout in the US.  And the bad optics would be offset by the optics of saying "we cut the cost to operate these ferries by 75%, there will be fare decreases or no fare increases for the foreseeable future"  And, if the competitors, like Circle Line, and all the water taxis in NYC were to go foreign flag, and then offer services competing with the Staten Island ferry, demand would drop, revenue would drop, subsidy would increase, and the politicians would say "let's privatize it", and let it go..

[ldubs]

19 hours ago, HALrunner said:

Can anyone play devil's advocate for me as to why the PVSA/Jones Act should not be repealed? Does it provide any benefits to anyone involved? It seems like the cruise lines and fellow cruisers are only harmed by this antiquated law, I'm just wondering why it hasn't been repealed yet.

 

Excellent responses from those that know the history and impacts of these reg's.  From my perspective, eliminating PVSA would be similar to allowing a business on American soil to pay substandard wages and ignore our labor laws.   

[njhorseman]

1 hour ago, chengkp75 said:

And, how have the maritime unions done with maintaining a US flag foreign-going fleet?  Why are the vast majority of USNS ships (Marad owned and operated for logistical support of the DOD) foreign built?  Maritime labor has very little clout in the US.  And the bad optics would be offset by the optics of saying "we cut the cost to operate these ferries by 75%, there will be fare decreases or no fare increases for the foreseeable future"  And, if the competitors, like Circle Line, and all the water taxis in NYC were to go foreign flag, and then offer services competing with the Staten Island ferry, demand would drop, revenue would drop, subsidy would increase, and the politicians would say "let's privatize it", and let it go..

The privately-owned water taxis and ferries in NY City can't exist with the approval of their franchise by the city government. None would be allowed to directly compete with the Staten Island Ferry.

 

In any event I am not talking about for-profit corporations. I'm strictly addressing the politically unacceptable scenario of government-owned operations such as the Staten Island Ferry operating foreign-flagged vessels crewed by citizens of other countries.

 

 The media outlets are going to feast on stories like "Mayor Adams Plans to Replace XXX New Yorkers Who Work on the Staten island Ferry with Panamanians"

 

Maritime unions may be weak, but not unions representing government employees. You may not be aware of the influence that union leaders in this area of the country have. My son happens to be president of a union representing several thousand government employees in this county. He has the ear of every politician from our town's council and mayor to the county executive to our state legislators to the governor. He and his union worked on their behalf to help them get elected.  Believe me if his rank and file were in danger of losing their jobs to citizens of other countries those politicians would  be instantaneously reminded of how many votes that would cost them the next election.

 

BTW, the Staten Island Ferry is already free, so foreign-flagging isn't going to reduce the fare.

Edited May 2 by njhorseman

[chengkp75]

12 minutes ago, njhorseman said:

My son happens to be president of a union representing several thousand government employees in this county.

And, none of the ship's crews on the Staten Island ferry are government employees.  They are members of the maritime unions.  And, yes, the Staten Island ferry is free, so that can be an outlier.  How many government run entities have been privatized in the last couple of decades?

Edited May 2 by chengkp75

[Essiesmom]

And I believe that on US flagged vessels,  not all employees have to be US citizens.  A specified percentage do, and could be legal residents or here with work visas.  EM

[chengkp75]

Just now, Essiesmom said:

And I believe that on US flagged vessels,  not all employees have to be US citizens.  A specified percentage do, and could be legal residents or here with work visas.  EM

All licensed officers have to be US citizens.  Unlicensed crew have to be 75% citizens, and 25% green card (resident alien, so taxpaying) holders.  Only NCL has an exemption to allow NRAC (non-resident alien crew) to serve on US flag ships, and those have to be part of the 25% of unlicensed crew.  The NRAC's have to be paid US wages, pay US Social Security tax, US income tax, and have other requirements, like having worked for NCL for 10 years prior, and NCL obtaining a work visa for them.

[njhorseman]

26 minutes ago, chengkp75 said:

And, none of the ship's crews on the Staten Island ferry are government employees.  They are members of the maritime unions.  And, yes, the Staten Island ferry is free, so that can be an outlier.  How many government run entities have been privatized in the last couple of decades?

There's a job opening on nyc.gov as a marine oiler for the Staten Island ferry.

The job description clearly states that the person will be an employee of the City of New York. 

[chengkp75]

19 minutes ago, njhorseman said:

There's a job opening on nyc.gov as a marine oiler for the Staten Island ferry.

The job description clearly states that the person will be an employee of the City of New York. 

I'm not sure what union represents the unlicensed crew on the Staten Island ferry, but the licensed officers are represented by MEBA, one of two maritime officer unions. I would be surprised if the unlicense crew are not represented by the SIU (Seafarers International Union, as these two unions typically require the company to contract with both unions), but you can be an employee of a company (or city) and a member of a different union than other government employees (like government employees union and teachers union).  But, this is far afield from the OP's question.

Edited May 2 by chengkp75

[njhorseman]

21 minutes ago, chengkp75 said:

I'm not sure what union represents the unlicensed crew on the Staten Island ferry, but the licensed officers are represented by MEBA, one of two maritime officer unions. I would be surprised if the unlicense crew are not represented by the SIU (Seafarers International Union, as these two unions typically require the company to contract with both unions), but you can be an employee of a company (or city) and a member of a different union than other government employees (like government employees union and teachers union).  But, this is far afield from the OP's question.

The point is that being represented by a maritime union doesn't mean you're not a government employee. 

I also checked job openings on the Washington State Ferry. Again they are state employees but may be represented by various unions.

You are correct...we have gone far afield from the original question, but that often happens .

 

[ontheweb]

9 minutes ago, njhorseman said:

The point is that being represented by a maritime union doesn't mean you're not a government employee. 

I also checked job openings on the Washington State Ferry. Again they are state employees but may be represented by various unions.

You are correct...we have gone far afield from the original question, but that often happens .

 

Going far afield often happens, but at least in this case it was after the original question was completely answered.