Why are all the ships registered out of the U.S.?

[McGarrett]

Why are all the ships registered out of the U.S.? I've heard some of the various reasons, but I'd like some input from everyone.

[firefly333]

Probably lots of reasons. My pick of reasons is so they dont run into U.S. labor laws and can work people as many hours as they want to.

[Essiesmom]

To be registered in the US, you have to be built in the US, or get a special dispensation from Congress, as NCL did for two of the NCLA ships (whose hulls were constructed here). EM

[smeyer418]

for the most part it has to do with the crew, duty free, casinos and taxes. Most ships are flagged at a country of convenience that minimally taxes them and supervises them. There are some exceptions(the QM is flagged in England). It has little to do with where they are built because most ships are built in Western Europe where the costs are just as much as in the US for labor-although they have the expertise to build them while we have lost it.

[janetz]

"taxes" ;)

[upstate_italian]

Would there be any benefit to having a US registered ship in either a passenger or freight vessel? I know about not transporting people from one port to another without visiting a distant foreign port first, but what else is there?

[mtwingcpa]

Generally taxes and labor laws. Plus, I believe that US flagged ships are not allowed to have casinos.

[smeyer418]

Would there be any benefit to having a US registered ship in either a passenger or freight vessel? I know about not transporting people from one port to another without visiting a distant foreign port first, but what else is there?

other than being able to transport between US ports and not having to visit foreign ports, absolutely none. The NCL ship registered in the US is not allowed to have a casino or have a duty free store. The ships that are US flagged have to do it because of the coast wise(intra US) trading laws. There is no other "benefit"

[smeyer418]

Generally taxes and labor laws. Plus, I believe that US flagged ships are not allowed to have casinos.

actually its not the US law that prohibits casino's. Its Hawaiian law that prohibits the NCL ship from having them.

[McGarrett]

What about avoiding lawsuits brought by U.S. Citizens? Does the country of registry avoid this?

[smeyer418]

What about avoiding lawsuits brought by U.S. Citizens? Does the country of registry avoid this?

no US law requires any ship that enters or leaves from the US to allow lawsuits for physical injuries. So registry is mostly irrelevant.

[donaldsc]

Lower costs.

 

DON

[paul929207]

Would there be any benefit to having a US registered ship in either a passenger or freight vessel? I know about not transporting people from one port to another without visiting a distant foreign port first, but what else is there?

Beng registered in the US woould be a step towards being allowed to carry passengers from one US port to another (Se discussions of PVSA). However, the other restrictions in the law force most companies to bypass this.

[McGarrett]

no US law requires any ship that enters or leaves from the US to allow lawsuits for physical injuries. So registry is mostly irrelevant.

 

Is a ship that is registered in a foreign port exempt/immune from lawsuits by U.S. residents? Is there any legal advantage for the American Cruise Ship company when facing a lawsuit? Is the fact that the ships are registered in other countries letting the cruise ship company skirt the U.S. court system even though it is a American company?

[McGarrett]

So far we have...

 

Avoid taxes.

Avoid Labor laws.

Avoid gambling laws.

Avoid US construction standards.

Avoid lawsuits.

Lower construction costs over seas.

 

What would it take for our own mega-cruise ship companies to start doing more business with our own country?

[Fredr]

Hello,

 

You ask a very good question. We hear and read lots of talk about Socialism in Europe, and how Europe is totally infected by laziness, government hand outs and all the stuff we do not do here.

 

And yet, the Oasis of the Seas is being built in Finland. The other two great ship building yards are Atlantique in France and Fiancanteri in Italy. On the ride from Mestre to Venice, you can see Fiancanteri off in the distance and a number of years ago we saw two Carnival ships being built there.

 

And...has any American ship building company ever bid on building cruise ships in the USA?

[smeyer418]

Is a ship that is registered in a foreign port exempt/immune from lawsuits by U.S. residents? Is there any legal advantage for the American Cruise Ship company when facing a lawsuit? Is the fact that the ships are registered in other countries letting the cruise ship company skirt the U.S. court system even though it is a American company?

1. No, any ship that leaves or returns or stops at a US port, US flagged or otherwise has the exact same liability for personal physical injury to passengers. Maritime law does have some limitations that others don't enjoy. as an example unless the cruise company supervises the actual operation of the ship the owners liability is limited to the value of the ship or the bond US law requires for the ship to be posted. This was true when the Titanic sank and its still true today. NY City tried to use this limit of liability when one of its ferries struck a pier injuring and killing many. The Court rejected the limit because of the supervision the port side people exercised over the crew. Where the ship is flagged is almost irrelevant for US laws and lawsuits to apply as long as the ship sails in US ports.

2. there is no legal advantage for a US flagged ship except being able to transport passengers between two US ports unencumbered by rules concerning foreign stops..

3. No they are still subject to many-but not all- US laws. The one clear advantage is that it is not subject to US labor laws and workers comp law(the Jones Act is the workers compensation law for maritime cases). A good example of this was the Norway explosion. A US flagged vessel would have to pay many millions to each employee that was killed or injured under the Jones Act but because the ship was foreign flagged the amount of liability was much less. The Cruise company was eventually found guilty of criminal activity and that US law did apply.

[smeyer418]

So far we have...

 

Avoid taxes.

Avoid Labor laws.

Avoid gambling laws.

Avoid US construction standards.

Avoid lawsuits.

Lower construction costs over seas.

 

What would it take for our own mega-cruise ship companies to start doing more business with our own country?

 

 

I don't believe that it cost less to build in Finland, France, or Italy...maybe Russia. But the first three have standards of living and Unions that are as costly-if not more so than anything here(France and Italy have many more days off than we do). They don't avoid most lawsuits(the limitation on class action lawsuits is contractual not a result of the ships flag) and the US Supreme court says that the construction standards of the US disability laws applies to cruise ships that stop in the US. Building ships are subject to pretty strict standards set by SOLAS which is a treaty the US does subscribe to and it applies to US flagged ships as well.

[smeyer418]

You know in writing some of my answers to this and other questions, I pointed out the for PSVA purposes US courts would look at the reality of what the cruise lines do(if a cruise line scheduled ships-same cruise line -different ships- to meet in Vancouver and then on different ships allowed someone to return to a different US port would that violate the PSVA and I think it would). Why are then cruise companies able to register a ship in a foreign country while the ship is still owned by a US company to avoid US labor laws? and not to answer my own question but its because of a legal theory called "comity". Comity means that the state or country with the most interest is allowed to have its laws apply unless that law violates some basic principle of the place where the lawsuit is heard.

Labor Laws are a good example in general Comity dictates that a state/country where the ship is flagged has a greater interest in how it treats its employees than the place the lawsuit is heard.

But as another example of when Comity wouldn't apply would be same sex marriage. Some states/countries allow same sex marriage. Some states(and US federal law) have indicated in law that same sex marriages will not be recognized.(this is not meant to set off a discussion of this it points out what some states have as a basic principle whether I agree with it or not). This is even true in the US which has a constitutional requirement to recognize other states laws-the full faith and credit clause-which only applies to US states not foreign law. (Those of you old enough to remember, other states were required to recognize Nevada divorces but not Tijuana, Mexico ones). But US courts have allowed US law to apply when it felt that the US had interests that should be protected over the flag of convenience. The example of that is US disability law applies to foreign flagged vessels(says the US supreme court). Comity can almost be described as "courtesy' which requires that one state accept the law of another state/country unless the hearing state has some stated public policy that should be obeyed.

So even though it hasn't yet, a court could find that comity would allow US labor laws to apply to a foreign flagged ship owned by US interests....and it would be an interesting argument before the US Supreme Court.

 

http://en.wikipedia.org/wiki/Comity

 

http://en.wikipedia.org/wiki/Full_Faith_and_Credit_Clause

 

I think the part of the Comity discussion in Wikipedia is wrong. Its not the immunity clause its the full faith and credit clause that requires that other US states laws be accepted...and many states do not have reciprocity for some licenses(law being one that doesn't have universal reciprocity). Most states do accept other states drivers licenses.

[ohioNCLcruiser]

I suggest everyone read the book "Devils on the Deep Blue Sea: The Dreams, Schemes and Showdowns That Built America's Cruise-Ship Empires ". It talks about a few issues and one of them is the "flags of convenience" topics. Another interesting part is what the cruise lines do to control docking fees in the different Caribbean ports and how most ports didn't have a choice but to listen. It was a great book!

[Philip217]

One more extremely good reason not to flag a cruise ship in the USA:

 

Every US Flag cruise ship in the past 50 years has either gone bankrupt, been re-flagged, or just moved to international service (minus the American crew).

 

Many fingers have been pointed and plenty blame assigned. Some people fault the now defunct American Maritime Unions for making their members unaffordable. Others blame the high operating costs and high American Taxes. Many blame the work ethics of the American sailors. Having worked on several American Flag ships, I suspect that it is a combination of all three - and then some.

 

The Pride of America is the last remaining US Flag ocean-going cruise vessel. There are many rumours circulating as to how much longer she will remain with an American Flag.

 

After the American shipyard that was trying to build her was bankrupted by the process, NCL tried to have another American shipyard finish her. Not a single American shipyard was even willing to bid on the job. It's far easier - and more profitable - for them to build US military ships with huge cost overruns. NCL was forced to tow the unfinished hull to Germany to get it completed.

 

Until last year it appeared that there was going to be a big resurgence in American Dry Dock jobs for the international cruise ships. This would have been a huge financial boost for cities like San Francisco, Seattle, Mobile, Charleston, and a few others. Then the US Immigration people changed the regulations for foreign engineers who are needed to supervise the dry dock jobs. They can no longer work in a US ship yard.

So all the cruise lines were forced to take their millions to Canada, Mexico and the Bahamas to get their dry docks completed.

[ohioNCLcruiser]

The Pride of America is the last remaining US Flag ocean-going cruise vessel. There are many rumours circulating as to how much longer she will remain with an American Flag.

 

This ship isn't going anywhere for a long time. ;)

[mtwingcpa]

actually its not the US law that prohibits casino's. Its Hawaiian law that prohibits the NCL ship from having them.

 

Aha! Thanks for the clarification.

 

Looking into this further, it appears that states do have SOME say on the gambling issue within their territorial waters. For example, Hawaii prohibits it, while Alaska allows it subject to taxation. Is that basically what's happening?

[smeyer418]

Aha! Thanks for the clarification.

 

Looking into this further, it appears that states do have SOME say on the gambling issue within their territorial waters. For example, Hawaii prohibits it, while Alaska allows it subject to taxation. Is that basically what's happening?

within their waters yes exactly.

[BroncosFan2010]

I suggest everyone read the book "Devils on the Deep Blue Sea: The Dreams, Schemes and Showdowns That Built America's Cruise-Ship Empires ". It talks about a few issues and one of them is the "flags of convenience" topics. Another interesting part is what the cruise lines do to control docking fees in the different Caribbean ports and how most ports didn't have a choice but to listen. It was a great book!

 

 

I have been meaning to read this! Thanks for reminding me of the title.