Could lifting the ''Jones act'' be a help in this mess.

[dkjretired]

1 hour ago, donaldsc said:

 

This is a post on the Jones act including why it is called the Jones Act - https://www.investopedia.com/terms/j/jonesact.asp.  You are correct that it has nothing to do w cruise ships.  

 

As you correctly noted, it is the PVSA that applies - https://en.wikipedia.org/wiki/Passenger_Vessel_Services_Act_of_1886.

 

DON

I was amused after reading the Wikipedia entry that the PVSA was signed into law by President Grover Cleveland.

[AL3XCruise]

Two thoughts I had, which overlap/reinforce some comments made before.

 

1) Major lines have flexibility under current rules to operate the vast majority of the routes they want.  They can hit multiple US Ports in a row as long as they visit a foreign port (or a distant foreign port if the is not a closed-loop cruise).  CLIA, which never hesitates to raise a ruckus, has not made PVSA modifications a priority, suggesting its members are happy as is.

2) While I don't want to start a debate a protectionism and politics, we are seeing right now why ensuring a robust transportation/logistics system is essential.  Changes to the PVSA (or Jones Act for that matter) could have significant impacts on this.  Any change, even a small one, needs to be carefully considered in a broader context.

 

I feel when it comes to the PVSA/Jones Act many people don't understand the intent and impact of the requirements they impose yet feel compelled to argue for changes.  Of course, change can be good, but understanding is key to ensuring it is!

[donaldsc]

21 minutes ago, AL3XCruise said:

Two thoughts I had, which overlap/reinforce some comments made before.

 

1) Major lines have flexibility under current rules to operate the vast majority of the routes they want.  They can hit multiple US Ports in a row as long as they visit a foreign port (or a distant foreign port if the is not a closed-loop cruise).  CLIA, which never hesitates to raise a ruckus, has not made PVSA modifications a priority, suggesting its members are happy as is.

2) While I don't want to start a debate a protectionism and politics, we are seeing right now why ensuring a robust transportation/logistics system is essential.  Changes to the PVSA (or Jones Act for that matter) could have significant impacts on this.  Any change, even a small one, needs to be carefully considered in a broader context.

 

I feel when it comes to the PVSA/Jones Act many people don't understand the intent and impact of the requirements they impose yet feel compelled to argue for changes.  Of course, change can be good, but understanding is key to ensuring it is!

 

My understanding that that the acts were enacted to preserve the American owned shipping companies and passenger ship companies.  Are there any significant numbers of them left?  Or do I have it wrong?

 

DON

[chengkp75]

8 minutes ago, donaldsc said:

 

My understanding that that the acts were enacted to preserve the American owned shipping companies and passenger ship companies.  Are there any significant numbers of them left?  Or do I have it wrong?

 

DON

Actually, that is pretty much the Wiki take on the acts.  The Jones Act was enacted to protect US shipowners in Washington State (hence Senator Jones as sponsor) from competition by Canadian ship owners.  There is still a significant Jones Act fleet today, and the Jones Act fleet supports about the same number of jobs that CLIA claims the cruise industry supports in the US, but the Jones Act fleet contributes nearly twice the benefit to the US economy as the cruise lines do.  The Jones Act not only protects coastwise US vessels, but the Great Lakes trade, and all tugs and barges that travel the ports, harbors, and rivers of the US.

 

The PVSA was not in fact a protectionist act, as maritime labor was in it's very infancy at the time of the act, and the ships that it covered at the time were already built in the US, and were not the type of vessels that you would sail across oceans from overseas to take over coastwise passenger services.  The Act was an outgrowth of the Steamboat Act of 1836, and the Steamboat Act of 1852, both of which were designed to protect US passengers from injury and death from the rash of explosions and fires that were commonplace on the steamboats of the day in US harbors and rivers.  These two acts, which required safety standards that passenger vessels needed to meet, lacked enforcement, and were of course unpopular with shipowners (added cost).  This led to the Act of 1871, which created the Steamboat Inspection Service, the precursor of today's USCG Marine Inspection Service, placed enforcement of the laws under this Service in the Department of the Treasury.  The inspection and enforcement of the safety standards caused ship owners to reflag their ships to foreign countries to avoid the cost of compliance.  This led to the PVSA, which required that coastwise and inland transportation of passengers be on US flag vessels, so that the Steamboat Acts could be enforced.  So, the purpose of the PVSA was to protect the US public.

 

There is also still a viable PVSA fleet, not only the small cruise lines like American Cruises and Blount Adventure, but the act also protects every single passenger vessel (defined as any vessel that carries more than 12 passengers) in the US, like ferries, water taxis, commuter boats, dinner cruises, casino boats, whale watching and sightseeing boats, and even large charter fishing boats.

[AL3XCruise]

24 minutes ago, donaldsc said:

My understanding that that the acts were enacted to preserve the American owned shipping companies and passenger ship companies.  Are there any significant numbers of them left?  Or do I have it wrong?

 

DON

 

You don't see huge numbers of US container ships, and, of course, only a single large US cruise ship, but there is still a major US shipping industry.  Inland shipping, domestic ferry routes, much of the shipping on the Great Lakes, small domestics cruises, and coastal shipping are all serviced by US ships that would likely face foreign competition.

 

Some would argue that more competition is a good thing, but I think there is also a case to be made in ensuring the most robust possible system is in place when it plays such a critical role in economy and safety.  Domestic ownership allows for more direct control of safety, quality, and reliability as well as avoiding any possible foreign influence on operations.  Many foreign companies certainly meet exceptionally high standards, and the international issues are somewhat hypothetical, but given the importance of the infrastructure I understand the desire to be cautious.

 

Jobs, of course, are another factor.  It is hard to quantify that impact, though.  Some folks in the industry can probably give you more specific numbers and economic data.  Much like with cruise lines, I'm hesitant to repost "economic impact" numbers and the like without reading through the underlying assumptions.  CLIA, for example, makes some questionable assumptions in order to estimate the number of jobs cruise lines create in the US.

 

Edit: Looks like the Chief already added some good numbers.

Edited April 21, 2020 by AL3XCruise

[dkjretired]

This discussion has been  very informative, some of this came up in other threads related to giving some of the stimulus funding to the cruise lines.  I did not favor this because they are not American Companies however in most of the discussions people don't understand that these laws effectively cause these companies to flag outside the US.   We also do not have any major shipyards in the US making the larger cruise ships due to these laws.    I really would like to see this change to give the US a fair chance.   

 

Also, should say that I did one of those cruise with all US ports in Alaska with the final stop in the evening for a few hours in Victoria, Canada.   Just my opinion but thought this was an absolute waste of a stop just to follow the law.   Don't get me wrong, Victoria is a beautiful city, just seems like something our government could fix. 

Edited April 21, 2020 by dkjretired

[chengkp75]

22 minutes ago, dkjretired said:

This discussion has been  very informative, some of this came up in other threads related to giving some of the stimulus funding to the cruise lines.  I did not favor this because they are not American Companies however in most of the discussions people don't understand that these laws effectively cause these companies to flag outside the US.   We also do not have any major shipyards in the US making the larger cruise ships due to these laws.    I really would like to see this change to give the US a fair chance.   

 

Also, should say that I did one of those cruise with all US ports in Alaska with the final stop in the evening for a few hours in Victoria, Canada.   Just my opinion but thought this was an absolute waste of a stop just to follow the law.   Don't get me wrong, Victoria is a beautiful city, just seems like something our government could fix. 

Once again, when I had a long post going, my internet onboard cut out, and it was lost to the "cloud".  I'll try again.

 

The downfall of the US Merchant Marine and US shipbuilding were not a result of either the Jones Act or the PVSA.  That distinction belongs to the Merchant Marine Act of 1936.  This act succeeded beyond expectations in it's original intent, to enlarge and prepare the US merchant fleet for the rigors of WW2.  Without the US Merchant Marine, and the benefits of the Act of 1936, that war would have been lost.  The Act provided subsidies to shipyards for the difference in cost between building a ship in the US and building the same ship overseas.  It also provided operating subsidies to shipowners for the difference in cost between operating the ship as US flag or foreign flag.  These subsidies continued until President Reagan rescinded them.  Shipyard labor would demand higher wages, knowing that their demands would not affect the shipyard, since the increase would be passed to the government via the subsidy.  The shipyard would accept the higher wage demands over attempts to improve efficiency or innovative building techniques, as the labor was no cost to them, while the improvements would be at their cost.  Similarly, maritime labor would demand higher wages rather than improved efficiency (meaning fewer crew), and the shipowners would simply pass the cost to the taxpayer.  This completely stunted our typical US capacity for innovation, and led to where we are now, unable to compete with foreign shipping.  A major example was that after WW2, the rest of the world shifted from the fuel inefficient steam propulsion to diesel propulsion, because fuel was expensive while labor was cheap, and diesel engines require more maintenance than steam plants.  The US clung to steam propulsion until the oil embargo of the 70's, because fuel was cheap and labor was expensive. This is why there are no marine diesel engines built in the US today.

 

Long after the passage of the PVSA (1886) and after the passage of the Jones Act (1920), US shipbuilding and US shipping were growing industries.  It was only once the maritime industry learned to "game" the Act of 1936, that we started losing our edge, and the rot set in.  I came into the industry in the 70's, shortly before President Reagan stopped the subsidies, and I have seen our wages remain stagnant in current dollars, and those current dollars buy much less than they did in the 70's.  We are still working to regain our competitiveness with foreign flag shipping, and we are still far away. 

[BlueRiband]

Interesting history lessen on why US merchant shipping is where it is today.   If there were no PVSA there would be other challenges to profitably operating coastal routes.

 

I noticed that the OP is from Philadelphia, PA which briefly had a cruise terminal within the old Navy Yard.   It seemed to have increased popularity in the first years then embarkations dwindled to almost nothing.  Then I found the crux of its demise: 5-6 hours to navigate the Delaware River before entering open ocean.  Piloting and/or tug charges for that amount of time would mean high very operating costs. 

[AL3XCruise]

2 hours ago, BlueRiband said:

Then I found the crux of its demise: 5-6 hours to navigate the Delaware River before entering open ocean.  Piloting and/or tug charges for that amount of time would mean high very operating costs. 

 

Baltimore and New Orleans have seemed to manage with similar issues, so while that may be a contributing factor I doubt it is the only one.

 

 

[dkjretired]

7 hours ago, AL3XCruise said:

 

Baltimore and New Orleans have seemed to manage with similar issues, so while that may be a contributing factor I doubt it is the only one.

 

 

 

We did Baltimore once and it took us eight hours to get to the Cheaspeak Bay Bridge Tunnel.   This was in 03 and it surprised me that a half hour after we left the pier, the casino opened.   

[chengkp75]

2 minutes ago, dkjretired said:

 

We did Baltimore once and it took us eight hours to get to the Cheaspeak Bay Bridge Tunnel.   This was in 03 and it surprised me that a half hour after we left the pier, the casino opened.   

That is because the ship stays on the Virginia side of the bay, and Virginia allows shipboard casinos.  Gambling laws on ships are a state issue, not federal.

[ChinaShrek]

Let's try to have an open mind about repealing the PVSA in order to allow cruising to American ports only. What would the positive and negative ramifications be of such a decision on the cruising world? Everyone has posted why it's not going to happen. So, what? What if it did change?  Many of you have chimed in providing about why the law was put into place. What happened in the 1800s should irrelevant to my cruising experience today. The past may indeed by prologue but I am tired of living in it! Let's paint a picture of a new world order of domestic cruises.

[dkjretired]

28 minutes ago, chengkp75 said:

That is because the ship stays on the Virginia side of the bay, and Virginia allows shipboard casinos.  Gambling laws on ships are a state issue, not federal.

 

I know that know, just surprised me back in 03....Another one of those cruise myths that many still believe, that you can't open the casinos until you're in international waters.   Like you said, state issue but very misunderstood by the average person. 

Edited April 22, 2020 by dkjretired

[chengkp75]

24 minutes ago, ChinaShrek said:

Let's try to have an open mind about repealing the PVSA in order to allow cruising to American ports only. What would the positive and negative ramifications be of such a decision on the cruising world? Everyone has posted why it's not going to happen. So, what? What if it did change?  Many of you have chimed in providing about why the law was put into place. What happened in the 1800s should irrelevant to my cruising experience today. The past may indeed by prologue but I am tired of living in it! Let's paint a picture of a new world order of domestic cruises.

Once again, people must remember that it is the Passenger Vessel Services Act, not the Cruise Vessel Services Act.  The act does not simply cover the narrow field of cruise ships, it relates to a "passenger vessel", which in US and maritime law is defined as "any vessel that carries more than 12 people for hire".  So, the PVSA covers every ferry, commuter boat, water taxi, dinner cruise, casino boat, whale watching or sightseeing boat, and larger charter fishing boats.  I personally would not want to allow these vessels to become foreign flag, hire foreign crew, and not be subject to USCG regulations on construction, safety, training, and crew competency.  And, before you say, "well, we can limit it to "large" passenger vessels", you would have to change the definition of "passenger vessel" in maritime law (getting the members of the IMO to agree), or the new law would face a court challenge from the Alaska Marine Highway system as to why they cannot gain the benefits of foreign flagging, as they are "passenger vessels", too, and they would win that court challenge.

 

And, as I've repeatedly reminded folks here, CLIA has publicly stated that none of it's members (95% of the world's cruise ships) are interested in a modification or repeal of the PVSA, since they see no benefit to their bottom line from pursuing it.

 

Hopefully this is not a "vociferous" attack on you.

[njhorseman]

8 hours ago, AL3XCruise said:

 

Baltimore and New Orleans have seemed to manage with similar issues, so while that may be a contributing factor I doubt it is the only one.

 

 

I was on one of the last cruises to depart Philadelphia. As I understand it, there are issues with the size of cruise ships that can be used on the Delaware River due to a relatively shallow channel and relatively low bridges the ships have to pass under. Many modern cruise ships wouldn't be able to use the river as they draw too much water and are too high.

Also the Philadelphia is very close to New York, and not all that far from Baltimore, so they were squeezed between two other active ports.

[nfcu]

The Philadelphia Naval Shipyard routinely serviced aircraft carriers (in fact the ex USS JFK is still docked there).  If aircraft carriers could navigate the Delaware river and bridges, then cruise ships would have no problem.  Carriers drafts are a lot larger than any flat bottomed cruise ship.

[ChinaShrek]

1 hour ago, chengkp75 said:

Once again, people must remember that it is the Passenger Vessel Services Act, not the Cruise Vessel Services Act.  The act does not simply cover the narrow field of cruise ships, it relates to a "passenger vessel", which in US and maritime law is defined as "any vessel that carries more than 12 people for hire".  So, the PVSA covers every ferry, commuter boat, water taxi, dinner cruise, casino boat, whale watching or sightseeing boat, and larger charter fishing boats.  I personally would not want to allow these vessels to become foreign flag, hire foreign crew, and not be subject to USCG regulations on construction, safety, training, and crew competency.  And, before you say, "well, we can limit it to "large" passenger vessels", you would have to change the definition of "passenger vessel" in maritime law (getting the members of the IMO to agree), or the new law would face a court challenge from the Alaska Marine Highway system as to why they cannot gain the benefits of foreign flagging, as they are "passenger vessels", too, and they would win that court challenge.

 

And, as I've repeatedly reminded folks here, CLIA has publicly stated that none of it's members (95% of the world's cruise ships) are interested in a modification or repeal of the PVSA, since they see no benefit to their bottom line from pursuing it.

 

Hopefully this is not a "vociferous" attack on you.

 

This is a vociferous attack on the idea of repealing the PVSA and why I posted the comment on the other thread. You have been clear on you views regarding repeal for many years. I do not see this as helpful in imagining a future without the PVSA. With Covid, it is a new world. All ideas should be explored...

[dkjretired]

1 hour ago, chengkp75 said:

Once again, people must remember that it is the Passenger Vessel Services Act, not the Cruise Vessel Services Act.  The act does not simply cover the narrow field of cruise ships, it relates to a "passenger vessel", which in US and maritime law is defined as "any vessel that carries more than 12 people for hire".  So, the PVSA covers every ferry, commuter boat, water taxi, dinner cruise, casino boat, whale watching or sightseeing boat, and larger charter fishing boats.  I personally would not want to allow these vessels to become foreign flag, hire foreign crew, and not be subject to USCG regulations on construction, safety, training, and crew competency.  And, before you say, "well, we can limit it to "large" passenger vessels", you would have to change the definition of "passenger vessel" in maritime law (getting the members of the IMO to agree), or the new law would face a court challenge from the Alaska Marine Highway system as to why they cannot gain the benefits of foreign flagging, as they are "passenger vessels", too, and they would win that court challenge.

 

And, as I've repeatedly reminded folks here, CLIA has publicly stated that none of it's members (95% of the world's cruise ships) are interested in a modification or repeal of the PVSA, since they see no benefit to their bottom line from pursuing it.

 

Hopefully this is not a "vociferous" attack on you.

Just curious but how strong is CLIA, do they have an enforcement arm. I ask because most people assume that cruise casinos have no regulatory authority as there is with land based casinos.  However , CLIA has regulations on cruise casinos but no way to really enforce them.

[chengkp75]

1 minute ago, ChinaShrek said:

 

This is a vociferous attack on the idea of repealing the PVSA and why I posted the comment on the other thread. You have been clear on you views regarding repeal for many years. I do not see this as helpful in imagining a future without the PVSA. With Covid, it is a new world. All ideas should be explored...

Then take your ideas to the IMO, not CC, where you can get action on them.  There is not going to be a future without the PVSA.

[Fishboy1947]

1 hour ago, chengkp75 said:

Once again, people must remember that it is the Passenger Vessel Services Act, not the Cruise Vessel Services Act.  The act does not simply cover the narrow field of cruise ships, it relates to a "passenger vessel", which in US and maritime law is defined as "any vessel that carries more than 12 people for hire".  So, the PVSA covers every ferry, commuter boat, water taxi, dinner cruise, casino boat, whale watching or sightseeing boat, and larger charter fishing boats.  I personally would not want to allow these vessels to become foreign flag, hire foreign crew, and not be subject to USCG regulations on construction, safety, training, and crew competency.  And, before you say, "well, we can limit it to "large" passenger vessels", you would have to change the definition of "passenger vessel" in maritime law (getting the members of the IMO to agree), or the new law would face a court challenge from the Alaska Marine Highway system as to why they cannot gain the benefits of foreign flagging, as they are "passenger vessels", too, and they would win that court challenge.

 

And, as I've repeatedly reminded folks here, CLIA has publicly stated that none of it's members (95% of the world's cruise ships) are interested in a modification or repeal of the PVSA, since they see no benefit to their bottom line from pursuing it.

 

Hopefully this is not a "vociferous" attack on you.

Are there changes that you feel would be beneficial for the US and/or US cruisers? 

 

I appreciate what you add to these conversations. I feel that I am intelligent but I find these laws complex and confusing 

[chengkp75]

1 minute ago, dkjretired said:

Just curious but how strong is CLIA, do they have an enforcement arm. I ask because most people assume that cruise casinos have no regulatory authority as there is with land based casinos.  However , CLIA has regulations on cruise casinos but no way to really enforce them.

CLIA does not have an enforcement arm, though if you want to belong to the association and get the benefits from it, you must follow the rules.  Not sure if you are asking about the PVSA enforcement, or not.  For casinos, the enforcement arm would be the court where suits against a cruise line can be brought, to show that the ship's casino does not follow the rules set by CLIA.  CLIA relies on internal audits by the cruise line to ensure compliance, and the casino must abide by the Nevada Gaming Control Board, or other licensing jurisdiction (so there are regulatory authorities, just not necessarily US ones).  Ships are required to post gaming rules in the casino.  The cruise ships also have a "Surveillance Department" that oversees the cameras, and monitors the casino operations, and the head of this department onboard the ship is outside the Captain's chain of command, and reports directly to casino operations at corporate.

[dkjretired]

1 minute ago, chengkp75 said:

CLIA does not have an enforcement arm, though if you want to belong to the association and get the benefits from it, you must follow the rules.  Not sure if you are asking about the PVSA enforcement, or not.  For casinos, the enforcement arm would be the court where suits against a cruise line can be brought, to show that the ship's casino does not follow the rules set by CLIA.  CLIA relies on internal audits by the cruise line to ensure compliance, and the casino must abide by the Nevada Gaming Control Board, or other licensing jurisdiction (so there are regulatory authorities, just not necessarily US ones).  Ships are required to post gaming rules in the casino.  The cruise ships also have a "Surveillance Department" that oversees the cameras, and monitors the casino operations, and the head of this department onboard the ship is outside the Captain's chain of command, and reports directly to casino operations at corporate.

Thanks, I ask because there are so many myths about casinos in general and additionally cruise casinos.

[Cruzaholic41]

2 hours ago, ChinaShrek said:

Let's try to have an open mind about repealing the PVSA in order to allow cruising to American ports only. What would the positive and negative ramifications be of such a decision on the cruising world? Everyone has posted why it's not going to happen. So, what? What if it did change?  Many of you have chimed in providing about why the law was put into place. What happened in the 1800s should irrelevant to my cruising experience today. The past may indeed by prologue but I am tired of living in it! Let's paint a picture of a new world order of domestic cruises.

Still not going to happen, no matter how much you dream. 

[chengkp75]

51 minutes ago, nfcu said:

The Philadelphia Naval Shipyard routinely serviced aircraft carriers (in fact the ex USS JFK is still docked there).  If aircraft carriers could navigate the Delaware river and bridges, then cruise ships would have no problem.  Carriers drafts are a lot larger than any flat bottomed cruise ship.

Well, the old JFK is a poor example.  Since she draws 11 meters (and carriers are flat bottomed as well, as are all ships), and the controlling depth of the Delaware below Philadelphia is 40 feet (12 meters), she came up the river light (no aircraft, minimal fuel, minimal ballast), and that exacerbated the air draft problem, since the Delaware Memorial Bridge is only 174' high, and the JFK was 192' high at 11 meter draft.  They had to remove the radar masts for her to clear under the bridge.  I don't remember the exact figure for air draft on Quantum class ships, but it is at least 170', so she could not get under the bridge.  And Oasis' draft is 9.3 meters, so only 5.5 feet less than JFK.

[chengkp75]

30 minutes ago, Fishboy1947 said:

Are there changes that you feel would be beneficial for the US and/or US cruisers? 

 

I appreciate what you add to these conversations. I feel that I am intelligent but I find these laws complex and confusing 

No, I do not.  Let me give an example.  CLIA says that the cruise industry "supports" (direct and indirect employment) about 400k jobs in the US, and contributes $53 billion to the US economy.  The Jones Act (coastwise and inland maritime cargo traffic in the US) fleet "supports" about 650k jobs in the US, but contributes over $41 billion in labor compensation alone, and another $72 billion in GDP.  While the PVSA fleet is smaller than the Jones Act fleet, it has a similar benefit to the US economy.

 

Additionally, while the USCG does inspect foreign flag cruise ships, they are only allowed to enforce the international SOLAS regulations, not the more stringent regulations the USCG places on US flag ships.  As an example, the USCG's "goal" is to inspect every foreign flag cruise ship at least once a year, but budgetary constraints, and vessel itineraries do not always allow for this, so some ships may slip a year or two.  It is not mandatory that a port state control agency like the USCG inspect foreign flag ships at all.  However, US flag cruise ships, like NCL's POA, must be inspected, by law, 4 times a year.  In addition to the more stringent regulations (from construction to safety equipment approvals, to crew and officer training and licensing), this is the largest drawback that I see to allowing foreign flag ships into the PVSA trade:  inspections and compliance by US flag ships is statutory, and must be done, while Port State inspections of foreign flag ships are optional at the discretion of the USCG.

 

As I've noted many times in the past, Puerto Rico and CLIA lobbied for 10 years to finally get an exemption from the PVSA for one way service to/from Puerto Rico and the mainland.  Only one cruise line stepped up to the market, Carnival, but they only ran the itineraries for about 2 years before dropping them due to lack of demand.  This is why CLIA's members feel that there is very little demand for PVSA compliant itineraries, and many potential downfalls.  One would be that since the cruise ships currently operate "foreign voyages" (calling at at least one foreign port), all of their alcohol comes to them "in bond" (no state liquor tax has been paid), and all of their supplies that they import from everywhere in the world, from engine parts to bed sheets, comes to them, imported into the US and delivered at a US port to the ship, duty free from Customs.  If they only did US itineraries, these tax breaks would go away.

 

I'm sorry, but there is no justification for a foreign flag ship to trade exclusively within the US, any more than there would be for a foreign airline to operate within the US.