How Distant is Distant?

There's a move afoot by US Customs and Border Protection (CBP) to clarify terminology in the 121-year-old Passenger Vessel Services Act which requires foreign-flagged cruise ships to stop at a "distant foreign port" when traveling from and to a US port of embarkation/disembarkation and prohibits those foreign-flagged ships from calls solely between US ports.

Frequent cruisers (and even cruise lines) often erroneously refer to these requirements as part of the "Jones Act" (which actually has more to do with freight). It's what keeps you from cruising from Seattle to Anchorage one-way. Or even doing a a cruise from LA to Vancouver and then adding a one-night from Vancouver to Seattle making a back-to-back. Also why you can't disembark a ship which has departed from a US port at any other US port you may wish. The original intent of the Passenger Services Act was to protect both the US shipbuilding industry and US jobs. As such, it's completely outdated, as there is no US shipbuilder either willing or able to complete a modern cruise ship. The last effort to build a cruise ship in the US resulted in bankruptcy of the shipyard (even with massive subsidies from the US government) and eventual purchase of the unfinished ships by NCL and their completion in Europe. They had to receive a waiver from the Federal Government to be US flagged.

You'll notice the examples I gave above all have to do with Alaska. But the CBP is actually looking into this because of Hawaiian itineraries which come from the West Coast. Such as the one way itineraries from Los Angeles to Honolulu, Seattle to Honolulu, or round-trips from similar. The stated goal is to protect the jobs which are held by US workers on the US-flagged NCL America ships, which are legally the only ones which may sail exclusively between US ports without a required "distant foreign port" call. The CBP is questioning whether a "service call" of just a few hours in a port such as Ensenada qualifies as a "distant foreign port."

Several things come to mind here. First is that the powerful Hawaiian lobby, headed up by Senator Daniel Inouye, a noted proponent of continuing and strengthening the outdated Passengers Services Act, have influenced the CBP in this action. I'm guessing he's doing this partially to help firm up the profitability of the two remaining NCL America US-flagged ships now that they've had to pull out their third ship as they weren't making enough money.

The CBP said it was acting in response to concerns by the Maritime Administration that NCL America's U.S.-flagged ships, and their U.S. crews, suffered "economic hardship" in Hawaii because foreign-flagged cruise lines were offering Hawaii cruises from the U.S. mainland that made only token stops in Ensenada, Mexico.

The CBP said NCL cited competition from the West Coast when it reduced its capacity in Hawaii earlier this year, and the CBP said these itineraries pose an "imminent threat" to the remaining U.S.-flag ships in Hawaii.

Sounds like this is the US Government acting on behalf of one state and one company. While I love the 7-night all-Hawaii itineraries of NCL America, I think this type of action is wrong.

The second major concern I have here is about Alaska cruises departing from Seattle. Because of lower air costs, and the convenience of round-trip air to and from the same city, Seattle has exploded in the past 3 years as a summer cruise port. This action, potentially limiting cruises which only make a service call in Victoria, BC, could send another crippling blow to the Alaska cruise market, following on the heels of the $50/passenger tax imposed by Alaska voters in 2006. Eventually, all this will put Alaska cruises in a much higher price point, which will in very short term reduce the number of ships available, further increasing the price and so on and so forth. There are just too many other places the ships can profitably sail in the summer. Do we really want to hurt Alaska for the sake of NCL America's profitability in Hawaii?

And those two concerns are perhaps only the tip of the iceberg. How long will it be before the Bahamas are no longer considered a distant foreign port? The proposed rule of port calls of at least 48 hours would rule out basically all 3-night cruises, and many 4-nighters, from LA or San Diego to Mexico or from Florida to the Bahamas.

This proposal is not in the best interests of the cruise industry as a whole. As cruisers, we need to stand up and ask for even-handed legislation. The Passenger Services Act is outdated, and instead of being strengthened, should be eliminated or liberalized.

The comment period for this proposed regulation is until December 21. To read the proposed regulations for yourself and express your opinions, visit http://edocket.access.gpo.gov/2007/pdf/E7-22788.pdf.