NCPA - National Center for Policy Analysis

Maritime Law Decks U.S. Cruise Industry

August 31, 1999

The 1886 Passenger Vessel Services Act requires ships going from one U.S. port to another to be U.S. flagged, U.S. built and U.S. crewed. But union requirements have made such ships prohibitively expensive. So cruise lines buy foreign ships, hoist foreign flags and take on foreign crews.

So the U.S. is left out in the cold as cruising attains new levels of popularity.

  • Passengers wanting to take the popular Alaska cruises must board in Vancouver, Canada -- since U.S. liners don't make the ocean-going trip.
  • Passengers wishing to cruise from California to Hawaii must cross over into Ensenada, Mexico, to board -- even though the liners load supplies in California.
  • Thus, thousands of union jobs, along with millions of tourism dollars, are lost -- and San Francisco, a once- vibrant cruise port for the Hawaii-bound, has been deep- sixed.
  • A 1997 economic impact study by the California Trade and Commerce Agency estimated that limited deregulation of the cruise market would create more than 1,100 new jobs and $96.3 million onshore maritime and tourism revenues for California by 2003.

Two maritime unions are now supporting new legislation that would allow U.S. lines to acquire foreign-built vessels until 2006 and allow limited access to U.S. routes for international ships. The unions and the Cruising America Coalition have written a letter to Sen. John McCain (R-Ariz.), chief sponsor of the legislation, calling a new approach necessary "to expand the opportunities for large and small American ports on all seacoasts to participate in the economic opportunities associated with cruise vessel operations."

Observers say that political relief is doubtful, given the opposition of the American Maritime Officers union and some favored cruise-ship lines.

Source: Editorial, "Lotts of Ships," Wall Street Journal, August 31, 1999.


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