What is the Jones Act?

"Jones Act" is the common name for the Merchant Marine Act of 1920, which is the current US cabotage law for cargo. The law that deals with passenger shipping (the primary interest here) is the Passenger Services Act, passed in 1886, which is presently the current law regarding cabotage as it applies to passenger service.

What is cabotage?

The exclusive right of a country to control the air traffic within its borders, or, in this case, navigation along its coastline.

The PSA excercises cabotage, what does it require?

The PSA requires ships in coastwise service (service between two or more U.S. ports) to be not only American-flagged, but American-built, American-owned, and with a crew comprised of at least 75% U.S. citizens. Of course, service between a U.S. port and a foreign port is excepted, as that falls outside the U.S. right of cabotage.

So why is this such a problem? Is it that hard to just stop at a foreign port somewhere along the way?

The common "solution" raised in discussions about the PSA in forums like this is simply to go to a foreign port along the route of the cruise, which seems very simple. This, however is the confusing part of the PSA.The key is that all foreign ports are not created equal. There are "nearby foreign" and "distant foreign" ports, which each have different meanings according to the PSA.

Any old foreign port is OK if you are providing round-trip transportation. Thus, for example, a trip from New York to Boston and Halifax, returning to New York, is perfectly legal.

Similarly, if your voyage either begins or ends in a foreign port, stopping at U.S. ports along the way, there is no problem, so long as everyone either begin or ends their voyage at a foreign port. A trip from New York to Halifax, stopping in Boston, is perfectly fine.

The surprising bit is that a trip from New York to Halifax and then Boston, with passengers disembarking there, would be illegal. Why? Along with most other ports in Canada, Mexico, and lots of other places, Halifax is a "nearby foreign" port. If you are transporting passengers between two different US ports (i.e. New York and Boston), any old foreign port will not do. You must have a "distant foreign" port in that case, and "distant foreign" ports are, well, distant - distant enough that such an itinerary would not be practical. This is of course the intent of having nearby and distant foreign ports - if you can just hop across to a nearby foreign port, and thus bypass the PSA, the entire thing would be essentially useless.

Last year I was trying to plan a cruise with Princess that was never completed due to the PSA. I wanted to take Coral Princess from San Francisco on her repositioning cruise to Vancouver, and then continue on the next cruise from Vancouver to Seward.

The ticketing agent said I would have to disembark in Vancouver with all my baggage, go through all the boarding proceedures again, and reboard the ship with new documentation. Basically I would have to treat the entire thing as 2 cruises, with double the taxes and whatnot. A real hassel.

The explanation was that Vancouver did not represent a "distant foreign port" and the Jones Act would apply. Stupid thing. I figure if they can make an exception to the law for NCL in Hawaii why not remove the antiquated law altogether!?

I never booked that cruise. I'll be on the Navigator of the Seas in September instead.

[ 03-24-2003: Message edited by: Fairsky ]

Can't imagine how disembarking one ship, and, boarding another can be construed as violating the "solemnity" of the JONES ACT!! What can possibly be the rationale??

[ 03-06-2004: Message edited by: annnthony ]

[ 03-06-2004: Message edited by: annnthony ]

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The United States General Accounting Office has published a report to the Chairman of the U.S. Senate's Committee on Commerce, Science, and Transportation in regards to the exemption from U.S. laws given to Norwegian Cruise Line in connection with the company's NCL America brand.

The background is that no large U.S.-flagged oceangoing cruise ships (ships registered in the U.S. that are U.S.-built, U.S.-owned, and U.S. crewed) are in operation. Foreign-flagged vessels cruising to foreign ports serve most of the U.S. demand for cruises. However, Norwegian Cruise Line (NCL) recently obtained an exemption from U.S. maritime law to operate three foreign-built ships under the U.S. flag in Hawaii. Cruise lines and others have raised concerns over the advantage the exemption might confer to NCL, since foreign-flagged competitors are unable to offer the same itineraries due to the Passenger Vessel Services Act (PVSA), which prevents foreign vessels from transporting passengers solely between U.S. ports. Concerns have also been raised over the effect this exemption might have on future attempts to grow the U.S.-flag cruise vessel fleet, since potential U.S.-flag competitors would need to build ships in the United States, presumably at higher cost.

The United States General Accounting Office (GAO) was asked to review the original intent of the PVSA and rulings and decisions regarding it, determine if the exemption will affect the implementation of the PVSA or other maritime laws, assess the potential effects of the exemption on competition and entry into the U.S. domestic cruise market, and assess the potential economic effects of granting other cruise lines similar exemptions.

The original intent of the PVSA, enacted in 1886, was to protect the U.S. maritime industry from foreign competition by penalizing foreign vessels that transport passengers solely between U.S. ports. However, several rulings and decisions interpreting the PVSA have allowed itineraries for foreign cruise vessels between U.S. ports that were previously restricted. For example, voyages by foreign vessels between two U.S. ports that include a distant foreign port, and round trip voyages from U.S. ports that include a nearby foreign port and other U.S. ports, do not violate the PVSA.

NCL's exemption will likely have little impact on how the PVSA or other maritime laws are administered or interpreted because it is specific to three NCL vessels and cannot be applied to any other vessels in any other areas.

The exemption effectively gives NCL a monopoly on interisland Hawaiian cruises - providing consumers with itineraries that were previously unavailable. However, NCL will likely have little power to raise prices on these itineraries because of competition from other vacation options. Because NCL is able to operate foreign-built ships in Hawaii, the exemption provides an additional obstacle for any potential U.S.-flag competitor to enter that market, since that competitor would need to build the ship in the United States at a higher cost. However, independent of the exemption, there were and still are other substantial obstacles for any potential U.S.-flag cruise vessel due to the higher capital and operating costs (e.g., labor costs) associated with the U.S. flag, as compared with existing foreign-flag cruise vessels offering itineraries through a foreign port.

Granting additional exemptions to ease entry into the domestic trade could lead to benefits for port cities, U.S. seamen, and consumers; however, it is unclear how many cruise lines would choose to enter even if they were permitted to operate foreign-built ships under the U.S. flag, because of the higher operating costs associated with a U.S.-flag carrier operating in domestic itineraries and because of uncertain market conditions.

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