Cruise Lines In A Bind

Piece together the tidbits about proposed changes in the intepretation of rules governing foreign cruise ships, and you come up with the story of a company in danger of being hoist with its own petard.

A story on the Cruise Critic site lays it all out. Norwegian Cruise Lines told the government that foreign cruise ships were driving its U.S.-flagged ships out of the Hawaiian market. Indeed, Norwegian just announced that it will remove another ship from Hawaii and reflag it, leaving just one ship on the interisland route.

Under the century-old Passenger Vessel Services Act, only U.S.-flagged ships may transport passengers between U.S. ports without stopping at a foreign port on the way.  So cruises among the Hawaiian islands must be carried out by U.S. ships.

But ships sailing from the West Coast to Honolulu have long met the requirement for a foreign port call by making a "technical stop" of just a few hours in Ensenada, Mexico. (If they don’t have to fly a U.S. flag, they don’t have to hire U.S. crews or pay U.S. wages, either.)

So the U.S. Customs and Border Protection service has proposed a change in the interpretation of the Passenger Vessel Services Act that would require foreign-flagged ships to to spend at least 48 hours in a foreign port or ports when sailing between U.S. ports.

This would affect not just ships sailing to Hawaii, but ships sailing to Alaska, Canada and the Bahamas. And business interests in American ports have realized that they will lose customers if ships are forced to spend more time in foreign ports. The Day of New London pointed out that it could hurt New London’s prospects as an emerging port of call on New England / Canada routes.

And Norwegian has realized that such a broad reinterpretation of the rule would disrupt some itineraries on its other ships, all of which sail under foreign flags. (Like, say, the Alaska cruise on the Norwegian Star that include a six-hour call in British Columbia.)

According to Cruise Critic, Norwegian has suggested to the Customs and Border Patrol service that the new intepretation of the PVSA apply only to Hawaii routes. Quoth Norwegian CEO Colin Veitch: "It is problematic if there are changes elsewhere in the country where there’s no U.S. flag to protect or promote. We’d be equally adversely affected. "


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