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The pandemic has brought about many lasting changes, but now it looks like it could also overturn a law that has impacted passenger transit for nearly a century and a half. The Passenger Vessel Service Act (PVSC) was enacted in 1886 by President Grover Cleveland to protect domestic businesses from foreign competition. It prevents foreign operators from transporting passengers between two national ports.
Since the beginning of modern pleasure cruising fifty years ago, the industry has ensured its compliance with the law by calling at foreign ports between US ports. Only a handful of cruise ships are registered in the United States, mostly smaller boutique ships and those serving Hawai’i.
The vast majority of cruise passengers choose to register their ships outside of the United States so that they do not have to follow labor laws and other United States regulations. This became a point of contention last year when other sectors of the travel industry received government assistance. At the time, many politicians cited their foreign status as the reason why the cruise industry should not receive the same level of support as airlines and hotel companies.
Cruise lines quickly responded to politicians by noting the thousands of jobs they create in the United States and the taxes they pay despite foreign registrations. Now, it appears that this move has convinced some politicians to work to remove some of the red tape that cruise lines face.
Utah Republican Mike Lee has introduced three bills in the Senate to repeal and reform the Passenger Ship Services Act of 1886, calling the law “bad economics” and “bad news.”
In the 136 years since the enactment of the PVSC, America has seen its shipbuilding industry collapse as the law creates hardship for foreign-built and flagged ships. The law also means that cruise lines are generally forced to choose between checking in in the United States or visiting foreign ports, almost all deciding the latter to be more economically viable. This, according to Lee, removes potential traffic and jobs from coastal towns.
Lee’s bills come as the outdated law sparks new interest due to Canada’s shutdown of its ports until next year, which in turn has nearly lost the Alaskan cruise season. After Alaska, which relies on tourism as the main driver of its economy, reported a second year without cruising having lasting negative consequences on its economy, a temporary amendment to the PVSC was quickly passed in Congress with a unanimous consent.
The Alaska Tourism Restoration Act created a stay of the PVSC but enacted additional medical and safety standards for ships. It should remain in place until Canada reopens its borders to foreign ships, at which time the full strength of the PVSC is restored.
Lee’s three bills are each designed to encourage cruise itineraries that feature multiple U.S. ports, with one of the proposals including incentives for such trips. This could allow for a significant change in Florida cruise itineraries.
The Sunshine State is home to three of the four busiest cruise terminals in the world, including the first two. But all of these cruises go to foreign destinations, like the Bahamas and Mexico. By lifting the PVSC, more cruises along the Gulf Coast or Atlantic port cities could be considered. Some smaller cruise lines registered in the United States already offer cruises between Jacksonville and the Mid Atlantic. There is also a growing Texas cruise presence. Many of these cruises could opt for itineraries in Florida instead of those in Mexico.
It’s still too early to know if Lee’s three proposals will pass, but the unanimous passage of the Alaska Tourism Restoration Act in a hugely divided Congress suggests there may at least be a chance.
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