What is the “Jones Act” and what it means for cruise travelers

by Janice Hough on July 1, 2010


Recently Senator John McCain introduced legislation to repeal the “Jones Act.”

The motivating issue here was allowing foreign ships with foreign crews to help in the BP cleanup. Depending which political party you believe, this would either increase the number of ships that could help in the gulf, or do nothing meaningful, but greatly undermine the U.S. shipping industry. While the legislation is a longshot, it would also matter greatly to cruise travelers.

As described in Wikipedia,/a>Section 27, also known as the Jones Act, “requires that all goods transported by water between U.S. ports be carried in U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents.”

While that may sound bureaucratic and overly technical, and not a concern of most Americans who aren’t in the shipping industry, it makes a huge difference to cruise lines, and thus to cruise passengers.

Simply put, because of the Jones Act, cruise ships that were not U.S. built, U.S. owned and with U.S. crews cannot travel between U.S. ports, unless they stop at a foreign port. Which means that a ship that is foreign in any way (origin, ownership, crew) ship can go roundtrip from Seattle to Alaska or San Francisco only if it stops in Canada.

Similarly, to stop in Hawaii means that a ship that is “foreign” in any sense of the word must either sail from Canada or Mexico, or as NCL did for years, stop in some tiny foreign port to get around the law — in their case, the Republic of Kiribati.

More than one client told me the story of being on a 10-day cruise roundtrip from Honolulu around the Hawaiian Islands, with this detour that took over a day’s sailing each way, to a port that didn’t seem like anything more than a mildly commercialized pit stop. On occasion the winds and/or sea get so rough that the ship can only touch land long enough to satisfy the legal requirements, and passengers are not allowed ashore.

Of course, there were significant financial advantages to the cruise line for all this trouble, including not only the ability to register the ship in a low-tax country, but also hiring foreign staff and paying them wages that would never pass U.S. labor laws.

If the Jones Act were repealed, it could definitely make a significant if not earthshattering difference to the cruise industry. For starts, there would probably be more cruises around Hawaii, and quite possibly short cruises from San Francisco to San Diego and the like.

In addition, in the fall, being able to travel between U.S. ports might mean a lot of potential new fall foliage cruises. (Currently, cruises either go roundtrip for Boston and New York and stop in Canada, or go one way between the countries.) Or, a cruise line could try an itinerary between, say, New York and Florida or vice versa.

Since, like many travel industry issues, it’s often in the end about money, a ship free from the Jones act would have lower operating costs, especially with labor. These savings could be passed on to consumers.

Personally, I’m not sure of how I feel on this issue. I lean towards repealing the Jones Act, thinking that the U.S. shipbuilding industry has largely vanished anyway, and that most cruise ship jobs, which are heavily tip-dependent and require being onboard for months at a time, aren’t exactly most American workers’ cup of tea.

Plus, more short cruises within the U.S. on large ships could certainly be an economic stimulus. The combination of “something new” and no need for a passport could be very appealing to both regular and first-time cruisers alike.

On the other hand, I know that cruise lines can hide behind foreign registry to take advantage of workers, especially regarding minimum wage and overtime issues. So, even just for the travel industry, it’s not a simple decision.

As always, comments and opinions encouraged.

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  • Michelle

    Living in Seattle, I am not a fan of the Jones Act. I’ve run up against it many times trying to plan cruises when connecting itineraries.

  • Hapgood

    I can see exempting cruise ships (not freighters) from the Jones Act. Who is it currently protecting? Are there ANY cruise ships that meet the “all-American” criteria? Even if there are a few of them, I suspect that overall the benefit to American consumers and the American economy would be much greater than any losses from foreign competition.

    Of course, whether there actually is a repeal or exemption ultimately comes down to which interests spend the most money to make it pass or fail. That’s what American democracy means in the 21st century: “One dollar, one vote.”

  • Mary Alice

    What you’re referring to is the Passenger Vessel Services Act of 1886, not the Jones Act, which deals with cabotage (coastal shipping) and, as you quoted, “requires that all GOODS transported by water between U.S. ports be carried in U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents.” The key word is GOODS. Quite simply, the Jones Act doesn’t cover cruise ships.

    The Passenger Vessel Services Act is a similar cabotage law covering the transportation of passengers, not cargo. That’s the law you’re referring to in regard to the cruise industry.

  • Matthew in NYC

    I think that the Jones Act needs to be modified, rather than repealed. All of these types of restrictive acts end up being reciprocal, e.g. because US ferry companies can’t buy foreign built ferry boats, irrespective of the construction standards, most foreign governments prohibit the importation of US built ferry boats. Freeing up the trade in ship construction would be a good thing. I would distinguish between cruise ships and passenger ferries, however. I would not want a foreign crewed ferry operating between Hoboken and Manhattan. However, if Carnival wants to run a four day cruise up the east coast from New York to Boston I would not have the same problem.

    I am not convinced that allowing a foreign company to have a majority ownership in a US shipping company or domestic airline adversely affects the national interest. In times of emergency, the government can and does lease or requisition ships, aircraft and their crews. Remember the Carnival ships that were used as emergency housing after Katrina?

  • Arizona Road Warrior

    It is by understanding that the Jones Act could be supsended by an executive order by President Obama in order to allow foreign ships to participate in the BP cleanup. Several countries offered to send their specialized oil cleanup ships to the US but was turned down by the Obama adminstration. It is my opinion that the Obama adminstration didn’t want to supsended the Jones Act for a temporary period during the BP cleanup as a favor to the labor unions since they are the only group who favors the Jones Act.

  • Joel Wechsler

    @Arizona Road Warrior I believe your facts are in error. As far as I know, there are already multiple foreign flag ships participating in the cleanup and only one request has been turned down. A Taiwanese ship, which I believe is the largest skimmer in the world, is on its way to the Gulf right now. Furthermore, no waiver is required because the Act doesn;’t apply beyond the three mile limit. This point originated with Sarah Palin and is a complete red herring.

  • http://www.cruiseresource.com Amber Blecker

    There is only one ocean-going cruise vessel which complies with the provisions of the PVSA (so often mistakenly referred to as the “Jones Act” but, which Mary Alice correctly pointed out, the Jones Act is about cargo, not passengers. Even the cruise lines make this mistake.

    The PVSA-compliant ship is the NCL America’s Pride of America currently sailing 7-night cruises in Hawaii. It actually took an act of Congress to get this ship, as while her hull was started in the US, the shipbuilder went out of business after 9/11, and the ship had to be completed in Europe. She had a sister ship, the Pride of Hawaii, but due to economic circumstances, she was reflagged internationally and now sails as the Norwegian Pearl in Europe.

    Interestingly, the major political powers in Hawaii (led by Senator Daniel Inouye) oppose easing of the PVSA, and in fact are in favor of strengthening it. They maintain that if the PVSA is eased or repealed, it will bring more ships spending less actual time (and of course money) in Hawaii, thus hurting the economy and taking tourists who would otherwise spend more time on land and in resorts.

    A proposal to strengthen the PVSA was recently floated, but has mostly gone away, due to the negative effects it would have had on Alaska and Canada/New England cruises.

    It’s a messy situation all around, and a protectionist measure understaken in another eara to shield a domestic shipbuilding industry and American Merchant Marines which no longer really exist.

  • ivnprt

    As Mary Alice pointed out it’s the Passenger Vessel Services Act of 1886. Senator John McCain wants to repeal the Jones Act because he has an axe to grind. He represents the state of Arizona which seems to be heading towards a police state and being that the Hispanic vote went towards President Obama during the last presidential election couple that with the fact that he is a former naval officer and the U.S. Navy and Marines were forced out of Roosevelt Roads Naval Station and the island of Vieques in Puerto Rico what better way to retaliate than to repeal this act which gives the people of Puerto Rico full American citizenship. This from a man that wasn’t even born in the United States. Are all of you Puerto Rican Republicans listening ?

  • Arizona Road Warrior

    @ Joel Wechsler – “@Arizona Road Warrior I believe your facts are in error. As far as I know, there are already multiple foreign flag ships participating in the cleanup and only one request has been turned down. A Taiwanese ship, which I believe is the largest skimmer in the world, is on its way to the Gulf right now. Furthermore, no waiver is required because the Act doesn;’t apply beyond the three mile limit.”
    - – - – - – - – - – — – -
    According to news report on CNN, Fox News and MSNBC, we have not accepted help from any country.

    How do you skim the oil within the three mile limit? The Obama administration refused the skimmer ships from Sweden and Mexico. You can check out this article, http://www.foxnews.com/opinion/2010/06/21/robert-bluey-gulf-spill-katrina-jones-act-waive-obama/.

    I don’t know why Obama hasn’t accepted help or have a temporary ban of the Jones Act.

    The Obama administration has appointed a committee (12 or 15 members) to see why this accident occurred. There is only one scientist\engineer on this committee and this person’s background has nothing to do with oil drilling. All of the rest of the members are environmentalists.

    When the Challenger crashed, the Regan administration appointed 10 aerospace engineers to the 15 member committee as well as 3 aerospace scientists. There was smart guy that figured out exactly what went wrong, prove it and etc.

    It seems to me that Obama is using this BP oil spell to pass his cap & trade policy and/or to pay off the unions.

    This is the worst environment accident in the US history. It will be several generations before this area will recover. We need action and leadership not politics. President Obama needs to know that he won the election so he needs to stop campaigning and start to govern.

    Talking about suing BP and holding his foot to BP neck doesn’t solve the problem at hand. Stop the leaking of the oil first then you can start the battle of finding who is at fault, who to sue, who is responsible, etc.

  • JDMOR

    One big thing that is often overlooked is the number of good jobs and business that would be created for the United States. This would be dock workers, food service industry, etc that an increased number of ship operating from US ports would introduce. Obviously these jobs in the “phantom” US maritine industry, but good old port city union jobs and more business for US companies.

  • Joel Wechsler

    @Arizona Road Warrior Forgive me if I don’t find Fox News an unbiased reliable source. I did read the article, and found no mentioin of Sweden or Mexico. Perhaps your reference to those countries was unrelatedto thre article. It seems to me that there has been a great deal of heat and very little light generated about this issue. Whether you like him or not, Obama is no idiot, and if he thought a waiver would have a significant impact, he would order it. The number of union jobs affected by a short-term waiver is too small to matter, either to him politically or to the unions. The idea of a payoff to unions or an attempt to push cap and trade are the stuff of conspiracy theories.
    P.S. You use U.S flagged vessels tio skim within the 3 mile limit and foreign ships ouitside. This isn’t hard to figure out.

  • The Good Doctor

    Just a couple of clarifications to the original article and some of the postings – the PVSA (Title 46 US Code, section 289), not the Jones Act, covers the carriage of passengers between US ports. Although the Pride of America was one of two US-builds (by Litton-Ingalls shipyard in Mississippi), NCL finished the ship in Germany, forcing NCL to seek a Congressional exemption that permitted it (and the Pride of Aloha and the Pride of Hawaii) to operate 7-day cruises among the Hawaiian Islands.

    A combination of factors caused NCL to pull two of its three ships out of the Hawaiian market. First was the general economic recession, second was the difficultly in finding sufficient US crewmembers to man the ships, and third was the competion from 14-day cruises starting from LA and San Diego (in order to make the cruise an “international” one, the ships made an obligatory stop in Ensenada, Mexico, in the same way Alaskan cruise ships roundtripping from Seattle make a six-hour layover in Victoria, BC). Several members of Congress have written the US Customs Service (the Federal agency tasked with enforcing the PVSA) regarding these “bogus” foreign port calls, but CBP has not taken action.

    The Pride of Hawaii isn’t sailing as the Norwegian Pearl, but rather, has been reflagged in the Bahamas as the Norwegian Sky. Amber may have been thinking of the Pride of Aloha, which has been reflagged as a Pearl-class ship, albeit as the Norwegian Jade.

    Hope this clears things up!

  • Charlotte

    I don’t understand what this Jones act has to do with my right to travel on a cruise.  I booked a coastal cruise on NCL ending in Vancouver on May 6.  Then wanted to extend the trip so booked on the same ship to enjoy another week in Alaska, ending in Seattle.  I was told I cannot do both together.  I am an American citizen.

  • WW

    You are right, why I cannot get back to back cruise. I booked & paid that trip (April 29) & to the Alaska cruise(May 6). NCL call later said I cannot take cruise back to back. WHY??? I had to change my flights with a penalty.

  • Paulette Fein

    I am about to cruise to Alaska from Seattle and end up in Vancouver. The ship then goes down to L.A. and then on thru the Panama Canal and on to Ft. Lauderdale. I would like to stay on the ship and continue from Vancouver to L.A. I was told I cannot do this due to the Jones Act. I have read info and do not understand why. I can do it the next day. Can someone explain this to me? Thanx.
    [email protected]

  • http://www.tripso.com/author/leocha Charlie Leocha

    The Jones Act restricts non-US ships without US crews from carrying passengers between US ports.
    Your ship is obviously foreign-flagged. The Jones Act allows you to sail from Seattle to Vancouver (USA to CANADA), but not back to the US on the same ship. You can change ships and leave the next day and sail from Vancouver to LA (Canada to USA).

    Convoluted? Yes. But, it is the law.

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