A considerable number of our
clients have raised the question as to how the "Jones Act" effects
them in terms of their clients embarking and disembarking during the
duration of a cruise at an intermediary port of call.
Take a recent situation which
applied to one of our clients - They had a group taking a cruise which
was going to start in Miami and go to the Mexican Riviera finally
returning to Miami. The President of the company was embarking in
Miami solely for the initial festivities and the corporate
banquet/prize giving, his intention was to then disembark in Key West
and fly to Europe for a series of meetings.
It came as a surprise to our client
to learn that this was not going to be possible because of the "Jones
Act", he was not going to be allowed to disembark at another US Port
until the ship had gone "foreign" after which he could then disembark
when the ship returned a US Port (which in effect is what happens to
almost every cruise passage) or, as he chose to do, disembark at the
first Mexican port the ship hit.
Act (the Jones Act as it is known) was signed into law
on March 2, 1917, by President Woodrow Wilson. Even
today, close to 90 years later, many provisions of the Act are very
pertinent especially those dealing with Seamen's health, accident and
disability benefits. So what is the "Jones Act" and how
does it influence us as resellers of cruises?
The Jones Act is the everyday name
for Section 27 of the Merchant Marine Act of 1920 (46 U.S.C. 883; 19
CFR 4.80 and 4.80b). Its intent is very simple, to promote a healthy
U.S-Flag fleet and protect that fleet from unfair foreign competition,
the Jones Act requires that cargo moving between U.S. ports be carried
in a vessel that was built in the United States and is owned (at least
75 percent) by American citizens or corporations. Since the Jones Act
vessels are registered in the United States, our general labor and
immigration laws require that crewmembers be American citizens or
legal aliens. (In fact most maritime nations have an equivalent to the
Jones Act - (50 countries).
To reduce the terminology to
something the layman can understand - this is termed "cabotage" and
applies not only to shipping but to airlines and other forms of
international transportation. The statute covering cabotage as it
applies to passengers is known as the Passenger Services Act (PSA) and
became law in 1886.
the Jones Act apply to passengers? The Act, no; the principle, yes.
What is known as the Passenger Vessel Act (PSA) of 1886 (46 U.S.C.
289) states that “no foreign vessel shall transport passengers between
ports or places in the United States, under penalty of $200 for each
passenger so transported or landed.”
Another question we are frequently
asked is, can the Jones act be waived or suspended? the answer is
Yes, but only during a national emergency. However, over time, a
number of exceptions have been made, for example Canadian vessels may
transport passengers between Rochester and Alexandria Bay, New York
and between southern Alaska and U.S. ports until an American carrier
enters the markets. Similarly, foreign vessels may transport
passengers between Puerto Rico and the U.S. mainland as long as a U.S.
carrier does not provide such service. Foreign-flagged cruise ships
may carry passengers from a U.S. port as long as they return them to
the same port (a "cruise to nowhere"). Foreign vessels may also call
at intermediate U.S. ports as long as no passenger permanently leaves
the vessel at those ports and the vessel makes at least one call at a
While the PSA prevents foreign
cruise ships from carrying passengers directly from Alaska and the
West Coast to Hawaii and from competing for Hawaiian inter-island
cruise traffic, a considerable number of foreign cruise ships do
visit Hawaii in any given year. American passengers on foreign cruise
ships to Hawaii must board in another country—typically, Vancouver,
Canada or Ensenada, Mexico. These ships cannot pick up a passenger in
one U.S. port and drop off the passenger in another U.S. port.
However, after arriving from Canada or Mexico, they may tour the
islands and drop off passengers in Hawaii. They may then pick up new
passengers, tour the islands, and return to Canada or Mexico. As a
consequence, these "foreign" cruise ships made approximately over 300
calls in Hawaii ports during 2002.
In October 1997, federal legislation
was passed that permits a person to operate a foreign-built cruise
ship in the U.S. coastwise trade provided that the person had entered
a binding contract for the delivery of two U.S.-built cruise ships.
The first ship must be delivered no later than January 1, 2005, and
the second ship must be delivered no later than January 1, 2008.
Moreover, in Hawaii, only the existing cruise ship operator may
operate a foreign-built ship among the islands unless a new U.S.-built
cruise ship is placed into regular service outside of Hawaii. This
legislation makes it possible to temporarily employ a foreign-built
vessel among the Hawaiian Islands despite the Passenger Services Act
while new U.S.-built cruise ships are constructed.
In the mid- and late 1990s, there
was a debate about the continued need for the nation's cabotage laws,
key among which is the Jones Act. A group calling itself the Jones
Act Reform Coalition (JARC), which was claiming service shortfalls in
every part of the nation made an unsuccessful effort to repeal the
law. As it later turned out, the JARC criticisms of the US Flag fleet
galvanized the industry into a coalition that won statements of
support for the Jones Act from a majority of the House, the Clinton
(and now Bush) Administrations, the Department of Defense, to the
extent that the JARC was disbanded in 2000.
The situation in other parts of the
world are somewhat more confusing. In Europe the European Economic
Union has indicated that it intends to make the carriage of passengers
and goods between members countries as open as its frontiers (another
story). To date this is not the case and each country appears to have
its own interpretation of how the cabotage laws are applied. For
example, we recently had a charter doing a site inspection on a ship
that was traveling between contiguous ports of one of the Atlantic
Coast EEC countries - this was no problem. A couple of weeks later a
different group wanted to do the same thing on a cruise ship traveling
between Mediterranean ports of another EEC country - and this was not