Alaska Senators Introduce Legislation To Allow Cruise Lines Circumvent “Foreign Port Rule” On Alaska Sailings

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The two U.S. Senators for Alaska have introduced a bill that would allow foreign flagged cruise vessels to operate between U.S. ports only which is currently prohibited under the Passenger Vessel Services Act (PVSA).

The ongoing and recently extended cruise ban from Canada as well as the ongoing closure of the Canadian border to the U.S. has destroyed any hopes of a restart for the Alaska cruise season and this legislation is designed to help with it.

Alaska cruises which I have covered extensively in the past are very popular with cruise enthusiasts and nature lovers for good reason as they offer a magnificent scenery to take in.

The Passenger Vessel Services Act (PVSA) demands that any foreign cruise ship has to make a stop as a foreign port in order to operate rather than running solely domestic itineraries. In the past this was never a problem and the Alaska cruise season satisfied the PVSA requirement by either operating from or stopping in Vancouver, BC or Victoria, Vancouver Island, BC.

Since Canada closed their borders and ports last year which already destroyed the Alaska cruise season (plus the CDC No Sail Order) they recently doubled down on this cruise ban and closed all ports to cruise ships until at least February 2022 (plus a possible extension). Never mind the fact that foreigners can’t enter Canada either at the moment.

The U.S. Senators for Alaska Murkowski and Sullivan now have introduced legislation to set this reliance on Canada aside and make it possible for cruises to operate for example from Seattle up to Alaska and back.

U.S. Senators Lisa Murkowski and Dan Sullivan, both R-Alaska, today introduced the Alaska Tourism Recovery Act to alleviate the Passenger Vessel Services Act (PVSA) restrictions for cruise ships transporting passengers between the State of Washington and the State of Alaska. This legislation will allow cruise ships to sail to Alaska without requiring that they stop in Canada, as U.S. law normally would require.  Canada’s Interim Order No. 5 Respecting Passenger Vessel Restrictions Due to the Coronavirus Disease 2019 (COVID-19) prohibits cruise ships from navigating, mooring, anchoring or berthing in Canadian waters until February 28, 2022 or until the Canadian Government lifts the prohibition. U.S. Congressman Don Young (R-AK) recently introduced companion legislation in the House of Representatives.

“Canada’s recent decision to prohibit Alaska-bound cruise ships from operating in Canadian waters creates legal hurdles that will hamstring the Alaska cruise season, creating additional economic strain on Alaska’s entire economy, especially in our Southeast communities. Alaskan communities are already facing severe economic hardship and uncertainty from missing one tourism season as a result of COVID-19. We have seen double-digit employment declines in Southeast and a more than 30 percent drop in revenue statewide. Missing another cruise season would only compound the economic fallout that has been devastating for so many families,” said Senator Murkowski.  “By providing this technical fix to the PVSA for Alaska-bound cruise ships from the State of Washington, we are taking significant steps towards safely resuming cruise ship activity and economic certainty at a time when Alaskans need it most.”

“Canada’s recent decision to close its ports to passenger vessels for another year has dire implications for Alaska’s tourism industry and the hundreds of small businesses and tens of thousands of hard-working Alaskans who support it,” said Senator Sullivan. “These Alaskans have already had to grapple with a lost season last year due to COVID-19. They simply can’t afford to weather another season without the tremendous economic activity that cruise ships provide to our coastal communities. As a delegation, when we first heard this announcement by the Canadians, we committed to pursuing all means available, including legislation, to save this tourism season. …”

When I wrote about these restrictions in 2020 and as recently as early February when Canada announced their one year cruise ban I already said that there should be something done about the PVSA from the political side, meaning U.S. Congress.

This is the entire bill:

Download (PDF, 25KB)

In my opinion the legislation should also include the 2022 cruise season because it’s impossible to rely on the Canadian government at this point. They have totally lost the plot and if Congress is already going through the hassle of running a vote on this bill then they should just make it for two years.

Nevertheless right now the bill would waive the PVSA for Washington/Alaska sailings until February 2022 or once the Canadians lift their restrictions.

The background of these provisions and their implications is first and foremost taxation. Cruise ships are mostly flagged in a country that have very loose labor laws and beneficial taxation. For example Celebrity vessels are Maltese flagged. It’s obviously the choice of the cruise line (often incorporated in tax havens as well) to not have their vessels U.S. flagged which prevents them from operating domestically in the first place.

One could argue that it might make sense to have a separate Alaska entity of ships that are U.S. flagged and would be permanently permitted to operate between U.S. ports only. This would relieve passengers of the annoying immigration procedures and having to take a flight to Vancouver to start their cruise. While there are many Canadian passengers, the majority are Americans and other foreigners.

Of course such action would come at a significant cost for the cruise line both in terms of taxes, liability and wages among others. The cost could probably be recouped by adding it to the price of the cruise which I’m sure many would be willing to pay. The labor issues are another complicated matter. Foreign crew would need to be entitled to U.S. employment and receive a respective visa which is a logistical and legal nightmare. I don’t see cruise lines taking such step for those reasons alone.

There is very little downside for Congress not to approve this bill. Having no cruise season at all is a loss for the U.S. economy and of course especially that of Alaska. Washington State could also benefit by getting Port of Seattle workers and the Seattle hospitality industry back on their feet.

Concerning the fate of this bill, now that the U.S. elections are over both parties hold a 50-50 parity in the Senate and I don’t see why the Senators for Washington State would vote against this bill. Aside from the fact that it isn’t fueled with political dynamite and Senator Murkowski is not a controversial figure that would lead many on the other aisle to dismiss outright for personal/political reasons. This is straight forward legislation that benefits the country overall, it has good chance of passing. The only question is when a vote will actually take place. It has to be tabled by the new Majority Leader Sen. Schumer (D).

Another thorn in the side of the cruise industry is the CDC. Interestingly there was an article in the New York Times yesterday that discusses why almost six months after expiration of the No Sail Order still no action has been forthcoming from the agency.

In October, the Centers for Disease Control and Prevention lifted its “no sail” order on U.S. cruise ships and set out a framework that would allow them to start sailing again, bringing relief and hope to a decimated industry — and to many cruise fans.

And then, nothing.

Nearly six months later, cruise lines are still waiting for technical instructions from the agency, which will allow them to prepare their ships for simulation voyages, designed to test whether they can safely sail. …

The C.D.C. says its current focus is working with cruise lines to implement the initial phase requirements of testing all crew and setting up onboard labs as part of a step-by-step approach for the return of passenger cruising. The framework includes extensive testing, quarantine measures and social distancing, but the details remain unclear. …

Major cruise companies are waiting for the C.D.C. to issue technical requirements to help them prepare their ships for sailings. They must then give the C.D.C. 30 days notice before starting test cruises with volunteer crew and passengers and will have to apply for a conditional sailing certificate 60 days before a planned regular voyage.

Cruise executives say they expect the C.D.C. to issue the technical requirements soon.

There are many avid cruisers who would immediately hop back on a ship if the opportunity arises. This would look a lot different than previous sailings. A mandatory mask policy and Covid-19 testing is almost certainly required. Not sure about a mandatory vaccination, probably not for solely domestic itineraries.

Celebrity (RCCL) just announced that the Millennium will return to Caribbean destinations from June 5th and cruises can be booked from March 25th.

… Celebrity Millennium will sail with vaccinated crew and will be available to vaccinated adult guests and children under the age of 18 with a negative PCR test result within 72 hours of embarkation. …

Now the U.S. is on a good trajectory concerning the vaccination program (for those who want one). If they make immunization mandatory for their voyages then the customers have to live with that or simply not book one (request a refund if they already did).

Conclusion

It could be months before a vote in Congress is taking place on the legislation but it has been introduced on March 5th. The Alaska cruise season doesn’t start until May, usually lasting until the end of September so with that there is still ample room to do something.

In short: Both Congress and the CDC should get a rocket up their rear end and do their job. I’d love this actually go ahead and that it’s once again possible to cruise in Alaska this year. Right now my next cruise is scheduled for June 2022 but I’d book one for this year if the opportunity arises.

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