With Alaska season on the ropes, lines challenged on cabotage law

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The Norwegian Joy alongside the Canada Place terminal in Vancouver in 2019.
The Norwegian Joy alongside the Canada Place terminal in Vancouver in 2019. Photo Credit: Tom Stieghorst

Alaska's three-member congressional delegation responded to Canada's Feb. 4 decision to extend its cruise ban into 2022 by calling it "unacceptable" and saying they would explore "all potential avenues, including changing existing laws, to ensure the cruise industry in Alaska resumes operations as soon as it is safe."

It was assumed that Republican Sens. Lisa Murkowski and Dan Sullivan and Rep. Don Young were referring to the Passenger Vessel Services Act of 1886 (PVSA), which requires foreign-flagged ships -- which almost all large cruise vessels are -- to stop in at least one foreign port when sailing between two U.S. destinations, such as Seattle and Alaska. It's why so many Alaska cruises start or stop in Vancouver or Victoria, British Columbia. If they didn't, they'd be in violation of this 19th-century cabotage legislation that was passed to protect U.S. shipbuilders and operators.

Alaska lawmakers were not alone in raising the possibility of changing or waiving laws to enable the industry to operate in Alaska waters this summer. Cruise and travel associations, including CLIA and the Alaska Travel Industry Association, also suggested they would seek a temporary waiver to the PVSA for the summer so that Canada's cruise ban won't kill the Alaska cruise season.

But historical precedence indicates that it is far easier said than done: A PVSA waiver has never been granted to the cruise industry. And many industry stakeholders know getting one would mean a steep uphill battle.

Andrew Cremata, the mayor of Skagway, said that as far back as April 2020, he and others in southeast Alaska started looking at the feasibility of getting a PVSA waiver for the 2020 summer season. They learned that it would take a long time to accomplish and "that there wasn't going to be anywhere near the support to do that."

"That hasn't changed, I'm sure," he said. "The PVSA has always been the elephant in the room and something you don't talk about because there doesn't seem to be a workaround." 

The reasons are manifold. 

Charlie Papavizas, chair of the maritime practice for Winston & Strawn, has written extensively about the Jones Act, the maritime cabotage law of which the PVSA is a part, and said that historically, "waivers are exceptions rather than the rule."

The letter of the law stipulates that any waiver has to be in the interest of national defense, which Papavizas said is "very difficult" to prove. He found that in virtually every denial, Customs and Border Protection (CBP) has determined there to be an insufficient national defense interest.

In what also bodes badly for the cruise industry's chances for a waiver, Papavizas found that in the CBP's many denials, it indicated that a Jones Act waiver "cannot be issued solely for economic reasons," simply because there is a "private economic benefit" or where the interest expressed is solely "commercial in nature."

UnCruise Adventures, American Cruise Lines and Lindblad Expeditions reminded cruisers that they are not impacted by Canada's cruise ban extension.

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In recent years, Jones Act waivers have been made primarily during natural disasters to enable getting relief to places like Puerto Rico after Hurricane Maria.

A PVSA waiver for the Alaska cruise season would be for the economic benefit of Alaska, the Seattle area and the cruise lines, whose ships fly under foreign flags of convenience and who are not U.S.-based, despite having their headquarters in Miami. This presents a further hurdle to a campaign for a waiver.

"If these were companies based in America and hiring American employees, you'd have a little bit more traction, but it would still be difficult," Cremata said. "It is a leisure industry, and we love it, and tourism is the best thing for local economies, especially in Alaska, but at the same time, it is what it is."

Rod McLeod, former chief marketing officer at Royal Caribbean International and a former executive at Carnival Corp. and Norwegian Cruise Line, has been in or consulted for the industry for more than four decades and has never seen a PVSA waiver granted to the cruise industry.

"If there was any time in the history of the PVSA that an exception should be granted, it is now," he said. "It will protect jobs in Seattle, clearly in Alaska -- all American jobs. A lot of people are going to be hurt by this."
Despite that, he is "not really confident that they'd make an exception."

The unions that support the law, he said, particularly the Seafarers International Union, would not want to allow any precedent to be set. 

"For those who support it, precedence is an evil," said McLeod. "It is American unions at their worst. I can understand their position to a point, but you've got to bend every once in a while for the public good. We're talking jobs for people who really need them. You'd think the Alaska delegation in the Senate and House would be using every bit of leverage they have to push for this. My bet is that, although they won't admit it, they're not."

As for Canada, there is speculation the cruise ban was retaliation for the Biden administration shutting down the Keystone XL pipeline project on the president's first day in office, prompting Alberta's premier, Jason Kenney, to call on prime minister Justin Trudeau to enact "proportional economic consequences" for the decision. A columnist for the Toronto-based National Post even suggested Canada "kneecap the Alaska cruise industry" by forbidding them from making stops in Canada, which would "decimate whole swaths of the American cruise industry."

Canada maintains that the ban is because "cruise vessels in Canadian waters pose a risk to our healthcare systems." The country is not currently open to the idea of allowing cruise ships to make technical calls in Canadian ports, i.e., stopping but not allowing crew or passengers to disembark, according to Clay Cervoni, a spokesperson for Transport Canada, a governmental agency. 

But the agency did leave open the possibility that the ban could be lifted as the nation continues "to evaluate the situation and make changes as necessary." 

The industry will be watching closely.

"We are carefully considering all options and remain hopeful for an opportunity to revisit the timeline set forth by the Canadian government as conditions related to the pandemic improve," CLIA said.

Cruise lines are still holding out hope. During her weekly Coffee Chat with travel advisors, Royal Caribbean International's senior vice president of sales, trade support and service, Vicki Freed, said, "Maybe there's an opportunity for an exemption, maybe there's not. Travel partners, we'll keep you informed as we move along."

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