project america under construction
Project America under construction in Ingalls

[UPDATED 2021] What is the Passenger Vessel Services Act (PVSA)?

You may have seen or heard this acronym around the cruise boards; PVSA. But what is it, what is its purpose, and how does it affect cruisers?

It stands for the Passenger Vessel Services Act, or PVSA. It is a piece of US legislation designed to protect American maritime interests. It’s sometimes referred to US’s Cabotage laws. Cabotage is the maritime term for protecting domestic lines interest along that country’s coastline. The PVSA along with the more widely known Jones Act are the United States two attempts at this.

Every country has their version of it, however the US’s is one of the most stringent.

Here it is in its raw format from the US Code of Federal Regulations:

46 CFR §551.03

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U.S. Code › Title 46 › Subtitle V › Part D › Chapter 551 › § 55103

  • (a)In General.—Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel—
    • (1)is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and
    • (2)has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.
  • (b)Penalty.—
    • The penalty for violating subsection (a) is $300 for each passenger transported and landed.

19 CFR §4.80a

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CFR › Title 19 › Chapter I › Part 4 › Section 4.80a

  • (a) For the purposes of this section, the following terms will have the meaning set forth below:
    • (1) means a port in the U.S., its territories, or possessions embraced within the coastwise laws.
    • (2) means any foreign port in North America, Central America, the Bermuda Islands, or the West Indies (including the Bahama Islands, but not including the Leeward Islands of the Netherlands Antilles, i.e., Aruba, Bonaire, and Curacao). A port in the U.S. Virgin Islands shall be treated as a nearby foreign port.
    • (3) means any foreign port that is not a nearby port.
    • (4) means a passenger boarding a vessel for the duration of a specific voyage and means a passenger leaving a vessel at the conclusion of a specific voyage. The terms and are not applicable to a passenger going ashore temporarily at a coastwise port who reboards the vessel and departs with it on sailing from the port.
    • (5) has the meaning defined in § 4.50(b).
  • (b) The applicability of the coastwise law ( 46 U.S.C. 55103) to a vessel not qualified to engage in the coastwise trade (i.e., either a foreign-flag vessel or a U.S.-flag vessel that is foreign-built or at one time has been under foreign-flag) which embarks a passenger at a coastwise port is as follows:
    • (1) If the passenger is on a voyage solely to one or more coastwise ports and the passenger disembarks or goes ashore temporarily at a coastwise port, there is a violation of the coastwise law.
    • (2) If the passenger is on a voyage to one or more coastwise ports and a nearby foreign port or ports (but at no other foreign port) and the passenger disembarks at a coastwise port other than the port of embarkation, there is a violation of the coastwise law.
    • (3) If the passenger is on a voyage to one or more coastwise ports and a distant foreign port or ports (whether or not the voyage includes a nearby foreign port or ports) and the passenger disembarks at a coastwise port, there is no violation of the coastwise law provided the passenger has proceeded with the vessel to a distant foreign port.
  • (c) An exception to the prohibition in this section is the transportation of passengers between ports in Puerto Rico and other ports in the U.S. on passenger vessels not qualified to engage in the coastwise trade. Such transportation is permitted until there is a finding under 46 U.S.C. 55104 that a qualified U.S.-flag passenger vessel is available for such service.
  • (d) The owner or charterer of a foreign vessel or any other interested person may request from Headquarters, U.S. Customs and Border Protection, Attention: Cargo Security, Carriers & Immigration Branch, Office of International Trade, an advisory ruling as to whether a contemplated voyage would be considered to be coastwise transportation in violation of 46 U.S.C. 55103. Such a request shall be filed in accordance with the provisions of part 177, CBP Regulations ( 19 CFR part 177).

So in short it says that if a vessel wants to transport passengers between two US ports it must be flagged, or registered, in the US. To do this, the ship must be built in a US shipyard with US steel, owned by a US citizen and crewed by 90%+ American citizens. (further federal regulations at the end of this document if you should so choose)

As it stands now, there is only one such medium-large cruise ship that meets these requirements; NCL’s Pride of America which we will explore it’s history below.

Now on paper it’s pretty clear that these regulations are designed to promote as much US business and create as many jobs as possible. However, it is my opinion that that this legislation, and it’s commercial maritime sibling the Jones Act (Merchant Marine Act of 1920), are doing more harm than good.

PVSA and How it Relates to Cruisers

The rule-of-thumb that cruise lines use when planning itineraries to ensure compliance, is if it’s a foreign flagged ship leaving from and returning to that same US port, you need to make a call in a nearby foreign port. This is why most ships call on Nassau for most Caribbean routes or Victoria, BC if it’s an Alaskan cruise.

US flagged National Geographic Venture

If you’re embarking from one port [for example Cape Liberty, NJ] and debarking at another US port [for example Ft Lauderdale], then you need to call a ‘distant’ foreign port. The legislation then goes on to clarify distant as specifically a port in South America or the A,B,C Islands. This comes into play when a ship is repositioning along the east coast or sailing from one coast to another. That is why Cartagena, Curacao or Aruba are included on all one way Panama Canal cruises.

Another way this impacts itineraries are on those that sail from the West Coast to Hawaii. They have two options; Either a one way to/from Vancouver to Honolulu or a round-trip out of a US west coast port but make a ‘technical stop’ in Ensenada for just half a day. This is to meet that nearby foreign port requirement. In this west coast -> Hawaii example, it will not need to be ‘distant’ because it’s returning to that same US port.

An interesting enigma, let’s say separately you book some combination of cruises where you board in one US port and disembark in another, without meeting the South American requirement. Also lets just say that the cruise line doesn’t catch it during the booking process. In this scenario, lets say you board the ship in Seattle for a 7-night Alaska round-trip voyage. In Seattle, you then stay on for the one-night, one-way repositioning cruise from Seattle-Vancouver. Then you stay onboard for the next weeks cruise along the west coast from Vancouver to Los Angeles. Because you technically went from Seattle -> Los Angeles without permanently disembarking the same ship, you would therefor be in violation of the PVSA. If that was all confusing to follow, then no need to sweat it. The booking agents and the systems the cruise lines use to process your reservation, all have condition inpalce to not allow this booking to occur. But lets say you do this by yourself and somehow are able to book it. You will actually get a red stamp on your passport that says PVSA Violation. If US Customs sees this, you will be required to pay the $798 note1 fine to them before being allowed back into the country. This may be years after your cruise took place.

Project America & Shipbuilding

Will this be changing anytime soon? Absolutely not. The US is holding onto it’s very last bit of shipbuilding industry that it has left. Excluding military vessels, the few remaining US yards put out between 2-3 mid-size ships a year combined. These are either container vessels sailing from the west coast to Alaska & Hawaii or oil/product tankers sailing between costal ports with refined fuels. The US will never see another medium-large scale cruise ship built possibly ever. We just don’t have the infrastructure, resources or key talent for these types of projects.

Project america ship render
Early side view of Project America, now sailing as NCL’s Pride of America

Case and point, the demise of American Classic Voyages. They attempted to build a small fleet of 70,000gt US flagged ships and sail them in Hawaii and US coastal cruises. They got a lot of government funding, sponsorship, and incentives to build this.

Project america ship render
project_america_early_render
Project america ship render
Project america ship render
Project america ship render
Project america ship render

The yard that was building it was Ingalls Shipbuilding in Pascagoula, MS (now Hunting Ingalls, part of Northrup Grumman). The yard quickly got in over their head, due to the above reasons, and the project was seriously delayed while also being completely over budget. Norwegian Cruise Line, at that time under Colin Vietch and Genting Group, came in and purchased the vessel for all of $24 million. They also received parts to a second ship that just had it’s steel cut. At the same time, they negotiated an exemption to the PVSA to finish the vessel overseas while retaining its US flag status & PVSA compliance. In that piece of legislature, NCL was also allowed to incorporate those pieces of the second ship into the Pride of Hawaii (now sailing as the Norwegian Jade). They were allowed to complete it at the German yard Meyer Werft and incorporated them into a Jewel-class design. Also, NCL was allowed to reflag one additional foreign built ship and granted it PVSA compliant. That ship was the Pride of Aloha (formerly and now sailing as the Norwegian Sky).

Project America leaving Ingalls
Project America being towed out of the Ingalls shipyard
AP
NCL former, former CEO Colin Vietch.

For several reasons that we will not go into here, the US subsidiary NCL America did not succeed. Colin Veitch was let go from NCL in 2008 and a new ownership group under Apollo Management saw them downsize NCL America to just one ship. Now as a result, the Norwegian Jade and Norwegian Sky can never regain their PVSA exempt status.

Currently the only line actively building overnight ocean going passenger vessels in the US is American Cruise Line. These ships are only around 250ft in length and only carry 200pax. Lindblad Expeditions recently built two 100pax ships in 2017 and 2019 but there aren’t plans for any more.

Looking Forward

If we were to open the flood gates to foreign flagged ships sailing on whatever routes they want, we obviously will increase port calls which will better for ports and local economies. Now of course this will be at the expense of US flagged ships meaning less will be built and maintained. However, as mentioned above, the shipbuilding industry in the US isn’t anywhere close to what it was when this legislation was written, so what exactly is it protecting?

Perhaps a creative solution is required whereby large ships/lines are able to easily obtain wavers of the PVSA. This will certainly help bring back the cruises-to-nowhere that were canceled in 2015.


Note 1: The original article listed this as $300. This was the case prior to 2015, but was adjusted by the Federal Civil Penalties Inflation Adjustment Act Improvements Act. The current one, $798 has been updated per the above embedded notice from September 2019. The fine now goes to the line and not direct to the pax. The lines all state in their terms and conditions that any fine will then be invoiced to that passenger after the fact.


Editors Note: This article was originally published on March 11, 2018. It has been updated for 2021.

Also, this article contains and will contain every known render of the proposed Project America.