Canada shuts down its ports & the U.S. law keeps American cruises at the pier

Monday, April 5, 2021

On cruise ships, good amount of money to be made ferrying travelers from the Lower 48 to Alaska. However, unless the tour stops over in Canada—or some other foreign port, Passenger Vessel Services Act of 1886 says the carrier must be flagged in the U.S. and owned, built and crewed by Americans. This obligation makes the outing even pricier to function and profits harder to come by.

The act, known as the PVSA in short, is a first cousin of the 1920 Jones Act. It gives permission for the same for the transportation of cargo between American ports. Both laws work well to keep foreign competition outside and improve the U.S. maritime lobby—shipbuilders, unionized crews and shipping firms. For this, the maritime lobby kindly contributes to the politicians on both sides of the aisle.

The high costs of the PVSA and the Jones Act to Americans are dispersed, so it’s politically tricky to assemble the victims in the right way. But the closing of Canada’s ports-of-call for the second time this summer because of Covid-19 is enlightening the weakness of this crony capitalism.

Carriers that don’t meet the requirements of PVSA won’t allow passengers to leave or join a cruise between U.S. ports, and the ship must make at least one stop in a foreign country. Canada, located as it is on the way to Alaska from Seattle, had given the cruise industry a way to serve mainland customers who wish to travel to the 49th state at competitive prices.

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