Foreign Crews

I mentioned recently that there was a U.S. law concerning transportation between U.S. ports--hence, our Alaska cruise included at least one non-U.S. port. Robert A. Book, one of my readers, tells me:

The reader who told you that "Alaska cruises always include at least one non-U.S. port is that ships traveling between U.S. ports need to have an entirely American crew" is (mostly) correct.  I happen to have just finished teaching a course in which this legislation and its economic (and potentially, national-security) effects figure prominently.

(S)He is referring to the Passenger Services Act of 1886, which states, "No foreign vessels shall transport passengers between ports or places in the United States, either directly or by way of a foreign port, under a penalty of $300 for each passenger so transported and landed."

A "foreign vessel" is now defined by the Jones Act (more formally, the Merchant Marine Act of 1920), which also extends the restrictions to transportation of cargo as well.  The Jones Act defines a US ship was one which is American-built, American-owned, and American-crewed.  American-crewed means at least 75% of the crew are American citizens.

This has substantial economic effects, since foreign shipbuilders have costs that are a fraction of those of U.S. shipbuilders.  This is not an effect of lower wages in foreign countries; it's true even if you measure costs in man-hours rather than dollars.  Container and tanker ships built in Korea and Japan, for example, and cruise ships built in the Netherlands   and Germany are so much cheaper than U.S.-build ships that without these trade restrictions, there would be essentially no market for U.S.-built ships -- or U.S. shipbuilders would have to become as efficient as the others to stay in business.

On the other side of the coin, since U.S.-build ships are so expensive, those who (would) use ships try very hard to find substitutes.  Like, having a cruise stop in a foreign port -- which allows them to buy a cheaper ship and hire a cheaper crew.  Or in the case of cargo, using trains or trucks, when ships would be cheaper (for some coastal routes anyway) if they could use the low-cost foreign ships rather than the high-cost American ships.

Also, there are a lot of products that don't exist, but might if it weren't for these restrictions.  For example, you could imagine a tour company offering Europeans a package deal in which they fly into Boston, take a cruise down the Atlantic coast stopping at all the major cities, and then fly home from Miami.  As far as I know, there isn't a market for that, because the cruise part would be too expensive.  You'd have to buy an American-built cruise ship, and that would make this cruise way more expensive than comparable cruises elsewhere in the world.  So, nobody does it.

If your interested, I could go on (and on!).  Wikipedia also has entries for the legislation:

  http://en.wikipedia.org/wiki/Merchant_Marine_Act_of_1920
  http://en.wikipedia.org/wiki/Passenger_Services_Act

This is, in summary, protectionism at (among) its worst.

It occurs me that the cruise he mentions--Boston to Miami--could get around the problem by making one stop in the Bahamas on the way to Miami.