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The old joke in transportation is that passengers are freight that complain. The same applies to passengers on cruise ships. Of course, if there are no cruises, there are no passengers to complain. Alaska’s cruise season this year is effectively canceled due to the unintended consequences of COVID-19 regulations. Technically, like in 2020, cruises will remain an intra-Alaska operation with companies like UnCruise Adventures and Alaska Dream Cruises.
The large cruise lines were ready to resume their annual summer visits to Alaska. In recent years, before the COVID-19 pandemic, the May through September season saw around 1.1 million visitors annually on cruises hosted by Carnival, Holland America, Norwegian Cruise Line, Royal Caribbean and others. Cruises make up about half the modal share for summer visitors to Alaska.
On Feb. 4, Canada’s minister of transport announced that the federal government will extend the ban from its waters of all cruise ships (domestic- and foreign-flagged) with a carrying capacity of more than 100 passengers. The ban is in force through Feb. 28, 2022, though it was set to expire at the end of this month. The ban also applies to cruise ships with a carrying capacity of 12 or more passengers but only regarding Canada’s Arctic waters. Such bans, to the extent they affect the United States, are in keeping with Canada’s wariness of bilateral tourism amid the COVID-19 pandemic.
Transport Canada notes: “Cruise vessels in Canadian waters pose a risk to our health care systems. The Government of Canada will continue to evaluate the situation and make changes as necessary to ensure the health and safety of all Canadians. Should the COVID-19 pandemic sufficiently improve to allow the resumption of these activities, the Minister of Transport has the ability to rescind the Interim Orders.”
Perhaps a revision will be made over the coming weeks or months, but given the lead time in bookings for the summer it does not look promising for Alaska’s cruise season.
Under the United Nations Convention on the Law of the Sea (UNCLOS), to which Canada is a signatory, Canada’s waters include an area 200 nautical miles off its shoreline. It has complete sovereignty (i.e., the right to deny innocent passage) over its territorial waters, which extend 12 nautical miles off its shoreline. Not being able to ply Canada’s waters means that cruise ships cannot dock at Canadian ports such as Vancouver and Victoria. This is significant because of the language of the U.S. Passenger Vessel Services Act (PVSA; 1886). The PVSA should not be confused with the Jones Act (1920) and its oversight of cargo transport by water. While a U.S.-flagged cruise ship could sail nonstop from Seattle to Alaska, foreign-flagged cruise ships must “break” the route by stopping at a “nearby foreign port” along the way. Logistically, this means Canada. The only real risk Canada would face by having an Alaska-bound cruise ship docked for a brief period at the ports of Vancouver or Victoria would be the need for a passenger to disembark due to a medical emergency. Also, there is no requirement under the PVSA for the foreign port to be used for any onshore sightseeing. In effect, it would be similar to a “technical stop.” Canada could assess dockage fees and supplemental charges for any fuel or other provisions the cruise ship might desire while briefly laid over. These would have been items to negotiate before Transport Canada’s unilateral decision.
Alaska’s congressional delegation felt blindsided by Canada’s announcement since there were no opportunities for consultation. Of course, the Biden administration’s cancellation of the Keystone XL pipeline project left Canada’s federal and Alberta’s provincial governments feeling much the same way. There is no reason to believe these events are in any way connected. Nonetheless, the world’s two largest trade partners need to do more talking and less unilateral banning and canceling.
Norwegian Cruise Line, unique to the industry, owns the only U.S.-flagged cruise ship. Pride of America began service in 2005 and is used for cruises to and from Hawaii. Of course, the cruise lines wishing to return to Alaska this summer have the option to make a case for an exemption to the PVSA and avoid the requirement to stop in Canada. There is precedent for exemptions to the Jones Act, but these have only been made in cases of emergency or demonstration that domestic vessels were not available to meet U.S. market demand. While the loss of a large share of tourism revenue will hit Alaska’s coastal communities significantly, it will be up to the Biden administration and Congress to determine if a PVSA exemption should be granted via executive order or an act of Congress.
Click here to see other commentaries by Darren Prokop on American Shipper and FreightWaves.