Cruise Lines, Ports Seek Federal Consideration

NCL-exclusive legislation elicits 'me-too' reaction

By: Theresa Norton Masek

Hawaii Sen. Daniel Inouye opened a Pandora’s box with his recent legislative proposal favoring Norwegian Cruise Line’s expansion plans in the islands.

Now, other cruise lines and some California ports want in on the action.

The proposal, added quietly to the 2003 Omnibus Appropriations Bill, would alter an old shipping law that prevents ships built and registered in other countries from operating between U.S. ports unless they also make a call at a foreign port.

Inouye’s proposal would allow NCL to fly the U.S. flag on three foreign-built ships, a move that would eliminate the need for a foreign stop and allow them to operate exclusively within Hawaiian waters. NCL has promised that the ships would comply with U.S. laws and carry a U.S. crew.

The appropriations bill, with Inouye’s provision, cleared the Senate Jan. 23 and now is in a House-Senate conference committee.

Lobbyists for Holland America Line and Princess Cruises now are pushing an amendment that would allow as many as six ships from other companies to reflag and operate in Hawaii.

“We basically want the opportunity to compete and not give our competitor a monopoly in the Hawaii market,” said Holland America spokeswoman Rose Abello.

“We’ve been going to Hawaii for years. We offer 15- and 16-day cruises on the Statendam roundtrip from San Diego. We call at Ensenada on those. So it’s five days out, five days in Hawaii and five days back.”

Princess declined to comment at this time, a spokeswoman said.

A key point in negotiations was NCL’s agreement to complete construction on the hull of the first Project America ship.

The project, sponsored by Inouye, would have allowed American Classic Voyages Co. to reflag a foreign-built ship for interisland Hawaii cruises as long as it used a U.S. shipyard to build two ships.

But, before those ships could be completed, American Classic declared bankruptcy. NCL has purchased parts of the ships and last fall it had the materials towed to Germany for completion.

Apparently Holland America and Princess are not proposing any shipbuilding provision.

Meanwhile, port officials in San Diego and San Francisco want a similar change that would allow foreign-built ships to cruise along the West Coast without a foreign-port requirement.

“What is good for Hawaii is good for all,” said Rita Vandergaw, senior director of marketing and communications for the Port of San Diego. “We are working with Sen. (Dianne) Feinstein, and we are asking her to put in a provision that extends that same waiver to the entire U.S.”

Gerry Roybal, maritime marketing manager for the Port of San Francisco, is suggesting legislation that would allow three foreign-built ships to reflag and operate solely among California ports.

Most California cruises stop at Ensenada or Vancouver to comply with the federal law.

“It puts San Francisco and any other central coastal port at a great competitive disadvantage because we are so far removed from foreign countries,” Roybal said.

Indeed, the Port of Seattle is not expressing any interest in the campaign. But Seattle is located near Vancouver, which easily allows Alaska-bound ships to make the foreign call.

“We’re very pleased with the way our business is growing with the Alaska and Canada cruise market, and we’re going to focus on that,” spokesman Mick Shultz said.

Roybal cited an economic-impact study that showed three ships on California coastal routes would generate $260 million in port revenues, wages from new jobs, revenue from the purchase of supplies and tourism spending.

Vandergaw said she is optimistic that Feinstein will sponsor some sort of legislation or amendment, and Roybal said that contacts with the Democratic legislator’s office have been positive.

“There are no legislative drafts or a real commitment, but there was a verbal interest expressed,” he said.

Feinstein’s chief of staff, Mark Kadish, referred comment to the senator’s press office, which did not return several phone calls from TravelAge West.