Protectionism

There Will Be No Viking Longboats Cruising the Mississippi, Thanks to Hard-Headed U.S. Protectionism

An old federal law demolishes the development of some domestic tourism markets.

|

Viking Cruises longboat
Viking Cruises

There are 2,000 ports across the world where cruise ships dock for passengers to embark on fabulous getaways. Only 30 of them are in North America.

The market won't likely be calling for more docks in the United States anytime soon. Switzerland-based Viking Cruises, which wanted to build and send small cruise ships up the Mississippi River, leaving new tourism dollars for river towns in its wake, is backing off its plan.

Viking announced a couple of years ago a plan to bring its luxe longboats to the Mississippi River, but last week the city manager from one those little communities got word Viking had terminated its plans, WQAD in the Quad Cities reports. The cruise ships Viking had been wanting to build and operate would have ended up costing double what they had planned, according to the report.

"As the details were being refined, it became the economics did not meet Viking's goals," a company statement read.

No new tourists. No new tourist revenue. No new tourism jobs.

Our own federal laws are to blame. More specifically, President Grover Cleveland's Passenger Vessel Services Act (PVSA). The 1886 law requires that in order to ferry passengers between ports in the United States, the ship must have been built in the United States and be owned and operated by Americans.

If the absurd contours of this law sound suspiciously familiar, it's because these restrictions are just like the Jones Act, the terrible protectionist law that uses similar rules and ultimately drives up the costs of shipping goods to U.S. islands and territories. The law received a lot of attention and criticism in the fall because it's going to make it much more expensive for Puerto Rico to recover from Hurricane Maria.

The Jones Act is for shipping. The PVSA is for ferrying passengers and for cruises. The intention of the PVSA was obviously to protect and foster domestic shipbuilding and shelter them from foreign competition.

Ships built and owned by foreign companies can depart and return from the same U.S. port, and they can go to distant foreign ports (outside of North America) and return back to a port in a different city. They cannot travel from port to port visiting locations within the United States. There are a very small number of exceptions, like Alaska.

As the decades sailed past, the law has ended up punishing only us. America doesn't make cruise ships anymore. An attempt to do so in 2001 (subsidized by the government, no less) failed miserably. Because cruise companies are not logistically able to meet the requirements of the PVSA, America doesn't really have a domestic cruise industry. (Clarification: To be clear, there are indeed domestic river cruise companies. But the market is not nearly as robust as it could be.)

The law doesn't protect American jobs from foreigners; it has prevented new jobs from being created in the United States. Victoria and Todd Buchholz (Todd is a former economic policy director under President George W. Bush) noted the consequences of this terrible law in a Los Angeles Times op-ed in August:

Without the PVSA, dozens more cruises would depart daily from U.S. cities such as New York and Seattle, and the hundreds of millions of dollars generated from those voyages would stay within the U.S. economy, providing thousands of portside jobs — for longshoremen loading cargo, bellhops, tour guides, taxi drivers and local farmers supplying fruits and vegetables for those all-you-can-eat buffets. And of course, each stop would generate revenue for U.S. cities in port fees as well as local and state taxes.

Who does the PVSA protect? Not Americans. Instead, Canada and Mexico should send thanks to that Congress of 1886, "attn. Grover Cleveland." The cruise docks of San Diego sit vacant 90% of the year. Meanwhile, 80 miles south, Ensenada receives more than three times as many passengers as San Diego, and many more than New York, New Orleans and Boston. Vancouver hosts three times as many sailings as Seattle. Since cruising generates an estimated $3.2 billion for Canada's ports, it's no surprise that the Canadian government lobbies to preserve the PVSA.

The existence of the PVSA is particularly absurd because about half of all cruise ship passengers are American. No other country comes close. We are net exporters of cruisers. American tourists spend money overseas and the PVSA makes it impossible to reduce our "cruise tourism deficit."

We don't even know what this protectionism is costing us. Would we see a dramatic increase in foreign tourism to cities people would never have chosen as destinations, but would be happy to visit along the way on a cruise?

We almost had a chance to find out. But for now, absurdly obsolete American protectionism wins and Americans lose.

This post has been updated to clarify that there is a modest domestic cruise market.

NEXT: A.M. Links: Trump to Speak at FBI Graduation, Rubio 'No' Vote Casts Doubt on Fate of GOP Tax Bill, ABC Fires Mario Batali Over Sexual Misconduct Allegations

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. So the atmosphere in D.C. is so toxic that it is impossible to put together a bi-partisan coalition of Congressmen from non-shipbuilding states to repeal this nonsense? It isn’t like there is a vast shipbuilding industrial complex that is contributing billions to the coffers of legislators.

    1. Yeah, except this issue strikes me as of little concern to anyone anywhere at any place in the country in any era.

      1. Because you scratch my back and I’ll scratch yours. Also port unions are strong despite their size. See LA port union strikes (every year almost). So if you attack the dry dock unions, then the long shore men might strike and then the economic calculus would swing in favor not repealing the law.

    2. Lawmakers make laws. They don’t repeal them. If they started repealing legislation, pretty soon the legislation they write could be up for repeal. So nobody repeals anything.

      1. Damned straight! Bakers don’t destroy cakes. Photographers don’t throw away pictures. Florists don’t mulch flowers.

      2. The repeals should be automatic. Add a Constitutional Amendment that forces every law to sunset in 12 years if not renewed. (2 Senate terms, 3 presidential terms and 6 House terms)

    3. You can earn more than $15,000 each month from you home, and most special thing is much interesting that the job is to just check some websites and nothing else. Enjoy full time and money freedome, also an awesome career in you life…. ?
      just click the link given belowHERE??? http://www.startonlinejob.com

  2. “More specifically, President Grover Cleveland’s Passenger Vessel Services Act (PVSA).”

    The irony is that Cleveland was the most free-market president in American history.

    1. The lapse is because he’d just gotten married to a much younger woman, and was understandably distracted.

  3. Meh, we didn’t want flyover country representing America to foreigners anyway.

    1. Better than New York and Seattle.

  4. Our own federal laws are to blame. More specifically, President Grover Cleveland’s Passenger Vessel Services Act (PVSA).

    thanks, dick.

    The 1886 law requires that in order to ferry passengers between ports in the United States, the ship must have been built in the United States and be owned and operated by Americans.

    MAGA!

  5. Because cruise companies are not logistically able to meet the requirements of the PVSA, America doesn’t really have a domestic cruise industry.

    While I agree with the general argument of this article, this statement is not true. My parents took a cruise on the Snake River last year.

    There are also cruises up and down the Mississippi and the Chesapeake Bay.

    https://www.americancruiselines.com/

    https://usarivercruises.com/cruise/chesapeake-bay/

    This seems to be a tread lately at Reason. Make a good freedom-based argument and then back it up with facts that turn out not to be true.

    1. I actually updated the post to clarify. It wasn’t my intent to leave readers with that claim and I was aware of the domestic cruises. I didn’t even realize how strongly I had made that argument until post-publication. Apologies!

      1. You should be. All ten people who have taken those cruises down the Mississippi from the Quad Cities (including myself) were very offended.

    2. Are you telling me that Trump didn’t kill that grandma?

    3. $4000 per person

      You could almost buy your own ship for that…

      1. We’ll pay you two thousand now, plus fifteen when we reach Albany.

      2. Coincidentally, that’s the same raise we’re promised from the tax reform bill.

  6. Burn!!!!! That’ll teach those stupid foreigners who’s best. Making America great again… since 1886!

      1. Fact: Crusty hears this phrase so often that until he was 12 he thought his name was Dammit.

  7. When I become King of America, the XXVIII Amendment will place a mandatory 10yr sunset on all legislation and regulation, retroactively.

    1. You have my vote.

      How many laws do you think could be maintained if they came up for reauthorization every 10 years?

      1. Even if all of them were, it would keep Congress busy so they couldn’t muck up the economy with a bunch of new laws.

        1. Nah, they’d come up with a lazy way to do it. There would simply be a Reauthorization of Existing Asinine Legislation and Dopey Universally Mandated Bullshit Act of 20xx passed each time it came up.

  8. That is too bad.

    There are a lot of small river towns that I think could benefit from such a cruise line.

  9. Lot’s of good tall bluffs along the Mississippi, perfect for launching a fusillade of liquor bottles at the cruise boats below. We have to get this law repealed.

  10. Minnesota doesn’t need another Love Boat fiasco.

  11. I got really excited when I read Viking Longboats. But when you click through to Viking’s webpage, they are modern fancy boats and not longships.

    What about a luxury cruise for someone who’s number one focus in life is to attain Valhalla? What about all the settlements along the Mississippi in dire need of raiding?

    1. Last year the US Coast Guard kept actual Viking longboats from visiting Minnesota on Lake Superior because of a rule that you need a licensed Great Lakes pilot, and the supply of licensed pilots is so small that they charge like $100K for a few months work.

      And Floki didn’t need no stinking license to sail to Iceland by himself back in the day.

  12. Smart move. Maybe France should have enacted a law like this one to prevent Ragnar Lothbrok from sailing his Viking longboats down the Seine to sack Paris!

  13. New plan: allow these Viking boats to ply the Mississippi, but also commission riverboat privateers to sail the river and plunder their Norwegian gold for ‘Murica!

  14. Does anyone have any thoughts as to why it seems American is wholly uncompetitive in nearly every industry? Steel, airlines, passenger ships, even infrastructure projects here are multiple times the cost of Europe. It also seems to be getting worse with the average age of our capital assets continuing to increase.

    1. Because the massive success of our mostly unfettered freedom generated unprecedented amounts of wealth and power, which attracted the most power and wealth hungry people to our shores. Specifically the shores of the Potomac…

  15. Rule of business: Before you consider nefariousness as a cause, first you must rule out garden-variety incompetence.

    The Corps(e) of Engineers will guarantee only a 9 foot deep channel in the inland river system. That’s why the few cruise boats on the Mississippi, Ohio, Columbia, etc. draw about 8 feet, and they are constructed basically as motorized, fancied up barges.

    Viking’s ‘long boats’ on the Rhine draw at least 12 feet, maybe more, and that’s what they wanted to build, in the USA, to run on our rivers. Pretty big technical ‘oops’ there. They would have had to totally redesign their ships to fit the channels on our rivers, which would have significantly impacted their contemplated business model.

    Plus, I think they rightly deduced that AQSC and ACL, the two current big boys, would have hammered them in advertising with the ‘we’re American…they AREN’T’ line.

    1. In case you haven’t checked, the demographic that does the cruising on US inland waterways is decidedly in the MAGA camp. Average age is between 65 and 70. Guess where they’ll fall in the US versus ‘them durn furreners’ camp…

  16. Holy shit, Cleveland’s ghost is here trolling……regulation, making America great since 1886.

Please to post comments

Comments are closed.