Yep---and everyone had better hope they don't close the loophole because if they do, they'll be putting the loop around the cruise line's neck and we won't be able to afford to cruise.
Ship's are registered outside the U.S. in order to take advantage of that country's laws, taxes and regulations. It is called "A Flag of Convenience".
Well, not really. The term "flag of convenience" referred to the historic practice of registering ships in countries to which they would never go (Panama, India, and Liberia were among the most common) to evade inspection for compliance with safety standards in an era when international maritime law permitted only the country of registry to inspect a vessel. The adoption of the Safety of Life at Sea (SOLAS) treaty effectively put an end to that practice by authorizing each country to inspect every ship that calls at its ports for compliance. Since ratification of SOLAS, the U. S. Coast Guard inspects every ship that calls in U. S. ports, and these inspections are very thorough. The inspections even include crew response to simulated casualties chosen by the inspectors.
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Originally Posted by You
If ships flew the U.S. flag they would be required to adhere to U.S. labor laws, ADA laws and everything else.
Those are the least of the cruise lines' concerns, as all of the cruise ships marketed in North America comply fully with ADA anyway. The real issue is one of cost. U. S. law requires much more extensive licensing of crews than most foreign countries, and nearly all of the people who hold the necessary licenses belong to maritime unions that have long demanded by far the highest wages on the seas. As a result, the cost of hiring crew for a vessel of U. S. flag is prohibitive.
The United States also has relatively high maritime taxes, but I the tax structure is secondary.
Can someone tell me why Cruise ships are registered outside the US?
There are two reasons.
>> 1. The cost of hiring crews licensed in the United States, as required for vessels of U. S. registry is prohibitive because they have very strong unions.
>> 2. In some cases, foreign registry permits vessels to offer services to passengers that U. S. law would forbid. The most obvious example is the ability to have a legal wedding performed by the master of the vessel while at sea, which Bermudan and Maltese laws permit but U. S. law does not.
There is one other big challenge with registering a cruise ship in the USA. It needs to be built in the USA first. There are not any US Shipyards left that know how to build a cruise ship, nor are they interested.
The last yard that tried - Ingalls in Mississippi - was bankrupted in the process.
When NCL bought the half-finished hull from the bankruptcy court, they asked every large shipyard in America to submit bids on finishing the job.
Not a single American Shipyard even put in a bid.
NCL had to tow the hull to Germany to finish the job.
Well, not really. The term "flag of convenience" referred to the historic practice of registering ships in countries to which they would never go (Panama, India, and Liberia were among the most common) to evade inspection for compliance with safety standards in an era when international maritime law permitted only the country of registry to inspect a vessel. The adoption of the Safety of Life at Sea (SOLAS) treaty effectively put an end to that practice by authorizing each country to inspect every ship that calls at its ports for compliance. Since ratification of SOLAS, the U. S. Coast Guard inspects every ship that calls in U. S. ports, and these inspections are very thorough. The inspections even include crew response to simulated casualties chosen by the inspectors.
Those are the least of the cruise lines' concerns, as all of the cruise ships marketed in North America comply fully with ADA anyway. The real issue is one of cost. U. S. law requires much more extensive licensing of crews than most foreign countries, and nearly all of the people who hold the necessary licenses belong to maritime unions that have long demanded by far the highest wages on the seas. As a result, the cost of hiring crew for a vessel of U. S. flag is prohibitive.
The United States also has relatively high maritime taxes, but I the tax structure is secondary.
Norm.
I have managed 28 different cruise ships calling at US Ports. Not one of them fully complied with ADA. The US Supreme Court ruled that the cruise lines could get away with ignoring certain portions of the ADA that we consider "difficult" for our operations.
When it comes to hiring ship's crew, there is also another issue: Drug Testing.
NCL America found out the hard way that many Americans cannot pass the Level 5 Drug Screen required for working on a ship. This disqualified far too many of the candidates they wanted to hire.
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Sensation 4/2002
Infinity 4/2003
Summit 4/2004+4/2005
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Liberty of the Seas 5/2008+11/2009
Solstice 4/2009
Oasis 4/2010+4/13/2013
Allure 1/16/ 2011
Equinox 4/11/2011
There is one other big challenge with registering a cruise ship in the USA. It needs to be built in the USA first. There are not any US Shipyards left that know how to build a cruise ship, nor are they interested.
The last yard that tried - Ingalls in Mississippi - was bankrupted in the process.
That's not accurate. It was actually American Classic Voyages, the company that ordered the ship, that went into bankruptcy and thus could not pay the cost of completing the vessel. The company planned to transition from offering cruises around the Hawai'ian Islands aboard the SS Independence, operated by its "American Hawai'i Cruises" unit, with a more upscale product operated under the "United States Lines" banner, to which it had acquired already the legal rights.
Quote:
Originally Posted by You
When NCL bought the half-finished hull from the bankruptcy court, they asked every large shipyard in America to submit bids on finishing the job.
Not a single American Shipyard even put in a bid.
IIRC, Ingalls Shipbuilding in Pascagoula actually did bid on completion of the vessel, but the company that acquired the unfinished hull, Norwegian Cruise Line (NCL), opted to award the contract for the completion to Meyer-Werft, with whom it had an established working relationship, instead. It appears that it was the established working relationship, rather than a significant difference in cost, that drove the decision.
I'm also pretty confident that Ingalls Shipbuilding did NOT go into bankruptcy. That yard has had a steady stream of shipbuilding contracts for destroyers and amphibious assault ships from the U. S. Navy. The parent company, Litton, did merge into Northrup Grumman Corporation as part of a major consolidation of the defense industry that occurred nearly a decade ago, but I'm not aware of any bankruptcy that might have been related to that transaction.
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