Mayor Gavin Newsom and San Francisco port officials are protesting a proposed rule by the federal Homeland Security Administration’s Department of Bureau of Customs and Border Protection (CBP) that threatens San Francisco’s core cruise business – Alaska, Pacific Northwest and Mexico cruises. The Port of San Francisco estimates that 39 cruise calls each year are at risk, resulting in the loss of $45 million in direct spending by cruise lines and passengers.

“At a time when our nation is on the brink of recession, the federal government should be stimulating our economy. This rule would strike a blow to our city’s successful cruise business,” said Mayor Gavin Newsom.

Currently, foreign-flagged passenger vessels that visit more than one U.S. port per itinerary must stop at a port outside the U.S. to be in compliance with the Passenger Vessel Services Act of 1886 (PVSA). Cruise ships sailing from San Francisco to Alaska and the Pacific Northwest stop in Canada – at Vancouver or Victoria – to comply with the 122-year-old law. Last November, CBP proposed an administrative rule that would require these vessels to stop for at least 48 hours at each foreign port, even though most calls today are for eight hours or less.

In his letter to the federal government, Mayor Newsom wrote, “The cruise industry provides significant employment in San Francisco. Our analysis shows that the proposed CBP rules as drafted would reduce our homeport calls by more than 40 percent and our passengers by more than fifty.” An estimated 7,500 longshore job assignments are at risk for the local dock workers, who handle passenger baggage and load the ship’s provisions.

Because of its geographical mid-position on the West Coast, San Francisco has a disadvantage in competing for domestic cruises because of the additional sailing time to Canadian or Mexican ports. The additional two-day requirement would force cruise lines to reassess their itineraries, jeopardizing San Francisco’s existing cruise business.

In urging CBP to “reconsider and redraft” the interpretation of the proposed ruling, Port Executive Director Monique Moyer pointed to the great local economic value of the cruise market. She stated that “the Port has just invested several million dollars in our drydock facilities to position ourselves to attract more cruise ship repair business.”  Ship repair is one of the City’s leading sources of skilled union jobs. In addition, the Port is planning to build a new cruise terminal at Pier 27 to accommodate today’s larger cruise ships.

The November 21, 2007 Federal Register Notice was issued in response to a request from the U.S. Maritime Administration, which expressed concern that the U.S.-flagged ships operated by NCL America in 7-day inter-island cruises were facing “economic hardship” because of competition from foreign-flag cruise ships sailing from Los Angeles and San Diego on 15-day cruises that include several Hawaiian Islands and Ensenada en route back to the port of origin. The NCL America ships in the Hawaiian Islands are the two remaining U.S.-flag passenger ships.

The proposed rule is written so broadly that it impacts every domestic cruise across the country that includes a foreign port of call to comply with the PVSA. At risk are cruises on foreign ships where the itinerary includes more than one U.S. port. Besides San Francisco, other domestic cruise voyages that will be affected include Seattle cruises to Alaska, as well as New York, Boston and Maine voyages to Canadian ports. Even short cruises from Los Angeles or Catalina to Mexico would be negatively impacted. California and Washington ports estimate the loss of more than 500 cruises if the definition of foreign port calls is changed by this new rule.

Under the proposed interpretive rule, a U.S.-based cruise itinerary would violate the PVSA, unless the stop at the foreign port meets the following three criteria:

·    the stop lasts at least 48 hours at the foreign port
·    time spent at foreign port is more than 50 percent of total time at U.S. ports of call
·    passengers are permitted to go ashore temporarily at the foreign port

Joining the Port of San Francisco in filing written protests were the American Association of Port Authorities (AAPA), the American Society of Travel Agents (ASTA), the International Longshore and Warehouse Union (ILWU), the San Francisco Convention and Visitors Bureau, the San Francisco Chamber of Commerce, and the Bay Planning Coalition.