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The Honolulu Advertiser
Posted on: Monday, January 28, 2008

Ports worry proposed change will hurt jobs, tourist revenue

By Ronald D. White
Los Angeles Times

LOS ANGELES — A Florida-based cruise line's efforts to protect its lucrative Hawai'i business through a federal rule change is generating a wave of concern among port and business representatives who say it would harm jobs and tourist revenue.

Critics say the change proposed in November by the Department of Homeland Security's Customs and Border Protection would affect any foreign-flagged cruise line traveling between U.S. ports. Under the provisions of the 121-year-old Passenger Vessel Services Act, those lines are required to stop at a foreign port before completing the trip.

The rule change would require cruise lines to stretch those foreign-port stopovers to at least 48 hours from the current minimum of six to eight hours.

The proposed change could be disastrous for ocean trips from Los Angeles to Hawai'i or Mexico, said Geraldine Knatz, executive director of the Port of Los Angeles.

"This rule change would effectively torpedo a cruise travel experience that millions of cruise travelers enjoy each year from ports nationwide," Knatz said. "At roughly $1 million in direct wages and business revenues per ship call, it's also an economic hit for our regional economy."

Her comments were included in a statement released Wednesday by the American Association of Port Authorities, a trade group for Western Hemisphere seaports. Chief Executive Kurt Nagle referred to the proposed change as "overreacting, like using a sledgehammer to swat a fly." The group said Customs had received hundreds of negative responses to the proposal.

Officials at Customs and Border Protection have made no final decision and couldn't be reached for comment.

The impetus for the proposed change was increasing competition on Hawaiian routes operated by Norwegian Cruise Lines America Inc., based in Miami. Nearly all U.S.-based cruise lines operate their ships under foreign flags.

In a December letter to Customs and Border Protection, Norwegian Vice President Alan T. Yamamoto said that his company had suffered so much from low-cost foreign competition to its Hawai'i business that it was forced to pull one of its three ships from that service.

Norwegian had accused its competitors of stretching the U.S. port rule to an unfair degree, with stays in foreign ports as short as one hour to circumvent U.S. rules.

Customs' response to the complaint was the 48-hour stay to eliminate "an imminent threat to the two remaining U.S.-flagged, coastwise endorsed passenger vessels."

But the change would threaten communities around the nation, including cruises that originate in Los Angeles and Long Beach and stop at Catalina Island before continuing on to Mexico and then returning.

Wayne G. Griffin, president and chief executive of the Catalina Island Chamber of Commerce, said the rule change could eliminate 100,000 of the 800,000 to 1 million visitors the island receives each year if Carnival Cruise Lines and Royal Caribbean pulled out of Catalina.

"There is no way any cruise line is going to spend 48 hours in any port. Whoever drafted this has no understanding at all of the cruise industry," Griffin said. "It's very scary."