Why Foreign-Flagged Cruise Ships Cannot Sail Directly Between US Ports

When the temporary maritime exemptions granted during the pandemic expired in early 2022, foreign-flagged cruise ships operating in American waters immediately returned to a strict regulatory framework that dictates every nautical mile of their itineraries. For a traveler boarding a luxury liner in Seattle bound for the Alaskan glaciers, this means the ship cannot simply sail north and return. It must dock in Victoria, British Columbia, to satisfy a legal requirement that predates the Titanic.[3]

The mechanism driving these mandatory detours is the Passenger Vessel Services Act (PVSA) of 1886. According to U.S. Customs and Border Protection, the law mandates that "no foreign vessel shall transport passengers between ports or places in the United States, either directly or by way of a foreign port." To legally transport travelers between two American cities, a ship must be built in the United States, owned by American citizens, flagged under the U.S. registry, and operated by an American crew.[1][3]

Because modern mega-cruise ships are almost exclusively built in European shipyards and flagged in nations like the Bahamas or Panama, they cannot legally operate as domestic ferries. Instead, cruise lines utilize specific itinerary loopholes. A "closed-loop" voyage—one that departs and returns to the exact same American port, such as a round-trip from Miami—is permitted as long as it visits at least one "nearby foreign port," such as Nassau or Ensenada.[3]

The rules become significantly tighter for travelers booking an "open-loop" cruise, which begins in one U.S. city and ends in another, such as sailing from Los Angeles to Honolulu. Under CBP enforcement, these one-way domestic journeys require the foreign-flagged vessel to call at a "distant foreign port" before disembarking passengers in the final American destination. Ports in North America, Central America, and the Caribbean do not qualify as distant; the ship must travel as far as South America to satisfy the requirement.[3]

While travelers frequently blame these routing quirks on the Jones Act, that legislation actually governs cargo, not people. Enacted as the Merchant Marine Act of 1920, the Jones Act applies the same four U.S.-origin requirements to the transport of merchandise. As the Congressional Research Service notes, the statute ensures that "coastwise trade is restricted to vessels that are built in the United States, owned by U.S. citizens, and documented under the laws of the United States."[1]

For residents of non-contiguous U.S. territories, the Jones Act fundamentally shapes the cost of daily life. A 1988 Government Accountability Office report analyzing the law's impact on Alaska found that the restrictions heavily influence transportation logistics and pricing for the state's residents, while simultaneously serving the federal goal of maintaining a U.S. military sealift capability. Because foreign cargo ships cannot drop off goods in Los Angeles and then carry a second load to Anchorage, domestic shipping lanes remain insulated from international competition.[7]

The logistics sector must navigate these rules meticulously. Promptus LLC, a global logistics firm, highlights that the Jones Act covers all domestic shipping, including the specialized transport of liquefied natural gas (LNG) between American ports. Because there is a severe shortage of Jones Act-compliant LNG tankers, moving energy resources from the Gulf Coast to New England or Puerto Rico often requires complex logistical workarounds or reliance on foreign imports.[5]

The economic utility of these century-old laws remains fiercely debated. In a February 1, 2024, analysis, the Independent Institute argued that "America's maritime policy is fighting the wrong war." The institute contends that shielding the domestic maritime industry from foreign competition has not revitalized American shipbuilding, but rather artificially inflated supply chain costs and reduced the total number of U.S.-flagged vessels available for national defense.[4]

Regulatory oversight of these domestic shipping lanes involves multiple federal agencies. While CBP enforces the border and customs elements, the Surface Transportation Board oversees specific economic and competitive aspects of domestic oceangoing shipping. A 2022 GAO review of the Board's regulatory processes found that stakeholders require transparent, consistent guidelines to navigate the complex tariff and rate requirements imposed on the non-contiguous domestic trade routes.[2]

Enforcement remains rigid, extending even to specialized maritime operations. In Customs Ruling HQ H213099, CBP evaluated whether a foreign-flagged vessel conducting research in U.S. territorial waters violated the coastwise laws under 46 U.S.C. § 55102. The agency strictly scrutinizes whether any "merchandise" or equipment is transported between U.S. points, demonstrating that the federal government actively polices the boundaries of the 1920 statute across all maritime sectors.[6]

For the traveler planning a Hawaiian island-hopping vacation or an Alaskan glacier expedition, these legislative frameworks mean that itinerary design is driven as much by compliance as by scenery. Until Congress amends the 1886 and 1920 statutes—a move strongly opposed by domestic maritime unions and national security advocates—foreign-flagged cruise ships will continue making their mandatory midnight stops in Ensenada, and domestic cargo will continue sailing on a limited fleet of American-built vessels.[1][4]