How the Jones Act Impacts Cruise Ships

If you operate a cruise line or manage maritime transportation, you know that regulatory compliance is a critical part of your business. Every route, port stop, and staffing decision must align with U.S. maritime laws, including the Jones Act, a regulation that directly influences vessel ownership, staffing, and the ability to transport passengers between U.S. ports.  

But the Jones Act isn't just a historical law—it actively impacts your operational costs, logistics, and legal liabilities. From route planning restrictions to crew injury liabilities, understanding its implications is essential to avoiding legal hurdles and ensuring smooth operations.

In this post, we’ll break down how the Jones Act impacts your cruise ship operations, the restrictions it imposes, the protections it offers, and why it remains a topic of ongoing debate in the maritime industry.

What is the Jones Act?

The Jones Act, officially known as the Merchant Marine Act of 1920, is a federal law designed to protect and regulate the U.S. maritime industry. Initially enacted for national security and economic reasons, it continues to shape how ships operate in U.S. waters today.

At its core, the Jones Act applies to cargo shipping, ensuring that goods transported between U.S. ports are carried on American-built, American-owned, and American-crewed vessels. However, its impact extends beyond cargo ships—it also influences the cruise industry and provides important protections for maritime workers.

Key Provisions of the Jones Act:

• U.S.-built and U.S.-operated vessels: Only ships built in the United States, owned by American companies, and operated by American crews can transport goods between two U.S. ports.
• Employment protections for seamen: The Jones Act allows your maritime employees working on qualifying vessels to file lawsuits for injuries caused by your company's negligence. 

This coverage ensures that your business meets legal obligations while protecting against costly injury claims, similar to how workers’ compensation operates on land.

• National security and economic interests: The law was created to ensure the U.S. had a strong merchant fleet to support national defense and financial stability.

The Passenger Vessel Services Act — and How It Affects Cruises

While the Jones Act primarily affects cargo shipping, cruise ships must also follow similar regulations, which significantly impact their operation in U.S. waters. This leads to additional restrictions under another law, the Passenger Vessel Services Act (PVSA), which directly applies to passenger ships, including cruise lines.

This law regulates passenger travel between U.S. ports and restricts foreign-flagged cruise ships from transporting passengers directly between two U.S. locations.

The key rules under the PVSA:

• Foreign-flagged cruise ships cannot travel directly between two U.S. ports: They must stop at a "distant foreign port" before reaching another U.S. port.
• Ships that fail to comply can face fines: Cruise lines risk hefty penalties if they don't follow PVSA rules, leading to carefully planned itineraries.
• The law applies to all non-U.S.-registered cruise ships: Since most major cruise lines register their ships in foreign countries (such as the Bahamas, Panama, or Malta), they must follow these restrictions.

How the PVSA Impacts Cruise Ship Itineraries:

• Alaska Cruises: Ships departing from Seattle must stop in Canada before returning to the U.S.
• Hawaii Cruises: Foreign-flagged cruise ships must visit Mexico or another international destination before traveling between Hawaiian islands.
• Panama Canal Cruises: Cruises sailing from Florida to California must stop at a South American or Caribbean port to comply with the PVSA.

Since most major cruise lines operate under foreign flags, the PVSA forces them to add international stops—sometimes making itineraries longer or less direct. However, U.S.-flagged cruise ships (such as Norwegian Cruise Line’s Pride of America) can bypass these rules, allowing them to operate directly between U.S. ports.

Challenges and Criticism of the Jones Act

While the Jones Act was designed to protect U.S. maritime businesses, its restrictions increase costs, limit your cruise operations and impact your competitiveness in the global market. As a cruise line operator or shipowner, you must navigate these challenges to ensure regulatory compliance while maintaining profitability.

Higher Costs for Your Business

The Jones Act requires ships transporting passengers or goods between U.S. ports to be U.S.-built, owned, and crewed. While this was meant to support American shipbuilding, it raises your operational expenses:

• Rerouted itineraries: Since most large cruise ships are foreign-flagged, you must make a foreign port stop before sailing between U.S. cities, adding to fuel, staffing, and operational costs.
• Increased fares: Higher compliance costs drive up passenger ticket prices, making your cruises less competitive compared to international options.

Limited U.S. Cruise Itineraries

Because most ships may not meet Jones Act requirements, you cannot operate direct U.S.-only cruises without stopping at a foreign port. This impacts potential domestic routes, such as:

• Cruises between California and Hawaii.
• Nonstop itineraries along the East Coast or Gulf Coast.

Forcing these additional stops makes U.S.-only cruises less viable, limiting your ability to expand into certain markets.

Encouraging Foreign Ship Registration

To bypass Jones Act restrictions, many operators—perhaps including your business—register vessels under foreign flags. This provides several advantages:

• Lower labor costs by hiring international crews.
• Reduced tax burdens in jurisdictions with more favorable regulations.
• Fewer compliance restrictions, allowing more flexibility in operations.

However, this also means fewer U.S.-flagged ships, making it harder for your business to qualify for specific government contracts or tax incentives.

Reduced Domestic Employment Opportunities

The high cost of building and operating U.S.-flagged vessels has led to a decline in American-owned cruise ships. For your business, this translates to:

• Fewer domestic shipbuilding options, increasing the cost of fleet expansion.
• Limited access to U.S. maritime workforce, requiring more reliance on foreign labor.

This makes it more difficult for your business to compete under the constraints of the Jones Act while maintaining cost efficiency.

Delays in Emergency Relief Operations

Jones Act restrictions can delay relief efforts after hurricanes or other emergencies if your business operates in disaster-prone regions. Since only U.S.-flagged ships can transport goods between U.S. ports, you may face logistical challenges in providing immediate aid to affected areas such as:

• Puerto Rico
• Hawaii
• Alaska

In many cases, temporary waivers are needed to expedite relief, which creates unpredictability in maritime business crisis response planning.

Legal and Regulatory Challenges for Your Crew

While the Jones Act provides legal protections for seafarers, it applies only to workers on U.S.-flagged ships. If you operate foreign-flagged vessels, your crew:

• Does not receive Jones Act protections in case of workplace injuries.
• Is subject to foreign labor laws, which may have fewer safeguards.

This presents a compliance challenge, as different regulatory frameworks may impact your liability in crew injury claims.

Despite its intended protections, critics argue that the Jones Act has made the U.S. cruise industry less competitive, more expensive, and harder to regulate.

Protections for Cruise Ship Workers Under the Jones Act

Cruise ship operations require a well-trained workforce, but the demanding nature of the job exposes your employees to risks such as long hours, unpredictable weather, and hazardous conditions. The Jones Act ensures your business remains compliant by providing legal protections for your crew in case of work-related injuries.

How the Jones Act Protects Your Business and Crew:

• Right to a Safe Work Environment: As an employer, you must maintain a seaworthy vessel, ensuring all safety measures are in place and the ship is free from avoidable hazards.
• Legal Recourse for Employer Negligence: If an injury occurs due to unsafe conditions, inadequate training, or equipment failure, your business could face liability claims under the Jones Act.
• Maintenance and Cure Benefits: If a crew member is injured, your business is responsible for:
  
  • Maintenance: A daily living allowance while recovering.
  • Cure: Coverage for medical expenses related to the injury, including hospital bills, medication, and rehabilitation.
• Compensation for Lost Wages and Pain & Suffering: Workers can seek financial compensation for:
  
  • Lost income due to their injury.
  • Physical pain and emotional distress.
  • Long-term disabilities that prevent them from returning to work.
• Protection Against Retaliation: The Jones Act prohibits your business from terminating, demoting, or retaliating against crew members for filing a claim, ensuring compliance with maritime labor laws.

Who Qualifies for Jones Act Protection?

To be covered under the Jones Act, a worker must:

• Be classified as a seaman (spending at least 30% of their work hours aboard a vessel).
• Work on a U.S.-owned, built, or operated cruise ship.
• Have been injured while performing job-related duties at sea.

Since cruise ship work involves unique risks, the Jones Act ensures employees have legal pathways to seek justice and compensation. However, not all cruise ship workers qualify—especially those on foreign-flagged vessels, which follow different legal rules.

Who is Covered by the Jones Act?

Common cruise ship jobs covered under the act include:

• Captains and deckhands
• Chefs, bartenders, and waitstaff
• Housekeepers and maintenance workers
• Entertainers and support staff
• Engineers and technical crew

Protect Your Maritime Business with TWFG Khan Insurance

The Jones Act and Passenger Vessel Services Act impose complex regulations on the maritime industry, affecting cruise lines, shipping companies, and businesses operating in U.S. waters. 

Whether you run a cruise line, a shipping company, or a marine service business, ensuring the proper insurance coverage is critical for safeguarding your operations from legal and financial risks.

At TWFG Khan Insurance, we specialize in customized maritime insurance solutions that help your business stay compliant with U.S. laws while protecting your assets, employees, and financial stability.

Here's why businesses trust TWFG Khan Insurance:

• Tailored coverage for your maritime business: We provide custom insurance solutions designed for your cruise line, cargo transport business, or marine service company, ensuring you stay compliant with Jones Act and maritime liability requirements while protecting your financial interests.
• Protection for crew members: If your employees work on ships covered under the Jones Act, we help you secure Maritime Employers Liability (MEL) and Jones Act coverage to protect them in case of injuries or lawsuits.
• Comprehensive risk management: From general liability insurance to marine pollution liability coverage, we offer policies that protect your business from economic losses due to legal disputes, accidents, or environmental claims.
• Expert guidance on compliance: Navigating maritime regulations can be complex. Our team works closely with you to assure that you meet all legal requirements while maintaining cost-effective and efficient insurance coverage.

The maritime industry is full of regulatory challenges and potential liabilities, but the right insurance plan can protect your business from unexpected risks. Whether you need coverage for your crew, vessels, or business operations, TWFG Khan Insurance is here to help.

Get a quote with us today and ensure your business stays protected in the ever-evolving maritime industry.