U.S.-flag operators are questioning the Maritime Administration’s opinion in a proposed deal that would let Switzerland-based Viking Line sail U.S. waters.
They want to know why an arrangement between Viking and an affiliate of Edison Chouest Offshore is a time charter and not a bareboat charter, and say the agency needs to be open about its deliberations as required by law. Vessels can be time chartered to non-citizens, but U.S. citizens must have operational control.
At issue is the expected entry into the U.S. market next year of cruise behemoth Viking on the Mississippi River with a 450’x75’ vessel being built by Edison Chouest, Galliano, La. Marad said River 1 LLC, a company formed by Chouest, proposed time chartering “a cruise vessel that it would construct, own and operate, to Viking USA, a non-citizen,” for an initial term of eight years with options extending to 30 years total, according to documents on Marad’s site. (https://www.maritime.dot.gov/national-security/strategic-sealift/transferring-us-flag-vessels-foreign-ownership-reflagging)
The 2021 National Defense Authorization Act requires Marad to issue a public notice, get comments and provide a detailed summary of a time charter approval. Operators say Marad didn’t provide any standards supporting its decision so everyone would know what’s acceptable and what isn’t and have the chance to comment.
Marad told River 1 in an advisory opinion the charter was a bona fide time charter and maintains in letters to the U.S. operators that it complied with the law. On July 30 it posted a summary of the time charter request that was made in 2019 and gave the public one month to comment. The Coast Guard in 2019 said it saw no problem documenting the vessel with a coastwise endorsement. Marad has not taken final action.
U.S.-flag operators’ interests must be considered before Marad “acts to change the standards and processes it has historically applied in ‘time charter’ determinations,” executives of Alaskan Dream Cruises, American Cruise Lines, American Queen Steamboat Company, The Boat Company and UnCruise Adventures said in comments to Marad. “Here, the economic consequences are substantial, since approval of the charter means entry into the Jones Act coastwise passenger market by a large foreign cruise line.”
They want a full airing of the time charter details before Marad’s final decision. “Congress requires Marad to share with the affected U.S.-flag cruise industry – which has played by the U.S. citizenship rules – its standard for differentiating time charters from bareboat/demise charters” and apply that to the proposed charter, the operators said.
"Edison Chouest Offshore is a long standing supporter of the Jones Act, having employed hundreds of vessels in domestic trade over several decades," the company said in a statement. "Like countless other U.S.-flag operators, we have time chartered these vessels to numerous clients, which such common-held activity has been beneficial to the growth and vitality of the coastwise-qualified fleet."
On the river cruise project, "Marad has confirmed the existence of an already generally accepted time charter between River 1 and Viking," the ECO statement continued. "This project is in compliance with all applicable laws, rules, and regulations."
Viking has said previously its vessels’ ownership, crewing and charter arrangements would be “in full compliance with maritime laws."
