State of the US Passenger Vessel Industry

The U.S. passenger vessel industry is looking forward to continued growth in the coming months. The past year was witness to solid economic conditions in the U.S., which added fuel to an already strong travel and tourism market, underpinning much of the U.S. passenger vessel industry. Ferry ridership continued to be strong with ferry systems in the Northeast, Pacific Northwest, and San Francisco Bay expanding operations with new ferry vessels either being delivered or under construction.
 

New vessel construction and acquisition also occurred in the U.S. flag overnight cruise market on the nation’s rivers as this industry continues to expand. Following on the success of 2017’s strong passenger ridership, passenger vessel operators are optimistic for the future and are making strong capital investments in building new vessels in shipyards nationwide.

It has been my honor to serve as the 2017 president of the Passenger Vessel Association. While my term comes to an end this month, I am both proud of and optimistic for the future of the passenger vessel industry going forward. We are certainly experiencing sound economic conditions and we are also seeing exciting technological advancements in the passenger vessel industry. Hydrogen fuel sources are being studied, more efficient battery technologies are emerging, and new and more fuel-efficient vessel designs and materials are being adopted.

Over the past year, we have also worked successfully with Members of Congress and the federal regulatory agencies to represent our interests in Washington, DC, and to ensure a positive business environment for passenger vessel operators nationwide. With member input and through rigorous strategic planning, PVA is developing programs for member use while also promoting issues of importance to industry at the national level.

PVA and its members have long been committed to safety. One area of growing concern to us is that of illegal charters. Illegal charter operations are on the rise in virtually every port in our nation and these operators pose a growing threat to public safety. Illegal charter operators skirt essential Coast Guard regulatory and safety oversight, place the public in potentially dangerous situations and compete directly with legal passenger vessel operators.

We are also seeing a surge in websites that promote these illegal charter operations. These websites make it easy for recreational vessel owners to market illegal charters. In many cases, the vessels being offered for charter simply do not meet U.S. Coast Guard regulations,

As a result, PVA is strongly encouraging the Coast Guard to pursue increased enforcement nationwide and we are finding that they are beginning to respond to our requests. This summer, the Coast Guard in Chicago boarded 39 recreational vessels that were suspected of operating illegally. They issued 22 Notices of Violation and $50,000 worth of fines. We applaud this effort and hope to see additional enforcement activity in other U.S. ports. 

The implementation of Subchapter M is expected to place increasing pressure on the Coast Guard’s already strained inspection resources. PVA, through lobbying efforts, is urging Congress to provide adequate funding for the Coast Guard’s inspection mission. The Coast Guard and passenger vessel operators have closely worked together for many years to promote safe operations on our nation’s waterways. While we have not always agreed with each other, we have developed a mutual respect which has fostered a stellar safety record for the U.S. flagged passenger vessel industry.

We are encouraged, however, by the Coast Guard’s use of the Risk Based Decision Making (RBDM) Policy Letter and Matrix. Initiated this past year, this new inspection tool provides criteria for Coast Guard inspectors to evaluate and alter, or reduce, the scope of a vessel inspection based on risk. Many factors are used to make these decisions, but one key element is the use of a Safety Management System. 

PVA’s Flagship Safety Management System (SMS) was recognized by Coast Guard in June 2017 as an accepted SMS that qualifies on this matrix for eligibility toward reduced scope of inspections. Utilizing tools like the RBDM may just provide relief for an undoubtedly stressed Coast Guard workforce, and more adequately spread inspection resources among the growing U.S. inspected vessel fleet.

PVA’s membership not only includes passenger vessel operators, but it also includes U.S. shipyards. As a result, our association includes shipyard-related programs in its advocacy war chest. This past year, PVA was pleased to see the government renew, and fully fund, the Small Shipyard Grant Program.

The Small Shipyard Grant Program, which is administered by the U.S. Maritime Administration, has been in existence for approximately a decade and has been renewed for another three years (through fiscal 2020). PVA has been a strong supporter of this program over the years, as it grows in importance to U.S. shipyards and passenger vessel operators who are building new vessels.

PVA meets with Coast Guard leadership several times each year to explore non-regulatory solutions to industry concerns through what is called the PVA/Coast Guard Quality Partnership. This year, industry and Coast Guard experts studied the most common types of accidents on passenger vessels: slips, trips, and falls. The group reported back vital data that will inform best practices to improve training and other risk mitigation strategies. The Partnership also produced policy clarifying guidance for testing requirements and procedures for engine automation controls at the request of many in our industry. In addition, we discussed illegal charters, Coast Guard inspection resource needs, the need for consistent application of Coast Guard regulations and policy across all ports, passenger vessel safety statistics, security and a host of other topics of importance to industry.

Passenger vessel operators remain vigilant when it comes to security at their vessels and facilities. Many PVA members use the Coast Guard approved PVA Alternate Security Program (ASP) for their vessel and facility security requirements, as mandated by the Maritime Transportation Security Act (MTSA) regulations. This year PVA, with the Coast Guard, undertook a revision of the PVA ASP, in keeping with five-year regulatory renewal requirements. This fourth revision of the ASP was approved by Coast Guard in September and includes updates on new Coast Guard regulations and policy letters. In addition, the PVA ASP incorporates new cyber security tools and resources to assist members in developing cyber security risk management best practices for their operations. PVA also developed assessment worksheets to help PVA members better analyze their security needs.

This month, PVA members will gather at the Savannah International Trade and Convention Center in Savannah, GA to continue the dialogue about the issues discussed above and many more important industry topics. Nearly 100 sessions, workshops, roundtables and social events are planned. More than 90 exhibitors will showcase products and services especially for passenger vessel operators on the MariTrends 2018 trade show floor.

Expanding membership ranks continue to contribute to our association’s diversity and along with that comes new issues, opportunities and challenges. We welcome these things and remain committed to serving the passenger vessel industry ever-changing needs in the New Year and beyond.

(As published in the January 2018 edition of Marine News)