Viking River Cruses blocked by Jones Act

by Michael Hansen, Hawaii Shippers Council December 22, 2017

Basel, Switzerland-based Viking River Cruises, who announced in February 2015 that they would be launching an American cruise business on the Mississippi River, revealed in December 2017 they have discontinued their efforts due to the high cost of ship construction in the U.S. The Jones Act requires vessels in domestic commerce to be built in U.S.

The Waynesville, North Carolina, online newspaper, The Mountaineer, reported on December 15, 2017, “Viking's plan was to cruise from at least Memphis to near Minneapolis, and stop in towns in between. “

Several publications reported Viking sent the same terse message to two Mississippi river towns -- Hannibal, Missouri, and Fort Madison, Iowa – inland ports where Viking proposed to call.

WQAD-TV, the ABC-affiliated television station for the Quad Cities area of northwestern Illinois and southeastern Iowa, reported on December 8, 2017, “The first community to hear of the change of plans was Ft. Madison, whose leaders have remained in pretty steady contact with the company since the 2015 announcement. Earlier this week, said City Manager David Varley, officials received a short, two-sentence statement from the company in response to a query about the timeline.”

The statement was, “Viking has terminated current discussions to build vessels in a U.S. shipyard for Mississippi River and U.S. coastal cruising. As details were being refined, it became apparent the economics did not meet Viking’s goals.”

WQAD-TV further reported, “Varley noted that it likely would cost the company nearly twice as much to build its ships in an American shipyard and noted it already has a contract with a European shipbuilder. In addition, the current political climate in the U.S. makes it unlikely a variance to the Jones Act allowing Viking to use European-built vessels, would be approved.”

The Herald Whig of Quincy, Illinois, reported on December 12, 2017, based upon an interview with Jeff LaGarce, Hannibal City Manager, “The reason Viking cited for halting its plans was because of federal obstacles, such as a law that requires that cruise ships offering trips on U.S. waters be built in the U.S.” That of course is the Jones Act.

In response to their inquiry, The Herald-Whig reported they received a Viking statement, "At this point we do not have any additional details to share, but we continue to work on the Mississippi project."

The Workboat Magazine reported on December 20, 2017:  “. . . . . Viking first hinted at its U.S. plans in 2013 soon after American Cruise Lines and American Queen Steamboat Co. started regular overnight inland river cruising. In early 2015, Viking, . . . . . said it would launch six Mississippi River vessels over three years starting late this year from a home port of New Orleans. Viking said its U.S. fleet would meet Jones Act requirements. The 300-passenger vessels, costing $90 million to $100 million each, were to be built at U.S. yards, crewed by U.S. citizens, owned by a Los Angeles-based investment management firm, and time-chartered to Viking ‘in full compliance with maritime laws.’ “

The fact that Viking, which operates virtually world-wide with 63 cruise ships on rivers in Europe, Russia, China and Southeast Asia, was unable to successfully navigate the Jones Act and launch an river cruise operation in the U.S. demonstrates how draconian are the country’s national shipping laws.