Who Pays for the U.S. Coast Guard to Respond to Cruise Ships in Distress? You Do!

At this moment the 210 foot Coast Guard cutter Vigorous is escorting the disabled Carnival Triumph back to the U.S. The Coast Guard performs a remarkable job responding to emergencies such as cruise ship fires and the numerous helicopter medevacs involving ill or injured passengers who need medical treatment back here in the U.S.

But who pays for these services?  

Cruise lines have no obligation to pay the Coast Guard or other U.S. federal agencies for services like this. Most people don't know this. Many people also don't realize that the cruise industry pays no U.S. federal taxes because companies like Carnival and Royal Caribbean are registered in foreign Coast Guard Vigorous - Carnival Triumphcountries like Panama and Liberia and fly the flag of countries like the Bahamas.  The industry collects around $35 billion a year, mostly from tax-paying U.S. citizens. But unlike you or me, the cruise lines are essentially exempt from paying the U.S. government anything on all of the billions and billions it collects each month.

So when it comes to paying for a Coast Guard escort of a foreign flagged ship back to an American port, you pay. That's right. Joe the plumber pays. Even though the cruise lines pay no federal taxes and you do, you pay. Even when the cruise ship fire occurs due to the negligence of the cruise line, you pay. 

Remember the last cruise engine fire which disabled the Carnival Splendor in November 2010?  The U.S. sent out an aircraft carrier (U.S. Ronald Reagan) and various U.S. Coast Guard vessels. You paid for all of that too.

The CEO of the International Cruise Victims (ICV) organization Ken Carver, requested information from the U.S. Navy and the U.S. Coast Guard pursuant to a Freedom of Information Act ("FOIA") request. The U.S. Navy timely responded to Mr. Carver's FOIA request. The Navy disclosed that it delivered 60 pallets, weighing over 37,000 pounds, of "bread, luncheon meat, pop tarts, canned crab, water and paper plates."

Considering the cost of positioning an aircraft carrier, dispatching multiple aircraft and helicopters, and delivering tons of food and water to be dropped onto the cruise ship, the Navy stated that it spent $1,884,376.75 responding to the fire aboard the Carnival Splendor cruise ship. 

This figure does not include the costs incurred by the U.S. Coast Guard in responding to the crisis. Unfortunately, the Coast Guard has not yet provided any information in response to Mr. Carver's FOIA request dating back to earlier last year.

The Coast Guard's costs were undoubtedly another $2,000,000 or so in personnel and fuel costs for their vessels and helicopters.

I mentioned this issue last year in an article Your Tax Dollars At Sea - Who Pays When Things Go Wrong on Cruises? 

So here we are again with another foreign-flagged cruise ship disabled due to fire, operated by a foreign incorporated cruise line which pays no U.S. income taxes calling on good ole Uncle Sam to spend a few million dollars to bail it out.

Its time to re-examine why these cruise lines collect billions but pay no taxes and why you and me have to pay when their cruise ships catch on fire on the high seas and they call on U.S federal agencies for help.     

Trackbacks (0) Links to blogs that reference this article Trackback URL
http://www.cruiselawnews.com/admin/trackback/294736
Comments (10) Read through and enter the discussion with the form at the end
Karla - February 13, 2013 5:52 PM

Thanks for sharing this. I've forwarded the link to Alaska U.S. Senator Begich.

A.J. Dutari - February 13, 2013 6:38 PM

It is commendable that the US Coast Guard proceed out of their own will outside of US jurisdictional waters to escort a towed passenger ship back to port. But is it really necessary since the vessel is quite capable of moving safely under tow ? Did the cruise ship company requested this escort to take place ?

Under ISM the shipping company is required to have contingency plans to all identify emergencies. Indeed the reported engine fire was promptly controlled with damage to propulsion machinery and auxiliaries that run the hotel services onboard. If the response plans and their implementation are inadequate the USCG can certainly intervene to protect life, property and the environment. Even fine the vessel later. It can even put inspectors onboard at sea to oversee everything and report for further measures to take place. But if the vessel's emergency plans are satisfactorily being implemented, there is no need to have a cutter in the scene. A couple of powerful tugboats and an experienced pilot, with towing experience to assist in overcoming the currents, will be more useful to the overall safety of the passengers than the present standby cutter observing her.

I now that, to the perception the passengers onboard, it is reassuring to have the USCG in sight. Thanks.

Renee - February 13, 2013 7:29 PM

So, why doesn't the Coast Guard and/or the Navy bill the cruise lines for their costs? I know that it is not uncommon for federal and/or state agencies to bill individuals. In fact, I live near Lake Erie and I have heard of occasions where the Coast Guard has billed people for rescues, especially when they feel that it was due to reckless actions. I don't see any reason why these agencies aren't billing the cruise lines for these costs! They are making money off the passengers hand over fist! They should be paying for the services that the taxpayers pay for with their hard earned dollars!

Juanito - February 13, 2013 11:41 PM

Congressmen get courtside Heat tickets.

Carnival doesn't get billed.

Bob Mac - February 14, 2013 1:17 AM

So what price do you suggest is put on human life?

Most littoral states worldwide provide some kind of SAR assistance to those in distress even if their resources do not always match those of the USCG or USN. I know of no instance where the cost is billed to anyone as the service is always provided on humanitarian grounds.

Don't forget that Jim the Plumber may have need of the USCG if the engine on his fishing boat dies. Finally how many US taxpayers are on the Carnival Triumph?

Irina Ciumac - February 14, 2013 12:46 PM

If you have family onboard the Carnival Triumph and are willing to share your story with the media, we would love to hear from you! Please email me at irina.ciumac@bellmedia.com or give me a call at 416-384-7854. Thank you! Let's help get people's stories out there!

Juanito - February 14, 2013 9:32 PM

Jim the plumber pays US taxes.

Jessica - February 15, 2013 8:08 PM

It is Jim, Joe and all the other plumbers out there paying the U.S. Coast Guard the millions of dollars it cost to tow these huge cruise ships back to shore with at least 4,000 souls on board. The Cruise line pays in their way, however, it is the U.S. Taxpayer paying the millions to the Coastguard and/or Navy to rescue them, which has become too common over the past 5 years. I heard one report that the price to the taxpayers over the past 5 years has been around 26 million dollars. The Cruise Line should be responsible for their risk and pay the tab, not us!

Renee - February 18, 2013 12:33 AM

Passengers that have been medivac'd off of the ships are billed for the service. My point was that when they drop food or other rations to these mammoth ships that have had such problems, then they should be billing the ship/company for the service just as they would bill for the medical services.

Tony - March 24, 2013 3:08 AM

The USCG also provide them security escorts when coming into or leaving port with passengers on them. The Cruise ships going to Baltimore get escorted all the way from the enterance of Chesapeake Bay to Baltimore!

Post A Comment / Question Use this form to add a comment to this entry.







Remember personal info?
Send To A Friend Use this form to send this entry to a friend via email.