Cover Story: Sick Days

Sick Days

After a dismal 2020, business picked up last year for many passenger vessel operators.

By Dale K. DuPont, Correspondent

Virus variants, threatened mandates, mask and sanitation protocols, supply chain woes and higher costs for everything including workers have tested the resilience of passenger vessel operators.

So far, they’re still a oat, but it hasn’t been easy. They’ve adapted in many ways, such as going cashless, postponing engine repowerings and other work, nding substitute products and burning through reserves.

What’s more, two existing challenges have gotten tougher: The widespread legalization of recreational marijuana has aggravated a

UnCruise Adventures suff ered through a rough 2020 but started the 2021 season in May from Juneau, Alaska, with six of their seven Alaska boats, and enjoyed a 77% capacity level.

American Cruise Lines was the fi rst cruise line in the U.S. to resume cruising in 2021, the company said. BOOKINGS START TO REBOUND

worker shortage, especially when drug tests can show use but not impairment; and illegal charters have proliferated, lling the void left when governments shut down licensed vessel operators and land-based nightclubs.

“A slowly rebounding economy, coupled with consumer desire to travel, helped PVA vessel operators in many industry segments with increasing business during the second half of 2021,” said John Groundwater, Passenger Vessel Association (PVA) executive director. “If Covid variants do not force new business shutdowns in 2022, PVA anticipates that U.S. passenger vessel operators will make slow progress in rebuilding their businesses.” For overnight operator UnCruise Adventures, Seattle, last year “was the start of a recovery,” said owner and CEO Capt. Dan Blanchard. They started the season in May from Juneau, Alaska, with six of their seven Alaska boats, which were kept “comfortably full” – about 77% capacity.

Over Thanksgiving, UnCruise began operations in Hawaii on the 36-passenger 127'×36'×12' Safari Explorer – the only small ship company operating interisland overnight cruises.

Bookings “are running very solid” for this year, Blanchard said, with a number of 2020 passengers having rescheduled. “We feel pretty good,” knowing Covid and its variants like Omicron are still a threat. “If it’s not anything worse than the Delta variant, we can handle it.”

American Cruise Lines (ACL) also is optimistic. ACL “was the rst cruise line in the U.S. to resume cruising in 2021 and operated a successful year with its full eet of 13 ships running. We were able to operate every itinerary, visiting more than 30 states,” said Charles B. Robertson, president and CEO of the Guilford, Conn.-based overnight line. ACL launched two new riverboats and expects to launch two more this year as part of their modern riverboat series. The outlook is “better than ever, and we anticipate a great 2022 season beginning in March,” he said.

At Wendella Sightseeing Boats, Chicago, “It was a pretty successful season for us,” said Andrew Sargis, chief of operations. “You can’t expect the business market and labor market to roar back immediately, but that doesn’t mean we’re not successful. We just need to see progress.”

Capacity restrictions loosened once the weather warmed up and people could go outside.

“We had a great season,” said Capt. Sarah Pennington, director, Classic Harbor Line, New York. The company operated the six boats in its eet and is looking forward to 2022. “Fortunately, we have a lot of local tourists.”

The private sector really came alive in the second and third quarters, and they had a lot more personal celebrations than usual. Pennington’s also thankful for the smaller passenger capacity of her eet. Certi cation on

Classic Harbor Line

Classic Harbor Lines’ Manhattan II and the fi ve other vessels in its fl eet enjoyed strong bookings in 2021.

the vessels ranges from 40 to 130 passengers.

“We’re not quite back to 2019 levels, but we’re within target,” said Capt. Dave Whanger, vice president of operations, Charleston Harbor Tours, and 2022 looks promising. “We’ve already got some solid early bookings.”

In 2020 they ran two of their four boats. In 2021 they ran all at about 90% capacity. As others noted, a lot of outdoor space was a big plus. Charter bookings which were basically nonexistent during the worst of Covid are returning.

The pandemic prompted them to go cashless and eliminate both a labor-intensive part of the business and touch points between passengers and staff. “We didn’t miss a beat. Nobody batted an eye,” Whanger said. “It worked really well for us this season.”

From a lender’s perspective, “The mood is positive, the trend is positive,” said Michael C. Sammartino, executive vice president, Thomas USAF Group, Atlanta, which offers government-guaranteed loans. He has had quite a few refinancing requests and no defaults. In 2020 operators were receiving deferments from existing loan payments, “but that’s probably not going to continue.” Sammartino credits the current and previous administrations for federal aid packages. “All those financing opportunities helped.”

Last year, PVA members received nearly $360 million in Coronavirus Economic Relief for Transportation Services Program (CERTS) emergency funding, Groundwater said. Because of Covid’s lingering effects, PVA is pushing for more CERTS funding for 2022 and for replenishing the Restaurant Revitalization Fund (RRF) which helped PVA members before funds ran out.

RECRUITMENT, RETENTION

Meanwhile, hiring and retention problems persist. And Wendella’s Sargis sees the marijuana issue as one of the reasons.

THC — the ingredient that produces the high — can remain in a body for 30 days or more after use, and there’s no test for impairment as there is for alcohol.

Prospective employees walk away because they don’t want to abstain or fail a drug test that will hurt future job prospects.

“It truly is a major impediment to hiring. It’s really going to become a pretty big labor relations issue,” Sargis said. “We have to figure out a way to test for impairment, not use. As prohibition ends, this does become a pretty serious issue.” Mark Meeker, assistant general counsel at American Maritime Safety Inc., a White Plains, N.Y.-based consortium that administers drug and alcohol testing compliance programs for maritime operators, said maritime employers tell him it’s increasingly difficult to find people.

What’s more, “you’ve got a lot of mariners who are under the mistaken impression that this wonderful new CBD product has no THC,” and they won’t fail a drug test, he said. CBD is allowed to have trace elements of THC.

Smoking marijuana leaves inactive THC, which is detected in commonly used urine tests. Blood tests can detect active THC.

Marijuana drug testing positivity surged in states with legal recreational use 118.2% from 2012-2020 – from 2.2% to 4.8%, according to Quest Diagnostics 2021 drug testing index.

GROWING LIKE A WEED

Ten years ago, Colorado and Washington state became the first states to legalize recreational marijuana. Today recreational use is legal in 18 states and the District of Columbia, and medical marijuana is allowed in 36 states, according to the National Conference of State Legislatures (www.ncsl.org).

The spread presents another hiring challenge. Because federal law still considers marijuana an illegal drug, weed is off limits for those in safetysensitive jobs under the Coast Guard’s and Department of Transportation’s watch.

Charleston Harbor Tours

The Charleston Princess is operated by Charleston Harbor Tours, which reported 90% capacity last year for its fleet of four boats.

Positivity rates were lower in states with only medical marijuana or no legalized marijuana statutes.

Credentialed mariners or other safety sensitive workers onboard who are subject to Coast Guard drug tests can’t use THC, a Coast Guard safety advisory says. “Claimed use of hemp products or CBD products is not an acceptable defense for a THC-positive drug test result.”

Breathalyzers may help if and when federal law changes. Some breathalyzers are under development.

Hound Labs Inc., Oakland, Calif., for example, recently received a $20 million investment to help produce its patented Hound Marijuana Breathalyzer. Production of the device, which has been in development since 2014, is expected to start this year, a spokesman said.

After an employee breathes into the breathalyzer’s mouthpiece, the cartridge is put into a processor which signals a positive or negative result for THC in breath. The device measures cannabis use within a few hours of the test, the spokesman said.

“It does not measure whether, or how much, a person is impaired,” the company said in the investment announcement. “It should not be used … for any federal drug testing programs.”

Changes in federal law will require legislation. Last summer, three senators, including majority leader Chuck Schumer, D-N.Y., proposed legislation to decriminalize marijuana at the federal level. In November, Rep. Nancy Mace, R-S.C., introduced a similar proposal.

ILLEGAL CHARTERS

U.S. Coast Guard

Another issue that requires federal help is illegal charters, which flourished while licensed operators were idled. And while it’s a nationwide problem, South Florida is at the heart of the action.

Miami accounts for 75% of all illegal charter cases in the U.S., said Jesús R. Porrata, chief of the investigations division of the Coast Guard’s Miami sector.

Two years ago, the agency formed the Illegal Charters Task Force, which includes local police department marine units, to crack down on illegal boat and jet ski rentals. Porrata called

A Coast Guard Station Fort Lauderdale 33-foot Special Purpose Craft-Law Enforcement team conducts a boarding of a 20-foot pontoon vessel in Fort Lauderdale in 2020. Aboard the illegal charter were seven paying passengers as well as the owner, who was acting as captain.

UNLICENSED CHARTERS

The illegal charter business has boomed during Covid as legitimate vessel operators and landside clubs were closed by government order. The Coast Guard was especially busy in the Miami area, which in normal times is a hot spot for illegal activity.

Total illegal charters cited:

2019 - 17 2020 - 33 2021 - 96

Source: U.S. Coast Guard, Miami it a “force multiplier,” with more eyes and ears on the water to stop unlicensed and uninspected boats. Customers often believe they’re dealing with legitimate, licensed mariners. “It’s extremely complex to even enforce these laws” when the people onboard won’t cooperate with investigators, Porrata said.

Under federal law, a boat must be inspected if it carries more than six people and at least one paying passenger. Operators must be licensed to legally carry up to six paying riders. Commercial operators with six or more onboard — with at least one paying — must have a master’s license and a Certificate of Inspection (COI). Bareboat charters may carry a maximum of 12 without a COI and neither the owner or agent can be involved in operating the charter – and that includes hiring and paying the crew.

Illegal operators can face penalties of $60,000 or more, and charters that violate a Captain of the Port Order can face penalties over $97,000 for violations that include no COI and failure to enroll in a drug and alcohol program.

Sometimes the fines are just a cost of doing business. But, Porrata said, “The Coast Guard is not going to let up on its mission.”