Lessons Learned – by Pat Carson
Over the last several years I have had the opportunity to deliver yachts to Ensenada for shipment to the East Coast of the U.S., to Long Beach for shipment to New Zealand, to Oakland for shipment to Hawaii and to Oxnard for shipment to Japan. I have also picked up yachts for Bay Area clients that have arrived in Mexico, San Diego, Point Hueneme, Seattle, Tacoma and Victoria, BC. It is common for owners desiring to have their boat on the East Coast of the U.S. to ship them rather than take them through the Panama Canal on their own bottom. There are three ways to get a boat from the West Coast to the East Coast, or vice versa. If the vessel is small enough it can be shipped overland by truck. This option is generally limited to vessels less than 12-feet wide and the permits and pilot cars required for the trip can drive up the cost considerably. A second option is to sail it around on its own bottom. If you do this yourself without a paid crew for the 30 days or so voyage, then the costs can be quite attractive, and as a bonus, you get the adventure. But for most yacht owners, shipping the yacht as deck cargo on a bulker is the most economical and efficient method.
The Jones Act
It might seem odd that to ship a vessel to the East Coast of the United States you first have to go to another country. Enter what is commonly called the Jones Act. The Jones Act was enacted by the United States Congress to stimulate the shipping industry in the wake of World War I. The requirement of shipping cargo between U.S. ports only on U.S. ships benefited the constituents of Wesley Jones, the U.S. Senator from the state of Washington who introduced the act. Washington State had a large shipping industry, and the act was designed to give the state a monopoly on shipping to Alaska. While the act benefited Jones’ constituents, it increased the shipping costs of other states and U.S. territories.
The Merchant Marine Act of 1920 was signed into law by President Woodrow Wilson and regulates maritime commerce. Sections 27 and 33, better known as the Jones Act, deal specifically with coastal shipping and basically requires that all goods transported by water between U.S. ports be carried on U.S. flagged vessels that were constructed in the United States, be owned by a United States company or United States citizen and be crewed by at least 75% United States citizens. The impact of the Jones Act is that it simply requires companies operating in the domestic coastwise commerce of cargo or passengers in the United States, known as cabotage, to comply with laws of the United States. This requirement includes corporate taxes, the National Labor Relations Act, the Fair Labor Standards Act, Coast Guard standards and employing American citizens. U.S. flagged ships are subject to these laws and foreign flagged ships are not. Since the ships that transport our yachts are usually foreign built, foreign flagged and usually foreign crewed, these ships cannot transport cargo (your boat), or passengers between two U.S. ports. For us California boaters we generally take our boats to Ensenada, Mexico for shipment to the East Coast. Boat owners in Washington and Oregon generally take their boats to Victoria, Canada for shipment to the East Coast. Shipping to Asia can be done from any United States port and we select the shipper based on cost and availability. A few years back one of our yacht clients requested their yacht be moved to Hawaii. We had several options and compared the total cost for each: move the boat to Ensenada and ship to Honolulu, move the boat to Victoria BC and ship to Hawaii or use a Jones Act compliant company we could ship from Oakland to Hawaii. Although the transportation costs shipping from Oakland were higher, we did not have to deliver the boat to Canada or Mexico for shipment. In the end, shipping from Oakland to Hawaii made the most sense and we used one of our local Jones Act carriers, Matson.
The Jones Act also provides sailors with additional rights including the ability to seek damages from the crew, captain, or vessel owner in case of injury based on claims of unseaworthiness or negligence. These are rights not afforded by international maritime law. The Supreme Court has ruled that any worker who spends more than 30 percent of his/her time in the service of a vessel on navigable waters qualifies as a seaman under the Jones Act. Only maritime workers who qualify as seaman can file a suit for damages under the Jones Act and have three years from the time of the accident to file a suit in either federal or state court.
Perhaps the most lasting effect of the Jones Act is its requirement that goods shipped between U.S. ports be transported on ships built, owned and operated by United States citizens or permanent residents. Detractors claim that the Jones Act increases the cost of shipping to Hawaii, Alaska, Puerto Rico and Guam by restricting the number of vessels that can legally deliver goods. The supply of U.S. built, U.S. owned and U.S. operated vessels is relatively small compared to the global supply of ships, while the demand for basic goods tends to remain constant or grow. This creates a scenario in which shipping companies can charge higher rates because of a lack of competition, with the increased costs passed on to consumers. While the Jones Act prevents foreign flagged ships from carrying cargo between mainland United States and certain noncontiguous parts of the U.S., such as Puerto Rico, Hawaii, Guam, Alaska, they can offload cargo and proceed to the mainland without picking up any additional cargo intended for delivery to another United States location.
From Mexico With Love
My latest yacht transport was a new European built yacht that shipped from the United Kingdom to Port Everglades, offloaded, rested in Fort Lauderdale for a while, loaded onto a non-Jones Act bulker and was then transported to Ensenada, Mexico where I was tasked with supervising the offloading and transport to San Francisco. It seems straight forward and easy since I have done this many times and the rules are quite well known. However, when it comes to shipping companies, weather, overloaded ports and international customs, nothing is as easy as it should be. Lots of moving parts with plenty of opportunities for delay.
In a two-part article I wrote for the Bay & Delta Yachtsman magazine, published in the March and April 2013 issues, part one dealt with the pitfalls of getting a boat as far as San Diego and part two was about the challenges of having the correct paperwork and making a scheduled loading time that was not flexible. When either shipping a yacht or offloading a yacht the shipper has complete control of the schedule based on all the variables of ocean travel and port operations. Although they generally do a good job of keeping all of the boat owners updated on progress, last minute delays do occur and we have to accommodate their frequent schedule changes.
Preparation Is The Key
There are a few things we can do ahead of time electronically that will help speed up the customs process when you are in Mexico. For example, you will need to have a current passport that has more than a few days left before it expires. That is a deal killer and one of our crew had to stay home because his passport expired in less than six months. We no longer need a Mexican Visa and instead obtain a single-entry tourist card that is good for 180 days. At Mexico FMM/Mexico FMM Official Application (mexico-traveldocmx.com), this can be done online ahead of time, at the border when you cross into Mexico or at the Ensenada customs office as part of the import paperwork.
We can also apply online for your Mexican Temporary Import Permit (TIP) and have this application out of the way. But there are a couple of catches, you must apply for it two weeks ahead of time and you can only have one boat with a TIP in Mexico at one time. The website (Importación Temporal de Vehículos (banjercito.com.mx)) is now available in English and easy to navigate; just fill in the blanks, pay the fee and you will have your TIP. The home page says vehicles but click thru the disclaimers and then you can select Yachts among the vehicles and motorhomes. However, Mexico has recently changed this requirement and now if you do not intend to stay in Mexico more than 72 hours then you can avoid the TIP.
The voyage from Port Everglades to Ensenada can take up to several weeks depending on the stops that the ship will make to load and offload cargo or yachts, delays at the Panama Canal, delays at ports along the Eastern Pacific and finally weather delays. Once the ship with our yacht left Port Everglades, we could track its progress via an internet-based AIS viewer and the shipping company sent regular email updates. After the ship successfully navigated the Panama Canal, the offloading dates started to get more accurate but still had a margin of several days, but that is close enough for us to start making travel arrangements and clearing out our calendars.
Getting to Ensenada from the United States takes the better part of a day depending on the method that you use. My preference is to take a hotel limo from the San Diego Airport directly to the hotel in Ensenada. The ride from the San Diego airport to Ensenada is about two hours depending on delays at the border crossing. Another method is to walk across the border and hail a taxi to your hotel in Ensenada. The cost for either of these methods is pretty much the same. I have flown to Ensenada many times in private planes from the Bay Area and we land at the military base just south of town. I do prefer this method if the client has a plane.
Back to our latest transport. Our transport ship departed Panama on a Thursday and was making her way up the coast with stops in Central America, offloading yachts along the way. We were given an approximate offload date for the following Tuesday, giving us just a short time to lock in hotel reservations and travel plans. A few days later when the ship arrived in La Paz, Mexico we had our first delay when she sat at anchor for several days. I never really received an explanation as to why our offload date got pushed to Wednesday, but we make logistical modifications. Our ship departed La Paz on Monday and should normally take approximately 2 days to make Ensenada, so a Wednesday offload is looking good except that on Tuesday we received word there was no dock available in Ensenada and that the ship would most likely sit at anchor with offloading now scheduled to start on Saturday. OK, adjust travel plans again and work on getting deposits refunded. Trying to predict when the dock will become available allowing our ship to start offloading operations is quite difficult. Throw in the mix that the ship has 23 yachts to offload in Ensenada and they have not yet sent us the offload sequence so we have no idea if we are first or last to be offloaded. We made the trip to Ensenada arriving late Wednesday evening with hopes the port would clear more quickly and we could have our boat.
In the early hours of Thursday, dock space became available and when I checked in with port operations at 0600, I was informed that the ship was secure and would start offloading immediately and that our scheduled time was 2200 that evening. Although I am pleased that we will have all day to get the customs paperwork completed and that we were scheduled to be offloaded earlier rather than later, I was not so pleased that we would be offloading in Ensenada and transiting to our hotel five miles north at night.
As we were diligent with preparation of our paperwork prior to arriving in Mexico, we finished customs clearance in just two hours and at 1100 had time to relax before preparing to get a Panga and head over to the ship for our evening offload. After customs clearance I called the port agent to check and was informed that the offload operations were going better than expected and that our new offload time was 1900. Much better as we still have daylight at this time and it would be easier for us. And we still had plenty of time for lunch and go back to the hotel to get our gear. After lunch in town, I called the port agent again to check. He asked if we could be ready at 1600 for our offload. Affirmative, we grabbed our gear and made our way to the harbor taxi service arriving a bit early at 1500 where a couple of phone calls later we were told to come right over and our boat would be in the water and ready for us to take her.
From here the story is really boring because everything else went exactly as planned and we arrived in San Francisco just a few days later.
Whether you are shipping a boat from Ensenada, picking up a boat in Ensenada to bring into the United States, or planning on cruising Mexico for an extended period you will need all the required documents. Don’t leave home without them. I have encountered many unhappy U.S. mariners at the customs office without the correct documents enviously watching as we moved effortlessly through the process with a routine stamp of approval on our documents and a quick swipe of the credit card.
Passport – The rules require everyone travelling to and from Mexico to have a passport. Yes, even U.S. citizens! And the passport must have more than six months before expiration or you will be denied. In the old days you could show a birth certificate or driver’s license, however these are no longer acceptable forms of identification. If you arrive by boat and expect to leave by land or air, you will need a passport.
Visa or Tourist cards are required – Everyone travelling to Mexico must have a Mexican Tourist card or visa. No need to get one in advance because they are issued on the spot at all points of entry. The tourist card is good for six months and can be renewed.
Crew list – you must list everyone on board the vessel and indicate their nationality and position such as captain, mate, etc. If you bring children under the age of 18 along, then you must have a notarized letter of permission unless both parents are on board.
Letter of Authorization – if you are not the owner of the vessel then you must have a notarized letter authorizing you to oversee the vessel. If the vessel is registered under a Family Trust, Company or LLC, you will need a Notarized “Letter of Authorization” for the captain to operate the vessel. This authorization is also required for cases where the owner is going to be absent and a delivery skipper has been hired. You also need a copy of the passport for whomever signs the Letter of Authorization. Make certain that the signature on the letter matches the passport exactly. If the vessel is registered under an LLC, you will need a copy of the articles of incorporation indicating the name of the person signing the Letter of Authorization also appears as a member of the LLC.
Boat Documentation – If your boat is documented by the U.S. Coast Guard then you must have the original certificate of documentation. If the boat is new and the documentation has not been processed yet you will need a notarized bill of sale. If the vessel sports any tenders/dinghies or PWCs you will need a copy of the registration or invoice so it can be included on the import permit. If your vessel is not documented, but instead registered in CA (CF numbers), you will need to show the original registration paper. If your boat is neither, for example documented in a foreign country, then you will need proof of ownership. Be careful here, there is no one size fits all and the authorities may not accept what you think proves that you own the vessel. Check in advance to be certain that you will not have problems. I used a notarized bill of sale for proof.
Engine serial numbers of the main engines – This is only required for the TIP so if you are planning to avoid the TIP and get out of Mexico in 72 hours then you will not need these. However, I would have them available just in case.
Proof of insurance – Just about any marina you go to will want to see insurance. If you are shipping your boat by one of the commercial companies, they want to see a copy of your insurance papers. Unlike the United States requirements, you must have insurance when cruising Mexican waters, insurance is not optional and must indicate liability coverage in Mexico.
Ships radio license – Although no radio licenses are required for your VHF radio used on recreational vessels less than 20 meters (sixty-five feet) in length when cruising in the United States, operating your VHF radio in Mexico does require that you have a ship station license issued by the FCC.
Until next month I am going to sit back, enjoy a fine port and cigar as I put plans together for the next boat relocation. Until then please keep those letters coming. Even the ones where you slam me for my oversights. Have a good story to tell, I love a good story. Have good photos of right and wrong, please send them and I will include them in next edition of “Is it Right Or Is it Wrong.” email@example.com