The Coast Guard is proposing Great Lakes pilots’ rates for the 2020 shipping season that are up in four of the six service areas and down in two resulting in slightly lower costs for shippers for the first time in several years.
Per pilot hourly pay will range from $327 to $757, compared to $306 to $733 this year due primarily to a 2% inflation adjustment, lower operating expenses for pilot associations, the addition of one pilot in District Two, and more money for the working capital fund. Total target pilot compensation rises to $367,085 from $359,887.
The proposed rule would affect 52 U.S. pilots, three associations as well as the owners and operators of about 266 oceangoing vessels. The Coast Guard estimates shippers’ payments would drop $225,658 from the 2019 season to $27.8 million in revenue.
“The Coast Guard believes that the new rates would continue to promote pilot retention, ensure safe, efficient, and reliable pilotage services on the Great Lakes, and provide adequate funds to upgrade and maintain infrastructure,” the agency said in the proposed rule notice published Wednesday.
The Coast Guard establishes rates for Great Lakes pilots while pilot rates elsewhere in the country are set at the local level. The number of lakes pilots has grown from 36 in 2014, and the Coast Guard has said its goal is 54 “to help reduce fatigue and ensure safety on the waterways.”
“This is the first relief from double digit cost increases experienced by industry over the last [six] years,” the American Great Lakes Ports Association (AGLPA) said in a statement describing the proposed rates as basically “a ‘maintain the status quo’ scenario.” The group noted costs rose as much as 24 % in 2016, 14% in 2017, 12.7% in 2018 and 11.3% in 2019. Next year would be a drop of 8 %.
The annual rate setting is a hypothetical exercise, AGLPA said. “Real world revenue generation will be impacted by traffic levels and business trends, which sometimes vary from the Coast Guard’s estimates.”
The Coast Guard, shippers and associations have been battling for years over the rates. The agency has changed the way it calculates rates, using hourly billing and the application of a weighting factor — so larger ships yield higher pilotage revenues than smaller ones.
Comments on the proposed rule are due Nov. 29. The docket number is USCG–2019–0736.
