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Judge upholds increase in US Great Lakes pilotage rates for 2016

Nov 7, 2017 03:09 PM

A shipping industry group sued the Coast Guard, claiming the new rates were 'arbitrary and capricious'

The following is text from a news release issued by the Lakes Pilots Association:

(WASHINGTON) — On Friday, Judge Rudolph Contreras of the U.S. District Court for the District of Columbia ruled that the U.S. Coast Guard was justified in increasing 2016 rates charged to shippers for U.S. pilotage service on the Great Lakes to address safety issues and problems in attracting and retaining pilots.

A group of industry users headed by Fednav Ltd., the Shipping Federation of Canada and the American Great Lakes Ports Association sued the Coast Guard in May 2016 under the Administrative Procedure Act, claiming the new rates were arbitrary and capricious. The Coast Guard was responding to complaints from those same groups in 2014 that delays from shortages of U.S. pilots were costing them too much money and that something should be done to fix the problem.

"When the Coast Guard decides, in its expert judgment, that safety measures are necessary, that rationale is also necessarily a justification of the associated cost,” Contreras stated. “Based on the Coast Guard’s long experience regulating Great Lakes pilotage and the numerous comments supporting its position, the Coast Guard could rationally conclude that there existed chronic pilot attraction and retention difficulties and that these difficulties were caused, at least in part, by the undercompensation of pilots.” The court found “no basis to overrule the Coast Guard’s considered judgment as to pilot recruitment and retention.”

Until the rate increase, U.S. Great Lakes pilots were the lowest paid pilots in the country considering the difficult routes and hours on board. The Coast Guard found that pilots incurred a $20 million shortfall in revenue from 2005 to 2014, and the system lost 22 percent of its pilots. This was the lowest level since 1960. Fatigue levels were also a consideration for the rate increase.

Click here to read the text of the ruling.

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