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Lakes ports group: Pilot rates ruling 'a mixed outcome'

Nov 10, 2017 02:37 PM

A 2016 increase is upheld, but the judge also finds compensation was arbitrarily adjusted

The following is the text of a news release from the American Great Lakes Ports Association (AGLPA):

(WASHINGTON) — On Nov. 3, U.S. District Court Judge Rudolph Contreras issued a final decision on a lawsuit brought by AGLPA and Great Lakes vessel operators against the U.S. Coast Guard. The suit challenged the agency's 2016 pilotage rate adjustment.

The decision was a mixed outcome with the court agreeing with two of four issues we raised, and disagreeing with the other two. Specifically, the court agreed that the Coast Guard should have taken vessel weighting factors into account when calculating the rates. Further, the court agreed that the Coast Guard had arbitrarily adjusted pilot target compensation upward by 10 percent in 2016. Both of these issues had caused 2016 pilotage rates to be unjustifiably inflated. Indeed the 2016 audited financial statements of the three U.S. pilot organizations show that inflated rates resulted in more than $5 million of overcharges paid by vessel operators that year. Contreras has asked the parties to submit remedy proposals to the court. AGLPA and its partners will be doing so.

Great Lakes ports believe excessive pilotage costs are making the navigation system uncompetitive. A recent Coast Guard study confirmed that view and documented that the 2016 rate adjustment resulted in the loss of more than 500,000 tons of agricultural cargoes and 4,000 jobs lost across the region.

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