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Coast Guard proposes reduction in Great Lakes pilotage costs

Oct 31, 2019 09:40 AM

The 1 percent decrease for 2020 follows a six-year stretch of double-digit increases

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

(WASHINGTON) — On Wednesday, the U.S. Coast Guard (USCG) published a notice of proposed rulemaking (NPRM) in the Federal Register outlining pilotage rates for the U.S. Great Lakes pilotage system for the 2020 shipping season. The service has requested public comment on its proposed rates, which seek to generate revenue by implementing hourly charges for pilotage services according to geographic area. 
 
The Coast Guard proposes to slightly shrink the overall cost of U.S. Great Lakes pilotage in 2020 compared to 2019. Specifically, the service seeks to generate $27,762,527 in revenue in 2020, compared to its target of $27,988,185 in 2019.
 
Costs will increase by roughly $1 million in 2020 due to inflation and the addition of one new pilot. However, because the service did not seek funds for pilot training this year (as it did in 2019), the overall cost of the program will shrink.
 
The Coast Guard will be increasing individual pilot compensation by inflation to a new high of $367,085. In 2020, the USCG is proposing a workforce of 52 total U.S. pilots.
 
The proposed 2020 rates are largely a “maintain the status quo” scenario. This is the first relief from double-digit cost increases experienced by industry over the past six years as described below:
 
(Year / Pilot numbers / Total estimated cost / Percentage over prior year)
 
2014 / 36 / $12,889,868 
2015 / 36 / $15,451,455 / +20 percent over 2014
2016 / 37 / $19,103,678 / +24 percent over 2015
2017 / 45 / $22,326,381 / +14 percent over 2016
2018 / 49 / $25,156,442 / +12.7 percent over 2017
2019 / 51 / $27,988,185 / +11.3 percent over 2018
2020 / 52 / $27,762,527 / - 1 percent from 2019
 
It is important to remember that the Coast Guard’s annual rate setting process is a hypothetical exercise. It seeks to estimate the overall revenue and hourly charges necessary to operate the three U.S. pilot associations. Real-world revenue generation will be impacted by traffic levels and business trends, which sometimes vary from the Coast Guard’s estimates.
 
To view a copy of the Federal Register notice, click here.

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