Panel Opposes Galveston Pilots Rate Hike

The Galveston Wharf Commission in a vote Monday unanimously opposed an application by port pilots that would raise their rates 43 percent over the next five years.

The 15-member Galveston-Texas City Pilot Association’s application for a multi-year rate increase was substantially higher than the increase a Houston-based maritime industry stakeholders group recommended last year. 

The West Gulf Maritime Association had suggested a Gal-Tex rate increase of 3 percent a year for three years. The Gal-Tex pilots countered with a request for increases of 8, 8, 7, 7, and 7 percent over five years, plus communications, education and transportation surcharges, cost of living increases and a Hurricane Ike recovery surcharge.

According to the Gal-Tex application, the rates and adjustments asked for will correct rate “stagnation” in compensation since 2000. The result, the application says, has been an “illegal subsidy of pilotage costs to industry and made it impossible for the Gal-Tex pilots to achieve ‘adequate and reasonable compensation’ and a ‘fair return’ on capital assets as required by Texas law.”

Port of Galveston Executive Director Steve Cernak said the Galveston Wharfs Commission “voted to go on record as opposing the rate increase and to encourage the Board of Pilot Commissioners of Galveston County to provide a fair and reasonable compensation and return on assets for the pilots.”

He said the port board would not be able to speak at the upcoming commission hearings unless it opposed the increase. “In representing the wishes of port customers, we have to maintain the ability to have a seat at the table,” he said.

The state-appointed Board of Pilot Commissioners that oversees the Gal-Tex pilots will rule on the rate application as soon as possible, said Pilot Commission Chairman Vandy Anderson, who did not attend the Galveston Wharfs Commission meeting.

Once objections are filed the pilot commission has a window of time in which to award or modify the rate application. Most of the Texas pilot groups have been able to work out an agreement on rate increases with their pilot users, Anderson said, but “these two groups [Gal-Tex and the WGMA] have not been able to do that, although we have strongly urged them to do so.”

In four out of five pilot rate negotiations during the last two years, including at Corpus Christi and Freeport, Tex., pilot groups and the WGMA were able to reach agreement on fee increases and the user’s group supported the pilot groups at their respective rate hearings, said WGMA Vice President for Maritime Affairs Niels Aalund.

The pilots now earn from $325,000 to $356,000 annually, depending on estimates from various sources. 

According to the WGMA, the requested rate increase would increase Gal-Tex pilot fees for a Del Monte vessel calling the Port of Galveston from $2,554.39 to $3,374.45 as of June 1 and to $4,880.63 by June 1, 2013, a 91 percent increase over five years. Pilot costs for a Wallenius Wilhelmsen ro-ro vessel would increase from $3,858.07 to $7,018.54, or 81.92 percent, over the five year-period, and for a Carnival Cruise vessel such as the Carnival Conquest costs would jump from $8,827.95 to $15,995.63, or 81.19 percent.

The WGMA has suggested the Houston and Gal-Tex pilot groups come to a cooperative agreement that would include centralized dispatch and the sharing of pilot boats in order to rationalize their operations, and perhaps even eventually merge the two pilot groups. While the Houston pilot group appears amenable to these suggestions, the Gal-Tex pilots have rejected them, according to WGMA.

The Gal-Tex pilots guide vessels from the Gulf to the ports of Galveston and Texas City, on Galveston Bay, while the Houston pilots guide vessels through Galveston Bay and up the Houston Ship Channel, a journey that can be as long as 50 miles one way.

For more, see: 
October protest re pocca
http://www.breakbulk.com/content/?p=271

first notice of rate application:
http://www.breakbulk.com/content/?p=657