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.”