PILOTAGE BACKLASH

PILOTAGE BACKLASH

'Your true pilot cares about nothing about anything on earth but the river, and his pride in his occupation surpasses the pride of kings.' -- Mark Twain

Life on the Mississippi, 1874.Marine pilots for centuries have plied their trade in relative obscurity -- yet their role in greasing the wheels of international trade has never been in doubt. Port cities dependent on trade don't want captains unfamiliar with their harbor's unique weather and tidal conditions running their ships aground or crashing into a bridge like the Golden Gate, imperiling the local economy. That is why marine pilotage may not be the world's oldest profession, but it's close.

New York's pilots date back to 1694, for most of their history helping sailing ships with no engines to tack into New York harbor. The first state law in California created the Board of Pilot Commissioners for San Francisco Bay. Pilotage is referred to in the 27th chapter of Ezekiel as well as in the writings of Homer and Virgil.

Yet pilots also have a unique ability to provoke controversy. Many pilot associations are known havens of nepotism, where some pilots are 4th or 5th generation in the business and pull every string available to get their sons admitted into the guild. Some groups have been sued for failing to admit women and minorities; there are only 25 women pilots in the U.S. out of 1,100 state pilots. U.S. pilots are among the highest-paid seagoing workers anywhere and as a group are certainly the highest-paid class of workers in the U.S. maritime industry. The members of the 60 U.S. state pilot associations earn an average of $300,000 a year, according to the American Pilots' Association. Pilots, not surprisingly, are the elites of their local maritime communities, provoking their share of envy and jealousy among their less-fortunate industry colleagues.

For all their expertise in guiding ships through often-treacherous waters, pilots have shown an equal talent for winning pay increases and resisting political reform. They have successfully argued that theirs is a highly skilled, difficult profession worthy of the above-average incomes they make. Few attempts to change state rate-setting systems have gone anywhere, in part because pilot groups are on guard against political salvos against them and have therefore made sure they're well-connected in state capitals, where they're accepted as guardians of the state's interest in safe waterways.

'The state pilots I always refer to as the gatekeeper,' said Timothy Brown, president of the International Organization of Masters, Mates and Pilots. 'He's the person who has to balance the interests of the shipping community and the state that he works for.'

For those reasons, while shipowners privately curse pilot costs, most consider it an accepted cost of doing business and don't argue.

But in Louisiana, discontent about pilots has reached a new level. As our reporter Bill Hensel Jr. points out on Page 39 of this week's issue, shipowner representatives on the state pilot rate-setting boards resigned en masse two years ago in the first shot of what's now a full-fledged battle to reform the system. They're upset that members of one of the Mississippi River pilot groups recently won a $60,000 salary increase to $320,000 and were allowed to expand their membership.

The lower Mississippi River handles nearly half of U.S. bulk grain exports and is home to several oil refiners that say pilotage costs on the river are hurting margins. Grain exporters, finding it increasingly difficult to compete against lower-cost producers in foreign countries, have joined in the effort, said John Hyatt, president of the International Freight Forwarders and Customs Brokers Association of New Orleans. Hyatt is a member of the recently formed Pilot Users Group.

'Everybody in the transportation chain, such as towboat operators, terminal operators, stevedores, forwarders, and brokers, have all been forced to become more competitive and reduce their costs over the last decade. The only cost that spirals upward is the pilotage cost,' he said.

This clash could have been seen from a mile away. Sooner or later pilots' pay and exclusivity was bound to provoke a backlash, and it's not surprising that it occurred on a primarily bulk cargo waterway where transportation costs represent a higher percentage of cargo cost than for higher-value goods that move in containers.

As Hensel reports, the pilots have fended off the challenge for the moment. But the protest is clearly not over.

Peter Tirschwell is editor of JoC Week. He can be reached at (973) 848-7158, or via e-mail at ptirschwell

oc.com.