Local Opposition to Gal-Tex Pilot Rate Increase Hardens

Galveston Wharf Commission joins West Gulf Maritime Association in unanimously opposing proposed pay hike. Board of Pilot Commissioners to rule on matter soon.

Monday’s unanimous vote by the Board of Trustees of the Galveston Wharves to object to a proposed rate adjustment requested by the Galveston-Texas (Gal-Tex) City Pilots provided additional notice to the 15-member Galveston-Texas City Pilot Association that their recently filed multiyear rate increase proposal would face considerable opposition. The 5-0 vote of Port of Galveston’s governing board followed a similar action from the West Gulf Maritime Association (WGMA). Neither the non-profit WGMA, a regional trade organization which represents steamship owners, operators, agents along with stevedoring and/or terminal companies located in all Texas ports and the Port of Lake Charles, LA, nor the Galveston Wharf commission has the power to deny or approve rate increases.

The newly filed Application for Pilotage Rate Change filed by the Gal-Tex Pilots has drawn the wrath of local stakeholders who say, among other things, that the multi-year rate increase request – totaling more than 42 percent – is excessive. The newly received document alleges insufficient rates since 2000 and further requests significant multi-year rate increases. In response, at least two industry stakeholder meetings have been called to discuss the rate change request and formulate industry response. Thus far, those responses have been unanimous in their opposition.

Niels Aalund, vice president of the West Gulf Maritime Association, told MarEx, that the rate hike cannot take place until the Board of Pilot Commissioners for the Ports of Galveston County calls a public hearing to take action on the request. Previously, the WGMA had called for a rate hike of 3 percent a year for three years. Gal-Tex pilots have now countered with a request for consecutive increases of 8, 8, 7, 7, and 7 percent over five years, plus a myriad of other miscellaneous surcharges, including a Hurricane Ike recovery surcharge. Industry and the pilots now appear to be very far apart, with little common ground, in the matter.

Aalund this week also said, “Industry unanimously, and strongly, opposes the Galtex application. We are not aware of any industry stakeholder who supports the application. We negotiated with Galtex for six months and tried in good faith to reach an agreement on an appropriate rate increase. We are disappointed that this was unsuccessful.” He went on to claim that some ships will see an increase of 90% in pilot charges if the latest Galtex application is adopted by the commission.

The latest row between local port stakeholders and the pilots follows a contentious process in 2007, when the pilot commissioners approved a 4.9 percent rate increase, or well shy of what the pilots had asked for.

The latest rate increase request, filed after negotiations with ship owners, operators and agents proved fruitless, is certain to be another hard fought battle between the two sides. The Board of Pilot Commissioners, a group of five individuals appointed by the Governor of Texas, will rule on the matter soon. As MarEx went on line with this edition, there was no firm date for that hearing.

The Galveston-Texas City Pilot Association is a state-sanctioned monopoly that guides foreign registered vessels in and out the ports of Galveston and Texas City, Texas. Local industry estimates the annual salaries earned by individual pilots to be as much as $365,000. But, local pilots claim that they are currently the lowest paid association among 19 studied in preparation for their current request. At the most recent industry stakeholder meeting in Galveston, the pilots characterized the situation as “unlawful.”

Similar in composition to other state pilot associations in other U.S. ports, the Gal-Tex group is feeling some of the same push-back from industry and local politicians that is playing out elsewhere. In Boston, Massachusetts, local pilots there have not been granted a pay increase since 2001. On the West Coast, a similar scenario is playing out in Puget Sound.

Photo Caption: WGMA Vice President Niels Aalund.