Galveston Pilots Requesting 27% Rate Increase

The Galveston County Pilots have formally requested a 27% rate increase over the current tariffs. Negotiations and presentations are underway in Texas and the matter has been discussed in Non-Binding Mediation with Industry Stakeholders. The mediation took place last Tuesday, and the issue is now before the local Pilot Commission, where hearings on Thursday and Friday of this week have been held. According to Niels Aalund, Vice President of Maritime Affairs for the West Gulf Maritime Association, “The mediation produced no movement.” Alan also said that his organization, a trade group representing a wide array of maritime interests from Lake Charles to Brownsville, strongly opposes the rate increase proposal.

The Galveston Pilots are currently thought to be making about $300,000 per year. In addition to their request to increase pilotage rates, they are also looking for increases in other fees, including a mechanism to fund a new pilot boat. The Pilots last increase in rates occurred in 2000, when they received an increase of approximately 35%. Since then, attempts to further augment those rates have been turned down on at least two occasions. One industry stakeholder, who declined to be identified for the purpose of this article, said that the vague nature of the Pilots’ financial data was the prime mover for those decisions. Niels Aalund told MarEx today, “I have never seen a stronger, more cohesive industry opposition to a rate increase.” Additionally, the Port of Galveston’s governing board said Monday it would protest a proposal by ship pilots to raise their rates by 27 percent.

The discussions and negotiations in Galveston are similar to those being played out in any number of venues, nationwide. In Massachusetts, the Boston Pilot Association is requesting a more modest (11-1/4%) rate increase, their first since 2001. In Long Island Sound, Memorandum of Agreement (MOA) pilots are struggling to achieve their first increase in almost 24 years. In Lake Charles, LA, the dispute between local stakeholders and the local pilots over rates is continuing. A meeting of the Pilot Fee Commission will take place on April 11, where one of two “hearing masters” (both retired judges) will be selected for the purpose of running future meetings on the subject of the Lake Charles pilot tariffs.

No resolution of the Galveston rate issue is expected this week. The Board of Pilot Commissioners, a group of five volunteers appointed by Governor Rick Perry, will ultimately decide to approve or deny the rate increase. The 16 members of the Galveston-Texas City Pilots say that rapidly escalating expenses, such as fuel and insurance, more than warrant the rate increase. But the majority of Texas City and Galveston tenants and stakeholders have predictably come out against the rate increase. Others, however, point to record profits being enjoyed by oil companies--ample proof, they say, that users can easily absorb the increase in fees--which make up a large percentage of the traffic handled by the pilots.