Coast Guard Must Rein in |Pilot Pay, Vessels Say

     (CN) — Demanding a 20 percent cut on federally mandated rates for boat pilots, foreign shipping companies brought a court challenge against the U.S. Coast Guard.
     Three Canadian and U.S. lobbying groups joined six marine-transport companies as plaintiffs in the federal complaint filed Tuesday in Washington.
     They say the Coast Guard has hiked pilotage rates substantially in the last nine years, with the latest update having taken effect via final rule in April 2016.
     “The Coast Guard set rates in the final rule based on numerous defects in its costs and revenue calculations, and supported by faulty or unexplained logic,” the complaint states.
     One of the plaintiffs, the Shipping Federation of Canada, “observed that pilotage is now one of the largest single cost items for foreign-flag vessels that enter the St. Lawrence Seaway/Great Lakes System,” according to the complaint.
     The St. Lawrence Seaway and the Great Lakes are jointly managed bodies of water that lie on the U.S.-Canadian border. They connect the Atlantic Ocean, on the countries’ east coasts, with the central regions of each country, traveling through the St. Lawrence River and the five Great Lakes: Ontario, Erie, Huron, Michigan and Superior.
     The Great Lakes Pilotage Act of 1960 requires foreign shipping companies to use U.S. or Canadian pilots when traversing the waterway, and the Coast Guard sets the wages for these pilots, according to the complaint.
     The seaway sustains more than 200,000 jobs yearly and generates more than $14 billion in wages and salaries, according to a brochure on the Seaway’s website.
     It is the latter number that has the transport companies sweating, claiming the Coast Guard’s new rule creates a “systematically biased rate-setting methodology exploitative of ratepayers.”
     The vessel owners say the latest arbitrary rule failed to consider their comments.
     Among other things, the Coast Guard failed to account for the variable size of vessels that traverse the waterway, instead raising wages uniformly for all pilots, according to the complaint.
     Unlike the last rule change, the Coast Guard failed to account for past differences between actual and projected revenues when changing the wage rate, the plaintiffs claim, and planned for peak-demand-level staffing even during the off-peak portions of the season, which make up the majority.
     The vessel owners also say no empirical evidence supports the Coast Guard’s claims of recruitment and retention problems.
     C. Jonathan Benner with Thompson Coburn represents the shipping companies and their lobbyists, which are demanding a rate decrease of at least 20.6 percent.
     They also want the court to immediately invalidate the rule and send it back to the Coast Guard for further consideration.
     The case has been assigned to U.S. District Judge Rudolph Contreras.
     A representative for the Coast Guard has not returned a request for comment.

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