Coast Guard aims to boost Great Lakes pilotage rates

(WASHINGTON) — The U.S. Coast Guard has published a notice of proposed rulemaking (NPRM) in the Federal Register outlining pilotage rates for the U.S. Great Lakes pilotage system for the 2023 shipping season. The Coast Guard has proposed a 14 percent cost increase due to inflation and the addition of four new pilots.

The agency has requested public comment on its proposed rates, which seek to generate revenue by implementing hourly charges for pilotage services according to geographic area. By publishing proposed rates each fall, the Coast Guard hopes to have them finalized by the beginning of the next shipping season.

By law, oceangoing vessels operating on the Great Lakes are required to engage the services of both U.S. and Canadian marine pilots to assist with navigation. U.S. pilotage services in the Great Lakes are provided by three private pilot organizations whose services and fees are regulated by the U.S. Coast Guard.

AGLPA photo

The Coast Guard proposes to increase the overall cost of U.S. Great Lakes pilotage in 2023 compared to 2022. Specifically, the agency seeks to generate $37,022,395 in revenue in 2023, compared to its target of $32,486,995 in 2022 – an increase of $4.535 million. This 14 percent increase is attributed to inflation and four new pilots being added. In 2023, the Coast Guard is proposing a total workforce of 55 fully registered U.S. pilots and seven apprentice pilots.

The Coast Guard will be increasing individual pilot compensation from the current level of $399,266 annually to a new high of $422,336 annually.

The recent history of pilotage cost increases is detailed below:

Year / Pilot numbers / Estimated cost / Change over year

2014 / 36 / $12,889,868

2015 / 36 / $15,451,455 / plus 20 percent over 2014

2016 / 37 / $19,103,678 / plus 24 percent over 2015

2017 / 45 / $22,326,381 / plus 14 percent over 2016

2018 / 49 / $25,156,442 / plus 12.7 percent over 2017

2019 / 51 / $27,988,185 / plus 11.3 percent over 2018

2020 / 52 / $28,268,030 / plus 1 percent over 2019

2021 / 55 / $30,332,652 / plus 4 percent over 2020

2022 / 56 / $32,486,995 / plus 12 percent over 2021

2023 / 55 / $37,022,395 / plus 14 percent over 2022

It is important to remember that the Coast Guard’s annual rate setting process is a hypothetical exercise. It seeks to estimate the overall revenue and hourly charges necessary to operate the three U.S. pilot associations. Real-world revenue generation will be impacted by traffic levels and business trends, which sometimes vary from the Coast Guard’s estimates.

The American Great Lakes Ports Association (AGLPA) has historically had a strong interest in both the cost and reliability of Great Lakes pilotage services due to its impact on the efficiency and competitiveness of Seaway commerce. AGLPA will be submitting comments on this proposed rule in coordination with other allied industry stakeholders.

To view a copy of the Federal Register notice, click here.

– American Great Lakes Ports Association

By Rich Miller