This rule will adjust the pilotage rates to account for a rolling ten-year average for traffic, and result in an increase in pilotage rates due to an adjustment for anticipated inflation, changes in operating expenses, surcharges for applicant pilots, and an addition of two pilots,
The estimated overall annual regulatory economic impact of this rate change is a net increase of $2,831,743 in payments made by shippers from the 2018 shipping season.
Pursuant to the Act, the Coast Guard regulates pilotage for oceangoing vessels on the Great Lakes—including setting the rates for pilotage services and adjusting them on an annual basis.
The rates, which during the 2018 shipping year ranged from $271 to $653 per pilot hour (depending on the specific area where pilotage service is provided), are paid by shippers to pilot associations.
Since 2016, the Coast Guard has used a ratemaking methodology calculating the revenue needed for each pilotage association (including operating expenses, compensation, and infrastructure needs), and then divides that amount by the 10-year average of shipping traffic to produce an hourly rate.
In this final rule, the Coast Guard is establishing new pilotage rates for 2019 based on the existing ratemaking methodology.
As proposed in the notice of proposed rulemaking (NPRM), the Coast Guard is adjusting the rates to account for 2019 inflation, the addition of two working pilots, and updated historic traffic data.
Because the Coast Guard must review, and, if necessary, adjust rates each year, the rates are analyzed as single year costs and are not annualized over 10 years.