Comments from the Executive Director
Some brief comments for now, but no less important…
U.S. Coast Guard Pilotage Office files Proposed Rule Making to establish new rate making methodology and new pilotage rate increases averaging 51 percent beginning in the 2016 Navigation Season.
The Proposed Rule Making (NPRM), published September 10, 2015, is seeking a rate increase of 51 percent over existing rates. In addition to the rate increase, a billing surcharge to create a total of $900,000., is being sought to underwrite certain training charges as a result of hiring new and/or additional pilots. The surcharge plus the rate increase is forecast to result in an overall increase in cost to operators of 58 percent in 2016.
Comments are invited to be filed no later than November 9, 2015
Not surprisingly, the amount of increase in a single year has resulted in considerable negative reaction from vessel operators and their USGLSA agents as well as other Lakes stakeholders which will be affected by this level of cost increase. As a result of the degree of concern, USGLSA has joined with the Shipping Federation of Canada and American Great Lakes Ports Association in forming a Steering Committee to organize a strong protest movement which is including the engagement of outside legal assistance as well.
Unlike in many prior pilotage rate NPRM’s from Coast Guard, ship owners and other stakeholders may be expected to participate more directly in opposition and urge changes in the new methodology and approaches which USCG proposes to impose which has resulted in these extremely burdensome proposed increases in total voyage costs. Economic impact on the customers served and the Lakes industry generally, which not surprisingly may also adversely affect the economic well-being of the pilots themselves as markets react, should be pointed out and I expect that to be part of the argument.
Federal Appeals Court rejects EPA ballast water standards
In a recently reported decision, a U.S. Federal Appeals Court determined that the ballast water management standards in the EPA’s Vessel General Permit (VGP) were insufficiently constructed and ordered a rewrite to contain wider ranging and more demanding compliance standards. A key finding by the Court was that the ballast water quality standards adopted by the internationally recognized IMO were insufficient. The current EPA rules were not eliminated by the ruling at this time, but rather the Court gave the EPA until the next renewal of its VGP (12/19/18) to have more stringent standards in place. A final piece of the decision of note is that the Court rejected the exemption of fresh water Lakers from the ballast water compliance standards.
Assessment of this result continues, but one matter which seems unclear is how that decision affects the U.S. Coast Guard’s implementation of its ballast water standards which are similar to the EPA’s if not in administration, at least in form and content. It is likely that USCG and EPA will have to look at this together. This development very likely also will affect decisions on new vessel design or refitting for ballast water management equipment as well as how the vendors of such equipment may react to the uncertainty now introduced again.
Finally, how will this decision affect the fate of the Vessel Incidental Discharge Act (VIDA) proposal (S.373 and H.R. 980) which has been mentioned earlier and which has been making headway at the federal legislative level? Part of that Bill is to place all ballast water regulation in the hands of Coast Guard and pre-empt State involvement on the issue. The question is now with the Court decision, what will the Coast Guard standards be?
–Stuart H. Theis
Mr. Theis, who has served as Executive Director since April 2007, is an attorney and businessman with prior associations at Cleveland, Ohio based M. A. Hanna Company and Oglebay Norton Company. At Hanna, he held a variety of legal/operational positions including Corporate Vice President with responsibilities for Hanna’s Great Lakes/St Lawrence Seaway and Ocean Marine vessel and dock operations in the U. S. and Canada. While at Oglebay Norton, Mr. Theis served as President of the Company’s Great Lakes fleet and dock operations. Mr. Theis is a member of the American Bureau of Shipping and has served as a member on two U. S. Coast Guard Advisory Committees, the Great Lakes Pilotage Advisory Committee and the National Maritime Security Advisory Committee.