October 2020 Comments and Important Announcement

UNITED STATES GREAT LAKES SHIPPING ASSOCIATION WEB SITE
COMMENTS FROM THE EXECUTIVE DIRECTOR
AND AN IMPORTANT ANNOUNCEMENT
OCTOBER, 2020

Greetings to all and thank you for visiting our new and improved USGLSA web site which includes Comments from the USGLSA Executive Director.

With the beginning of the Fourth Quarter and the end of the 2020 Navigation Season on the horizon, as well as to make an Announcement of some personnel news, this Report and Comments are respectfully presented. Come to think of it, to eliminate all the mystery right away about the personnel news, let me do that first.

RETIREMENT ANNOUNCEMENT

The close of the 2020 Navigation Season will mark 14 years that I have been privileged to serve as Executive Director of this Association. For personal reasons, not the least of which being old age (!), I have informed the Membership that as of December 31, 2020, I will retire as Executive Director.  More to come later, perhaps, but I sincerely thank all the Member Agents and staff (current and retired), the vessel owner principals, our corporate support team (Joan, Jackie and Leo) and especially, Warren who has been such a valuable resource and advisor to me.  All of you, I so respect, and will consider you to be dear friends in the future. I hope I have delivered value to the Association and principals with communication, visibility and representation of everything that USGLSA stands for in the Lakes/Seaway industry.

Final Note…After I stand down, there is the matter of a successor which our Executive Committee is tasked to identify.  I have been asked by the Committee to extend an invitation to anyone with Lakes familiarity and experience who may be interested in exploring this to contact our President,  Aaron Bensinger at 630/886-2125 or  aaron@intership.us

YEAR TO DATE – 2020

It goes without saying that just about every part of our personal and commercial activities in the Great Lakes Region and indeed, around the world, have been in some manner, affected by COVID -19. I can hardly recall a meeting or discussion which somehow doesn’t have COVID creep into the conversation. We know it all too well and the uncertainties are legion…all with a Presidential election only weeks away.

1. Commercial Activity Generally on the Lakes and Seaway System

Business activity and markets have been adversely affected by the COVID as enterprises throughout the US and Canada have suffered crushing shut downs, closures and layoffs. USGLSA Agents have serviced far fewer Ship Calls from arriving vessels than have been experienced in over 14 years.  A good deal of that loss has come from international cruise ship arrivals which until now have been viewed as a growing market. Upside, shipments have been particularly strong in Canadian grain cargoes from the West.

• Other factors impacting traffic have been higher water levels throughout the System which while favoring loading limits have created much political turmoil in the affected States and Provinces where shoreline damage has occurred. Discussion and some controversy over Seaway Seasonal opening and closure as well as flow limits at control points are expected to continue in to 2021.
• Collateral issues have arisen over managing crew changes and quarantine in different jurisdictions for international flag vessels.
• Overall an up and down Season dominated by the Pandemic. The sooner the vaccines arrive the better 2021 might look. Projections for 2021 to be addressed in another edition closer to or after year end.
• Not surprisingly, many of the customarily scheduled gatherings of Lakes/Seaway maritime operators and other stakeholder trade associations during the year which involves USGLSA participation have either been cancelled or rescheduled as telephone conference calls or as “virtual” meetings through the wonders of Zoom and other similar technology.
• USGLA has participated in these revised techniques when made available. An example was that on March 25, 2020, the USGLSA Annual Meeting of Members was held telephonically and all necessary business was concluded smoothly.
• More on the normal side, USGLSA in cooperation with Port of Toledo and NOAA, continued to support a NOAA undertaking covering operation and maintenance of a current metering device located in the Maumee River which benefits USGLSA principals and industry as a whole.

2. Issues addressed with direct application to USGLSA and Fleets served

• Pilotage Rate Litigation. Highlights (perhaps, lowlights) include a disappointing decision of a U.S. Appeals Court covering the USCG rate making in the 2016 Final Rule case.  The Appeals Court, while affirming a lower U.S. District Court decision that vessel operators were grossly overcharged in the rate, chose to take no steps to require USCG to further handle any remedy (such as any repayment of overcharges) as had been ordered by the District Court on remand to handle all such remedy matters. The Appeals Court let the status quo of no overpayment recovery stand, observing that this all took place so long ago that it would be like trying to “unscramble an egg,”  but that I the future, USCG should “ try harder” to do a better job with more balanced respect to all parties interests (including operators) as reflected generally in USCG policy. While this appears to effectively close the matter, there is still a statutory claim on file for recovery of legal fees expended to achieve the finding of error in the weighting factor impositions. Small solace there, although on the bright side, the litigation has removed the existence in a portion of the rate which otherwise to this day might otherwise still be charged and collected.
• Individual pilot compensation still withheld by pilots and USCG – Industry has asked for this data on numerous times; by pilot, but not attaching names to the disclosure. Still no cooperation. Several years ago some of such data was available, but no more.
• Great Lakes Pilotage Advisory Committee (GLPAC) did hold a regular meeting September 1 at Sault Ste. Marie, MI. It was lightly attended as COVID took its toll especially regarding any Canadian attendance due to Customs restrictions. No virtual broadcast was made available for bureaucratic reasons given. We wait for the transcript. I believe a part of the reason for USCG pushing on with the Meeting was that according to a legislative “Sunset Provision,” GLPAC was due to expire September 30, 2020 and USCG wanted to be sure it would be in a strong positon to reclaim GLPAC if a renewal did not get passed by Congress and signed by the President before the 30^th. In fact, while the House did pass a bill with GLPAC renewed, the Senate did not do so by the 30^th and to this date, the Senate Bill exists with the GLPAC renewal but not yet passed. There is still plenty of optimism that this will all come together as these GLPAC items are part of the still pending Defense Authorization Act which covers funding of all military including USCG.  We are told that the cake is baked and that this is far too important to not have this passed and signed.  We’ll see as elections are upon us.  Final GLPAC note is that there were some organizational changes made with the structure of representation on GLPAC to accommodate a Labor interest.  Actually, the overall effect will be to restore an industry seat sought by labor and is now more clearly designed, so that voting rules will not give either side any additional power; rather it responds to the Labor seat which might have had the risk of creating an imbalance in the pre-amendment form. Complicated.

BALANCE OF 2020

My unvarnished observations/predictions for what we will face by the end of 2020 are much of the same – some new ones – and would include:

• 1 Key Unknown- Who wins the Presidential and Congressional elections? Endless possibilities for the pundits to ponder.
• COVID -19 will continue to plague our society and business operations. Will be with us until vaccinations are available and injections of the masses are completed. End of 2021?
• More financial disruption with U.S. Treasury debt levels and pressures to deliver supplemental COVID relief funding.
• Lakes/ Seaway – Will water levels become controversial again affecting the date of Seaway closings again. Joint Commission Action.
• USCG expected to file an NPRM covering 2021 rates on the Lakes. Word has it that it may be some new ideas. Will the Pilotage Coalition have the will to oppose or will individual stakeholders go it independently?

All for now and best wishes,

–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.