The Pacific Merchant Shipping Association said the ever-increasing size of ships means pilot revenues will continue to grow naturally without need for a rate increase.
A proposed increase in the fees collected by the San Francisco Bar Pilots is being opposed by the Pacific Merchant Shipping Association (PMSA).
A bill related to the increase is scheduled to be considered during a hearing of the Appropriations Committee of the California State Senate today.
In an article on the California business and politics website Foxandhoundsdaily.com, titled “Millionaire Monopoly asks the legislature for a Raise…again,” PMSA President John McLaurin urged the rejection of any increase.
“In 2014, the San Francisco Bar Pilots, who guide ships in and out of the Bay, collected their highest revenues ever in their 150+ year history, nearly $40 million, from the ships that called on the Bay Area’s seaports,” wrote McLaurin. “After expenses, each pilot took home an annual income of $453,766 last year. And that income is for an estimated six months of work per pilot.”
In a letter to Ricardo Lara, chairman of the California State Senate Committee on Appropriations, Michael Jacob, the vice president and general counsel of the PMSA said, “a full, across the board 10 percent pilot rate increase is unjustifiable and unnecessary, as the existing rates continue to generate record high pilot revenues and high income.”
The Board of Pilot Commissioners for the Bays of San Francisco, Sand Pablo and Suisun, has recommended an increase of 3 percent in 2016 and 2017 and increases of 2 percent in 2018 and 2019 as well as reauthorization of a navigation technology surcharge.
The board does not set pilotage rates itself, but makes recommendations to California’s state legislature.
When the the San Francisco Bar Pilots petitioned the board for an increase in February, they said since pilotage rates were last increased in 2006, their expenses have risen 33 percent and that the cost of living index for the Bay Area has increased 20.5 percent.
The pilots said “largely as a result of variations in the number and size of ships, revenues from pilotage fees dropped from $39.3 million in 2006 to $34.1 million in 2009, before rebounding to $39.8 million. The bar pilots said the board found pilot income in San Francisco as compared to income levels for pilots in other comparable ports was “about in the middle,” but that the cost of living in the San Francisco Bay Area is one of the highest in the nation.
Jacob said that “after expenses are deducted, each pilot earned an average net income of $453,729 in 2014,” $91,619 more than the pilots projected when they asked for an increase in 2011.
“Even without a rate increase for 10 years, pilot gross revenues in 2014 reached record highs, as a result of record high vessel tonnage—larger tonnage per vessel results in higher pilotage fees per vessel moved,” added Jacob.
The introduction of even larger ships, including ultra-large containerships calling the Port of Oakland, is already increasing the pilots’ revenues, says the PMSA.
PMSA says both the industry and pilots agree that the trend toward large ships will continue and “thus pilot revenues will continue their natural growth without a rate increase.”
According to the PMSA, the average vessel pilotage fees have grown from $2,865 in 2002, to $4,004 in 2006, and $4,738 in 2014. But some ships pay much more, it said, with the MSC Aurora (a containership with capacity of 13,050 TEUs according to BlueWater Reporting) paying as much as $13,660.
Industry association opposes San Francisco Pilots rate increase
