Read recent news articles of importance below:
Florida Alliance of Maritime Organizations (FAMO) released the following statement in response to the signing into law of HB 1271, which contained a measure to reform the way oversight is conducted of Florida’s harbor pilot system:
“Modernizing the pilot statutes is in the best interest of the state. We applaud the state legislature and the Governor for recognizing flaws within the system and taking this step toward restructuring the antiquated Florida pilotage laws.
“HB 1271 contained modifications to the Florida pilotage statute in regard to how the Board of Pilot Commissioners and the Pilotage Rate Review Board shall operate. Under the new law, the Rate Review Board must now include two maritime representatives. A balanced board will ensure that all pilot rate increases or decreases are fairly considered.”
March 18, 2010
Seemingly out of nowhere, a controversy has erupted over Florida's ports.
A group of shipping interests has called attention to the manner in which Florida oversees its harbor pilots, calling it a "state-sanctioned monopoly."
Harbor pilots are a shipping version of air traffic controllers. Once a ship nears Florida ports, control is turned over to a pilot. The shipping interests pay for this service.
They are asking that changes be considered in light of several factors:
Licensing system: The shippers say the closed system is reducing competition, leading to higher rates than necessary and a possible shortage of qualified pilots in the future.
They contend that in 2008 inflated costs resulted in $50 million being paid to fewer than 100 pilots. A typical pilot may make $368,000 a year. In addition, the pilots are paid much more than ship captains.
They call this a monopoly that deserves to be broken up with a larger pool of qualified pilots.
The shipping interests, called the Florida Alliance of Maritime Organizations, calls for opening up licenses to pilots who can meet standards, not just in a closed system controlled by the pilots association.
Oversight boards: Vacancies on the boards have left pilots with more weight than they would normally have. In addition, shipping interests contend that rates are set on insufficient information.
Technology improvements: Ability to enter Florida ports has been enhanced by technology such as GPS systems.
In response, the pilot association says that they keep Florida's harbors safe, they have intimate knowledge of Florida ports, that rates are lower than the national average and are among the lowest on the Eastern seaboard.
So who is right?
Florida's Office of Program Policy Analysis & Governmental Accountability tried to sort out the claims.
On rates, the office notes that the rates charged for the harbor pilots are in line with rates in Charleston and Savannah.
The office reports that data is not available to determine the impact of modifications to the current system. Nor is data available to determine the effectiveness of the regulatory process.
Several factors do seem clear, though.
- Safety should not be compromised.
- Vacancies need to be filled on the oversight boards.
- Opening up the ranks to qualified pilots could help deal with expected mass retirements in coming years, and perhaps put some downward pressure on rates.
The bottom line: Would changes produce increased costs or savings for the state's taxpayers?
The Office of Program Policy Analysis & Governmental Accountability should make a second study.
Florida citizens need answers on whether regulations are working and the impacts of proposed changes.
Quotables
For change: "The rates at which state-licensed harbor pilots are paid are the result of a system that stifles competition vs. the benefits of an open market." - Antonio Villamil, principal economic adviser for the Washington Economic Group in Miami, in a news release from the Florida Alliance of Maritime Organizations.
For status quo: "Without harbor pilots, the lives and safety of the people of Florida and the protection of the state's ports and coastal environment would be at risk." -Florida Harbor Pilots Association in a news release.
February 18th, 2010
By Jennifer Nugent-Hill, Tropical Shipping and Board Member, Florida Alliance of Maritime Organizations
For decades harbor pilots and ship operators have stood as partners to ensure the safe passage of large vessels into our ports. Freight and passenger vessel industries appreciate the essential services provided by the pilots. However, a modernization of the harbor pilot system in the state of Florida is greatly needed.
The Florida Alliance of Maritime Organizations, which is comprised of cargo and cruise companies, supports change that would introduce an open market system to the Sunshine State’s harbor pilot structure. We are seeking competition and job growth in what is a monopoly-like system. Our reform efforts are not about doing away with pilots or deregulation of the system; we are working to reform a broken system. Florida needs a balanced system that permits men and women who have the qualifications to be pilots to become pilots. Harbor pilots remain imperative, and we believe there should be more opportunities created for men and women who want to join this profession.
A reasonable approach would be to allow other qualified harbor pilots to offer their services to the thousands of vessels that dock in Florida ports each year. This would be a “win-win-win situation” for Florida consumers, state and local governments, and those looking for work in related industries.The Legislature's Office of Program Policy Analysis and Government Accountability found problems with two panels that license pilots and set rates they charge to guide ships into the state's 11 deep-water ports…
Lack of a statutorily mandated balance … may result in allegations of bias in board decision making," the report states. In the last three fiscal years, the board received 54 complaints involving pilots but disciplined only three.
The report also took issue with the rate board. It takes into account, for example, the length of a trip when setting rates. But there's no standard definition if that includes time driving to the dock or filling out paperwork. The board also doesn't verify the information provided by pilot associations…
"Today's in-depth report reinforces what the maritime industry has long-known — the system that regulates harbor pilots is broken," said Florida Alliance of Maritime Organizations president Michelle Paige.
Options to reform the state harbor pilot system are offered in a study released today by the Florida Legislature’s Office of Program Policy Analysis and Government Accountability (OPPAGA).
The Legislature asked OPPAGA to study the system in response to concerns about the regulation and compensation of harbor pilots. Most ships, including foreign-flag cruise vessels, are required by law to obtain the services of a state-licensed harbor pilot when entering or leaving Florida seaports. Fewer than 100 harbor pilots are currently active in the state.
Critics of the existing structure, like the Florida Alliance of Maritime Organizations (FAMO), formed in 2009, view current practices as monopolistic and complain they drive up rates.
Possible alternatives identified in the OPPAGA analysis include allowing pilot exemption certificates for officers of ships that frequent Florida ports, a practice in some European countries, typically on short-sea shipping routes.
OPPAGA also said possible rate setting or approval by elected officials or the Public Service Commission ‘may have more credibility than the current system, which relies on appointed volunteers.’
Further options for consideration include establishing a formula to determine the number of pilots needed at each port.
‘The current system is a detriment to the economic health of our ports and we are hopeful the Legislature will reform this outdated system this year,’ said FAMO president Michele Paige, who also serves as president of the Florida-Caribbean Cruise Association.
Paige said the OPPAGA study confirmed it’s time to update the 36-year-old harbor pilot structure ‘to accommodate open competition whereby a larger pool of adequately trained harbor pilots can offer their services.’December 7, 2009
The amount of cargo handled by the Jacksonville Port Authority’s customers and tenants in October was down 19 percent from October last year. The number of containers that came through the port increased by about 12 percent, but the handling of all other cargoes fell. The sharpest decline was in bulk cargo handling, which was down about 50 percent. The port handled about 719,000 tons of cargo this October, compared with about 885,000 tons of cargo in October 2008. Imports were down about 35 percent and exports were up about 3 percent in October, compared with the same period a year ago. The number of cruise passengers grew by about 20 percent to about 15,800.
October 21, 2009
“The pilot system needs to be transformed from a state protected monopoly to a competitive system that is both safe and efficient. The time has come to level the playing field, so that a larger pool of maritime professionals can help ships safely port in Florida.” – Michelle Paige, FAMO President
“A more open and market-driven system would result in new public revenues for Florida, jobs within related industries, and lower costs for consumers.” – Antonio Vilamil, WEG Principal Economic Advisor
October 21, 2009
“Florida’s harbor pilots earn excessive pay because of an archaic state regulatory system that sets rates and limits the profession’s numbers.” – WEG Study
“The rates at which state-licensed pilots are paid are the result of a system that stifles competition vs. the benefits of the free market.” – Antonio Vilamil, WEG Principal Economic Advisor
October 20, 2009
“Harbor pilots are compensated three times as much as occupations requiring similar responsibilities and experience.” – Antonio Vilamil, WEG Principal Economic Advisor
“As a result of this monopoly, harbor pilot fees have continued to grow, and ultimately it is Florida consumers who are bearing the burden. This study suggests a need for the pilot system to be transformed from a state protected monopoly to a competitive system that is both safe and efficient.” – Michelle Paige, FAMO President
“Pulling in and out of ports safely and without incident is paramount to our ability to do business, which is why we fully appreciate the extra pair of eyes and knowledge that pilots offer. As such, our industry has invested heavily in improving shipboard technologies that enhance safety and navigation. Each safety layer is necessary and helpful, but a more reasonable harbor pilot structure that allows for open market competition is both long overdue and healthy for business and consumers.” – Jennifer Nugent-Hill, Tropical Shipping
October 20, 2009
“If compensated on the same level as ship captains, the salaries of pilots would drop by more than one-third to $230,000 a year. If paid on a similar scale to air traffic controllers, they would see salaries fall even further to $110,000. The savings, estimated at $35 million a year, would translate into more jobs and up to $13 million in tax revenue for state, federal and local governments.” – Antonio Vilamil, WEG Principal Economic Advisor
October 20, 2009
“The pay rates are the result of a system that stifles competition.” –Antonio Vilamil, WEG Principal Economic Advisor
November 1, 2009
“It is a good thing for all Floridians that the state is reviewing the current, outdated harbor pilot system. Today there are fewer than 100 state-licensed harbor pilots to guide thousands of ships in and out of port each year. Their monopolistic system has intentionally kept their numbers low and has allowed them to establish a non-competitive pay structure that pays them an average $368,000 per year - far more than jobs with similar safety and stress concerns, such as air traffic controllers, airline pilots and ships' captains. By comparison, Tampa's police chief earns just more than $144,000.” – Michelle Paige, FAMO President
