Florida Alliance of Maritime Organizations (FAMO) today once again urged Florida lawmakers to take a serious look at the state’s outdated harbor pilot system, saying much-needed reforms could be made while keeping Florida’s maritime industry safe and competitive.
Captain Bill Wright, Senior Vice President of Marine Operations for Royal Caribbean International and the Master Captain for the inaugural passage of the Oasis of the Seas, appeared before the House Committee today to endorse the findings of Florida’s Office of Program Policy Analysis and Government Accountability (OPPAGA). A recent OPPAGA report found serious flaws in the system that regulates and compensates the state’s 94 pilots.
“As a lifelong mariner, I would not be here today if the modernization and reform of today’s harbor pilot system meant jeopardizing safety. Safety remains our number one priority,” said Captain Wright. “From GPS to electronic charts, today’s shipboard technology provides captains and their team of maritime professionals a dramatically improved perspective on vessel position, hazards and relative motion of other ships. Frequenting Florida’s seaports time and again, these teams of six to seven skilled mariners are on the bridge every time a ship comes to port and have a far more detailed, working knowledge of the vessel’s system operations than any given harbor pilot.”
Currently in Florida, most ships (non-U.S. registered cargo and passenger vessels as well as U.S. flag vessels not engaged in coastal trade) are required by law to obtain the services of a state-licensed harbor pilot when entering or leaving any of Florida’s seaports. First enacted in 1975, Chapter 310 of Florida statutes tasked the Department of Business and Professional Regulation (DBPR) with regulating the state’s approximately 94 harbor pilots.
“We are advocating for a more robust pilot industry; we do not want to pay excessive fees for piloting driven by a monopoly instead of the market in which we and most of the rest of the vendors and allied industries operate,” continued Captain Wright.
Earlier this month, members of the Senate Transportation and Economic Development Appropriations Committee expressed clear concern about the current system after hearing testimony from OPPAGA, FAMO and the harbor pilots. Today’s hearing with the House Roads, Bridges and Ports Policy Committee is the next step in the review of the OPPAGA report.
TALLAHASSEE – Cargo and cruise industry representatives today urged Florida lawmakers to reform the state’s outdated harbor pilot system, saying reforms could be made while keeping Florida’s maritime industry safe and competitive.
Appearing before the Senate Committee on Transportation and Economic Development Appropriations, Florida Alliance of Maritime Organization (FAMO) representatives Jennifer Nugent-Hill of Tropical Shipping and Greg Purdy of Celebrity Cruises also endorsed a recent state study that found numerous flaws in the system that regulates and compensates the state’s 94 pilots. The study was conducted by the Office of Program Policy Analysis and Government Accountability (OPPAGA).
“Florida is home to 14 seaports, making it a world-leader in the maritime industry, international trade and a global cruising hub,” said Nugent-Hill, FAMO Vice President and Assistant Vice President of Public and Governmental Affairs for Tropical Shipping. “To remain competitive with other states we must improve the efficiency of our seaports and implement cost-competitive strategies. ”
“In 2008 alone, inflated harbor pilot costs accounted for $50 million in fees - born by cargo and cruise operators - to be paid to the less than 100 pilots,” Nugent-Hill said. “That’s just over 90 individuals receiving $50 million dollars in fees. Ultimately, these costs are passed along to consumers who purchase goods transported through Florida’s ports or vacationers who cruise through state waters. “
Nugent-Hill told the committee that safe navigation in ports and harbors “is a top priority for everyone in the maritime industry.” She added that opening the harbor pilot system to allow market competition for a larger pool of well-qualified professional pilots would not undermine safety, as some have said.
“We favor breaking up the monopoly to provide for more pilots in Florida - we need to be creating more jobs, not eliminating them. New pilots would and should be subject to the same stringent professional and experience standards,” she said.
Currently in Florida, most ships (non-U.S. registered cargo and passenger vessels and U.S. flag vessels not engaged in coastal trade) are required by law to obtain the services of a state-licensed harbor pilot when entering or leaving any of Florida’s seaports. First enacted in 1975, Chapter 310 of Florida statutes tasked the Department of Business and Professional Regulation (DBPR) with regulating the state’s approximately 94 harbor pilots.
“Today’s mariners benefit from advanced training and substantial technological improvements, allowing them to become highly trained specialists,” Purdy said, Vice President of Marine Operations for Celebrity Cruises and a former commanding officer of a Coast Guard cutter. “From GPS to electronic charts and digital radar systems, today’s shipboard technology provides captains a dramatically improved perspective on vessel position, hazards and relative motion of other ships. Compared to the ship captains, harbor pilots have a general working knowledge of the operations of these systems. This translates to the need for pilots
to often operate at the lowest common denominator, failing to take advantage of the state-of-the-art safety systems installed on our ships.”
“If either of us sitting before you this morning thought the modernization and reform of today’s harbor pilot system would jeopardize the safety of our passengers and crews, and the ports we call upon, we would not be here endorsing the findings of the OPPAGA study and asking the Legislature to bring needed change,” Purdy concluded.
The Florida Legislature’s Office of Program Policy Analysis and Government Accountability (OPPAGA) today released a report examining Florida’s harbor pilot system.
According to the official OPPAGA findings, while harbor pilots serve an important and necessary role within in the maritime industry, the report conclusively found the system by which the harbor pilots are regulated and compensated is flawed and in need of substantial reform. Florida’s 94 active harbor pilots essentially control almost all of the waterborne maritime commerce in the state including more than $66 billion in total economic impact for the cargo and $6.3 billion economic impact for the cruise industry. The maritime industry's combined jobs total is 350,000 in the state. The Florida Alliance of Maritime Organizations (FAMO), formed in 2009, is calling for immediate modernization of the harbor pilot system.
Among other findings (a full fact sheet is available at here), the report found:
- The Board of Pilot Commissioners and the Pilotage Rate Review Board are not in compliance with state law. The boards are operating short of members due to long-term vacancies, which “may affect the boards’ effectiveness.” Numerous members are serving with expired terms. OPPAGA concludes that these factors may “reduce the expertise and representation intended by state law.” The Board of Pilot Commissioners also lacks the mandated balance in pilots and non-pilots, resulting in possible bias during board decision making.
- “The absence of standardized and verified measures introduces subjectivity into the rate-setting process, which may contribute to the board approving unnecessary changes in pilotage rates.” The average annual income for a Florida harbor pilot has grown to an average of $400,000, significantly higher than similar public safety occupations. A more uniform rate setting method would ensure pilot rates are “fair, just and reasonable” as required by state law.
- Current closed licensing system has put the size of near-future workforce at serious risk. Of the state’s 94 active harbor pilots, 44 percent are 55 years or older. Nearly half of the harbor pilot workforce will be entering retirement over the next decade. Because of closed nature of the current system and inability of new pilots to get licensed, the rush of retirements will create a shortage of pilots.
- Level of accountability and Review Board’s ability to thoroughly investigate complaints are questionable. Over a three year period (FY 06 - FY 09), 49 complaints filed met the state threshold for investigation of a pilot. Only three complaints of the 49 investigations resulted in disciplinary action by the Board of Pilot Commissioners. The most severe action was 18 months probation, payments costs of $3,516, and license suspension for 14 days.
“Today’s in-depth report reinforces what the maritime industry has long-known – the system that regulates harbor pilots is broken,” said FAMO President Michele Paige. “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.” “Our industries believe that the current pilotage structure needs reform,” continued Paige. “ Laws governing the pilots were established some 35 years ago and the OPPAGA study affirms to us that it’s time to update this structure to accommodate open competition whereby a larger pool of adequately trained harbor pilots can offer their services.”
Currently in Florida, most ships (non-U.S. registered cargo and passenger vessels and U.S. flag vessels not engaged in coastal trade) are required by law to obtain the services of a state-licensed harbor pilot when entering or leaving any of Florida’s 14 seaports. First enacted in 1975, Chapter 310 of Florida statutes tasked the Department of Business and Professional Regulation (DBPR) with regulating the state’s approximately 94 harbor pilots.
Two separate state-appointed boards, under DBPR’s regulation, are authorized to oversee harbor pilot licensing and fee structure. Licenses are issued by the state Board of Pilot Commissioners, half of whom are mandated to be non-harbor pilots despite the Board’s current composition. A second panel, the Pilotage Rate Review Board, considers applications from local port pilot association for pay increases. As noted in the OPPAGA study, these boards have numerous and enduring vacancies, during which time both boards have continued conducting business, including pay increase approvals.
“Under the current mode of operation, vacancies are not being filled, members whose terms are expired are voting and ultimately, there are real questions about due process requirements being violated,” Paige said. “The net result is pay raises and other decisions may have been made without proper compliance with state regulations. In their response to the criticisms with the independent report, the DBPR refused to acknowledge the innate flaws within the system. This highlights the need for openness and additional oversight.”
Additionally, in the 35 years since Chapter 310 was established, progress in navigation, radar and communications technology has changed dramatically allowing ships to be driven and docked with greater safety and precision.
“A more reasonable harbor pilot structure that allows for open market competition is both long overdue and healthy for business and consumers. As evidenced by today’s report, legislators should hold the Board’s accountable for failing to adhere to current law, and we encourage a close examination of options for reform,” said FAMO Board Member, Jennifer Nugent-Hill of Tropical Shipping.
The official OPPAGA report recommended options to modernize the system:
- Allow pilot exemption certificates for officers of foreign flagged ships that frequent Florida ports.
- Establish a formula to determine pilot fees. (Official OPPAGA report states, “Rate setting or approval by elected officials or the Public Service Commission may have more credibility than the current system”)
- Establish a formula to determine the number of pilots needed at each port.
- Create alternative rate-setting procedure which is fair and more transparent.
Last October, a study conducted by a leading economist concluded Florida’s harbor pilot system functions similar to a monopoly that limits the number of available pilots and inflates pilots’ salaries. The study concluded that the current harbor pilot system causes Florida to lose jobs, income, economic output and revenues for the state.
The study found that Florida’s 14 ports were served in 2008 by less than 100 pilots, who were paid approximately $50 million in fees by cargo and passenger vessel operators whose ships frequent the state’s ports. Those costs, in turn, are borne by consumers who purchase goods transported through Florida’s ports or vacationers who cruise through state waters. The study found that reducing Florida’s fees to levels comparable to the incomes of air traffic controllers would result in as much as $35 million in direct annual savings.
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Established in 2009, the Florida Alliance of Maritime Organizations (FAMO) is a coalition of 33 foreign and domestic cargo and cruise companies that utilize and support Florida’s 14 seaports. FAMO Inc. is a 501(c)(6) organization authorized to conduct business in Florida.
A recent study conducted by a leading economist concludes Florida’s harbor pilot system functions like a monopoly that limits the number of available pilots and inflates pilots’ salaries to an average of $368,000 per year - significantly above similar occupations. The study concludes that the current harbor pilot system causes Florida to lose jobs, income, economic output and revenues for the state.
Among other things, the comprehensive study examined harbor pilot rates in Florida and compared those rates to the earnings of air traffic controllers, ship captains and commercial airline captains.
The study found that Florida’s 14 ports were served in 2008 by just 88 pilots, who were paid approximately $50 million in fees by cargo and passenger vessel operators whose ships frequent the state’s ports. Those costs, in turn, are borne by consumers who purchase goods transported through Florida’s ports or vacationers who cruise through state waters. The study found that reducing Florida’s fees to levels comparable to the incomes of air traffic controllers would result in as much as $35 million in direct annual savings. In addition, the WEG study concluded the change in fee structure would result in:
- 4,096 permanent jobs created in a broad range of industries throughout the state
- $52 million per year in additional earning for Florida workers
- $56 million more in state GDP
- $69 million in increased statewide economic output each year
- $13 million in new fiscal revenue for federal, state & local governments
Full study: Click here
