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The Coast Guard announced in the Federal Register that, in accordance with the Great Lakes Pilotage Act of 1960, it is establishing new base pilotage rates and surcharges for the 2018 shipping season. Additionally, the Coast Guard is making several changes to the Great Lakes pilotage ratemaking methodology. These changes include:

• Creating clear delineation between the Coast Guard’s annual rate adjustments and the Coast Guard’s requirement to conduct a full ratemaking every five years
• The adoption of a revised compensation benchmark
• Reorganization of the text regarding the staffing model for calculating the number of pilots needed
• Certain editorial changes

In this final rule, the Coast Guard is modifying the ratemaking methodology and establishing new pilotage rates for 2018 based on the new methodology. The modifications to the ratemaking methodology consist of a new compensation benchmark, updates and revisions to annually adjusted figures such as inflation rates and traffic volumes, organizational changes, and clarifications. In this final rule, the Coast Guard is establishing a new compensation benchmark based on input from the American Maritime Officers Union 2015 contracts. Also, based on comments to the proposed rule that the Coast Guard received, the inflation adjustment index has changed from the Consumer Price Index (CPI) to the Employment Cost Index (ECI). Additionally, from an organizational standpoint, the Coast Guard is moving, but not changing, the requirements of the staffing model from their current location in title 46 of the Code of Federal Regulations (CFR) 404.103 (as part of “Step 3” of the ratemaking process), to the general regulations governing pilotage in 46 CFR 401.220(a). For clarification purposes, the Coast Guard is setting forth separate regulatory paragraphs detailing the differences between how an annual adjustment of the pilotage rate is undertaken and a full reassessment of the rates, which must be undertaken once every five years.

Based on the ratemaking model discussed in this final rule, the new rates, effective July 5, 2018, are shown in Table 1.

For information, view the Final Rule or contact Mr. Todd Haviland, Director, Great Lakes Pilotage, at 202-372-2037 or Todd.A.Haviland@uscg.mil.

This blog is not a replacement or substitute for the formal posting of regulations and updates or existing processes for receiving formal feedback of the same. Links provided on this blog will direct the reader to official source documents, such as the Federal Register, Homeport and the Code of Federal Regulations. These documents remain the official source for regulatory information published by the Coast Guard.