Federal Register / Vol. 74, No. 78 / Friday, April 24, 2009 / Proposed Rules 18669 

4. Mail: John M. Mooney, Chief, 

Criteria Pollutant Section, Air Programs 

Branch (AR–18J), U.S. Environmental 

Protection Agency, 77 West Jackson 

Boulevard, Chicago, Illinois 60604. 

5. Hand Delivery: John M. Mooney, 

Chief, Criteria Pollutant Section, Air 

Programs Branch (AR–18J), U.S. 

Environmental Protection Agency, 77 

West Jackson Boulevard, Chicago, 

Illinois 60604. Such deliveries are only 

accepted during the Regional Office 

normal hours of operation, and special 

arrangements should be made for 

deliveries of boxed information. The 

Regional Office official hours of 

business are Monday through Friday, 

8:30 a.m. to 4:30 p.m., excluding 

Federal holidays. 

Please see the direct final rule which 

is located in the Rules section of this 

Federal Register for detailed 

instructions on how to submit 

comments. 

FOR FURTHER INFORMATION CONTACT: 

Gilberto Alvarez, Environmental 

Scientist, Criteria Pollutant Section, Air 

Programs Branch (AR–18J), U.S. 

Environmental Protection Agency, 

Region 5, 77 West Jackson Boulevard, 

Chicago, Illinois 60604, (312) 886–6143, 

alvarez.gilberto@epa.gov. 

SUPPLEMENTARY INFORMATION: In the 

Rules section of this Federal Register, 

EPA is approving the State’s SIP 

submittal as a direct final rule without 

prior proposal because the Agency 

views this as a noncontroversial 

submittal and anticipates no adverse 

comments. A detailed rationale for the 

approval is set forth in the direct final 

rule. If no adverse comments are 

received in response to this rule, no 

further activity is contemplated. If EPA 

receives adverse comments, the direct 

final rule will be withdrawn and all 

public comments received will be 

addressed in a subsequent final rule 

based on this proposed rule. EPA will 

not institute a second comment period. 

Any parties interested in commenting 

on this action should do so at this time. 

Please note that if EPA receives adverse 

comment on an amendment, paragraph, 

or section of this rule and if that 

provision may be severed from the 

remainder of the rule, EPA may adopt 

as final those provisions of the rule that 

are not the subject of an adverse 

comment. For additional information, 

see the direct final rule which is located 

in the Rules section of this Federal 

Register. 

Dated: April 9, 2009. 

Bharat Mathur, 

Acting Regional Administrator, Region 5. 

[FR Doc. E9–9363 Filed 4–23–09; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

46 CFR Part 401 

[Docket No. USCG–2008–1126] 

RIN 1625–AB29 

2009 Rates for Pilotage on the Great 

Lakes 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Coast Guard is proposing 

to update the rates for pilotage on the 

Great Lakes by 9.41%, effective August 

1, 2009, to generate sufficient revenue to 

cover allowable expenses, target pilot 

compensation, and returns on 

investment. The proposed update 

reflects an August 1, 2009, increase in 

benchmark contractual wages and 

benefits, as well as an increase in the 

ratio of pilots to ‘‘bridge hours.’’ This 

rulemaking promotes the Coast Guard 

strategic goal of maritime safety. 

DATES: Comments and related material 

must reach the Docket Management 

Facility on or before May 26, 2009. 

ADDRESSES: You may submit comments 

identified by Coast Guard docket 

number USCG–2008–1126 to the Docket 

Management Facility at the U.S. 

Department of Transportation. To avoid 

duplication, please use only one of the 

following methods: 

(1) Federal eRulemaking Portal: 

http://www.regulations.gov. 

(2) Fax: 202–493–2251. 

(3) Mail: Docket Management Facility 

(M–30), U.S. Department of 

Transportation, West Building Ground 

Floor, Room W12–140, 1200 New Jersey 

Avenue SE., Washington, DC 20590– 

0001. 

(4) Hand delivery: Same as mail 

address above, between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. The telephone number 

is 202–366–9329. 

FOR FURTHER INFORMATION CONTACT: For 

questions on this proposed rule, call Mr. 

Woo S. Kim, Program Analyst, Great 

Lakes Pilotage Branch, Commandant 

(CG–54122), U.S. Coast Guard, at 202– 

372–1538, by fax 202–372–1929, or by 

e-mail at Woo.S.Kim@uscg.mil. If you 

have questions on viewing or submitting 

material to the docket, call Renee V. 

Wright, Program Manager, Docket 

Operations, telephone 202–366–9826. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Public Participation and Request for 

Comments 

A. Submitting comments 

B. Viewing comments and documents 

C. Privacy Act 

D. Public Meeting: 

II. Abbreviations 

III. Background and Purpose 

IV. Discussion of the Proposed Rule 

V. Regulatory Analyses 

A. Regulatory Planning and Review 

B. Small Entities 

C. Assistance for Small Entities 

D. Collection of Information 

E. Federalism 

F. Unfunded Mandates Reform Act 

G. Taking of Private Property 

H. Civil Justice Reform 

I. Protection of Children 

J. Indian Tribal Governments 

K. Energy Effects 

L. Technical Standards 

M. Environment 

I. Public Participation and Request for 

Comments 

We encourage you to participate in 

this rulemaking by submitting 

comments and related materials. All 

comments received will be posted, 

without change, to http:// 

www.regulations.gov and will include 

any personal information you have 

provided. We have an agreement with 

the Department of Transportation to use 

the Docket Management Facility. 

A. Submitting Comments 

If you submit a comment, please 

include the docket number for this 

rulemaking, (USCG–2008–1126), 

indicate the specific section of this 

document to which each comment 

applies, and give the reason for each 

comment. We recommend that you 

include your name and a mailing 

address, an e-mail address, or a phone 

number in the body of your document 

so that we can contact you if we have 

questions regarding your submission. 

You may submit your comments and 

material by electronic means, mail, fax, 

or delivery to the Docket Management 

Facility at the address under ADDRESSES; 

but please submit your comments and 

material by only one means. If you 

submit them by mail or delivery, submit 

them in an unbound format, no larger 

than 81⁄2 by 11 inches, suitable for 

copying and electronic filing. If you 

submit them by mail and would like to 

know that they reached the Facility, 

please enclose a stamped, self-addressed 

postcard or envelope. We will consider 

all comments and material received 


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18670 Federal Register / Vol. 74, No. 78 / Friday, April 24, 2009 / Proposed Rules 

during the comment period. We may 

change this proposed rule in view of 

them. 

B. Viewing Comments and Documents 

To view comments, as well as 

documents mentioned in this preamble 

as being available in the docket, go to 

http://www.regulations.gov at any time. 

Enter the docket number for this 

rulemaking (USCG–2008–1126) in the 

Search box, and click ‘‘Go >>.’’ If you 

do not have access to the Internet, you 

may view the docket online by visiting 

the Docket Management Facility in 

Room W12–140 on the ground floor of 

the Department of Transportation West 

Building, 1200 New Jersey Avenue, SE., 

Washington, DC 20590, between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. 

C. Privacy Act 

Anyone can search the electronic 

form of all comments received into any 

of our dockets by the name of the 

individual submitting the comment (or 

signing the comment, if submitted on 

behalf of an association, business, labor 

union, etc.). You may review a Privacy 

Act system of records notice regarding 

our public dockets in the January 17, 

2008 issue of the Federal Register (73 

FR 3316). 

D. Public Meeting 

We do not plan to hold a public 

meeting. But you may submit a request 

for one to the Docket Management 

Facility at the address under ADDRESSES

explaining why one would be 

beneficial. If we determine that one 

would aid this rulemaking, we will hold 

one at a time and place announced by 

a later notice in the Federal Register. 

II. Abbreviations 

AMOU American Maritime Officers Union 

MISLE Coast Guard Marine Inspection, 

Safety, and Law Enforcement 

NAICS North American Industry 

Classification System 

NEPA National Environmental Policy Act 

of 1969 

NPRM Notice of Proposed Rulemaking 

NVMC National Vessel Movement Center 

OMB Office of Management and Budget 

III. Background and Purpose 

This notice of proposed rulemaking 

(NPRM) is issued pursuant to Coast 

Guard regulations in 46 CFR Parts 401– 

404. Those regulations implement the 

Great Lakes Pilotage Act of 1960, 46 

U.S.C. Chapter 93, which requires 

foreign-flag vessels and U.S.-flag vessels 

engaged in foreign trade to use federally 

registered Great Lakes pilots while 

transiting the St. Lawrence Seaway and 

the Great Lakes system, and which 

requires the Secretary of Homeland 

Security to ‘‘prescribe by regulation 

rates and charges for pilotage services, 

giving consideration to the public 

interest and the costs of providing the 

services.’’ 46 U.S.C. 9303(f). 

The U.S. waters of the Great Lakes 

and the St. Lawrence Seaway are 

divided into three pilotage Districts. 

Pilotage in each District is provided by 

an association certified by the Coast 

Guard Director of Great Lakes Pilotage 

to operate a pilotage pool. It is 

important to note that, while the Coast 

Guard sets rates, it does not control the 

actual compensation that pilots receive. 

This is determined by each of the three 

District associations, which use 

different compensation practices. 

District One, consisting of Areas 1 and 

2, includes all U.S. waters of the St. 

Lawrence River and Lake Ontario. 

District Two, consisting of Areas 4 and 

5, includes all U.S. waters of Lake Erie, 

the Detroit River, Lake St. Clair, and the 

St. Clair River. District Three, consisting 

of Areas 6, 7, and 8, includes all U.S. 

waters of the St. Mary’s River, Sault Ste. 

Marie Locks, and Lakes Michigan, 

Huron, and Superior. Area 3 is the 

Welland Canal, which is serviced 

exclusively by the Canadian Great Lakes 

Pilotage Authority and, accordingly, is 

not included in the U.S. rate structure. 

Areas 1, 5, and 7 have been designated 

by Presidential Proclamation, pursuant 

to the Great Lakes Pilotage Act of 1960, 

to be waters in which pilots must at all 

times be fully engaged in the navigation 

of vessels in their charge. Areas 2, 4, 6, 

and 8 have not been so designated 

because they are open bodies of water. 

Under the Great Lakes Pilotage Act of 

1960, pilots assigned to vessels in these 

areas are only required to ‘‘be on board 

and available to direct the navigation of 

the vessel at the discretion of and 

subject to the customary authority of the 

master.’’ 46 U.S.C. 9302(a)(1)(B). 

The Coast Guard pilotage regulations 

require annual reviews of pilotage rates 

and the setting of new rates at least once 

every five years, or sooner, if annual 

reviews show a need. 46 CFR 404.1. To 

assist in calculating pilotage rates, the 

pilotage associations are required to 

submit to the Coast Guard annual 

financial statements prepared by 

certified public accounting firms. In 

addition, every fifth year, in connection 

with the mandatory rate adjustment, the 

Coast Guard contracts with an 

independent accounting firm to conduct 

a full audit of the accounts and records 

of the pilotage associations and prepare 

and submit financial reports relevant to 

the ratemaking process. In those years 

when a full ratemaking is conducted, 

the Coast Guard generates the pilotage 

rates using Appendix A to 46 CFR Part 

404. Between the five-year full 

ratemaking intervals, the Coast Guard 

annually reviews the pilotage rates 

using Appendix C to Part 404, and 

adjusts rates when deemed appropriate. 

Terms and formulas used in Appendix 

A and Appendix C are defined in 

Appendix B to Part 404. 

The last full ratemaking using the 

Appendix A methodology was 

published on April 3, 2006 (71 FR 

16501). Rates for the 2007 season were 

adjusted based on an Appendix C 

review and the final rule was published 

on September 18, 2007 (72 FR 53158). 

Rates for the 2008 shipping season were 

also adjusted based on an Appendix C 

review published in an interim rule (73 

FR 15092) on March 21, 2008 and a final 

rule (74 FR 220) on January 5, 2009. The 

present rulemaking proposes rate 

adjustments for the 2009 shipping 

season, based once again on an 

Appendix C review. 

IV. Discussion of the Proposed Rule 

The pilotage regulations require that 

pilotage rates be reviewed annually. If 

the annual review shows that pilotage 

rates are within a reasonable range of 

the base target pilot compensation set in 

the previous ratemaking, no adjustment 

to the rates will be initiated. However, 

if the annual review indicates that an 

adjustment is necessary, then the Coast 

Guard will establish new pilotage rates 

pursuant to 46 CFR 404.10. 

A. Proposed Pilotage Rate Changes— 

Summarized 

The Appendix C to 46 CFR 404 

ratemaking methodology is intended for 

use during the years between Appendix 

A full ratemaking reviews and 

adjustments. This section summarizes 

the rate changes proposed for 2009, and 

then discusses in detail how the 

proposed changes were calculated 

under Appendix C. We are proposing an 

increase of 9.41% across all Districts 

over the last pilotage rate adjustment. 

This reflects an August 1, 2009, increase 

in benchmark contractual wages and 

benefits, as well as an increase in the 

ratio of pilots to ‘‘bridge hours,’’ which 

are the number of hours a pilot is aboard 

a vessel providing pilotage service. 

Actual rate increases vary by Area, and 

are summarized in Table 1. 


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TABLE 1—2009 AREA RATE CHANGES

If pilotage service is required in: 

Then the 

proposed 

percentage 

increases over 

the current 

rate is: 

Area 1 (Designated waters) ........................................................................................................................................................... 3.89 

Area 2 (Undesignated waters) ....................................................................................................................................................... 4.44 

Area 4 (Undesignated waters) ....................................................................................................................................................... 4.54 

Area 5 (Designated waters) ........................................................................................................................................................... 4.12 

Area 6 (Undesignated waters) ....................................................................................................................................................... 12.14 

Area 7 (Designated waters) ........................................................................................................................................................... 23.07 

Area 8 (Undesignated waters) ....................................................................................................................................................... 2.18 

Overall Rate Change (percentage change in overall prospective unit costs/base unit costs; see Table 18) .............................. 9.41 

Rates for cancellation, delay, or 

interruption in rendering services (46 

CFR 401.420), and basic rates and 

charges for carrying a U.S. pilot beyond 

the normal change point, or for boarding 

at other than the normal boarding point 

(46 CFR 401.428), have been increased 

by 9.41% in all Areas. 

B. Calculating the Rate Adjustment 

The Appendix C ratemaking 

calculation involves eight steps: 

Step 1: Calculate the total economic 

costs for the base period (i.e., pilot 

compensation expense plus all other 

recognized expenses plus the return 

element) and divide by the total bridge 

hours used in setting the base period 

rates; 

Step 2: Calculate the ‘‘expense 

multiplier,’’ the ratio of other expenses 

and the return element to pilot 

compensation for the base period; 

Step 3: Calculate an annual 

‘‘projection of target pilot 

compensation’’ using the same 

procedures found in Step 2 of Appendix 

A; 

Step 4: Increase the projected pilot 

compensation in Step 3 by the expense 

multiplier in Step 2; 

Step 5: Adjust the result in Step 4, as 

required, for inflation or deflation; 

Step 6: Divide the result in Step 5 by 

projected bridge hours to determine 

total unit costs; 

Step 7: Divide prospective unit costs 

in Step 6 by the base period unit costs 

in Step 1; and 

Step 8: Adjust the base period rates by 

the percentage changes in unit cost in 

Step 7. 

The base data used to calculate each 

of the eight steps comes from the 2008 

Appendix C review. The Coast Guard 

also used the most recent union 

contracts between the American 

Maritime Officers Union (AMOU) and 

vessel owners and operators on the 

Great Lakes to determine target pilot 

compensation. Bridge hour projections 

for the 2009 season have been obtained 

from historical data, pilots, and 

industry. All documents and records 

used in this rate calculation have been 

placed in the public docket for this 

rulemaking and are available for review 

at the addresses listed under ADDRESSES. 

Some values may not total exactly due 

to format rounding for presentation in 

charts and explanations in this section. 

The rounding does not affect the 

integrity or truncate the real value of all 

calculations in the ratemaking 

methodology described below. 

Step 1: Calculate the total economic 

cost for the base period. In this step, for 

each Area, we divide total economic 

costs for the base period by the total 

bridge hours used in setting the base 

period rates, to yield the base cost per 

bridge hour. Total base period economic 

costs include pilot compensation 

expenses, plus all other recognized 

expenses, plus the return on investment 

element set during the last Appendix A 

review (2006). The calculations 

providing the total base period 

economic costs for each Area are 

summarized in Table 16 of the 2008 

final rule (74 FR 220; Jan. 5, 2009). Total 

bridge hours use in setting the base 

period rates were calculated in Table 13 

of the 2008 final rule. Tables 2 through 

4 summarize the Step 1 calculations: 

TABLE 2—TOTAL ECONOMIC COST FOR BASE PERIOD, DISTRICT ONE

Area 1 St. 

Lawrence 

River 

Area 2 Lake 

Ontario 

Total District 

One 

Total base period economic costs ............................................................................................... $2,078,551 $1,474,806 $3,553,357 

Base bridge hours ....................................................................................................................... ÷ 5,661 ÷ 5,650 ÷ 11,311 

Base cost per bridge hour ........................................................................................................... = $367.17 = $261.03 = $314.15 

TABLE 3—TOTAL ECONOMIC COST FOR BASE PERIOD, DISTRICT TWO

Area 4 Lake 

Erie 

Area 5 Southeast Shoal to 

Port Huron, MI 

Total District 

Two 

Total base period economic costs ............................................................................................... $1,251,203 $2,334,169 $3,585,372 

Base bridge hours ....................................................................................................................... ÷ 7,320 ÷ 5,097 ÷ 12,417 

Base cost per bridge hour ........................................................................................................... = $170.93 = $457.95 = $288.75 


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TABLE 4—TOTAL ECONOMIC COST FOR BASE PERIOD, DISTRICT THREE

Area 6 Lakes 

Huron and 

Michigan 

Area 7 St. 

Mary’s River 

Area 8 Lake 

Superior 

Total District 

Three 

Total base period economic costs ................................................................... $2,884,724 $1,427,515 $1,944,032 $6,256,273 

Base bridge hours ........................................................................................... ÷ 18,000 ÷ 3,863 ÷ 11,390 ÷ 33,253 

Base cost per bridge hour ............................................................................... = $160.26 = $369.54 = $170.68 = $188.14 

Step 2. Calculate the expense 

multiplier. In this step, for each Area, 

we calculate an expense multiplier by 

dividing the base operating expense, 

shown in Table 16, Column B of the 

2008 final rule, by base pilot 

compensation, shown in Table 16, 

Column C of the 2008 final rule. Tables 

5 through 7 show the Step 2 

calculations. 

TABLE 5—EXPENSE MULTIPLIER, DISTRICT ONE

Area 1 St. 

Lawrence 

River 

Area 2b Lake 

Ontario 

Total District 

One 

Base operating expense .............................................................................................................. $516,138 $529,046 $1,045,185 

Base target pilot compensation ................................................................................................... ÷ $1,562,413 ÷ $945,760 ÷ $2,508,173 

Expense multiplier ....................................................................................................................... = .33035 = .55939 = .41671 

TABLE 6—EXPENSE MULTIPLIER, DISTRICT TWO

Area 4 Lake 

Erie 

Area 5 Southeast Shoal to 

Port Huron, MI 

Total District 

Two 

Base operating expense .............................................................................................................. $494,595 $771,756 $1,266,351 

Base target pilot compensation ................................................................................................... ÷ $756,608 ÷ $1,562,413 ÷ $2,319,021 

Expense multiplier ....................................................................................................................... = .65370 = .49395 = .54607 

TABLE 7—EXPENSE MULTIPLIER, DISTRICT THREE

Area 6 Lakes 

Huron and 

Michigan 

Area 7 St. 

Mary’s River 

Area 8 Lake 

Superior 

Total District 

Three 

Base operating expense .................................................................................. $993,207 $384,201 $619,968 $1,997,375 

Base target pilot compensation ....................................................................... ÷ $1,891,520 ÷ $1,041,609 ÷ $1,324,064 ÷ $4,257,193 

Expense multiplier ........................................................................................... = .52508 = .36885 = .46823 = .46918 

Step 3. Calculate annual projection of 

target pilot compensation. In this step, 

we determine the new target rate of 

compensation and the new number of 

pilots needed in each pilotage Area, to 

determine the new target pilot 

compensation for each Area. 

(a) Determine new target rate of 

compensation. Target pilot 

compensation is based on the average 

annual compensation of first mates and 

masters on U.S. Great Lakes vessels. 

Compensation includes wages and 

benefits. For pilots in undesignated 

waters, we approximate the first mates’ 

compensation and, in designated 

waters, we approximate the master’s 

compensation (first mates’ wages 

multiplied by 150% plus benefits). To 

determine first mates’ and masters’ 

average annual compensation, we use 

data from the most recent AMOU 

contracts with the U.S. companies 

engaged in Great Lakes shipping. Where 

different AMOU agreements apply to 

different companies, we apportion the 

compensation provided by each 

agreement according to the percentage 

of tonnage represented by companies 

under each agreement. 

On August 16, 2007, the Coast Guard 

received the two most recent AMOU 

contracts. ‘‘Agreement A’’ covers vessels 

operated by American Steamship Co. 

and Inland Lakes Management, Inc. 

Inland Lakes Management operations 

continue to be covered by Agreement A, 

despite that company’s 2008 acquisition 

by Mittal Steel USA, Inc. ‘‘Agreement 

B’’ covers vessels operated by Key 

Lakes, Inc., and all other vessels 

operated by Mittal Steel. 

Both Agreement A and Agreement B 

provide for a 3% wage increase effective 

August 1, 2009. Under Agreement A, the 

daily wage rate will be increased from 

$255.28 to $262.73. Under Agreement B, 

the daily wage rate will be increased 

from $314.42 to $323.86. 

To calculate monthly wages, we apply 

Agreement A and Agreement B monthly 

multipliers of 54.5 and 49.5, 

respectively, to the daily rate. 

Agreement A’s 54.5 multiplier 

represents 30.5 average working days, 

15.5 vacation days, 4 days for four 

weekends, 3 bonus days, and 1.5 

holidays. Agreement B’s 49.5 multiplier 

represents 30.5 average working days, 

16 vacation days, and 3 bonus days. 

To calculate average annual 

compensation, we multiply monthly 

figures by 9 months, the length of the 

Great Lakes shipping season. 

Table 8 shows new wage calculations 

based on Agreements A and B effective 

August 1, 2009. 


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TABLE 8—WAGES

Monthly component 

Pilots on 

undesignated 

waters 

Pilots on 

designated 

waters (undesignated × 

150%) 

AGREEMENT A: $262.73 daily rate × 54.5 days ................................................................................................... $14,319 $21,478 

AGREEMENT A: 

Monthly total × 9 months = total wages ........................................................................................................... 128,870 193,305 

AGREEMENT B: 

323.86 daily rate × 49.5 days ........................................................................................................................... 16,031 24,046 

AGREEMENT B: 

Monthly total × 9 months = total wages ........................................................................................................... 144,278 216,417 

Both Agreements A and B include a 

health benefits contribution rate of 

$80.69 effective August 1, 2009. 

Agreement A includes a pension plan 

contribution rate of $33.35 per man-day. 

Agreement B includes a pension plan 

contribution rate of $43.55 per man-day. 

Both Agreements A and B provide a 

401K employer matching rate, 5% of the 

wage rate. Neither Agreement A nor 

Agreement B includes a clerical 

contribution that appeared in earlier 

contracts. Per the AMOU, the multiplier 

used to calculate monthly benefits is 

45.5 days. 

Table 9 shows new benefit 

calculations based on Agreements A and 

B, effective August 1, 2009. 

TABLE 9—BENEFITS

Monthly component 

Pilots on 

undesignated 

waters 

Pilots on 

designated 

waters 

AGREEMENT A: 

Employer contribution, 401(K) plan (Monthly Wages × 5%) ............................................................................ $715.95 $1,073.92 

Pension = 33.35 × 45.5 days ........................................................................................................................... 1,517.43 1,517.43 

Health = 80.69 × 45.5 days .............................................................................................................................. 3,671.40 3,671.40 

AGREEMENT B: 

Employer contribution, 401(K) plan (Monthly Wages × 5%) ............................................................................ 801.54 1,202.32 

Pension = 43.55 × 45.5 days ........................................................................................................................... 1,981.53 1,981.53 

Health = 80.69 × 45.5 days .............................................................................................................................. 3,671.40 3,671.40 

AGREEMENT A: 

Monthly total benefits ....................................................................................................................................... = 5,904.77 = 6,262.74 

AGREEMENT A: 

Monthly total benefits × 9 months .................................................................................................................... = 53,143 = 56,365 

AGREEMENT B: 

Monthly total benefits ....................................................................................................................................... = 6,454.46 = 6,855.24 

AGREEMENT B: 

Monthly total benefits × 9 months .................................................................................................................... = 58,090 = 61,697 

Table 10 totals the wages and benefits 

under each agreement. 

TABLE 10—TOTAL WAGES AND BENEFITS

Pilots on 

undesignated 

waters 

Pilots on 

designated 

waters 

AGREEMENT A: Wages ..................................................................................................................................... $128,870 $193,305 

AGREEMENT A: Benefits ................................................................................................................................... + 53,143 + 56,365 

AGREEMENT A: Total ................................................................................................................................. = 182,013 = 249,670 

AGREEMENT B: Wages ..................................................................................................................................... 144,278 216,417 

AGREEMENT B: Benefits ................................................................................................................................... + 58,090 + 61,697 

AGREEMENT B: Total ................................................................................................................................. = 202,368 = 278,114 

Table 11 shows that approximately 

one third of U.S. Great Lakes shipping 

deadweight tonnage operates under 

Agreement A, with the remaining two 

thirds operating under Agreement B. 


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TABLE 11—DEADWEIGHT TONNAGE, AGREEMENT A AND AGREEMENT B 

Company Agreement A Agreement B 

American Steamship Company ............................................................................................................................... ........................ 664,215 

Mittal Steel USA, Inc. (including Inland Lakes Management, Inc., vessels acquired by Mittal and continuing to 

operate under Agreement A) ............................................................................................................................... 12,656 96,544 

Key Lakes, Inc ......................................................................................................................................................... 361,385 

Total tonnage, each agreement ....................................................................................................................... 374,041 760,759 

Percent tonnage, each agreement ............................................................................................................ 374,041 ÷ 

1,134,800 = 

32.9600% 

760,759 ÷ 

1,134,800 = 

67.0400% 

Table 12 applies the percentage of 

tonnage represented by each agreement 

to the wages and benefits provided by 

each agreement, to determine the 

projected target rate of compensation on 

a tonnage-weighted basis. 

TABLE 12—PROJECTED TARGET RATE OF COMPENSATION, WEIGHTED BY AGREEMENT

Undesignated waters Designated waters 

AGREEMENT A: 

Total wages and benefits × percent tonnage .......................................................................... $182,013 × 32.96% 

= $59,993 

$249,670 × 32.96% 

= $82,294 

AGREEMENT B: 

Total wages and benefits × percent tonnage .......................................................................... $202,368 × 67.04% 

= $135,666 

$278,114 × 67.04% 

= $186,445 

Total weighted average wages and benefits = projected target rate of compensation ... $59,993 + $135,666 

= $195,659 

$82,294 + $186,445 

= $268,738 

(b) Determine number of pilots 

needed. Subject to adjustment by the 

Coast Guard Director of Great Lakes 

Pilotage to ensure uninterrupted service, 

we determine the number of pilots 

needed in each Area by dividing each 

Area’s projected bridge hours, either by 

1,000 (designated waters) or by 1,800 

(undesignated waters). 

Bridge hours are the number of hours 

a pilot is aboard a vessel providing 

pilotage service. Projected bridge hours 

are based on the vessel traffic that pilots 

are expected to serve. Based on 

historical data and information 

provided by pilots and industry, the 

Coast Guard projects that vessel traffic 

in Districts 1 and 2, for the 2009 

navigation season, will remain at the 

same level as in 2007. In District 3, the 

actual bridge hours for Areas 6 and 7 

were down by more than 17% and 6%, 

respectively, when compared to the 

projected bridge hours in 2007. 

Consequently, District 3 has 

recommended, and we have agreed, to 

reduce the projected 2009 Area 6 and 

Area 7 bridge hours by 10% from 2007. 

Consistent with this decrease in 

projected bridge hours, we are also 

reducing the number of pilots in Area 6 

by two. We are projecting the same 

number of bridge hours for 2009 in Area 

8 as we did in 2007. 

Table 13 shows the projected bridge 

hours needed for each Area, and the 

total number of pilots needed after 

dividing those figures either by 1,000 or 

1,800 and rounding up to the next 

whole pilot: 

TABLE 13—NUMBER OF PILOTS NEEDED

Pilotage area Projected 2009 

bridge hours 

Divided by 1,000 

(designated 

waters) or 1,800 

(undesignated 

waters) 

Pilots needed 

(total = 40) 

Area 1 .............................................................................................................................. 5,661 1,000 6 

Area 2 .............................................................................................................................. 5,650 1,800 * 5 

Area 4 .............................................................................................................................. 7,320 1,800 4 

Area 5 .............................................................................................................................. 5,097 1,000 6 

Area 6 .............................................................................................................................. 13,406 1,800 8 

Area 7 .............................................................................................................................. 3,259 1,000 4 

Area 8 .............................................................................................................................. 11,630 1,800 7 

* As indicated in the 2008 Final Rule, the Director has exercised his discretion to maintain 5 pilots in Area 2, to ensure facilitation of traffic. 

(c) Determine the projected target 

pilot compensation for each Area. The 

projection of new total target pilot 

compensation is determined separately 

for each pilotage Area by multiplying 

the number of pilots needed in each 

Area (see Table 13) by the projected 

target rate of compensation (see Table 

12) for pilots working in that Area. 

Table 14 shows this calculation. 


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TABLE 14—PROJECTED TARGET PILOT COMPENSATION

Pilotage area Pilots needed 

(total = 40) 

Multiplied by target rate of compensation 

Projected target 

pilot compensation 

Area 1 ........................................................................................................................ 6 × $268,738 $1,612,431 

Area 2 ........................................................................................................................ 5 × 195,659 978,294 

Total, District One ............................................................................................... 11 .............................. 2,590,725 

Area 4 ........................................................................................................................ 4 × 195,659 782,635 

Area 5 ........................................................................................................................ 6 × 268,738 1,612,431 

Total, District Two ............................................................................................... 10 .............................. 2,395,066 

Area 6 ........................................................................................................................ 8 × 195,659 1,565,271 

Area 7 ........................................................................................................................ 4 × 268,738 1,074,954 

Area 8 ........................................................................................................................ 7 × 195,659 1,369,612 

Total, District Three ............................................................................................ 19 .............................. 4,009,836 

Step 4: Increase the projected pilot 

compensation in Step 3 by the expense 

multiplier in Step 2. This step yields a 

projected increase in operating costs 

necessary to support the increased 

projected pilot compensation. Table 15 

shows this calculation. 

TABLE 15—PROJECTED PILOT COMPENSATION, MULTIPLIED BY THE EXPENSE MULTIPLIER EQUALS PROJECTED

OPERATING EXPENSE

Pilotage area Projected target 

pilot compensation 

Multiplied by 

expense multiplier 

Projected 

operating expense 

Area 1 ........................................................................................................................ $1,612,431 × .33035 $532,661 

Area 2 ........................................................................................................................ 978,294 × .55939 547,246 

Total, District One ............................................................................................... 2,590,725 × .41671 1,079,585 

Area 4 ........................................................................................................................ 782,635 × .65370 511,609 

Area 5 ........................................................................................................................ 1,612,431 × .49395 796,463 

Total, District Two ............................................................................................... 2,395,066 × .54607 1,307,877 

Area 6 ........................................................................................................................ 1,565,271 × .52508 821,898 

Area 7 ........................................................................................................................ 1,074,954 × .36885 396,501 

Area 8 ........................................................................................................................ 1,369,612 × .46823 641,295 

Total, District Three ............................................................................................ 4,009,836 × .46918 1,881,322 

Step 5: Adjust the result in Step 4, as 

required, for inflation or deflation, and 

calculate projected total economic cost. 

Based on data from the U.S. Department 

of Labor’s Bureau of Labor Statistics, we 

have multiplied the results in Step 4 by 

a 1.027 inflation factor, reflecting an 

average inflation rate of 2.7% in 

‘‘Midwest Economy—Consumer Prices’’ 

between 2006 and 2007, the latest years 

for which data are available. Table 16 

shows this calculation and the projected 

total economic cost. 

TABLE 16—PROJECTED OPERATING EXPENSE, ADJUSTED FOR INFLATION, AND ADDED TO PROJECTED TARGET PILOT

COMPENSATION EQUALS PROJECTED TOTAL ECONOMIC COST

Pilotage area A. Projected 

operating expense 

B. Increase, 

multiplied by 

inflation factor 

(= A × 1.027) 

C. Projected 

target pilot 

compensation 

D. Projected total 

economic cost 

(= B + C) 

Area 1 ...................................................................................... $532,661 $547,043 $1,612,431 $2,159,474 

Area 2 ...................................................................................... 547,246 562,021 978,294 1,540,315 

Total, District One ............................................................. 1,079,585 1,108,734 2,590,725 3,699,790 

Area 4 ...................................................................................... 511,609 525,422 782,635 1,308,058 

Area 5 ...................................................................................... 796,463 817,967 1,612,431 2,430,398

Total, District Two ............................................................. 1,307,877 1,343,190 2,395,066 3,738,456 


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TABLE 16—PROJECTED OPERATING EXPENSE, ADJUSTED FOR INFLATION, AND ADDED TO PROJECTED TARGET PILOT

COMPENSATION EQUALS PROJECTED TOTAL ECONOMIC COST—Continued 

Pilotage area A. Projected 

operating expense 

B. Increase, 

multiplied by 

inflation factor 

(= A × 1.027) 

C. Projected 

target pilot 

compensation 

D. Projected total 

economic cost 

(= B + C) 

Area 6 ...................................................................................... 821,898 844,090 1,565,271 2,409,360

Area 7 ...................................................................................... 396,501 407,206 1,074,954 1,482,160

Area 8 ...................................................................................... 641,295 658,610 1,369,612 2,028,221

Total, District Three .......................................................... 1,881,322 1,932,117 4,009,836 5,941,954 

Step 6: Divide the result in Step 5 by 

projected bridge hours to determine 

total unit costs. Table 17 shows this 

calculation. 

TABLE 17—PROSPECTIVE (TOTAL) UNIT COSTS

Pilotage area A. Projected total 

economic cost 

B. Projected 

2009 bridge 

hours 

Prospective 

(total) unit costs 

(A divided by B) 

Area 1 .............................................................................................................................. $2,159,474 5,661 $381.47 

Area 2 .............................................................................................................................. 1,540,315 5,650 272.62 

Total, District One ..................................................................................................... 3,699,790 11,311 327.10 

Area 4 .............................................................................................................................. 1,308,058 7,320 178.70 

Area 5 .............................................................................................................................. 2,430,398 5,097 476.83 

Total, District Two ..................................................................................................... 3,738,456 12,417 301.08 

Area 6 .............................................................................................................................. 2,409,360 13,406 179.72 

Area 7 .............................................................................................................................. 1,482,160 3,259 454.79 

Area 8 .............................................................................................................................. 2,028,221 11,630 174.40 

Total, District Three .................................................................................................. 5,941,954 28,295 210.00 

Overall ............................................................................................................... 13,380,200 52,023 257.19 

Step 7: Divide prospective unit costs 

(total unit costs) in Step 6 by the base 

period unit costs in Step 1. Table 18 

shows this calculation, which expresses 

the percentage change between the total 

unit costs and the base unit costs. The 

results, for each Area, are identical with 

the percentage increases listed in Table 

1. 

TABLE 18—PERCENTAGE CHANGE, PROSPECTIVE VS. BASE PERIOD UNIT COSTS

Pilotage area A. Prospective 

unit costs 

B. Base period 

unit costs 

C. Percentage 

change from 

base (A divided 

by B; result 

expressed as 

percentage) 

Area 1 .............................................................................................................................. $381.47 $367.17 3.89 

Area 2 .............................................................................................................................. 272.62 261.03 4.44 

Total, District One ..................................................................................................... 327.07 314.15 4.11 

Area 4 .............................................................................................................................. 178.70 170.93 4.54 

Area 5 .............................................................................................................................. 476.83 457.95 4.12 

Total, District Two ..................................................................................................... 301.06 288.75 4.26 

Area 6 .............................................................................................................................. 179.72 160.26 12.14 

Area 7 .............................................................................................................................. 454.79 369.54 23.07 

Area 8 .............................................................................................................................. 174.40 170.68 2.18 

Total, District Three .................................................................................................. 210.00 188.14 11.62 

Overall ............................................................................................................... 257.19 235.08 9.41 


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Step 8: Adjust the base period rates by 

the percentage change in unit costs in 

Step 7. Table 19 shows this calculation. 

TABLE 19—BASE PERIOD RATES ADJUSTED BY PERCENTAGE CHANGE IN UNIT COSTS * 

Pilotage A. Base period 

rate 

B. Percentage 

change in unit 

costs 

C. Increase in 

base rate 

(A × B%) 

D. Adjusted 

rate (A + C, 

rounded to 

nearest dollar) 

Area (Multiplying 

factor) 

Area 1 .......................................................................................................... ........................ 3.89 (1.0389) 

—Basic pilotage .................................................................................... $14.94/km, 

$26.44/mi 

............................ $0.58/km, 

$1.04/mi 

$15.52/km, 

$27.48/mi 

—Each lock transited ........................................................................... 331.03 ............................ 12.89 343.92 

—Harbor movage ................................................................................. 1,083.89 ............................ 42.20 1,126.09 

—Minimum basic rate, St. Lawrence River .......................................... 722.98 ............................ 28.15 751.12 

—Maximum rate, through trip ............................................................... 3,173.51 ............................ 123.55 3,297.07 

Area 2 .......................................................................................................... ........................ 4.44 (1.0444) 

—6-hr. period ........................................................................................ 780.23 ............................ 34.66 814.89 

—Docking or undocking ....................................................................... 744.24 ............................ 33.06 777.30 

Area 4 .......................................................................................................... ........................ 4.54 (1.0454) 

—6-hr. period ........................................................................................ 688.35 ............................ 31.28 719.63 

—Docking or undocking ....................................................................... 530.49 ............................ 24.11 554.60 

—Any point on Niagara River below Black Rock Lock ........................ 1,354.15 ............................ 61.53 1,415.68 

Area 5 between any point on or in .............................................................. ........................ 4.12 (1.0412) 

—Toledo or any point on Lake Erie W. of Southeast Shoal ................ 1,243.75 ............................ 51.28 1,295.03 

—Toledo or any point on Lake Erie W. of Southeast Shoal & Southeast Shoal ......................................................................................... 2,104.72 ............................ 86.77 2,191.49 

—Toledo or any point on Lake Erie W. of Southeast Shoal & Detroit 

River .................................................................................................. 2,732.79 ............................ 112.66 2,845.45 

—Toledo or any point on Lake Erie W. of Southeast Shoal & Detroit 

Pilot Boat ........................................................................................... 2,104.72 ............................ 86.77 2,191.49 

—Port Huron Change Point & Southeast Shoal (when pilots are not 

changed at the Detroit Pilot Boat) .................................................... 3,665.60 ............................ 151.12 3,816.72 

—Port Huron Change Point & Toledo or any point on Lake Erie W. 

of Southeast Shoal (when pilots are not changed at the Detroit 

Pilot Boat) ......................................................................................... 4,246.60 ............................ 175.07 4,421.67 

—Port Huron Change Point & Detroit River ......................................... 2,753.85 ............................ 113.53 2,867.38 

—Port Huron Change Point & Detroit Pilot Boat ................................. 2,141.88 ............................ 88.30 2,230.18 

—Port Huron Change Point & St. Clair River ...................................... 1,522.48 ............................ 62.77 1,585.25 

—St. Clair River .................................................................................... 1,243.75 ............................ 51.28 1,295.03 

—St. Clair River & Southeast Shoal (when pilots are not changed at 

the Detroit Pilot Boat) ....................................................................... 3,665.60 ............................ 151.12 3,816.72 

—St. Clair River & Detroit River/Detroit Pilot Boat .............................. 2,753.85 ............................ 113.53 2,867.38 

—Detroit, Windsor, or Detroit River ...................................................... 1,243.75 ............................ 51.28 1,295.03 

—Detroit, Windsor, or Detroit River & Southeast Shoal ...................... 2,104.72 ............................ 86.77 2,191.49 

—Detroit, Windsor, or Detroit River & Toledo or any point on Lake 

Erie W. of Southeast Shoal .............................................................. 2,732.79 ............................ 112.66 2,845.45 

—Detroit, Windsor, or Detroit River & St. Clair River .......................... 2,753.85 ............................ 113.53 2,867.38 

—Detroit Pilot Boat & Southeast Shoal ................................................ 1,522.48 ............................ 62.77 1,585.25 

—Detroit Pilot Boat & Toledo or any point on Lake Erie W. of Southeast Shoal ......................................................................................... 2,104.72 ............................ 86.77 2,191.49 

—Detroit Pilot Boat & St. Clair River .................................................... 2,753.85 ............................ 113.53 2,867.38 

Area 6 .......................................................................................................... ........................ 12.14 (1.1214) 

—6-hr. period ........................................................................................ 553.62 ............................ 67.22 620.84 

—Docking or undocking ....................................................................... 525.88 ............................ 63.86 589.74 

Area 7 between any point on or in .............................................................. ........................ 23.07 (1.2307) 

—Gros Cap & De Tour ......................................................................... 1,975.83 ............................ 455.84 2,431.67 

—Algoma Steel Corp. Wharf, Sault Ste. Marie, Ont. & De Tour ......... 1,975.83 ............................ 455.84 2,431.67 

—Algoma Steel Corp. Wharf, Sault Ste. Marie, Ont. & Gros Cap ...... 744.10 ............................ 171.67 915.77 

—Any point in Sault Ste. Marie, Ont., except the Algoma Steel Corp. 

Wharf & De Tour ............................................................................... 1,656.11 ............................ 382.08 2,038.19 

—Any point in Sault Ste. Marie, Ont., except the Algoma Steel Corp. 

Wharf & Gros Cap ............................................................................ 744.10 ............................ 171.67 915.77 

—Sault Ste. Marie, MI & De Tour ........................................................ 1,656.11 ............................ 382.08 2,038.19 

—Sault Ste. Marie, MI & Gros Cap ...................................................... 744.10 ............................ 171.67 915.77 

—Harbor movage ................................................................................. 744.10 ............................ 171.67 915.77 

Area 8 .......................................................................................................... ........................ 2.18 (1.0218) 

—6-hr. period ........................................................................................ 535.92 ............................ 11.67 547.59 


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TABLE 19—BASE PERIOD RATES ADJUSTED BY PERCENTAGE CHANGE IN UNIT COSTS *—Continued 

Pilotage A. Base period 

rate 

B. Percentage 

change in unit 

costs 

C. Increase in 

base rate 

(A × B%) 

D. Adjusted 

rate (A + C, 

rounded to 

nearest dollar) 

Area (Multiplying 

factor) 

—Docking or undocking ....................................................................... 509.36 ............................ 11.09 520.45 

* Rates for ‘‘Cancellation, delay or interruption in rendering services (§ 401.420)’’ and ‘‘Basic Rates and charges for carrying a U.S. pilot beyond the normal change point, or for boarding at other than the normal boarding point (§ 401.428)’’ are not reflected in this table but have been 

increased by 9.41% across all areas. 

V. Regulatory Analyses 

We developed this proposed rule after 

considering numerous statutes and 

executive orders related to rulemaking. 

Below, we summarize our analyses 

based on 13 of these statutes or 

executive orders. 

A. Regulatory Planning and Review 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ 58 FR 51735, 

October 4, 1993, requires a 

determination whether a regulatory 

action is ‘‘significant’’ and therefore 

subject to review by the Office of 

Management and Budget (OMB) and 

subject to the requirements of the 

Executive Order. This rulemaking is not 

significant under Executive Order 12866 

and will not be reviewed by OMB. 

The Coast Guard is required to 

conduct an annual review of pilotage 

rates on the Great Lakes and, if 

necessary, adjust these rates to align 

compensation levels between Great 

Lakes pilots and industry. See the 

‘‘Background and Purpose’’ section for a 

detailed explanation of the legal 

authority and requirements for the Coast 

Guard to conduct an annual review and 

provide possible adjustments of pilotage 

rates on the Great Lakes. Based on our 

annual review for this rulemaking, we 

are proposing an adjustment to the 

pilotage rates for the 2009 shipping 

season to generate sufficient revenue to 

cover allowable expenses, target pilot 

compensation, and returns on 

investment. 

This proposed rule would implement 

a 9.41 percent overall rate adjustment 

for the Great Lakes system over the 

current rate as adjusted in the 2008 final 

rule. These adjustments to Great Lakes 

pilotage rates meet the requirements set 

forth in 46 CFR part 404 for similar 

compensation levels between Great 

Lakes pilots and industry. They also 

include adjustments for inflation and 

changes in association expenses to 

maintain these compensation levels. 

In general, we expect an increase in 

pilotage rates for a certain area to result 

in additional costs for shippers using 

pilotage services in that area, while a 

decrease would result in a cost 

reduction or savings for shippers in that 

area. This proposed rule would result in 

a distributional effect that transfers 

payments (income) from affected 

shippers (vessel owners and operators) 

to the Great Lakes’ pilot associations 

through Coast Guard regulated pilotage 

rates. 

The shippers affected by these rate 

adjustments are those owners and 

operators of domestic vessels operating 

on register (employed in the foreign 

trade) and owners and operators of 

foreign vessels on a route within the 

Great Lakes system. These owners and 

operators must have pilots or pilotage 

service as required by 46 U.S.C. 9302. 

There is no minimum tonnage limit or 

exemption for these vessels. However, 

the Coast Guard issued a policy position 

several years ago stating that the statute 

applies only to commercial vessels and 

not to recreational vessels. 

Owners and operators of other vessels 

that are not affected by this proposed 

rule, such as recreational boats and 

vessels only operating within the Great 

Lakes system, may elect to purchase 

pilotage services. However, this election 

is voluntary and does not affect the 

Coast Guard’s calculation of the rate 

increase and is not a part of our 

estimated national cost to shippers. 

We reviewed a sample of pilot source 

forms, which are the forms used to 

record pilotage transactions on vessels, 

and discovered very few cases of U.S. 

Great Lakes vessels (i.e., domestic 

vessels without registry operating only 

in the Great Lakes) that purchased 

pilotage services. We found a case 

where the vessel operator purchased 

pilotage service in District One to 

presumably leave the Great Lakes 

system. We assume some vessel owners 

and operators may also choose to 

purchase pilotage services if their 

vessels are carrying hazardous 

substances or were navigating the Great 

Lakes system with inexperienced 

personnel. Based on information from 

the Coast Guard Office of Great Lakes 

Pilotage, we have determined that these 

vessels voluntarily chose to use pilots 

and, therefore, are exempt from pilotage 

requirements. 

We used 2006–2007 vessel arrival 

data from the Coast Guard’s Marine 

Inspection, Safety, and Law 

Enforcement (MISLE) system to estimate 

the average annual number of vessels 

affected by the rate adjustment to be 208 

vessels that journey into the Great Lakes 

system. These vessels entered the Great 

Lakes by transiting through or in part of 

at least one of the three pilotage 

Districts before leaving the Great Lakes 

system. These vessels often make more 

than one distinct stop, docking, loading, 

and unloading at facilities in Great 

Lakes ports. Of the total trips for the 208 

vessels, there were approximately 923 

annual U.S. port arrivals before the 

vessels left the Great Lakes system, 

based on 2006-2007 vessel data from 

MISLE. 

The impact of the rate adjustment to 

shippers is estimated from the district 

pilotage revenues. These revenues 

represent the direct and indirect costs 

(‘‘economic costs’’) that shippers must 

pay for pilotage services. The Coast 

Guard sets rates so that revenues equal 

the estimated cost of pilotage. 

We estimate the additional impact 

(costs or savings) of the rate adjustment 

in this proposed rule to be the 

difference between the total projected 

revenue needed to cover costs based on 

the 2008 rate adjustment and the total 

projected revenue needed to cover costs 

in this proposed rule for 2009. Table 20 

details additional costs or savings by 

area and district. 


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TABLE 20—RATE ADJUSTMENT AND ADDITIONAL IMPACT OF PROPOSED RULE

[$U.S.; non-discounted] 1

Projected 

revenue in 

2008 

Proposed rate 

change 

Projected 

revenue in 

2009 

Additional 

costs or 

savings of 

proposed 

rule 2

Area 1 .............................................................................................................. $2,078,551 1.0389 $2,159,474 $80,923 

Area 2 .............................................................................................................. 1,474,806 1.0444 1,540,315 65,509 

District 1 ........................................................................................................... 3,553,357 1.0412 3,699,790 146,433 

Area 4 .............................................................................................................. 1,251,203 1.0454 1,308,058 56,855 

Area 5 .............................................................................................................. 2,334,169 1.0412 2,430,398 96,229 

District 2 ........................................................................................................... 3,585,372 1.0427 3,738,456 153,084 

Area 6 .............................................................................................................. 2,884,724 0.8352 2,409,360 3 (475,364) 

Area 7 .............................................................................................................. 1,427,515 1.0383 1,482,160 54,645 

Area 8 .............................................................................................................. 1,944,032 1.0433 2,028,221 84,189 

District 3 ........................................................................................................... 6,256,273 0.9498 5,941,954 3 (314,319) 

1Some values may not total due to rounding. 

2Additional cost or savings of this rule = ‘Projected revenue in 2009’ ¥ ‘Projected Revenue in 2008’. 3Area 6 incurs a substantial cost savings that results in a net cost savings for pilotage services in District 3 and the system. The sum of the 

additional impacts from this rulemaking result in a net savings for the system of about $15,000. 

After applying the rate change in this 

proposed rule, the resulting difference 

between the projected revenue in 2008 

and the projected revenue in 2009 is the 

annual impact to shippers from this 

proposed rule. This figure will be 

equivalent to the total additional 

payments or savings that shippers will 

incur for pilotage services from this 

proposed rule. As discussed earlier, we 

consider a reduction in payments to be 

a cost savings. 

The impact of the rate adjustment in 

this proposed rule to shippers varies by 

area and district. The annual costs of the 

rate adjustments in Districts 1 and 2 are 

approximately $146,000 and $153,000, 

respectively, while District 3 will 

experience an annual savings of 

approximately $314,000. To calculate an 

exact cost or savings per vessel is 

difficult because of the variation in 

vessel types, routes, port arrivals, 

commodity carriage, time of season, 

conditions during navigation, and 

preferences for the extent of pilotage 

services on designated and 

undesignated portions of the Great 

Lakes system. Some owners and 

operators will pay more and some will 

pay less depending on the distance and 

port arrivals of their vessels’ trips. 

However, the annual cost or savings 

reported above does capture all of the 

additional cost the shippers face as a 

result of the rate adjustment in this 

proposed rule. 

As Table 20 indicates, all areas will 

experience an increased annual cost due 

to this proposed rate change except Area 

6, which will experience a savings. The 

projected savings for Area 6 is 

approximately $475,000. This will cause 

a net savings for District 3, and is due 

to a decrease in actual bridge hours in 

Area 6 from 2008 to 2009. This decrease 

in bridge hours led to a decrease in the 

number of pilots needed, from 10 pilots 

in 2008 to 8 pilots in 2009. This 

decrease in the number of pilots would 

reduce the projected revenue needed to 

cover costs of pilotage services in Area 

6. 

The effects of a rate adjustment on 

costs and savings vary by year and area. 

A decrease in projected expenses for 

individual areas or districts is common 

in past pilotage rate adjustments. Most 

recently, in the 2008 Final Rule, District 

2 experienced a decrease in projected 

expenses due to an adjustment in bridge 

hours from the 2008 Interim Rule, 

which led to a savings for that district. 

However, this savings was not large 

enough to outweigh the costs to the 

other districts. 

This proposed rate adjustment will 

result in a savings for District 3 that will 

outweigh the combined costs of Districts 

1 and 2. We measure the impact of this 

rulemaking by examining the changes in 

costs to shippers for pilotage services. 

With savings in District 3 exceeding the 

combined costs in Districts 1 and 2, the 

net impact of this rulemaking would be 

a cost savings for pilotage services in the 

Great Lakes system. 

B. Small Entities 

Under the Regulatory Flexibility Act 

(5 U.S.C. 601–612), we have considered 

whether this proposed rule would have 

a significant economic impact on a 

substantial number of small entities. 

The term ‘‘small entities’’ comprises 

small businesses, not-for-profit 

organizations that are independently 

owned and operated and are not 

dominant in their fields, and 

governmental jurisdictions with 

populations of less than 50,000 people. 

We expect entities affected by the 

proposed rule would be classified under 

the North American Industry 

Classification System (NAICS) code 

subsector 483-Water Transportation, 

which includes one or all of the 

following 6-digit NAICS codes for 

freight transportation: 483111-Deep Sea 

Freight Transportation, 483113-Coastal 

and Great Lakes Freight Transportation, 

and 483211-Inland Water Freight 

Transportation. According to the Small 

Business Administration’s definition, a 

U.S. company with these NAICS codes 

and employing less than 500 employees 

is considered a small entity. 

For the proposed rule, we reviewed 

recent company size and ownership 

data from 2006–2007 Coast Guard 

MISLE data and business revenue and 

size data provided by Reference USA 

and Dunn and Bradstreet. We were able 

to gather revenue and size data or link 

the entities to large shipping 

conglomerates for 22 of the 24 affected 

entities in the United States. We found 

that large, mostly foreign-owned, 

shipping conglomerates or their 

subsidiaries owned or operated all 

vessels engaged in foreign trade on the 

Great Lakes. We assume that new 

industry entrants will be comparable in 

ownership and size to these shippers. 

There are three U.S. entities affected 

by the proposed rule that receive 

revenue from pilotage services. These 

are the three pilot associations that 

provide and manage pilotage services 

within the Great Lakes districts. Two of 

the associations operate as partnerships 

and one operates as a corporation. These 

associations are classified with the same 

NAICS industry classification and small 

entity size standards described above, 

but they have far fewer than 500 


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employees: approximately 65 total 

employees combined. We expect no 

adverse impact to these entities from 

this proposed rule since all associations 

receive enough revenue to balance the 

projected expenses associated with the 

projected number of bridge hours and 

pilots. 

Therefore, the Coast Guard has 

determined that this proposed rule 

would not have a significant economic 

impact on a substantial number of small 

entities under 5 U.S.C. § 605(b). If you 

think that your business, organization, 

or governmental jurisdiction qualifies as 

a small entity and that this proposed 

rule would have a significant economic 

impact on it, please submit a comment 

to the Docket Management Facility at 

the address under ADDRESSES. In your 

comment, explain why you think it 

qualifies and how and to what degree 

this proposed rule would economically 

affect it. 

C. Assistance for Small Entities 

Under section 213(a) of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (Pub. L. 104–121), 

we offer to assist small entities in 

understanding the proposed rule so that 

they could better evaluate its effects on 

them and participate in the rulemaking. 

If the proposed rule would affect your 

small business, organization, or 

governmental jurisdiction and you have 

questions concerning its provisions or 

options for compliance, please call Mr. 

Woo Kim, Great Lakes Pilotage Branch, 

(CG–54122), U.S. Coast Guard, 

telephone 202–372–1538 or send him email at Woo.S.Kim@uscg.mil. Small 

businesses may send comments on the 

actions of Federal employees who 

enforce, or otherwise determine 

compliance with, Federal regulations to 

the Small Business and Agriculture 

Regulatory Enforcement Ombudsman 

and the Regional Small Business 

Regulatory Fairness Boards. The 

Ombudsman evaluates these actions 

annually and rates each agency’s 

responsiveness to small business. If you 

wish to comment on actions by 

employees of the Coast Guard, call 1– 

888–REG–FAIR (1–888–734–3247). 

D. Collection of Information 

This proposed rule would call for no 

new collection of information under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501–3520). This rule does not 

change the burden in the collection 

currently approved by the Office of 

Management and Budget (OMB) under 

OMB Control Number 1625–0086, Great 

Lakes Pilotage Methodology. 

E. Federalism 

A rule has implications for federalism 

under Executive Order 13132, 

Federalism, if it has a substantial direct 

effect on State or local governments and 

would either preempt State law or 

impose a substantial direct cost of 

compliance on them. We have analyzed 

this rule under that Order and have 

determined that it does not have 

implications for federalism because 

there are no similar State regulations, 

and the States do not have the authority 

to regulate and adjust rates for pilotage 

services in the Great Lakes system. 

F. Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act 

of 1995 (2 U.S.C. 1531–1538) requires 

Federal agencies to assess the effects of 

their discretionary regulatory actions. In 

particular, the Act addresses actions 

that may result in the expenditure by a 

State, local, or tribal government, in the 

aggregate, or by the private sector of 

$100,000,000 or more in any one year. 

Though this rule would not result in 

such expenditure, we do discuss the 

effects of this rule elsewhere in this 

preamble. 

G. Taking of Private Property 

This rule would not affect a taking of 

private property or otherwise have 

taking implications under Executive 

Order 12630, Governmental Actions and 

Interference with Constitutionally 

Protected Property Rights. 

H. Civil Justice Reform 

This rule meets applicable standards 

in sections 3(a) and 3(b)(2) of Executive 

Order 12988, Civil Justice Reform, to 

minimize litigation, eliminate 

ambiguity, and reduce burden. 

I. Protection of Children 

We have analyzed this rule under 

Executive Order 13045, Protection of 

Children from Environmental Health 

Risks and Safety Risks. This rule is not 

an economically significant rule and 

does not create an environmental risk to 

health or risk to safety that may 

disproportionately affect children. 

J. Indian Tribal Governments 

This rule does not have tribal 

implications under Executive Order 

13175, Consultation and Coordination 

with Indian Tribal Governments, 

because it does not have a substantial 

direct effect on one or more Indian 

tribes, on the relationship between the 

Federal Government and Indian tribes, 

or on the distribution of power and 

responsibilities between the Federal 

Government and Indian tribes. 

K. Energy Effects 

We have analyzed this rule under 

Executive Order 13211, Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use. We have 

determined that it is not a ‘‘significant 

energy action’’ under that order because 

it is not a ‘‘significant regulatory action’’ 

under Executive Order 12866 and is not 

likely to have a significant adverse effect 

on the supply, distribution, or use of 

energy. The Administrator of the Office 

of Information and Regulatory Affairs 

has not designated it as a significant 

energy action. Therefore, it does not 

require a Statement of Energy Effects 

under Executive Order 13211. 

L. Technical Standards 

The National Technology Transfer 

and Advancement Act (NTTAA) (15 

U.S.C. 272 note) directs agencies to use 

voluntary consensus standards in their 

regulatory activities unless the agency 

provides Congress, through the Office of 

Management and Budget, with an 

explanation of why using these 

standards would be inconsistent with 

applicable law or otherwise impractical. 

Voluntary consensus standards are 

technical standards (e.g., specifications 

of materials, performance, design, or 

operation; test methods; sampling 

procedures; and related management 

systems practices) that are developed or 

adopted by voluntary consensus 

standards bodies. This rule does not use 

technical standards. Therefore, we did 

not consider the use of voluntary 

consensus standards. 

M. Environment 

We have analyzed this proposed rule 

under Department of Homeland 

Security Directive 0023.1 and 

Commandant Instruction M16475.lD, 

which guide the Coast Guard in 

complying with the National 

Environmental Policy Act of 1969 

(NEPA)(42 U.S.C. 4321–4370f), and 

have made a preliminary determination 

that this action is one of a category of 

actions which do not individually or 

cumulatively have a significant effect on 

the human environment, and that 

therefore the proposed rule will be 

categorically excluded, under figure 2– 

1, paragraph (34)(a) of the Instruction, 

from further environmental 

documentation. Paragraph 34(a) pertains 

to minor regulatory changes that are 

editorial or procedural in nature. This 

rule adjusts rates in accordance with 

applicable statutory and regulatory 

mandates. A preliminary 

‘‘Environmental Analysis Check List’’ 

supporting this determination is 


tjames on PRODPC75 with PROPOSALS
Federal Register / Vol. 74, No. 78 / Friday, April 24, 2009 / Proposed Rules 18681 

available in the docket where indicated 

under the ‘‘Public Participation and 

Request for Comments’’ section of this 

preamble. We seek any comments or 

information that may lead to discovery 

of a significant environmental impact 

from this proposed rule. 

List of Subjects in 46 CFR Part 401 

Administrative practice and 

procedure, Great Lakes, Navigation 

(water), Penalties, Reporting and 

recordkeeping requirements, Seamen. 

For the reasons discussed in the 

preamble, the Coast Guard proposes to 

amend 46 CFR Part 401 as follows: 

PART 401—GREAT LAKES PILOTAGE 

REGULATIONS 

1. The authority citation for part 401 

continues to read as follows: 

Authority: 46 U.S.C. 2104(a), 6101, 7701, 

8105, 9303, 9304; Department of Homeland 

Security Delegation No. 0170.1; 46 CFR 

401.105 also issued under the authority of 44 

U.S.C. 3507. 

2. In § 401.405, revise paragraphs (a) 

and (b), including the footnote to Table 

(a), to read as follows: 

§ 401.405 Basic rates and charges on the 

St. Lawrence River and Lake Ontario. 

* * * * * 

(a) Area 1 (Designated Waters): 

Service St. Lawrence River 

Basic Pilotage ........... $15.52 per Kilometer 

or $27.48 per mile 1

Each Lock Transited $344 1

Harbor Movage ......... $1,126 1

1The minimum basic rate for assignment of 

a pilot in the St. Lawrence River is $751, and 

the maximum basic rate for a through trip is 

$3,298. 

(b) Area 2 (Undesignated Waters): 

Service Lake Ontario 

Six-Hour Period .................... $815 

Docking or Undocking .......... $777 

* * * * * 

3. In § 401.407 revise paragraphs (a) 

and (b), including the footnote to Table 

(b), to read as follows: 

§ 401.407 Basic rates and charges on Lake 

Erie and the navigable waters from 

Southeast Shoal to Port Huron, MI. 

* * * * * 

(a) Area 4 (Undesignated Waters): 

Service 

Lake Erie (east 

of southeast 

Shoal) 

Buffalo 

Six-Hour Period $720 ............... $720 

Docking or 

Undocking.

$555 ............... $555 

Any Point on the 

Niagara River 

below the 

Black Rock 

Lock.

N/A ................. $1,416 

(b) Area 5 (Designated Waters): 

Any point on or in Southeast 

Shoal 

Toledo or any 

Point on Lake 

Erie west of 

Southeast 

Shoal 

Detroit River Detroit pilot 

boat St. Clair River 

Toledo or any port on Lake Erie west of Southeast Shoal $2,192 $1,295 $2,846 $2,192 N/A 

Port Huron Change Point .................................................... 1 $3,817 1 $4,422 $2,868 $2,230 $1,586 

St. Clair River ....................................................................... 1 $3,817 N/A $2,868 $2,868 $1,295 

Detroit or Windsor or the Detroit River ................................ $2,192 $2,846 $1,295 N/A $2,868 

Detroit Pilot Boat .................................................................. $1,585 $2,192 N/A N/A $2,868 

1When pilots are not changed at the Detroit Pilot Boat. 

4. In § 401.410, revise paragraphs (a), 

(b), and (c) to read as follows: 

§ 401.410 Basic rates and charges on 

Lakes Huron, Michigan, and Superior, and 

the St Mary’s River. 

* * * * * 

(a) Area 6 (Undesignated Waters): 

Service Lakes Huron 

and Michigan 

Six-Hour Period .................... $621 

Service Lakes Huron 

and Michigan 

Docking or Undocking .......... $590 

(b) Area 7 (Designated Waters): 

Area De tour Gros cap Any harbor 

Gros Cap ..................................................................................................................................... $2,432 N/A N/A 

Algoma Steel Corporation Wharf at Sault Ste. Marie Ontario .................................................... $2,432 $916 N/A 

Any point in Sault Ste. Marie, Ontario, except the Algoma Steel Corporation Wharf ................ $2,038 $916 N/A 

Sault Ste. Marie, MI ..................................................................................................................... $2,038 $916 N/A 

Harbor Movage ............................................................................................................................ N/A N/A $916 

(c) Area 8 (Undesignated Waters): 

Service Lake Superior 

Six-Hour Period .................... $548 

Docking or Undocking .......... $521 

§ 401.420 [Amended] 

5. In § 401.420— 

a. In paragraph (a), remove the 

number ‘‘$102’’ and add, in its place, 

the number ‘‘$112’’; and remove the 

number ‘‘$1,604’’ and add, in its place, 

the number ‘‘$1,755’’. 

b. In paragraph (b), remove the 

number ‘‘$102’’ and add, in its place, 

the number ‘‘$112’’; and remove the 

number ‘‘$1,604’’ and add, in its place, 

the number ‘‘$1,755’’. 

c. In paragraph (c)(1), remove the 

number ‘‘$606’’ and add, in its place, 

the number ‘‘$663’’; in paragraph (c)(3), 

remove the number ‘‘$102’’ and add, in 

its place, the number ‘‘$112’’; and, also 

in paragraph (c)(3), remove the number 

‘‘$1,604’’ and add, in its place, the 

number ‘‘$1,755’’. 

§ 401.428 [Amended] 

6. In § 401.428, remove the number 

‘‘$618’’ and add, in its place, the 

number ‘‘$676’’. 


tjames on PRODPC75 with PROPOSALS
18682 Federal Register / Vol. 74, No. 78 / Friday, April 24, 2009 / Proposed Rules 

Dated: April 21, 2009. 

James A. Watson, 

Rear Admiral, U.S. Coast Guard, Director of 

Prevention Policy. 

[FR Doc. E9–9432 Filed 4–21–09; 4:15 pm] 

BILLING CODE 4910–15–P 


tjames on PRODPC75 with PROPOSALS