Source: https://www.federalregister.gov/documents/2010/02/23/2010-3396/2010-rates-for-pilotage-on-the-great-lakes
Timestamp: 2018-09-21 15:38:47
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Federal Register :: 2010 Rates for Pilotage on the Great Lakes
2010 Rates for Pilotage on the Great Lakes
A Rule by the Coast Guard on 02/23/2010
This final rule is effective August 1, 2010.
75 FR 7958
7958-7971 (14 pages)
Docket No. USCG-2009-0883
1625-AB39
2010-3396
V. Discussion of the Final Rule
https://www.federalregister.gov/d/2010-3396 https://www.federalregister.gov/d/2010-3396
The Coast Guard is increasing the rates for pilotage service on the Great Lakes by an average of 5.07% to generate sufficient revenue to cover allowable expenses, target pilot compensation, and return on investment. This increase reflects an August 1, 2010, increase in benchmark contractual wages and benefits and an adjustment for inflation. This rulemaking promotes the Coast Guard strategic goal of maritime safety.
Comments and material received from the public, as well as documents mentioned in this preamble as being available in the docket, are part of docket USCG-2009-0883 and are available for inspection or copying at the 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, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. You may also find this docket on the Internet by going to http://www.regulations.gov, inserting USCG-2009-0883 in the “Keyword” box, and then clicking “Search.”
For questions on this final rule, please call Mr. Paul Wasserman, Chief, Great Lakes Pilotage Branch, Commandant (CG-54122), U.S. Coast Guard, at 202-372-1535, by fax 202-372-1909, or e-mail Paul.M.Wasserman@uscg.mil. For questions on viewing or submitting material to the docket, call Renee V. Wright, Chief, Dockets, Department of Transportation, telephone 202-493-0402.
AMOU American Maritime Officer Union
MISLE Coast Guard Marine Inspection, Safety, and Law Enforcement system
On October 30, 2009, we published a notice of proposed rulemaking entitled Great Lakes Pilotage Rates—2010 Annual Review and Adjustment in the Federal Register (NPRM, 74 FR 56153). We received five comments on the proposed rule. No public meeting was requested and none was held.
We published a notice of proposed rulemaking on October 30, 2009 (NPRM, 74 FR 56153). The NPRM proposed an average 5.07% rate increase.
This rulemaking increases Great Lakes pilotage rates in accord with the methodology contained in Coast Guard regulations in 46 CFR parts 401-404. Our regulations implement the Great Start Printed Page 7959Lakes Pilotage Act of 1960 (“the Act”), 46 U.S.C. Chapter 93, which requires foreign-flag vessels engaged in foreign trade to use U.S. registered pilots while transiting the St. Lawrence Seaway and the Great Lakes system. The Act also 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,” and requires annual rate reviews to be completed by March 1 of each year, with a “full ratemaking” to establish new base rates at least once every five years. 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 we set rates, we do not control the actual number of pilots an association maintains, so long as the association is able to provide safe, efficient, and reliable pilotage service, nor do we 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 Act, 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).
Our pilotage regulations implement the Act's requirement for annual reviews of pilotage rates and a full ratemaking at least once every five years. 46 CFR 404.1. To assist in calculating pilotage rates, the regulations require pilotage associations to submit annual financial statements prepared by certified public accounting firms. In addition, every fifth year, in connection with the full ratemaking, we contract 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, we generate the pilotage rates using Appendix A to 46 CFR part 404. The last Appendix A review was concluded in 2006 (71 FR 16501, Apr. 3, 2006). Between the five-year full ratemaking intervals, we annually review the pilotage rates using Appendix C to part 404, and adjust rates when deemed appropriate. We conducted Appendix C reviews in 2007, 2008 and 2009 and increased rates in each year. The 2009 final rule was published on July 21, 2009 (74 FR 138), and took effect on August 1, 2009. We define the terms and formulas used in Appendix A and Appendix C in Appendix B to part 404.
This final rule concludes the annual Appendix C rate review for 2010, and increases rates by an average of 5.07% over the rates that took effect August 1, 2009.
Five comments were submitted during the NPRM public comment period.
Ratemaking methodology. One commenter recommended that we suspend any further action on this rulemaking until full consideration can be given to comments received in response to our July 21, 2009, request for public comments (“Great Lakes Pilotage Ratemaking Methodology,” 74 FR 35838). In July, we requested comments on the adequacy of our current ratemaking methodology in light of the realities of Great Lakes commercial shipping and the need to fairly balance competing considerations. We noted that any comments would be referred to the Great Lakes Pilotage Advisory Committee (GLPAC), a group created by the Great Lakes Pilotage Act to advise us on significant issues relating to Great Lakes pilotage. GLPAC will review our methodology and the comments received in response to our notice, and may recommend changes. If we accept their recommendations, any changes would require regulatory action. GLPAC has just begun reviewing comments. As yet there is no timeline for any GLPAC recommendations and no rulemaking underway to modify the methodology. Therefore, we cannot complete the “full consideration” mentioned by the commenter before March 1, 2010, the Act's deadline for establishing any annual rate adjustment for 2010. The Act provides no exception to the March 1 deadline for consideration of possible changes to the existing rate review process. Thus, we cannot suspend work on this rulemaking without violating the law.
Another commenter reiterated comments the commenter made during the 2007 and 2009 rate reviews. In 2007, we explained our reasons for disagreeing with this commenter's analysis of the “150% factor” for designated waters; 2007 interim rule, 72 FR 8115 at 8117 (Feb. 23, 2007) and 2007 Final Rule, 72 FR 53158 at 53159 (July 18, 2007). In the 2009 final rule, we explained our reasons for disagreeing with this Commenter on the “Riker Report” on bridge hour calculations; 74 FR 35812 at 35814. As no new substantive information has been added, we will not repeat those earlier explanations. The commenter's suggestion that we amend the vessel weighting factor table in 46 CFR 401.400 is beyond the scope of this ratemaking.
Two commenters reiterated past comments about our use of rounding in bridge hour calculations, without adding new information. We fully discussed our use of rounding in the 2009 final rule, specifically with reference to Area 4, which is of particular concern to one of these commenters, and we will not repeat that discussion; 74 FR 35812 at 35813. The Area 4 calculations have not changed since the 2009 final rule.
A commenter said that our ratemaking is arbitrary and capricious because we count delay and detention in calculating bridge hours for Areas 6, 7, and 8, but not in Areas 4 and 5. No information was provided to substantiate this claim, which runs counter to our discussion of bridge hour calculations in ratemaking documents over many years, and which repeats an allegation made in 2007 and refuted in that year's interim rule: “The Coast Guard has never considered delay, detention, or travel time to be included in the definition of bridge hours and has never knowingly included these items in its bridge hour computations”; 72 FR 8115 at 8117, Feb. 23, 2007. Coast Guard did not consider delay, detention, or travel time in its bridge hour computations in this final rule.
Effective date. Another commenter stated that the Act requires any 2010 rate adjustment to take effect by March 1, 2010. The comment acknowledged that this is not the Coast Guard's interpretation of the Act. In our view, 46 Start Printed Page 7960U.S.C. 9303(f) only requires us to publish a rule announcing the 2010 rate adjustment by March 1, 2010; the rule's effective date should be delayed until the event triggering the need for adjustment actually takes place. In this case, the triggering event will be the benchmark contract changes that do not take effect until August 1, 2010. This commenter also said that, even under the Coast Guard's interpretation of the Act, some relevant rate factors have already changed. The commenter mentions bridge hour projections (discussed subsequently) and cost of living (which is determined using 2007 and 2008 data). However, the inflation factor is merely one of three components that make up projected total economic costs and has a minimal effect on the rate calculation. We decline to adjust the rates to reflect only minimal changes.
Supporting data. One commenter found it impossible to verify the calculations made in our NPRM. He mentioned the absence from the docket of two benchmark contracts and the absence of supporting documentation for the inflation factor used in our calculations. The two contracts were placed in the docket maintained by the Docket Management Facility on November 25, 2009, prior to the close of the public comment period. The NPRM, 74 FR 56153 at 56156, identified the parties to both contracts and accurately represented their terms. This enabled the commenter to verify the accuracy of our data, prior to November 25, 2009, by contacting any of the contractual parties. The data supporting the inflation factor did not appear in the docket maintained by the Docket Management Facility until December 2, 2009, after the close of the public comment period. However, the NPRM, 74 FR 56153 at 56159, identified Bureau of Labor Statistics (BLS) Midwest consumer price data as the source of our calculations, and this data was at all times available from the BLS Web site, http://www.bls.gov.
This same commenter also said that projected bridge hours for 2010 should be based on actual bridge hours for 2009 to date, along with results of consultations with stakeholders, including the shipping industry. Another commenter asked why we did not use 2009 actual hours. As stated in the NPRM, 74 FR 56153 at 56158, our 2010 projections are based on historical data (by which we mean actual figures for complete past shipping seasons) and information provided both by pilots and industry. To meet the Act's March 1 deadline for completion of each year's rate review, with a final rule that meets all applicable requirements of the Federal regulatory process, Coast Guard data collection for the following year's review typically begins in the early spring of the preceding year. Given that reality, it is impracticable for the Coast Guard to base NPRM projections for the next year on actual results from the preceding year. The commenter's estimate of a 25% drop in shipping traffic between 2008 and 2009 does not provide us with sufficiently detailed data on which to base a revision of our 2010 projections in this final rule. We do expect verified and complete 2009 actual data to inform our 2011 ratemaking.
District One pilot boat. Another commenter expressed a desire to have District One's purchase of a new pilot boat reflected in the 2010 rate adjustment, or as soon as possible. This comment is beyond the scope of this ratemaking, which is being conducted pursuant to our Appendix C methodology, because it asks for action that can be taken only under an Appendix A full ratemaking. The next Appendix A review is already in progress. It will be based on a 2008 audit of pilot association expenses. This could present a timing problem from District One's perspective, because their boat expenses did not begin until 2009 and therefore would not be captured in the 2008 audit data. Presumably to address that timing problem, in March 2009, District One petitioned the Coast Guard for a “modified” Appendix A review that could focus specifically on the pilot boat purchase. We could not grant that petition because there are no provisions for “modifying” Appendix A without conducting a rulemaking to make the modifications. However, we are mindful of the importance of this issue for District One, and we will ask GLPAC for its recommendations on how best to proceed, as part of GLPAC's consideration of public comments received in response to our July 2009 ratemaking methodology notice.
Miscellaneous. A commenter asked us to refer to “U.S. registered pilots” instead of “federally registered Great Lakes pilots” and we have done so.
We are increasing pilotage rates in accordance with the methodology outlined in Appendix C to 46 CFR part 404, by increasing rates an average 5.07% over the 2009 final rule, effective August 1, 2010. The new rates are unchanged from what we proposed in the NPRM. Table 1 shows the new rates for each Area.
Table 1—2010 Area Rate Changes
Area 1 (Designated waters) 4.65
Area 2 (Undesignated waters) 5.33
Area 4 (Undesignated waters) 5.47
Area 5 (Designated waters) 4.96
Area 6 (Undesignated waters) 5.27
Area 7 (Designated waters) 4.73
Area 8 (Undesignated waters) 5.17
Overall Rate Change (percentage change in overall prospective unit costs/base unit costs; see Table 18) 5.07
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 5.07% in all Areas.
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 Start Printed Page 7961hours used in setting the base period rates;
The base data used to calculate each of the eight steps comes from the 2009 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 2010 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. Also, please note that in previous rulemakings we calculated an expense multiplier for each District. This was unnecessary because Appendix C calculations are based on area figures, not district figures. District figures, where they are shown in the following tables, now reflect only the arithmetical totals for each of the district's areas.
Table 2—Total Economic Cost for Base Period (2009), Areas in District One
Total * District One
Base operating expense (less base return element) $538,155 $547,489 $1,085,644
Base target pilot compensation + $1,617,955 + $981,589 + $2,599,544
Base return element + $10,763 + $16,425 + $27,188
Subtotal * = $2,166,873 = $1,545,503 = $3,712,376
Base bridge hours ÷ 5,203 ÷ 5,650 ÷ 10,853
Base cost per bridge hour = $416.47 = $273.54 = $342.06
* As explained in the text preceding Step 1, District totals have been expressed differently from previous rulemakings. This accounts for slight differences between the District totals shown in Table 16 of the 2009 final rule and the District totals shown in this table.
Table 3—Total Economic Cost for Base Period (2009), Areas in District Two
Total * District Two
Base operating expense $502,087 $789,202 $1,291,289
Base target pilot compensation + $785,271 + $1,617,955 + $2,403,226
Base return element + $25,104 + $31,568 + $56,672
Subtotal = $1,312,463 = $2,438,725 = $3,751,188
Base cost per bridge hour = $179.30 = $478.46 = $302.10
* See footnote to Table 2.
Table 4—Total Economic Cost for Base Period (2009), Areas in District Three
Total * District Three
Base operating expense $814,358 $398,461 $641,580 $1,854,399
Base target pilot compensation + $1,570,542 + $1,078,637 + $1,374,224 + $4,023,403
Base return element + $32,574 + $11,954 + $19,247 + $63,776
Subtotal = $2,417,474 = $1,489,052 = $2,035,052 = $5,941,578
Base bridge hours ÷ 13,406 ÷ 3,259 ÷ 11,630 ÷ 28,295
Base cost per bridge hour = $180.33 = $456.90 = $174.98 = $209.99
Table 5—Expense Multiplier, Areas in District One
Base operating expense $538,155 $547,489 $1,085,644
Subtotal = $548,918 = $563,914 = $1,112,832
Base target pilot compensation ÷ $1,617,955 ÷ $981,589 $2,599,544
Expense multiplier 0.33927 0.57449 Not applicable (n/a)
Table 6—Expense Multiplier, Areas in District Two
Subtotal = $527,192 = $820,770 = $1,347,962
Base target pilot compensation ÷ $785,271 ÷ $1,617,955 $2,403,226
Expense multiplier 0.67135 0.50729 n/a
Table 7—Expense Multiplier, Areas in District Three
Subtotal = $846,932 = $410,415 = $660,828 = $1,918,175
Base target pilot compensation ÷ $1,570,542 ÷ $1,078,637 ÷ $1,374,224 $4,023,403
Expense multiplier 0.53926 0.38049 0.48087 n/a
(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. 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.
As of May 2009, there are two current AMOU contracts, which we designate Agreement A and Agreement B. Agreement A applies to vessels operated by Key Lakes, Inc., and Agreement B applies to all vessels operated by American Steamship Co. and Mittal Steel USA, Inc.
Both Agreement A and Agreement B provide for a 3% wage increase effective August 1, 2010. Under Agreement A, the daily wage rate will be increased from $262.73 to $270.61. Under Agreement B, the daily wage rate will be increased from $323.86 to $333.57.
Table 8 shows new wage calculations based on Agreements A and B effective August 1, 2010.Start Printed Page 7963
$270.61 daily rate × 54.5 days $14,748 $22,123
Monthly total × 9 months = total wages 132,735 199,103
$333.57 daily rate × 49.5 days 16,512 24,768
Monthly total × 9 months = total wages 148,608 222,912
Both Agreements A and B include a health benefits contribution rate of $88.76 effective August 1, 2010. 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, 2010, and Table 10 totals the figures in Tables 8 and 9.
Employer contribution, 401(K) plan (Monthly Wages × 5%) $737.42 $1,106.13
Health = $88.76 × 45.5 days 4,038.58 4,038.58
Employer contribution, 401(K) plan (Monthly Wages × 5%) 825.60 1,238.40
Monthly total benefits = 6,293.42 = 6,662.13
Monthly total benefits × 9 months = 56,641 = 59,959
Monthly total benefits = 6,845.71 = 7,258.51
Monthly total benefits × 9 months = 61,611 = 65,327
AGREEMENT A: Wages $132,735 $199,103
AGREEMENT A: Benefits + 56,641 + 59,959
AGREEMENT A: Total = 189,376 = 259,062
AGREEMENT B: Wages 148,608 222,912
AGREEMENT B: Benefits + 61,611 + 65,327
AGREEMENT B: Total = 210,219 = 288,239
Table 11—Deadweight Tonnage by AMOU Agreement
Table 12—Projected Target Rate of Compensation, Weighted
Total wages and benefits x percent tonnage $189,376 x 29.7238% = 56,290 259,062 x 29.7238% = 77,003
Total wages and benefits x percent tonnage 210,219 x 70.2762% = 147,734 288,239 x 70.2762% = 202,563
Total weighted average wages and benefits = projected target rate of compensation 56,290 + 147,734 = 204,024 77,003 + 202,563 = 279,566
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, we project that vessel traffic in the 2010 navigation season, in all areas, will remain unchanged from the 2009 projections noted in Table 13 of the 2009 final rule.
Table 13, below, shows the projected bridge hours needed for each area, and the total number of pilots needed for ratemaking purposes after dividing those figures either by 1,000 or 1,800. As in 2008 and 2009, and for the same reasons, we rounded up to the next whole pilot except in Area 2 where we rounded up from 3.14 to 5, and in Area 4 where we rounded down from 4.07 to 4.
Projected 2010 bridge hours
Area 1 5,203 1,000 6
Area 2 5,650 1,800 5
(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.Start Printed Page 7965
Area 1 6 x $279,566 $1,677,397
Area 2 5 x 204,024 1,020,120
Total, District One 11 n/a 2,697,517
Area 4 4 x 204,024 816,096
Area 5 6 x 279,566 1,677,397
Total, District Two 10 n/a 2,493,493
Area 6 8 x 204,024 1,632,191
Area 7 4 x 279,566 1,118,265
Area 8 7 x 204,024 1,428,167
Total, District Three 19 n/a 4,178,623
Table 15—Projected Operating Expense
Area 1 $1,677,397 × 0.33927 = $569,084
Area 2 1,020,120 × 0.57449 = 586,050
Total, District One 2,697,517 n/a = 1,155,134
Area 4 816,096 × 0.67135 = 547,886
Area 5 1,677,397 × 0.50729 = 850,924
Total, District Two 2,493,493 n/a = 1,398,810
Area 6 1,632,191 × 0.53926 = 880,177
Area 7 1,118,265 × 0.38049 = 425,493
Area 8 1,428,167 × 0.48087 = 686,767
Total, District Three 4,178,623 n/a = 1,992,438
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 available at http://www.bls.gov/​xg_​shells/​ro5xg01.htm, we have multiplied the results in Step 4 by a 1.037 inflation factor, reflecting an average inflation rate of 3.7% between 2007 and 2008, the latest years for which data are available. Table 16 shows this calculation and the projected total economic cost.
Table 16—Projected Total Economic Cost
B. Increase, multiplied by inflation factor (= A × 1.037)
Area 1 $569,084 $590,140 $1,677,397 $2,267,537
Area 2 586,050 607,733 1,020,120 1,627,853
Total, District One 1,155,134 1,197,874 2,697,517 3,895,390
Area 4 547,886 568,158 816,096 1,384,253
Area 5 850,924 882,408 1,677,397 2,559,805
Total, District Two 1,398,810 1,450,566 2,493,493 3,944,058
Area 6 880,177 912,744 1,632,191 2,544,935
Area 7 425,493 441,236 1,118,265 1,559,501
Area 8 686,767 712,178 1,428,167 2,140,345
Total, District Three 1,992,438 2,066,158 4,178,623 6,244,781
Table 17—Total Unit Costs
Area 1 $2,267,537 5,203 $435.81
Area 2 1,627,853 5,650 288.12
Total, District One 3,895,390 10,853 358.92
Area 4 1,384,253 7,320 189.11
Area 5 2,559,805 5,097 502.22
Total, District Two 3,944,058 12,417 317.63
Area 6 2,544,935 13,406 189.84
Area 7 1,559,501 3,259 478.52
Area 8 2,140,345 11,630 184.04
Total, District Three 6,244,781 28,295 20.70
Overall 14,084,230 51,565 273.14
Table 18—Percentage Change in Unit Costs
Area 1 $435.81 $416.47 4.65
Area 2 288.12 273.54 5.33
Total, District One 358.92 342.06 4.93
Area 4 189.11 179.30 5.47
Area 5 502.22 478.46 4.96
Total, District Two 317.63 302.10 5.14
Area 6 189.84 180.33 5.27
Area 7 478.52 456.90 4.73
Area 8 184.04 174.98 5.17
Total, District Three 220.70 209.99 5.10
Overall 273.14 259.97 5.07
Table 19—Base Period Rates Adjusted by Percentage Change in Unit Costs*
Area 1: 4.65 (1.0465)
—Basic pilotage $16.95/km, 29.99/mi $0.78/km, 1.39/mi $17.73/km, 31.38/mi
—Each lock transited 375.47 17.44 393
—Harbor movage 1,229.41 57.11 1,287
—Minimum basic rate, St. Lawrence River 820.04 38.09 858
—Maximum rate, through trip 3,599.58 167.20 3,767
Area 2: 5.33 (1.0533)
—6-hr. period 817.63 43.56 861
Start Printed Page 7967
—Docking or undocking 779.92 41.55 821
Area 4: 5.47 (1.0547)
—6 hr. period 722.05 39.49 762
—Docking or undocking 556.46 30.44 587
—Any point on Niagara River below Black Rock Lock 1,420.45 77.69 1,498
Area 5 between any point on or in: 4.96 (1.0496)
—Toledo or any point on Lake Erie W. of Southeast Shoal 1,299.46 64.51 1,364
—Toledo or any point on Lake Erie W. of Southeast Shoal & Southeast Shoal 2,198.99 109.16 2,308
—Toledo or any point on Lake Erie W. of Southeast Shoal & Detroit River 2,855.20 141.74 2,997
—Toledo or any point on Lake Erie W. of Southeast Shoal & Detroit Pilot Boat 2,198.99 109.16 2,308
—Port Huron Change Point & Southeast Shoal (when pilots are not changed at the Detroit Pilot Boat) 3,829.80 190.12 4,020
—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) 4,436.82 220.26 4,657
—Port Huron Change Point & Detroit River 2,877.20 142.83 3,020
—Port Huron Change Point & Detroit Pilot Boat 2,237.82 111.09 2,349
—Port Huron Change Point & St. Clair River 1,590.68 78.97 1,670
—St. Clair River 1,299.46 64.51 1,364
—St. Clair River & Southeast Shoal (when pilots are not changed at the Detroit Pilot Boat) 3,829.80 190.12 4,020
—St. Clair River & Detroit River/Detroit Pilot Boat 2,877.20 142.83 3,020
—Detroit, Windsor, or Detroit River 1,299.46 64.51 1,364
—Detroit, Windsor, or Detroit River & Southeast Shoal 2,198.99 109.16 2,308
—Detroit, Windsor, or Detroit River & Toledo or any point on Lake Erie W. of Southeast Shoal 2,855.20 141.74 2,997
—Detroit, Windsor, or Detroit River & St. Clair River 2,877.20 142.83 3,020
—Detroit Pilot Boat & Southeast Shoal 1,590.68 78.97 1,670
—Detroit Pilot Boat & Toledo or any point on Lake Erie W. of Southeast Shoal 2,198.99 109.16 2,308
—Detroit Pilot Boat & St. Clair River 2,877.20 142.83 3,020
Area 6: 5.27 (1.0527)
—6 hr. period 622.93 32.84 656
—Docking or undocking 591.72 31.20 623
Area 7 between any point on or in: 4.73 (1.0473)
—Gros Cap & De Tour 2,442.98 115.57 2,559
—Algoma Steel Corp. Wharf, Sault Ste. Marie, Ont. & De Tour 2,442.98 115.57 2,559
—Algoma Steel Corp. Wharf, Sault Ste. Marie, Ont. & Gros Cap 920.03 43.52 964
—Any point in Sault Ste. Marie, Ont., except the Algoma Steel Corp. Wharf & De Tour 2,047.67 96.87 2,145
—Any point in Sault Ste. Marie, Ont., except the Algoma Steel Corp. Wharf & Gros Cap 920.03 43.52 964
—Sault Ste. Marie, MI & De Tour 2,047.67 96.87 2,145
—Sault Ste. Marie, MI & Gros Cap 920.03 43.52 964
—Harbor movage 920.03 43.52 964
Area 8: 5.17 (1.0517)
—6 hr. period 549.44 28.42 578
—Docking or undocking 522.20 27.02 549
*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 5.07% across all areas.
We developed this final 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.
Public comments on the NPRM are summarized in Part IV of this publication. We received no public comments that would alter our assessment of the impacts discussed in the NPRM. We have adopted the Start Printed Page 7968assessment in the NPRM as final. See the “Regulatory Analyses” section of the NPRM for more details. A summary of the assessment follows.
This final rule would implement a 5.07 percent overall rate adjustment for the Great Lakes system over the current rate as adjusted in the 2009 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.
Owners and operators of other vessels that are not affected by this final 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 used 2006-2008 vessel arrival data from the Coast Guard's Marine Information for 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.
We estimate the additional impact of the rate adjustment in this final rule to be the difference between the total projected revenue needed to cover costs based on the 2009 rate adjustment and the total projected revenue needed to cover costs in this final rule for 2010. Table 20 details additional costs by area and district.
Table 20—Rate Adjustment and Additional Impact of Final Rule
Total projected expenses in 2009
Total projected expenses in 2010 2
Additional revenue or cost of this rulemaking 3
Area 1 $2,166,873 1.0465 $2,267,537 $100,664
Area 2 1,545,503 1.0533 1,627,853 82,350
Total, District One 3,712,376 3,895,390 183,014
Area 4 1,312,463 1.0547 1,384,253 71,791
Area 5 2,438,725 1.0496 2,559,805 121,080
Total, District Two 3,751,188 3,944,058 192,870
Area 6 2,417,474 1.0527 2,544,935 127,461
Area 7 1,489,052 1.0473 1,559,501 70,449
Area 8 2,035,052 1.0517 2,140,345 105,293
Total, District Three 5,941,578 6,244,781 303,203
All Districts 13,405,142 14,084,230 679,088
2 Rate changes are calculated for areas only. District totals reflect arithmetic totals and are for informational and discussion purposes. See discussion in final rule for further details.
3 Additional Revenue or Cost of this Rulemaking = `Total Projected Expenses in 2010'—`Total Projected Expenses in 2009'.
After applying the rate change in this final rule, the resulting difference between the projected revenue in 2009 and the projected revenue in 2010 is the annual impact to shippers from this final rule. This figure will be equivalent to the total additional payments that shippers will incur for pilotage services from this rule.
The impact of the rate adjustment in this final rule to shippers varies by area and district. The annual non-discounted costs of the rate adjustments in Districts 1, 2 and 3 would be approximately $183,000 and $193,000, and $303,000. To calculate an exact cost 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 would pay more and some would pay less depending on the distance and port arrivals of their vessels' trips. However, the annual cost reported above does capture all of the additional cost the shippers face as a result of the rate adjustment in this rule.
As Table 20 indicates, all areas will experience an increased annual cost due to this final rule. The overall impact of the final rule would be an additional cost to shippers of just over $679,000 across all three districts, due primarily to an increase in benchmark contractual wages and benefits and an inflation adjustment.Start Printed Page 7969
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this final 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.
In the NPRM, we certified under 5 U.S.C. 605(b) that the proposed rule would not have a significant economic impact on a substantial number of small entities. We received no public comments that would alter our certification in the NPRM. We have found no additional data or information that would change our findings in the NPRM. We have adopted the certification in the NPRM for this final rule. See the “Small Entity” section of the NPRM for additional details. A summary of the NPRM analysis follows.
We found entities affected by the rule to 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.
We reviewed company size and ownership data from 2006-2008 Coast Guard MISLE data and business revenue and size data provided by Reference USA and Dun 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 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 employees: Approximately 65 total employees combined. We expect no adverse impact to these entities from this final 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 final rule would not have a significant economic impact on a substantial number of small entities under 5 U.S.C. 605(b).
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 final rule so that they could better evaluate its effects on them and participate in the rulemaking. The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This final 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.
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 Start Printed Page 7970of 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.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 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 concluded that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded under section 2.B.2, figure 2-1, paragraph (34)(a) of the Instruction. 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. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under ADDRESSES.
Basic Pilotage $17.73 per kilometer or $31.38 per mile 1
Each Lock Transited 393 1
Harbor Movage 1287 1
1 The minimum basic rate for assignment of a pilot in the St. Lawrence River is $858, and the maximum basic rate for a through trip is $3,767.
Six-Hour Period $861
Docking or Undocking 821
Any Point on the Niagara River below the Black Rock Lock N/A 1,498
Toledo or any port on Lake Erie west of Southeast Shoal $2,308 $1,364 $2,997 $2,308 N/A
Port Huron Change Point 1 4,020 1 4,657 3,020 2,349 1,670
St. Clair River 1 4,020 N/A 3,020 3,020 1,364
Detroit or Windsor or the Detroit River 2,308 2,997 1,364 N/A 3,020
Detroit Pilot Boat 1,670 2,308 N/A N/A 3,020
Six-Hour Period $656
Docking or Undocking 623
(b) Area 7 (Designated Waters):Start Printed Page 7971
Gros Cap $2,559 N/A N/A
Algoma Steel Corporation Wharf at Sault Ste. Marie Ontario 2,559 $964 N/A
Any point in Sault Ste. Marie, Ontario, except the Algoma Steel Corporation Wharf 2,145 964 N/A
Sault Ste. Marie, MI 2,145 964 N/A
Harbor Movage N/A N/A $964
Six-Hour Period $578
a. In paragraph (a), remove the number “$113” and add, in its place, the number “$119”; and remove the number “$1,777” and add, in its place, the number “$1,867”.
b. In paragraph (b), remove the number “$113” and add, in its place, the number “$119”; and remove the number “$1,777” and add, in its place, the number “$1,867”.
c. In paragraph (c)(1), remove the number “$671” and add, in its place, the number “$705”; in paragraph (c)(3), remove the number “$113” and add, in its place, the number “$119”; and, also in paragraph (c)(3), remove the number “$1,777” and add, in its place, the number “$1,867”.
6. In § 401.428, remove the number “$684” and add, in its place, the number “$719”.
[FR Doc. 2010-3396 Filed 2-19-10; 11:15 am]