MarEx Mailbag:
This week’s mailbag contains more than a few letters addressing a myriad of previous on line MarEx articles and current events.
This week, we received a number of letters, none addressing last week’s (light & easy) lead piece. Instead, the entries referenced, pilot compensation, TWIC cards and the disposal of obsolete so-called “Ghost Ships” – from MARAD’s fleet and others. Our first letter comes from an Alaska pilot who takes issue with a study recently published in the state of Florida. The paper, among other things, suggested that the compensation levels of Florida’s state-licensed pilots be linked to other “similar” transportation worker’s salaries. The study has its fans and its detractors. Read our article on the matter by clicking HERE or simply go directly to what our reader had to say below:
Dear MarEx:
I hope that all parties to the argument have a solid fix on the fact that these "studies" such as the one below are emphasizing pilot revenue and trying to mischaracterize it as a "salary". My revenue last year and my salary (adjusted gross income) after I took out the ordinary self-employment obligations of retirement contributions, social security contributions (self employment tax), health insurance, disability insurance, and of course, Schedule C expenses were two vastly different numbers. The next big joke being propounded by cruise ship company sponsored studies is that somehow the money saved by the cruise ship companies would immediately be converted to some hazy public good. As a matter of fact, the pilots themselves probably spend more in the local economy as a percentage of their gross incomes than the cruise ship companies who are notorious for keeping any windfall in the pockets of the top shadowy few.
My income is taxable and I have an incentive to spend money on certain Schedule C items to reduce that taxable income. When a company such as Carnival Cruises has no IRS obligation there is certainly no incentive to spend money to reduce their (nonexistent) taxable income. The economy definitely loses when the money slips away in the hands of the cruise ship companies. The first thing that happens to any windfall from pilot exemptions is that it reverts to a non-taxable status so the first huge bite is experienced by the United States Treasury in the form of lost taxes which were previously paid by the pilots out of their adjusted gross income.
I am very cynical anytime someone rails against harbor pilots' so-called salaries and wonders why can't we give the poor cruise ship companies a chance to make some more (tax free) money in the United States. I would assert that even in a non-tax state like Florida that the interests of the United States Treasury are tied in with the interests of Florida residents.
Anyway here is some cruise ship generated nonsense by a lobbying group that they hired to promote their point of view. Please notice that they carefully avoid stating their client's IRS tax status and rely heavily on generalities about jobs lost and income lost to local economies. It would be useful if anyone would argue successfully that any windfall from pilotage fee reductions would wind up anywhere but in the suitcases of the cruise ship company executives. That argument has yet to be made.
Douglas MacPherson
MarEx Editor’s Remarks: Mr. MacPherson reports that he is a harbor pilot in Alaska. We’re grateful for his letter. In general terms, it is clear that – in at least many places in North America – the salaries quoted for marine pilots are exclusive (above and beyond) of the many expenses which go along with providing that service, but are also paid for by users. Hence, someone making as much as $400,000 annually should not be surprised if there is little sympathy for a rate increase request, especially in this economy. What are pilots worth? I don’t know. The individual states have done a pretty good job of setting those rates, all by themselves. If the rates are too high, then perhaps they have no one to blame but themselves. The argument that pilot rates are too low – in most places – isn’t getting too much traction these days, however.
Our next letter addresses the issue of obsolete ship disposal and also points out why the environmental lobby doesn’t necessarily trust the maritime industry or those who regulate it. Fair enough. Specially, this letter responds to our November 19th editorial, entitled, Current Events + Costly Regulations = Cottage Industry Opportunities. Click the link to read that article or go directly to our reader’s response, shown below:
Hi Joe,
Another fine commentary that I want to add to.
It may be true that the Basel Action Network is comprised of amateurs who don't know their way around the waters of the maritime industry. It also describes 99% of the population, including the political leaders who ultimately make the decisions that our industry must deal with.
Your attitude toward the BAN sent me flashing back to 1975 and the debate about the potential for oil spills before the Valdez TAPS trade commenced. Various do-gooder groups warned that a large oil spill was inevitable. Industry, politicians and the Coast Guard dismissed the environmentalists concerns in the Washington and Alaska media. The 'know-it-alls' heaped derision on proposals for twin-screws, twin-rudders and double-hulls. Experts told us there was a '1-in-20 million' chance of a catastrophic oil spill during the twenty year lifetime of the TAPS. Our industry beat those odds in less than 12 years.
For decades, an old hulk was moored in Dutch Harbor, Alaska. Seafood was processed and stored onboard. Eventually, that hulk became a liability and the owners arranged to have it towed to a breakers yard in the Far East. The community was invited to gather all of its toxics and load it on the ship. To no ones' surprise, that old ship sank in the North Pacific releasing all the toxics into the aquatic food chain.
And that is why groups like the Basel Action Network don't trust the maritime industry.
Regards,
L. G. Picton
MarEx Editor’s Remarks: I haven’t actually researched the event(s) that Mr. Picton describes, but I will take his word for it. For my part, I am respectful of the work that BAN does, but I do not feel obligated to print or repeat everything that they say to be true without first making sure they have evidence to back up their claims. Our September 3rd on line article describing the sale and departure of two vessels for Norfolk, VA is a perfect example. BAN would have us believe that the vessels were immediately headed off to scrap and that the U.S. government was somehow negligent in all of that. In fact, as far as anyone knows today, the vessels continue to trade commercially. The vessels might someday be scrapped – in fact, that’s probably what will happen. It also might be accomplished in a responsible fashion. Until BAN can provide real evidence to the contrary, then what they provide to the media will remain exactly what it is: an unsubstantiated opinion.
And, now, one more letter. This one is my favorite. I love TWIC stories. My personal tale can be read by clicking HERE. Or, see what our reader had to say below:
Joe:
This is one for the books.
Last Thursday on November 12, I went to Oakland to the USCG for my Master License renewal. The entrance to the USCG in the Federal Building is guarded by Homeland Security. After sending my briefcase and other obligatory items through the X-ray machine, the intimidating Guards wanted to see my ID. Full with exuberance, I whipped out my TWIC and to my chagrin was told, that this card is not acceptable to Homeland Security. My CA driver’s License would be O.K., though. One only can wonder.
Best Regards;
Klaus Niem,
SFBA Chapter President of the Council of American Master Mariners.
MarEx Editor’s Remarks: This is a familiar story, although no less funny to hear it again (and again). I recently spoke to a guy at an industry function (the names remain anonymous to protect the innocent and their paychecks) who was involved at some point with the TWIC rollout and he admitted to me that while the card issuance procedure seems to have smoothed itself out, the deployment of TWIC readers is anything but complete. Hence, it is a familiar lament (of those who have gone through the trouble of getting a TWIC card) that security guards all across the fruited plain will routinely reject the use of TWIC cards as identification and demand something more official – like a driver’s license. I myself take great joy in using mine whenever possible. A couple of weeks ago, on my way to Boston for an industry function, I pulled it out at the security checkpoint at our local airport. “It’s a TWIC card!” I announced brightly. The annoyed TSA Agent snatched it from me and responded evenly, “I KNOW what IT is. WE issued it!” Of course, without a “reader” to scan it, he then waved his purple light over it a couple of times, blessed my boarding pass and dismissed me. TWIC: the story that keeps on giving…