Politics, Pilots, Pay – and Predictably, Problems…

A backlash against perceived excessive pilot compensation may, in the short run, look like the right thing to do. Down the road, the unintended consequences may outweigh the immediate “benefits.”

It is, apparently, a very good time to push back against state-sanctioned harbor pilots who are seeking to get rate increases of one sort or another. The weak economy notwithstanding, port authorities, local stakeholders, pilot commissions and state legislators are now regularly eschewing the usual rubberstamp for calls to hike rates and it’s not always about the money, either.

Puget Sound and Galveston, Texas are the latest and most visible battlegrounds, but there are plenty of others. And in a document that was only just recently made public, a study prepared for The Florida Alliance of Maritime Operators is suggesting that “the compensation levels of harbor pilots, as analyzed in this Study, should be brought down to levels that are comparatively close to, or equal to, similar high-stress and high-skilled occupations that have public safety concerns in the mass transportation sector.”

The implications of the recommendations, put forth in a document entitled, The Economic Development Importance of Florida Seaport Operations and Economic Impacts on the State Economy From Current Harbor Pilot Compensation Practices, last month sent shock waves through the nation’s pilot industry where most, if not all state pilotage is operated in a similar fashion whereby a state-sanctioned monopoly is granted to individual groups that operate in each deep draft harbor or river, under some sort of regulatory oversight from local authorities. In some places, the pilots have long been accustomed to having it “their” way. That’s not true of all states, of course, but today’s American marine pilots are among the most highly compensated workers on the continent. That can’t be denied.

In a nutshell, the Florida-based report compares the compensation levels of Florida’s marine pilots to other “similar occupations that involve a high degree of stress and unique skills since they impact the public’s safety in the mass transportation sector.” That’s quite a mouthful. In general terms, airline pilots, ship’s masters and air traffic controllers were used as comparative benchmarks. Those three categories of transportation professionals, of course, make far less money on paper than do the typical marine harbor pilot. Nominally, then, the comparisons appear to be good ones. Or, are they?

In each case for the four professions, all of these individuals are critically important in terms of safety. I think IOMMP President (Captain) Tim Brown put it best a few weeks ago when he said, “The most important job that the ship's pilot does is to act as the arbitrator between the interests of the shipping community and the interest of the state. Without this independent group, it would be far too easy for a company (passenger vessels come to mind first due to the fixed nature of their arrival and departure schedules) to order the Captain or intimidate the Captain into bring the ship into or out of a given port. That is why the state pilot is important.” Indeed.

In their own individual ways, the same can be said for the other professions, with one key difference: the air traffic controller, the airline pilot and the ship’s Master aren’t being asked to pay for the infrastructure that allows them to do their jobs and/or any of the expenses that go along with completing a particular assignment. The expenses necessary to running any pilot outfit are many and like anything else with a maritime-prefix, the tab is usually double what it otherwise might cost. For example, a $2 million pilot boat is a typical expense that must be mortgaged and along with that goes the fuel charges, maintenance and payrolls that must be funded for support staff. Imagine the ship’s Captain picking up the tab for the guy who steers the boat or perhaps the air traffic controller being asked to buy (rent?) the software and control console that he/she sits at to work. Ridiculous, you say?

The Florida pilot report pegs the average salary of Florida’s marine pilots to be $368,717. That’s a lot of money by any standard. What’s unclear to me is how much of that goes to running the infrastructure of the pilot organization and job expenses related to motoring around at all hours of the night in rough seas trying to climb up sometimes non-standard pilot accommodation ladders. But, if as the Florida-based report suggests, people are going to “adjust” pilot compensation down to $230,000 (I’d like to have that ship’s Captain position) or to the level of air traffic controllers at $111,870 (their numbers, not mine), then local authorities ought to be ready to ante up to purchase pilot boats for as many as 14 seaports whose operations, according to the report, “are critical economic development assets to the state and to the economies of the metro areas in which they are located.”

By my calculations, 14 pilot boats will cost as much as USD $20 million, but maybe they (local authorities) can get a deal in the down economy by buying used equipment direct from the folks whose pay they seek to more than cut in half. They also might want to factor in the fuel charges that are bound to escalate in price – as well as increasing (in consumption) with the new trade that they hope will come in the absence of excessively compensated pilots. And, what happens when the voters decide that a twenty-five year old hull is “good enough” and then there’s an accident? But, I’m just spitballing now. I’m also not asking anyone to shed any tears for harbor pilots. As they collectively begin to understand in a post-COSCO BUSAN world that they are no longer just “advisors” to the Master, their seemingly high pay is being scrutinized right now for some of the same reasons that America’s senior executives are finding themselves under the same hot spotlight.

We’ve seen what unfettered competition can do in a regulated pilot area. In that same body of water, we have also seen marine pilots wait 25 years for a pay increase. That’s just wrong. As a result, many of these Long Island Sound pilots have trouble funding adequate safety equipment and/or keeping a pilot boat – never mind a modern one – on the water. The result of many years of benign neglect of that situation also cannot be denied. Hence, Sunshine State regulators ought to be careful what they wish for before dickering with what seems to work just fine.

I’m not sure what constitutes fair pay for pilots, but the report has pilots at one Florida port making $436,000 and in another U.S. port, they allegedly pull down – wait for it – more than $513,000. That sounds pretty good to me. The question that I want to ask is that if these compensation levels are so unreasonable, how in the world did they get so high in the first place? It takes two to tango and I’m told that in all places, there is a regulatory board of some sort or another that considers these requests when they come up. And that includes Florida. To blame all of this on marine pilots is ludicrous, and it misses the point altogether. Maybe Florida could take some pointers from the Connecticut – after all, they managed to keep rates low for a long time. Arguably, they still are.

There’s some middle ground to be found here; I’m sure of that. Not too long ago – last year to be exact – I wrote a column for this very newsletter entitled, “Politicizing Marine Safety – Never a Good Idea.” That was true then and it still rings true today. Today, state pilots have the means, the will and the authority to arbitrate safety on the waters that they operate. Changes to the traditional system(s) of state pilotage might be necessary, but these moves should be carefully thought out and implemented with an eye towards maintaining the status-quo for safety and not some obscure actuarial formulae that compares, in this case, apples-to-oranges. – MarEx.

Joseph Keefe is the Editor in Chief of THE MARITIME EXECUTIVE. He can be reached with comments on this editorial at jkeefe@maritime-executive.com. Join the Maritime Executive ‘Linked In’ group at by clicking http://www.linkedin.com/e/gis/47685>