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An Open Market Harbor Pilot System Benefits All Floridians

By The Maritime Executive 01-17-2011 09:58:09

POINT By Jennifer Nugent-Hill, Tropical Shipping and Board Member, Florida Alliance of Maritime Organizations

For decades harbor pilots and ship operators have stood as partners to ensure the safe passage of large vessels into our ports. Freight and passenger vessel industries appreciate the essential services provided by the pilots. However, a modernization of the harbor pilot system in the state of Florida is greatly needed.

The Florida Alliance of Maritime Organizations, which is comprised of cargo and cruise companies, supports change that would introduce an open market system to the Sunshine State’s harbor pilot structure. We are seeking competition and job growth in what is a monopoly-like system. Our reform efforts are not about doing away with pilots or deregulation of the system; we are working to reform a broken system. Florida needs a balanced system that permits men and women who have the qualifications to be pilots to become pilots. Harbor pilots remain imperative, and we believe there should be more opportunities created for men and women who want to join this profession.

A reasonable approach would be to allow other qualified harbor pilots to offer their services to the thousands of vessels that dock in Florida ports each year. This would be a “win-win-win situation” for Florida consumers, state and local governments, and those looking for work in related industries.

In Florida, the vast majority of ships are required to obtain the services of a state-licensed harbor pilot when entering or leaving any of the state’s 14 seaports. First enacted in 1974, Chapter 310 of Florida Statutes tasked the Department of Business and Professional Regulation (DBPR) with regulating the state’s approximately 90 harbor pilots. Instead of being competitively based on supply and demand, the pool of eligible pilot licenses has historically been kept low and not subject to free market conditions. Licenses and compensation are set by two DBPR boards, one of which includes pilots. Essentially, the pilots – whose services are required – determine who joins their small group.

Under this noncompetitive system, thousands of vessels have no other choice than to utilize this group of approximately 90 pilots, whose average annual income has ballooned to over $368,000 annually. According to a new study by the Washington Economics Group of Miami, this greatly exceeds what ship captains, airline pilots or even air traffic controllers make in a year.

The study concluded that in 2008, approximately $50 million in pilotage fees were paid by cargo and passenger vessel operators whose ships frequent the state’s ports. Those costs, in turn, are borne by consumers who purchase goods transported through Florida’s ports or by vacationers who cruise through state waters. The Washington Economics Group found that setting Florida harbor pilot fees to levels comparable to the incomes of air traffic controllers – a job with similar stress and responsibilities – would result in as much as $35 million in direct annual savings. Nearly 5,000 new jobs in related industries would be created.

This issue is not a debate about safety. Safe navigation is a top priority as traveling in and out of Florida’s ports without incident is critical to our ability to do business. Opening the harbor pilot system to allow market competition among a larger pool of adequately trained professionals would in no way undermine safety, which is an utmost priority for the entire maritime industry. New pilots would and should be subject to stringent professional and experience standards. Moreover, due to heavy maritime investment in the 36 years since the harbor pilots’ regulatory framework was enacted, there have been dramatic advancements in navigation, weather, radar and communications technology, allowing ships to be driven and docked with high degrees of safety and precision.

As such, our industries do not support a removal of pilots – their extra set of eyes adds another layer of safety. With our own trained captains and bridge teams, a larger pool of qualified harbor pilots, and the deployment of various new shipboard technologies, port navigation is already very safe and getting safer each year.

Each layer of safety is valued by ship operators, which is why we appreciate the extra pair of eyes and knowledge that harbor pilots provide. The reality, however, is harbor pilot compensation has grown unreasonably high and is among the highest in the maritime industry and perhaps in the entire state. Opening the system to competition is an overdue, pragmatic step necessary to keep Florida ports competitive for the long term. – MarEx

JENNIFER NUGENT-HILL is currently Assistant Vice President for Government and Public Affairs for Tropical Shipping. She is a member of the Board of Trustees for the Caribbean Central American Action and a member of the Board of Directors for the Florida Alliance of Maritime Organizations. Mrs. Nugent-Hill has in the past worked as a management consultant to small businesses and has received numerous public and civic awards and commendations for services provided in both the private and public sectors.