Monday, October 26, 2009

Opinion: Puget Sound Pilots Helping Ports Stay Competitive

By: Andy Coe - President, Puget Sound Pilots (As seen in Oct. 2009 Issue of Pacific Maritime Magazine)

The Ports of Seattle and Tacoma recently completed a joint survey of the factors their customers consider in choosing ports. Customers cited productivity, costs, size of local markets, ease of doing business, intermodal accessibility, available marine services and green initiatives.

Pilots applaud the ports for this effort. Amid increasing West Coast competition and especially during the current economic conditions, it is imperative ports take advantage of whatever tools are available to attract and hold business. Another tool our ports are using is full and effective use of the local pilot corps. No one cares more about having healthy port districts than the pilots whose livelihoods depend on a vibrant local shipping community.

Unlike the shipping companies and trade groups that do business in all West Coast ports, pilot groups are local and depend solely on the well-being of the ports they serve. Because pilotage is fully regulated at the state level, the local pilot group is a public resource available to all members of the maritime community. This resource should be applied to the fullest advantage because effective use of pilots assures smooth and predictable operations – a vital aspect of maintaining a competitive port.

State pilotage commissions typically are also charged with protecting local economic interests. While these commissions recognize that their primary function is to foster the safe movement of vessels in local waters and protect the marine environment, they are also sensitive to economic conditions. For example, the Washington pilotage commission recently declined to enact a rate increase for Puget Sound pilots despite significant increases in the cost of delivering pilot services. It took this action in direct response to the current economic crisis in the shipping industry. The commission is sensitive to the needs of the local economy and is specifically charged with keeping the local ports competitive.

Costs are always an important factor in any economic decision, of course. While all ports have pilotage costs, the absolute cost of pilotage is not significant and the difference in that cost from one port to another plays no real role in selecting a port. In Puget Sound in particular, pilotage costs are low in comparison to the other West Coast ports dependent on discretionary cargo. For example, one-way pilotage on a typical bulk ship costs $3,000 in Seattle, $4,700 (US) in Vancouver, $7,100 in Redwood City and $10,000 in Portland. An average size container ship (5,400 TEU) costs $6,000 in Seattle, $7,000 (US) in Vancouver, $8,600 in Oakland and $16,000 in Portland.

But while pilotage fees are simply not large enough to be a factor in port competitiveness, the effectiveness with which pilot expertise is integrated into smooth port operations most definitely can matter. Port operations relate directly to more crucial port selection factors found in the ports’ customer survey – productivity and ease of doing business.

Because they are grounded in local concerns, the pilot groups can be valuable allies in demonstrating to customers that a port is a good place to do business. The main requirement is that the port has an adequate number of pilots competent to move ships smoothly and efficiently. Nothing is more disruptive to shipping than marine accidents, especially those affecting the environment.

In Washington, competency is assured by state regulatory standards established for pilots that far exceed federal requirements. Pilots must have served as master of a ship for two years (sea time) on qualifying ships; pass a competitive written and simulator exam; and, successfully complete a training program of eight months to three years. Pilot commissions must attract sea captains who are well-established in their careers and convince them to undertake a lengthy period of reduced earnings while they learn a new skill. This, along with the responsibility, difficulty, and risk of the job, are primary reasons that pilots are well compensated. Once licensed, pilots are subject to license limitations relating to the size of ships and nature of the cargo for the first five years and to continuing education requirements that last throughout a pilot’s career.

In addition to competence, pilots play an important role in the day-to-day operations of a port that are so essential to making the port a good place to do business. Pilots are constantly in communication with operators, agents, port districts, ferry systems, terminal users and the Coast Guard to help make sure ships move on schedule with a minimum of delay. While this activity is often ‘below the radar,’ it is crucial to making ports efficient. Examples abound of how this can work to the advantage of the operators and the port districts.

Last November, for instance, the Coast Guard District 13 Commander looked out his window in the Federal Building in downtown Seattle and saw a ship dragging anchor in the Smith Cove anchorage of Elliott Bay. He immediately notified the Captain of the Port’s office, apparently with directions to get some rules in place to limit or close the anchorage.

The COTP’s office contacted the Puget Sound Pilots’ President that very night. This began a series of discussions between the pilots and the Coast Guard about the problem and the history of similar problems in Tacoma. These discussions eventually moved away from proposals to close or severely limit use of the anchorages to a discussion of the real problem: ships not following adequate bridge watch procedures in windy conditions.

As they had done in Tacoma, the pilots and the COPT developed a written advisory for foreign crews describing the watch standards to be maintained and elevated during deteriorating weather conditions. The Coast Guard eventually agreed that the anchorage was safe if the proper procedures were followed. The pilots now deliver a copy of the advisory to the master on all vessels going to anchor. As a result, this very popular and heavily used anchorage remains open and available to bulk ships calling in Seattle.

In a related event, it was decided that at certain times it would be prudent to move ships from this anchorage to another anchorage across Elliott Bay. One of the local ship agents expressed his concerns that discarded chains and anchors at the proposed location could entangle ships’ anchors. At the pilots’ request, NOAA agreed to use its side reading sonar to find the debris. There were no hazards identified in the anchorage and it is in use today.

In a similar but separate situation last fall, the pilot on a log ship proceeding down the Hylebos waterway in Tacoma saw some movement of an old, partially submerged (but quite large) derelict barge on the southern side of the waterway. Investigation determined the barge had slipped into the channel and the waterway was not passable above that point, cutting off access to three separate active terminals. The pilots initiated a series of discussions among the waterways users, terminal operators, Corps of Engineers and the Coast Guard. Ultimately, Washington’s US Senators were enlisted to expedite the funding needed by the Corps to complete the barge removal.

In a different kind of situation recently, one of our smaller ports was seeing an increase in traffic and had a problem with tug surcharges levied to get assist tugs to the port. They asked the pilots to work with a tug company on operating characteristics and tug requirements so that they could successfully contract with the tug provider to serve the port. With ongoing input from the pilots, these discussions were successful and the port is now operating with the tug provider.

Many more examples of pilots helping ports exist in Puget Sound and other ports as well. The pilots work with port users on a daily basis to make sure that ships are moving as efficiently as possible. Sometimes they are called upon in advance to avoid problems and anticipate issues, but more often they are reacting to the everyday events that will delay shipping if not properly handled. It might be talking to the Corps about where the shallow spot is in a waterway, explaining a problem to a US Senator’s staffer or negotiating with the Coast Guard over the conditions under which a ship with a mechanical issue can sail. Whatever the situation, state-licensed pilots have the same interest as the ports – keep ships moving smoothly and predictably and making local ports an efficient, hospitable place to do business.

Captain Coe first went to sea as a deckhand for Western Pioneer in the near coastal ocean trade in 1979, becoming a Master for Western Pioneer in 1985, and then a licensed Puget Sound Pilot in 1992. Captain Coe has also served as Vice President of the Pilots and previously served on Pilot committees concerned with Operating Rules, Safe Practices, and Pilot Licensing Qualifications.