Crowley

Friday, May 6, 2011

State Board Approves Big Jump in Bay Area Pilot Rates, Surcharges

A California state board has approved a substantial raise to pilots that guide commercial vessels to and from dock in the Bay Area.

The California State Board of Pilot Commissioners voted Tuesday to increase rates and surcharges that the pilots charge shipping lines.

In addition to the actual pilot rate on each vessel call, shipping lines must also pay the pilots additional surcharges for pilot training, pilot pensions, and pilot fuel/equipment.

Pilot revenues are generated by applying the rate to the size of the ships they guide. Larger ships generate larger rates for the pilots. However, as the industry continues to increase the size of vessels, pilots’ incomes increase accordingly, regardless of any increase in rates.

Because pilot salaries are directly tied to the amount of total funds collected from the shipping lines, the rate and surcharge increases would raise the average annual income of the approximately 60 Bay Area pilots from about $400,000, coupled with predicted growth in shipping, to about $530,000 within the next four years.

In 2002, when the last rate increase was recommended by the state, the Board of Pilot Commissioners approved increased pilot rates by a cumulative 22 percent, but due to increased ship sizes pilot incomes actually increased by 53 percent.

If the board-approved rate and surcharge increases are approved by the State Legislature, the Bay Area pilots, already the highest paid pilots in California, would become some of, if not the most, highly paid port pilots in the entire nation.

By comparison, pilots in the Long Beach/Los Angeles port complex – the busiest container complex in the Western Hemisphere – make about $227,000, while remaining some of the most highly trained and well-respected pilots in the industry.

The Pacific Merchant Shipping Association, which represents most of the shipping lines and terminal operators on the West Coast, opposed the increases requested by the Bay Area pilots. The group proposed that rates and surcharges be adjusted so the pilots would earn about $425,000.

“We appreciate the important work done by harbor pilots everywhere and believe they should be fairly compensated for their work,” PMSA president John McLaurin said. “However, for the State of California to recommend increasing this rate and further driving up pilot compensation is irresponsible and unjustified.”

The state board approval comes after several days of hearings into the rates and surcharges increase request by the pilots.

Prior to the hearing, the San Francisco Bar Pilots Association, which represents the pilots, submitted a proposal to the Board of Pilot Commissioners requesting a rate increase of 22 percent over four years. This request would have boosted the average annual Bay Area pilot salary to more than $600,000 by 2015.