Great Lakes Pilotage Rates-2010 Annual Review and Adjustment, 56153-56166 [E9-26212]
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Federal Register / Vol. 74, No. 209 / Friday, October 30, 2009 / Proposed Rules
Dated: October 22, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Approved: October 27, 2009.
Kathleen Sebelius,
Secretary.
[FR Doc. E9–26297 Filed 10–29–09; 8:45 am]
Table of Contents
BILLING CODE 4120–01–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
46 CFR Part 401
[Docket No. USCG–2009–0883]
RIN 1625–AB39
Great Lakes Pilotage Rates—2010
Annual Review and Adjustment
Coast Guard, DHS.
Notice of proposed rulemaking.
AGENCY:
ACTION:
SUMMARY: The Coast Guard proposes to
update the rates for pilotage on the
Great Lakes by 5.07% to generate
sufficient revenue to cover allowable
expenses, target pilot compensation,
and return on investment. The proposed
update reflects an August 1, 2010
increase in benchmark contractual
wages and benefits and an adjustment
for inflation. This rulemaking promotes
the Coast Guard strategic goal of
maritime safety.
DATES: Comments and related material
must reach the Docket Management
Facility on or before November 30,
2009.
You may submit comments
identified by Coast Guard docket
number USCG–2009–0883 to the Docket
Management Facility at the U.S.
Department of Transportation. To avoid
duplication, please use only one of the
following methods:
(1) Federal eRulemaking Portal:
https://www.regulations.gov.
(2) Fax: 202–493–2251.
(3) Mail: Docket Management Facility
(M–30), U.S. Department of
Transportation, West Building Ground
Floor, Room W12–140, 1200 New Jersey
Avenue, SE., Washington, DC 20590–
0001.
(4) Hand delivery: Same as mail
address above, between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays. The telephone number
is 202–366–9329.
FOR FURTHER INFORMATION CONTACT: For
questions on this proposed rule, call Mr.
Paul M. Wasserman, Chief, Great Lakes
Pilotage Branch, Commandant (CG–
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ADDRESSES:
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54122), U.S. Coast Guard, at 202–372–
1535, by fax 202–372–1929, or by e-mail
at Paul.M.Wasserman@uscg.mil. If you
have questions on viewing or submitting
material to the docket, call Renee V.
Wright, Program Manager, Docket
Operations, telephone 202–366–9826.
SUPPLEMENTARY INFORMATION:
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I. Public Participation and Request for
Comments
A. Submitting Comments
B. Viewing Comments and Documents
C. Privacy Act
D. Public Meeting
II. Abbreviations
III. Background and Purpose
IV. Discussion of the Proposed Rule
V. Regulatory Analyses
A. Regulatory Planning and Review
B. Small Entities
C. Assistance for Small Entities
D. Collection of Information
E. Federalism
F. Unfunded Mandates Reform Act
G. Taking of Private Property
H. Civil Justice Reform
I. Protection of Children
J. Indian Tribal Governments
K. Energy Effects
L. Technical Standards
M. Environment
I. Public Participation and Request for
Comments
We encourage you to participate in
this rulemaking by submitting
comments and related materials. All
comments received will be posted,
without change, to https://
www.regulations.gov and will include
any personal information you have
provided. We have an agreement with
the Department of Transportation to use
the Docket Management Facility.
A. Submitting Comments
If you submit a comment, please
include the docket number for this
rulemaking, (USCG–2009–0883),
indicate the specific section of this
document to which each comment
applies, and provide a reason for each
suggestion or recommendation. You
may submit your comments and
material online or by fax, mail, or hand
delivery, but please use only one of
these means. We recommend that you
include your name and a mailing
address, an e-mail address, or a phone
number in the body of your document
so that we can contact you if we have
questions regarding your submission.
To submit your comment online, go to
https://www.regulations.gov, click on the
‘‘submit a comment’’ box, which will
then become highlighted in blue. In the
‘‘Document Type’’ drop down menu
select ‘‘Proposed Rule’’ and insert
‘‘USCG–2009–0883’’ in the ‘‘Keyword’’
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box. Click ‘‘Search’’ then click on the
balloon shape in the ‘‘Actions’’ column.
If you submit your comments by mail or
hand delivery, submit them in an
unbound format, no larger than 81⁄2 by
11 inches, suitable for copying and
electronic filing. If you submit
comments by mail and would like to
know that they reached the Facility,
please enclose a stamped, self-addressed
postcard or envelope.
We will consider all comments and
material received during the comment
period and may change this proposed
rule based on your comments.
B. Viewing Comments and Documents
To view comments, as well as
documents mentioned in this preamble
as being available in the docket, go to
https://www.regulations.gov, click on the
‘‘read comments’’ box, which will then
become highlighted in blue. In the
‘‘Keyword’’ box insert ‘‘USCG–2009–
0883’’ and click ‘‘Search.’’ Click the
‘‘Open Docket Folder’’ in the ‘‘Actions’’
column. If you do not have access to the
internet, you may view the docket
online by visiting the Docket
Management Facility in Room W12–140
on the ground floor of the Department
of Transportation West Building, 1200
New Jersey Avenue, SE., Washington,
DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal
holidays. We have an agreement with
the Department of Transportation to use
the Docket Management Facility.
C. Privacy Act
Anyone can search the electronic
form of all comments received into any
of our dockets by the name of the
individual submitting the comment (or
signing the comment, if submitted on
behalf of an association, business, labor
union, etc.). You may review a Privacy
Act system of records notice regarding
our public dockets in the January 17,
2008 issue of the Federal Register (73
FR 3316).
D. Public Meeting
We do not plan to hold a public
meeting. But you may submit a request
for one to the Docket Management
Facility at the address under ADDRESSES
explaining why one would be
beneficial. If we determine that one
would aid this rulemaking, we will hold
one at a time and place announced by
a later notice in the Federal Register.
II. Abbreviations
AMOU American Maritime Officers Union
MISLE Marine Information for Safety and
Law Enforcement
NAICS North American Industry
Classification System
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NEPA National Environmental Policy Act
of 1969
NPRM Notice of Proposed Rulemaking
NVMC National Vessel Movement Center
OMB Office of Management and Budget
III. Background and Purpose
This notice of proposed rulemaking
(NPRM) is issued pursuant to Coast
Guard regulations in 46 CFR Parts 401–
404. Those regulations implement the
Great Lakes Pilotage Act of 1960, 46
U.S.C. Chapter 93, which requires
foreign-flag vessels and U.S.-flag vessels
engaged in foreign trade to use federally
registered Great Lakes pilots while
transiting the St. Lawrence Seaway and
the Great Lakes system, and which
requires the Secretary of Homeland
Security to ‘‘prescribe by regulation
rates and charges for pilotage services,
giving consideration to the public
interest and the costs of providing the
services.’’ 46 U.S.C. 9303(f).
The U.S. waters of the Great Lakes
and the St. Lawrence Seaway are
divided into three pilotage Districts.
Pilotage in each District is provided by
an association certified by the Coast
Guard Director of Great Lakes Pilotage
to operate a pilotage pool. It is
important to note that, while the Coast
Guard sets rates, it does not control the
actual compensation that pilots receive.
This is determined by each of the three
District associations, which use
different compensation practices.
District One, consisting of Areas 1 and
2, includes all U.S. waters of the St.
Lawrence River and Lake Ontario.
District Two, consisting of Areas 4 and
5, includes all U.S. waters of Lake Erie,
the Detroit River, Lake St. Clair, and the
St. Clair River. District Three, consisting
of Areas 6, 7, and 8, includes all U.S.
waters of the St. Mary’s River, Sault Ste.
Marie Locks, and Lakes Michigan,
Huron, and Superior. Area 3 is the
Welland Canal, which is serviced
exclusively by the Canadian Great Lakes
Pilotage Authority and, accordingly, is
not included in the U.S. rate structure.
Areas 1, 5, and 7 have been designated
by Presidential Proclamation, pursuant
to the Great Lakes Pilotage Act of 1960,
to be waters in which pilots must at all
times be fully engaged in the navigation
of vessels in their charge. Areas 2, 4, 6,
and 8 have not been so designated
because they are open bodies of water.
Under the Great Lakes Pilotage Act of
1960, pilots assigned to vessels in these
areas are only required to ‘‘be on board
and available to direct the navigation of
the vessel at the discretion of and
subject to the customary authority of the
master.’’ 46 U.S.C. 9302(a)(1)(B).
The Coast Guard pilotage regulations
require annual reviews of pilotage rates
and the setting of new rates at least once
every five years, or sooner, if annual
reviews show a need. 46 CFR 404.1. To
assist in calculating pilotage rates, the
pilotage associations are required to
submit to the Coast Guard annual
financial statements prepared by
certified public accounting firms. In
addition, every fifth year, in connection
with the mandatory rate adjustment, the
Coast Guard contracts with an
independent accounting firm to conduct
a full audit of the accounts and records
of the pilotage associations and prepare
and submit financial reports relevant to
the ratemaking process. In those years
when a full ratemaking is conducted,
the Coast Guard generates the pilotage
rates using Appendix A to 46 CFR part
404. Between the five-year full
ratemaking intervals, the Coast Guard
annually reviews the pilotage rates
using Appendix C to Part 404, and
adjusts rates when deemed appropriate.
Terms and formulas used in Appendix
A and Appendix C are defined in
Appendix B to Part 404.
The last full ratemaking using the
Appendix A methodology was
published on April 3, 2006 (71 FR
16501). Since then, rates have been
reviewed under Appendix C and
adjusted annually: 2007 (72 FR 53158,
Sep. 18, 2007); 2008 (interim rule 73 FR
15092, Mar. 21, 2008; final rule 74 FR
220, Jan. 5, 2009); 2009 (74 FR 18669,
Jul. 21, 2009). The present rulemaking
proposes a rate adjustment for the 2010
shipping season, based on an Appendix
C review. At the conclusion of this
ratemaking cycle and during the latter
portion of the 2010 navigation season,
we anticipate publishing an NPRM
proposing a rate adjustment based upon
an Appendix A 5-year review and full
audit of the pilot association books and
records.
IV. Discussion of the Proposed Rule
The pilotage regulations require that
pilotage rates be reviewed annually. If
the annual review shows that pilotage
rates are within a reasonable range of
the base target pilot compensation set in
the previous ratemaking, no adjustment
to the rates will be initiated. However,
if the annual review indicates that an
adjustment is necessary, then the Coast
Guard will establish new pilotage rates
pursuant to 46 CFR 404.10.
A. Proposed Pilotage Rate Changes—
Summarized
The Appendix C to 46 CFR 404
ratemaking methodology is intended for
use during the years between Appendix
A full ratemaking reviews and
adjustments. This section summarizes
the rate changes proposed for 2010, and
then discusses in detail how the
proposed changes were calculated
under Appendix C.
We are proposing an increase of
5.07% across all Districts over the last
pilotage rate adjustment. This reflects an
August 1, 2010, increase in benchmark
contractual wages and benefits and an
inflation adjustment. This rate increase
would not go into effect until August 1,
2010. Actual rate increases vary by
Area, and are summarized in Table 1.
TABLE 1—2010 AREA RATE CHANGES
Then the proposed percentage increases
over the current
rate is:
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If pilotage service is required in:
Area 1 (Designated waters) .............................................................................................................................................................
Area 2 (Undesignated waters) .........................................................................................................................................................
Area 4 (Undesignated waters) .........................................................................................................................................................
Area 5 (Designated waters) .............................................................................................................................................................
Area 6 (Undesignated waters) .........................................................................................................................................................
Area 7 (Designated waters) .............................................................................................................................................................
Area 8 (Undesignated waters) .........................................................................................................................................................
Overall Rate Change (percentage change in overall prospective unit costs/base unit costs; see Table 18) ................................
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5.33
5.47
4.96
5.27
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Rates for cancellation, delay, or
interruption in rendering services (46
CFR 401.420), and basic rates and
charges for carrying a U.S. pilot beyond
the normal change point, or for boarding
at other than the normal boarding point
(46 CFR 401.428), have been increased
by 5.07% in all Areas.
B. Calculating the Rate Adjustment
The Appendix C ratemaking
calculation involves eight steps:
Step 1: Calculate the total economic
costs for the base period (i.e. pilot
compensation expense plus all other
recognized expenses plus the return
element) and divide by the total bridge
hours used in setting the base period
rates;
Step 2: Calculate the ‘‘expense
multiplier,’’ the ratio of other expenses
and the return element to pilot
compensation for the base period;
Step 3: Calculate an annual
‘‘projection of target pilot
compensation’’ using the same
procedures found in Step 2 of Appendix
A;
Step 4: Increase the projected pilot
compensation in Step 3 by the expense
multiplier in Step 2;
Step 5: Adjust the result in Step 4, as
required, for inflation or deflation;
Step 6: Divide the result in Step 5 by
projected bridge hours to determine
total unit costs;
Step 7: Divide prospective unit costs
in Step 6 by the base period unit costs
in Step 1; and
Step 8: Adjust the base period rates by
the percentage changes in unit cost in
Step 7.
The base data used to calculate each
of the eight steps comes from the 2009
Appendix C review. The Coast Guard
also used the most recent union
contracts between the American
Maritime Officers Union (AMOU) and
vessel owners and operators on the
Great Lakes to determine target pilot
compensation. Bridge hour projections
for the 2010 season have been obtained
from historical data, pilots, and
industry. All documents and records
used in this rate calculation have been
placed in the public docket for this
rulemaking and are available for review
at the addresses listed under ADDRESSES.
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Some values may not total exactly due
to format rounding for presentation in
charts and explanations in this section.
The rounding does not affect the
integrity or truncate the real value of all
calculations in the ratemaking
methodology described below. Also,
please note that in previous rulemakings
we calculated an expense multiplier for
each District. This was unnecessary
because Appendix C calculations are
based on Area figures, not District
figures. District figures, where they are
shown in the following tables, now
reflect only the arithmetical totals for
each of the District’s Areas.
Step 1: Calculate the total economic
cost for the base period. In this step, for
each Area, we add the total cost of target
pilot compensation, all other recognized
expenses, and the return element (net
income plus interest). We divide this
sum by the total bridge hours for each
Area. The result is the cost in each Area
of providing pilotage service per bridge
hour for the base period. Tables 2
through 4 summarize the Step 1
calculations:
TABLE 2—TOTAL ECONOMIC COST FOR BASE PERIOD (2009), AREAS IN DISTRICT ONE
Area 1
St. Lawrence River
Area 2
Lake Ontario
Total*
District One
Base operating expense (less base return element) ..........................................
Base target pilot compensation ...........................................................................
Base return element ............................................................................................
$538,155
+ $1,617,955
+ $10,763
$547,489
+ $981,589
+ $16,425
$1,085,644
+ $2,599,544
+ $27,188
Subtotal* ........................................................................................................
Base bridge hours ...............................................................................................
Base cost per bridge hour ...................................................................................
= $2,166,873
÷ 5,203
= $416.47
= $1,545,503
÷ 5,650
= $273.54
= $3,712,376
÷ 10,853
= $342.06
*As explained in the text preceding Step 1, District totals have been expressed differently from previous rulemakings. This accounts for slight
differences between the District totals shown in Table 16 of the 2009 final rule and the District totals shown in this table.
TABLE 3—TOTAL ECONOMIC COST FOR BASE PERIOD (2009), AREAS IN DISTRICT TWO
Area 4
Lake Erie
Area 5
Southeast Shoal to
Port Huron, MI
Total*
District Two
Base operating expense ......................................................................................
Base target pilot compensation ...........................................................................
Base return element ............................................................................................
$502,087
+ $785,271
+ $25,104
$789,202
+ $1,617,955
+ $31,568
$1,291,289
+ $2,403,226
+ $56,672
Subtotal .........................................................................................................
Base bridge hours ...............................................................................................
Base cost per bridge hour ...................................................................................
= $1,312,463
÷ 7,320
= $179.30
= $2,438,725
÷ 5,097
= $478.46
= $3,751,188
÷ 12,417
= $302.10
*See footnote to Table 2.
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TABLE 4—TOTAL ECONOMIC COST FOR BASE PERIOD (2009), AREAS IN DISTRICT THREE
Area 6
Lakes Huron and
Michigan
Area 7
St. Mary’s River
Area 8
Lake Superior
Total*
District Three
Base operating expense ..................................................
Base target pilot compensation .......................................
Base return element ........................................................
$814,358
+ $1,570,542
+ $32,574
$398,461
+ $1,078,637
+ $11,954
$641,580
+ $1,374,224
+ $19,247
$1,854,399
+ $4,023,403
+ $63,776
Subtotal .....................................................................
= $2,417,474
= $1,489,052
= $2,035,052
= $5,941,578
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TABLE 4—TOTAL ECONOMIC COST FOR BASE PERIOD (2009), AREAS IN DISTRICT THREE—Continued
Area 6
Lakes Huron and
Michigan
÷ 13,406
= $180.33
Base bridge hours ...........................................................
Base cost per bridge hour ...............................................
Area 7
St. Mary’s River
Area 8
Lake Superior
÷ 3,259
= $456.90
÷ 11,630
= $174.98
Total*
District Three
÷ 28,295
= $209.99
*See footnote to Table 2.
Step 2. Calculate the expense
multiplier. In this step, for each Area,
we add the base operating expense and
the base return element. Then, we
divide the sum by the base target pilot
compensation to get the expense
multiplier for each Area. Tables 5
through 7 show the Step 2 calculations.
TABLE 5—EXPENSE MULTIPLIER, AREAS IN DISTRICT ONE
Area 1
St. Lawrence
River
Area 2
Lake Ontario
Total
District One
Base operating expense ......................................................................................
Base return element ............................................................................................
$538,155
+ $10,763
$547,489
+ $16,425
$1,085,644
+ $27,188
Subtotal .........................................................................................................
Base target pilot compensation ...........................................................................
Expense multiplier ...............................................................................................
= $548,918
÷ $1,617,955
0.33927
= $563,914
÷ $981,589
0.57449
= $1,112,832
$2,599,544
n/a
TABLE 6—EXPENSE MULTIPLIER, AREAS IN DISTRICT TWO
Area 5
Southeast Shoal to
Port Huron, MI
Area 4
Lake Erie
Total
District Two
Base operating expense ......................................................................................
Base return element ............................................................................................
$502,087
+ $25,104
$789,202
+ $31,568
$1,291,289
+ $56,672
Subtotal ................................................................................................................
Base target pilot compensation ...........................................................................
Expense multiplier ...............................................................................................
= $527,192
÷ $785,271
0.67135
= $820,770
÷ $1,617,955
0.50729
= $1,347,962
$2,403,226
n/a
TABLE 7—EXPENSE MULTIPLIER, AREAS IN DISTRICT THREE
Area 6
Lakes Huron and
Michigan
Area 7
St. Mary’s River
Area 8
Lake Superior
Total
District Three
$814,358
+ $32,574
$398,461
+ $11,954
$641,580
+ $19,247
$1,854,399
+ $63,776
Subtotal .....................................................................
Base target pilot compensation .......................................
Expense multiplier ...........................................................
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Base operating Expense .................................................
Base return element ........................................................
= $846,932
÷ $1,570,542
0.53926
= $410,415
÷ $1,078,637
0.38049
= $660,828
÷ $1,374,224
0.48087
= $1,918,175
$4,023,403
n/a
Step 3. Calculate annual projection of
target pilot compensation. In this step,
we determine the new target rate of
compensation and the new number of
pilots needed in each pilotage Area, to
determine the new target pilot
compensation for each Area.
(a) Determine new target rate of
compensation. Target pilot
compensation is based on the average
annual compensation of first mates and
masters on U.S. Great Lakes vessels. For
pilots in undesignated waters, we
approximate the first mates’
compensation and, in designated
waters, we approximate the master’s
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compensation (first mates’ wages
multiplied by 150% plus benefits). To
determine first mates’ and masters’
average annual compensation, we use
data from the most recent AMOU
contracts with the U.S. companies
engaged in Great Lakes shipping. Where
different AMOU agreements apply to
different companies, we apportion the
compensation provided by each
agreement according to the percentage
of tonnage represented by companies
under each agreement.
As of May 2009, there are two current
AMOU contracts, which we designate
Agreement A and Agreement B.
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Agreement A applies to vessels operated
by Key Lakes, Inc., and Agreement B
applies to all vessels operated by
American Steamship Co. and Mittal
Steel USA, Inc.
Both Agreement A and Agreement B
provide for a 3% wage increase effective
August 1, 2010. Under Agreement A, the
daily wage rate will be increased from
$262.73 to $270.61. Under Agreement B,
the daily wage rate will be increased
from $323.86 to $333.57.
To calculate monthly wages, we apply
Agreement A and Agreement B monthly
multipliers of 54.5 and 49.5,
respectively, to the daily rate.
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Agreement A’s 54.5 multiplier
represents 30.5 average working days,
15.5 vacation days, 4 days for four
weekends, 3 bonus days, and 1.5
holidays. Agreement B’s 49.5 multiplier
represents 30.5 average working days,
16 vacation days, and 3 bonus days.
To calculate average annual
compensation, we multiply monthly
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figures by 9 months, the length of the
Great Lakes shipping season.
Table 8 shows new wage calculations
based on Agreements A and B effective
August 1, 2010.
TABLE 8—WAGES
Pilots on
undesignated
waters
Monthly component
AGREEMENT A:
$270.61 daily rate × 54.5 days ................................................................................................................
AGREEMENT A:
Monthly total × 9 months = total wages ..................................................................................................
AGREEMENT B:
$333.57 daily rate × 49.5 days .........................................................................................................
AGREEMENT B:
Monthly total × 9 months = total wages ...........................................................................................
Both Agreements A and B include a
health benefits contribution rate of
$88.76 effective August 1, 2010.
Agreement A includes a pension plan
contribution rate of $33.35 per man-day.
Agreement B includes a pension plan
contribution rate of $43.55 per man-day.
Both Agreements A and B provide a
401K employer matching rate, 5% of the
wage rate. Neither Agreement A nor
Agreement B includes a clerical
contribution that appeared in earlier
Pilots on
designated
waters
(undesignated ×
150%)
$14,748
$22,123
$132,735
$199,103
$16,512
$24,768
$148,608
$222,912
contracts. Per the AMOU, the multiplier
used to calculate monthly benefits is
45.5 days.
Table 9 shows new benefit
calculations based on Agreements A and
B, effective August 1, 2010.
TABLE 9—BENEFITS
Pilots on
undesignated
waters
Monthly component
AGREEMENT A:
Employer contribution, 401(K) plan (Monthly Wages × 5%) ............................................................
Pension = $33.35 × 45.5 days .........................................................................................................
Health = $88.76 × 45.5 days ............................................................................................................
AGREEMENT B:
Employer contribution, 401(K) plan (Monthly Wages × 5%) ............................................................
Pension = $43.55 × 45.5 days .........................................................................................................
Health = $88.76 × 45.5 days ............................................................................................................
AGREEMENT A:
Monthly total benefits .......................................................................................................................
AGREEMENT A:
Monthly total benefits × 9 months ....................................................................................................
AGREEMENT B:
Monthly total benefits .......................................................................................................................
AGREEMENT B:
Monthly total benefits × 9 months ....................................................................................................
Pilots on
designated
waters
$737.42
$1,517.43
$4,038.58
$1,106.13
$1,517.43
$4,038.58
$825.60
$1,981.53
$4,038.58
$1,238.40
$1,981.53
$4,038.58
= $6,293.42
= $6,662.13
= $56,641
= $59,959
= $6,845.71
= $7,258.51
= $61,611
= $65,327
TABLE 10—TOTAL WAGES AND BENEFITS
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Pilots on
undesignated
waters
AGREEMENT
AGREEMENT
AGREEMENT
AGREEMENT
AGREEMENT
AGREEMENT
A:
A:
A:
B:
B:
B:
Wages .........................................................................................................................
Benefits .......................................................................................................................
Total ............................................................................................................................
Wages .........................................................................................................................
Benefits .......................................................................................................................
Total ............................................................................................................................
Table 11 shows that approximately
one third of U.S. Great Lakes shipping
deadweight tonnage operates under
VerDate Nov<24>2008
16:11 Oct 29, 2009
Jkt 220001
$132,735
+$56,641
= $189,376
$148,608
+$61,611
= $210,219
Agreement A, with the remaining two
thirds operating under Agreement B.
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Pilots on
designated
waters
$199,103
+$59,959
= $259,062
$222,912
+$65,327
= $288,239
56158
Federal Register / Vol. 74, No. 209 / Friday, October 30, 2009 / Proposed Rules
TABLE 11—DEADWEIGHT TONNAGE BY AMOU AGREEMENT
Company
Agreement A
American Steamship Company ..........................................................
Mittal Steel USA, Inc ..........................................................................
Key Lakes, Inc ....................................................................................
..........................................................
..........................................................
361,385 ............................................
815,600
38,826
Total tonnage, each agreement ..................................................
361,385 ............................................
854,426
Percent tonnage, each agreement .....................................................
361,385 ÷ 1,215,811 = 29.7238% ...
854,426 ÷ 1,215,811 = 70.2762%
Table 12 applies the percentage of
tonnage represented by each agreement
to the wages and benefits provided by
each agreement, to determine the
Agreement B
projected target rate of compensation on
a tonnage-weighted basis.
TABLE 12—PROJECTED TARGET RATE OF COMPENSATION, WEIGHTED
Undesignated
waters
AGREEMENT A:
Total wages and benefits × percent tonnage ..............................
AGREEMENT B:
Total wages and benefits × percent tonnage ..............................
Total weighted average wages and benefits = projected target
rate of compensation.
(b) Determine number of pilots
needed. Subject to adjustment by the
Coast Guard Director of Great Lakes
Pilotage to ensure uninterrupted service,
we determine the number of pilots
needed for ratemaking purposes in each
Area by dividing each Area’s projected
bridge hours, either by 1,000
(designated waters) or by 1,800
(undesignated waters).
Bridge hours are the number of hours
a pilot is aboard a vessel providing
Designated waters
$189,376 × 29.7238% = $56,290 ....
$259,062 × 29.7238% = $77,003
$210,219 × 70.2762% = $147,734 ..
$56,290 + $147,734 = $204,024 .....
$288,239 × 70.2762% = $202,563
$77,003 + $202,563 = $279,566
pilotage service. Projected bridge hours
are based on the vessel traffic that pilots
are expected to serve. Based on
historical data and information
provided by pilots and industry, we
project that vessel traffic in the 2010
navigation season, in all Areas, will
remain unchanged from the 2009
projections noted in Table 13 of the
2009 final rule.
Table 13, below, shows the projected
bridge hours needed for each Area, and
the total number of pilots needed for
ratemaking purposes after dividing
those figures either by 1,000 or 1,800.
As in 2008 and 2009, and for the same
reasons, we rounded up to the next
whole pilot except in Area 2 where we
rounded up from 3.14 to 5, and in Area
4 where we rounded down from 4.07 to
4.
TABLE 13—NUMBER OF PILOTS NEEDED
Pilotage area
Area
Area
Area
Area
Area
Area
Area
1
2
4
5
6
7
8
..................................................................................................................
..................................................................................................................
..................................................................................................................
..................................................................................................................
..................................................................................................................
..................................................................................................................
..................................................................................................................
sroberts on DSKD5P82C1PROD with PROPOSALS
(c) Determine the projected target
pilot compensation for each Area. The
projection of new total target pilot
compensation is determined separately
Divided by 1,000
(Designated
waters) or 1,800
(undesignated waters)
Projected 2010
bridge hours
5,203
5,650
7,320
5,097
13,406
3,259
11,630
for each pilotage Area by multiplying
the number of pilots needed in each
Area (see Table 13) by the projected
target rate of compensation (see Table
Pilots needed
(total = 40)
1,000
1,800
1,800
1,000
1,800
1,000
1,800
6
5
4
6
8
4
7
12) for pilots working in that Area.
Table 14 shows this calculation.
TABLE 14—PROJECTED TARGET PILOT COMPENSATION
Area 1 ..................................................................................................................
Area 2 ..................................................................................................................
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Jkt 220001
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target rate of
compensation
Pilots needed
(total = 40)
Pilotage area
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6
5
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× $279,566
× 204,024
30OCP1
Projected target
pilot compensation
$1,677,397
1,020,120
Federal Register / Vol. 74, No. 209 / Friday, October 30, 2009 / Proposed Rules
56159
TABLE 14—PROJECTED TARGET PILOT COMPENSATION—Continued
Multiplied by
target rate of
compensation
Pilots needed
(total = 40)
Pilotage area
Total, District One ................................................................................................
Area 4 ..................................................................................................................
Area 5 ..................................................................................................................
Total, District Two ................................................................................................
Area 6 ..................................................................................................................
Area 7 ..................................................................................................................
Area 8 ..................................................................................................................
Total, District Three .............................................................................................
11
4
6
10
8
4
7
19
Step 4: Increase the projected pilot
compensation in Step 3 by the expense
multiplier in Step 2. This step yields a
projected pilot compensation. Table 15
shows this calculation.
projected increase in operating costs
necessary to support the increased
n/a
× 204,024
× 279,566
n/a
× 204,024
× 279,566
× 204,024
n/a
Projected target
pilot compensation
2,697,517
816,096
1,677,397
2,493,493
1,632,191
1,118,265
1,428,167
4,178,623
TABLE 15—PROJECTED OPERATING EXPENSE
Projected target
pilot compensation
Pilotage area
Multiplied by
expense multiplier
Projected operating
expense
Area 1 ..................................................................................................................
Area 2 ..................................................................................................................
$1,677,397
1,020,120
× 0.33927
× 0.57449
= $569,084
= 586,050
Total, District One .........................................................................................
2,697,517
n/a
= 1,155,134
Area 4 ..................................................................................................................
Area 5 ..................................................................................................................
816,096
1,677,397
× 0.67135
× 0.50729
= 547,886
= 850,924
Total, District Two .........................................................................................
2,493,493
n/a
= 1,398,810
Area 6 ..................................................................................................................
Area 7 ..................................................................................................................
Area 8 ..................................................................................................................
Total, District Three ......................................................................................
1,632,191
1,118,265
1,428,167
4,178,623
× 0.53926
× 0.38049
× 0.48087
n/a
= 880,177
= 425,493
= 686,767
= 1,992,438
Step 5: Adjust the result in Step 4, as
required, for inflation or deflation, and
calculate projected total economic cost.
Based on data from the U.S. Department
of Labor’s Bureau of Labor Statistics, we
have multiplied the results in Step 4 by
a 1.037 inflation factor, reflecting an
average inflation rate of 3.7% in
‘‘Midwest Economy—Consumer Prices’’
between 2007 and 2008, the latest years
for which data are available. Table 16
shows this calculation and the projected
total economic cost.
TABLE 16—PROJECTED TOTAL ECONOMIC COST
B.
Increase, multiplied by inflation
factor (= A ×
1.037)
A.
Projected
operating
expense
Pilotage area
C.
Projected
target pilot
compensation
D.
Projected total
economic cost
(= B + C)
$569,084
586,050
$590,140
607,733
$1,677,397
1,020,120
$2,267,537
1,627,853
Total, District One .....................................................................
1,155,134
1,197,874
2,697,517
3,895,390
Area 4 ..............................................................................................
Area 5 ..............................................................................................
547,886
850,924
568,158
882,408
816,096
1,677,397
1,384,253
2,559,805
Total, District Two .....................................................................
sroberts on DSKD5P82C1PROD with PROPOSALS
Area 1 ..............................................................................................
Area 2 ..............................................................................................
1,398,810
1,450,566
2,493,493
3,944,058
Area 6 ..............................................................................................
Area 7 ..............................................................................................
Area 8 ..............................................................................................
880,177
425,493
686,767
912,744
441,236
712,178
1,632,191
1,118,265
1,428,167
2,544,935
1,559,501
2,140,345
Total, District Three ..................................................................
1,992,438
2,066,158
4,178,623
6,244,781
Step 6: Divide the result in Step 5 by
projected bridge hours to determine
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16:11 Oct 29, 2009
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total unit costs. Table 17 shows this
calculation.
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56160
Federal Register / Vol. 74, No. 209 / Friday, October 30, 2009 / Proposed Rules
TABLE 17—TOTAL UNIT COSTS
A. Projected total
economic cost
Pilotage area
B. Projected
2009 bridge
hours
Prospective
(total) unit costs
(A divided by B)
Area 1 ..............................................................................................................................
Area 2 ..............................................................................................................................
$2,267,537
1,627,853
5,203
5,650
$435.81
288.12
Total, District One .....................................................................................................
3,895,390
10,853
358.92
Area 4 ..............................................................................................................................
Area 5 ..............................................................................................................................
1,384,253
2,559,805
7,320
5,097
189.11
502.22
Total, District Two .....................................................................................................
3,944,058
12,417
317.63
Area 6 ..............................................................................................................................
Area 7 ..............................................................................................................................
Area 8 ..............................................................................................................................
2,544,935
1,559,501
2,140,345
13,406
3,259
11,630
189.84
478.52
184.04
Total, District Three ..................................................................................................
6,244,781
28,295
220.70
Overall ...............................................................................................................
14,084,230
51,565
273.14
Step 7: Divide prospective unit costs
(total unit costs) in Step 6 by the base
period unit costs in Step 1. Table 18
shows this calculation, which expresses
the percentage change between the total
unit costs and the base unit costs. The
results, for each Area, are identical with
the percentage increases listed in Table
1.
TABLE 18—PERCENTAGE CHANGE IN UNIT COSTS
A. Prospective
unit costs
Pilotage area
B. Base period
unit costs
C. Percentage
change from
base (A divided
by B; result
expressed as
percentage)
Area 1 ..............................................................................................................................
Area 2 ..............................................................................................................................
$435.81
288.12
$416.47
273.54
4.65
5.33
Total, District One .....................................................................................................
358.92
342.06
4.93
Area 4 ..............................................................................................................................
Area 5 ..............................................................................................................................
189.11
502.22
179.30
478.46
5.47
4.96
Total, District Two .....................................................................................................
317.63
302.10
5.14
Area 6 ..............................................................................................................................
Area 7 ..............................................................................................................................
Area 8 ..............................................................................................................................
189.84
478.52
184.04
180.33
456.90
174.98
5.27
4.73
5.17
Total, District Three ..................................................................................................
220.70
209.99
5.10
Overall ...............................................................................................................
273.14
259.97
5.07
Step 8: Adjust the base period rates by
the percentage change in unit costs in
Step 7. Table 19 shows this calculation.
TABLE 19—BASE PERIOD RATES ADJUSTED BY PERCENTAGE CHANGE IN UNIT COSTS*
sroberts on DSKD5P82C1PROD with PROPOSALS
Pilotage
A. Base period rate
Area
16:11 Oct 29, 2009
C. Increase in base rate
(A × B%)
D. Adjusted rate (A + C,
rounded to nearest
dollar)
.......................................
$0.78/km, $1.39/mi .......
17.44 .............................
57.11 .............................
38.09 .............................
$17.73/km, $31.38/mi.
393.
1,287.
858.
(Multiplying Factor)
Area 1:
—Basic pilotage ........................
—Each lock transited ................
—Harbor movage ......................
—Minimum basic rate, St. Lawrence River.
VerDate Nov<24>2008
B. Percentage change
in unit costs
.......................................
$16.95/km, $29.99/mi ...
375.47 ...........................
1,229.41 ........................
820.04 ...........................
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.......................................
.......................................
.......................................
.......................................
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Federal Register / Vol. 74, No. 209 / Friday, October 30, 2009 / Proposed Rules
56161
TABLE 19—BASE PERIOD RATES ADJUSTED BY PERCENTAGE CHANGE IN UNIT COSTS*—Continued
Pilotage
A. Base period rate
sroberts on DSKD5P82C1PROD with PROPOSALS
Area
16:11 Oct 29, 2009
C. Increase in base rate
(A × B%)
D. Adjusted rate (A + C,
rounded to nearest
dollar)
3,767.
(Multiplying Factor)
—Maximum rate, through trip ....
Area 2:
—6-hr. period ............................
—Docking or undocking ............
Area 4:
—6-hr. period ............................
—Docking or undocking ............
—Any point on Niagara River
below Black Rock Lock.
Area 5 between any point on or in:
—Toledo or any point on Lake
Erie W. of Southeast Shoal.
—Toledo or any point on Lake
Erie W. of Southeast Shoal &
Southeast Shoal.
—Toledo or any point on Lake
Erie W. of Southeast Shoal &
Detroit River.
—Toledo or any point on Lake
Erie W. of Southeast Shoal &
Detroit Pilot Boat.
—Port Huron Change Point &
Southeast Shoal (when pilots
are not changed at the Detroit
Pilot Boat).
—Port Huron Change Point &
Toledo or any point on Lake
Erie W. of Southeast Shoal
(when pilots are not changed
at the Detroit Pilot Boat).
—Port Huron Change Point &
Detroit River.
—Port Huron Change Point &
Detroit Pilot Boat.
—Port Huron Change Point &
St. Clair River.
—St. Clair River .........................
—St. Clair River & Southeast
Shoal (when pilots are not
changed at the Detroit Pilot
Boat).
—St. Clair River & Detroit River/
Detroit Pilot Boat.
—Detroit, Windsor, or Detroit
River.
—Detroit, Windsor, or Detroit
River & Southeast Shoal.
—Detroit, Windsor, or Detroit
River & Toledo or any point
on Lake Erie W. of Southeast
Shoal.
—Detroit, Windsor, or Detroit
River & St. Clair River.
—Detroit Pilot Boat & Southeast
Shoal.
—Detroit Pilot Boat & Toledo or
any point on Lake Erie W. of
Southeast Shoal.
—Detroit Pilot Boat & St. Clair
River.
Area 6:
—6-hr. period ............................
—Docking or undocking ............
Area 7 between any point on or in:
—Gros Cap & De Tour ..............
—Algoma Steel Corp. Wharf,
Sault Ste. Marie, Ont. & De
Tour.
VerDate Nov<24>2008
B. Percentage change
in unit costs
3,599.58 ........................
.......................................
817.63 ...........................
779.92 ...........................
.......................................
722.05 ...........................
556.46 ...........................
1,420.45 ........................
.......................................
5.33 (1.0533) ................
.......................................
.......................................
5.47 (1.0547) ................
.......................................
.......................................
.......................................
167.20 ...........................
.......................................
43.56 .............................
41.55 .............................
.......................................
39.49 .............................
30.44 .............................
77.69 .............................
.......................................
1,299.46 ........................
4.96 (1.0496) ................
.......................................
.......................................
64.51 .............................
1,364.
2,198.99 ........................
.......................................
109.16 ...........................
2,308.
2,855.20 ........................
.......................................
141.74 ...........................
2,997.
2,198.99 ........................
.......................................
109.16 ...........................
2,308.
3,829.80 ........................
.......................................
190.12 ...........................
4,020.
4,436.82 ........................
.......................................
220.26 ...........................
4,657.
2,877.20 ........................
.......................................
142.83 ...........................
3,020.
2,237.82 ........................
.......................................
111.09 ...........................
2,349.
1,590.68 ........................
.......................................
78.97 .............................
1,670.
1,299.46 ........................
3,829.80 ........................
.......................................
.......................................
64.51 .............................
190.12 ...........................
1,364.
4,020.
2,877.20 ........................
.......................................
142.83 ...........................
3,020.
1,299.46 ........................
.......................................
64.51 .............................
1,364.
2,198.99 ........................
.......................................
109.16 ...........................
2,308.
2,855.20 ........................
.......................................
141.74 ...........................
2,997.
2,877.20 ........................
.......................................
142.83 ...........................
3,020.
1,590.68 ........................
.......................................
78.97 .............................
1,670.
2,198.99 ........................
.......................................
109.16 ...........................
2,308.
2,877.20 ........................
.......................................
142.83 ...........................
3,020.
.......................................
622.93 ...........................
591.72 ...........................
.......................................
2,442.98 ........................
2,442.98 ........................
5.27 (1.0527) ................
.......................................
.......................................
4.73 (1.0473) ................
.......................................
.......................................
.......................................
32.84 .............................
31.20 .............................
.......................................
115.57 ...........................
115.57 ...........................
Jkt 220001
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861.
821.
762.
587.
1,498.
656.
623.
2,559.
2,559.
56162
Federal Register / Vol. 74, No. 209 / Friday, October 30, 2009 / Proposed Rules
TABLE 19—BASE PERIOD RATES ADJUSTED BY PERCENTAGE CHANGE IN UNIT COSTS*—Continued
Pilotage
A. Base period rate
Area
B. Percentage change
in unit costs
C. Increase in base rate
(A × B%)
D. Adjusted rate (A + C,
rounded to nearest
dollar)
(Multiplying Factor)
—Algoma Steel Corp. Wharf,
Sault Ste. Marie, Ont. & Gros
Cap.
—Any point in Sault Ste. Marie,
Ont., except the Algoma Steel
Corp. Wharf & De Tour.
—Any point in Sault Ste. Marie,
Ont., except the Algoma Steel
Corp. Wharf & Gros Cap.
—Sault Ste. Marie, MI & De
Tour.
—Sault Ste. Marie, MI & Gros
Cap.
—Harbor movage ......................
Area 8:
—6 hr. period ............................
—Docking or undocking ............
920.03 ...........................
.......................................
43.52 .............................
964.
2,047.67 ........................
.......................................
96.87 .............................
2,145.
920.03 ...........................
.......................................
43.52 .............................
964.
2,047.67 ........................
.......................................
96.87 .............................
2,145.
920.03 ...........................
.......................................
43.52 .............................
964.
920.03 ...........................
.......................................
549.44 ...........................
522.20 ...........................
.......................................
5.17 (1.0517) ................
.......................................
.......................................
43.52 .............................
.......................................
28.42 .............................
27.02 .............................
964
578.
549.
* Rates for ‘‘Cancellation, delay or interruption in rendering services (§ 401.420)’’ and ‘‘Basic Rates and charges for carrying a U.S. pilot beyond the normal change point, or for boarding at other than the normal boarding point (§ 401.428)’’ are not reflected in this table but have been
increased by 5.07% across all areas.
sroberts on DSKD5P82C1PROD with PROPOSALS
V. Regulatory Analyses
We developed this proposed rule after
considering numerous statutes and
executive orders related to rulemaking.
Below, we summarize our analyses
based on 13 of these statutes or
executive orders.
A. Regulatory Planning and Review
Executive Order 12866, ‘‘Regulatory
Planning and Review,’’ 58 FR 51735,
October 4, 1993, requires a
determination whether a regulatory
action is ‘‘significant’’ and therefore
subject to review by the Office of
Management and Budget (OMB) and
subject to the requirements of the
Executive Order. This rulemaking is not
significant under Executive Order 12866
and will not be reviewed by OMB.
The Coast Guard is required to
conduct an annual review of pilotage
rates on the Great Lakes and, if
necessary, adjust these rates to align
compensation levels between Great
Lakes pilots and industry. See the
‘‘Background and Purpose’’ section for a
detailed explanation of the legal
authority and requirements for the Coast
Guard to conduct an annual review and
provide possible adjustments of pilotage
rates on the Great Lakes. Based on our
annual review for this rulemaking, we
are proposing an adjustment to the
pilotage rates for the 2010 shipping
season to generate sufficient revenue to
cover allowable expenses, target pilot
compensation, and returns on
investment.
This proposed rule would implement
a 5.07 percent overall rate adjustment
VerDate Nov<24>2008
16:11 Oct 29, 2009
Jkt 220001
for the Great Lakes system over the
current rate as adjusted in the 2009 final
rule. These adjustments to Great Lakes
pilotage rates meet the requirements set
forth in 46 CFR part 404 for similar
compensation levels between Great
Lakes pilots and industry. They also
include adjustments for inflation and
changes in association expenses to
maintain these compensation levels.
In general, we expect an increase in
pilotage rates for a certain area to result
in additional costs for shippers using
pilotage services in that area, while a
decrease would result in a cost
reduction or savings for shippers in that
area. This proposed rule would result in
a distributional effect that transfers
payments (income) from affected
shippers (vessel owners and operators)
to the Great Lakes’ pilot associations
through Coast Guard regulated pilotage
rates.
The shippers affected by these rate
adjustments are those owners and
operators of domestic vessels operating
on register (employed in the foreign
trade) and owners and operators of
foreign vessels on a route within the
Great Lakes system. These owners and
operators must have pilots or pilotage
service as required by 46 U.S.C. 9302.
There is no minimum tonnage limit or
exemption for these vessels. However,
the Coast Guard issued a policy position
several years ago stating that the statute
applies only to commercial vessels and
not to recreational vessels.
Owners and operators of other vessels
that are not affected by this proposed
rule, such as recreational boats and
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Fmt 4702
Sfmt 4702
vessels only operating within the Great
Lakes system, may elect to purchase
pilotage services. However, this election
is voluntary and does not affect the
Coast Guard’s calculation of the rate
increase and is not a part of our
estimated national cost to shippers.
We reviewed a sample of pilot source
forms, which are the forms used to
record pilotage transactions on vessels,
and discovered very few cases of U.S.
Great Lakes vessels (i.e., domestic
vessels without registry operating only
in the Great Lakes) that purchased
pilotage services. We found a case
where the vessel operator purchased
pilotage service in District One to
presumably leave the Great Lakes
system. We assume some vessel owners
and operators may also choose to
purchase pilotage services if their
vessels are carrying hazardous
substances or were navigating the Great
Lakes system with inexperienced
personnel. Based on information from
the Coast Guard Office of Great Lakes
Pilotage, we have determined that these
vessels voluntarily chose to use pilots
and, therefore, are exempt from pilotage
requirements.
We used 2006–2008 vessel arrival
data from the Coast Guard’s Marine
Information for Safety and Law
Enforcement (MISLE) system to estimate
the average annual number of vessels
affected by the rate adjustment to be 208
vessels that journey into the Great Lakes
system. These vessels entered the Great
Lakes by transiting through or in part of
at least one of the three pilotage
Districts before leaving the Great Lakes
E:\FR\FM\30OCP1.SGM
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Federal Register / Vol. 74, No. 209 / Friday, October 30, 2009 / Proposed Rules
system. These vessels often make more
than one distinct stop, docking, loading,
and unloading at facilities in Great
Lakes ports. Of the total trips for the 208
vessels, there were approximately 923
annual U.S. port arrivals before the
vessels left the Great Lakes system,
based on 2006–2008 vessel data from
MISLE.
The impact of the rate adjustment to
shippers is estimated from the district
pilotage revenues. These revenues
represent the direct and indirect costs
(‘‘economic costs’’) that shippers must
pay for pilotage services. The Coast
Guard sets rates so that revenues equal
the estimated cost of pilotage.
We estimate the additional impact
(costs or savings) of the rate adjustment
in this proposed rule to be the
difference between the total projected
revenue needed to cover costs based on
the 2009 rate adjustment and the total
projected revenue needed to cover costs
in this proposed rule for 2010. Table 20
details additional costs or savings by
area and district.
TABLE 20—RATE ADJUSTMENT AND ADDITIONAL IMPACT OF PROPOSED RULE ($U.S.; NON-DISCOUNTED)1
Total projected
expenses in
2009
Proposed rate
change
Total projected
expenses in
2010 2
Additional revenue or cost
of this rulemaking 3
Area 1 ..............................................................................................................
Area 2 ..............................................................................................................
$2,166,873
1,545,503
1.0465
1.0533
$2,267,537
1,627,853
$100,664
82,350
Total, District One .....................................................................................
3,712,376
........................
3,895,390
183,014
Area 4 ..............................................................................................................
Area 5 ..............................................................................................................
1,312,463
2,438,725
1.0547
1.0496
1,384,253
2,559,805
71,791
121,080
Total, District Two .....................................................................................
3,751,188
........................
3,944,058
192,870
Area 6 ..............................................................................................................
Area 7 ..............................................................................................................
Area 8 ..............................................................................................................
2,417,474
1,489,052
2,035,052
1.0527
1.0473
1.0517
2,544,935
1,559,501
2,140,345
127,461
70,449
105,293
Total, District Three ..................................................................................
5,941,578
........................
6,244,781
303,203
All Districts .........................................................................................
13,405,142
........................
14,084,230
679,088
1
Some values may not total due to rounding.
Rate changes are calculated for areas only. District totals reflect arithmetic totals and are for informational and discussion purposes. See discussion in proposed rule for further details.
3 Additional Revenue or Cost of this Rulemaking = ‘Total Projected Expenses in 2010’¥‘Total Projected Expenses in 2009’.
sroberts on DSKD5P82C1PROD with PROPOSALS
2
After applying the rate change in this
proposed rule, the resulting difference
between the projected revenue in 2009
and the projected revenue in 2010 is the
annual impact to shippers from this
proposed rule. This figure will be
equivalent to the total additional
payments or savings that shippers will
incur for pilotage services from this
rule. As discussed earlier, we consider
a reduction in payments to be a cost
savings.
The impact of the rate adjustment in
this proposed rule to shippers varies by
area and district. The annual nondiscounted costs of the rate adjustments
in Districts 1 and 2 would be
approximately $183,000 and $193,000,
respectively, while District 3 would
experience an annual non-discounted
cost of approximately $300,000. To
calculate an exact cost or savings per
vessel is difficult because of the
variation in vessel types, routes, port
arrivals, commodity carriage, time of
season, conditions during navigation,
and preferences for the extent of
pilotage services on designated and
undesignated portions of the Great
Lakes system. Some owners and
operators would pay more and some
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16:11 Oct 29, 2009
Jkt 220001
would pay less depending on the
distance and port arrivals of their
vessels’ trips. However, the annual cost
or savings reported above does capture
all of the additional cost the shippers
face as a result of the rate adjustment in
this rule.
As Table 20 indicates, all areas would
experience an increased annual cost due
to this proposed rulemaking. The
overall impact of the proposed rule
would be an additional cost to shippers
of just over $679,000 across all three
districts, due primarily to an increase in
benchmark contractual wages and
benefits and an inflation adjustment.
B. Small Entities
Under the Regulatory Flexibility Act
(5 U.S.C. 601–612), we have considered
whether this proposed rule would have
a significant economic impact on a
substantial number of small entities.
The term ‘‘small entities’’ comprises
small businesses, not-for-profit
organizations that are independently
owned and operated and are not
dominant in their fields, and
governmental jurisdictions with
populations of less than 50,000 people.
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We expect entities affected by the
proposed rule would be classified under
the North American Industry
Classification System (NAICS) code
subsector 483–Water Transportation,
which includes one or all of the
following 6-digit NAICS codes for
freight transportation: 483111–Deep Sea
Freight Transportation, 483113–Coastal
and Great Lakes Freight Transportation,
and 483211–Inland Water Freight
Transportation. According to the Small
Business Administration’s definition, a
U.S. company with these NAICS codes
and employing less than 500 employees
is considered a small entity.
For the proposed rule, we reviewed
recent company size and ownership
data from 2006–2008 Coast Guard
MISLE data and business revenue and
size data provided by Reference USA
and Dunn and Bradstreet. We were able
to gather revenue and size data or link
the entities to large shipping
conglomerates for 22 of the 24 affected
entities in the United States. We found
that large, mostly foreign-owned,
shipping conglomerates or their
subsidiaries owned or operated all
vessels engaged in foreign trade on the
Great Lakes. We assume that new
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sroberts on DSKD5P82C1PROD with PROPOSALS
industry entrants will be comparable in
ownership and size to these shippers.
There are three U.S. entities affected
by the proposed rule that receive
revenue from pilotage services. These
are the three pilot associations that
provide and manage pilotage services
within the Great Lakes districts. Two of
the associations operate as partnerships
and one operates as a corporation. These
associations are classified with the same
NAICS industry classification and small
entity size standards described above,
but they have far fewer than 500
employees: Approximately 65 total
employees combined. We expect no
adverse impact to these entities from
this proposed rule since all associations
receive enough revenue to balance the
projected expenses associated with the
projected number of bridge hours and
pilots.
Therefore, the Coast Guard has
determined that this proposed rule
would not have a significant economic
impact on a substantial number of small
entities under 5 U.S.C. 605(b). If you
think that your business, organization,
or governmental jurisdiction qualifies as
a small entity and that this proposed
rule would have a significant economic
impact on it, please submit a comment
to the Docket Management Facility at
the address under ADDRESSES. In your
comment, explain why you think it
qualifies and how and to what degree
this proposed rule would economically
affect it.
C. Assistance for Small Entities
Under section 213(a) of the Small
Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104–121),
we offer to assist small entities in
understanding the proposed rule so that
they could better evaluate its effects on
them and participate in the rulemaking.
If the proposed rule would affect your
small business, organization, or
governmental jurisdiction and you have
questions concerning its provisions or
options for compliance, please call Mr.
Paul M. Wasserman, Chief,Great Lakes
Pilotage Branch, Commandant (CG–
54122), U.S. Coast Guard, at 202–372–
1525, by fax 202–372–1929, or by e-mail
at Paul.M.Wasserman@uscg.mil. Small
businesses may send comments on the
actions of Federal employees who
enforce, or otherwise determine
compliance with, Federal regulations to
the Small Business and Agriculture
Regulatory Enforcement Ombudsman
and the Regional Small Business
Regulatory Fairness Boards. The
Ombudsman evaluates these actions
annually and rates each agency’s
responsiveness to small business. If you
wish to comment on actions by
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16:11 Oct 29, 2009
Jkt 220001
employees of the Coast Guard, call 1–
888–REG–FAIR (1–888–734–3247).
D. Collection of Information
This proposed rule would call for no
new collection of information under the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3520). This rule does not
change the burden in the collection
currently approved by the Office of
Management and Budget (OMB) under
OMB Control Number 1625–0086, Great
Lakes Pilotage Methodology.
E. Federalism
A rule has implications for federalism
under Executive Order 13132,
Federalism, if it has a substantial direct
effect on State or local governments and
would either preempt State law or
impose a substantial direct cost of
compliance on them. We have analyzed
this rule under that Order and have
determined that it does not have
implications for federalism because
there are no similar State regulations,
and the States do not have the authority
to regulate and adjust rates for pilotage
services in the Great Lakes system.
F. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995 (2 U.S.C. 1531–1538) requires
Federal agencies to assess the effects of
their discretionary regulatory actions. In
particular, the Act addresses actions
that may result in the expenditure by a
State, local, or tribal government, in the
aggregate, or by the private sector of
$100,000,000 or more in any one year.
Though this rule would not result in
such expenditure, we do discuss the
effects of this rule elsewhere in this
preamble.
G. Taking of Private Property
This rule would not affect a taking of
private property or otherwise have
taking implications under Executive
Order 12630, Governmental Actions and
Interference with Constitutionally
Protected Property Rights.
H. Civil Justice Reform
This rule meets applicable standards
in sections 3(a) and 3(b)(2) of Executive
Order 12988, Civil Justice Reform, to
minimize litigation, eliminate
ambiguity, and reduce burden.
I. Protection of Children
We have analyzed this rule under
Executive Order 13045, Protection of
Children from Environmental Health
Risks and Safety Risks. This rule is not
an economically significant rule and
does not create an environmental risk to
health or risk to safety that may
disproportionately affect children.
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Fmt 4702
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J. Indian Tribal Governments
This rule does not have tribal
implications under Executive Order
13175, Consultation and Coordination
with Indian Tribal Governments,
because it does not have a substantial
direct effect on one or more Indian
tribes, on the relationship between the
Federal Government and Indian tribes,
or on the distribution of power and
responsibilities between the Federal
Government and Indian tribes.
K. Energy Effects
We have analyzed this rule under
Executive Order 13211, Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use. We have
determined that it is not a ‘‘significant
energy action’’ under that order because
it is not a ‘‘significant regulatory action’’
under Executive Order 12866 and is not
likely to have a significant adverse effect
on the supply, distribution, or use of
energy. The Administrator of the Office
of Information and Regulatory Affairs
has not designated it as a significant
energy action. Therefore, it does not
require a Statement of Energy Effects
under Executive Order 13211.
L. Technical Standards
The National Technology Transfer
and Advancement Act (NTTAA) (15
U.S.C. 272 note) directs agencies to use
voluntary consensus standards in their
regulatory activities unless the agency
provides Congress, through the Office of
Management and Budget, with an
explanation of why using these
standards would be inconsistent with
applicable law or otherwise impractical.
Voluntary consensus standards are
technical standards (e.g., specifications
of materials, performance, design, or
operation; test methods; sampling
procedures; and related management
systems practices) that are developed or
adopted by voluntary consensus
standards bodies. This rule does not use
technical standards. Therefore, we did
not consider the use of voluntary
consensus standards.
M. Environment
We have analyzed this rule under
Department of Homeland Security
Management Directive 023–01 and
Commandant Instruction M16475.lD,
which guide the Coast Guard in
complying with the National
Environmental Policy Act of 1969
(NEPA)(42 U.S.C. 4321–4370f), and
have concluded that this action is one
of a category of actions which do not
individually or cumulatively have a
significant effect on the human
environment. This rule is categorically
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Federal Register / Vol. 74, No. 209 / Friday, October 30, 2009 / Proposed Rules
excluded under section 2.B.2, figure 2–
1, paragraph (34)(a) of the Instruction.
Paragraph 34(a) pertains to minor
regulatory changes that are editorial or
procedural in nature. This rule adjusts
rates in accordance with applicable
statutory and regulatory mandates. An
environmental analysis checklist and a
categorical exclusion determination are
available in the docket where indicated
under ADDRESSES.
List of Subjects in 46 CFR Part 401
PART 401—GREAT LAKES PILOTAGE
REGULATIONS
Service
Harbor Movage .........
1. The authority citation for part 401
continues to read as follows:
Authority: 46 U.S.C. 2104(a), 6101, 7701,
8105, 9303, 9304; Department of Homeland
Security Delegation No. 0170.1; 46 CFR
401.105 also issued under the authority of 44
U.S.C. 3507.
For the reasons discussed in the
preamble, the Coast Guard proposes to
amend 46 CFR Part 401 as follows:
(b) Area 2 (Undesignated Waters):
Lake
Ontario
Six-Hour Period ........................
Docking or Undocking ..............
$861
821
3. In § 401.407, revise paragraphs (a)
and (b) to read as follows:
*
*
*
*
(a) Area 1 (Designated Waters):
Service
St. Lawrence River
Basic Pilotage ...........
$17.73 per Kilometer
or $31.38 per mile.1
$393.1
Each Lock Transited
minimum basic rate for assignment of
a pilot in the St. Lawrence River is $858, and
the maximum basic rate for a through trip is
$3,767.
Service
2. In § 401.405, revise paragraphs (a)
and (b) to read as follows:
*
$1287.1
1 The
§ 401.405 Basic rates and charges on the
St. Lawrence River and Lake Ontario.
Administrative practice and
procedure, Great Lakes, Navigation
(water), Penalties, Reporting and
recordkeeping requirements, Seamen.
St. Lawrence River
§ 401.407 Basic rates and charges on Lake
Erie and the navigable waters from
Southeast Shoal to Port Huron, MI.
*
*
*
*
*
(a) Area 4 (Undesignated Waters):
Lake Erie
(East of
Southeast
Shoal)
Service
Six-Hour Period .......................................................................................................................................................
Docking or Undocking .............................................................................................................................................
Any Point on the Niagara River below the Black Rock Lock. .................................................................................
Buffalo
$762
587
N/A
$762
587
1,498
(b) Area 5 (Designated Waters):
Southeast
Shoal
Any point on or in
Toledo or any point on Lake Erie west of Southeast Shoal ...................
Port Huron Change Point ........................................................................
St. Clair River ...........................................................................................
Detroit or Windsor or the Detroit River ....................................................
Detroit Pilot Boat ......................................................................................
1 When
$2,997
3,020
3,020
1,364
N/A
$2,308
2,349
3,020
N/A
N/A
$1,364
1 4,657
1 4,020
Detroit Pilot
Boat
N/A
2,997
2,308
2,308
1,670
(a) Area 6 (Undesignated Waters):
*
*
Lakes
Huron and
Michigan
Service
N/A
1,670
1,364
3,020
3,020
Six-Hour Period ........................
*
Docking or Undocking ..............
$656
De Tour
Gros Cap .................................................................................................................................................
Algoma Steel Corporation Wharf at Sault Ste. Marie Ontario ................................................................
Any point in Sault Ste. Marie, Ontario, except the Algoma Steel Corporation Wharf ............................
Sault Ste. Marie, MI .................................................................................................................................
Harbor Movage ........................................................................................................................................
(c) Area 8 (Undesignated Waters):
Lake
Superior
Service
Six-Hour Period ........................
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16:11 Oct 29, 2009
Jkt 220001
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$578
623
(b) Area 7 (Designated Waters):
Area
sroberts on DSKD5P82C1PROD with PROPOSALS
St. Clair
River
Lakes
Huron and
Michigan
Service
§ 401.410 Basic rates and charges on
Lakes Huron, Michigan, and Superior, and
the St. Mary’s River.
*
$2,308
1 4,020
Detroit River
pilots are not changed at the Detroit Pilot Boat.
4. In § 401.410, revise paragraphs (a),
(b), and (c) to read as follows:
*
Toledo or
any point on
Lake Erie
west of
Southeast
Shoal
$2,559
2,559
2,145
2,145
N/A
Gros Cap
N/A
964
964
964
N/A
Service
Docking or Undocking ..............
E:\FR\FM\30OCP1.SGM
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Any Harbor
N/A
N/A
N/A
N/A
$964
Lake
Superior
549
56166
§ 401.420
Federal Register / Vol. 74, No. 209 / Friday, October 30, 2009 / Proposed Rules
[Amended]
5. In § 401.420—
a. In paragraph (a), remove the
number ‘‘$113’’ and add, in its place,
the number ‘‘$119’’; and remove the
number ‘‘$1,777’’ and add, in its place,
the number ‘‘$1,867’’.
b. In paragraph (b), remove the
number ‘‘$113’’ and add, in its place,
the number ‘‘$119’’; and remove the
number ‘‘$1,777’’ and add, in its place,
the number ‘‘$1,867’’.
c. In paragraph (c)(1), remove the
number ‘‘$671’’ and add, in its place,
the number ‘‘$705’’.
d. In paragraph (c)(3), remove the
number ‘‘$113’’ and add, in its place,
the number ‘‘$119’’; and, also in
paragraph (c)(3), remove the number
‘‘$1,777’’ and add, in its place, the
number ‘‘$1,867’’.
§ 401.428
[Amended]
6. In § 401.428, remove the number
‘‘$684’’ and add, in its place, the
number ‘‘$719’’.
Dated: October 26, 2009.
Kevin S. Cook,
Rear Admiral, U.S. Coast Guard, Director of
Prevention Policy.
[FR Doc. E9–26212 Filed 10–29–09; 8:45 am]
BILLING CODE 4910–15–P
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
49 CFR Part 571
[Docket No. NHTSA–09–0117]
RIN 2127–AK42
Federal Motor Vehicle Safety
Standards; New Pneumatic and Certain
Specialty Tires
sroberts on DSKD5P82C1PROD with PROPOSALS
AGENCY: National Highway Traffic
Safety Administration (NHTSA),
Department of Transportation (DOT).
ACTION: Notice of proposed rulemaking
(NPRM).
SUMMARY: This NPRM proposes to
amend Federal Motor Vehicle Safety
Standard (FMVSS) No. 109, New
pneumatic and certain specialty tires, to
change the test pressure for the physical
dimensions test for T-type tires
(temporary use spare tires) from 52
pounds per square inch (psi) to 60 psi.
A 60-psi test pressure for the physical
dimensions test would marginally
increase the stringency of the test while
harmonizing FMVSS No. 109 with
international and voluntary consensus
standards. This NPRM responds to a
VerDate Nov<24>2008
16:11 Oct 29, 2009
Jkt 220001
petition for rulemaking from the Tire &
Rim Association.
DATES: You should submit your
comments early enough to ensure that
the Docket receives them no later than
December 29, 2009.
ADDRESSES: You may submit comments
(identified by the DOT Docket ID
Number above) by any of the following
methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
online instructions for submitting
comments.
• Mail: Docket Management Facility:
U.S. Department of Transportation, 1200
New Jersey Avenue, SE., West Building
Ground Floor, Room W12–140,
Washington, DC 20590–0001
• Hand Delivery or Courier: West
Building Ground Floor, Room W12–140,
1200 New Jersey Avenue, SE., between
9 a.m. and 5 p.m. ET, Monday through
Friday, except Federal holidays.
• Fax: 202–493–2251
Instructions: For detailed instructions
on submitting comments and additional
information on the rulemaking process,
see the Public Participation heading of
the Supplementary Information section
of this document. Note that all
comments received will be posted
without change to https://
www.regulations.gov, including any
personal information provided. Please
see the Privacy Act heading below.
Privacy Act: Anyone is able to search
the electronic form of all comments
received into any of our dockets by the
name of the individual submitting the
comment (or signing the comment, if
submitted on behalf of an association,
business, labor union, etc.). You may
review DOT’s complete Privacy Act
Statement in the Federal Register
published on April 11, 2000 (65 FR
19477–78), or at https://www.dot.gov/
privacy.html.
Docket: For access to the docket to
read background documents or
comments received, go to https://
www.regulations.gov or the street
address listed above. Follow the online
instructions for accessing the dockets.
FOR FURTHER INFORMATION CONTACT:
Santiago Navarro or George Soodoo,
NHTSA Office of Rulemaking,
telephone 202–366–2720, fax 202–493–
2739. For legal issues, you may call
Deirdre Fujita, NHTSA Office of Chief
Counsel, telephone 202–366–2992, fax
202–366–3820. You may send mail to
these officials at the National Highway
Traffic Safety Administration, 1200 New
Jersey Avenue, SE., West Building,
Washington, DC, 20590.
SUPPLEMENTARY INFORMATION:
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Frm 00029
Fmt 4702
Sfmt 4702
I. Background
a. T-Type Spare Tires
NHTSA regulates ‘‘T-type’’ spare tires
under FMVSS No. 109, New pneumatic
and certain specialty tires. A ‘‘T-type’’
spare tire refers to a type of spare tire
that is manufactured to be used as a
temporary substitute by the consumer
for a conventional tire that failed. For Ttype spare tires, FMVSS No. 109
specifies tire dimensions and laboratory
test requirements for bead unseating
resistance, strength, endurance, and
high speed performance. The standard
also defines tire load ratings and
specifies labeling requirements for the
tires.
NHTSA amended FMVSS No. 109 to
permit the manufacture of T-type (then
known as ‘‘60-psi’’) spare tires in 1977,
describing them as ‘‘differ[ing]
substantially in specification and
construction from conventional tires
* * * [with] a higher inflation pressure
(60 psi), different dimensions, and a
shorter treadwear life than conventional
tires.’’ 1 The agency adopted endurance
and high-speed performance tests,
strength requirements, a resistance to
bead unseating test, and a physical
dimensions test, which were
appropriate for the temporary use tires.
Today’s NPRM proposes an amendment
to the physical dimensions test.
b. Physical Dimensions Test
The purpose of the physical
dimensions test is to measure the tire’s
growth under inflated conditions and to
determine if it is within allowable
growth limits. If a tire exceeds allowable
growth limits in the physical
dimensions test, that indicates that there
could be a safety risk from that tire not
matching well with its rim, or not fitting
well with the vehicle to which it is
attached. Either of these mis-matches
could present safety risks.
All T-type tires must comply with
growth limits as specified by S4.2.2.2 of
FMVSS No. 109, which states that the
tire’s actual section width and overall
width may not exceed the specified
section width 2 by more than 7 percent
or 10 millimeters (0.4 inches),
1 42
FR 12869, 12870 (March 7, 1977).
states that the measured section width
‘‘shall not exceed the section width specified in a
submission made by an individual manufacturer,
pursuant to S4.4.1(a) or in one of the publications
described in S4.4.1(b) for its size designation and
type * * *.’’ (Emphasis added.) The ‘‘publications
described in S4.4.1(b)’’ refer to the year books
published by various tire manufacturer
associations, such as T&RA. As a practical matter,
individual tire manufacturers generally submit
section width information to associations like
T&RA for inclusion in the year books, rather than
submitting such information directly to NHTSA,
although FMVSS No. 109 allows the latter option.
2 S4.2.2.2
E:\FR\FM\30OCP1.SGM
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]]>Agencies
[Federal Register Volume 74, Number 209 (Friday, October 30, 2009)]
[Proposed Rules]
[Pages 56153-56166]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-26212]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
Coast Guard
46 CFR Part 401
[Docket No. USCG-2009-0883]
RIN 1625-AB39
Great Lakes Pilotage Rates--2010 Annual Review and Adjustment
AGENCY: Coast Guard, DHS.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Coast Guard proposes to update the rates for pilotage on
the Great Lakes by 5.07% to generate sufficient revenue to cover
allowable expenses, target pilot compensation, and return on
investment. The proposed update reflects an August 1, 2010 increase in
benchmark contractual wages and benefits and an adjustment for
inflation. This rulemaking promotes the Coast Guard strategic goal of
maritime safety.
DATES: Comments and related material must reach the Docket Management
Facility on or before November 30, 2009.
ADDRESSES: You may submit comments identified by Coast Guard docket
number USCG-2009-0883 to the Docket Management Facility at the U.S.
Department of Transportation. To avoid duplication, please use only one
of the following methods:
(1) Federal eRulemaking Portal: https://www.regulations.gov.
(2) Fax: 202-493-2251.
(3) Mail: Docket Management Facility (M-30), U.S. Department of
Transportation, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590-0001.
(4) Hand delivery: Same as mail address above, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The telephone
number is 202-366-9329.
FOR FURTHER INFORMATION CONTACT: For questions on this proposed rule,
call Mr. Paul M. Wasserman, Chief, Great Lakes Pilotage Branch,
Commandant (CG-54122), U.S. Coast Guard, at 202-372-1535, by fax 202-
372-1929, or by e-mail at Paul.M.Wasserman@uscg.mil. If you have
questions on viewing or submitting material to the docket, call Renee
V. Wright, Program Manager, Docket Operations, telephone 202-366-9826.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Public Participation and Request for Comments
A. Submitting Comments
B. Viewing Comments and Documents
C. Privacy Act
D. Public Meeting
II. Abbreviations
III. Background and Purpose
IV. Discussion of the Proposed Rule
V. Regulatory Analyses
A. Regulatory Planning and Review
B. Small Entities
C. Assistance for Small Entities
D. Collection of Information
E. Federalism
F. Unfunded Mandates Reform Act
G. Taking of Private Property
H. Civil Justice Reform
I. Protection of Children
J. Indian Tribal Governments
K. Energy Effects
L. Technical Standards
M. Environment
I. Public Participation and Request for Comments
We encourage you to participate in this rulemaking by submitting
comments and related materials. All comments received will be posted,
without change, to https://www.regulations.gov and will include any
personal information you have provided. We have an agreement with the
Department of Transportation to use the Docket Management Facility.
A. Submitting Comments
If you submit a comment, please include the docket number for this
rulemaking, (USCG-2009-0883), indicate the specific section of this
document to which each comment applies, and provide a reason for each
suggestion or recommendation. You may submit your comments and material
online or by fax, mail, or hand delivery, but please use only one of
these means. We recommend that you include your name and a mailing
address, an e-mail address, or a phone number in the body of your
document so that we can contact you if we have questions regarding your
submission.
To submit your comment online, go to https://www.regulations.gov,
click on the ``submit a comment'' box, which will then become
highlighted in blue. In the ``Document Type'' drop down menu select
``Proposed Rule'' and insert ``USCG-2009-0883'' in the ``Keyword'' box.
Click ``Search'' then click on the balloon shape in the ``Actions''
column. If you submit your comments by mail or hand delivery, submit
them in an unbound format, no larger than 8\1/2\ by 11 inches, suitable
for copying and electronic filing. If you submit comments by mail and
would like to know that they reached the Facility, please enclose a
stamped, self-addressed postcard or envelope.
We will consider all comments and material received during the
comment period and may change this proposed rule based on your
comments.
B. Viewing Comments and Documents
To view comments, as well as documents mentioned in this preamble
as being available in the docket, go to https://www.regulations.gov,
click on the ``read comments'' box, which will then become highlighted
in blue. In the ``Keyword'' box insert ``USCG-2009-0883'' and click
``Search.'' Click the ``Open Docket Folder'' in the ``Actions'' column.
If you do not have access to the internet, you may view the docket
online by visiting the Docket Management Facility in Room W12-140 on
the ground floor of the Department of Transportation West Building,
1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. We have an
agreement with the Department of Transportation to use the Docket
Management Facility.
C. Privacy Act
Anyone can search the electronic form of all comments received into
any of our dockets by the name of the individual submitting the comment
(or signing the comment, if submitted on behalf of an association,
business, labor union, etc.). You may review a Privacy Act system of
records notice regarding our public dockets in the January 17, 2008
issue of the Federal Register (73 FR 3316).
D. Public Meeting
We do not plan to hold a public meeting. But you may submit a
request for one to the Docket Management Facility at the address under
ADDRESSES explaining why one would be beneficial. If we determine that
one would aid this rulemaking, we will hold one at a time and place
announced by a later notice in the Federal Register.
II. Abbreviations
AMOU American Maritime Officers Union
MISLE Marine Information for Safety and Law Enforcement
NAICS North American Industry Classification System
[[Page 56154]]
NEPA National Environmental Policy Act of 1969
NPRM Notice of Proposed Rulemaking
NVMC National Vessel Movement Center
OMB Office of Management and Budget
III. Background and Purpose
This notice of proposed rulemaking (NPRM) is issued pursuant to
Coast Guard regulations in 46 CFR Parts 401-404. Those regulations
implement the Great Lakes Pilotage Act of 1960, 46 U.S.C. Chapter 93,
which requires foreign-flag vessels and U.S.-flag vessels engaged in
foreign trade to use federally registered Great Lakes pilots while
transiting the St. Lawrence Seaway and the Great Lakes system, and
which requires the Secretary of Homeland Security to ``prescribe by
regulation rates and charges for pilotage services, giving
consideration to the public interest and the costs of providing the
services.'' 46 U.S.C. 9303(f).
The U.S. waters of the Great Lakes and the St. Lawrence Seaway are
divided into three pilotage Districts. Pilotage in each District is
provided by an association certified by the Coast Guard Director of
Great Lakes Pilotage to operate a pilotage pool. It is important to
note that, while the Coast Guard sets rates, it does not control the
actual compensation that pilots receive. This is determined by each of
the three District associations, which use different compensation
practices.
District One, consisting of Areas 1 and 2, includes all U.S. waters
of the St. Lawrence River and Lake Ontario. District Two, consisting of
Areas 4 and 5, includes all U.S. waters of Lake Erie, the Detroit
River, Lake St. Clair, and the St. Clair River. District Three,
consisting of Areas 6, 7, and 8, includes all U.S. waters of the St.
Mary's River, Sault Ste. Marie Locks, and Lakes Michigan, Huron, and
Superior. Area 3 is the Welland Canal, which is serviced exclusively by
the Canadian Great Lakes Pilotage Authority and, accordingly, is not
included in the U.S. rate structure. Areas 1, 5, and 7 have been
designated by Presidential Proclamation, pursuant to the Great Lakes
Pilotage Act of 1960, to be waters in which pilots must at all times be
fully engaged in the navigation of vessels in their charge. Areas 2, 4,
6, and 8 have not been so designated because they are open bodies of
water. Under the Great Lakes Pilotage Act of 1960, pilots assigned to
vessels in these areas are only required to ``be on board and available
to direct the navigation of the vessel at the discretion of and subject
to the customary authority of the master.'' 46 U.S.C. 9302(a)(1)(B).
The Coast Guard pilotage regulations require annual reviews of
pilotage rates and the setting of new rates at least once every five
years, or sooner, if annual reviews show a need. 46 CFR 404.1. To
assist in calculating pilotage rates, the pilotage associations are
required to submit to the Coast Guard annual financial statements
prepared by certified public accounting firms. In addition, every fifth
year, in connection with the mandatory rate adjustment, the Coast Guard
contracts with an independent accounting firm to conduct a full audit
of the accounts and records of the pilotage associations and prepare
and submit financial reports relevant to the ratemaking process. In
those years when a full ratemaking is conducted, the Coast Guard
generates the pilotage rates using Appendix A to 46 CFR part 404.
Between the five-year full ratemaking intervals, the Coast Guard
annually reviews the pilotage rates using Appendix C to Part 404, and
adjusts rates when deemed appropriate. Terms and formulas used in
Appendix A and Appendix C are defined in Appendix B to Part 404.
The last full ratemaking using the Appendix A methodology was
published on April 3, 2006 (71 FR 16501). Since then, rates have been
reviewed under Appendix C and adjusted annually: 2007 (72 FR 53158,
Sep. 18, 2007); 2008 (interim rule 73 FR 15092, Mar. 21, 2008; final
rule 74 FR 220, Jan. 5, 2009); 2009 (74 FR 18669, Jul. 21, 2009). The
present rulemaking proposes a rate adjustment for the 2010 shipping
season, based on an Appendix C review. At the conclusion of this
ratemaking cycle and during the latter portion of the 2010 navigation
season, we anticipate publishing an NPRM proposing a rate adjustment
based upon an Appendix A 5-year review and full audit of the pilot
association books and records.
IV. Discussion of the Proposed Rule
The pilotage regulations require that pilotage rates be reviewed
annually. If the annual review shows that pilotage rates are within a
reasonable range of the base target pilot compensation set in the
previous ratemaking, no adjustment to the rates will be initiated.
However, if the annual review indicates that an adjustment is
necessary, then the Coast Guard will establish new pilotage rates
pursuant to 46 CFR 404.10.
A. Proposed Pilotage Rate Changes--Summarized
The Appendix C to 46 CFR 404 ratemaking methodology is intended for
use during the years between Appendix A full ratemaking reviews and
adjustments. This section summarizes the rate changes proposed for
2010, and then discusses in detail how the proposed changes were
calculated under Appendix C.
We are proposing an increase of 5.07% across all Districts over the
last pilotage rate adjustment. This reflects an August 1, 2010,
increase in benchmark contractual wages and benefits and an inflation
adjustment. This rate increase would not go into effect until August 1,
2010. Actual rate increases vary by Area, and are summarized in Table
1.
Table 1--2010 Area Rate Changes
------------------------------------------------------------------------
Then the
proposed
percentage
If pilotage service is required in: increases over
the current rate
is:
------------------------------------------------------------------------
Area 1 (Designated waters)............................ 4.65
Area 2 (Undesignated waters).......................... 5.33
Area 4 (Undesignated waters).......................... 5.47
Area 5 (Designated waters)............................ 4.96
Area 6 (Undesignated waters).......................... 5.27
Area 7 (Designated waters)............................ 4.73
Area 8 (Undesignated waters).......................... 5.17
Overall Rate Change (percentage change in overall 5.07
prospective unit costs/base unit costs; see Table 18)
------------------------------------------------------------------------
[[Page 56155]]
Rates for cancellation, delay, or interruption in rendering
services (46 CFR 401.420), and basic rates and charges for carrying a
U.S. pilot beyond the normal change point, or for boarding at other
than the normal boarding point (46 CFR 401.428), have been increased by
5.07% in all Areas.
B. Calculating the Rate Adjustment
The Appendix C ratemaking calculation involves eight steps:
Step 1: Calculate the total economic costs for the base period
(i.e. pilot compensation expense plus all other recognized expenses
plus the return element) and divide by the total bridge hours used in
setting the base period rates;
Step 2: Calculate the ``expense multiplier,'' the ratio of other
expenses and the return element to pilot compensation for the base
period;
Step 3: Calculate an annual ``projection of target pilot
compensation'' using the same procedures found in Step 2 of Appendix A;
Step 4: Increase the projected pilot compensation in Step 3 by the
expense multiplier in Step 2;
Step 5: Adjust the result in Step 4, as required, for inflation or
deflation;
Step 6: Divide the result in Step 5 by projected bridge hours to
determine total unit costs;
Step 7: Divide prospective unit costs in Step 6 by the base period
unit costs in Step 1; and
Step 8: Adjust the base period rates by the percentage changes in
unit cost in Step 7.
The base data used to calculate each of the eight steps comes from
the 2009 Appendix C review. The Coast Guard also used the most recent
union contracts between the American Maritime Officers Union (AMOU) and
vessel owners and operators on the Great Lakes to determine target
pilot compensation. Bridge hour projections for the 2010 season have
been obtained from historical data, pilots, and industry. All documents
and records used in this rate calculation have been placed in the
public docket for this rulemaking and are available for review at the
addresses listed under ADDRESSES.
Some values may not total exactly due to format rounding for
presentation in charts and explanations in this section. The rounding
does not affect the integrity or truncate the real value of all
calculations in the ratemaking methodology described below. Also,
please note that in previous rulemakings we calculated an expense
multiplier for each District. This was unnecessary because Appendix C
calculations are based on Area figures, not District figures. District
figures, where they are shown in the following tables, now reflect only
the arithmetical totals for each of the District's Areas.
Step 1: Calculate the total economic cost for the base period. In
this step, for each Area, we add the total cost of target pilot
compensation, all other recognized expenses, and the return element
(net income plus interest). We divide this sum by the total bridge
hours for each Area. The result is the cost in each Area of providing
pilotage service per bridge hour for the base period. Tables 2 through
4 summarize the Step 1 calculations:
Table 2--Total Economic Cost for Base Period (2009), Areas in District One
----------------------------------------------------------------------------------------------------------------
Area 1 St. Area 2 Lake Total* District
Lawrence River Ontario One
----------------------------------------------------------------------------------------------------------------
Base operating expense (less base return element)... $538,155 $547,489 $1,085,644
Base target pilot compensation...................... + $1,617,955 + $981,589 + $2,599,544
Base return element................................. + $10,763 + $16,425 + $27,188
-----------------------------------------------------------
Subtotal\*\..................................... = $2,166,873 = $1,545,503 = $3,712,376
Base bridge hours................................... / 5,203 / 5,650 / 10,853
Base cost per bridge hour........................... = $416.47 = $273.54 = $342.06
----------------------------------------------------------------------------------------------------------------
*As explained in the text preceding Step 1, District totals have been expressed differently from previous
rulemakings. This accounts for slight differences between the District totals shown in Table 16 of the 2009
final rule and the District totals shown in this table.
Table 3--Total Economic Cost for Base Period (2009), Areas in District Two
----------------------------------------------------------------------------------------------------------------
Area 5 Southeast
Area 4 Lake Erie Shoal to Port Total* District
Huron, MI Two
----------------------------------------------------------------------------------------------------------------
Base operating expense.............................. $502,087 $789,202 $1,291,289
Base target pilot compensation...................... + $785,271 + $1,617,955 + $2,403,226
Base return element................................. + $25,104 + $31,568 + $56,672
-----------------------------------------------------------
Subtotal........................................ = $1,312,463 = $2,438,725 = $3,751,188
Base bridge hours................................... / 7,320 / 5,097 / 12,417
Base cost per bridge hour........................... = $179.30 = $478.46 = $302.10
----------------------------------------------------------------------------------------------------------------
*See footnote to Table 2.
Table 4--Total Economic Cost for Base Period (2009), Areas in District Three
----------------------------------------------------------------------------------------------------------------
Area 6 Lakes Huron Area 7 St. Mary's Area 8 Lake Total* District
and Michigan River Superior Three
----------------------------------------------------------------------------------------------------------------
Base operating expense.......... $814,358 $398,461 $641,580 $1,854,399
Base target pilot compensation.. + $1,570,542 + $1,078,637 + $1,374,224 + $4,023,403
Base return element............. + $32,574 + $11,954 + $19,247 + $63,776
-------------------------------------------------------------------------------
Subtotal.................... = $2,417,474 = $1,489,052 = $2,035,052 = $5,941,578
[[Page 56156]]
Base bridge hours............... / 13,406 / 3,259 / 11,630 / 28,295
Base cost per bridge hour....... = $180.33 = $456.90 = $174.98 = $209.99
----------------------------------------------------------------------------------------------------------------
*See footnote to Table 2.
Step 2. Calculate the expense multiplier. In this step, for each
Area, we add the base operating expense and the base return element.
Then, we divide the sum by the base target pilot compensation to get
the expense multiplier for each Area. Tables 5 through 7 show the Step
2 calculations.
Table 5--Expense Multiplier, Areas in District One
----------------------------------------------------------------------------------------------------------------
Area 1 St. Area 2 Lake
Lawrence River Ontario Total District One
----------------------------------------------------------------------------------------------------------------
Base operating expense.............................. $538,155 $547,489 $1,085,644
Base return element................................. + $10,763 + $16,425 + $27,188
-----------------------------------------------------------
Subtotal........................................ = $548,918 = $563,914 = $1,112,832
Base target pilot compensation...................... / $1,617,955 / $981,589 $2,599,544
Expense multiplier.................................. 0.33927 0.57449 n/a
----------------------------------------------------------------------------------------------------------------
Table 6--Expense Multiplier, Areas in District Two
----------------------------------------------------------------------------------------------------------------
Area 5 Southeast
Area 4 Lake Erie Shoal to Port Total District Two
Huron, MI
----------------------------------------------------------------------------------------------------------------
Base operating expense.............................. $502,087 $789,202 $1,291,289
Base return element................................. + $25,104 + $31,568 + $56,672
-----------------------------------------------------------
Subtotal............................................ = $527,192 = $820,770 = $1,347,962
Base target pilot compensation...................... / $785,271 / $1,617,955 $2,403,226
Expense multiplier.................................. 0.67135 0.50729 n/a
----------------------------------------------------------------------------------------------------------------
Table 7--Expense Multiplier, Areas in District Three
----------------------------------------------------------------------------------------------------------------
Area 6 Lakes Huron Area 7 St. Mary's Area 8 Lake Total District
and Michigan River Superior Three
----------------------------------------------------------------------------------------------------------------
Base operating Expense.......... $814,358 $398,461 $641,580 $1,854,399
Base return element............. + $32,574 + $11,954 + $19,247 + $63,776
-------------------------------------------------------------------------------
Subtotal.................... = $846,932 = $410,415 = $660,828 = $1,918,175
Base target pilot compensation.. / $1,570,542 / $1,078,637 / $1,374,224 $4,023,403
Expense multiplier.............. 0.53926 0.38049 0.48087 n/a
----------------------------------------------------------------------------------------------------------------
Step 3. Calculate annual projection of target pilot compensation.
In this step, we determine the new target rate of compensation and the
new number of pilots needed in each pilotage Area, to determine the new
target pilot compensation for each Area.
(a) Determine new target rate of compensation. Target pilot
compensation is based on the average annual compensation of first mates
and masters on U.S. Great Lakes vessels. For pilots in undesignated
waters, we approximate the first mates' compensation and, in designated
waters, we approximate the master's compensation (first mates' wages
multiplied by 150% plus benefits). To determine first mates' and
masters' average annual compensation, we use data from the most recent
AMOU contracts with the U.S. companies engaged in Great Lakes shipping.
Where different AMOU agreements apply to different companies, we
apportion the compensation provided by each agreement according to the
percentage of tonnage represented by companies under each agreement.
As of May 2009, there are two current AMOU contracts, which we
designate Agreement A and Agreement B. Agreement A applies to vessels
operated by Key Lakes, Inc., and Agreement B applies to all vessels
operated by American Steamship Co. and Mittal Steel USA, Inc.
Both Agreement A and Agreement B provide for a 3% wage increase
effective August 1, 2010. Under Agreement A, the daily wage rate will
be increased from $262.73 to $270.61. Under Agreement B, the daily wage
rate will be increased from $323.86 to $333.57.
To calculate monthly wages, we apply Agreement A and Agreement B
monthly multipliers of 54.5 and 49.5, respectively, to the daily rate.
[[Page 56157]]
Agreement A's 54.5 multiplier represents 30.5 average working days,
15.5 vacation days, 4 days for four weekends, 3 bonus days, and 1.5
holidays. Agreement B's 49.5 multiplier represents 30.5 average working
days, 16 vacation days, and 3 bonus days.
To calculate average annual compensation, we multiply monthly
figures by 9 months, the length of the Great Lakes shipping season.
Table 8 shows new wage calculations based on Agreements A and B
effective August 1, 2010.
Table 8--Wages
------------------------------------------------------------------------
Pilots on
Pilots on designated waters
Monthly component undesignated (undesignated x
waters 150%)
------------------------------------------------------------------------
AGREEMENT A:
$270.61 daily rate x 54.5 days.. $14,748 $22,123
AGREEMENT A:
Monthly total x 9 months = total $132,735 $199,103
wages..........................
AGREEMENT B:
$333.57 daily rate x 49.5 $16,512 $24,768
days.......................
AGREEMENT B:
Monthly total x 9 months = $148,608 $222,912
total wages................
------------------------------------------------------------------------
Both Agreements A and B include a health benefits contribution rate
of $88.76 effective August 1, 2010. Agreement A includes a pension plan
contribution rate of $33.35 per man-day. Agreement B includes a pension
plan contribution rate of $43.55 per man-day. Both Agreements A and B
provide a 401K employer matching rate, 5% of the wage rate. Neither
Agreement A nor Agreement B includes a clerical contribution that
appeared in earlier contracts. Per the AMOU, the multiplier used to
calculate monthly benefits is 45.5 days.
Table 9 shows new benefit calculations based on Agreements A and B,
effective August 1, 2010.
Table 9--Benefits
------------------------------------------------------------------------
Pilots on
Monthly component undesignated Pilots on
waters designated waters
------------------------------------------------------------------------
AGREEMENT A:
Employer contribution, $737.42 $1,106.13
401(K) plan (Monthly Wages
x 5%)......................
Pension = $33.35 x 45.5 days $1,517.43 $1,517.43
Health = $88.76 x 45.5 days. $4,038.58 $4,038.58
AGREEMENT B:
Employer contribution, $825.60 $1,238.40
401(K) plan (Monthly Wages
x 5%)......................
Pension = $43.55 x 45.5 days $1,981.53 $1,981.53
Health = $88.76 x 45.5 days. $4,038.58 $4,038.58
AGREEMENT A:
Monthly total benefits...... = $6,293.42 = $6,662.13
AGREEMENT A:
Monthly total benefits x 9 = $56,641 = $59,959
months.....................
AGREEMENT B:
Monthly total benefits...... = $6,845.71 = $7,258.51
AGREEMENT B:
Monthly total benefits x 9 = $61,611 = $65,327
months.....................
------------------------------------------------------------------------
Table 10--Total Wages and Benefits
------------------------------------------------------------------------
Pilots on
undesignated Pilots on
waters designated waters
------------------------------------------------------------------------
AGREEMENT A: Wages.............. $132,735 $199,103
AGREEMENT A: Benefits........... +$56,641 +$59,959
AGREEMENT A: Total.............. = $189,376 = $259,062
AGREEMENT B: Wages.............. $148,608 $222,912
AGREEMENT B: Benefits........... +$61,611 +$65,327
AGREEMENT B: Total.............. = $210,219 = $288,239
------------------------------------------------------------------------
Table 11 shows that approximately one third of U.S. Great Lakes
shipping deadweight tonnage operates under Agreement A, with the
remaining two thirds operating under Agreement B.
[[Page 56158]]
Table 11--Deadweight Tonnage by AMOU Agreement
--------------------------------------------------------------------------------------------------------------------------------------------------------
Company Agreement A Agreement B
--------------------------------------------------------------------------------------------------------------------------------------------------------
American Steamship Company.............. ...................................................... 815,600
Mittal Steel USA, Inc................... ...................................................... 38,826
Key Lakes, Inc.......................... 361,385............................................... ......................................................
---------------------------------------------------------------------------------------------------------------
Total tonnage, each agreement....... 361,385............................................... 854,426
---------------------------------------------------------------------------------------------------------------
Percent tonnage, each agreement......... 361,385 / 1,215,811 = 29.7238%........................ 854,426 / 1,215,811 = 70.2762%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 12 applies the percentage of tonnage represented by each
agreement to the wages and benefits provided by each agreement, to
determine the projected target rate of compensation on a tonnage-
weighted basis.
Table 12--Projected Target Rate of Compensation, Weighted
--------------------------------------------------------------------------------------------------------------------------------------------------------
Undesignated waters Designated waters
--------------------------------------------------------------------------------------------------------------------------------------------------------
AGREEMENT A:
Total wages and benefits x percent $189,376 x 29.7238% = $56,290......................... $259,062 x 29.7238% = $77,003
tonnage.
AGREEMENT B:
Total wages and benefits x percent $210,219 x 70.2762% = $147,734........................ $288,239 x 70.2762% = $202,563
tonnage.
Total weighted average wages and $56,290 + $147,734 = $204,024......................... $77,003 + $202,563 = $279,566
benefits = projected target rate of
compensation.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(b) Determine number of pilots needed. Subject to adjustment by the
Coast Guard Director of Great Lakes Pilotage to ensure uninterrupted
service, we determine the number of pilots needed for ratemaking
purposes in each Area by dividing each Area's projected bridge hours,
either by 1,000 (designated waters) or by 1,800 (undesignated waters).
Bridge hours are the number of hours a pilot is aboard a vessel
providing pilotage service. Projected bridge hours are based on the
vessel traffic that pilots are expected to serve. Based on historical
data and information provided by pilots and industry, we project that
vessel traffic in the 2010 navigation season, in all Areas, will remain
unchanged from the 2009 projections noted in Table 13 of the 2009 final
rule.
Table 13, below, shows the projected bridge hours needed for each
Area, and the total number of pilots needed for ratemaking purposes
after dividing those figures either by 1,000 or 1,800. As in 2008 and
2009, and for the same reasons, we rounded up to the next whole pilot
except in Area 2 where we rounded up from 3.14 to 5, and in Area 4
where we rounded down from 4.07 to 4.
Table 13--Number of Pilots Needed
----------------------------------------------------------------------------------------------------------------
Divided by 1,000
(Designated
Pilotage area Projected 2010 waters) or 1,800 Pilots needed
bridge hours (undesignated (total = 40)
waters)
----------------------------------------------------------------------------------------------------------------
Area 1.............................................. 5,203 1,000 6
Area 2.............................................. 5,650 1,800 5
Area 4.............................................. 7,320 1,800 4
Area 5.............................................. 5,097 1,000 6
Area 6.............................................. 13,406 1,800 8
Area 7.............................................. 3,259 1,000 4
Area 8.............................................. 11,630 1,800 7
----------------------------------------------------------------------------------------------------------------
(c) Determine the projected target pilot compensation for each
Area. The projection of new total target pilot compensation is
determined separately for each pilotage Area by multiplying the number
of pilots needed in each Area (see Table 13) by the projected target
rate of compensation (see Table 12) for pilots working in that Area.
Table 14 shows this calculation.
Table 14--Projected Target Pilot Compensation
----------------------------------------------------------------------------------------------------------------
Multiplied by
Pilotage area Pilots needed target rate of Projected target
(total = 40) compensation pilot compensation
----------------------------------------------------------------------------------------------------------------
Area 1.............................................. 6 x $279,566 $1,677,397
Area 2.............................................. 5 x 204,024 1,020,120
[[Page 56159]]
Total, District One................................. 11 n/a 2,697,517
Area 4.............................................. 4 x 204,024 816,096
Area 5.............................................. 6 x 279,566 1,677,397
Total, District Two................................. 10 n/a 2,493,493
Area 6.............................................. 8 x 204,024 1,632,191
Area 7.............................................. 4 x 279,566 1,118,265
Area 8.............................................. 7 x 204,024 1,428,167
Total, District Three............................... 19 n/a 4,178,623
----------------------------------------------------------------------------------------------------------------
Step 4: Increase the projected pilot compensation in Step 3 by the
expense multiplier in Step 2. This step yields a projected increase in
operating costs necessary to support the increased projected pilot
compensation. Table 15 shows this calculation.
Table 15--Projected Operating Expense
----------------------------------------------------------------------------------------------------------------
Projected target Multiplied by Projected
Pilotage area pilot compensation expense multiplier operating expense
----------------------------------------------------------------------------------------------------------------
Area 1.............................................. $1,677,397 x 0.33927 = $569,084
Area 2.............................................. 1,020,120 x 0.57449 = 586,050
-----------------------------------------------------------
Total, District One............................. 2,697,517 n/a = 1,155,134
-----------------------------------------------------------
Area 4.............................................. 816,096 x 0.67135 = 547,886
Area 5.............................................. 1,677,397 x 0.50729 = 850,924
-----------------------------------------------------------
Total, District Two............................. 2,493,493 n/a = 1,398,810
-----------------------------------------------------------
Area 6.............................................. 1,632,191 x 0.53926 = 880,177
Area 7.............................................. 1,118,265 x 0.38049 = 425,493
Area 8.............................................. 1,428,167 x 0.48087 = 686,767
Total, District Three........................... 4,178,623 n/a = 1,992,438
----------------------------------------------------------------------------------------------------------------
Step 5: Adjust the result in Step 4, as required, for inflation or
deflation, and calculate projected total economic cost. Based on data
from the U.S. Department of Labor's Bureau of Labor Statistics, we have
multiplied the results in Step 4 by a 1.037 inflation factor,
reflecting an average inflation rate of 3.7% in ``Midwest Economy--
Consumer Prices'' between 2007 and 2008, the latest years for which
data are available. Table 16 shows this calculation and the projected
total economic cost.
Table 16--Projected Total Economic Cost
----------------------------------------------------------------------------------------------------------------
B. Increase,
A. Projected multiplied by C. Projected D. Projected
Pilotage area operating inflation factor target pilot total economic
expense (= A x 1.037) compensation cost (= B + C)
----------------------------------------------------------------------------------------------------------------
Area 1.................................. $569,084 $590,140 $1,677,397 $2,267,537
Area 2.................................. 586,050 607,733 1,020,120 1,627,853
-----------------------------------------------------------------------
Total, District One................. 1,155,134 1,197,874 2,697,517 3,895,390
-----------------------------------------------------------------------
Area 4.................................. 547,886 568,158 816,096 1,384,253
Area 5.................................. 850,924 882,408 1,677,397 2,559,805
-----------------------------------------------------------------------
Total, District Two................. 1,398,810 1,450,566 2,493,493 3,944,058
-----------------------------------------------------------------------
Area 6.................................. 880,177 912,744 1,632,191 2,544,935
Area 7.................................. 425,493 441,236 1,118,265 1,559,501
Area 8.................................. 686,767 712,178 1,428,167 2,140,345
-----------------------------------------------------------------------
Total, District Three............... 1,992,438 2,066,158 4,178,623 6,244,781
----------------------------------------------------------------------------------------------------------------
Step 6: Divide the result in Step 5 by projected bridge hours to
determine total unit costs. Table 17 shows this calculation.
[[Page 56160]]
Table 17--Total Unit Costs
----------------------------------------------------------------------------------------------------------------
Prospective
A. Projected B. Projected (total) unit
Pilotage area total economic 2009 bridge costs (A
cost hours divided by B)
----------------------------------------------------------------------------------------------------------------
Area 1.................................................... $2,267,537 5,203 $435.81
Area 2.................................................... 1,627,853 5,650 288.12
-----------------------------------------------------
Total, District One................................... 3,895,390 10,853 358.92
-----------------------------------------------------
Area 4.................................................... 1,384,253 7,320 189.11
Area 5.................................................... 2,559,805 5,097 502.22
-----------------------------------------------------
Total, District Two................................... 3,944,058 12,417 317.63
-----------------------------------------------------
Area 6.................................................... 2,544,935 13,406 189.84
Area 7.................................................... 1,559,501 3,259 478.52
Area 8.................................................... 2,140,345 11,630 184.04
-----------------------------------------------------
Total, District Three................................. 6,244,781 28,295 220.70
=====================================================
Overall........................................... 14,084,230 51,565 273.14
----------------------------------------------------------------------------------------------------------------
Step 7: Divide prospective unit costs (total unit costs) in Step 6
by the base period unit costs in Step 1. Table 18 shows this
calculation, which expresses the percentage change between the total
unit costs and the base unit costs. The results, for each Area, are
identical with the percentage increases listed in Table 1.
Table 18--Percentage Change in Unit Costs
----------------------------------------------------------------------------------------------------------------
C. Percentage
change from base
Pilotage area A. Prospective B. Base period (A divided by B;
unit costs unit costs result expressed
as percentage)
----------------------------------------------------------------------------------------------------------------
Area 1.................................................... $435.81 $416.47 4.65
Area 2.................................................... 288.12 273.54 5.33
-----------------------------------------------------
Total, District One................................... 358.92 342.06 4.93
-----------------------------------------------------
Area 4.................................................... 189.11 179.30 5.47
Area 5.................................................... 502.22 478.46 4.96
-----------------------------------------------------
Total, District Two................................... 317.63 302.10 5.14
-----------------------------------------------------
Area 6.................................................... 189.84 180.33 5.27
Area 7.................................................... 478.52 456.90 4.73
Area 8.................................................... 184.04 174.98 5.17
-----------------------------------------------------
Total, District Three................................. 220.70 209.99 5.10
=====================================================
Overall........................................... 273.14 259.97 5.07
----------------------------------------------------------------------------------------------------------------
Step 8: Adjust the base period rates by the percentage change in
unit costs in Step 7. Table 19 shows this calculation.
Table 19--Base Period Rates Adjusted by Percentage Change in Unit Costs*
----------------------------------------------------------------------------------------------------------------
B. Percentage C. Increase in
Pilotage A. Base period change in unit base rate (A x D. Adjusted rate (A + C,
rate costs B%) rounded to nearest dollar)
----------------------------------------------------------------------------------------------------------------
Area (Multiplying
Factor)
----------------------------------------------------------------------------------------------------------------
Area 1: ............... 4.65 (1.0465).. ............... ..............................
--Basic pilotage......... $16.95/km, ............... $0.78/km, $1.39/ $17.73/km, $31.38/mi.
$29.99/mi. mi.
--Each lock transited.... 375.47......... ............... 17.44.......... 393.
--Harbor movage.......... 1,229.41....... ............... 57.11.......... 1,287.
--Minimum basic rate, St. 820.04......... ............... 38.09.......... 858.
Lawrence River.
[[Page 56161]]
--Maximum rate, through 3,599.58....... ............... 167.20......... 3,767.
trip.
Area 2: ............... 5.33 (1.0533).. ............... ..............................
--6-hr. period........... 817.63......... ............... 43.56.......... 861.
--Docking or undocking... 779.92......... ............... 41.55.......... 821.
Area 4: ............... 5.47 (1.0547).. ............... ..............................
--6-hr. period........... 722.05......... ............... 39.49.......... 762.
--Docking or undocking... 556.46......... ............... 30.44.......... 587.
--Any point on Niagara 1,420.45....... ............... 77.69.......... 1,498.
River below Black Rock
Lock.
Area 5 between any point on ............... 4.96 (1.0496).. ............... ..............................
or in:
--Toledo or any point on 1,299.46....... ............... 64.51.......... 1,364.
Lake Erie W. of
Southeast Shoal.
--Toledo or any point on 2,198.99....... ............... 109.16......... 2,308.
Lake Erie W. of
Southeast Shoal &
Southeast Shoal.
--Toledo or any point on 2,855.20....... ............... 141.74......... 2,997.
Lake Erie W. of
Southeast Shoal &
Detroit River.
--Toledo or any point on 2,198.99....... ............... 109.16......... 2,308.
Lake Erie W. of
Southeast Shoal &
Detroit Pilot Boat.
--Port Huron Change Point 3,829.80....... ............... 190.12......... 4,020.
& Southeast Shoal (when
pilots are not changed
at the Detroit Pilot
Boat).
--Port Huron Change Point 4,436.82....... ............... 220.26......... 4,657.
& Toledo or any point on
Lake Erie W. of
Southeast Shoal (when
pilots are not changed
at the Detroit Pilot
Boat).
--Port Huron Change Point 2,877.20....... ............... 142.83......... 3,020.
& Detroit River.
--Port Huron Change Point 2,237.82....... ............... 111.09......... 2,349.
& Detroit Pilot Boat.
--Port Huron Change Point 1,590.68....... ............... 78.97.......... 1,670.
& St. Clair River.
--St. Clair River........ 1,299.46....... ............... 64.51.......... 1,364.
--St. Clair River & 3,829.80....... ............... 190.12......... 4,020.
Southeast Shoal (when
pilots are not changed
at the Detroit Pilot
Boat).
--St. Clair River & 2,877.20....... ............... 142.83......... 3,020.
Detroit River/Detroit
Pilot Boat.
--Detroit, Windsor, or 1,299.46....... ............... 64.51.......... 1,364.
Detroit River.
--Detroit, Windsor, or 2,198.99....... ............... 109.16......... 2,308.
Detroit River &
Southeast Shoal.
--Detroit, Windsor, or 2,855.20....... ............... 141.74......... 2,997.
Detroit River & Toledo
or any point on Lake
Erie W. of Southeast
Shoal.
--Detroit, Windsor, or 2,877.20....... ............... 142.83......... 3,020.
Detroit River & St.
Clair River.
--Detroit Pilot Boat & 1,590.68....... ............... 78.97.......... 1,670.
Southeast Shoal.
--Detroit Pilot Boat & 2,198.99....... ............... 109.16......... 2,308.
Toledo or any point on
Lake Erie W. of
Southeast Shoal.
--Detroit Pilot Boat & 2,877.20....... ............... 142.83......... 3,020.
St. Clair River.
Area 6: ............... 5.27 (1.0527).. ............... ..............................
--6-hr. period........... 622.93......... ............... 32.84.......... 656.
--Docking or undocking... 591.72......... ............... 31.20.......... 623.
Area 7 between any point on ............... 4.73 (1.0473).. ............... ..............................
or in:
--Gros Cap & De Tour..... 2,442.98....... ............... 115.57......... 2,559.
--Algoma Steel Corp. 2,442.98....... ............... 115.57......... 2,559.
Wharf, Sault Ste. Marie,
Ont. & De Tour.
[[Page 56162]]
--Algoma Steel Corp. 920.03......... ............... 43.52.......... 964.
Wharf, Sault Ste. Marie,
Ont. & Gros Cap.
--Any point in Sault Ste. 2,047.67....... ............... 96.87.......... 2,145.
Marie, Ont., except the
Algoma Steel Corp. Wharf
& De Tour.
--Any point in Sault Ste. 920.03......... ............... 43.52.......... 964.
Marie, Ont., except the
Algoma Steel Corp. Wharf
& Gros Cap.
--Sault Ste. Marie, MI & 2,047.67....... ............... 96.87.......... 2,145.
De Tour.
--Sault Ste. Marie, MI & 920.03......... ............... 43.52.......... 964.
Gros Cap.
--Harbor movage.......... 920.03......... ............... 43.52.......... 964
Area 8: ............... 5.17 (1.0517).. ............... ..............................
--6 hr. period........... 549.44......... ............... 28.42.......... 578.
--Docking or undocking... 522.20......... ............... 27.02.......... 549.
----------------------------------------------------------------------------------------------------------------
* Rates for ``Cancellation, delay or interruption in rendering services (Sec. 401.420)'' and ``Basic Rates and
charges for carrying a U.S. pilot beyond the normal change point, or for boarding at other than the normal
boarding point (Sec. 401.428)'' are not reflected in this table but have been increased by 5.07% across all
areas.
V. Regulatory Analyses
We developed this proposed rule after considering numerous statutes
and executive orders related to rulemaking. Below, we summarize our
analyses based on 13 of these statutes or executive orders.
A. Regulatory Planning and Review
Executive Order 12866, ``Regulatory Planning and Review,'' 58 FR
51735, October 4, 1993, requires a determination whether a regulatory
action is ``significant'' and therefore subject to review by the Office
of Management and Budget (OMB) and subject to the requirements of the
Executive Order. This rulemaking is not significant under Executive
Order 12866 and will not be reviewed by OMB.
The Coast Guard is required to conduct an annual review of pilotage
rates on the Great Lakes and, if necessary, adjust these rates to align
compensation levels between Great Lakes pilots and industry. See the
``Background and Purpose'' section for a detailed explanation of the
legal authority and requirements for the Coast Guard to conduct an
annual review and provide possible adjustments of pilotage rates on the
Great Lakes. Based on our annual review for this rulemaking, we are
proposing an adjustment to the pilotage rates for the 2010 shipping
season to generate sufficient revenue to cover allowable expenses,
target pilot compensation, and returns on investment.
This proposed rule would implement a 5.07 percent overall rate
adjustment for the Great Lakes system over the current rate as adjusted
in the 2009 final rule. These adjustments to Great Lakes pilotage rates
meet the requirements set forth in 46 CFR part 404 for similar
compensation levels between Great Lakes pilots and industry. They also
include adjustments for inflation and changes in association expenses
to maintain these compensation levels.
In general, we expect an increase in pilotage rates for a certain
area to result in additional costs for shippers using pilotage services
in that area, while a decrease would result in a cost reduction or
savings for shippers in that area. This proposed rule would result in a
distributional effect that transfers payments (income) from affected
shippers (vessel owners and operators) to the Great Lakes' pilot
associations through Coast Guard regulated pilotage rates.
The shippers affected by these rate adjustments are those owners
and operators of domestic vessels operating on register (employed in
the foreign trade) and owners and operators of foreign vessels on a
route within the Great Lakes system. These owners and operators must
have pilots or pilotage service as required by 46 U.S.C. 9302. There is
no minimum tonnage limit or exemption for these vessels. However, the
Coast Guard issued a policy position several years ago stating that the
statute applies only to commercial vessels and not to recreational
vessels.
Owners and operators of other vessels that are not affected by this
proposed rule, such as recreational boats and vessels only operating
within the Great Lakes system, may elect to purchase pilotage services.
However, this election is voluntary and does not affect the Coast
Guard's calculation of the rate increase and is not a part of our
estimated national cost to shippers.
We reviewed a sample of pilot source forms, which are the forms
used to record pilotage transactions on vessels, and discovered very
few cases of U.S. Great Lakes vessels (i.e., domestic vessels without
registry operating only in the Great Lakes) that purchased pilotage
services. We found a case where the vessel operator purchased pilotage
service in District One to presumably leave the Great Lakes system. We
assume some vessel owners and operators may also choose to purchase
pilotage services if their vessels are carrying hazardous substances or
were navigating the Great Lakes system with inexperienced personnel.
Based on information from the Coast Guard Office of Great Lakes
Pilotage, we have determined that these vessels voluntarily chose to
use pilots and, therefore, are exempt from pilotage requirements.
We used 2006-2008 vessel arrival data from the Coast Guard's Marine
Information for Safety and Law Enforcement (MISLE) system to estimate
the average annual number of vessels affected by the rate adjustment to
be 208 vessels that journey into the Great Lakes system. These vessels
entered the Great Lakes by transiting through or in part of at least
one of the three pilotage Districts before leaving the Great Lakes
[[Page 56163]]
system. These vessels often make more than one distinct stop, docking,
loading, and unloading at facilities in Great Lakes ports. Of the total
trips for the 208 vessels, there were approximately 923 annual U.S.
port arrivals before the vessels left the Great Lakes system, based on
2006-2008 vessel data from MISLE.
The impact of the rate adjustment to shippers is estimated from the
district pilotage revenues. These revenues represent the direct and
indirect costs (``economic costs'') that shippers must pay for pilotage
services. The Coast Guard sets rates so that revenues equal the
estimated cost of pilotage.
We estimate the additional impact (costs or savings) of the rate
adjustment in this proposed rule to be the difference between the total
projected revenue needed to cover costs based on the 2009 rate
adjustment and the total projected revenue needed to cover costs in
this proposed rule for 2010. Table 20 details additional costs or
savings by area and district.
Table 20--Rate Adjustment and Additional Impact of Proposed Rule ($U.S.; non-discounted)\1\
----------------------------------------------------------------------------------------------------------------
Total Total Additional
projected Proposed rate projected revenue or
expenses in
