2010 Rates for Pilotage on the Great Lakes, 7958-7971 [2010-3396]
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Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations
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Unincorporated
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Town of Smyrna
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July 8, 2009; July 15, 2009;
Daily News Journal.
The Honorable Ernest Burgess, Mayor,
Rutherford County, County Courthouse,
Room 101, Murfreesboro, TN 37130.
November 12, 2009 ........
470165
July 8, 2009; July 15, 2009;
Daily News Journal.
November 12, 2009 ........
470169
Unincorporated
areas of Wilson
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3370P).
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Town of Smyrna, 315 South Lowry
Street, Smyrna, TN 37167.
The Honorable Robert Dedman, County
Mayor, Wilson County, 228 East Main
Street, Lebanon, TN 37087.
November 12, 2009 ........
470165
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City of Waco (09–
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June 26, 2009; July 3, 2009;
Waco Tribune Herald.
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County Judge, P.O. Box 1728, Waco,
TX 76701.
November 2, 2009 ..........
480456
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November 2, 2009 ..........
480461
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October 29, 2009 ...........
510091
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City of Rock Springs
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The Honorable Virginia DuPuy, Mayor,
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The Honorable Jeff Coleman, Mayor, City
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November 18, 2009 ........
560051
State and county
Rutherford ........
Rutherford ........
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Texas:
McLennan .........
McLennan .........
(Catalog of Federal Domestic Assistance No.
97.022, ‘‘Flood Insurance.’’)
Sandra K. Knight,
Deputy Assistant Administrator for
Mitigation, Department of Homeland
Security, Federal Emergency Management
Agency.
[FR Doc. 2010–3440 Filed 2–22–10; 8:45 am]
BILLING CODE 9110–12–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
46 CFR Part 401
[Docket No. USCG–2009–0883]
RIN 1625–AB39
2010 Rates for Pilotage on the Great
Lakes
Coast Guard, DHS.
Final rule.
AGENCY:
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ACTION:
SUMMARY: The Coast Guard is increasing
the rates for pilotage service on the
Great Lakes by an average of 5.07% to
generate sufficient revenue to cover
allowable expenses, target pilot
compensation, and return on
investment. This increase 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: This final rule is effective August
1, 2010.
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Comments and material
received from the public, as well as
documents mentioned in this preamble
as being available in the docket, are part
of docket USCG–2009–0883 and are
available for inspection or copying at
the 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, between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays. You may also
find this docket on the Internet by going
to https://www.regulations.gov, inserting
USCG–2009–0883 in the ‘‘Keyword’’
box, and then clicking ‘‘Search.’’
FOR FURTHER INFORMATION CONTACT: For
questions on this final rule, please call
Mr. Paul Wasserman, Chief, Great Lakes
Pilotage Branch, Commandant (CG–
54122), U.S. Coast Guard, at 202–372–
1535, by fax 202–372–1909, or e-mail
Paul.M.Wasserman@uscg.mil. For
questions on viewing or submitting
material to the docket, call Renee V.
Wright, Chief, Dockets, Department of
Transportation, telephone 202–493–
0402.
ADDRESSES:
Community
No.
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. Abbreviations
AMOU American Maritime Officer Union
GLPAC Great Lakes Pilotage Advisory
Committee
MISLE Coast Guard Marine Inspection,
Safety, and Law Enforcement system
NAICS North American Industry
Classification System
NPRM Notice of Proposed Rulemaking
NTTAA National Technology Transfer and
Advancement Act
OMB Office of Management and Budget
Table of Contents for Preamble
II. Regulatory History
On October 30, 2009, we published a
notice of proposed rulemaking entitled
Great Lakes Pilotage Rates—2010
Annual Review and Adjustment in the
Federal Register (NPRM, 74 FR 56153).
We received five comments on the
proposed rule. No public meeting was
requested and none was held.
I. Abbreviations
II. Regulatory History
III. Background
IV. Discussion of Comments and Changes
V. Discussion of the Final Rule
A. Summary
B. Calculating the Rate Adjustment
VI. Regulatory Analyses
A. Regulatory Planning and Review
B. Small Entities
C. Assistance for Small Entities
III. Background
We published a notice of proposed
rulemaking on October 30, 2009 (NPRM,
74 FR 56153). The NPRM proposed an
average 5.07% rate increase.
This rulemaking increases Great Lakes
pilotage rates in accord with the
methodology contained in Coast Guard
regulations in 46 CFR parts 401–404.
Our regulations implement the Great
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Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations
Lakes Pilotage Act of 1960 (‘‘the Act’’),
46 U.S.C. Chapter 93, which requires
foreign-flag vessels engaged in foreign
trade to use U.S. registered pilots while
transiting the St. Lawrence Seaway and
the Great Lakes system. The Act also
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,’’ and
requires annual rate reviews to be
completed by March 1 of each year,
with a ‘‘full ratemaking’’ to establish
new base rates at least once every five
years. 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 we set
rates, we do not control the actual
number of pilots an association
maintains, so long as the association is
able to provide safe, efficient, and
reliable pilotage service, nor do we
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 Act, 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).
Our pilotage regulations implement
the Act’s requirement for annual
reviews of pilotage rates and a full
ratemaking at least once every five
years. 46 CFR 404.1. To assist in
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calculating pilotage rates, the
regulations require pilotage associations
to submit annual financial statements
prepared by certified public accounting
firms. In addition, every fifth year, in
connection with the full ratemaking, we
contract 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, we
generate the pilotage rates using
Appendix A to 46 CFR part 404. The
last Appendix A review was concluded
in 2006 (71 FR 16501, Apr. 3, 2006).
Between the five-year full ratemaking
intervals, we annually review the
pilotage rates using Appendix C to part
404, and adjust rates when deemed
appropriate. We conducted Appendix C
reviews in 2007, 2008 and 2009 and
increased rates in each year. The 2009
final rule was published on July 21,
2009 (74 FR 138), and took effect on
August 1, 2009. We define the terms and
formulas used in Appendix A and
Appendix C in Appendix B to part 404.
This final rule concludes the annual
Appendix C rate review for 2010, and
increases rates by an average of 5.07%
over the rates that took effect August 1,
2009.
IV. Discussion of Comments and
Changes
Five comments were submitted
during the NPRM public comment
period.
Ratemaking methodology. One
commenter recommended that we
suspend any further action on this
rulemaking until full consideration can
be given to comments received in
response to our July 21, 2009, request
for public comments (‘‘Great Lakes
Pilotage Ratemaking Methodology,’’ 74
FR 35838). In July, we requested
comments on the adequacy of our
current ratemaking methodology in light
of the realities of Great Lakes
commercial shipping and the need to
fairly balance competing considerations.
We noted that any comments would be
referred to the Great Lakes Pilotage
Advisory Committee (GLPAC), a group
created by the Great Lakes Pilotage Act
to advise us on significant issues
relating to Great Lakes pilotage. GLPAC
will review our methodology and the
comments received in response to our
notice, and may recommend changes. If
we accept their recommendations, any
changes would require regulatory
action. GLPAC has just begun reviewing
comments. As yet there is no timeline
for any GLPAC recommendations and
no rulemaking underway to modify the
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methodology. Therefore, we cannot
complete the ‘‘full consideration’’
mentioned by the commenter before
March 1, 2010, the Act’s deadline for
establishing any annual rate adjustment
for 2010. The Act provides no exception
to the March 1 deadline for
consideration of possible changes to the
existing rate review process. Thus, we
cannot suspend work on this
rulemaking without violating the law.
Another commenter reiterated
comments the commenter made during
the 2007 and 2009 rate reviews. In 2007,
we explained our reasons for
disagreeing with this commenter’s
analysis of the ‘‘150% factor’’ for
designated waters; 2007 interim rule, 72
FR 8115 at 8117 (Feb. 23, 2007) and
2007 Final Rule, 72 FR 53158 at 53159
(July 18, 2007). In the 2009 final rule,
we explained our reasons for
disagreeing with this Commenter on the
‘‘Riker Report’’ on bridge hour
calculations; 74 FR 35812 at 35814. As
no new substantive information has
been added, we will not repeat those
earlier explanations. The commenter’s
suggestion that we amend the vessel
weighting factor table in 46 CFR 401.400
is beyond the scope of this ratemaking.
Two commenters reiterated past
comments about our use of rounding in
bridge hour calculations, without
adding new information. We fully
discussed our use of rounding in the
2009 final rule, specifically with
reference to Area 4, which is of
particular concern to one of these
commenters, and we will not repeat that
discussion; 74 FR 35812 at 35813. The
Area 4 calculations have not changed
since the 2009 final rule.
A commenter said that our ratemaking
is arbitrary and capricious because we
count delay and detention in calculating
bridge hours for Areas 6, 7, and 8, but
not in Areas 4 and 5. No information
was provided to substantiate this claim,
which runs counter to our discussion of
bridge hour calculations in ratemaking
documents over many years, and which
repeats an allegation made in 2007 and
refuted in that year’s interim rule: ‘‘The
Coast Guard has never considered delay,
detention, or travel time to be included
in the definition of bridge hours and has
never knowingly included these items
in its bridge hour computations’’; 72 FR
8115 at 8117, Feb. 23, 2007. Coast Guard
did not consider delay, detention, or
travel time in its bridge hour
computations in this final rule.
Effective date. Another commenter
stated that the Act requires any 2010
rate adjustment to take effect by March
1, 2010. The comment acknowledged
that this is not the Coast Guard’s
interpretation of the Act. In our view, 46
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U.S.C. 9303(f) only requires us to
publish a rule announcing the 2010 rate
adjustment by March 1, 2010; the rule’s
effective date should be delayed until
the event triggering the need for
adjustment actually takes place. In this
case, the triggering event will be the
benchmark contract changes that do not
take effect until August 1, 2010. This
commenter also said that, even under
the Coast Guard’s interpretation of the
Act, some relevant rate factors have
already changed. The commenter
mentions bridge hour projections
(discussed subsequently) and cost of
living (which is determined using 2007
and 2008 data). However, the inflation
factor is merely one of three
components that make up projected
total economic costs and has a minimal
effect on the rate calculation. We
decline to adjust the rates to reflect only
minimal changes.
Supporting data. One commenter
found it impossible to verify the
calculations made in our NPRM. He
mentioned the absence from the docket
of two benchmark contracts and the
absence of supporting documentation
for the inflation factor used in our
calculations. The two contracts were
placed in the docket maintained by the
Docket Management Facility on
November 25, 2009, prior to the close of
the public comment period. The NPRM,
74 FR 56153 at 56156, identified the
parties to both contracts and accurately
represented their terms. This enabled
the commenter to verify the accuracy of
our data, prior to November 25, 2009, by
contacting any of the contractual
parties. The data supporting the
inflation factor did not appear in the
docket maintained by the Docket
Management Facility until December 2,
2009, after the close of the public
comment period. However, the NPRM,
74 FR 56153 at 56159, identified Bureau
of Labor Statistics (BLS) Midwest
consumer price data as the source of our
calculations, and this data was at all
times available from the BLS Web site,
https://www.bls.gov.
This same commenter also said that
projected bridge hours for 2010 should
be based on actual bridge hours for 2009
to date, along with results of
consultations with stakeholders,
including the shipping industry.
Another commenter asked why we did
not use 2009 actual hours. As stated in
the NPRM, 74 FR 56153 at 56158, our
2010 projections are based on historical
data (by which we mean actual figures
for complete past shipping seasons) and
information provided both by pilots and
industry. To meet the Act’s March 1
deadline for completion of each year’s
rate review, with a final rule that meets
all applicable requirements of the
Federal regulatory process, Coast Guard
data collection for the following year’s
review typically begins in the early
spring of the preceding year. Given that
reality, it is impracticable for the Coast
Guard to base NPRM projections for the
next year on actual results from the
preceding year. The commenter’s
estimate of a 25% drop in shipping
traffic between 2008 and 2009 does not
provide us with sufficiently detailed
data on which to base a revision of our
2010 projections in this final rule. We
do expect verified and complete 2009
actual data to inform our 2011
ratemaking.
District One pilot boat. Another
commenter expressed a desire to have
District One’s purchase of a new pilot
boat reflected in the 2010 rate
adjustment, or as soon as possible. This
comment is beyond the scope of this
ratemaking, which is being conducted
pursuant to our Appendix C
methodology, because it asks for action
that can be taken only under an
Appendix A full ratemaking. The next
Appendix A review is already in
progress. It will be based on a 2008
audit of pilot association expenses. This
could present a timing problem from
District One’s perspective, because their
boat expenses did not begin until 2009
and therefore would not be captured in
the 2008 audit data. Presumably to
address that timing problem, in March
2009, District One petitioned the Coast
Guard for a ‘‘modified’’ Appendix A
review that could focus specifically on
the pilot boat purchase. We could not
grant that petition because there are no
provisions for ‘‘modifying’’ Appendix A
without conducting a rulemaking to
make the modifications. However, we
are mindful of the importance of this
issue for District One, and we will ask
GLPAC for its recommendations on how
best to proceed, as part of GLPAC’s
consideration of public comments
received in response to our July 2009
ratemaking methodology notice.
Miscellaneous. A commenter asked us
to refer to ‘‘U.S. registered pilots’’
instead of ‘‘federally registered Great
Lakes pilots’’ and we have done so.
V. Discussion of the Final Rule
A. Summary
We are increasing pilotage rates in
accordance with the methodology
outlined in Appendix C to 46 CFR part
404, by increasing rates an average
5.07% over the 2009 final rule, effective
August 1, 2010. The new rates are
unchanged from what we proposed in
the NPRM. Table 1 shows the new rates
for each Area.
TABLE 1—2010 AREA RATE CHANGES
Then the proposed
percentage increases
over the current rate is:
If pilotage service is required in:
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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) ................
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
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(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:
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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
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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,
7961
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.
TABLE 4—TOTAL ECONOMIC COST FOR BASE PERIOD (2009), AREAS IN DISTRICT THREE
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Area 6
Lakes Huron and
Michigan
Area 7
St. Mary’s River
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 .....................................................................................
Base bridge hours ...........................................................................
Base cost per bridge hour ...............................................................
= $2,417,474
÷ 13,406
= $180.33
= $1,489,052
÷ 3,259
= $456.90
= $2,035,052
÷ 11,630
= $174.98
= $5,941,578
÷ 28,295
= $209.99
Area 8
Lake Superior
* See footnote to Table 2.
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Total *
District Three
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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
Base operating expense .....................................................................................................
Base return element ...........................................................................................................
$538,155
+ $10,763
$547,489
+ $16,425
Subtotal .......................................................................................................................
Base target pilot compensation ..........................................................................................
Expense multiplier ..............................................................................................................
= $548,918
÷ $1,617,955
0.33927
= $563,914
÷ $981,589
0.57449
Total
District One
$1,085,644
+ $27,188
= $1,112,832
$2,599,544
Not applicable
(n/a)
TABLE 6—EXPENSE MULTIPLIER, AREAS IN DISTRICT TWO
Area 4
Lake Erie
Area 5
Southeast Shoal
to Port Huron, MI
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 7
St. Mary’s River
Base operating Expense .................................................................
Base return element ........................................................................
$814,358
+ $32,574
$398,461
+ $11,954
$641,580
+ $19,247
$1,854,399
+ $63,776
Subtotal .....................................................................................
Base target pilot compensation .......................................................
Expense multiplier ...........................................................................
mstockstill on DSKH9S0YB1PROD with RULES
Area 6
Lakes Huron and
Michigan
= $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
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
VerDate Nov<24>2008
16:17 Feb 22, 2010
Jkt 220001
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,
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Area 8
Lake Superior
Total
District Three
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.
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.
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7963
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.
Pilots on designated waters
(undesignated × 150%)
$14,748
132,735
199,103
16,512
24,768
148,608
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
$22,123
222,912
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, and Table
10 totals the figures in Tables 8 and 9.
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
Pilots on undesignated waters
Pilots on designated waters
$132,735
+ 56,641
$199,103
+ 59,959
AGREEMENT A: Total .....................................................................................................
= 189,376
= 259,062
AGREEMENT B: Wages .........................................................................................................
AGREEMENT B: Benefits .......................................................................................................
148,608
+ 61,611
222,912
+ 65,327
AGREEMENT B: Total .....................................................................................................
mstockstill on DSKH9S0YB1PROD with RULES
AGREEMENT A: Wages .........................................................................................................
AGREEMENT A: Benefits .......................................................................................................
= 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.
TABLE 11—DEADWEIGHT TONNAGE BY AMOU AGREEMENT
Company
Agreement A
American Steamship Company ...............................................................................................................................
Mittal Steel USA, Inc. ..............................................................................................................................................
........................
........................
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Agreement B
815,600
38,826
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TABLE 11—DEADWEIGHT TONNAGE BY AMOU AGREEMENT—Continued
Company
Agreement A
Agreement B
Key Lakes, Inc. ........................................................................................................................................................
361,385
........................
Total tonnage, each agreement .......................................................................................................................
Percent tonnage, each agreement ..........................................................................................................................
361,385
361,385 ÷
1,215,811 =
29.7238%
854,426
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
AGREEMENT A:
Total wages and benefits x percent tonnage ...................................................................................................
$189,376 x
29.7238% =
56,290
Total weighted average wages and benefits = projected target rate of compensation ...................................
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
259,062 x
29.7238% =
77,003
210,219 x
70.2762% =
147,734
56,290 +
147,734 =
204,024
AGREEMENT B:
Total wages and benefits x percent tonnage ...................................................................................................
(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
288,239 x
70.2762% =
202,563
77,003 +
202,563 =
279,566
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
Projected
2010
bridge hours
Pilotage area
mstockstill on DSKH9S0YB1PROD with RULES
Area
Area
Area
Area
Area
Area
Area
1
2
4
5
6
7
8
....................................................................................................................................
....................................................................................................................................
....................................................................................................................................
....................................................................................................................................
....................................................................................................................................
....................................................................................................................................
....................................................................................................................................
(c) Determine the projected target
pilot compensation for each area. The
projection of new total target pilot
compensation is determined separately
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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
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Divided by
1,000
(designated
waters) or
1,800
(undesignated
waters)
5,203
5,650
7,320
5,097
13,406
3,259
11,630
Pilots needed
(total = 40)
1,000
1,800
1,800
1,000
1,800
1,000
1,800
pilots working in that area. Table 14
shows this calculation.
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5
4
6
8
4
7
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7965
TABLE 14—PROJECTED TARGET PILOT COMPENSATION
Pilots needed
(total = 40)
Pilotage area
Multiplied by
target rate of
compensation
Projected
target pilot
compensation
Area 1 ......................................................................................................................................
Area 2 ......................................................................................................................................
6
5
x $279,566
x 204,024
$1,677,397
1,020,120
Total, District One .............................................................................................................
Area 4 ......................................................................................................................................
Area 5 ......................................................................................................................................
11
4
6
n/a
x 204,024
x 279,566
2,697,517
816,096
1,677,397
Total, District Two .............................................................................................................
Area 6 ......................................................................................................................................
Area 7 ......................................................................................................................................
Area 8 ......................................................................................................................................
10
8
4
7
n/a
x 204,024
x 279,566
x 204,024
2,493,493
1,632,191
1,118,265
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 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 .............................................................................................................
Area 4 ......................................................................................................................................
Area 5 ......................................................................................................................................
2,697,517
816,096
1,677,397
n/a
× 0.67135
× 0.50729
= 1,155,134
= 547,886
= 850,924
Total, District Two .............................................................................................................
Area 6 ......................................................................................................................................
Area 7 ......................................................................................................................................
Area 8 ......................................................................................................................................
2,493,493
1,632,191
1,118,265
1,428,167
n/a
× 0.53926
× 0.38049
× 0.48087
= 1,398,810
= 880,177
= 425,493
= 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
available at https://www.bls.gov/
xg_shells/ro5xg01.htm, we have
multiplied the results in Step 4 by a
1.037 inflation factor, reflecting an
average inflation rate of 3.7% 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
A. Projected
operating
expense
Pilotage area
B. Increase, multiplied
by inflation factor
(= A × 1.037)
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 .....................................................................
Area 4 ..............................................................................................
Area 5 ..............................................................................................
mstockstill on DSKH9S0YB1PROD with RULES
Area 1 ..............................................................................................
Area 2 ..............................................................................................
1,155,134
547,886
850,924
1,197,874
568,158
882,408
2,697,517
816,096
1,677,397
3,895,390
1,384,253
2,559,805
Total, District Two .....................................................................
Area 6 ..............................................................................................
Area 7 ..............................................................................................
Area 8 ..............................................................................................
1,398,810
880,177
425,493
686,767
1,450,566
912,744
441,236
712,178
2,493,493
1,632,191
1,118,265
1,428,167
3,944,058
2,544,935
1,559,501
2,140,345
Total, District Three ..................................................................
1,992,438
2,066,158
4,178,623
6,244,781
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Step 6: Divide the result in Step 5 by
projected bridge hours to determine
total unit costs. Table 17 shows this
calculation.
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 ...........................................................................................................
Area 4 ....................................................................................................................................
Area 5 ....................................................................................................................................
3,895,390
1,384,253
2,559,805
10,853
7,320
5,097
358.92
189.11
502.22
Total, District Two ...........................................................................................................
Area 6 ....................................................................................................................................
Area 7 ....................................................................................................................................
Area 8 ....................................................................................................................................
3,944,058
2,544,935
1,559,501
2,140,345
12,417
13,406
3,259
11,630
317.63
189.84
478.52
184.04
Total, District Three ........................................................................................................
Overall ....................................................................................................................................
6,244,781
14,084,230
28,295
51,565
20.70
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
C. Percentage
change from base
(A divided by B;
result expressed as
percentage)
B. Base period
unit costs
Area 1 ..........................................................................................................................
Area 2 ..........................................................................................................................
$435.81
288.12
$416.47
273.54
4.65
5.33
Total, District One .................................................................................................
Area 4 ..........................................................................................................................
Area 5 ..........................................................................................................................
358.92
189.11
502.22
342.06
179.30
478.46
4.93
5.47
4.96
Total, District Two .................................................................................................
Area 6 ..........................................................................................................................
Area 7 ..........................................................................................................................
Area 8 ..........................................................................................................................
317.63
189.84
478.52
184.04
302.10
180.33
456.90
174.98
5.14
5.27
4.73
5.17
Total, District Three ..............................................................................................
Overall ..........................................................................................................................
220.70
273.14
209.99
259.97
5.10
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*
A. Base period
rate
Pilotage
mstockstill on DSKH9S0YB1PROD with RULES
Area
Area 1: .......................................................................................................
—Basic pilotage ..................................................................................
—Each lock transited .........................................................................
—Harbor movage ...............................................................................
—Minimum basic rate, St. Lawrence River ........................................
—Maximum rate, through trip .............................................................
Area 2: .......................................................................................................
—6-hr. period ......................................................................................
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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
167.20
$17.73/km,
31.38/mi
393
1,287
858
3,767
43.56
B. Percentage
change in unit
costs
861
(Multiplying
Factor)
4.65 (1.0465)
$16.95/km,
29.99/mi
375.47
1,229.41
820.04
3,599.58
5.33 (1.0533)
817.63
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TABLE 19—BASE PERIOD RATES ADJUSTED BY PERCENTAGE CHANGE IN UNIT COSTS*—Continued
C. Increase in
base rate
(A × B%)
D. Adjusted
rate (A + C,
rounded to
nearest dollar)
41.55
821
39.49
30.44
77.69
762
587
1,498
1,299.46
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
2,877.20
2,237.82
1,590.68
1,299.46
220.26
142.83
111.09
78.97
64.51
4,657
3,020
2,349
1,670
1,364
3,829.80
2,877.20
1,299.46
2,198.99
190.12
142.83
64.51
109.16
4,020
3,020
1,364
2,308
2,855.20
2,877.20
1,590.68
141.74
142.83
78.97
2,997
3,020
1,670
2,198.99
2,877.20
109.16
142.83
2,308
3,020
32.84
31.20
656
623
2,442.98
2,442.98
920.03
115.57
115.57
43.52
2,559
2,559
964
2,047.67
96.87
2,145
920.03
2,047.67
920.03
920.03
43.52
96.87
43.52
43.52
964
2,145
964
964
28.42
27.02
578
549
A. Base period
rate
Pilotage
Area
B. Percentage
change in unit
costs
(Multiplying
Factor)
—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 .......
—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 .....................................................................
779.92
5.47 (1.0547)
722.05
556.46
1,420.45
4.96 (1.0496)
5.27 (1.0527)
622.93
591.72
4.73 (1.0473)
5.17 (1.0517)
549.44
522.20
*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.
mstockstill on DSKH9S0YB1PROD with RULES
VI. Regulatory Analyses
We developed this final 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.
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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
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Executive Order. This rulemaking is not
significant under Executive Order 12866
and has not been reviewed by OMB.
Public comments on the NPRM are
summarized in Part IV of this
publication. We received no public
comments that would alter our
assessment of the impacts discussed in
the NPRM. We have adopted the
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assessment in the NPRM as final. See
the ‘‘Regulatory Analyses’’ section of the
NPRM for more details. A summary of
the assessment follows.
This final 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.
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 final 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 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 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.
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 of
the rate adjustment in this final 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 final rule for 2010.
Table 20 details additional costs by area
and district.
TABLE 20—RATE ADJUSTMENT AND ADDITIONAL IMPACT OF FINAL 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 .........................................................................
Area 4 ..................................................................................................
Area 5 ..................................................................................................
3,712,376
1,312,463
2,438,725
........................
1.0547
1.0496
3,895,390
1,384,253
2,559,805
183,014
71,791
121,080
Total, District Two .........................................................................
Area 6 ..................................................................................................
Area 7 ..................................................................................................
Area 8 ..................................................................................................
3,751,188
2,417,474
1,489,052
2,035,052
........................
1.0527
1.0473
1.0517
3,944,058
2,544,935
1,559,501
2,140,345
192,870
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.
changes are calculated for areas only. District totals reflect arithmetic totals and are for informational and discussion purposes. See discussion in final rule for further details.
3 Additional Revenue or Cost of this Rulemaking = ‘Total Projected Expenses in 2010’—‘Total Projected Expenses in 2009’.
mstockstill on DSKH9S0YB1PROD with RULES
2 Rate
After applying the rate change in this
final rule, the resulting difference
between the projected revenue in 2009
and the projected revenue in 2010 is the
annual impact to shippers from this
final rule. This figure will be equivalent
to the total additional payments that
shippers will incur for pilotage services
from this rule.
The impact of the rate adjustment in
this final rule to shippers varies by area
and district. The annual non-discounted
costs of the rate adjustments in Districts
1, 2 and 3 would be approximately
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16:17 Feb 22, 2010
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$183,000 and $193,000, and $303,000.
To calculate an exact cost 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
would pay less depending on the
distance and port arrivals of their
vessels’ trips. However, the annual cost
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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 will
experience an increased annual cost due
to this final rule. The overall impact of
the final 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.
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B. Small Entities
Under the Regulatory Flexibility Act
(5 U.S.C. 601–612), we have considered
whether this final 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.
In the NPRM, we certified under 5
U.S.C. 605(b) that the proposed rule
would not have a significant economic
impact on a substantial number of small
entities. We received no public
comments that would alter our
certification in the NPRM. We have
found no additional data or information
that would change our findings in the
NPRM. We have adopted the
certification in the NPRM for this final
rule. See the ‘‘Small Entity’’ section of
the NPRM for additional details. A
summary of the NPRM analysis follows.
We found entities affected by the rule
to 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.
We reviewed company size and
ownership data from 2006–2008 Coast
Guard MISLE data and business revenue
and size data provided by Reference
USA and Dun 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
industry entrants will be comparable in
ownership and size to these shippers.
There are three U.S. entities affected
by the 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
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16:17 Feb 22, 2010
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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 final 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 final rule would
not have a significant economic impact
on a substantial number of small entities
under 5 U.S.C. 605(b).
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 final rule so that they
could better evaluate its effects on them
and participate in the rulemaking. The
Coast Guard will not retaliate against
small entities that question or complain
about this rule or any policy or action
of the Coast Guard.
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
employees of the Coast Guard, call 1–
888–REG–FAIR (1–888–734–3247).
7969
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.
J. Indian Tribal Governments
This final 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.
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.
E. Federalism
K. Energy Effects
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
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
D. Collection of Information
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Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations
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
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
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.
2. In § 401.405, revise paragraphs (a)
and (b), including the footnote to Table
(a), to read as follows:
■
§ 401.405 Basic rates and charges on the
St. Lawrence River and Lake Ontario.
*
§ 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):
Service
Six-Hour Period ....
Docking or
Undocking .........
Any Point on the
Niagara River
below the Black
Rock Lock .........
Lake Erie
(East of
Southeast
Shoal)
Buffalo
$762
$762
587
587
N/A
1,498
Southeast
Shoal
$2,308
$1,364
1 4,020
1 4,657
1 4,020
N/A
2,997
2,308
2,308
1,670
Detroit
River
$2,997
3,020
3,020
1,364
N/A
Detroit
Pilot
Boat
St. Clair
River
$2,308
2,349
3,020
N/A
N/A
pilots are not changed at the Detroit Pilot Boat.
*
*
*
*
4. In § 401.410, revise paragraphs (a),
(b), and (c) to read as follows:
■
mstockstill on DSKH9S0YB1PROD with RULES
*
*
*
*
3. In § 401.407, revise paragraphs (a)
and (b), including the footnote to Table
(b), to read as follows:
Toledo
or any
Point on
Lake Erie
west of
Southeast
Shoal
*
§ 401.410 Basic rates and charges on
Lakes Huron, Michigan, and Superior, and
the St. Mary’s River.
*
$861
821
(b) Area 5 (Designated Waters):
Toledo or any port on Lake Erie west of Southeast Shoal ...............................
Port Huron Change Point ..................................................................................
St. Clair River .....................................................................................................
Detroit or Windsor or the Detroit River ..............................................................
Detroit Pilot Boat ................................................................................................
*
Lake Ontario
■
■
Any point on or in
1 When
1 The 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.
*
PART 401—GREAT LAKES PILOTAGE
REGULATIONS
*
Each Lock Transited
Harbor Movage .........
$17.73 per kilometer
or $31.38 per mile 1
393 1
1287 1
Six-Hour Period ....................
Docking or Undocking ..........
For the reasons discussed in the
preamble, the Coast Guard amends 46
CFR part 401 as follows:
*
Basic Pilotage ...........
St. Lawrence River
Service
■
*
Service
(b) Area 2 (Undesignated Waters):
Administrative practice and
procedure, Great Lakes, Navigation
(water), Penalties, Reporting and
recordkeeping requirements, Seamen.
*
(a) Area 1 (Designated Waters):
*
VerDate Nov<24>2008
*
*
16:17 Feb 22, 2010
Jkt 220001
(b) Area 7 (Designated Waters):
(a) Area 6 (Undesignated Waters):
Lakes Huron
and Michigan
Service
Six-Hour Period ....................
Docking or Undocking ..........
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$656
623
E:\FR\FM\23FER1.SGM
23FER1
N/A
1,670
1,364
3,020
3,020
Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations
Area
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 ....................................................................................................................................................
Proposed Rulemaking in this
proceeding, to eliminate that portion of
Service
Lake Superior
the Commission’s rules governing
International Fixed Public
Six-Hour Period ..................
$578 Radiocommunication Services (IFPRS).
Docking or Undocking ........
549
The elimination of these rules is to
facilitate coordination of facilities and
*
*
*
*
*
services in the C-band (3700–4200 MHz
and 5926–6425 MHz).
§ 401.420 [Amended]
DATES: Effective March 25, 2010.
■ 5. In § 401.420—
FOR FURTHER INFORMATION CONTACT:
■ a. In paragraph (a), remove the
number ‘‘$113’’ and add, in its place, the Steven Spaeth (202) 418–1539,
number ‘‘$119’’; and remove the number International Bureau, Federal
Communications Commission,
‘‘$1,777’’ and add, in its place, the
Washington, DC 20554.
number ‘‘$1,867’’.
■ b. In paragraph (b), remove the
SUPPLEMENTARY INFORMATION: This is a
number ‘‘$113’’ and add, in its place, the summary of the Commission’s Report
number ‘‘$119’’; and remove the number and Order in IB Docket 05–216, adopted
‘‘$1,777’’ and add, in its place, the
January 6, 2010, and released January
number ‘‘$1,867’’.
14, 2010. The full text of the Report and
■ c. In paragraph (c)(1), remove the
Order is available for public inspection
number ‘‘$671’’ and add, in its place, the and copying during regular business
number ‘‘$705’’; in paragraph (c)(3),
hours at the FCC Reference Information
remove the number ‘‘$113’’ and add, in
Center, Portals II, 445 12th Street, SW.,
its place, the number ‘‘$119’’; and, also
Room CY–A257, Washington, DC 20054.
in paragraph (c)(3), remove the number
This document may also be purchased
‘‘$1,777’’ and add, in its place, the
from the Commission’s duplicating
number ‘‘$1,867’’.
contractor, Best Copy and Printing, Inc.,
Portals II, 445 12th Street, SW., Room
§ 401.428 [Amended]
CY–B402, Washington, DC 20554,
■ 6. In § 401.428, remove the number
telephone 202–488–5300, facsimile
‘‘$684’’ and add, in its place, the number 202–488–5563, or via e-mail
‘‘$719’’.
FCC@BCPIWEB.com. It is also available
on the Commission’s Web site at
Dated: February 4, 2010.
https://www.fcc.gov.
Kevin S. Cook,
Paperwork Reduction Act Analysis:
Rear Admiral, U.S. Coast Guard, Director of
The actions taken in the Report and
Prevention Policy.
Order have been analyzed with respect
[FR Doc. 2010–3396 Filed 2–19–10; 11:15 am]
to the Paperwork Reduction Act of 1995
BILLING CODE 4910–15–P
(PRA), Public Law 104–13 (44 U.S.C.
3501–3520), and found to impose no
new or modified requirements.
FEDERAL COMMUNICATIONS
Regulatory Flexibility Analysis
COMMISSION
Certification:
The Regulatory Flexibility Act of
47 CFR Parts 0, 2, and 23
1980, as amended, 5 USC 601 et seq.,
[IB Docket No. 05–216; FCC 10–7]
(RFA) requires that a regulatory
flexibility analysis be prepared for
Elimination of the Commission’s Rules
rulemaking proceedings, unless the
Governing International Fixed Public
agency certifies that ‘‘the rule will not
Radiocommunication Services
have a significant economic impact on
a substantial number of small entities.’’
AGENCY: Federal Communications
The RFA generally defines ‘‘small
Commission.
entity’’ as having the same meaning as
ACTION: Final rule.
the terms ‘‘small business,’’ ‘‘small
SUMMARY: In this document, the Federal
organization,’’ and ‘‘small governmental
Communications Commission (FCC)
jurisdiction.’’ In addition, the term
adopts the proposal in the Notice of
‘‘small business’’ has the same meaning
mstockstill on DSKH9S0YB1PROD with RULES
(c) Area 8 (Undesignated Waters):
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16:17 Feb 22, 2010
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$2,559
2,559
2,145
2,145
N/A
Gros Cap
N/A
$964
964
964
N/A
7971
Any
harbor
N/A
N/A
N/A
N/A
$964
as the term ‘‘small business concern’’
under the Small Business Act. A small
business concern is one which: (1) Is
independently owned and operated; (2)
is not dominant in its field of operation;
and (3) satisfies any additional criteria
established by the Small Business
Administration (SBA).
In the Report and Order, the
Commission decides to eliminate the
part 23 rules applicable to International
Fixed Public Radio Service (IFPRS)
licensees, because there are no IFPRS
licensees in operation. Therefore, we
certify that the actions in this Report
and Order will not have a significant
economic impact on a substantial
number of small entities. The
Commission will send a copy of the
Report and Order, including a copy of
this certification, in a report to Congress
and the Government Accountability
Office pursuant to the Congressional
Review Act, see 5 USC 801(a)(1)(A). In
addition, the Report and Order and this
certification will be sent to the Chief
Counsel for Advocacy of the Small
Business Administration, and will be
published in the Federal Register. See
5 USC 605(b).
Summary of Report and Order
In the Report and Order, the
Commission observed that there are no
licensees currently offering IFPRS, and
there is no basis in the record for
assuming that anyone will apply for a
license to operate facilities to provide
this service in the future. Accordingly,
the Commission found that there is no
need for part 23, and removed it from
the Commission’s rules. In addition, the
Commission found that issues related to
the regulation of IFPRS and the
transition from part 23 to part 101 raised
in the Notice of Proposed Rulemaking in
this proceeding, 70 FR 56620 (Sept. 20,
2005), are moot. Finally, the
Commission eliminated the allocations
for IFPRS in the Table of Frequency
Allocations, 47 CFR 2.106, in order to
simplify the planning and coordination
of facilities in services that have a coprimary allocation in the C-band.
Ordering Clauses
Accordingly, it is ordered, pursuant to
sections 4(i), 7(a), 11, 303(c), 303(f),
303(g), and 303(r) of the
E:\FR\FM\23FER1.SGM
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]]>Agencies
[Federal Register Volume 75, Number 35 (Tuesday, February 23, 2010)]
[Rules and Regulations]
[Pages 7958-7971]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-3396]
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
Coast Guard
46 CFR Part 401
[Docket No. USCG-2009-0883]
RIN 1625-AB39
2010 Rates for Pilotage on the Great Lakes
AGENCY: Coast Guard, DHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Coast Guard is increasing the rates for pilotage service
on the Great Lakes by an average of 5.07% to generate sufficient
revenue to cover allowable expenses, target pilot compensation, and
return on investment. This increase 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: This final rule is effective August 1, 2010.
ADDRESSES: Comments and material received from the public, as well as
documents mentioned in this preamble as being available in the docket,
are part of docket USCG-2009-0883 and are available for inspection or
copying at the 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, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. You may also find this
docket on the Internet by going to https://www.regulations.gov,
inserting USCG-2009-0883 in the ``Keyword'' box, and then clicking
``Search.''
FOR FURTHER INFORMATION CONTACT: For questions on this final rule,
please call Mr. Paul Wasserman, Chief, Great Lakes Pilotage Branch,
Commandant (CG-54122), U.S. Coast Guard, at 202-372-1535, by fax 202-
372-1909, or e-mail Paul.M.Wasserman@uscg.mil. For questions on viewing
or submitting material to the docket, call Renee V. Wright, Chief,
Dockets, Department of Transportation, telephone 202-493-0402.
Table of Contents for Preamble
I. Abbreviations
II. Regulatory History
III. Background
IV. Discussion of Comments and Changes
V. Discussion of the Final Rule
A. Summary
B. Calculating the Rate Adjustment
VI. 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. Abbreviations
AMOU American Maritime Officer Union
GLPAC Great Lakes Pilotage Advisory Committee
MISLE Coast Guard Marine Inspection, Safety, and Law Enforcement
system
NAICS North American Industry Classification System
NPRM Notice of Proposed Rulemaking
NTTAA National Technology Transfer and Advancement Act
OMB Office of Management and Budget
II. Regulatory History
On October 30, 2009, we published a notice of proposed rulemaking
entitled Great Lakes Pilotage Rates--2010 Annual Review and Adjustment
in the Federal Register (NPRM, 74 FR 56153). We received five comments
on the proposed rule. No public meeting was requested and none was
held.
III. Background
We published a notice of proposed rulemaking on October 30, 2009
(NPRM, 74 FR 56153). The NPRM proposed an average 5.07% rate increase.
This rulemaking increases Great Lakes pilotage rates in accord with
the methodology contained in Coast Guard regulations in 46 CFR parts
401-404. Our regulations implement the Great
[[Page 7959]]
Lakes Pilotage Act of 1960 (``the Act''), 46 U.S.C. Chapter 93, which
requires foreign-flag vessels engaged in foreign trade to use U.S.
registered pilots while transiting the St. Lawrence Seaway and the
Great Lakes system. The Act also 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,'' and requires annual rate reviews to be
completed by March 1 of each year, with a ``full ratemaking'' to
establish new base rates at least once every five years. 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 we set rates, we do not control the actual number of
pilots an association maintains, so long as the association is able to
provide safe, efficient, and reliable pilotage service, nor do we
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 Act, 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).
Our pilotage regulations implement the Act's requirement for annual
reviews of pilotage rates and a full ratemaking at least once every
five years. 46 CFR 404.1. To assist in calculating pilotage rates, the
regulations require pilotage associations to submit annual financial
statements prepared by certified public accounting firms. In addition,
every fifth year, in connection with the full ratemaking, we contract
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, we generate the pilotage
rates using Appendix A to 46 CFR part 404. The last Appendix A review
was concluded in 2006 (71 FR 16501, Apr. 3, 2006). Between the five-
year full ratemaking intervals, we annually review the pilotage rates
using Appendix C to part 404, and adjust rates when deemed appropriate.
We conducted Appendix C reviews in 2007, 2008 and 2009 and increased
rates in each year. The 2009 final rule was published on July 21, 2009
(74 FR 138), and took effect on August 1, 2009. We define the terms and
formulas used in Appendix A and Appendix C in Appendix B to part 404.
This final rule concludes the annual Appendix C rate review for
2010, and increases rates by an average of 5.07% over the rates that
took effect August 1, 2009.
IV. Discussion of Comments and Changes
Five comments were submitted during the NPRM public comment period.
Ratemaking methodology. One commenter recommended that we suspend
any further action on this rulemaking until full consideration can be
given to comments received in response to our July 21, 2009, request
for public comments (``Great Lakes Pilotage Ratemaking Methodology,''
74 FR 35838). In July, we requested comments on the adequacy of our
current ratemaking methodology in light of the realities of Great Lakes
commercial shipping and the need to fairly balance competing
considerations. We noted that any comments would be referred to the
Great Lakes Pilotage Advisory Committee (GLPAC), a group created by the
Great Lakes Pilotage Act to advise us on significant issues relating to
Great Lakes pilotage. GLPAC will review our methodology and the
comments received in response to our notice, and may recommend changes.
If we accept their recommendations, any changes would require
regulatory action. GLPAC has just begun reviewing comments. As yet
there is no timeline for any GLPAC recommendations and no rulemaking
underway to modify the methodology. Therefore, we cannot complete the
``full consideration'' mentioned by the commenter before March 1, 2010,
the Act's deadline for establishing any annual rate adjustment for
2010. The Act provides no exception to the March 1 deadline for
consideration of possible changes to the existing rate review process.
Thus, we cannot suspend work on this rulemaking without violating the
law.
Another commenter reiterated comments the commenter made during the
2007 and 2009 rate reviews. In 2007, we explained our reasons for
disagreeing with this commenter's analysis of the ``150% factor'' for
designated waters; 2007 interim rule, 72 FR 8115 at 8117 (Feb. 23,
2007) and 2007 Final Rule, 72 FR 53158 at 53159 (July 18, 2007). In the
2009 final rule, we explained our reasons for disagreeing with this
Commenter on the ``Riker Report'' on bridge hour calculations; 74 FR
35812 at 35814. As no new substantive information has been added, we
will not repeat those earlier explanations. The commenter's suggestion
that we amend the vessel weighting factor table in 46 CFR 401.400 is
beyond the scope of this ratemaking.
Two commenters reiterated past comments about our use of rounding
in bridge hour calculations, without adding new information. We fully
discussed our use of rounding in the 2009 final rule, specifically with
reference to Area 4, which is of particular concern to one of these
commenters, and we will not repeat that discussion; 74 FR 35812 at
35813. The Area 4 calculations have not changed since the 2009 final
rule.
A commenter said that our ratemaking is arbitrary and capricious
because we count delay and detention in calculating bridge hours for
Areas 6, 7, and 8, but not in Areas 4 and 5. No information was
provided to substantiate this claim, which runs counter to our
discussion of bridge hour calculations in ratemaking documents over
many years, and which repeats an allegation made in 2007 and refuted in
that year's interim rule: ``The Coast Guard has never considered delay,
detention, or travel time to be included in the definition of bridge
hours and has never knowingly included these items in its bridge hour
computations''; 72 FR 8115 at 8117, Feb. 23, 2007. Coast Guard did not
consider delay, detention, or travel time in its bridge hour
computations in this final rule.
Effective date. Another commenter stated that the Act requires any
2010 rate adjustment to take effect by March 1, 2010. The comment
acknowledged that this is not the Coast Guard's interpretation of the
Act. In our view, 46
[[Page 7960]]
U.S.C. 9303(f) only requires us to publish a rule announcing the 2010
rate adjustment by March 1, 2010; the rule's effective date should be
delayed until the event triggering the need for adjustment actually
takes place. In this case, the triggering event will be the benchmark
contract changes that do not take effect until August 1, 2010. This
commenter also said that, even under the Coast Guard's interpretation
of the Act, some relevant rate factors have already changed. The
commenter mentions bridge hour projections (discussed subsequently) and
cost of living (which is determined using 2007 and 2008 data). However,
the inflation factor is merely one of three components that make up
projected total economic costs and has a minimal effect on the rate
calculation. We decline to adjust the rates to reflect only minimal
changes.
Supporting data. One commenter found it impossible to verify the
calculations made in our NPRM. He mentioned the absence from the docket
of two benchmark contracts and the absence of supporting documentation
for the inflation factor used in our calculations. The two contracts
were placed in the docket maintained by the Docket Management Facility
on November 25, 2009, prior to the close of the public comment period.
The NPRM, 74 FR 56153 at 56156, identified the parties to both
contracts and accurately represented their terms. This enabled the
commenter to verify the accuracy of our data, prior to November 25,
2009, by contacting any of the contractual parties. The data supporting
the inflation factor did not appear in the docket maintained by the
Docket Management Facility until December 2, 2009, after the close of
the public comment period. However, the NPRM, 74 FR 56153 at 56159,
identified Bureau of Labor Statistics (BLS) Midwest consumer price data
as the source of our calculations, and this data was at all times
available from the BLS Web site, https://www.bls.gov.
This same commenter also said that projected bridge hours for 2010
should be based on actual bridge hours for 2009 to date, along with
results of consultations with stakeholders, including the shipping
industry. Another commenter asked why we did not use 2009 actual hours.
As stated in the NPRM, 74 FR 56153 at 56158, our 2010 projections are
based on historical data (by which we mean actual figures for complete
past shipping seasons) and information provided both by pilots and
industry. To meet the Act's March 1 deadline for completion of each
year's rate review, with a final rule that meets all applicable
requirements of the Federal regulatory process, Coast Guard data
collection for the following year's review typically begins in the
early spring of the preceding year. Given that reality, it is
impracticable for the Coast Guard to base NPRM projections for the next
year on actual results from the preceding year. The commenter's
estimate of a 25% drop in shipping traffic between 2008 and 2009 does
not provide us with sufficiently detailed data on which to base a
revision of our 2010 projections in this final rule. We do expect
verified and complete 2009 actual data to inform our 2011 ratemaking.
District One pilot boat. Another commenter expressed a desire to
have District One's purchase of a new pilot boat reflected in the 2010
rate adjustment, or as soon as possible. This comment is beyond the
scope of this ratemaking, which is being conducted pursuant to our
Appendix C methodology, because it asks for action that can be taken
only under an Appendix A full ratemaking. The next Appendix A review is
already in progress. It will be based on a 2008 audit of pilot
association expenses. This could present a timing problem from District
One's perspective, because their boat expenses did not begin until 2009
and therefore would not be captured in the 2008 audit data. Presumably
to address that timing problem, in March 2009, District One petitioned
the Coast Guard for a ``modified'' Appendix A review that could focus
specifically on the pilot boat purchase. We could not grant that
petition because there are no provisions for ``modifying'' Appendix A
without conducting a rulemaking to make the modifications. However, we
are mindful of the importance of this issue for District One, and we
will ask GLPAC for its recommendations on how best to proceed, as part
of GLPAC's consideration of public comments received in response to our
July 2009 ratemaking methodology notice.
Miscellaneous. A commenter asked us to refer to ``U.S. registered
pilots'' instead of ``federally registered Great Lakes pilots'' and we
have done so.
V. Discussion of the Final Rule
A. Summary
We are increasing pilotage rates in accordance with the methodology
outlined in Appendix C to 46 CFR part 404, by increasing rates an
average 5.07% over the 2009 final rule, effective August 1, 2010. The
new rates are unchanged from what we proposed in the NPRM. Table 1
shows the new rates for each Area.
Table 1--2010 Area Rate Changes
------------------------------------------------------------------------
Then the proposed
If pilotage service is required in: percentage 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 5.07
overall prospective unit costs/base unit
costs; see Table 18)........................
------------------------------------------------------------------------
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
[[Page 7961]]
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 and Area 7 St. Area 8 Lake Total * District
Michigan Mary's 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
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.
[[Page 7962]]
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 Not applicable
(n/a)
----------------------------------------------------------------------------------------------------------------
Table 6--Expense Multiplier, 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 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 and Area 7 St. Area 8 Lake Total District
Michigan Mary's 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.
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.
[[Page 7963]]
Table 8--Wages
----------------------------------------------------------------------------------------------------------------
Pilots on
Monthly component undesignated Pilots on designated waters
waters (undesignated x 150%)
----------------------------------------------------------------------------------------------------------------
AGREEMENT A:
$270.61 daily rate x 54.5 days............................. $14,748 $22,123
AGREEMENT A:
Monthly total x 9 months = total wages..................... 132,735 199,103
AGREEMENT B:
$333.57 daily rate x 49.5 days............................. 16,512 24,768
AGREEMENT B:
Monthly total x 9 months = total wages..................... 148,608 222,912
----------------------------------------------------------------------------------------------------------------
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, and Table 10 totals the figures in Tables 8
and 9.
Table 9--Benefits
----------------------------------------------------------------------------------------------------------------
Pilots on
Monthly component undesignated Pilots on designated waters
waters
----------------------------------------------------------------------------------------------------------------
AGREEMENT A:
Employer contribution, 401(K) plan (Monthly Wages x 5%).... $737.42 $1,106.13
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, 401(K) plan (Monthly Wages x 5%).... 825.60 1,238.40
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 months.......................... = 56,641 = 59,959
AGREEMENT B:
Monthly total benefits..................................... = 6,845.71 = 7,258.51
AGREEMENT B:
Monthly total benefits x 9 months.......................... = 61,611 = 65,327
----------------------------------------------------------------------------------------------------------------
Table 10--Total Wages and Benefits
----------------------------------------------------------------------------------------------------------------
Pilots on
undesignated Pilots on designated waters
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.
Table 11--Deadweight Tonnage by AMOU Agreement
------------------------------------------------------------------------
Company Agreement A Agreement B
------------------------------------------------------------------------
American Steamship Company.............. .............. 815,600
Mittal Steel USA, Inc................... .............. 38,826
[[Page 7964]]
Key Lakes, Inc.......................... 361,385 ..............
-------------------------------
Total tonnage, each agreement....... 361,385 854,426
Percent tonnage, each agreement......... 361,385 / 854,426 /
1,215,811 = 1,215,811 =
29.7238% 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 Designated
waters waters
------------------------------------------------------------------------
AGREEMENT A:
Total wages and benefits x percent $189,376 x 259,062 x
tonnage............................ 29.7238% = 29.7238% =
56,290 77,003
AGREEMENT B:
Total wages and benefits x percent 210,219 x 288,239 x
tonnage............................ 70.2762% = 70.2762% =
147,734 202,563
Total weighted average wages and 56,290 + 77,003 +
benefits = projected target rate of 147,734 = 202,563 =
compensation....................... 204,024 279,566
------------------------------------------------------------------------
(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 Pilots needed
bridge hours 1,800 (total = 40)
(undesignated
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.
[[Page 7965]]
Table 14--Projected Target Pilot Compensation
----------------------------------------------------------------------------------------------------------------
Multiplied by Projected
Pilotage area Pilots needed target rate of target pilot
(total = 40) compensation compensation
----------------------------------------------------------------------------------------------------------------
Area 1........................................................ 6 x $279,566 $1,677,397
Area 2........................................................ 5 x 204,024 1,020,120
-------------------------------------------------
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 Multiplied by Projected
Pilotage area target pilot expense operating
compensation multiplier 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
available at https://www.bls.gov/xg_shells/ro5xg01.htm, we have
multiplied the results in Step 4 by a 1.037 inflation factor,
reflecting an average inflation rate of 3.7% 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
----------------------------------------------------------------------------------------------------------------
A. Projected B. Increase, multiplied C. Projected D. Projected
Pilotage area operating by 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
----------------------------------------------------------------------------------------------------------------
[[Page 7966]]
Step 6: Divide the result in Step 5 by projected bridge hours to
determine total unit costs. Table 17 shows this calculation.
Table 17--Total Unit Costs
----------------------------------------------------------------------------------------------------------------
Prospective
A. Projected B. Projected (total) unit
Pilotage area total economic 2009 bridge costs (A divided
cost hours 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 20.70
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*
----------------------------------------------------------------------------------------------------------------
D. Adjusted
B. Percentage C. Increase in rate (A + C,
Pilotage A. Base period change in unit base rate (A rounded to
rate costs x B%) nearest
dollar)
----------------------------------------------------------------------------------------------------------------
Area .............. (Multiplying .............. ..............
Factor)
Area 1:...................................... .............. 4.65 (1.0465) .............. ..............
--Basic pilotage......................... $16.95/km, ................. $0.78/km, $17.73/km,
29.99/mi 1.39/mi 31.38/mi
--Each lock transited.................... 375.47 ................. 17.44 393
--Harbor movage.......................... 1,229.41 ................. 57.11 1,287
--Minimum basic rate, St. Lawrence River. 820.04 ................. 38.09 858
--Maximum rate, through trip............. 3,599.58 ................. 167.20 3,767
Area 2:...................................... .............. 5.33 (1.0533) .............. ..............
--6-hr. period........................... 817.63 ................. 43.56 861
[[Page 7967]]
--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 River below Black 1,420.45 ................. 77.69 1,498
Rock Lock...............................
Area 5 between any point on or in:........... .............. 4.96 (1.0496) .............. ..............
--Toledo or any point on Lake Erie W. of 1,299.46 ................. 64.51 1,364
Southeast Shoal.........................
--Toledo or any point on Lake Erie W. of 2,198.99 ................. 109.16 2,308
Southeast Shoal & Southeast Shoal.......
--Toledo or any point on Lake Erie W. of 2,855.20 ................. 141.74 2,997
Southeast Shoal & Detroit River.........
--Toledo or any point on Lake Erie W. of 2,198.99 ................. 109.16 2,308
Southeast Shoal & Detroit Pilot Boat....
--Port Huron Change Point & Southeast 3,829.80 ................. 190.12 4,020
Shoal (when pilots are not changed at
the Detroit Pilot Boat).................
--Port Huron Change Point & Toledo or any 4,436.82 ................. 220.26 4,657
point on Lake Erie W. of Southeast Shoal
(when pilots are not changed at the
Detroit Pilot Boat).....................
--Port Huron Change Point & Detroit River 2,877.20 ................. 142.83 3,020
--Port Huron Change Point & Detroit Pilot 2,237.82 ................. 111.09 2,349
Boat....................................
--Port Huron Change Point & St. Clair 1,590.68 ................. 78.97 1,670
River...................................
--St. Clair River........................ 1,299.46 ................. 64.51 1,364
--St. Clair River & Southeast Shoal (when 3,829.80 ................. 190.12 4,020
pilots are not changed at the Detroit
Pilot Boat).............................
--St. Clair River & Detroit River/Detroit 2,877.20 ................. 142.83 3,020
Pilot Boat..............................
--Detroit, Windsor, or Detroit River..... 1,299.46 ................. 64.51 1,364
--Detroit, Windsor, or Detroit River & 2,198.99 ................. 109.16 2,308
Southeast Shoal.........................
--Detroit, Windsor, or Detroit River & 2,855.20 ................. 141.74 2,997
Toledo or any point on Lake Erie W. of
Southeast Shoal.........................
--Detroit, Windsor, or Detroit River & 2,877.20 ................. 142.83 3,020
St. Clair River.........................
--Detroit Pilot Boat & Southeast Shoal... 1,590.68 ................. 78.97 1,670
--Detroit Pilot Boat & Toledo or any 2,198.99 ................. 109.16 2,308
point on Lake Erie W. of Southeast Shoal
--Detroit Pilot Boat & St. Clair River... 2,877.20 ................. 142.83 3,020
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 or in:........... .............. 4.73 (1.0473) .............. ..............
--Gros Cap & De Tour..................... 2,442.98 ................. 115.57 2,559
--Algoma Steel Corp. Wharf, Sault Ste. 2,442.98 ................. 115.57 2,559
Marie, Ont. & De Tour...................
--Algoma Steel Corp. Wharf, Sault Ste. 920.03 ................. 43.52 964
Marie, Ont. & Gros Cap..................
--Any point in Sault Ste. Marie, Ont., 2,047.67 ................. 96.87 2,145
except the Algoma Steel Corp. Wharf & De
Tour....................................
--Any point in Sault Ste. Marie, Ont., 920.03 ................. 43.52 964
except the Algoma Steel Corp. Wharf &
Gros Cap................................
--Sault Ste. Marie, MI & De Tour......... 2,047.67 ................. 96.87 2,145
--Sault Ste. Marie, MI & Gros Cap........ 920.03 ................. 43.52 964
--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.
VI. Regulatory Analyses
We developed this final 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
