Pilotage issue creates stir at Canadian ports conference

Sparks flew over high pilotage costs on the Great Lakes at a Canadian ports conference held a Thunder Bay, on the tip of Lake Superior. These costs run in the tens of thousands of dollars for carriers entering the waterway through the St. Lawrence Seaway. Under the general theme of Sea the Superior Way, the conference of the Association of Canadian Port Authorities (ACPA) began on Sept. 7 and ends Sept. 9. Angus Armstrong, harbor master and director of security at the Port of Toronto, charged that in light of the significant progress in recent years of navigational equipment “pilotage today is a 19th century technology” that is undermining the competitiveness of the waterway in the industrial heartland of North America. In an interview, he expressed concern that a refusal to eliminate or reduce compulsory pilotage could compromise the future of international shipping on the Great Lakes.“Where are the cost savings, when regulations don’t reflect technology. They are killing the golden goose.” Following a marked decline last year, with Seaway cargo volume down nearly 10% to about 35 million metric tons, the downtrend is continuing this year with Canadian domestic carriers notably not using their fleets at full capacity. A major factor has been the sharp drop in global commodity markets. “To make the system competitive, one has to work on costs, not just at one entity but the collective costs,” said a representative of Canada’s St. Lawrence Seaway Management Corporation. Blair McKeil, chairman and CEO of McKeil Marine, a leading Canadian tug and barge enterprise, stressed that “from a domestic fleet perspective, pilotage is doubling costs in compulsory zones.” While he affirmed that “a lot of good things are happening on the Great Lakes,” pilotage costs were among “the dams in the system that hinder our efficiencies and increase our costs, inhibiting our competitiveness in the world-wide markets.” He also evoked loading and discharge costs. Bulk carriers move cargo from the head of the Great Lakes to the St. Lawrence for nearly $20 per metric ton. But it’s a “real impediment when the cost to load and unload that cargo runs up $12 a ton. Yet we know that in place like New Orleans, stevedoring costs are less than $3 a ton. Otherwise, McKeil said the biggest issue facing Canadian carriers (part of a global trend) was the ability to find experienced crew to meet the needs of the industry. He said that one solution could be to “allow ourselves to bring in foreign crew and pay Canadian wages in order to compete with foreign-flag operators. In conclusion, McKeil suggested that “a day will come in the not too distant future for UBER-like cargo on the Great Lakes, especially for short-haul cargoes. Think about it: ports will post available cargoes on quasi UBER platforms and see who can move it.”