Costly 19th century pilotage rules make Great Lakes uncompetitive
Time：2016-09-18
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"Pilotage today is a 19th century technology" that is undermining the competitiveness of the waterway in the industrial heartland of North America, said Toronto harbour master Angus Armstrong.
Said Canadian tug and barge owner Blair McKeil: "From a domestic fleet perspective, pilotage is doubling costs in compulsory zones."
A refusal to eliminate or reduce compulsory pilotage could compromise the future of international shipping on the Great Lakes, Mr Armstrong told the American Journal of Transportation.
"Where are the cost savings, when regulations don`t reflect technology. They are killing the golden goose," he said.
Following a marked decline last year, with Seaway cargo volume down nearly 10 per cent to about 35 million tonnes, the downtrend is continuing this year with Canadian domestic carriers notably not using their fleets at full capacity.
"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.
Mr McKeil, chairman and CEO of McKeil Marine, a leading Canadian tug and barge enterprise, said "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 worldwide markets".
He cited loading and discharge costs. Bulk carriers move cargo from the head of the Great Lakes to the St Lawrence for nearly US$20 per tonne.
But it`s a "real impediment when the cost to load and unload that cargo runs up $12 a tonne. Yet we know that in place like New Orleans, stevedoring costs are less than $3 a tonne.
Otherwise, Mr 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 to compete with foreign-flag operators.
Mr 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 cargo. Think about it: ports will post available cargoes on quasi Uber platforms and see who can move it."