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Federal Register / Vol. 86, No. 47 / Friday, March 12, 2021 / Rules and Regulations
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TABLE 42SUMMARY OF CHANGES FROM NPRM TO FINAL RULEContinued Element of the analysis
NPRM

Final rule
Impact
Resulting change in RA

Target Pilot Compensation Step 4.

To calculate target pilot compensation, the Coast Guard used a Q1 ECI inflation value of 3.4% and a 2021 PCE value of 1.6% for 2021, based on the most recently available data at the time the NPRM was completed.

To calculate target pilot compensation, the Coast Guard used a Q3 ECI inflation value of 3.5% and a 2021 PCE value of 1.7% for 2021, based on the most recently available data.

Target pilot compensation decreased by $745 per pilot, from $378,180 to $378,925.

Data affects the calculation of projected revenues.

The Coast Guard is required to review and adjust pilotage rates on the Great Lakes annually. See Sections III and IV
of this preamble for detailed discussions of the legal basis and purpose for this rulemaking and for background information on Great Lakes pilotage ratemaking. Based on our annual review for this rulemaking, we are adjusting the pilotage rates for the 2021 shipping season to generate sufficient revenues for each district to reimburse its necessary and reasonable operating expenses, fairly compensate trained and rested pilots, and provide an appropriate working capital fund to use for improvements. The rate changes in this final rule will increase the rates for District One and decrease them for District Two and the designated area of District Three. The rate for District Threes undesignated area will not change from 2020. In addition, the rule will not implement a surcharge for the training of apprentice pilots as was last implemented in the 2019 ratemaking.63
These changes lead to a net increase in the cost of service to shippers. However, because the rates will increase for some areas and decrease for others, the change in per unit cost to each individual shipper would be dependent on their area of operation, and if they previously paid a surcharge.
A detailed discussion of our economic impact analysis follows.
Affected Population This rule will impact United States registered Great Lakes pilots, the 3 pilot associations, and the owners and operators of 279 oceangoing vessels that transit the Great Lakes annually. We estimate that there will be 54 pilots registered during the 2021 shipping season. The shippers affected by these rate changes are those owners and operators of domestic vessels operating on register engaged in foreign trade and owners and operators of nonCanadian foreign vessels on routes within the Great Lakes system. These owners and operators must have pilots or pilotage service as required by 46
63 See,
84 FR 20551 May 10, 2019.

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U.S.C. 9302. There is no minimum tonnage limit or exemption for these vessels. The statute applies only to commercial vessels and not to recreational vessels. United Statesflagged vessels not operating on register and Canadian lakers, which account for most commercial shipping on the Great Lakes, are not required by 46
U.S.C. 9302 to have pilots. However, these U.S. and Canadian-flagged lakers may voluntarily choose to engage a Great Lakes registered pilot. Vessels that are U.S.-flagged may opt to have a pilot for varying reasons, such as unfamiliarity with designated waters and ports, or for insurance purposes.
The Coast Guard used billing information from the years 2017 through 2019 from the Great Lakes Pilotage Management System GLPMS to estimate the average annual number of vessels affected by the rate adjustment.
The GLPMS tracks data related to managing and coordinating the dispatch of pilots on the Great Lakes, and billing in accordance with the services. As described in Step 7 of the methodology, we use a 10-year average to estimate the traffic. We used 3 years of the most recent billing data to estimate the affected population. When we reviewed 10 years of the most recent billing data, we found the data included vessels that have not used pilotage services in recent years. We believe using 3 years of billing data is a better representation of the vessel population that is currently using pilotage services and will be impacted by this rulemaking. We found that 474 unique vessels used pilotage services during the years 2017 through 2019. That is, these vessels had a pilot dispatched to the vessel and billing information was recorded in the GLPMS. Of these vessels, 434 were foreign-flagged vessels and 40 were U.S.-flagged vessels. As previously stated, U.S.-flagged vessels not operating on register are not required to have a registered pilot per 46 U.S.C.
9302, but they can voluntarily choose to have one.
Numerous factors affect vessel traffic, which varies from year to year.
Therefore, rather than using the total
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number of vessels over the time period, we took an average of the unique vessels using pilotage services from the years 2017 through 2019 as the best representation of vessels estimated to be affected by the rates in this rulemaking.
From 2017 through 2019, an average of 279 vessels used pilotage services annually.64 On average, 261 of these vessels were foreign-flagged vessels and 18 were U.S.-flagged vessels that voluntarily opted into the pilotage service.
Total Cost to Shippers The rate changes resulting from this adjustment to the rates will result in a net increase in the cost of service to shippers. However, the change in per unit cost to each individual shipper would be dependent on their area of operation.
The Coast Guard estimates the effect of the rate changes on shippers by comparing the total projected revenues needed to cover costs in 2020 with the total projected revenues to cover costs in 2021, including any temporary surcharges we have authorized.65 We set pilotage rates so pilot associations receive enough revenue to cover their necessary and reasonable expenses.
Shippers pay these rates when they have a pilot as required by 46 U.S.C.
9302. Therefore, the aggregate payments of shippers to pilot associations are equal to the projected necessary revenues for pilot associations. The revenues each year represent the total costs that shippers must pay for pilotage services. The change in revenue from the previous year is the additional cost to shippers discussed in this rule.
The impacts of the rate changes on shippers are estimated from the district pilotage projected revenues shown in Tables 9, 21, and 33 of this preamble.
The Coast Guard estimates that for the 2021 shipping season, the projected 64 Some vessels entered the Great Lakes multiple times in a single year, affecting the average number of unique vessels utilizing pilotage services in any given year.
65 While the Coast Guard implemented a surcharge in 2019, we are not implementing any surcharges for 2021.

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