Louisiana’s chemical industry has filed suit to block raises for two groups of Mississippi River ship pilots that would boost their average annual pay more than $50,000 over four years, to $473,692 in 2019.
Pay agreements approved by the Louisiana Pilotage Fee Commission include pay hikes of more than $30,000 in 2016, followed by 1.5 percent annual raises from 2017 to 2019. The agreements increase the number of ship pilots in the two groups on the lower Mississippi River by seven, to a total of 171. The agreements also add funding for what the Louisiana Chemical Association says are “phantom pilots,” or positions that shippers must pay for even though there’s no guarantee the positions will be filled.
The chemical association’s stance puts it at odds with the Louisiana Maritime Association. That industry group negotiated the agreements with the two pilot groups in an effort to end cost-of-living increases, equalize base pay, create predictability and require reports on pilots and their work time, according to transcripts from a Fee Commission meeting.
State law allows the pilots, who help steer ocean-going vessels, to operate as a monopoly on their section of the river. Customers, such as chemical plants, refineries and shipping companies, pay the pilots’ fees.
The pilots’ power in setting fees and their salaries has drawn criticism from shippers over the years. The dispute peaked in 2004, following a decade that saw the pilots’ fees triple while commerce on the river was falling.
The Legislature created the Pilotage Fee Commission to establish rates and fees. The governor appoints the commission’s 11 members: four representatives each from the shipping industry and pilot groups and three independent members.
In the latest dispute, the chemical association alleges the commission violated “a multitude” of state laws when it approved the latest fees for the Crescent River Port Pilots Association and the Associated Branch Pilots of New Orleans. The Crescent Pilots navigate ships on the 100-plus miles of river from New Orleans to Pilottown. The Branch Pilots, or Bar Pilots, cover the stretch from Pilottown to the mouth of the river.
The chemical association argues the Fee Commission approved the pay packages on July 30 without a public hearing, which the association requested, and without demonstrating that handling the issue that way was in the public’s best interest.
The chemical association has asked a state district judge in Baton Rouge to stop the commission from allowing the raises.
“What we’re hoping … is the judge will say, ‘Yeah, you’ve got to go back and have a hearing and go through this process,’ ” said LCA spokesman Greg Bowser, who is also a member of the Fee Commission. “And we want to put on a case to say, ‘Wait a minute. There’s some things in here you shouldn’t be allowed to do.’ ”
The Louisiana Chemical Association represents 63 chemical companies with more than 100 plants in the state, the vast majority of them along the Mississippi River.
The Louisiana Maritime Association’s membership represents 90 percent of the companies that pay the pilots’ fees. Those include shipping companies, freight forwarders, agents and ports, including the Port of New Orleans and the Port of Greater Baton Rouge.
Michael Maloz, chairman of the Louisiana Maritime Commission, and Paul West, an attorney representing the Pilotage Fee Commission, both said they could not comment on pending litigation.
Officials with the Crescent Pilots were not available. Bar Pilots President Capt. Michael R. Lorino Jr., a Fee Commission member, issued a statement saying his group agrees with the Fee Commission’s “decision and process” and will fully support the commission going forward.
The increases approved by the commission would add five pilot positions to the Crescent River Port Pilots Association and two to the Bar Pilots. But the chemical association says those are “phantom pilots.”
Bowser said both groups are allowed to bill for more pilots than actually exist. The Crescent pilots will be able to bill customers for 122 pilots but need to have only 117. The Bar Pilots can bill for 49 pilots, even if they have only 47, he said.
At $453,000 a year, the phantom positions effectively give the actual pilots more than $19,000 a year in additional pay, Bowser said.
However, a transcript of the July 30 meeting shows that attorneys and officials for both pilot groups argued that the additional positions are needed to handle the current level of business.
“There are no phantom pilots,” Andrew Ezell, an attorney for the Crescent Pilots, told the commission.
The agreements include fees to cover additional pilots so as to be able to handle any spike in business, Ezell said. Also, he said, it takes time to train additional pilots. Including the additional positions provides flexibility, he said.
Commission member Capt. A.J. Gibbs, who represents the Crescent Pilots, told the commission the 114 pilots now on staff are doing the work of 130 to 140 pilots. The pilots settled on the number 122 because that is the minimum needed to do the work safely, he said.
The current dispute grew out of the Louisiana Maritime Association’s request to end cost-of-living adjustments for the Bar Pilots.
The maritime group had argued that annual cost-of-living increases were unnecessary because members of both pilot groups were already making well above their base pay. From 2009 to 2014, the Crescent River Pilots made anywhere from $21,000 to $108,000 more than their target salary. From 2011 to 2014, the Bar Pilots made $25,000 to $44,000 more than their base pay, the association said.
The pilots’ actual pay was more than their target, or base, pay because of heavier-than-anticipated traffic on the river.
The negotiations between the maritime association and Bar Pilots expanded to the Crescent River Pilots. Eventually, the proposed agreements included equalizing the base pay for all the pilots on the lower Mississippi and included annual reporting requirements for disclosing the number of pilots, their income and the hours worked.
Attorneys for both pilot groups argued that the expanded scope of the agreements is in the public’s interest. They said it will allow the Fee Commission to expedite its decisions without going through the hearing process that the chemical association requested.
“I submit to this commission that this negotiated settlement creates parity where there’s been none; predictability where there’s been none; transparency where there has been very little, comparatively; and regulatory efficiency, which I also believe is very material to the public interest,” Ezell told the Fee Commission.
The commission approved both fee arrangements. Bowser said he and the independent commissioners voted against the proposals. The commissioners who represent the pilots and the shippers voted for the proposals.