Pilotage Services and Competition
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Reklam
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Dr. JALE NUR ECE

Dr. JALE NUR ECE

Pilotage Services and Competition

22 March 2015 - 18:59

Pilotage is a challenging profession which is performed onboard ships in straits, passages, channels, bays, harbors and other confined narrow waters. It requires special knowledge and experience. Piloting ships is not an easy job. Unlike most other professionals, an accident while performing this profession will affect the safety of life, navigation, property and environment. Preventing  accidents at sea which harm lives, cargo, and environment, ensuring the safe, fast and regulated flow of maritime traffic; contributing to the economy with service fees were the major factors which caused the emergence of the profession of pilotage (Erol, A. "Pilots and Pilotage" denizhaber.com, 1988).

According to accident statistics; human error is responsible for 80-85% of marine accidents and the most efficient factor in eliminating or minimizing human error is the use of well trained, self-governed, expert and experienced pilots. Therefore, modern countries in the world attach utmost importance to these services and take necessary measures in this regard (Erol, A. "pilotage services in the world and Turkey", http://www.denizhaber.com, 1997).

Pilotage and towage services aim to ensure and protect the safety of navigation, life, property and the environment and, in this context, it is rendered  to ships while berthing and un-berthing, entering in and out of ports, anchoring and leaving anchorages and shifting operations during which tugboats with sufficient bollard pull as mentioned in harbor regulations

Most of the time, pilotage is a compulsory service but in some cases, in some regions and for some ship types it may be voluntary. Each country has her own rules and regulations with regard to pilotage services in order to ensure safe maneuvering and safety of life, property and the environment.

In Turkey, all policies and procedures in relation to pilotage and tug services are specified in the Decree Law No. 655 which is regarding the Organization and Duties of the Ministry of Transportation, Maritime Affairs and Communication. These are “to render or authorize and inspect the renderers of these services, to set out rules and regulations with regard to these services”. (Ministry of Transportation, Maritime Affairs and Communications, Department of Navigational Safety and Maritime Security).

In Turkey, the "Regulation Regarding the Qualifications, Training, Certification and Operational Procedures of Maritime Pilots" was published in Official Gazette No. 26360 on 28 November 2006 and entered into force by this date. The said Regulation, was prepared to determine the conditions of qualification, training, certification and operational procedures and principles of maritime pilots which will be rendered to the ships navigating, anchoring, proceeding from anchorage, mooring or departing to and from a buoyage system, coming alongside or unmooring to and from shore or off-shore facilities in the pilotage areas as stipulated by the administration in order to ensure the safe navigation and maneuvering of the vessels along with the safety of life, properties and environment. (Article 1).

As it was pointed out in the Regulation, priority was given to the safety of navigation, maneuvering, life and the environment.

Organizations such as IMPA (International Maritime Pilots’ association), EMPA (European Maritime Pilots' Association) emphasized the negative effects of competition on pilotage. Competition caused many accidents and negative effects in the world and some examples in this regard are mentioned below.

(http://www.impahq.org/policy.cfm; 11 Transport, Maritime Affairs and Communications Council, Maritime Working Group Report, 2013 73-75).

In the United States, pilotage services are provided by the States. The United States granted the authority to make regulations relating to pilotage to 20 States across the country. (Istikbal, C. "IMPA and the Fundamental Principles of Pilotage, www.gemimanevrasi.com). Every State has their own rules and legislation in accordance with the special needs and conditions in their waters. In the US, pilotage is a compulsory service for ships engaged in international trade. Each state sets a limit on the number of pilot licenses issued to ensure safe and efficient pilotage services and there is no competition amongst pilots.

From experiences in the past, in the US, competition in pilotage has been seen and accepted as harmful to the safety of navigation and has never been on the agenda. There are very few non-public pilots. Each state limits the number of pilot licenses. The Federal State develops the pilotage system. Pilotage services are subject to many regulations, even though private.

The State of Florida issued a law which prohibited competition in pilotage on the grounds that there was a significant conflict of interest between a vessel owner’s economic needs and the public’s interest in safe passage. In the United States, competition in pilotage is accepted as harmful to the safety of navigation. (http://www.americanpilots.org/pilotageinus.html, 22.03.2013).

In Alaska, competition between pilots developed during the 1980s, when growth of the cruise ship industry and certain sectors of the fishing industry created demand for more pilotage services. However, many problems related to safety and efficiency was seen as a result of competition. Following the grounding of the cruise ship Nieuw Amsterdam in 1994, an Alaska Government report stated “competition between (pilot) associations has had a seriously negative effect on public safety”. (http://www.marinepilots.ca/en/articles/competition.html).

The United Kingdom abolished state oversight of standards for pilot training and work practices in the 1987 Pilotage Act and delegated regulatory responsibilities to Harbour Authorities. Following an inquiry into the grounding of the Sea Empress, a review of that Act in 1998 resulted in the restoration of the status quo ante. (http: // www. The maib.gov.t) . The structure of British Pilotage is so that it is is run by commercially-minded harbor authorities which score points by doing more with less, a principle incompatible with maritime pilotage as a public service. (http: // www. Marinepilots.ca/en/articles/competition.html, 3/20/2013; Youda, B. (2015), "Ports running pilotage services" Incompatible ", seanews.com.tr ).

Nautilus International, a trade union and professional organization representing some ship masters, officers, officer trainees and other professional staff working in the maritime sector, submitted written evidence to the British Parliament (Written evidence from Nautilus International MP 11, Session 2012-13), in which, competition in pilotage was described as harmful because the resulting drop in the pilotage fees lowered the service standards and led to unfair competition.

(Http://www.publications.parliament.uk/pa/cm201213/cmselect/ writev / marine / m11.htm).

Australian coastal pilotage was de-regulated in 1993 utilizing the “franchise” approach described above. Following the grounding of the container ship Bunga Teratai Satu in 2000 and environmental concerns over damage to the Great Barrier Reef, the Australian Government ordered a Review of Ship Safety and Pollution Measures in the Great Barrier Reef. The Review’s recommendations included several related to pilotage, including the extension of compulsory pilotage areas and changes to the recruitment, licensing, training and qualification practices for coastal pilots. It is significant that these concerns over pilotage standards surfaced in a system where service was provided by competing pilots, mirroring the experience of the State of Alaska’s experiment with de-regulation. The urgency and gravity of the issue was underlined when the bulk carrier Doric Chariot grounded on the Great Barrier Reef in July, 2002. The Government of Australia accepted the review’s recommendations the same month..(http://www.amsa.gov.a of 20.03.2013).

Argentina introduced competition in pilotage in 1997. In 2000, following 18 major maritime accidents - compared to none in the 20 years preceding its introduction - the Government introduced legislation to abolish competition pointing out that “the nature of pilotage was that of a non-commercial public service of national interest, pilotage had no commercial basis and it was essentially a government function; and competition has led pilots to do things they would refuse to do for safety reasons in a non-competitive setting.”(Http://www.marinepilots.ca/en/articles/competition.html, 20.03.2013).

In Canada, 4 regional pilotage authorities were established by the law and adopted in 1972 which prohibits competition in pilotage. The Authority was to determine the use of pilots in accordance with the ship types and sea areas. Authorities are able either to sign a contract with specific pilotage groups or render the service themselves by employing the pilots. (http://www.marinepilots.ca/en/what-is-pilotage.html, 22.03.2013).

In Germany, France, Italy and the Netherlands pilotage services has been rendered by pilot organizations which were established by the pilots under state supervision and control and thus public interests were served. In developed countries, the pilotage service areas are delimited and the forms of service, condition and continuity regulated on a certain basis because these services “are connected to the safety of ships and the environment”, “have to be rendered in a certain standard, on a regulated, continuous and fast system” and “are seen as serving public interest”. The management of competent organizations/companies is left to the pilots and are monitored and inspected by the Administrations. (Erol, A., denizhaber.co, 1997).

In Turkey, there is no uniformity in the organizational structure of pilotage.  There are three different organizational structures for pilot organizations: "public organizations", "Organizations of the privatized ports" and “Ports and private pilotage organizations which are authorized by the Administration”.

In the year 2035, the targets set out by Transport, Maritime Affairs and Communications Council recommended that "In order to establish high safety awareness and reduce the number of accidents in pilotage waters a more contemporary and stable legislation is needed”. As mentioned above, updating relevant legislation and making the necessary amendments are necessary.

Competition in the pilotage services is unfavorable in terms of safety of navigation, maneuvering, life and property and the environment the main reasons for this are as follows: (http://www.empa-pilots.org; http: //www.marinepilots.cacles/competitio's; http: // members .shaw. ACE / riverpilot35 / competition.htm).

  • Competition is incompatible with the provision of sufficiently comprehensive pilotage services, the system governing the pilotage and the traffic safety. Even the slightest mistake in the pilotage services may lead to catastrophic consequences for the industry, port users and the region.
  • When pilotage services are open to competition, ensuring safety or in another word serving the public’s interests which should be main priority for a pilot could be at stake. It is likely that a pilot will compromise safety considerations in order to accommodate financial interests.
  • In a competitive situation, it is difficult for each company to invest in modern, efficient and safe equipment to render these services, to establish training programs and these might further increase the risk of accidents. If pilotage regulations which take safety into account as a priority are altered in favor of competition, these issues might not be considered in due regard.
  • Traffic safety may be compromised due to competition in the pilotage services. International Maritime Pilots Association (IMPA) is opposed to competition in the pilotage. A competitive environment in pilotage inevitably results in the compromise of maritime safety. (Istikbal, C., www.gemimanevrasi.com). Such services should not compromise the safety of navigation even in a competitive environment. However, this could be difficult to achieve in the case of competition. In a competitive setting, pilots might have to make a choice between the financial interests of a private sector company and safe passage. If pilots must compete against one another to win assignments, there are chances that a pilot will compromise safety considerations in order to accommodate the financial interest of the ship owner
  • Competition could lead to discriminatory service. Pilots are expected to be impartial. In economic efficiency terms, competing providers of pilotage will not cooperate in providing a port-wide service. (Istikbal, C., www.gemimanevrasi.com). These potential situations encourage rebates, kickbacks, and other illegal activities as both pilots and ships/agents seek preferential treatment. As IMPA states, one of the important results observed in an environment where pilotage is open to competition is the corruption
  • In the non-competitive environment pilots can gain experience onboard different ships through the rotation system. In the case of competition, pilots could not gain such an experience as the rotation system would not in place.
  • IMPA states that experiments with competition elsewhere in the world has shown that, in spite of regulation, the outcome will be longer hours and shorter rest periods with consequential fatigue-induced decrements in performance. (Istikbal, C., www.gemimanevrasi.com) .
  • There may be a deterrent in making the necessary investments to competitive services in the pilotage service in question. Although piloting is a personal service provided by an individual, pilotage operations are relatively capital intensive.  A modern, efficient pilotage operation requires things such as pilot boats and crews, training programs, radios, and sophisticated electronic navigation equipment. It is difficult to make the investment for these and other items if there is no assurance of getting available work. Experience with the pilotage of coastwise vessels in the United States has shown that competitive pilotage leads to ill-equipped, unstable, marginal operations. (http://members.shaw.ca/riverpilot35/competition.htm).
  • A pilot operation is similar to a public utility except the higher number of customers. Those customers have much greater economic power and a stronger bargaining position than the pilots and can very easily dictate to the pilot group. But there should be no bargaining on the safety of life, navigation and the environment. 
  • Competition in the pilotage services is not economically advantageous either. The results of statistical research reveal that in a competitive environment the pilotage cost for a ship owner/charterer does not drop; on the contrary it increases significantly. (Istikbal, C., www.gemimanevrasi.com). In view of the large capital investment required for full service, modern pilot operations, when two or more groups operate in a single pilotage area, there is inevitably duplication of many items of expense, such a pilot boats and dispatch services. With rate regulation being enforced to ensure that pilotage fees are no higher than necessary, this duplication of expense is contrary to the public interest. Experience with the few instances of competition in pilotage in the world has shown that the burdens placed on the regulatory authorities are much greater with competition than without competition, particularly in the areas of licensing and training rates.
  • Competition in pilotage services will require extensive arrangements to be made in the legislation relating to these services. Experience has shown that related rules and regulations conflicted with the aspects of complaints voiced out by the competing parties.  With competition, a greater level of control is required in order to monitor the activities of the pilots to prevent these types of abuses.
  • There may be shortages to provide the necessary training for pilots in a competitive environment. The above mentioned Regulation states that "Apprentice maritime pilots take part in the maneuvers of at least 90 ships of 500 GT or over, equally distributed day and night 6 months at minimum in the related port. But the Administration may drop this number to 50 ships for the ports having slack traffic where 90 ships do not call in 6 months (Article 8-C / 1). However, when two or more pilotage company render service for the same pilotage area, opportunity would be more rare to gain experience on many different ship types.
As it is known, the maritime sector is an international sector where the priority is safety and other than commercial expectations, practices should focus on the nature of the sea, sea conditions and internationally accepted recommendations.

International Maritime Organization (IMO) 's primary mission is to ensure "Safe and Efficient Shipping at Clean Seas". The opening to competition of pilotage services as mentioned above have been tried in a number of developed countries and was abandoned upon  experiencing various problems such as increased pollution and accidents.

As a result, the author is of the opinion that the regulation on "Pilotage and Towage Services” needs to be revised and updated, organizational structure needs to be formed by taking the examples in Germany, France, Italy and Netherlands into account, the management and running of the pilotage organizations could be left to the pilots themselves under the supervision and monitoring of the Administration, bringing the pilotage services to international standards and adopting a pilotage act which contains the rules above is needed

In addition, due to the strategic characteristics of the Turkish Straits and the importance of the pilotage services with regard to safety of navigation and the environment, pilotage services in these waterways should be given by a public body.

In order to maintain the safety of navigation at the highest level, pilotage and towage services which serve the public’s interest should be exempted from commercial pressures and without competition. In the process of taking decisions and preparing regulations in this regard, various practices from around the world and negative experiences such as increase in the accidents in areas open to competition should also be considered. 

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