Ship pilots withdraw request for higher fees amid discussion
The Houston Pilots group has withdrawn its application requesting higher fees as it continues “to engage in meaningful discussions” with the shipping companies that pushed back against its proposal.
The ship pilots, tasked with guiding vessels in and out of the Houston Ship Channel, had wanted an aggregate increase that would have boosted fees by about 2.9 percent a year in each of the next three years. Individual shipping companies, however, said their costs would be higher. Some companies said they could end up paying 13 percent or almost 14 percent more over the next three
years for pilot services.
Such increases prompted 15 companies in September to file letters opposing the rate increase with the Board of Pilot Commissioners for Harris County Ports, which must approve pilot rates. Some companies even threatened to take their business to other ports.
“This most recent request,” French container shipping company CMA CGM said in its letter, “will place the Port of Houston so far out of line with comparable ports that it stands to jeopardize CMA CGM’s future relationship with the Port of Houston and the local labor force.”
The commissioners had scheduled a hearing on the proposed increase for Oct. 30, but the Houston Pilots requested that discussion of its application for a rate increase be removed from the agenda.
“As Houston Pilots and industry continue to engage in meaningful discussions, I respectfully withdraw the Houston Pilots’ application,” Houston Pilots Presiding Officer Capt. Mark Mitchem wrote in a letter on Thursday to the Port of Houston Authority.
The Houston Pilots declined to comment outside of that letter. Port Houston Executive Director Roger Guenther said that the application has been removed from the agenda and that “we look forward to continuing to work with them.”
It’s hard to predict whether the Houston Pilots will come back with a smaller rate increase or drop it all together, said Kevin Sterling, managing director of the investment bank Seaport Global Securities.
But he said the pilots might still want some increase and could come back to the table with a smaller number.
“I’ve seen negotiating tactics like this before,” he said, where a large number is proposed but a smaller number is actually expected.