Great Lakes Pilotage Rates-2026 Annual Review and Revisions to Methodology

DEPARTMENT OF HOMELAND SECURITY <SUBAGY>Coast Guard</SUBAGY> <CFR>46 CFR Parts 401 and 404</CFR> <DEPDOC>[Docket No. USCG-2025-0252]</DEPDOC> <RIN>RIN 1625-AD03</RIN> <SUBJECT>Great Lakes Pilotage Rates—2026 Annual Review and Revisions to Methodology</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Coast Guard, DHS. <HD SOURCE="HED">ACTION:</HD> Notice of proposed rulemaking. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Coast Guard is proposing new base Great Lakes pilotage rates for the 2026 shipping season while facilitating commerce and supply chains. The Coast Guard estimates that this proposed rule would result in an approximately 7-percent decrease in operating costs compared to the 2025 season. The Coast Guard is also proposing one change to the ratemaking methodology: the removal of Step 5 regarding the working capital fund. In accordance with the requirement to conduct a full ratemaking at least every 5 years, we are conducting a full ratemaking for 2026 and accepting comments on the Great Lakes pilotage ratemaking methodology. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments and related material must be received by the Coast Guard on or before October 8, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may submit comments identified by docket number USCG-2025-0252 using the Federal Decision-Making Portal at <E T="03">www.regulations.gov.</E> See the “Public Participation and Request for Comments” portion of the <E T="02">SUPPLEMENTARY INFORMATION</E> section for further instructions on submitting comments. This notice of proposed rulemaking, with its plain-language, 100-word-or-less proposed rule summary, will be available in this same docket. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> For information about this document, call or email Mr. Brian Rogers, Commandant, Office of Waterways and Ocean Policy—Great Lakes Pilotage Division (CG-WWM-2), Coast Guard; telephone 571-608-8418 or email <E T="03">Brian.Rogers@uscg.mil.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Table of Contents for Preamble</HD> <EXTRACT> <FP SOURCE="FP-2">I. Abbreviations</FP> <FP SOURCE="FP-2">II. Basis and Purpose</FP> <FP SOURCE="FP-2">III. Discussion of Proposed Methodological Changes and Consideration of Past Comments</FP> <FP SOURCE="FP-2">IV. Summary of the Ratemaking Methodology</FP> <FP SOURCE="FP-2">V. Discussion of Proposed Rate Adjustments</FP> <HD SOURCE="HD1">District One</HD> <FP SOURCE="FP1-2">A. Step 1: Recognize Previous Operating Expenses</FP> <FP SOURCE="FP1-2">B. Step 2: Project Operating Expenses, Adjusting for Inflation or Deflation</FP> <FP SOURCE="FP1-2">C. Step 3: Estimate Number of Registered Pilots and Apprentice Pilots</FP> <FP SOURCE="FP1-2">D. Step 4: Determine Target Pilot Compensation Benchmark and Apprentice Pilot Wage Benchmark</FP> <FP SOURCE="FP1-2">E. Redesignated Step 5: Project Needed Revenue (Previously Step 6)</FP> <FP SOURCE="FP1-2">F. Redesignated Step 6: Calculate Initial Base Rates (Previously Step 7)</FP> <FP SOURCE="FP1-2">G. Redesignated Step 7: Calculate Average Weighting Factors by Area (Previously Step 8)</FP> <FP SOURCE="FP1-2">H. Redesignated Step 8: Calculate Revised Base Rates (Previously Step 9)</FP> <FP SOURCE="FP1-2">I. Redesignated Step 9: Review and Finalize Rates (Previously Step 10)</FP> <HD SOURCE="HD1">District Two</HD> <FP SOURCE="FP1-2">A. Step 1: Recognize Previous Operating Expenses</FP> <FP SOURCE="FP1-2">B. Step 2: Project Operating Expenses, Adjusting for Inflation or Deflation</FP> <FP SOURCE="FP1-2">C. Step 3: Estimate Number of Registered Pilots and Apprentice Pilots</FP> <FP SOURCE="FP1-2">D. Step 4: Determine Target Pilot Compensation Benchmark and Apprentice Pilot Wage Benchmark</FP> <FP SOURCE="FP1-2">E. Redesignated Step 5: Project Needed Revenue (Previously Step 6)</FP> <FP SOURCE="FP1-2">F. Redesignated Step 6: Calculate Initial Base Rates (Previously Step 7)</FP> <FP SOURCE="FP1-2">G. Redesignated Step 7: Calculate Average Weighting Factors by Area (Previously Step 8)</FP> <FP SOURCE="FP1-2">H. Redesignated Step 8: Calculate Revised Base Rates (Previously Step 9)</FP> <FP SOURCE="FP1-2">I. Redesignated Step 9 Review and Finalize Rates (Previously Step 10)</FP> <HD SOURCE="HD1">District Three</HD> <FP SOURCE="FP1-2">A. Step 1: Recognize Previous Operating Expenses</FP> <FP SOURCE="FP1-2">B. Step 2: Project Operating Expenses, Adjusting for Inflation or Deflation</FP> <FP SOURCE="FP1-2">C. Step 3: Estimate Number of Registered Pilots and Apprentice Pilots</FP> <FP SOURCE="FP1-2">D. Step 4: Determine Target Pilot Compensation Benchmark and Apprentice Pilot Wage Benchmark</FP> <FP SOURCE="FP1-2">E. Redesignated Step 5: Project Needed Revenue (Previously Step 6)</FP> <FP SOURCE="FP1-2">F. Redesignated Step 6: Calculate Initial Base Rates (Previously Step 7)</FP> <FP SOURCE="FP1-2">G. Redesignated Step 7: Calculate Average Weighting Factors by Area (Previously Step 8)</FP> <FP SOURCE="FP1-2">H. Redesignated Step 8: Calculate Revised Base Rates (Previously Step 9)</FP> <FP SOURCE="FP1-2">I. Redesignated Step 9: Review and Finalize Rates (Previously Step 10)</FP> <FP SOURCE="FP-2">VI. Regulatory Analyses</FP> <FP SOURCE="FP1-2">A. Regulatory Planning and Review</FP> <FP SOURCE="FP1-2">B. Small Entities</FP> <FP SOURCE="FP1-2">C. Assistance for Small Entities</FP> <FP SOURCE="FP1-2">D. Collection of Information</FP> <FP SOURCE="FP1-2">E. Federalism</FP> <FP SOURCE="FP1-2">F. Unfunded Mandates</FP> <FP SOURCE="FP1-2">G. Taking of Private Property</FP> <FP SOURCE="FP1-2">H. Civil Justice Reform</FP> <FP SOURCE="FP1-2">I. Protection of Children</FP> <FP SOURCE="FP1-2">J. Indian Tribal Governments</FP> <FP SOURCE="FP1-2">K. Energy Effects</FP> <FP SOURCE="FP1-2">L. Technical Standards</FP> <FP SOURCE="FP1-2">M. Environment</FP> <FP SOURCE="FP-2">VII. Public Participation and Request for Comments</FP> </EXTRACT> <HD SOURCE="HD1">I. Abbreviations</HD> <EXTRACT> <FP SOURCE="FP-1">2021 final rule Great Lakes Pilotage Rates—2021 Annual Review and Revisions to Methodology final rule</FP> <FP SOURCE="FP-1">2023 final rule Great Lakes Pilotage Rates—2023 Annual Ratemaking and Review of Methodology</FP> <FP SOURCE="FP-1">2025 final rule Great Lakes Pilotage Rates—2025 Annual Review</FP> <FP SOURCE="FP-1">APA American Pilots' Association</FP> <FP SOURCE="FP-1">BLS Bureau of Labor Statistics</FP> <FP SOURCE="FP-1">CFR Code of Federal Regulations</FP> <FP SOURCE="FP-1">CPI Consumer Price Index</FP> <FP SOURCE="FP-1">DHS Department of Homeland Security</FP> <FP SOURCE="FP-1">Director U.S. Coast Guard's Director of the Great Lakes Pilotage</FP> <FP SOURCE="FP-1">ECI Employment Cost Index</FP> <FP SOURCE="FP-1">FOMC Federal Open Market Committee</FP> <FP SOURCE="FP-1">FR Federal Register</FP> <FP SOURCE="FP-1">GLPAC Great Lakes Pilotage Advisory Committee</FP> <FP SOURCE="FP-1">LPA Lakes Pilots Association</FP> <FP SOURCE="FP-1">NAICS North American Industry Classification System</FP> <FP SOURCE="FP-1">NPRM Notice of proposed rulemaking</FP> <FP SOURCE="FP-1">OMB Office of Management and Budget</FP> <FP SOURCE="FP-1">PCE Personal Consumption Expenditures</FP> <FP SOURCE="FP-1">§ Section </FP> <FP SOURCE="FP-1">SBA Small Business Administration</FP> <FP SOURCE="FP-1"> SLSPA Saint Lawrence Seaway Pilots Association </FP> <FP SOURCE="FP-1">U.S.C. United States Code</FP> <FP SOURCE="FP-1">WGLPA Western Great Lakes Pilots Association</FP> </EXTRACT> <HD SOURCE="HD1">II. Basis and Purpose</HD> The legal basis of this rulemaking is 46 U.S.C. Chapter 93, <SU>1</SU> <FTREF/> which requires foreign merchant vessels and United States vessels operating “on register” (meaning United States vessels engaged in foreign trade) to use United States or Canadian Registered Pilots while transiting the United States waters of the St. Lawrence Seaway and the Great Lakes system. <SU>2</SU> <FTREF/> For United States Registered Pilots, the statute requires the Secretary to “prescribe by regulation rates and charges for pilotage services, giving consideration to the public interest and the costs of providing the services.”  <SU>3</SU> <FTREF/> The statute requires that rates be established or reviewed and adjusted each year, not later than March 1. <SU>4</SU> <FTREF/> The statute also requires that base rates be established by a full ratemaking at least once every 5 years, and, in years when base rates are not established, they must be reviewed and, if necessary, adjusted. <SU>5</SU> <FTREF/> The Secretary's duties and authority under 46 U.S.C. Chapter 93 have generally been delegated to the Coast Guard. <SU>6</SU> <FTREF/> <FTNT> <SU>1</SU>  46 U.S.C. 9301-9308. </FTNT> <FTNT> <SU>2</SU>  46 U.S.C. 9302(a)(1). </FTNT> <FTNT> <SU>3</SU>  46 U.S.C. 9303(f). </FTNT> <FTNT> <SU>4</SU>   <E T="03">Id.</E> </FTNT> <FTNT> <SU>5</SU>   <E T="03">Id.</E> </FTNT> <FTNT> <SU>6</SU>  Department of Homeland Security (DHS) Delegation 00170.1, Revision No. 01.4, paragraph (II)(92)(f). </FTNT> The purpose of this rulemaking is to conduct a full ratemaking and issue new pilotage rates for the 2026 shipping season. The full ratemaking includes solicitating feedback regarding the entire methodology and the staffing model. The Coast Guard believes that the new rates and proposed changes to the methodology will continue to promote our goal, as outlined in46 CFR 404.1, to promote safe, efficient, and reliable pilotage service on the Great Lakes by generating for each pilotage association sufficient revenue to reimburse its necessary and reasonable operating expenses and fairly compensate trained and rested Pilots. The Coast Guard believes this ratemaking will continue to meet the other § 404.1 goal of providing an appropriate profit to use for i ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 183k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━