Deregulation and competition in maritime pilotage are increasing costs, reduce safety and efficiency, and expose the public and the shipping industry to unnecessary and avoidable risk, according to the International Maritime Pilots’ Association (IMPA).
The IMPA is calling attention to the consequences of deregulation and competition in maritime pilotage.
The association states that some jurisdictions are tempted by the idea that deregulation and competition deliver a better service at a lower cost. This is a mistake, the IMPA says, and the evidence agrees.
“Where deregulation and competition have been introduced, we see increasing costs, reductions in safety and efficiency. In the worst cases, we see systems that fail to adequately protect the public,” said captain Simon Pelletier, president of IMPA, “To capture the economic, social and environmental benefits from maritime pilotage, governments must create the right environment. This is what the overwhelming majority of jurisdictions do. The few jurisdictions that have introduced deregulation and competition need to change course.”
Data cited by the association shows that in one jurisdiction where competition in service-delivery was introduced, pilotage fees have doubled since 2018, while the incident rate per port call is 41 times the international average.
In another, 60% of maritime safety incidents under pilotage occur in areas where providers compete against one and other to provide the service.
In another, the main provider’s efficiency has declined by 9%, and the service’s ability to meet total demand has been compromised.
In another, deregulation and government profiteering, in combination with a dilution of training and licensing standards, make it hard to say the service is pilotage.
IMPA states that some jurisdictions are very explicit in their position. The association refers to the European Union’s Port Services Regulation safeguards against competition in maritime pilotage and to Alaska and Florida, which explicitly prohibit the practice because of the threat to public interest.
“When multiple operators must replicate infrastructure – pilots, pilot boats, training programs and facilities and seek to recover costs from a divided market, costs inevitably go up, not down,” the IMPA notes. “Furthermore, when the prospect of profit is insufficient, there can be under-provision of pilotage, necessitating government intervention. And when providers abuse their market power, the government must intervene again.”
A 2023 economic study cited by the IMPA found that every $1 invested in a well-regulated system returns $60 in safety and efficiency benefits.
The IMPA, a not-for-profit organisation established in 1970, represents pilots’ organisations in over 50 countries and a professional community of over 8,000 maritime pilots.
