By Tom Peters
Faced with declining numbers of vessel calls within its pilotage areas, Atlantic Pilotage Authority will increase its rates in several ports in 2013. APA rate increases were published in the Canada Gazette in mid-December. Halifax rates will increase by 7 per cent; Saint John 8 per cent; Canso and Bras d’Or Lakes, 5 per cent; Humber Arm and Bay of Exploits, 3 per cent and Sydney 2 per cent. Rates for all other ports served by the APA will remain unchanged.
APA employs between 50-55 pilots and operates in 17 compulsory pilotage areas. The increases are expected to generate estimated incremental revenues of $817,000 or 3.75 per cent. As an example of the increase, the cost of a pilot for an average vessel in Halifax will increase from $1,684 in 2012 to $1,794 per trip.
According to APA’s third quarter report, pilot assignments have declined 10 per cent during the first nine months of 2012, compared to the same period in 2011. Pilots handled 6,125 assignments to the end of September 2012 and 6,774 assignments in the first nine months of 2011. Revenues declined from $16.4 million in 2011 to $15.1 million in the first nine months of 2012. The Authority had a small profit of $22,000 in the first nine months of this year, compared to a $1.4 million profit in the same period in 2011.
The port hardest hit by the lower vessel counts was Strait of Canso with assignments down nearly 50 per cent from 471 by the end of Q3 in 2011 to 236 assignments in the first nine months of 2012.
The vast majority of those assignments were tankers going into the NuStar Energy terminal. NuStar is a storage/transshipment facility that operates a tank farm of 37 tanks with a storage capacity of 7.6 million barrels for a variety of petroleum products. “When we did our budget for 2012 in September of the previous year, we had no idea about the situation in Cape Breton at NuStar and really that is where the significant drop has been,” said Capt. Anthony McGuinness, APA’s Chief Executive Officer. The decline at Canso is believed to be from a weaking demand for petroleum products at U.S. East Coast refineries supplied by NuStar. No new refineries have been built for decades, some are closing, and demand for petroleum products, in general, is down, thus fewer ships into NuStar.
In Halifax, the decline was about 8 per cent from 2,311 assignments during the first three quarters of 2011 to 2,124 in the same time period in 2012. There is growing concern for continued decline with the uncertain future of the Imperial Oil refinery in Dartmouth. Imperial plans to either close the facility, sell it or use it as a storage facility. A decision is expected by the end of the first quarter of 2013.
Capt. McGuinness said the refinery represents about 25 per cent of APA’s business in Halifax, and vessels into the refinery in the first nine months of 2012 dropped to 370 from 403 during the first nine months of 2011.
In Saint John the issue is also a drop in overall assignments by 10 per cent, with oil tanker calls down 12 per cent. The local concern is that tanker calls will continue to decline as Irving, owners of the refinery, increases its use of rail to access oil from U.S. sources.
Capt. McGuinness remains optimistic. “I know everyone is trying extremely hard out there to get new business and maintain business, but it’s the world economy that has caught up with us, and it kind of dictates terms to us, but we are trying to be positive,” he said. At this point, he said there will be no pilot layoffs. “To do that would be “kind of silly” , because it takes two to three years to train pilots from the mariner stage.”