Port backs cruise lines in pilots lawsuit

Ship pilot operational policies and efforts to raise fees threaten to sink the island’s lucrative cruise-ship business, waterfront managers said Monday in attempt to rally public support in an increasingly rancorous fight.

Demands by the Galveston-Texas City Pilots Association, whose 15 members help ship captains guide vessels in and out of the port, could steer business to the Port of Houston’s new, and idle, Bayport Cruise Terminal, Port Director Steve Cernak said.

“The Galveston community should find the timing of these actions interesting, considering there is a port about 40 miles away that has a new cruise terminal that is going unused and that is offering major incentives to entice businesses there,” Cernak said.

The Port of Galveston’s governing board unanimously voted Monday to support Carnival Cruise Lines and Royal Caribbean Cruises, which sail from the island, in a lawsuit seeking to enforce an agreement struck this summer.

In that deal, the association agreed to drop a requirement of two pilots on cruise ships if the lines dropped opposition to a 5 percent across-the-board rate increase.

The rate issue has been hashed out among industry stakeholders for months, but Monday the port began directly appealing to island residents and business owners to weigh in on the matter at a hearing Nov. 2.

Cruise ship agreements with the port, which generate $5 million a year, are in jeopardy as the pilots demand higher rates, Port Director Steve Cernak said.

“They contain a clause that allows for the cancellation of the agreements should excessive fees be imposed,” Cernak said at Monday’s monthly meeting of the Wharves Board of Trustees, which governs the port.

“That will most certainly be tested here, costing the port high legal bills and certainly having the potential of damaging an otherwise outstanding business relationship.”

Ship pilots, who each make about $350,000 a year, have been seeking a rate increase for more than a year. Industry has fought the increases.

Meanwhile, the cruise lines argue the requirement that two pilots steer cruise ships into the harbor is unreasonable. One pilot is enough, they argue.

But safety is the issue, pilots said. Industry is attempting to make the issue about money, Paxton Crew, an attorney for the pilots said in a separate interview Monday.

“When it’s characterized as a money-grab, hyperboles get cast around,” Crew said. “But at the end of the day, if something happens, they’re going to blame the pilot.”

Last year, the average round-trip pilot fees to steer Royal Caribbean’s Voyager into harbor was $9,300. That paid one pilot at the full rate and the second at half the rate.

The port predicts the round-trip fee for the Voyager will average $12,400, this year.

Considering the well-being of thousands of passengers sailing on the cruise ships, it’s a bargain, Paxton said.

“It’s pennies on the dollars,” Paxton said.

“I think the community of Galveston and Texas City would be a little more cognizant of the ramifications of looking past safety for someone else’s bottom dollar.”

The port pays pilot fees for Royal Caribbean and Carnival Cruise Lines pays its own pilot fees.

The pilots and the lines had submitted an agreed tariff to pilot commissioners July 16, which commissioners accepted unanimously.

Carnival Cruise Lines, Royal Caribbean and the Florida-Caribbean Cruise Association filed the lawsuit last month against the five-member Board of Pilot Commissioners in an attempt to enforce the July agreement.

The board in July also voted to grant the pilots a 5 percent rate increase. But there was a snag.

“When the commission met to approve the tariff, the rates presented an approximate 9 percent increase, not the 5 percent previously ruled on by commission action,” Cernak said Monday.

The pilots abruptly withdrew their request, citing legal challenges by industry groups.

Since 2000, when Carnival Cruise Lines began sailing from the island, Galveston has become the top cruise port in the Gulf of Mexico.

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At A Glance

WHAT: Rate hearing for the Galveston-Texas City Pilots Association

WHEN: 9:30 a.m. Nov. 2.

WHERE: Galveston County Courthouse, 722 21st St., first floor