San Francisco Bar Pilots Revenues Boosted by New California Law

In September, California Governor Gavin Newsom signed into law Assembly Bill 2056 (AB 2056), authored by Assemblymember Timothy Grayson which represents the first significant update to the rate structure in over 15 years for San Francisco Bar Pilots.

The legislation was the culmination of a multi-year effort to reach consensus among the San Francisco Bar Pilots, Pacific Merchant Shipping Association (PMSA), Cruise Lines International Association, and Western States Petroleum Association.

AB 2056 addresses fundamental issues exacerbated by the pandemic and supply chain disruptions which led to an unprecedented 28% decrease in pilotage fee revenue.

The new legislation updates three critical aspects of the pilotage system, including reforming the rate-setting process, implementing Temporary Transit Fees, and modifying the pilot boat replacement surcharge.

This provides both temporary and long-term fixes that will ensure state-regulated pilot operations can continue sustainably to support the future growth of the supply chain well into the future.

Capt. Anne McIntyre, Business Director, San Francisco Bar Pilots said: “The decrease in revenues was primarily related to delays in container shipping and congestion at the Port of Oakland.”

Asked whether other pilotage groups are experiencing similar decreases in revenue, McIntyre replied: “This issue varies across the country; some pilotage systems are busier than ever, while others are still reeling from the effects of the pandemic. The San Francisco Bar Pilots revenue issue is unique because prior to the passage of AB 2056, the rate setting structure did not provide us the flexibility needed to respond to the significant revenue decline caused by the supply chain crisis.”

“On behalf of the San Francisco Bar Pilots, we want to thank Governor Newsom for signing this monumental piece of legislation, Assemblymember Grayson for his leadership in authoring this bill, and our industry partners for their collaboration,” said San Francisco Bar Pilots President, Captain John Carlier. “These changes are critical in addressing an outdated pilotage rate-making process and will ensure that the Bar Pilots continue their essential work to push the local, regional, and state economy forward.”

“I’m proud that we have passed a law that will bring long-needed investments in our ports and pilotage system and support the crucial work the San Francisco Bar Pilots conduct in our state,” said Timothy Grayson (D-Concord).

“The Bar Pilots help over $1 billion in goods—in addition to thousands of individuals—safely navigate our waterways every day. It is long past time for California to step up and invest in an organization so essential to our state’s success, and I’m thrilled that the Governor has signed AB 2056 to make that a reality.”