Editorial: Despite Some Bright Signs, Towing Industry Is In ER

To read about all of the new construction and reconstruction going on in the towing industry, one could mistakenly conclude that the industry is better off than it is. Seemingly unrelated events have converged to make it tough for companies that operate towboats to find and keep the crews that man them. The industry is in the emergency room.

The process for obtaining or renewing licenses has become more difficult. New towing vessel licenses are required as of this month. The Coast Guard is set to construct a new consolidated license-processing center in Martinsburg, W.Va. Security requirements are adding to the woes. Before the end of the year it is expected that the Transportation Security Administration and the Coast Guard will release rules requiring federal ID cards called TWICs (Transportation Worker Identification Credentials). New rules spelling out physical standards are coming soon, and they are expected to be more restrictive. Wavers for some health conditions are becoming more difficult to obtain. The Coast Guard’s Regional Exam Centers, which had limited authority to grant some medical waivers, will no longer be able to. Virtually all requests for medical waivers will be sent to Washington for approval. Employment conditions in the towing industry now are bad for towing companies but good for those holding Coast Guard licenses. It is, as they say, a seller’s market. Supply-and-demand considerations make it possible for pilots to demand higher pay and get it. There is great demand for licensed people.

One vessel operator called to say that since the first of the year, day rates have risen to $350–$400. He expects them to hit $500 soon. “Call a pilot and offer him $400, and he’ll say he’ll call you back,” he explained. “Then he’ll shop around, negotiate a higher rate elsewhere and never call back.”

This is not an isolated problem. From what we hear, boats are tied up for want of people to work them.

This operator attributes the problem to the Coast Guard’s move to more restrictive licensing requirements, and to industry for allowing it to happen.

The problem is huge and is not expected to get better soon.

The terrorist attacks of September 11, 2001, spawned multiple complications related to homeland security. Plans were made public recently for all transportation workers who have access to secure areas in ports to undergo background checks, a procedure port operators say will only slow production.

The TWICs, it is believed, will be required of all boat crews. Anyone with access to restricted areas must have them. There is no question as to whether obtaining TWICs will have a fee attached. In addition to that, random background checks once were required on only 10 percent of persons seeking to renew a license. As of January 13 this year, checks must be done on 100 percent of them. Further complicating the issue is that the FBI is involved, and minor infractions and arrests that applicants formerly didn’t have to report can surface, creating licensing delays. The operator we wrote of earlier said that one of his pilots couldn’t get his license renewed because of a DWI issue in the 1980s.

As relates to the TWICs, Congress is now dawdling over which companies will be eligible to vie for the contract for doing background checks required to get these credentials. (We have to play favorites, don’t we?) Observers do not expect to see a Notice of Proposed Rule Making, which would allow comment to help shape the rule. They think it will come out before the end of the year as an interim rule that must be obeyed immediately, with complaints to be filed later. TWICs were to have been instituted back in 2004, but the deadline passed un-noticed. Then came the Dubai Ports World incident, where some U.S. port operations were nearly turned over to foreign operators. Congress has become very interested in who has access to ports and vessels, so TWICs are on the front burner.

On top of that, Katrina destroyed Coast Guard’s Regional Exam Center in New Orleans. (The Coast Guard did grant some license extensions because of that.) The agency began last week preparing to move records from Memphis back to New Orleans, but even that will be temporary because of the new processing center under construction in West Virginia. Over several decades, the Regional Exam Centers have been modified, relocated, reduced in number, etc., while the agency pledged no reduction in service. It isn’t clear that the Coast Guard received additional positions for the new consolidated licensing center. If the past is prologue staff will be taken from existing RECs, thus leaving them understaffed during the transition. The new center begins operating next year and is scheduled for completion in 2008.

The Coast Guard reported in the summer of 2005 that there were almost 87,000 licensed mariners. The number includes licenses for fishing vessels, offshore service, multiple-tonnage licenses and mate’s licenses, but if, say, 60 percent—just over 50,000—are for the inland waterways, the number still far exceeds the need. Where are they?

We can only guess that because of the myriad licensing issues, they’re either choosing to work elsewhere or, as the case may be with older pilots, of which there are many, they’re simply retiring.

So while there are reports often of new vessel construction and renovation, and the towboats plying the waterways look resplendent after spring cleanup and fresh paint, the picture is not all that rosy.

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