Not Logged In, Login,

Tuesday, October 16, 2018


Déjà vu on exclusive tug franchises in the USA

INTERTANKO has since 1999 monitored the practice of exclusive tug franchises granted by dry bulk terminals on the Mississippi River in particular. The latest reference being in Weekly NEWS No/25 of 22 June 2001.

Mississippi River:
The Federal Maritime Commission (FMC) has re-started the hearing process on the exclusive tug franchises on the Mississippi River, following an order issued on 15 October 2001. The deadline for filing petitions to intervene was 22 October 2001. As previously reported, INTERTANKO has supported the dry-bulk industry in their efforts to have the practice overturned, and to revert to an open, competitive market for tugboat services.

Under the exclusive tug practice, dry bulk ship interests are unable to select their own tugboat provider, are unable to set standards for tug characteristics or crew qualifications, cannot require minimum levels of P&I insurance, cannot negotiate general terms, conditions, payment terms or discounts, and must pay for tugboat services before berthing at a dry bulk terminal.

The largest number of calls on the Mississippi River are made by dry bulk vessels, with tankers comprising approximately one-half of that number. The exclusive tug arrangement is only in place at dry bulk terminals. INTERTANKO was instrumental in stopping an attempt by liquid facilities to adopt the practice last year and will immediately act if further attempts to introduce such practices are detected.

Until October of this year, tanker interests were not affected by the practice at the dry bulk terminals. Since the last published tariff increases in 1996, operating costs have continued to rise. Consequently, early in October 2001, the four tugboat companies each separately announced an increase in their tariffs in order to cover those higher operational expenses, and since the dry bulk terminal operators are able to exert tremendous pressure on the tugboat companies, the average increase of the tugboat company tariffs on the Mississippi River is estimated to be about 26 per cent.

It would appear that tanker, container and general cargo ship interests are bearing the entire burden of the increased operating costs for tugboat operators on the Mississippi River.

Further to our article in Weekly NEWS No. 42/2001 of 19 October, FMC has rescheduled proceedings until 1 November 2001.

Web link:

Contact: Steinar Digre