Passenger vessel operators voice concern about illegal charters

Illegal charters are becoming more of a menace, not just cutting into commercial passenger vessel operators’ business but also raising the specter of accidents leading to higher insurance rates and more regulation. The boats also are a draw for licensed captains who may not know the risks.

That was the message delivered last week at the Passenger Vessel Association’s annual convention in Seattle.

The problem has become a lot more prevalent in recent years, said Mike Borgström, president, Wendella Sightseeing Co., a Chicago tour boat operator. Borgström led a session on illegal charters at the PVA convention.

“Why is this important to us as an industry as small passenger vessels?” he asked. “For starters, some of these boats are doing the same thing we’re doing without the inspection criteria. That’s putting people in jeopardy because the boats aren’t inspected, the crew’s not licensed.”

The law requires a boat to be inspected if it carries more than six people with at least one paying passenger. Operators must be licensed to legally carry up to six paying riders. Commercial operators with six or more onboard — with at least one paying — must have a master’s license and a Certificate of Inspection (COI). Bareboat charters may carry a maximum of 12 without a COI. The Coast Guard has several enforcement options including taking control of the vessel, civil penalties up to $37,500, violation notices and revoking a master’s license.

“The Coast Guard has been made aware of more incidents of individuals operating illegally,” said Coast Guard Lt. Cmdr. Tim Tilghman, who’s based in Miami. “People who are good citizens and responsible marine operators” are feeling easier about reporting suspicious charters.

“There have always been instances of people taking vessels that are not Coast Guard inspected saying, ‘I’ll make a little bit of money.’ It’s a slow burn type problem in many areas,” said Ed Welch, the PVA’s legislative director.

“I don’t think people fully understand laws that apply to bareboat charters,” Borgström said. “The public is being misled into thinking it’s safe. Many of these boats wouldn’t stand up to Coast Guard inspection. People have gotten away with it without any repercussions. We need a couple of these guys to get busted big time.”

Borgström showed a few slides of alleged illegal charters and what to look for. One slide showed a boat that operates in Chicago with a crew outfitted in matching shorts. “The boat is not inspected, has no registration numbers, and is registered in the Cayman Islands. They take anywhere from 10 to 30 people out on that boat in and out all day. This is one of those things that you see and something’s not right there. But how do you prove it? That’s up to the Coast Guard.”

But Borgström said the Coast Guard is now trained to look for suspicious charters and can take action.

Borgström said that it’s important to note “a lot of this illegal activity is not necessarily being done intentionally. It’s ignorance of the law, ignorance of insurance requirements, it’s whether I think I have a license or I don’t. In most cases, I think all of us on the panel here feel that people that are breaking the law or operating illegally don’t realize it.”

BOAT-SHARING APPS

Now there’s a new wrinkle with boat-sharing applications that connect recreational boat owners with people looking for fun on the water.

“On these boat-sharing apps, you get a mixture of people who are doing things perfectly legally, because they have inspected vessels. Then there are illegal charters,” Welch said.

PVA and its members have been working with the Coast Guard to deal with the issue and discourage the practice, Welch said. They’re also trying to come up with materials to give to licensed captains, who “might not realize insurance from their regular employer might not cover them, and they could lose their license.”

The Coast Guard is looking into boat-sharing apps and making them aware of Coast Guard requirements. The apps operate as third-party negotiators.

“All of our boats have to comply with Coast Guard regulations and laws,” said a spokesman for San Francisco-based GetMyBoat, which bills itself as the world’s largest boat rental and charter marketplace.

Seattle-based Boatbound, another site, describes itself as “the largest and fastest growing pier-to-pier boat rental marketplace in the world.” The company has over 15,000 boats listed in 2,100 cities. It’s core features are marketing and insurance, and also offers payment processing and booking management tools.

Borgström said Boatbound is one of the good ones.

“Let’s be clear,” Borgström said at PVA. “Illegal charters and Boatbound don’t go together.”

“The on-demand type platforms are the ones that give everyone a bad name,” said Boatbound’s Chris Fox, who was on the panel with Borgström at PVA. “These are the ones that are highly illegal and they don’t care.”

“We applaud what you’re doing with your website,” Borgström said, “but the concern we have is when these guys get kicked off of your website and can’t rent the boat from you they’re going to go to somebody else. So they’re still out there. We just need to figure out who those bad players are.” — Correspondent Dale K. DuPont contributed to this report.

 

About the author

David Krapf

David Krapf has been editor of WorkBoat, the nation’s leading trade magazine for the inland and coastal waterways industry, since 1999. He is responsible for overseeing the editorial direction of the publication. Krapf has been in the publishing industry since 1987, beginning as a reporter and editor with daily and weekly newspapers in the Houston area. He also was the editor of a transportation industry daily in New Orleans before joining WorkBoat as a contributing editor in 1992. He has been covering the transportation industry since 1989, and has a degree in business administration from the State University of New York at Oswego, and also studied journalism at the University of Houston.

9 Comments

  1. Thank you for this article. I am a yacht captain, and have had concerns concerning ilegal passenger vessel operations for some time. I also do a fair share of large yacht deliveries. I recently replaced an unlicensed captain who attempted the delivery of a 100 yacht. A tug had to be called in to assist in returning and docking the perfectly operable vessel in its slip. I met the priviously hired captain who assisted turning the vessel over to me. He is a very likable guy, but he obviously lacked the experience and skill to operate that size vessel. If he would have continued with the 715 MN delivery, it would have almost certainly resulted in an insurance claim if not worse. The public is obviously unaware of maritime laws.
    Best,
    Darien

  2. Captain Joshua Sheridan on

    Gentleman,
    Might I suggest you do some fact checking prior to publishing potentially slanderous material.
    My name is Joshua Sheridan, I am the captain of the above referenced vessel. I have worked the past 30 years in both commercial and private sectors of the marine industry and held a USCG issued masters liscence for twenty plus of those years.
    This vessel is one of the largest and most active private yachts operating in the greater Chicago area during the summer months and as such garners much attention. Attention can be both a blessing and a curse, I find myself boarded by the Coast Gaurd on a fairly regular basis and have been found to be in full compliance with all regulations on each occasion. I understand the laws regarding bareboat charter as well as those of Inspected Passenger vessels thanks to my experience in the marine industry as well as the assistance of Maritime Attorneys who specialize in such matters.
    As a captain my primary responsibilities are the safety of the passengers aboard and preservation of the owners interests both financial and legal. I take this responsibility seriously as it is my livelihood. I live up to this responsibility by ensuring we operate in full compliance with local regulations wherever my vessel may be operating. I hire competent and qualified crew as directed by both insurance underwriters and STCW. I find it unfortunate and misguided that you have chosen to cite my vessel to illustrate an issue that I surely agree is a problem in our industry.
    Mr. Borgstrom, I say to you directly that I am easily accessible, we all operate on channel 16 do we not?
    If you have any questions regarding my credentials or the certification of the vessel I operate, reach out.
    To the best of my knowledge we have never met and you have absolutely no knowledge of my vessels operational platform. In the future, I would hope you refrain from speaking without first hand knowledge. Ask your captains on the river about me, I make every attempt to follow good marine procedure on a very busy and congested waterway. We all wish to get home safe and sound.
    To Mr Krapf I invite you as well to contact me.
    Fair winds and following seas

    • David Krapf

      Joshua, thanks for your comment. We did not state in the photo information that the boat charter pictured was illegal. However, I understand your concerns and have swapped in a different photo.

  3. It seems like Mr. Borgstrom needs to make a visit down to South Florida and learn a little more about the yachts he so suggests are not being run professionally.
    Alternatively we could suggest this link to the yachting industry whom are 10’s of thousands strong and world wide.
    I am not sure on what experience Mr. Brogstrom qualifies himself to express his opinion. I respect he has one.
    Many of Chicago’s leading industry executives own these yachts. They keep them in other parts of the county and internationally abroad.
    Certain yachts such as in the picture above range from millions to hundreds of millions that exceed 500 feet. They are maintained with funding the average person could ever imagine and ship repair standards are that of ABYC suggested standards under 65′ in the United States. Then we get into class, ABS, Lloyds, Rena, USCG…
    Some, not all a registered charter vessels which are subject to guest limitations as he suggest. Many are just private yachts and not carrying paid passengers. It is very unlikely a yacht such as the one above would be picked up by a carrier without A: Licensed Captain B: Experienced Captain
    I will offer Mr. Borgstrom the opportunity to submit his resume to the leading professional crew agents down here in Florida, France and beyond. Lets see how you match up.
    The guy running this yacht may quite possibly be running with a USCG 1600 with a 3000 MCA equvilant. Some of these guys are back in the yachting industry as the commercial sector in the Gulf has laid off thousands.
    Mr. Kraph, I would invite you to contact the USSA United States Superyacht Association based in Fort Lauderdale Florida and offer your readers a follow up article. Thanks for sharing guys.

  4. Karl W. Messner on

    Excellent article for those of us on the right side of the law. However as we all know, those who aren’t don’t really care because they are driven to make money….safety is not a high priority. I’ve been operating as a ,licensed Captain for over 25 years in addition to having 31+ years serving with The USCG. Therefore I have seen both sides of the industry where business interests are offset by regulatory demands for safety. Darien’s response was outstanding in that we need to regulate ourselves to ensure the highest level of safety comes first for our customer’s as well as our business concerns. In Darien’s case, had an incident occurred to the vessel while being operated by an unlicensed Captain, there may not have been an insurance claim as most P&I Carriers require the Captain to be licensed as part of the terms and conditions of coverage.

    Get the word out and keep up the good work.

    Fair winds

    Karl

  5. This is an interesting article. I checked on Get My Boat and Boatsetter; both sites advertise rec boats WITH captain for up to 13 people. How are they doing this and staying in compliance when a legitimate bareboat charter has you (a) captain the boat yourself or (b) hire a captain separate from the rental?

  6. I have a question — We just paid for a charter and captain in Hawaii. When we arrived, we were provided with a dirty boat in massive disrepair, and three days into the charter, our captain revealed that she had no license —

    I have subsequently discovered that a paying passenger has already died with this company. Who do I report them to?

    Thanks in Advance —

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    The local company will be responsible for Capital Expenditure (like buying boat) Funding for operational expenses, site allocation, Govt. permission, license etc. And the Foreign experienced Ferry Operator will support and assist to run the show properly..

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