COS News – Week ending 21 October 2011
Issue No. 180

 

VANCOUVER SHIPYARDS AWARDED $8 BILLION CONTRACT

The National Shipbuilding Procurement Strategy (NSPS) Secretariat has announced the results of a Request for Proposals to build large ships for Canada.  Seaspan Marine Corporation’s Vancouver Shipyards has been awarded the $8 billion non-combat package that includes construction of the Navy’s joint support ships, the Canadian Coast Guard’s off-shore science vessels and the new polar icebreaker.  On the other coast, Irving Shipbuilding in Halifax has been selected to build21 combat vessels, including the Royal Canadian Navy’s Arctic Offshore Patrol ships and the Canadian Surface Combatants ships.  This contract is estimated to be worth $25 billion.  

Small ship construction (116 vessels), an estimated value of $2 billion, will be set aside for competitive procurement amongst Canadian shipyards other than the yards selected to build large vessels. Regular maintenance and repair, valued at $500 million annually, will be open to all shipyards through normal procurement processes.

Visit the National Shipbuilding Procurement Strategy website for more information. 

CN AND SPECIALTY-GRAIN EXPORTER REACH AGREEMENT

CN and Agri-Food Central Ltd. announced an agreement to improve the service delivery performance and consistency of the supply chain for specialty grains moving from Western Canada to Mexico via rail and to other markets including those in Latin America through Atlantic, Pacific and Gulf coast ports served by CN.

Under the agreement, CN and Agri-Food Central have agreed to exchange information that will allow the parties to jointly measure rail service and supply chain performance, to cooperate on joint supply chain planning, and establish a process to address any rail service issues.

EFFICIENT NEW RAIL PRODUCT CREATES INTERMODAL OPPORTUNITIES

Canadian Pacific will be the exclusive Canadian rail transportation provider for Contrans, using innovative Raildecks multimodal flat rack containers. The agreement extends the long-haul efficiencies of rail to a markets currently served by transport trucks across Canada.

Canadian Pacific has been testing Raildecks' 53ft collapsible, multimodal carriers over the summer at its Toronto Intermodal Facility in Vaughn, ON. The testing proved the concept, as pipe and other industrial products moved seamlessly on CP's longhaul intermodal trains. Previously shippers relied on trucks to move these types of products over a long distance.

ASIAN GYPSY MOTH - END OF HIGH RISK PERIOD

The Canadian Food Inspection Agency has provided the attached notice to end the high risk period for Asian Gypsy Moth on October 15, 2011.

Government News

BC SETS YEARLY CHINA LUMBER EXPORT RECORD

BC Minister of Jobs, Tourism and Innovation, Pat Bell, announced that British Columbia has broken another record in lumber exports to China this year – with shipments already surpassing 2010’s final year-end record total.  Overall exports for the first eight months of 2011 are valued at almost $3.4 billion, an increase of more than $1 billion or 42 per cent compared with the pace set over the same period in 2010.

CLEAN ENERGY MARKET OPPORTUNITIES FOR WESTERN CANADIAN BUSINESSES

Western Economic Diversification announced an investment of $150,000 towards WADE Canada to implement the Clean Energy Small and Medium Sized Enterprises (SME) Capacity Building Program.

The Clean Energy SME Capacity Building Program is providing 150 companies from across the West with access to resources such as workshops, training and business advisory services geared towards increasing their capacity to attract trade and investment opportunities. Up to 50 of these companies will also be selected to showcase and demonstrate their technologies to potential investors and partners at the Global Clean Energy Congress.

MANDATORY REPORTING OF EXPORT CARGO – APRIL 2012

Canada Border Services Agency has confirmed that mandatory reporting of export cargo will be required on April 1, 2012.  Penalties will not apply until the Regulations come into effect in late 2014.  A Customs Notice to this effect will be issued imminently.  Paper filing of the B13A will be phased out and users will be encouraged to use the Canadian Automated Export Declaration (CAED) for marine exports.  Industry is still in discussion with CBSA on requirements for those currently on summary reporting.  The eligibility criteria and timelines are being reviewed.   Attached is a presentation given to the Border Commercial Consultative Committee earlier this week. 

Other News

VANCOUVER MARITIME MUSEUM RECEIVES $500,000 GIFT

The Vancouver Maritime Museum is excited and honoured to be the recent recipient of a gift of $500,000 from Mr. John Salisbury to create a new endowment fund in support of the RCMP vessel St. Roch.  As the most significant item in the Vancouver Maritime Museum’s collection, and valued at over $2 million, the RCMP vessel St. Roch is always in need of conservation and care.  The museum is currently undertaking a survey on the vessel and is preparing a conservation report for future action.  The creation of this much needed fund will help the museum ensure that this icon of arctic sovereignty is preserved for future generations. 

St. Roch is special not only for her history - The St. Roch was the first vessel to sail the Northwest Passage from west to east 1940-42, the first to complete the passage in one season 1944, and the first to circumnavigate North America - but also for the experience she offers. The ship is a unique artifact of arctic endurance, a compelling symbol of human endeavour in a forbidding land, and of ordinary men rendered heroic by unusual and extreme circumstances at the top of the world. St. Roch through its years of service in the Northwest Territories and the Arctic Ocean provides tangible proof of Canada’s sovereign claims to those regions. 

The creation of this fund reflects Mr. Salisbury’s belief that both the history and social fabric of our province is uniquely tied to the water, whether it is the growth and development of BC’s economy through one of the busiest ports in North America, or the settlement and service of remote communities through our vast waterways.

Mr. Salisbury passed away peacefully on September 23, 2011.  His very generous contributions in his final days to many local and provincial organizations, such as the Vancouver Maritime Museum, will be appreciated for many years to come. 

Mr. John Salisbury was trained as a paratrooper near the end of the World War II.  He was involved in mining in the Yukon and enjoyed taking mining courses at BCIT.  He was also involved in a variety of business ventures across the province, including both plumbing and used auto parts for many years.  His final years were spent enjoying both the waterways and community of Pender Harbour.  The John Salisbury Endowment fund will be open to the public for further donations.  Please contact Jana Lyons at Vancouver Maritime Museum for further information.

ILWU MEMBERS RATIFY GRAIN CONTRACT

International Longshore and Warehouse Union locals in the US Pacific Northwest voted to ratify a grain-handlers contract agreement that was tentatively agreed to on Sept. 14 by union negotiators and six grain terminals in the region.  The new contract, which runs through Sept. 30, 2012, leaves the EGT grain export terminal in Longview, Wash., as the only grain terminal in the Pacific Northwest without an ILWU contract.

PIRACY LINKS TO THE AL SHABAAB GROUP GROWING

According to the head of the UN’s counter-piracy unit, cooperation between Somalia's al Qaeda linked militants and pirate gangs is growing as the al Shabaab group becomes more desperate for funding. Steed told Reuters that pirates taking ships and their crews hostages for lucrative ransoms would remain their main focus.

Upcoming Meetings and Events

PLIMSOLL CLUB FALL BANQUET

Nov 18 – Reserve your tickets today for the Plimsoll Club’s Annual Fall Banquet.  This year’s event will be held at the Fairmont Waterfront Hotel with proceeds benefiting the Greater Vancouver Food Bank and the Surrey Food Bank.  For more information see the attached information.

Oct 25              VMAA Board of Directors Meeting @ 12:00
Oct 26              PACMAR/NANS Meeting @ 10:30
Nov 2               Plimsoll Club Board of Directors Meeting
Nov 16            COS Liner Committee Meeting @ 10:00
Nov 17            COS Ship & Port Operations Committee Meeting @ 12:00
Nov 18            COS Board of Directors Meeting @ 10:00
Nov 18            Plimsoll Club Annual Fall Banquet

Ship of the Week

                            

                                                                   Cielo di Vancouver

Built 2002 in Shanghai Shipyard & Chengxi Shipyard Shanghai
LOA 185.5m
Beam 29m
Speed 14.5 knots
DWT 37,420 MT
TEU Capacity 1888

Medbulk’s history dates back to 1936 when the d’Amico family formed a shipping company in Salerno, Italy to handle imports of lumber for use in their own saw mills. In 1952 d’Amico Tankers Limited was formed when d'Amico Società di Navigazione S.p.A., the holding company of the d'Amico Group, was established in Rome. On the dry bulk side, the fleet consist of 10 conventionally craned “open hatch box-shaped” bulk carriers. In 2005, a strategic alliance with Glencore was formed that now operates as GLENDA International Management Limited.

COS News – Week ending 14 October 2011
Issue No. 179

 

PORT METRO VANCOUVER - PORT 2050

In 2010, Port Metro Vancouver embarked on a strategic visioning process called Port 2050. The results of the process, including four scenarios telling alternative stories of our future, are presented in a summary report.   The outcomes of the Port 2050 process will guide future business priorities, shape new initiatives and ultimately transform every aspect of Port Metro Vancouver’s operations, beginning with the revision of our strategic vision and mission statements. 

KITIMAT LNG EXPORT LICENCE APPROVED BY NATIONAL ENERGY BOARD

Kitimat LNG partners Apache Canada Ltd. (Apache Canada), EOG Resources Canada Inc. (EOG Canada) and Encana Corporation (Encana) announced that the National Energy Board (NEB) has granted Kitimat LNG a 20-year export licence to ship liquefied natural gas from Canada to international markets.

Kitimat LNG is currently carrying out a Front End Engineering and Design (FEED) study which will provide certainty around project design, construction timelines and costs and labour force requirements. The FEED study is expected to be complete by early in 2012 followed by a final investment decision by the partners.

Government News

CANADA AND BC TO CONSULT ON STRAIT OF GEORGIA CONSERVATION AREA RESERVE

The Honourable Peter Kent, Canada’s Environment Minister and Minister responsible for Parks Canada, announced with the Honourable Terry Lake, British Columbia’s Minister of Environment, that the governments of Canada and British Columbia have agreed on a proposed boundary for a national marine conservation area reserve in the southern Strait of Georgia also known as the Salish Sea.  The proposed area extends from the southern tip of Gabriola Island to Saanich Inlet and Cordova Bay, just north of Victoria.

In-depth consultations with First Nations, local governments and stakeholders on the proposed national marine conservation area reserve will follow.  The Government of British Columbia has agreed to transfer administration of the seabed to the federal government if a national marine conservation area reserve is established. 

The Strait of Georgia is one of 29 marine regions that Parks Canada aims to represent as part of the national marine conservation area system.  Ecologically sustainable fishing, navigation and recreation will continue.

CUSTOMS NOTICE 11-09 – ACI TRANSMISSION OF EDTL

Canada Border Services Agency has issued CN 11-09 to clarify the requirement regarding the transmission of estimated date and time of loading (EDTL) on the Advance Commercial Information (ACI) Marine Cargo Report (SO83).  

The EDTL must be provided to the Canada Border Services Agency (CBSA) at least 24 hours prior to loading when the foreign port of load is in a country other than the United States and when one or both of the conditions below apply:

(a) If the Supplementary Data Required Indicator is “Yes”.
(b) When the cargo report has containerized goods or break-bulk goods without a ministerial exemption.

***Although the notice states that the EDTL must be included in the marine supplementary report, CBSA has since advised that this is not a current requirement

The carrier or freight forwarder may load the cargo at or after the EDTL if they do not receive a “Do not load” message.

MANDATORY eMANIFEST REQUIREMENT FOR HIGHWAY CARRIERS

Canada Border Services Agency (CBSA) has announced that eManifest requirements for highway carriers will be mandatory on November 1, 2012.

Now that all transmission options (Electronic Data Interchange and the eManifest Portal) are available and operating efficiently, the 18-month implementation timeline will begin November 1, 2011. In accordance with the eManifest implementation approach, the following key dates will apply to eManifest implementation in the highway mode:

• Highway carriers have 12 months to incorporate eManifest requirements into their business processes.November 1, 2011, to November 1, 2012

• eManifest requirements are mandatory. Highway carriers deemed to be non-compliant will be denied entry to and issued zero-rated penalties.November 1, 2012, to May 1, 2013

• The implementation timeline is complete.  Highway carriers deemed to be non‑compliant will be denied entry to and issued monetary penalties.May 1, 2013

Note that the eManifest section of the CBSA Web site has been updated to better organize the content, accommodate the posting of policy decisions and interim highway processes, and include user information on, and access to, the eManifest Portal. 

AMENDMENTS TO THE TRANSPORTATION OF DANGEROUS GOODS ACT

Regulations Amending the Transportation of Dangerous Goods Regulations (Amendment 10) are now published in the Canada Gazette Part II – October 12, 2011.  The amendments add compensation guidelines for contractors and other parties authorized to implement approved Emergency Response Assistance Plans (ERAPs). 

VOYAGE DATA RECORDER REGULATIONS

Also published in the Canada Gazette Part II are new Voyage Data Recorder (VDR) Regulations that will apply to new and existing domestic vessels and implement certain SOLAS Convention provisions by requiring that Canadian vessels engaged on international voyages be fitted with VDRs. 

Other News

CALIFORNIA LOW SULPHUR FUEL UPDATE

The California Air resources Board (CARB) has advised that a revised regulation will be enforced from December 1, 2011 as follows:

Regulatory boundary change

• The regulatory boundary has been expanded in Southern California to be consistent with the Contiguous Zone, which is 24 nautical miles from the California “Baseline”. This new boundary includes the region 24 nautical miles from the California shoreline, including 24 nautical miles from the shoreline of each of the Channel Islands off California’s coastline.
• A small region within the 24 nautical mile boundary is exempt from the regulatory requirements to encourage vessels transiting to and from the Ports of Los Angeles or Long Beach to use the established traffic separation scheme in the Santa Barbara Channel.

Revised fuel requirements

Fuel requirement	Effective date	Percent sulphur content limit
Phase I	July 1, 2009*	Marine gas oil (DMA) at or below 1.5% sulphur; or marine diesel oil (DMB) at or below 0.5% sulphur
	August 1, 2012**	Marine gas oil (DMA) at or below 1.0% sulphur; or marine diesel oil (DMB) at or below 0.5% sulphur
Phase II	January 1, 2014***	Marine gas oil (DMA) or marine diesel oil (DMB) at or below 0.1% sulphur

* No change from the existing requirements.
** Marine gas oil sulphur limit reduced from 1.5% to 1%. No change in marine diesel oil limit.
*** Implementation delayed from 2012 to 2014.

Changes to the Non-compliance Fee provision: The new provision provides the option to pay a fee in lieu of direct compliance with the regulation (using compliant fuels) under certain limited situations. Under the amendments, this provision is revised as follows:

• The non compliance fee is halved for vessels that purchase compliant fuel during their port visit and use the fuel in port and on departure from port while in regulated waters.
• Offshore anchorages made in conjunction with a port visit are not counted as a second port visit when calculating non-compliance fees.

 

The fee schedule is revised as follows:

California port visits	Amended per-port visit fee*	Fee prior to amendments
1st port visited	$45,500	$45,500
2nd port visited	$45,500	$91,000
3rd port visited	$91,000	$136,500
4th port visited	$136,500	$182,000
5th or more visits	$182,000	$227,500

* Fee halved for vessels that purchase and use compliant fuel during port visit. Further details are available in CARB Marine Notice 2011-1

UK BRITISH SPECIAL FORCES RESCUE BULK CARRIER

UK special forces have captured 11 pirates in an operation off the coast of East Africa after pirates attacked the Supramax bulk carrier Montecristo (built 2011) earlier this week. It appears that in the face of overwhelming odds, the pirates offered no resistance to a boarding team from the Royal Fleet Auxiliary Fort Victoria.

   

                               Montecristo                                                                                RFA Fort Victoria

Save Our Seafarers reports that Britain is to boost its fight against Somali piracy by creating a new intelligence cell with the job of tracking the multi-million dollar money flows generated by buccaneering "kingpins".   Ministers plan to dispatch officers from the Serious and Organized Crime Agency to staff a new Indian Ocean unit dedicated to hunting pirate financiers, who provide start-up cash for gangs in return for the lion's share of ransom proceeds.

AUSTRALIA TO MOVE AHEAD WITH SHIPPING REFORM

The Australian government has reconfirmed its intention to establish a policy framework designed to rejuvenate its national merchant fleet. Despite criticism of some aspects of the policy, the government has reminded its detractors that 99% of Australia’s international trade is carried by ships, yet only half of one per cent of that trade is carried by Australian flagged vessels. Volumes handled at Australian ports are estimated to account for 10% of all global seaborne trade yet the number of Australian flagged ships has fallen to just 22, most of it old. The measures include:

• Australian resident companies with Australian registered vessels will pay no company tax.
• Qualifying income from shipping and royalty withholding tax are exempted.
• The depreciation rate will be cut to 10 years from 20 years as part of a drive to accelerate fleet renewal.
• Rollover relief will also be offered and tax offsets will be available to Australian employers of resident seafarers who work in international trade.
• Shipowners will be required to comply with the International Labour Organisation’s “Maritime Labour Convention” and other treaties.
• New Entrants to Australia’s international register will need to employ at least two Australian seafarers per ship, preferably the Master and the Chief Engineer.

Teresa Hatch, Executive Director of the Australian Shipowners’ Association, welcomed the change of policy direction by saying “The policy provides the necessary elements to allow ship owners to base their operations in Australia and add value to our economy by doing so. The creation of an international second register will allow Australian companies to own and operate ships in international trades on a competitive basis. The importance of this measure cannot be overstated.”

Despite some provisions that could be seen as watering down workers’ rights, a Maritime Union of Australia spokesman commented “the MUA welcomes shipping reform as one of the greatest policy developments in Australian shipping since the Navigation Act was introduced in 1912. The new policy restores fairness and transparency to the way shipping participates in the domestic freight market, while greatly increasing the potential for greenfield opportunities for Australian businesses to participate in international shipping. If implemented properly, shipping reform will be good for the domestic economy, providing surety of investment, regular scheduling, efficient and effective utilization of ships and developing the critical shortage in maritime skills that Australia as a trading and shipping nation so desperately needs.”

TEEKAY LNG PARTNERS BUYS MAERSK LNG FLEET

Teekay’s joint venture with Japan's Marubeni will pay $1.4bn for interests in LNG eight carriers comprising the entire Maersk LNG fleet – a sector it has elected to strategically exit at a time of strong ship re-sale values. The venture will own six carriers outright, plus a 26% holding in two more. Five of the eight are operating under long-term, fixed-rate time-charter contracts, with an average remaining firm contract period duration of approximately 17 years, plus options. The part owners of the vessels not 100% controlled by Teekay and Marubeni have a put option to sell their stakes.

                Maersk Magellan - built in 2008

Teekay CEO Peter Evensen commented “with an average age of only four years, we are acquiring a modern, well-maintained fleet that has been operated by one of the leaders in global shipping."

DREWRY PESSIMISTIC ON CONTAINER SECTOR PROSPECTS

In stark comparison to collective profits of $17 billion in 2010 which generated accelerated ordering of new tonnage, container carriers are bracing for 2011 losses of around $3 billion according to latest estimates from Drewry. Whilst far short of $19 billion losses suffered in 2009, there is intense disappointment that trade growth forecasts have fallen short of even the most conservative forecasts. Drewry sees no improvement in the global supply/demand balance for the next five years, hardly welcome news when 80% of the 2m TEU of new capacity ordered since June 2010 is for vessels of 8,000 TEU and above. That ordering “has already done the damage”, says Drewry.

To emphasize the scale of the problem, Alphaliner estimates that owners and operators will need to raise an estimated $57bn to fund new ships ordered for delivery between now and 2015. Of this, about $35bn is for orders placed directly by carriers, with the remaining $22bn ordered by charter owners. The headline grabbing order to date has been Maersk’s 20 18,000 TEU Triple-E ships at $190 million each.

CONTAINER SHIP GROUNDS OFF TAURANGA NZ

The 3032 TEU capacity container ship Rena grounded last week on Astrolabe Reef, some 12 miles from Tuaranga, a major port on New Zealand’s North Island. Australian and other overseas salvage experts are assisting their Maritime New Zealand (MNZ) counter-parts in an effort to control loss of bunker fuel. Svitzer Salvage has appointed by Rena’s owners, Daina Shipping, a unit of Greece based Costamare, under a Lloyd’s Open Form Agreement. As a precaution, the ship’s crew was taken off the vessel earlier this week as poor weather battered the vessel.  MNZ said the Rena's 44-year old Master and the ship’s 2nd Officer have been charged with “operating a vessel in a manner causing unnecessary danger or risk” under section 65 of the Maritime Transport Act. They each face a fine of NZ$10,000 or a maximum prison sentence of 12 months if convicted.

  

“This has become the nation’s worst maritime disaster” according to the government of New Zealand.  A spokesman for the vessel’s operator Mediterranean Shipping Co said: Rena, owned by Costamare, has been on charter to them since July.   He has apologized to the citizens of New Zealand and the people of Tauranga for the oil spill that has washed up on local beaches near the North Island city and forced the closure of Tauranga’s port overnight on Thursday. “For us, one drop of oil in the water is one drop too much,” said Costamare managing director Diamanti Manos in a video statement played on New Zealand television. “Therefore it is a matter of great regret that a ship associated with us should be the cause of so much anguish.”

Maritime New Zealand estimated that 200-300 tonnes of the 1,700 tonnes of oil on board had escaped the vessel, higher than original estimates, as adverse weather conditions continued to frustrate salvage efforts. Salvage experts will spend the weekend attempting to remove fuel oil from the vessel in an attempt to limit the environmental impact before the ship breaks up.

Market Update

Chinese customs data shows imports of 60m tons of iron ore in September, bringing imports for the first nine months of the year to 508m tons, 11% more than compared with the same period in 2010. This has driven the improvement in demand and the employment of Capesizes whose time charter rate for a Pacific round voyage hit an 11-month high this week at over $30,000 per day. On the back of this, Tthe Baltic Dry Index closed up on Thursday on 2155 points compared to 1967 points last week and 1913 points the week previously. 

                                               Cape Size               Panamax           Supramax
Index                                        3546                         2006                    1583
Last week                               3162                         1869                    1519
Spot time charter               $31,000/day            $16,500/day      $16,000/day
Last week                           $27,300/day            $15,600/day      $15,900/day

Upcoming Meetings and Events

ABS – ISM TRAINING COURSE

Oct 18 - ABS Academy is offering ISM Training Course in Vancouver October 18-20. 

GERMANISCHER LLOYD UPCOMING ACADEMY COURSES

Oct 20 - Advanced Maritime Accident Investigations and Analysis from 9am – 5pm.  For more information visit: http://www.gl-group.com/en/academy/17943.php or to register email:   This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Oct 21 - ISM - A Risk Management Approach from 9am – 5pm.  For more information visit:

http://www.gl-group.com/en/academy/18211.php or to register email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

LLOYDS REGISTER – ADVANCES IN SHIPBUILDING

Oct 21 – LR in conjunction with the Chamber of Shipping will be hosting a presentation by Nick Brown, LR’s Area General Manager and Marine Manager for Greater China on October 21^st at noon.  Mr. Brown’s presentation will provide an update on shipbuilding and repair in China and a discussion on new designs and technologies being considered in newbuilds.  If you are interested in attending and would like further information, please email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

PLIMSOLL CLUB FALL BANQUET

Nov 18 – Reserve your tickets today for the Plimsoll Club’s Annual Fall Banquet.  This year’s event will be held at the Fairmont Waterfront Hotel with proceeds benefiting the Greater Vancouver Food Bank and the Surrey Food Bank.  For more information see www.plimsollclub.ca.

Oct 18              ISSC Board of Directors Meeting @ 12:00
Oct 18-20        ABS – ISM Training Course
Oct 20-21        GL – Academy Courses
Oct 21              LR / COS Discussion on Shipbuilding in China
Oct 25              VMAA Board of Directors Meeting @ 12:00
Oct 26              PACMAR/NANS Meeting @ 10:30
Nov 2               Plimsoll Club Board of Directors Meeting
Nov 8               COS Ship & Port Operations Committee Meeting @ 12:00
Nov 9               COS Liner Committee Meeting @ 10:00
Nov 18            COS Board of Directors Meeting @ 10:00
Nov 18            Plimsoll Club Annual Fall Banquet

 

Ship of the Week

 

                                          Stolt Achievement – chemical tanker

Built 1999
LOA 177m
Beam 31m
DWT 37,141 MT

Stolt Tankers operates one of the world’s largest and most sophisticated global fleet of deep-sea, regional, coastal and inland parcel tankers, providing safe, reliable, high quality transportation services to the world’s leading manufacturers of chemicals and other bulk liquids. The company currently operates 158 tankers of around 2.7 million tons DWT either independently or in partnership.

Founded in 1959 by Jacob Stolt-Nielsen, the company has a long rich history in the transportation of high grade chemical products. Mr. Stolt-Nielsen was a pioneer of the modern chemical tanker but is also recognized for his role in development of the aquaculture industry.

COS News – Week ending 7 October 2011
Issue No. 178

FMC CONSIDERS CANADIAN CONTAINER HANDLING COMPETITION

In shades of a repeat of the softwood lumber dispute, Canadian business, port and railway circles have voiced dismay over the launching of an inquiry by the Federal Maritime Commission in Washington on the impact of the Harbour Maintenance Tax and “other disparities” on alleged container cargo diversion from US west coast ports to Canadian and Mexican ports. Prince Rupert is singled out for special review. The inquiry was announced by FMC chairman Richard Lidinsky in response to written requests from two senators and eight members of Congress on the west coast. They want the FMC to eventually propose legislative and regulatory changes. Mr. Lidinsky has acknowledged that the decision to study the issue of US-bound trade moving through Canadian and Mexican ports “does not imply any position by the Obama Administration”. However, many believe that he personally added fuel on the fire last summer when he referred during an industry event to “weaker container inspections” and “possible subsidy of rail moves through Canada”, a claim robustly rejected by CN Rail.

For his part, Prince Rupert Port Authority CEO Don Krusel has consistently argued that “the advantages shippers are realising through utilising the Port of Prince Rupert and the northern trade corridor are not the result of a subsidy or lax security, but rather the speed and reliability in service attributed to efficient operations”.

“They have to stop the use of the word diversion as it has no place in the discussion of free trade and a globalised economy, with clear rules established in North America with Nafta and the free trade agreement,” Canadian Chamber of Commerce president Perrin Beatty wrote in a letter to federal trade minister Ed Fast. “Just as some cargo moving between the US and other continents passes through Canadian ports, so, too, do American ports handle shipments originating or destined for Canada,” Mr Beatty said. The Canadian Chamber of Commerce has vowed to “oppose any protectionist measures that will penalise Canadian ports and railways and make North America’s freight system more costly”.

Over the past five years, the share of Port Metro Vancouver and Prince Rupert in total North America west coast container traffic has risen from 9% to about 13% as shippers calculate savings of $130- 150 per container through the expediting of cargo through Canadian ports free of the highly contentious U.S. Harbour Maintenance Tax.

PINE ISLAND PILOT LAUNCH REFIT

The Pine Island pilot launch is scheduled to be in refit from 13 to 18 October 2011, both days inclusive.  During this time, vessels wishing to transfer pilots at the Pine Island pilot boarding station may still do so via helicopter if they meet the requirements. Vessels that do not meet the helicopter requirements will be required to transfer pilots at Brotchie (Victoria) or Triple Island (Rupert) pilot stations.

ST. LAWRENCE SEAWAY REACHES TENTATIVE AGREEMENT

The St. Lawrence Seaway Management Corporation and the National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada) have reached new tentative agreements with three bargaining groups. The new tentative agreements will cover units of approximately 47 supervisors, 340 operations and maintenance employees, and 15 headquarters personnel.

2011 CP HOLIDAY TRAIN: MAKING A DIFFERENCE

North America's longest-running rolling food bank fundraiser begins its unique trek across Canada and the U.S. Midwest and Northeast the last weekend of November in its cross-border mission to feed communities. For the 13th year, two specially decorated freight trains will launch their unique journeys across six Canadian provinces and eight U.S. states: The U.S. Holiday Train on Friday, November 25 while the Canadian train will begin its cross-country trek on Sunday, November 27. 

The 2011 CP Holiday Train schedule is now available on cpr.ca - a website that more than 150,000 visitors check out each holiday season to get the latest updates and the train stop nearest them. As well, both Holiday Trains can be followed on Facebook and on Twitter (@CPHolidaytrain).

Government News

APPOINTMENTS TO LOCAL PORT AUTHORITIES

The Honourable Denis Lebel, Minister of Transport, Infrastructure and Communities has appointed Tim Chapman and Paul Landry to the Vancouver Fraser Port Authority, each for a three-year term, effective September 29, 2011. 

Richard Ringma has also been appointed to the Nanaimo Port Authority for a three-year term, effective September 29, 2011.

PROPOSED AMENDMENT TO THE PROOF OF ORIGIN OF IMPORTED GOODS REGULATIONS

The Government is seeking views from interested parties regarding a proposed amendment to the Proof of Origin of Imported Goods Regulations. It is the Government’s intention to add a new subsection to section 6 of these Regulations to waive the North American Free Trade Agreement (NAFTA) Certificate of Origin requirement of subsection 35.1(1) of the Customs Act for locomotives of headings 86.01 and 86.02 and railway freight cars of heading 86.06 transported overland from the United States into Canada and for which NAFTA preferential tariff treatment is claimed.

Other News

US PRESIDENT NAMES EMERGENCY RAIL REVIEW BOARD

President Obama, moving to prevent a potential strike against major US railroads, named a five-person presidential emergency board on Thursday to review contract disputes the railroads and most of their unions.  The move averts a possible nationwide strike by the Brotherhood of Locomotive Engineers and Trainmen, that could have started just after midnight. The union voted earlier to authorize a strike effective at 12:01 a.m. Friday unless the president intervened.

By creating a review board, Obama puts off any potential strike or lockout of workers by the freight railroads until at least early December. That would put a final deadline past the peak rail shipping season that is now under way and lasts through autumn, but a major strike at any time could tip the fragile economy into recession.

EGT DISPUTE IN LONGVIEW GOES TO NEXT PHASE

The dispute between the ILWU and the EGT grain export terminal in Longview, Wash. is moving to the next stage following both parties’ request for a summary judgment in the crucial legal issue in the case. In summary, this is whether EGT’s lease with the Port of Longview requires the company to employ ILWU labour. The union and the port argue “yes” whilst EGT argues “no”. The judge handling the case will have three options i.e. he can issue a summary judgment in favor of the ILWU, he can rule in favor of EGT, or he can deny both parties’ request for a summary judgment and let the case proceed to trial in April 2012.

Meanwhile, and despite continued picketing, EGT continues with preparations for opening the terminal and trains are arriving with export product for the day when the first vessel will arrive to load. More than 100 ILWU members and supporters have been arrested since July, and the union has so far been fined $250,000 as it battles to avoid the break-up of its 77-year history of exclusive jurisdiction at West Coast ports. EGT Development is a joint venture of Japan-based Itochu Corp, South Korea’s STX Pan Ocean and St. Louis-based Bunge North America.

US EAST COAST PORTS FACE HURDLES IN PREPARING FOR 2014

The preparations of U.S. east coast ports for the arrival of post Panamax container ships in 2014 when the widened Panama Canal opens for business, continue to face waterway dredging hurdles. Jacksonville Port Authority is just one of several ports that admits to lacking the funds required for extensive dredging. In addition South Carolina environmental regulators last week refused a permit sought by the Army Corps of Engineers to deepen the Savannah River channel to the Port of Savannah as Georgia Ports Authority seeks to dredge 32 miles of the Savannah River from 42 feet to 48 feet. At present, the US west coast handles around 58% of U.S. container imports, amounting to 9.6m teu in 2010.

GREEK BULKER RELEASED AFTER SEVEN MONTHS

Pirates released the 38,000 DWT 30 years old Greek bulk carrier Dover this week after seven months. Ransom paid is said to be in order of $3.5m. “The prospect of a mass refusal by seafarers to transit the Gulf of Aden is among “nightmare scenarios” that could worsen the problems caused by pirate attacks in the region” said Secretary General of the IMO Mr. Efthimios Mitropoulos in an address to the Maritime Cyprus Conference this week. Mr. Mitropoulos also said he had communicated his fears to UN secretary-general Ban Ki-moon about this and other nightmarish spectres including the capture of a passenger vessel, a major spill caused by a large laden tanker while in pirate hands, and the deviation of traffic around the Cape of Good Hope .

Addressing same conference, International Chamber of Shipping Chairman Spyros Polemis said the continuing scourge was “an extremely depressing topic - since 2008, over 3,000 seafarers have been taken hostage, often after being held in the most terrible conditions, with as many as 60 so far losing their lives. The fundamental problem remained lack of navy ships to protect shipping.

CAMPAIGN HITS THE BIG SCREEN IN BATTLE AGAINST SOMALI PIRACY

SaveOurSeafarers is taking its message to celluloid with the launch of a short video highlighting the human and economic cost of Somali piracy.   The six-minute video launched at Safety4Sea, an international maritime security conference in Athens, this week highlights the significant threat of Somali piracy attacks for the worldwide seafarer community.   The video, which is also being posted on YouTube, uses a mixture of hard-hitting real life interviews, and the latest technology to create a “Hollywood style” action sequence where a ship is captured and hostages taken.  The video can be viewed here.

CONTINUING RATIONALIZATION IN TRANSPACIFIC CONTAINER TRADES

Continuing weakness of the US economy and no light at the end of the tunnel is forcing major rationalization in the transpacific container trades. The China-Long Beach (CLX) service is the latest to be abruptly cut by the consortium of COSCO, Hanjin, PIL & Wan Hai Lines after less than a year of existence despite representing only 0.01% of trade capacity. This follows at least seven other loop suspensions since April this year.

The transpacific trade lane is the world’s 3rd largest at around 3.4 m TEU of capacity with around 50% trading Far East to US West Coast trade. The erroneous estimate of volume predictions for 2011 following 15% trade growth in 2010 has resulted in the current unsustainable overcapacity and low level of freight with benchmark Hong Kong to Los Angeles rate struggling to hold at $1500 per FEU. The Port of Long Beach has reported loaded inbound container throughput for August reached down 14% compared with the same month last year. Similarly, the Port of Los Angeles reported a decline of 5.7%.

In a small step towards the inevitable greater rationalization of the container sector, Maersk has announced that its Safmarine subsidiary is to merge management activities into its parent. There will obviously be job losses with the closure of the Antwerp corporate office and regional offices in Shanghai, Dubai, Cape Town, Singapore and Mumbai.

BALLAST WATER CONVENTION RATIFICATION INCHES CLOSER

The first of the two requirements for the ballast water convention to come into force has now been met with the signatures of landlocked Mongolia and the Pacific island state of Palau. As a result, the convention has finally been ratified by 30 member states of the International Maritime Organization. It requires a minimum 30 states representing a minimum 35% of the global fleet to have ratified it in order for it to come into force a year later. The convention therefore still needs flag states representing 8.6% of the world’s gross tonnage to sign for both convention requirements to be met.

Two flag states that have yet to sign the convention that could push the percentage to the required level on their own are China ( including Hong Kong flagged vessels) and Panama Denmark, with 2.2% of the world fleet, briefly withdrew its papers for ratification last month due to a legal hitch. The convention could become enforceable by the end of next year. Many existing ships will need to have a system installed as soon as the convention comes into force, while newbuildings will need to be constructed with a system onboard. There are deadlines, based on the volume of ballast water a vessel holds, but none exceed 2016.

WET VERSUS DRY – VESSEL OPERATING COSTS

Latest market research providing benchmark running costs for vessels in all segments by Moore Stephens shows it costs an average of $10,670 per day to run a modern VLCC, whereas the benchmark Arabian Gulf to Asia route continues to provide negative returns of around $5,000 per day. By way of comparison, Capesize average operating costs are quoted at $7,437 per day at a time when returns on these vessels have improved over the poast two motnh to around $30,000 per day for a transatlantic round voyage. It should be noted that these number do not include the financing of vessel capital costs.

INTERNATIONAL CHANMBER OF SHIPPING CHAIRMAN TO ATTEND WORLD OCEANS SUMMIT

The ICS Chairman, Mr. Spyros M. Polemis, has accepted an invitation to participate at a major global conference on oceans policy in Singapore (The World Oceans Summit) from 22-24 February, which is being organised by the Economist magazine.  ICS is also serving as an official supporter of the event. The program for the event can be found at www.economist.com/worldoceanssummit

Market Update

The Baltic Dry Index firmed this week, on the back of increased demand for Panamaxes to eventually close on Thursday on 1967 points compared to 1913 points last week and 1884 points the week previously. 

                                                     Cape Size               Panamax             Supramax

Index                                                3162                      1869                    1519
Last week                                         3207                      1705                    1497
Spot time charter                         $27,300/day            $15,600/day          $15,900/day
Last week                                   $27,400/day            $13,600/day          $15,600/day

Capesize rates have dipped slightly ahead of the Golden Week holidays in China but Panamax bulker rates have strengthened across the board on strong steam coal shipments to China and India.

Upcoming Meetings and Events

SUSTAINABLE SHIPPING CONFERENCE  2011 - VANCOUVER, BC

Oct 12 - The sixth annual Sustainable Shipping Conference – All Aboard: Collaboration for Change will be held at the Pan Pacific Hotel in Vancouver on October 12 -14, 2011.  New for 2011 and running parallel to the main conference program are two additional complimentary workshops which will be open to non-registrants.  Further detail is available on the conference website.  We are pleased to advise that the conference organizer have offered Chamber of Shipping members a significant discount on the registration fee.  COS members are invited to join the full conference at the discounted rate of $495. To register please send an email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it advising of COS membership status. 

WISTA CANADA WESTERN REGION MIXER

WISTA Canada extends this invitation to Executive Shipping & Maritime professionals attending Sustainable Shipping Conference in Vancouver October 12th-16th 2011

Date:           October 12th, 2011Time:          16:30- hrs – 18:30 hrs
Location:     Mahony & Sons Public House (No Host Bar)
                  Burrard Landing,   1055 Canada Place, Unit # 36
                  Vancouver, BC    V6C 0C3

RSVP:         Kindly advise attendance to: This e-mail address is being protected from spambots. You need JavaScript enabled to view it  by October 10th 2011  

LLOYD’S REGISTER RISK MANAGEMENT & INCIDENT INVESTIGATION

Oct 12 – LR is offering a two-day Risk Management and Incident Investigation Training course for those individuals responsible for safety.  For more information, see the attached.

ABS – ISM TRAINING COURSE

Oct 18 - ABS Academy is offering ISM Training Course in Vancouver October 18-20. 

GERMANISCHER LLOYD UPCOMING ACADEMY COURSES

Oct 20 - Advanced Maritime Accident Investigations and Analysis from 9am – 5pm.  For more information visit: http://www.gl-group.com/en/academy/17943.php or to register email:   This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Oct 21 - ISM - A Risk Management Approach from 9am – 5pm.  For more information visit:

http://www.gl-group.com/en/academy/18211.php or to register email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

LLOYDS REGISTER – ADVANCES IN SHIPBUILDING

Oct 21 – LR in conjunction with the Chamber of Shipping will be hosting a presentation by Nick Brown, LR’s Area General Manager and Marine Manager for Greater China on October 21^st at noon.  Mr. Brown’s presentation will provide an update on shipbuilding and repair in China and a discussion on new designs and technologies being considered in newbuilds.  If you are interested in attending and would like further information, please email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Oct 10              Office Closed – Thanksgiving Holiday
Oct 11              Vancouver Grain Exchange Council Meeting @ 12:00
Oct 12              COS Ship & Port Operations Committee Meeting @ 10:30
Oct 12              Green Marine Information Session
Oct 12-14          Sustainable Shipping Conference
Oct 13              ICMA Planning Meeting @ 12:00
Oct 18              ISSC Board of Directors Meeting @ 12:00
Oct 18-20          ABS – ISM Training Course
Oct 20-21          GL – Academy Courses
Oct 21              LR / COS Discussion on Shipbuilding in China
Oct 25              VMAA Board of Directors Meeting @ 12:00
Oct 26              PACMAR/NANS Meeting @ 10:30
Nov 2               Plimsoll Club Board of Directors Meeting

Ship of the Week

          Annilies Ilena- the world’s largest fishing factory ship

Built by Strkoder Shipbuilding, Kristiansand, Norway in 2000
Owned by Parlevliet & Van Der Plas, The Netherlands
GRT    14,055
DWT   11,500
LOA    144m
Beam   24m
Speed 18 knots
Crew 43

Having capacity for 375,00 packages of frozen fish, a recent visitor to Vancouver was the Dutch fish factory ship Annilies Ilena. Also known as fish processing vessels, these are large ocean-going vessels with on-board facilities for processing and freezing their catch. Contemporary factory ships are automated and enlarged versions of the earlier whalers and their use for fishing has grown dramatically. Some factory ships also function as mother ships.

    

             bunkering in Burrard Inlet                                                             at sea in the English Channel

Parlevliet & Van der Plas was founded in 1949 by Dirk Parlevliet and the brothers Dirk and Jan van der Plas. Buying herring at the Dutch fish auctions and trading same on the Dutch market was then the primary activity but the company soon grew beyond the Dutch market leading to the formation of its own fishing company. The company is now an international enterprise with about 800 employees. The emphasis is on high quality seafood, sustainability and business at the source. The fleet today comprises 12 freezer-trawlers along with multiple cold stores, trading offices, factories and in-house transport providing service at every point in the process from catch to delivery.  See Annelies Ilena at sea: http://www.youtube.com/watch?v=HhF7zQnsKPI&feature=related

 

COS News – Week ending 30 September 2011
Issue No. 177

 

SUSTAINABLE SHIPPING CONFERENCE  2011 - VANCOUVER, BC

The sixth annual Sustainable Shipping Conference – All Aboard: Collaboration for Change will be held at the Pan Pacific Hotel in Vancouver on October 12 -14, 2011.  New for 2011 and running parallel to the main conference program are two additional complimentary workshops which will be open to non-registrants.  Further detail is available on the conference website.  We are pleased to advise that the conference organizer have offered Chamber of Shipping members a significant discount on the registration fee.  COS members are invited to join the full conference at the discounted rate of $495. To register please send an email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it advising of COS membership status. 

ASIAN GYPSY MOTH – CERTIFICATES FROM KOREA

The Canadian Food Inspection Agency has been notified unofficially that the Korean NPQS will not be issuing pre-departure clearance inspection certificates after the end of their high risk period, i.e. September 30^th.   NPQS has informed CFIA that a new Korean inspection body which will be established in time for the 2012 risk period.  No further details are available at this time. 

FAIRVIEW TERMINAL PHASE II MITIGATION STRATEGY REPORT RELEASED

The Prince Rupert Port Authority (PRPA) and the Canadian National Railway Company (CN) have released the Mitigation Strategy Report prepared by Stantec for the construction and operation of a wharf expansion and expanded container and intermodal facilities at the existing Fairview Terminal, on Kaien Island in Prince Rupert, BC.

VEDC RELEASES ECONOMIC ACTION PLAN FOR VANCOUVER

The City of Vancouver, through the Vancouver Economic Commission, unveiled The Vancouver Economic Action Strategy: An Economic Development Plan for the City.  The action plan for Vancouver is focused on creating a climate for growth, supporting business investment and trade as well as attracting and retaining talent.

The plan provides 160 actions, measures and outcomes for how the Vancouver Economic Commission (VEC) will work with partners to enhance local economic performance through a variety of business-support programs.

Strategies in the plan include:

• boosted support for Port Metro Vancouver, including preservation of job-lands throughout city that support port activities; continued port/neighbourhood interface planning; and port-related transportation needs planning;
• increased trade with new global markets targeting Asia and South America.
• an expedited review of the city’s regulatory framework on job spaces, taxes and regulatory burden on business;

Government News

ST. LAWRENCE SEAWAY UNION SERVES STRIKE NOTICE

The National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada) has provided 72-hour strike notice effective October 3 at noon. The Minister of Labour has issued a statement encouraging the St. Lawrence Seaway Management Corporation and CAW-Canada to work closely together to reach an agreement and avoid a work stoppage.

The two sides began negotiations for the three collective agreements in May. The two sides are scheduled to continue bargaining over the weekend with the assistance of an officer of the HRSDC Federal Mediation and Conciliation Service.

REGULATIONS AMENDING THE GENERAL PILOTAGE REGULATIONS

Published in the Canada Gazette Part I – October 1, 2011 are proposed amendments to ensure that the General Pilotage Regulations are consistent with the Marine Personnel Regulations references to the qualifications for seafarers. 

The proposed amendment of Part 1 of the Regulations would harmonize the existing health qualifications for seafarers with the ones described in Division 8 of Part 2 of the MPR. The MPR enhance current medical requirements, and ensure that appropriate and qualified crewmembers contribute to the overall safe and efficient operation of the ships and vessels.

MOVING TO MARKETING FREEDOM

Agriculture Minister Gerry Ritz welcomed the report of the working group on marketing freedom for Western Canadian producers of wheat and barley. The report draws on expert advice from across the grain industry and will play a vital role in the Government’s planning for an orderly transition to marketing choice. 

The report addresses key issues related to the importance of certainty for the market, a voluntary wheat board and how the grain marketing and transportation systems can adapt to take advantage of the opportunities of an open market.  The recommendations put forward in the report will be considered as the Government moves to eliminate the Canadian Wheat Board’s monopoly.
 

TSB CALLS FOR SAFETY IMPROVEMENTS TO SAIL TRAINING VESSELS

Following its investigation into the loss of the sail training vessel Concordia, the Transportation Safety Board (TSB) is calling for change both domestically and internationally.  The Board’s investigation identified two important safety issues and recommendations:

• Canadian sail training vessels are required to have comprehensive stability guidance on board, but there is no requirement for watchkeepers to be trained in its use. The first recommendation is for this training to be mandatory.
• Additionally, because sail training is international in scope, the Board’s second recommendation is for Transport Canada to lead the way towards international standards for stability guidance and training. Unlike Canada, some jurisdictions do not require comprehensive stability guidance. 

 

Other News

EGT GRAIN TERMINAL OPENS DESPITE ILWU PROTESTS

Grain terminal operator EGT in Longview, Wash., has received a 110 car rail shipment of wheat in preparation for the opening of their new $200 million facility in the face of continued labor protests. The train was met again with protests from the ILWU which lead to more arrests. EGT is a joint venture of three international companies led by Bunge which is determined to become the first grain terminal on the West Coast to operate without the use of ILWU labour.

EGT grain export terminal, Longview

The ILWU, which is limited in its picketing by a restraining order, said two of its members and 10 wives and mothers of longshoremen were arrested by Cowlitz County Sheriff Department officers "for exercising their First Amendment rights by demonstrating peacefully." ILWU President Mr. Bob McEllrath surrendered to police earlier this week to face misdemeanour charges relating to blocking a train from entering EGT. As Mr. McEllrath entered the Cowlitz County Hall of Justice, ILWU workers at all West Coast ports shut down their cargo operations for 15 minutes in solidarity.

JUDGES RULE IN FAVOUR OF OWNER-OPERATOR TRUCKERS IN LOS ANGELES

In an important judgment, the Port of Los Angeles has lost a three year legal battle to exclude owner-operator truckers from the port under a diesel emissions reduction program. The US Court of Appeals for the Ninth Circuit ruled in favour of the City and Port of Los Angeles on several points, but upheld the key District Court trial judgment on employee driver requirements. The port has long argued that owner-operators rely on older and therefore higher polluting trucks, however a three judge panel rejected the evidence. The American Trucking Associations called the decision a “decisive victory for the trucking industry and consumers, this plan was never about clean air, it was about promoting special interests of a few well connected, labour groups”.

EU ISSUES GUIDELINES ON ECA IMPLEMENTATION

The European Union has issued new guidance to member states on how they may consider financial incentives to ship owners faced with the challenges of Emissions Control Area (ECA) implementation. The guidelines make it clear that while the financial burden of upgrading a fleet to meet the rules is to be borne by the shipowner, member states may offer compensation for any net increased costs for the shipping industry to comply with EU rules under certain conditions. In principle, these are that the aid should be in line with existing guidelines, and be available mostly as an incentive. Countries may grant two categories of investment, namely for owners that go beyond the existing standards and once new standards are in place, for the early adopters. Innovation aid may also be granted by member states to shipbuilding, repair and conversion yards, although this is under a framework that expires at the end of this year.

The Marco Polo II work program for 2011 is also giving priority to supporting maritime services that implement technologies that sufficiently reduce ships emissions, meaning scrubbers and the use of LNG will be amongst the range of short-sea shipping projects. Marco Polo aims to free Europe's roads of an annual volume of 20 billion tonne-kilometres of freight, the equivalent of more than 700 000 trucks a year travelling between Paris and Berlin.

INDIAN NAVY IN ACTION AGAIN

Never out of the action for long, the Indian navy has again been busy frustrating pirate attacks on the Singapore registered chemical tanker Fairchem Bronco and a Greek bulker Conqueror, both in the Gulf of Aden. In both cases, the warship INS Sukanya, was escorting the vessels. In August, a sister ship to Fairchem Bronco, the Fairchem Bogey, was brazenly hijacked while anchored within the limits of the port of Salalah in Oman. Two chemical tankers were also unsuccessfully attacked in the southern Red Sea this week. The weakening of the South West Monsoon which runs on average from June to September is generating concern that the recent decline in successful piracy attacks will be short lived.

In a surprise decision, Spain this week became the first flag state to approve the use of high calibre weapons by non-military vessels at risk from Somali pirates. It is assumed that the decision is being driven by the need of Spain’s commercial fishing fleet operating out of the Seychelles, which is the main Spanish maritime interest in the region.

TYPHOON NESAT HITS HONG KONG

Staying with the weather theme, Typhoon Nesat hit Hainan Island in south China on Thursday after it swept past Hong Kong, closing financial markets, schools and most businesses.

               Typhoon Nesat – impact area

China recalled ships to port and suspended flight and ferry operations over a wide area after Nesat devastated the Northern Philippines where it left at least 39 people dead and 31 missing. No deaths were reported in Hong Kong which is well prepared for the annual typhoon season and damage was minimal. Usually crowded streets were however devoid of people as the city’s tram system ceased operations and the subway and bus systems cut trips. As customary in Hong Kong during heavy rain, the thousands of taxis around town were selling their services to the highest bidder but many tourists were reported to be “hanging out’ in Macau’s casinos which was probably not a bad idea.

Typhoons have long impacted Hong Kong and even the word "typhoon" is said to be derived from the Cantonese "tai fung" - big (or great) wind. One of Hong Kong's worst typhoons struck in 1874 when thousands of homes were destroyed and some 35 ships wrecked. Hong Kong's deadliest typhoon occurred in 1937 when an estimated 11,000 people died.

SOUTH AFRICA DEBATES OWNERSHIP OF NATURAL RESOURCES

South Africa has initiated debate on the direction the country should be taking with its natural resources. Whilst only a microcosm of the wider debate raging within Africa, investment in South Africa from Chinese and Indian companies is encountering resistance from various social and governmental circles over resource ownership rights. South Africa is a major producer of coal, as well as many other major minerals such as iron ore, chrome ore, gold and platinum. However, in the coal sector, major mining companies such as BHP Billiton, Rio Tinto and Xstrata are in the process of disinvesting in South African mining assets in favour of other countries, such as Australia.

South Africa employs a “use it or lose it” policy with regards to coal prospect licences. Some of the mining majors have assessed their development plans and have started to put out to tender licences that are deemed of a lower priority or ones that will never get developed within their given timeframe. Recent exports through the Richard’s Bay Coal Terminal, which is owned by the major mine operators, has been consistently below the terminal’s 93m tons per year design capacity. Coal exports reached 63.4m tonnes in 2010, an increase of 4% on 2009. RBCT has lowered its export target twice so far this year as the state-owned rail operator, Transnet, which links the Witbank coal fields to Richards Bay has advised that it will only be able to deliver around 70m tonnes by the end of the year.

Exports in Capesizes to Europe, mainly Spain and the Netherlands, previously dominated Richards Bay’s coal exports, but export markets are now shifting eastwards with main destinations now India and China. Richards Bay has six Capesize berths, each 350m in length with 19m water depth alongside. Just a little to the north, there is also coal export activity in Mozambique. Brazil’s Vale recently initiated mining operations at the Moatize mine in Mozambique’s northwestern Tete province, which has been under development since 2008. The company has invested some $1.66bn in the project, which will eventually have a capacity to produce some 11m tons a year of coking and thermal coal. Given adequate finance, this could increase to as much as 26m tons, however, the coal has to be transported 600 kms by rail to the port of Beira for export. Rio Tinto, has also invested heavily in a joint venture with India’s Tata Steel group but the development of inland and port infrastructure is a major challenge to viability in the short term. Work to upgrade the coal terminal at Beira and the rail connection from the Moatize coal project is being partly funded by the China Kingho Group, reflecting China’s keen interest in Mozambique’s coal exports.

Market Update

The Baltic Dry Index has been in something of a holding pattern this week closing on Thursday on 1913 points compared to 1884 points last week and 1902 points the week previously. 

                                        Cape Size               Panamax             Supramax

Index                                    3207                       1705                     1497
Last week                             3244                       1642                     1471
Spot time charter             $27,400/day            $13,600/day         $15,600/day
Last week                       $27,700/day            $13,100/day         $15,400/day

Tankers: The problem of oversupply in the VLCC sector has produced fresh analysis that highlights the divergence between high levels of crude oil production and low level spot market earnings for VLCCs. The below graph indicates growth in production by OPEC countries of 2m barrels (equivalent to one VLCC) per day while time charter equivalent earnings for VLCCs trading Arabian Gulf to Asia have dropped from $30,000 per day to below zero. 

 

 

Upcoming Meetings and Events

GREEN MARINE INFORMATION SESSION

If you’re interested in attending the session on October 12th, please send an email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

LLOYD’S REGISTER RISK MANAGEMENT & INCIDENT INVESTIGATION

Oct 12 – LR is offering a two-day Risk Management and Incident Investigation Training course for those individuals responsible for safety.  For more information, see the attached.

ABS – ISM TRAINING COURSE

Oct 18 - ABS Academy is offering ISM Training Course in Vancouver October 18-20. 

GERMANISCHER LLOYD UPCOMING ACADEMY COURSES

Oct 20 - Advanced Maritime Accident Investigations and Analysis from 9am – 5pm.  For more information visit: http://www.gl-group.com/en/academy/17943.php or to register email:   This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Oct 21 - ISM - A Risk Management Approach from 9am – 5pm.  For more information visit: http://www.gl-group.com/en/academy/18211.php or to register email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

LLOYDS REGISTER – ADVANCES IN SHIPBUILDING

Oct 21 – LR in conjunction with the Chamber of Shipping will be hosting a presentation by Nick Brown, LR’s Area General Manager and Marine Manager for Greater China on October 21^st at noon.  Mr. Brown’s presentation will provide an update on shipbuilding and repair in China and a discussion on new designs and technologies being considered in newbuilds.  If you are interested in attending and would like further information, please email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Oct 4                PMV Security Stakeholders Meeting @ 09:30
Oct 5                COS Board of Directors Meeting @ 11:30
Oct 5                Pacific Marine Advisory Board Meeting @ 13:00
Oct 6                COS Navigation & Pilotage Committee Meeting @ 10:00
Oct 6                COS Liner Committee Meeting @ 12:00
Oct 12              COS Ship & Port Operations Committee Meeting @ 10:30
Oct 12              Green Marine Information Session
Oct 12-14          Sustainable Shipping Conference
Oct 18              ISSC Board of Directors Meeting @ 12:00
Oct 18-20          ABS – ISM Training Course
Oct 20-21          GL – Academy Courses

Ship of the Week

R/V Investigator – computer generated impression

RALion, a joint venture between Robert Allan Ltd., Alion Science and Technology Corporation, McLean, Va., and Alion Science and Technology (Canada) Corporation, Kanata, Ontario, has been awarded a contract to design an 89 meter, ice-strengthened research vessel for the Commonwealth Scientific and Industrial Research Organization (CSIRO), Australia’s national science agency. Singapore’s Sembawang Shipyard Pte. Ltd. Sembawang Shipyard has been awarded a S$123 million contract for the engineering, procurement, construction and commissioning of the vessel by Teekay Holding Australia Pty. Ltd. as project managers.

The research vessel, which will be named the R/V Investigator, is being built as a replacement for the R/V Southern Surveyor built in 1972. The new vessel will be one of the largest and most capable oceanographic research vessels in the world, capable of continuous and extended operations throughout the Great Southern Ocean, and operating in the full range of operating environments encountered. It will be based in Hobart, Tasmania and will operate from the tropical north to the Antarctic ice-edge and across the Indian, Southern and Pacific oceans. Following her completion and delivery in the second quarter of 2013, the vessel will provide advanced diverse marine science capability to Australia.  The country’s oceanographic, geoscientific, fishery, and ecosystem research capability will all be enhanced.

     

             R/V Southern Surveyor – to be replaced                                   Teekay managed tug Yandeyarra – Port Hedland

Teekay Shipping (Australia) Pty Ltd. (TKA) is a wholly subsidiary of Teekay Holdings Australia. TKA has made a long-standing commitment to provide Marine Services to the energy and resource companies throughout Australasia and has earned a reputation for addressing some of the most complex shipping challenges.

From the Australian Office TKA carries out the following operations:

• Safety and emergency response support
• Total Ship Management for owned and third party owned vessels
• Commercial management for third party owners
• Crew management for owned and third party owners
• Vessel construction supervision
• Vessel inspections
• Industrial relations management
• Offshore services
• Provides docking and build supervision services to a range of Australian and International customers
• Project Management for TKA, third parties and the Australian Defence Industry
• Ship Agency work
• Business development for TKA
• Logistic Support
• Port infrastructure assessments