COS Weekly News - 18 December 2009

Friday, 18 December 2009 11:18

COS News – Week ending 18 December 2009

Issue No. 86

 

 

 

 

 

ST.LAWRENCE SEAWAY CONTINUES TO STRUGGLE FOR CARGO

St. Lawrence Seaway volumes have touched a 40 year low in 2009 on account of the depleted regional manufacturing base during the 2008/09 recession and with very little optimism for 2010. Some 20% of the Canadian fleet is in long term layup reflecting a similar reduction in total volumes carried. This year marks the 50th anniversary of the St.Lawrence Seaway which opened on April 25th 1959.

 

 

PMSA GAINS COURT APPROVAL TO CHALLENGE LOW SULPHUR FUEL RULES

The Pacific Merchant Shipping Association, is for the third time appealing the legality of California Air Resources Board rulings related to mandatory switching to low sulphur fuels within 24 miles of the coastline. At the heart of the Association’s case is that US federal law pre-empts California’s powers to regulate fuel use on any vessels other than state pilot boats. PMSA has twice been successful in having CARB regulations struck down in favour of federal jurisdiction, each time ignored and in fact made compulsory from July 1 2009.

 

Closer to home, Port Metro Vancouver and the Chamber of Shipping have established a steering committee to review the current Gold, Silver Bronze voluntary scheme which provides for concessionary rates on Harbour Dues. The mutual objective is to design an updated scheme with sufficient inducement to attract increased participation as a “bridge” to the mandatory Emissions Control Area which will take effect in 2012. It is also hoped to expand the scheme to all main port in BC.

 

 

CANADIAN PORTS CLEARANCE ASSOCIATION FEES

No change to the fees for 2010.

 

 

WASHINGTON DOE LEVIES FINES FOR OIL SPILL

The state Department of Ecology (Ecology) has issued a news release confirming that it has levied fines totalling $33,250 against two companies whose ships spilled oil while loading and unloading cargo at state ports in March 2009.

Ecology has issued a $17,250 penalty to DS Schiffahrt GmbH & Co. KG of Hamburg, Germany, because its 997-foot containership Hyundai Republic, spilled 159 gallons of hydraulic oil in Tacoma's Blair Waterway on March 17, 2009.

 

Ecology also levied a $16,000 fine against Masterbulk Pte Ltd. of Singapore after its 700-foot cargo ship, Heranger, developed a slow seep of hydraulic oil to the Columbia River that continued for 58 hours – from mid-morning March 20 through mid-afternoon March 22, 2009.

 

 

 

 

Government News

 

CANADIAN NORAD REGION NAMES SANTA’S ESCORT PILOTS

The Department of National Defence has issued a new release advising that the Canadian North American Aerospace Defense Command (NORAD) Region has put the finishing touches on this year's plan to welcome and track Santa Claus when he visits Canada, by naming four CF-18 fighter pilots as his official escorts.

 

Lieutenant-Colonel Sean Penney and Captain David Chamberlin of 4 Wing Cold Lake, Alta., and Captain Yannick Jobin and Captain Dave Patrick of 3 Wing Bagotville, Que., will take on the responsibility of welcoming Santa when he arrives in Canada for his annual Christmas Eve journey.

 

 

BC LAUNCHES REVIEW OF THE SOCIETY ACT

The Minister of Finance, Colin Hansen, has announced that the Province is embarking on a review of British Columbia’s Society Act to modernize and update the statute that provides rules for the registration and governance of not-for-profit organizations.

 

The review will address the corporate model most appropriate for societies and regulatory provisions.  Deadline for the feedback on the first phase of the review is April 1, 2010.

 

 

ORDER AMENDING THE SHIPPING SAFETY CONTROL ZONES

The Order prescribes certain areas of the arctic waters as shipping safety control zones as permitted under the Arctic Waters Pollution Prevention Act.

 

The proposed consequential regulatory amendments to the Shipping Safety Control Zones Order would extend the Seaward (outer) Boundary of the shipping safety control zones to the outer limit of the Exclusive Economic Zone, which is the extent of the new definition of “arctic waters” under the recently amended AWPPA

 

Other News

 

 

DRIVE TO MAINTAIN CONFIDENTIALITY IN RE-FINANCING

With so much renegotiation of ship finance deals and loan covenants underway, there are unprecedented efforts of cooperation between owners, shipyards and banks to protect asset values, shareholders and markets by maintaining an information blackout. For the most part, bankers are reluctant to become ship owners, likewise shipyards, hence willingness to find “solutions” for cash strapped owners having cash flow problems and/or overly exposed to the new build market.

 

 

EUROPEAN VERSION OF 24 HOUR RULE ON TRACK

The World Shipping Council representing container carriers has warned that European Union’s January 2011 deadline for advanced filing of container import manifests is on schedule. Whilst the challenging of harmonising legislation between the 27 member nations should not be under estimated, there is consensus that this is something which must be made to happen. Similar legislation was introduced in North America some five years ago.

 

 

MAERSK CONTINUES TO EXPAND SPEED REDUCTION PROGRAM

Given initial success in main trade lanes, Maersk is planning on speed reduction speeds on other routes given relatively little push back from shippers on the supply chain impacts. Next up is the company’s Asia to South Africa trade which will be operated at reduced speed commencing January 2010. Given excess vessel capacity and the urgent need to slash operating costs, most major carriers have followed the Maersk lead in reducing speed to the 12-14 knot range but at the same time inserting more ships into their schedules to maintain sailing frequency. The U.S. based National Industrial Transportation League representing several blue chip shippers has also confirmed support for the wider benefits of slow steaming.

Also this week it was announced that Maersk has teamed up with Richard Branson’s Carbon War Room (CWR)at COP15 to highlight the efforts being made to reduce shipping’s carbon emissions. Earlier this year, CWR accused the industry of foot dragging on emissions reduction policy and it is hoped that direct industry engagement will help to allay some of the misconceptions.

 

 

WASHINGTON – SHIP OPERATORS FINED FOR DELAYED REACTION TO SPILLS

The Washington State Department of Ecology issued a news release stating that it levied fines against two ship operators for delayed reaction to oil spills. One operator did not notify the Department for a hydraulic oil spill that occurred while getting underway until two hours later. The other operator delayed activating its contingency plan until nearly 48 hours after it was notified by the Coast Guard and the Department of the spill.

 

 

A NEW FRANCE?

The original SS. France – built 1961

 

Plans are at an advanced stage to build a new “France” as a successor to the conventional 1961 built transatlantic liner later renamed “Norway” and which was eventually scrapped in 2007. The ship is expected to be in the pocket cruise mould having an LOA of around 240 m and capacity for around 500 passengers in a luxurious setting.

 

 

 

Market Update

Back in the real world. lead by weak demand for Capesizes, the Baltic Dry Index (BDI) closed softer on Thursday note at 3376 points compared to 3671 points last week and 4062 points the week previously.

 

                                          Cape Size                Panamax              Supramax          

Index                                     4875                       3436                       2340

Last week                              5387                       3795                       2432

Spot time charter              $49,300/day           $27,600/day           $24,500/day

Last week                         $55,600/day           $30,500/day           $25,400/day

 

Charterers have played a strong hand in the annual pre-Christmas cat and mouse game of ship fixing, most notably in the Capesize markets. Australia and Brazil and both relatively quiet for iron ore cargoes to China and most fixtures over the past week are below “last done” levels.

On the tanker front, winter weather in Asia has resulted in a number of cargoes seeking VLCCs for December loading. A few lucky owners with ships in position have therefore been cashing in. Rates for Arabian Gulf to Far East are in the $40-45,000/day range compared to Arabian Gulf to Europe at $25-30,000/day. Whilst not great, these rates are considerably more healthy than anything seen for the past 6-9 months.

 

 

 

Upcoming Events

 

Dec 24              Christmas Eve – COS Offices Close @ 12:00

Dec 25              Statutory Holiday – Christmas Day – COS Office Closed

Dec 28              Boxing Day Holiday – COS Office Closed

Dec 31              New Year’s Eve – COS Offices Close @ 12:00

Jan 1                New Year’s Day – COS Offices Closed

Jan 6                COS Board of Directors Meeting @ 11:30

Jan 12               VMAA Board of Directors Meeting @ 12:00

Jan 12               COS Ship & Port Operations Committee @ 12:00

Jan 13               COS Liner Committee Meeting @ 11:30

Jan 13               Rail Services Review Discussions @ 13:00

Jan 14               COS Navigation Services Committee Meeting @ 10:30

Jan 19               CIABC Board of Directors Meeting @ 10:30

Jan 19               ICS Board of Directors Meeting @ 12:00

Jan 20               Plimsoll Club Pub Night @ 17:00 (tbc)

Jan 21               Business of Shipping Course

Jan 26               ISSC Board of Directors Meeting @ 12:00

Jan 27               PACMAR/NANS Meeting @ 10:30

Jan 28               COS Owners Committee Meeting @ 12:00

Jan 28               VMAA Seminar on Bill C-7 @ 12:00

 

 

 

 

 

Ship of the Week

M.V. MIDNIGHT SUN

                   Totem Ocean Trailer Express Inc

 

LOA 839’

Beam 118’

Speed 24 knots

Trailer capacity 600 FEU

Cars 200

 

Midnight Sun and her sister vessel North Star are ro-ro vessels dedicated to servicing Anchorage, Alaska from Tacoma, Washington State. The two so called Orca Class vessels carry 53-foot and larger length trailers and regular vehicles. Midnight Sun completed construction in April 2003, North Star in August the same year being specifically designed to achieve

 

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