COS Weekly News - 8 January 2010

Friday, 08 January 2010 15:19

COS News – Week ending 8 January 2010
Issue No. 88

 

TRANSPORT CANADA INVOICES WITH GST

A number of members have received invoices from Transport Canada with the 5% goods and services tax applied to Port Warden and other services.  We have discussed this matter with Transport Canada and this error is apparently as a result of an internal system review and is not intended to be a result of a change in policy.  We expect that the department may require a statement on the non-residence and non-registration status for GST purposes.  However, we have suggested that the vessel flag provides sufficient evidence/proof of the zero-rated status

Once clarification on what Transport Canada requires we will advise the membership accordingly.  In the meantime, please call Carlton Gee at 604-666-9323 if you have received an invoice with GST in error and the invoices will be corrected.

 

CONFERENCE CALL – MOVEMENT OF IN-BOND GOODS

Canada Border Services Agency – Pacific Region has provided the following clarification:

As you know, in the past Metro Vancouver District CBSA officers allowed the movement of in-bond goods from the docks to various sufferance warehouses on a C6 for things such as repairs and blocking/bracing.  For the better part of a year now there has been controversy and confusion over the use of C6’s in these types of situations within the marine and transportation industry.  As a result, we contacted our national headquarters for guidance earlier this fall. 

Headquarters has now come back and informed us that the movement of in-bond goods/shipments between release points in Canada cannot be performed using a C6.  They went on and stated that a bonded cargo control document (A8A) must be presented and authorized by CBSA with the “Manifest From” and the “Manifest To” fields shown as (Port Code)(Warehouse Sub-Locator Code) to (Port Code)(Warehouse Sub-Locator Code) prior to any movement. 

Consequently, effective immediately the use of C6’s for the movement of in-bond goods as described above will no longer be authorized, and all movements of in-bond goods must be manifested and re-manifested as per the regulations found in Customs D Memoranda – D3-1-1, paragraph 73-80.  Access to these regulations can be found at www.cbsa.gc.ca.

We have organized a conference call with CBSA to discuss the implications with the new procedures on Monday, January 11^th at 1:30 pm.  To join the call, please call 1-866-512-0904 or 604-484-8700 and enter participant code #1216021.  In the meantime, CBSA has agreed to continue with the existing C-6 process for these movements until the discussion occurs on Monday.

 

COLLECTION OF MARINE NAVIGATION SERVICE FEES

The Canadian International Trade Tribunal has determined that the complaint filed by the Chamber of Shipping in December is valid. This relates to the outcome of the RFP conducted last summer for the billing and collection of the Canadian Coast Guard’s Marine Navigation Services fees. A formal enquiry into our complaint has therefore been launched.

 

PORT METRO INFORMATION SESSION - 2010 WINTER GAMES PLANNING

Port Metro Vancouver will host the third information session on port operations and the Vancouver 2010 Winter Olympic and Paralympic Games. Following a brief presentation, a panel will convene to discuss topics of interest and provide the latest updates.

 

Date:                 Thursday January 14th, 2010
Time:                 9:00 am – 10:30 am
Location:            Hyatt Regency Vancouver
                         655 Burrard Street
                         Vancouver, BC   V6C 2R7

RSVP:               This e-mail address is being protected from spambots. You need JavaScript enabled to view it   (RSVP by January 8^th)

Questions are encouraged in advance of the meeting. Please provide questions or areas of interest when replying to this invitation. For more information on the Port’s role in the 2010 Winter Games, please visit our website at portmetrovancouver.com/2010.

 

BUSINESS OF SHIPPING COURSE REMINDER

COS is offering its third full-day Business of Shipping Course on January 21^st.  Spaces are still available. See attached program/registration form for details.

 

BCMEA/ILWU COLLECTIVE BARGAINING

The BC Maritime Employers Association and the ILWU Locals 500 and 514 commenced bargaining this week.  The current collective agreements are set to expire on March 31, 2010.

 

CANADIAN WHEAT BOARD ESTIMATES INCREASE IN EXPORTS

In a recent issue of Fairplay it was reported that the Canadian Wheat Board is estimating that exports will total 18.7M tonnes of grain during 2009-10, its highest level of shipments in a decade.

In its annual Grain Marketing Report, the board increased its earlier export forecast by 2M tonnes. The revision is largely due to an unusually mild autumn that extended the growing season and boosted yields. In mid-autumn, the board began shipping high volumes of grain by rail from the Prairies to West Coast and St Lawrence River ports, as well as through the now-closed Seaway.

The organisation's top export performance was in 1999-2000, when exports reached 19.2M tonnes. The board operates on a crop year that begins on 1 August.

This year's export program consists of 13.5M tonnes of wheat, 3.5M tonnes of durum and 1.7M tonnes of mostly malting barley. Demand for durum has eased because of higher global production, while wheat crops have been generally good around the world, creating a buyers’ market, the board said. Malting barley prospects are good. CANADA’S Wheat Board has estimated that it will export 18.7M tonnes of grain during 2009-10, its highest level of shipments in a decade.

 

Government News

CUSTOMS TARIFF AMENDMENTS – INTERNATIONAL CONTAINERS

Pursuant to the passage of Bill C-51 on December 15th, the Customs Tariff was amended and Canada Border Services Agency will be advising under Tariff Notice – TN-48 that duty free period for international containers will be extended from 30 days to 365 days, i.e. effective as of December 22, 2009 international containers must be exported within 365 days of the date of their importation.

 

INTERIM ORDER RE DANGEROUS GOODS IN EFFECT

The Interim Order respecting dangerous goods that are lost or stolen or otherwise unlawfully interfered with is in force.

It is imperative that reporting of the loss or theft of or other unlawful interference with dangerous goods, other than those included in Class 9, be undertaken immediately to CANUTEC (613-996-6666) to ensure that such incidents are known and acted on in order to eliminate or reduce potential security threats. The Transportation of Dangerous Goods Regulations do not currently include any provision for reporting these incidents.

The Interim Order will remain in force for through to July 23, 2011 unless it is repealed or until regulations that have the same effect come into force, whichever is earliest

 

Other News

 

PARIS MOU CIC IDENTIFIES ISSUES WITH LIFEBOAT DRILLS

In a press release issued by the Paris MOU secretariat, serious issues with lifeboat launching and drills have been identified following a Concentrated Inspection Campaign (CIC).  Between the 1st of September and the 30th of November 2009 the CIC on lifeboat launching arrangements conducted jointly with the Tokyo MoU found that one out of every five inspections revealed CIC-related deficiencies.

Full details of the CIC questionnaire and results are published on the Paris MoU website at: www.parismou.org.

 

REMINDER OF IMMINENT USA EPA VGP REQUIREMENTS

The US Environmental Protection Agency (EPA) National Pollution Discharge Elimination System (NPDES) Vessel General Permit Scheme (VGP) that entered into force 6 February 2009 contains annual requirements that must be met prior 6 February 2010.

 

CN EXCEEDS GRAIN REVENUE CAP

Canadian National Railway has exceeded its revenue cap for the crop year 2008-09 and owes a total of $717,432, the Canadian Transportation Agency says.

The agency said Thursday that CN's revenues for the movement of western grain were $683,269 above its revenue cap of $479.1 million. As a result, the railway now has 30 days to pay the amount by which it exceeded its cap, plus a five per cent penalty of $34,163.

Canadian Pacific Railway's revenues from grain transportation for the same period were $1.1 million below its cap of $486.0 million.

 

2010: YEAR OF THE SEAFARER

The International Maritime Organization has dedicated this year’s theme for World Maritime Day, "2010: Year of the Seafarer" to pay tribute to the world's 1.5 million seafarers - men and women around the world.

 

SEAFARER SHORTAGE - ALARMING NEW FORECAST

The Tokyo based think tank Ocean Policy Research Foundation (OPRF) has just published a study report on the ever increasing shortage in skilled and trained seafarers. The report concludes that growth in global seaborne trade over the next 40 years will result in a shortfall of 364,000 seafarers by 2050.

The report predicts that world seaborne trade will increase by a factor of 2.5 from 29,043 billion ton miles in 2005 to 72,498 billion ton miles in 2050, the OPRF says 830,000 seafarers will be required in 2050 as a result of the increased number of vessels. “If we assume that the supply of seafarers will remain the same as at present, the total will be 364,000 short of the required number,” it claims. By 2050, the OPRF concludes that container shipments will show a particularly sharp rise of just under six times that of 2005 levels to register 2,894bn TEU miles by 2050. Increases in global and regional seaborne trade are predicted to also result in heavy maritime traffic congestion.

In a related development, UK shipping interests are pressing for increased government funding for seafarer training, after a delegation of industry representatives met this week with Prime Minister Gordon Brown to argue for an extra £13m ($20.8m) a year in financial support.

 

LATEST HIJACKINGS

On December 28 the UK registered chemical tanker St James Park was hijacked in the Gulf of Aden having transited the Suez Canal en route to Thailand. On the same day, the Greek Supramax bulk carrier Navios Apollon was hijacked off the Seychelles The vessel was loaded with fertiliser and was en route from Tampa to the Indian west coast port of Rozy. The Navios Apollon has become the third Greek-owned ship to be held by Somali pirates, the others being the small bulk carrier Filitsa  and the  loaded VLCC Maran Centaurus.

On January 1, despite her large freeboard, the Eukor operated car carrier Asian Glory was hijacked about 1,000km east of the Somali and on the same day the chemical tanker Pramoni was also hijacked in the Gulf of Aden whilst en route to Kandla in India.

Following ransom payments, pirates have meanwhile released a Singapore registered Kota Wajar (1550 TEU) and the Cosco Qingdao owned Panamax bulk De Xin Hai. The Chinese navy has recently suggested that China establish a permanent base in the Gulf of Aden to support its anti-piracy operations. China's navy currently has no overseas bases, but there are calls for this to change.

The British government has also warned the shipping industry that “it must rely on its own devices to defend itself against Somali piracy in the Indian Ocean, admitting frankly that navies cannot provide the high level of support provided in the Gulf of Aden”.  The government also has also reiterated its position that ransoms should not be paid to secure the release of crews and vessels. Perhaps with this in mind, Maersk is known to have hired a Tanzanian naval vessel to escort one of its tankers into Kenya in December. Ironically, there is speculation that at least some of the ill gotten gains of piracy are being channeled into the Kenyan property market, the price of Nairobi housing having more than doubled in the last five years.

 

NEW LONDON GATEWAY CONTAINER TERMINAL

Following a site visit by the UK Prime Minister Gordon Brown, DP World announced this week that essential infrastructure work is to proceed on their London Gateway deep sea container port in the Thames estuary. Competitors Hutchison Ports, Associated British Ports and Forth Ports received assurances from the UK Department for Transport that there will be no government investment or subsidy to the project. Development has been on hold for the past year as DP World, which inherited the £1.5bn ($2.4bn) 3.5m TEU annual capacity project when it acquired P&O, reviewed the scheme after years of growth in container traffic through UK ports suddenly went into reverse.

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The site of the new container terminal is that of  the previous Shell Haven oil refinery. DP World is the fourth-largest ports group in the world, operating 49 terminals in 31 countries. 

Despite a drop in throughput of 13.5%, provisional numbers indicate that Singapore retained its crown as the top container handling port in 2009 with 26m TEU, down from 30m TEU in 2008. Shanghai looks to remain in second place, handling about 24.5m TEU in 2009 against 28m TEU in 2008. Hong Kong stayed in third place with 20.5m TEU in 2009, down from nearly 24.5m TEU in 2008 and neighbouring Shenzhen was fourth, handling a mere 18m TEU in 2009, against 21.4m TEU in 2008.

 

WORLD’S TALLEST BUILDING OPEN FOR BUSINESS

Despite the world’s economic woes, the world’s tallest building was commissioned to much fanfare this week. Previously known as Burj Dubai, the gleaming glass and metal tower was launched as Burk Khalifa in honour of the leader of neighbouring Abu Dhabi. The nearby Dubai Maritime City is being developed to create a “unique specialized environment for the networking and integration of maritime industry players from all over the globe”.

 

Market Update

The Baltic Dry Index closed on Thursday on 3149 points, down on gains made earlier in the week but lead by Panamax demand still marginally improved on market closing December 24 when the index stood at 3005 points.

                                       Cape Size             Panamax            Supramax          

Index                                  3824                    4188                    2375
December 24                      3887                    3567                    2224
Spot time charter            $35,500/day         $33,600/day         $24,800/day
December 24                  $37,200/day         $28,600/day         $24,500/day

Panamax and Supramax tonnage was much sought after this week to satisfy Asian and Indian demand for iron ore and coal. There were also credible reports of a few lucky Supramax owners in the right place at the right time loading U.S. Gulf grain cargoes to the Far East at $50k/day - way over market levels.

Tankers: Recent extreme cold weather in the U.S and now throughout Europe has leveraged spot rates for product tankers as demand for heating oil and gasoline goes through the roof. Daily earning have shot up to $15,000 a day which while not great are an improvement on $9,000 a day in December. The number of tankers chartered for crude and oil product storage fell by 5% to 141 vessels by the end of December as speculators took the opportunity to profit from northern hemisphere demand.

On the VLCC front, following a brief post holiday dip, Arabian Gulf to Asia route rates have been spurred on by a lack of vessels to cover January voyages resulting in rates of $35-40,000/day.

 

Upcoming Events

Jan 10               Emissions Inventory Meeting @ 10:00
Jan 10               Conference Call – In-bond Movements @ 13:30
Jan 12               VMAA Board of Directors Meeting @ 12:00
Jan 13               COS Liner Committee Meeting @ 11:30
Jan 13               Rail Services Review Discussions @ 13:00
Jan 14               Port Metro Vancouver Olympic Planning Info Session @ 09:00
Jan 18               Official Opening – Deltaport Third Berth
Jan 19               CIABC Board of Directors Meeting @ 10:30
Jan 19               COS Ship & Port Operations Committee @ 12:00
Jan 20               COS Navigation Services Committee Meeting @ 10:30
Jan 20               ICS Board of Directors Meeting @ 12:00
Jan 20               Plimsoll Club Pub Night @ 17:00
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

 

The tanker Moscow University, of 106521 MT DWT was the vessel chosen to christen the new Port of Kozmino oil terminal on December 28 when Russian Prime Minister Vladimir Putin pressed a button to begin loading Siberian oil flowing into the first tanker for delivery to Hong Kong. The ceremony completed four years of work to construct the East Siberia-Pacific Ocean pipeline and the port, worth a combined 420 billion rubles ($14 billion) to ease the industry’s reliance on the European market.

The entry of Russian into the Asian oil market will compliment Russia’s role as a major supplier of LNG to Asia. The Gazprom-led Sakhalin-2 project — with Shell, Mitsui and Mitsubishi as partners started shipping LNG by tankers in February 2009. The Kozmino project, near Vladivostok, cost $2 billion to build and has the capacity to export 300,000 barrels of crude per day (15 million tons per year), with oil quality comparable to that of Middle Eastern blends now dominating the market. Transneft, the state pipeline monopoly, spent another $12 billion to lay the 2,694-kilometer ESPO pipeline through east Siberian wilderness to connect the area’s greenfields, being developed by oil majors Rosneft, TNK-BP and Surgutneftegaz, to the rail hub of Skovorodino. From Skovorodino, the oil is temporarily railed to the port.however a fixed pipe line connection to the port is scheduled for completion by 2014.

When completed, the pipeline will carry eastward an annual 80 million tons of oil from Siberia, including 15 million tons to China through an additional spur. China has loaned $25 billion to Russia in exchange for oil deliveries over the next two decades. Kozmino will increase capacity to 600,000 barrels per day, or 30 million tons per year.

M.T. Moscow University is owned by Novoship Novorossiysk, Russia and Novoship (UK) Ltd.

 

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