COS Weekly News - 4 February 2011

Issue No. 143

BCMEA / ILWU COLLECTIVE BARGAINING

On February 6th, the 21 day cooling off period between the BC Maritime Employers Association and ILWU negotiating committees will expire. However, prior to a strike occurring, the union membership must take a strike vote and must also provide written 72 hour strike notice.  Whilst the necessary strike votes have been taken, locals 500, 502, 500 and 508 have yet to declare results and in a statement issued on Thursday, the ILWU Canadian Area leadership stated in its news release that it has no plans to issue a strike notice at this time. The BCMEA and the ILWU are scheduled to return to the negotiating table on Monday, February 7 in an attempt to rescue bargaining which began in January 2010. Unfortunately damage is once again apparent with significant volumes of cargo being diverted to competing ports and by highly inappropriate “information leafleting” of several COS principal member offices earlier this week.

 

 

CP – CAW NEGOTIATIONS UPDATE

Negotiations are continuing with comprehensive offers exchanged over the past several days between CP Rail and the Canadian Auto Workers Union. As the union’s self-imposed deadline approaches, in an effort to ensure ongoing customer service, CP has started re-positioning managers as part of their strategic deployment strategy.

The CP offers are consistent with the pattern of the settlements that have been ratified by four other CP unions to date. However, the earliest that job action could occur is 0001 Tuesday, February 8, 2011 following the mandatory 72-hour notice.

 

 

HARBOUR & SHIPPING WINDS DOWN

After 48 years of publishing HARBOUR & SHIPPING, Murray D. McLellan, President & Publisher of the has announced his retirement and the end of the monthly publication which has served the local marine industry for over 92 years over four generations of family.

 

 

RE-BIRTH OF SEASPAN MARINE CORPORATION

Seaspan has announced that the company is returning to its roots with the implementation of a new brand name called Seaspan Marine Corporation. The former corporate identity of Washington Marine Group has been retired, and Seaspan Marine Corporation is taking the helm as the legal entity and parent company for both the marine transportation and shipyard divisions.

 

The Washington family continues to own Seaspan and its holdings, which includes Seaspan Ferries Corporation, Vancouver Drydock Company Ltd., Vancouver Shipyards Co. Ltd., and Victoria Shipyards Co. Ltd.

 

 

NEW DIRECTOR FOR PORT METRO VANCOUVER

The Province of British Columbia has appointed Philip Hochstein to the board of directors of Port Metro Vancouver for a term of three years, effective March 1, 2011. Mr. Hochstein replaces the outgoing Chair, Sarah Morgan-Silvester, whose term expires on February 28, 2011. Mr. Hochstein is President of the Independent Contractors and Businesses Association of BC (ICBA) and brings with him extensive governance and board experience as well as knowledge of the Asia Pacific Gateway, primarily through this experience serving on the board of directors of the Asia Pacific Gateway Skills Table.

 

 

COS ELECTION OF DIRECTORS

Voting members of the Chamber of Shipping should by now have received a ballot for the election of directors for 2011. If you have not received a ballot, please contact the COS Secretariat at tel: 604-681-2351.

 

 

Government News

 

 

PRIME MINISTER HARPER AND US PRESIDENT OBAMA SIGN NEW DECLARATION ON BORDER SECURITY

In a press conference today in Washington, DC Prime Minister Stephen Harper and U.S. President Barack Obama said that their two countries will work together to ensure better trade, security and economic flow across the shared border. A North American perimeter approach will look at streamlining and de-congesting the borders while maintaining sovereignty.

 

Harper’s visit happens amidst a critical report on northern border security by the U.S. Government Accountability Office, and calls by at least one US senator to consider visas for Canadians.

 

CBSA - CFIA CONTAMINATED SOIL POLICY

CN 11-001 - Implementation of the Strengthening of the Canada Border Services Agency's Procedure Respecting the Importation of Goods Contaminated With Soil and/or Related Matter, was issued to remind industry that February 1, 2011 was the end of the transition period for the revised policy.

 

The policy now stands that goods contaminated with soil are not admissible into Canada. Non-compliant goods will be refused entry and ordered removed from Canada at the first point of arrival (FPOA) under the authority of the Plant Protection Act and the Health of Animals Act. However, under highly regulated circumstances, and where operational capacity exists, goods contaminated with soil may be allowed to be cleaned within a CBSA-controlled environment at the FPOA by a Canadian Food Inspection Agency (CFIA)-approved mobile wash facility.

 

 

Other News

 

 

QUEENSLAND TAKES ANOTHER PUMELLING

Cyclone Yasi, which at Category 5 is the most powerful storm ever to hit the Australian State of Queensland with 190 mph winds has left a trail of destruction along coastal communities. However, despite being battered by torrential rain and gale force winds, the cities of Cairns and Townsville were relatively unscathed. An Australian Government vessel carrying 2750 tons of urgently needed food and medical supplies arrived today in the Port of Townsville and 4000 troops are assigned to flood relief.

 

As Cyclone Yasi approached, coal export terminals at Hay Point and Abbot Point were evacuated and vessels waiting to load moved further offshore to ride out the storm. This latest natural disaster comes just three weeks after most of Queensland was damaged by floods, affecting mining operations, agriculture and rail networks following torrential rain associated with a previous cyclone.

 

 

SUEZ CANAL SAFETY UNCERTAINTY

Despite disruption to communications, the Egyptian military authorities have ensured continuity of Suez Canal transits this week but other port activities have been disrupted, some significantly. DP World has experienced interruption to operations at the Egyptian port of Sokhna, 120 kms from Cairo on the southern mouth of the Suez Canal. At the northern end of the Canal at Port Said, APM Terminals "Suez Canal Container Terminal" is operational but at much reduced capacity.

 

Meanwhile the country’s oil and gas terminals remain fluid, with VLCCs discharging at the Red Sea terminal of Ain Sukhna. The Sumed pipeline moves crude oil 200 miles north from Ain Sukhna to Sidi Kerir on the Mediterranean Sea. VLCCs that cannot transit the Suez Canal fully laden discharge at Ain Sukhna, with tankers loading at Sidi Kerir at the other end of the pipeline. Cruise line calls at Egyptian ports are cancelled until further notice.

 

in transit through Suez canal

 

First opened in 1869, the Suez Canal was closed in 1956 when Egypt unilaterally nationalized the Canal and again from 1967-75 under Israeli occupation when eight cargo vessels were trapped for the duration. Approximately 1500 ships currently transit the Suez Canal each month.

 

 

PIRATES RESORT TO EXECUTION TACTICS ON BELUGA VESSEL

A crew member on the Beluga Nomination which was hijacked over a week ago has been executed by pirates and a further two crew members are unaccounted for. The incident occurred after intervention by the Danish Navy and the Seychelles Coast Guard which resulted in the rescue of two of the ship's original twelve crew members. Security forces are reporting increased brutality and torture being used against ships' crews as pirates become ever more ruthless in response to the use of citadels and determined crew resistance to hijacking.

As we reported last week the Master of the Korean chemical tanker Samho Jewelry was shot by pirates when Korean commandos stormed his vessel in a successful rescue attempt. He is now fighting for his life in a Korean hospital. UN secretary-general Ban Ki-moon admitted in an address to the International Maritime Organization in London this week that piracy is outpacing the efforts of the international community to fight it, and more must be done to deter attacks on ships.

 

In an open letter to world governments this week, the International Round Table comprising BIMCO, the International Chamber of Shipping, Intercargo and Intertanko has stated “Torture and execution as recently happened on the Beluga Nomination are clearly crimes which cannot be tolerated. We feel that a fresh and more robust approach to this long standing problem must now be considered. We urgently request all governments to recognize the seriousness of the problem; the changed circumstances of murder and ill treatment of seafarers; the threat that pirates present to world trade; and to take the necessary action immediately to end these unlawful atrocities”.

 

 

US COURTS RULE THAT FAILURE TO NOTIFY COAST GUARD IS A CONTINUING OFFENSE

The US Court of Appeals for the Sixth Circuit ruled that the willful failure to notify the Coast Guard of a hazardous condition on the vessel is a continuing offense for purposes of venue. Defendant’s barge was loaded benzene and was under towage by defendant’s tug. While the barge was on the Mississippi River near St. Louis, it sprang a leak, emitting benzene. The pilot on the towboat instructed deckhands to seal the leak with a bar of soap. When notified by the pilot, the port captain instructed the pilot to apply a temporary epoxy patch. Meanwhile, the barge was taken down the Mississippi River to Cairo and then up the Ohio River toward its intended destination. The epoxy patch failed while the barge was near Louisville, four days after the initial leak. It was then that the Coast Guard was notified for the first time. Defendant was prosecuted and convicted by a federal court in the Western District of Kentucky. Defendant moved for dismissal, contending that the offense was committed, if at all, when the benzene leak initially occurred near St. Louis and could not be tried in any other venue. The district court granted the motion and the government appealed. The appellate court ruled that the offense of failing to notify the Coast Guard continued until proper notification was given. Since the barge travelled through several federal districts prior to the notification, defendant was subject to prosecution in any of those districts. United States v. Canal Barge Co., No. 09-5388 (6th Cir, January 7, 2011). Courtesy of Bryant’s Maritime Consulting.

 

 

Market Update

A further slide in Capesize rates and a lack of market interest over celebrations to bring in the “Year of the Rabbit” was largely responsible for more depression in the bulk markets this week. The Baltic Dry Index closed on Thursday at 1045 points compared to 1186 points last week and 1393 points the week previously.

Cape Size       Panamax Supramax

Index                               1298               1311                 1101

Last week                        1403               1381                 1273

Spot time charter      $5,200/day      $10,500/day       $11,500/day

Last week                   $6,700/day      $11,000/day       $13,300/day

Note the relatively cheap value of a Capesize versus vessels which are a fraction of the size.

 

Tankers: Despite market nervousness as the Middle East get a taste for democracy, VLCC rates remain abysmally low even as HFO prices exceed the $600 level.

 

 

Upcoming Meetings and Events

BUSINESS OF SHIPPING UPDATE

In conjunction with the Institute of Chartered Shipbrokers, we are putting the finishing touches to a half day seminar on March 10 entitled, “Inter-Modal Cargo Movement Through Canada’s Asia-Pacific Gateway - Next Steps.”  The seminar will be held at the Vancouver Club on March 10 and will run from 8am – 12.30. Please contact Rose on 604 681 2351 for no fee registration.

 

The next full day “Business of Shipping” course will be held on March 31 and will be specifically customized for an Executive and Management audience only. Please see the attached flyer for full details.

The next regular full day course will be scheduled for the second quarter.

 

 

LLOYD’S REGISTER – RISK MANAGEMENT AND INVESTIGATION TRAINING

March 8-9th – LR is offering a 2 day training course on "Risk Management and Incident Investigation" in their offices located in North Vancouver. The cost is $1000 per person – registration details and course information can be found in the attached flyer.

 

 

BIMCO GENERAL MEETING IN VANCOUVER

June 5 – 8^th - The Baltic and International Maritime Council will hold its Annual General Meeting in Vancouver.  COS is coordinating the work of a “Vancouver Advisory Committee” including promotion of sponsorship opportunities. A conference website providing further details including registration process will be up very shortly.

 

Just prior to BIMCO, we are also very pleased to note that the “Nautical Institute” will hold its Annual General Meeting and a Command Series Seminar in Victoria from June 2-3. This will be only the second occasion that the Institute has held its AGM outside of Europe.

 

 

Feb 8 COS Ship & Port Operations Committee @ 12:00

Feb 9 COS Liner Committee Meeting @ 10:00

Feb 9 COS Board of Directors Meeting @ 11:30

Feb 10 COS Owners Committee Meeting @ 12:00 (tbc)

Feb 15 COS Navigation & Pilotage Committee Meeting @ 10:00

Feb 17 Business of Shipping Course, Prince George

Feb 22-23 PNCIMA IOAC Meeting

Mar 1 GrainWorld Conference, Winnipeg

Mar 31 Business of Shipping Executive Course, Vancouver

 

 

Ship of the Week

 

CCG FISHERY PATROL VESSEL TSEKOA II

 

 

The Canadian Coast Guard vessel Tsekoa II is currently undergoing conversion to a hybrid fuel cell powered research vessel. In an $8m joint Provincial and Federal "Canadian Foundation for Innovation" financed project, the vessel will also be re-fitted for cold ironing (shore side power) where this is available. The vessel was originally built i985 by Allied Shipbuilders of Vancouver which used it to support the routine construction, maintenance and repair of buoys on the west coast before being transferred to the Canadian Coast Guard where she was allocated to fishery patrols. Following conversion she will be used used to research coastal ecosystems and marine resources by the University of Victoria, supported by UBC, SFU, Vancouver Island University and the University of Alberta.

 

The vessel will be reliant on the all electric propulsion system fired by fuel cell technology and low-emission diesel generators. The generators will only be used when power demands are high during long-distance cruising. The use of hybrid propulsion will permit acoustically sensitive research operations such as marine mammal observations. As part of the conversion to green energy, the original 26.7m vessel will be extended by 6.6 meters to include a science lab with accommodation for 7 crew members and up to 11 scientists. The vessel is to be managed on behalf of U-Vic by Victoria based Tactical Marine Solutions which describes itself as “a company offering shipping companies, governments and the marine departments of energy and resource companies specialist solutions for complex shipping requirements”. See www.tactmarine.com.