COS Weekly News - 11 February 2011

Issue No. 144

BCMEA / ILWU COLLECTIVE BARGAINING

The BCMEA negotiating team resumed mediated bargaining on Monday this week with ILWU Canada (Longshore) in an attempt to successfully conclude a Collective Agreement. It is anticipated that bargaining will continue next week with no suggestion of a strike or lockout from either of the parties.

VTEA AND GWU CONCLUDE A 5 YEAR AGREEMENT

After several months of bargaining sessions the Grain Workers Union local 333 and the Vancouver Terminal Elevator Association reached a collective agreement. Bargaining began prior to the end of the current 5 year agreement which expired on December 31, 2010. A ratification vote took place on Friday, February 4^th and was met with approval by 55% of the membership.

CAW AND CP RAIL ENDORSE NEW DEAL

Canadian Auto Workers (CAW) and CP Rail workplace representatives from across the country have unanimously endorsed a new collective agreement, reached late Friday night. More than 50 workplace leaders met in Montreal last night and earlier in the week to review the contents of the deal.

The deal is subject to ratification which will take place in a series of cross country meetings over the next three weeks. Details of the agreement will be released upon ratification. CAW Local 101 represents 2,100 mechanical services workers (shopcraft) at CP Rail.

APPOINTMENTS TO THE TRANSPORTATION APPEAL TRIBUNAL OF CANADA

The Honourable Chuck Strahl, Minister of Transport, Infrastructure and Communities, appointed Brad Caldwell and Trevor Jain to the Transportation Appeal Tribunal of Canada (TATC).

Mr. Caldwell has practised law since his admission to the British Columbia bar in 1986, with an emphasis on maritime and fisheries litigation, general commercial litigation and administrative law. Prior to his legal career, Mr. Caldwell gained practical experience in the marine industry as a fisherman, deckhand, commercial diver and longshoreman. Mr. Caldwell has been appointed to the TATC for a term of three years.

Dr. Jain holds a bachelor of science degree in biology and computer science from Acadia University as well as a medical degree from Dalhousie University, and pursued further studies in medicine at the University of Ottawa and Queen's University.

 

The TATC provides an independent review process for anyone who has been given notice of an administrative or enforcement action taken by the Minister of Transport, railway safety inspectors or the Canadian Transportation Agency under various federal transportation acts.

SEASPAN MARINE CORPORATION COMMISSIONS THE SEASPAN RAVEN

At an official ceremony held in North Vancouver, Clare Waters, wife of Port Metro Vancouver’s Robin Silvester, commissioned Seaspan’s newest tug, the Seaspan Raven.

The Seaspan Raven is the first of four new ship assist tugs built by Sanmar Denizcilik Shipyard, of Istanbul Turkey. The Seaspan Raven will dock, undock and escort ships in Vancouver Harbour and Roberts Bank. The RAstar 28 m tugs will feature full fire fighting capability. Vancouver based naval architects, Robert Allan Ltd., designed the new tug.

 

 

 

 

 

 

Tug Particulars:

LOA:                 28.2 metres

Breadth:            12.6 metres

Depth:              5.3 metres

Engine Power:   2x2500 BHP @ 1600 RPM

Bollard Pull:      71 tonnes

Speed:             13 knots

CWB NOW ALSO A SHIPOWNER

The Canadian Wheat Board (CWB) has become the latest Canadian ship owner after agreeing to buy two self-unloading bulkers for CAD 65m ($65m). CWB has purchased two new bulk carriers, which are due for delivery in 2013, from Algoma Central Corp. The ships are part of a larger order for up to six vessels placed by Algoma at China’s Nantong Mingde Heavy Industries in December. CWB estimates that farmers will benefit to the tune of at least CAD10m per year to the CWB pools when the ships are in operation. Credit is being given to the government’s decision in 2010 to remove the 25% tariff on imported vessels.

The CWB, as the largest wheat and barley marketer in the world already owns a fleet of 3,400 rail hopper cars that move wheat and barley to ports and domestic customers. The Board acts as a single marketer of wheat and barley on behalf of prairie farmers who following delivery to an elevator, receive an initial payment for their grain that represents a percentage of the expected return for that grade from the pool account. After the end of the crop year, July 31, an interim payment and a final payment are paid to farmers, in addition to their initial payment so they will have received 100 percent of the return from the pool for the grain they delivered.

PORT ALICE PULP MILL SOLD AGAIN

The Neucel Speciality Cellulose Mill in Port Alice has been sold to China’s Fulida Group which will consolidate with Zhejiang Fulida Ltd., a minority owner in the mill for the past year. Neucel Specialty Cellulose is owned by Wellspring Capital Partners, and Charlestown Investments. Wellspring is a New York based private equity firm which manages more than $2 billion in equity capital on behalf of some of the largest and most respected institutional investors in the United States, Canada, and Europe. Charlestown Investments is an investment holding company registered in Zug, Switzerland and controlled by a group of private European investors.

Aerial view Port Alice mill

 

The former Doman owned mill which employs 400 people specializes in the production of Dissolving Sulphite Pulp which sells at a significant premium over Northern Bleached Softwood Kraft (NBSK), the more common product of BC mills. Fulida is a leading producer of rayon and in buying the Port Alice Mill, the company has secured its supply chain for the long term. Originally built in 1917, the town of Port Alice and the mill were named after Alice Whalen, the mother of the company’s founders, the Whalen brothers of Whalen Pulp & Paper Ltd.

NEW ASSOCIATE MEMBERS

Earlier this week the Board of Directors approved two new applications for Associate membership. Please welcome our new Associate members:

Canadian Sea Marshal Tactical Teams

2200-1050 West Pender Street

Vancouver, BC V6E 3S7

Tel: 604-891-5550

Representatives: David Jackson, Director of Operations & President and Frank Aquino, Vice President.

Website: www.csmtt.com

 

 

Lorentzen & Stemoco (North America) Shipborkers Ltd.

Suite 928-1100 Melville Street

Vancouver, BC V6E 4A6

Tel: 604-566-9210

Representatives: Haijun Yu, Managing Director

Website: www.lorstem.com

 

 

Government News

CBSA REMINDER TO TRADE ON DIVERTED MARINE SHIPMENTS

The Canada Border Services Agency has sent out the attached reminder on the cargo policy requirements for diverted marine shipments. Highway carriers transporting containers from a US marine port via highway to a Canadian land border must respect the requirements noted in the D Memorandum 3-4-2 Highway Cargo – Import Movements.

CBSA LAUNCHES SERVICE STRATEGY

The Canada Border Services Agency’s new strategy demonstrates its commitment to providing the best possible service to all clients and the trade community, while protecting the safety and security of Canada. Their commitment is to provide quality service that is fair, accurate, accessible, efficient and timely. For more information visit: http://www.cbsa-asfc.gc.ca/services/serving-servir/menu-eng.html

TRANSPORTATION OF DANGEROUS GOODS REGULATIONS PROPOSED AMENDMENTS

Proposed amendments have been published in the Canada Gazette Part I – February 12, 2011. While the Transportation of Dangerous Goods Act, 1992 enables a person who has an approved emergency response assistance plan (ERAP) to respond to an actual or anticipated release of dangerous goods if the identity of the person who is required to have an approved ERAP is unknown, the compensation that is available for costs incurred during a response had not been clarified. The proposed amendments to the TDG Act seek to ensure that the person who agrees to respond to an authorization from the Minister to implement the approved ERAP is aware of the compensation available.

 

 

Other News

NEW YORK STATE BACKS OFF BALLAST WATER TREATMENT DEADLINE

In a carefully worded letter released this week, New York State has responded to concerted industry pressure and up to 30,000 waiver applications by backing away from implementation of stringent water ballast treatment requirements which were to have been applied from January 1 2012. Industry, supported by the Government of Canada has been vocal in  seeking to have NY State acknowledge that there is no technology in existence to meet the required standard which is 100 times greater than that agreed by IMO. With highly prescriptive conditions, the new deadline is August 1 2013 but even this remains meaningless in the absence of the technical means of compliance.

INDUSTRY REMAINS NERVOUS FOR SUEZ CANAL

Amid the continuing turmoil in Egypt, several hundred workers at the Suez Canal staged a demonstration on Wednesday this week demanding the resignation of their immediate boss, the chairman of the Suez Canal Authority. Also 6000 workers from Suez Canal service companies are staging a sit-in for improved working conditions. To date Canal operations remain fluid.

Suez Canal Company Building

AFTERMATH OF CYCLONE YASI

Almost 10 days after Cyclone Yasi wreaked havoc on the North East coast of Australia, help has still not arrived in some remote communities. The Australian defense forces have been cutting their way through mountains of debris to reach smaller townships and farms. The coastal town of Cardwell, south of Cairns, was particularly badly damaged.

Cardwell Marina – what’s left of it

PIRACY “OUT OF CONTROL” SAYS BIMCO

The Secretary-General of BIMCO has voiced the opinion of his organization that Somali piracy has now spiraled out of control following the execution of a seafarer on board the Beluga Nomination. It is also apparent that the Round Table of leading shipping organizations (BIMCO, the International Chamber of Shipping, Intertanko and Intercargo) is prepared to recommend drastic action including an industry boycott of the region.

To compound the problem, pirates are forcing skeleton crews of hostages to operate a growing and sophisticated fleet of around 20 hijacked mother ships to expand their range of operations and also deter naval rescue attempts. Pirates are operating the fleet with the full knowledge of anti-piracy naval forces, which track the vessels but are prevented from intervention by strict rules of engagement.

Known vessels being used as mother ships including 7 fishing vessels, a product tanker, 2 chemical carriers, an LPG carrier, a product tanker, an asphalt carrier, a container vessel and a ro-ro vessel.

Major prizes for Somali pirates this week were the capture of the 104,000 tons DWT Italian tanker Savina Caylyn which, despite determined resistance from the crew, was hijacked off the coast of India. Less than 24 hours later, the fully loaded 319,300-DWT VLCC Irene SL was captured 350 miles south-east of Muscat after clearing the Arabian Gulf. She is the fourth VLCC to have been hijacked by pirates and will likely command a rich ransom.

Savina Caylyn – hijacked Irene SL - hijacked

Even the renowned Economist Magazine included two articles on piracy this past week – links below:

http://www.economist.com/node/18070160?story_id=18070160&CFID=155983442&CFTOKEN=75173152

http://www.economist.com/node/18061574?story_id=18061574&CFID=155983442&CFTOKEN=75173152

AUTO CARRIER TRADES ADJUSTING TO NEW REALITY

The auto carrier trades are adjusting to a reverse flow of cars from Europe to Asia, as demand for luxury vehicles in China exceeds all forecasts. In December 2010 a massive 1.7m new cars were sold in China, up 17.9% year on year. Total sales for the year were 18m units in 2010, a 32% rise over 2009 sales. In 2003 there were 12m cars in China whereas there are now 55m. BMW and Mercedes top the luxury import brands, China representing 12% of global sales for both. Demand on the US to Asia route is also now higher than that from Asia to the US demand. This reverse flow of cars is creating real scheduling challenges for the specialized industry carriers.

 

Market Update

After staging a minor rally to pull back from the precipice, the Baltic Dry Index closed slightly firmer on Thursday at 1136 points compared to 1045 points last week and 1186 points the week previously. A number of Capesize owners are said to have declined to trade at the current low levels in the hope that a resumption of business in China after the holiday, and a return to some semblance of normality in Australia, will provide a more positive direction to the market.

Cape Size      Panamax Supramax

Index                             1411               1567               1120

Last week                      1298               1311               1101

Spot time charter    $6,400/day      $12,500/day      $11,700/day

Last week               $5,200/day      $10,500/day      $11,500/day

 

An influx of VLCC chartering by Asian oil traders after the lunar holidays has propelled spot rates on the Arabian Gulf to Far East routes to treble the miserably low rates prevailing at the end of last week. Will it last? Probably not.

 

 

Upcoming Meetings and Events

CANADIAN WHEAT BOARD HOSTS GRAINWORLD

March 1 - GrainWorld is Canada's leading grain-industry conference focused on the outlook for grains, oilseeds, special crops, the economy, and livestock. This year's theme is "Flight to commodities: smooth ride or turbulence  ahead?" Agricultural commodities have been influenced by strong demand, extreme global weather, an influx of capital and the global economic crisis. GrainWorld speakers will provide their views on the road ahead.

 

The event takes place at the Fairmont Hotel in Winnipeg starting on Sunday evening (Feb. 27, 2011) with registration and an opening reception. The program concludes on Tuesday, March 1, 2011 at approximately 2:30 p.m.  Please visit http://www.cwb.ca/public/en/newsroom/events/grainworld/ for more information.

 

 

WESTAC AND GLOBAL INSTITUTE OF LOGISTICS SUMMIT
March 2-3 - WESTAC and the Global Institute of Logistics present - Transportation Summit 2011: Best Practices Shaping Global Logistics at the Vancouver, Renaissance Harbourside Hotel. To register and for program updates vist: http://www.westac.com/conferences/BestPracticesSummit/index.html

Speakers include:

• Jordan Cowman, expert in international labour relations, and Partner in Akin Gump Strauss Hauer & Feld LLP, a Dallas law firm
• Oksana Exell, Executive Director, Asia Pacific Gateway Skills Table
• José García, Technology Innovation Director at Port Authority of Valencia and expert on port community systems
• Daniel Olivier, Senior Analyst, Economic Analysis & Research, Transport Canada and expert on initiatives to measure system performance end-to-end
• Kieran Ring, CEO, Global Institute of Logistics
• Rafael Sapiña, Director of Liner Shipping and Port Operations, Valencia Port Authority
• Robin Silvester, President & Chief Executive Officer, Port Metro Vancouver
• Robert West, expert in international commerce, economics and trade developments and Principal Strategist at WorleyParsons, Inc.

BUSINESS OF SHIPPING UPCOMING COURSES

March 10 - In conjunction with the Institute of Chartered Shipbrokers, we are hosting a half day seminar on March 10 entitled, “Inter-Modal Cargo Movement Through Canada’s Asia-Pacific Gateway - Next Steps.” Please see the attached flyer for program and registration details.

 

March 31 - 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 program and registration details. The next regular full day course will be scheduled for the second quarter.

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

Feb 21 Transport Canada Presentation on Dangerous Goods Reporting @ 11:00

Feb 22-23 PNCIMA IOAC Meeting

Feb 23 WMC PACMAR / NANS Committee Meeting @ 10:30

Feb 24 Liner Discussions with Exam Facility @ 10:00

Feb 24 VMAA Board of Directors Meeting @ 12:00

Feb 25 COS Annual General Meeting and Lunch Reception @ 10:30

Mar 1 GrainWorld Conference, Winnipeg

Mar 1 CIABC Board of Directors Meeting @ 10:30

Mar 2 Pacific Pilotage Authority Financial Review Meeting @ 10:00

Mar 2 COS Board of Directors Meeting @ 11:30

Mar 8 COS Ship & Port Operations Committee Meeting @ 12:00

Mar 9 COS Liner Committee Meeting @ 10:00 (tbc)

Mar 10 COS / ICS Business of Shipping Course @ 08:00

Mar 15 ISSC Board of Directors Meeting @ 12:00

Mar 17 COS Navigation & Pilotage Committee @ 10:00 (tbc)

Mar 31 Business of Shipping Executive Course, Vancouver

 

 

Ship of the Week

 

VLCC Starlight Venture

Wah Kwong Shipping

Built in 2004 by Hyundai Heavy Industries, South Korea

LOA 333m

Beam 60m

DWT 318,000 MT

Draft 22.5m

 

 

The founder of Wah Kwong, T.Y.Chao, graduated from Soochow University, Shanghai in 1934 with a law degree. Instead of persuing a legal career, he became a comprador in a reputed trading firm in Shanghai. Mr. Chao’s first venture into shipping comprised a 50% ownership of the 6,000dwt cargo ship Kwok Sing which shipped coal along the China coast.

In 1948, the outbreak of the civil war in China saw Mr.Chao left Shanghai for Hong Kong where he established a new shipping company with two partners which thrived until 1952 when it was decided to amicably divide the business. T.Y. then established Wah Kwong.

Group founder T.Y. Chao

 

In the mid 1960’s TY’s sons Frank and George joined the business around the time that the company placed its first new build order, the 16,000 DWT bulk carrier New Venture. This initiated a long relationship which would result in Wah Kwong building more than one hundred vessels at Japanese shipyards.

 

 

Current Group Chairman George Chao and daughter Sabrina

Frank eventually retired in 1999 leaving George to run the business to the present day. In 2002 a 3rd generation of the family was welcomed into the company when George’s daughter Sabrina came in, eventually assuming the role of Vice-Chairman with her father as Chairman. Over the years the company has become a pillar of the Hong Kong marine community. The Group’s policy of employing the vessels on medium to long term charters to industrial end users and other major charterers continues to this day.