COS News - Week ending 25 February 2011
Issue No. 146

BCMEA / ILWU NEGOTIATIONS UPDATE

The BCMEA resumed discussions with the ILWU this week over three scheduled meetings. The ILWU must give in writing 72 hour strike notice before a lawful work stoppage can occur.

 

REPORTING OF DANGEROUS GOODS TO TRANSPORT CANADA

COS members met with Transport Canada (TC) earlier this week to review the department’s dangerous goods reporting requirements. A guidance document is being developed by COS in conjunction with TC to provide clarification on the expectations for the reporting of Class 1 and Ammonium Nitrate and Ammonium Nitrate based fertilizer to Marine Safety and the port authorities. TC is encouraging members to include and if possible verify 24/7 emergency numbers on the IMDG declaration forms.

 

VANCOUVER CONTAINER EXAMINATION FACILITY

Earlier this week COS members, joined by the Shipping Federation members via conference call, met with the operator of the Vancouver container examination facility earlier this week. Recent tariff amendments have resulted in a significant increase to the cost of contraband and wood packaging examinations on containers selected by Canada Border Services Agency (CBSA). On January 1^st the tariff was amended to reduce the number of dock man hours included in the base tariff and lines are seeing a significant increase in the number of containers incurring extra dock man hours. The shipping lines are encouraging the facility operator to revise the tariff to eliminate the additional dock hours altogether and develop a new tariff that is based on commodity type or number of package to provide targeted importers greater certainty in the costs involved. The Vancouver facility is now the most expensive facility for container examinations when compared to other facilities across Canada, and remains to be the only facility to charge additional dock hours.

 

On a related issue, CBSA has implemented new procedures to address containers that failed air quality tests and later failed to reach safe working thresholds after five days of ventilation. As part of CBSA’s commitment to introduce service standards in the container examination process, a procedure, based on various studies and tests conducted within the Vancouver and Montreal facility over the past year, has been initiated to enable examinations to occur after the fifth day. CBSA’s goal is to prevent containers from being delayed for more than five days as a result of ventilation issues.

 

ASIAN GYPSY MOTH – HIGH RISK SEASON

March 1^st will kick off the 2011 high risk season for vessels arriving to Canada from the regulated ports outlined in the Canadian Food Inspection Agency policy directive (D-95-03). A notice to masters is being finalized together with an enforcement package that will be distributed to industry imminently.

Note that effective immediately, vessels arriving from the 2011 regulated areas must provide CFIA with a 96 hours advance notice of arrival together with the last two years ports of call and copies of the latest phytosanitary certificate available.

Earlier this week the US Customs and Border Protection (CBP) issued a news release stating that its personnel discovered an egg mass of the Asian Gypsy Moth (AGM) on a bulk carrier arriving in New Orleans from Japan with a prior call in China. The ship has been restricted at anchorage and will undergo decontamination.

 

CAW MEMBERS AT CP RATIFY NEW DEAL

CAW members at CP Rail have ratified the Memorandum of Settlement reached on February 5th by 82 per cent in a series of cross country membership meetings that took place over the last two weeks. CAW Local 101 represents 2,100 shopcraft (skilled trades) workers at CP.

 

PMV AND CP ANNOUNCE PRODUCTIVITY AND PERFORMANCE AGREEMENT

Canadian Pacific and Port Metro Vancouver (PMV) signed a collaboration agreement to improve productivity and performance through Canada's Pacific Gateway.

 

This collaboration agreement sets the framework for the Port, CP and port stakeholders to develop mechanisms to define, measure, monitor and evaluate the performance of each participant at the port against established benchmarks. It also establishes processes to proactively communicate on service-related matters and resolve disputes between CP, the Port and port supply chain participants on a commercial basis.

 

It was announced today that CP has signed a similar agreement with the Port of Montreal.

LORENTZEN & STEMOCO FEATURED

In today’s Vancouver Sun, the opening of the new Oslo-based shipbrokers Lorentzen & Stemoco office in Vancouver is featured.

 

 

Government News

REGULATIONS AMENDING THE CARRIERS AND TRANSPORTATION AND GRAIN HANDLING UNDERTAKINGS INFORMATION REGULATIONS

Transport Canada has published in the Canada Gazette Part I – February 19, 2011 a proposal to update the data collection requirements under the existing Regulations to better reflect today’s issues affecting security, safety and competitiveness in Canada’s gateways and corridors The proposed amendments seek to specify the data elements that transportation stakeholders would be required to provide.

Marine transportation would be impacted in two distinct ways by the proposed amendments. Canadian domiciled marine operators would be required to provide the Government with information on a vessel by vessel basis while Canadian Port Authorities would be required to report on their infrastructure. Hence, the proposed amendments would require

• marine operators to complete a new survey that provides the Government with an inventory of their fleet, the use of green technologies on board the vessels, specifications on the vessels’ engines, and their vessels’ annual fuel consumption, distance travelled and freight carried;
• marine operators to provide the United Nations code for dangerous goods commodities they carry;
• the Canadian Border Services Agency (CBSA) to provide detailed marine import and export data from both the general declaration (form A6) and the manifest (Form A6-A); and
• Canadian port authorities to report an inventory of their infrastructure every year. This includes the number of berths and their length, the number of gantry cranes, the amount of warehousing space and total rail track mileage.

LUMBER SALES TO CHINA SET NEW STANDARD IN 2010

The BC Minister of Forests, Mines and Lands, Pat Bell, announced that China is the number-one overseas destination for BC lumber in terms of value as well as volume. The announcement follows a record-breaking month and year for exports to China. BC lumber exports to China for 2010 are valued at about $687 million, more than double the value of shipments in 2009 and, for the first time ever, exceed the value of softwood products shipped to Japan.

 

 

Other News

TOKYO MOU CIC ON HARMFUL SUBSTANCES RESULTS

The Tokyo MOU issued a press release on its Concentrated Inspection Campaign (CIC) on harmful substances carried in packaged form during the period September through November 2010. During this period, 4,079 inspections were carried out of which 589 (14.4%) ships were either carrying or loading covered substances. Ten detentions were recorded, as well as numerous less serious deficiencies. The most common problem areas noted in the 305 instances of non-compliance were documentation (58.4%) and cargo marking, stowing, and securing (41.6%).

LIBYAN PORTS REPORTED CLOSED

Main Libyan ports are reported to be formally closed as a consequence of the political turmoil sweeping the country. Even so, a number of ships have been successful in accessing ports to evacuate foreign nationals and the country’s oil exports ports are trying to stay open. The country exports around 1.5m barrels/day and the prospect of supply disruptions helped push the price of oil to $120 per barrel at one stage this week. Control of the country’s key Ras Lanuf export terminal which appears to be operational is considered crucial to the regime’s survival.

Ras Lanuf Oil Terminal

NEW ZEALAND EARTHQUAKE CENTRED ON PORT OF LYTTLETON

This week’s 6.3 magnitude earthquake which killed more than 100 people, with around 200 still unaccounted for, was centred under the Port of Lyttleton NZ. Whilst the port’s wharves were slightly damaged, container cranes survived intact, however the port is closed to commercial traffic until Saturday when it is hoped to resume limited operations. In the meantime, the port is being used to ferry emergency supplies into the City of Christchurch. The cruise ship Europa was in port at the time of the quake.

Still in New Zealand, a converted shipping container was this week parked in Auckland’s city centre to give passersby an insight into the environmental effects of global shipping. Developed for the 2009 Copenhagen Climate Change conference, the Maersk Line Climate Box's interactive displays explain how a product's carbon footprint is calculated, the relative greenhouse gas emissions of different modes of transport, and how improvements in route planning and ship design can boost eco-efficiency. Maersk’s New Zealand export clients are said to be under increasing pressure from their customers to demonstrate environmental best practice across their supply chain.

MAERSK FINALLY CONFIRMS 18000 TEU NEW BUILDS AT $5.7Bn

Maersk confirmed earlier this week that it has ordered 10 vessels of 18,000 TEU with Daewoo Shipbuilding & Marine Engineering (DSME) at $190m each which includes $30m per vessels of energy efficiency technologies. The order comes with two options of 10 additional vessels, i.e. a grand total of 30 vessels if fully executed. The firm orders will arrive between 2013 and 2014 with options needing to de declared this year for delivery in 2015. The vessels will be designated ‘Triple-E’ class which denotes “Energy Efficiency, Environmental Performance and Economies of Scale”. The vessels which will be 400 metres LOA and 59 metres in beam, will be the largest vessels afloat and are earmarked for the Asia to Europe trade with ports of call in China, Hong Kong, Malaysia, Port Said Algeciras, Rotterdam, Felixstowe and Bremerhaven.

Impression of the new vessels

 

Maersk estimates that the new ships will reduce the per TEU shipping cost from Asia to Europe by around 26%. The vessels will carry 23 TEU across the beam instead of 22 on the Emma Maersk class vessels. Operating speed will be 19 knots and a top speed of 23, as against 23 and 25 for the Emma Maersk. Fuel consumption is designed to be 50% lower than the industry average. The order itself is believed to be the largest ever in the history of ship building.

SEASPAN SEEKS 10 NEW 10,000-TEU SHIPS

According to the Journal of Commerce, Seaspan is negotiating to order up to 10 new ships that would carry up to 10,000 20-foot equivalent units each and have “an innovative design that focuses on improving loadability and fuel efficiency.”

Seaspan is in discussions with several Chinese and Korean shipyards about the possible orders for delivery in 2013 and 2014, the company said in a document filed with the Securities and Exchange Commission.

The company’s CEO, Gerry Wang, has called for shipyards and naval architects to develop new container ship designs that improve fuel and operating efficiency.

IMO SEEKS SINGLE ANTI-PIRACY COMMAND CENTRE

The International Maritime Organization has called an urgent meeting for February 28 in London with a view to obtaining agreement that would bring all international anti-piracy operations under a single United Nations command and increase the number of warships in the Indian Ocean. Senior military and diplomatic representatives from more than 20 governments participating in naval operations off the Somali coast will attend. There are currently 23 governments actively participating in ant-piracy patrols.

Four retired Americans whose yacht was hijacked by Somali pirates off the coast of Oman last week have been killed by their captors. U.S. Navy vessels trailing the yacht intervened when gunfire was heard. In the end 13 pirates were captured and 2 shot dead. There are now 750 Somali men in 14 different countries awaiting trial for piracy.

RUSSIA ANNOUNCES MILITARY RENEWAL

Russian announced a major program of military renewal this week including construction of 100 surface warships, 8 nuclear submarines, 600 jets and 1,000 helicopters by 2020. The budget for all this is set at $650bn.

Russian Destroyer Admiral Chabanenko which

transited the Panama Canal last year

FURTHER INCENTIVES FOR SINGAPORE INTERNATIONAL MARITIME CENTRE

Singapore continues to set the pace for International Maritime Centres by providing serious incentives to cluster development. Overall in 2010, the country’s maritime sector increased its contribution to GDP from 5% to over 7.5%. However, not to rest on its laurels, in its 2011 budget last week, the government introduced the “Maritime Sector Incentive scheme” which will be effective from June 2011. New tax benefits such as certainty of withholding tax exemption for interest payments on loans to build or buy ships are to be introduced to further entrench international ship operators and encourage the growth of the shipping related services sector. In addition, the GST zero-rating for repair and maintenance services performed on ship parts and components is to be expanded. The country’s ambitions to become Asia’s main ship broking hub were advanced in the 2010 budget which included a 10% concessionary corporate tax rate for companies dealing solely in ship broking and freight derivatives trading.

Market Update

The Baltic Dry Index closed on Thursday at 1242 points compared to 1292 points last week and 1136 points the week previously.

Cape Size          Panamax          Supramax

Index                                 1319                 1813                 1362

Last week                          1455                 1997                 1233

Spot time charter            $5,300/day      $14,800/day        $13,900/day

Last week                      $6,800/day      $16,000/day        $12,900/day

 

 

 

Upcoming Meetings and Events

 

 

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 subsequent regular full day course will take place on

June 29 - Regular full day course in Vancouver

BIMCO GENERAL MEETING JUNE 5-8

June 5-8 - The program and registration details for the BIMCO General Meeting in Vancouver this year is now available at http://gm.bimco.org.

Mar 1 GrainWorld Conference, Winnipeg

Mar 1 CIABC Board of Directors Meeting @ 10:30

Mar 2-3 Transportation Summit – Best Practices Shaping Global Logistics

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

Mar 2 COS Board of Directors Meeting @ 11:30

Mar 8-9 Lloyd’s Register – Risk Management and Incident Investigation

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

Mar 9 COS Liner Committee Meeting @ 10:00

Mar 10 COS / ICS Business of Shipping Course – Intermodal Cargo Movement @ 08:00

Mar 15 ISSC Board of Directors Meeting @ 12:00

Mar 16 Regional CMAC Meeting @ 09:00

Mar 17 COS Navigation & Pilotage Committee @ 10:00

Mar 29 VMAA Board of Directors Meeting

Mar 30 PACMAR/NANS Committee Meeting

Mar 31 Business of Shipping Executive Course, Vancouver

 

 

Ship of the Week

Morning Cedar

 

Built 1981

LOA 198m

Beam 32m

Capacity for 5,340 vehicles

Former name Carmen

Now servicing the Seaboard International Shipping ro-ro service from BC to the Far East are Morning Cedar and her sister vessel Morning Spruce. Being slightly longer than the long standing Skaugran (now retired) and Skaubryn, dock modifications were required in Port Alberni to accommodate the ramps of the new vessels. Breakbulk lumber is carried westbound and vehicles on the back haul eastbound leg.

 

Morning Spruce (ex Figaro)

 

Seaboard Shipping Company was formed in June 1936 to provide ocean transportation for Seaboard member company lumber exports. By 1939 at the peak of its activity, the company was operating 143 vessels. The company consolidated its operations into the new Seaboard North Vancouver Terminal in 1971, now known as Lynnterm West.

EUKOR was established in 2002 following the acquisition of Hyundai Merchant Marine’s car transport division. It is owned 40% each by Wallenius Lines and Wilh. Wilhelmsen,with the remaining 20% held by Hyundai Motor Company (HMC) and Kia Motors Corporation (KMC). Holding a long exclusive contract of affreightment with HMC, EUKOR’s business includes handling all car exports from Korea for HMC and KMC as well as transport for a number of other car manufacturers.