COS Weekly News - 5 August 2011
Tuesday, 09 August 2011 13:34
COS News – Week ending 5 August 2011
Issue No. 169
PORT METRO VANCOUVER POSTS SOLID NUMBERS
Port Metro Vancouver has released its 2011 mid-year results, with stable numbers showing solid performance for Canada's largest and most diverse port. The 2011 mid-year statistics report shows the Port handled 58.7 million tonnes of cargo in the first six months of 2011, a 1 per cent increase over the same period in 2010.
Port Metro Vancouver's 2011 mid-year statistics report highlights stable performance in key sectors and follows a strong 2010 that saw new records set in key sectors.
- Auto volumes dropped 28 per cent, a reflection of the market challenges stemming from the major disruption of manufacturing in Japan due to the continuing impact of the devastating March 11 earthquake and tsunami.
- Breakbulk cargo is down 6 per cent overall; however, foreign breakbulk exports have posted a 12 per cent increase due to the strength in demand for Canadian forest products, like lumber and logs.
- Bulk volumes were up 1 per cent overall, with dry bulk cargoes like coal and potash posting a 2 per cent and 38 per cent increase respectively, and liquid bulk cargo posting a 22 per cent decrease.
- Container traffic at Port Metro Vancouver has continued its upward trend, increasing 5 per cent YTD to 1.2 million TEUs*, as a 12 per cent increase in containerized exports offset a weaker demand for consumer goods showing a 1 per cent rise in imports.
- Cruise voyage and passenger numbers have increased with 81 cruise calls and 259,465 passengers welcomed at Port Metro Vancouver during the first half of the 2011 season, representing a 16 per cent increase. The Port also anticipates a significant increase in the number of shore power connections during the 2011 cruise season, with an estimated 56 shore power-enabled cruise calls, up from 44 in 2010.
PRINCE RUPERT CONTAINER TRAFFIC SOARS
Port of Prince Rupert reported loaded container volume increased 33.1 percent in July. Loaded imports grew 18 percent while outbound volume, less than third of the business at Prince Rupert, nearly doubled, expanding a dramatic 94.5 percent.
The strong growth at Prince Rupert follows the addition of two services in May, bringing to four the number of weekly trans-Pacific services at Prince Rupert, some 500 miles north of Vancouver.
China Ocean Shipping Co. in May added Prince Rupert to its South China service. Hanjin added the port to its Pacific Northwest Express service. The express service marks the first at Prince Rupert on which Hanjin vessels are deployed.
For the first seven months of the year, Prince Rupert’s container volume was up 16.5 percent over the same period a year ago. But imports have slipped 0.1 percent while exports were up 82.3 percent in that time. The port handled 165,283 loaded TEUS in fiscal year 2011 ending July 31, up 15 percent from the previous fiscal year.
RIDLEY ISLAND CONSTRUCTION BEGINS
Public access to the perimeter road around Ridley Island will be restricted starting Tuesday, August 2nd, as crews and heavy machinery begin preparations for the planned expansion of Ridley Terminals. The terminal, which is approaching its capacity of 12 million tonnes of coal annually, is set to double its capacity by adding 14 hectares to its 55-hectare working site. The expanded land was acquired from the Prince Rupert Port Authority earlier this year. Addition of a new dumper system is underway, as is the installation of a third stacker/reclaimer.
Starting at 6 am on Tuesday, August 2nd, the access control gate at the entrance to Ridley Island—some 17 km from the city of Prince Rupert—will be staffed around the clock, seven days a week. Only personnel carrying appropriate photo identification will be permitted to enter, assuming they have specific business on the island.
The estimated completion date for this phase of the Ridley Terminals expansion project is December 2011. The access control gate will be in continuous operation until then.
SEASPAN REVENUE GROWS 36 PERCENT
Seaspan cut its loss to $34.9 million in the second quarter from the $121.8 million loss the independent ship-owner and charter company posted for the same quarter last year.
The company on Thursday said revenue jumped 36.1 percent in the quarter to $133.7 billion, partly as a result of four new vessels that were delivered and chartered out in the quarter. That brought Seaspan’s total fleet to 62 vessels by June 30. Two of the four new vessels have capacities of 13,100 20-foot equivalent units, the largest in its fleet, and are chartered to COSCO, and the company this month added a 63rd vessel. The Hong Kong-based company signed construction contracts for three 10,000-TEU containerships that will be chartered to a new Seaspan customer, Hanjin Shipping, under 10-year, fixed-rate charters when they are delivered in 2014. Seaspan’s vessel utilization for the quarter stood at 98.9 percent, compared to 97.2 percent in the year-ago quarter.
CANPOTEX TO SELL POTASH TO TWO INDIAN COMPANIES
Canpotex Ltd., the international marketing and distribution company for three major Saskatchewan-based potash producers, announced that it has signed a contract to sell 670,000 tonnes of fertilizer to two Indian companies. Coromandel International and Tata Chemicals, both India-based fertilizer producers, will buy 50% of those volumes at US$470 per tonne in the fourth quarter of 2011. The rest will be bought at US$530 per tonne during the first quarter of 2012. The three members of Canpotex include Agrium Inc., Potash Corp. of Saskatchewan and Mosaic Co.
TOKYO MOU – CIC QUESTIONNAIRE
The Tokyo MOU posted a Questionnaire on its upcoming Concentrated Inspection Campaign (CIC) on structural safety and the International Convention on Load Lines.
PRPA SEEKING NOMINATION FOR DIRECTORS
The Prince Rupert Port Authority’s Port User Nominating Committee (PUNC) is now seeking responses from qualified individuals who have an interest in serving on the seven-person Board of Directors of the Prince Rupert Port Authority. The Directors are part-time appointees whose role is to oversee the operations of the Prince Rupert Port Authority.
The PUNC, under the provisions of the Canada Marine Act, will be submitting names to the Minister of Transport for his consideration when making the appointment of a "User Director" to the Board of Directors of the Prince Rupert Port Authority. Please note that potential candidates must meet qualifications set out in the Canada Marine Act.
Responses, including curriculum vitae, from qualified individuals should be forwarded to the PUNC at the address below no later than August 15, 2011. All responses are handled in the strictest confidence.
Port User Nominating Committee
Attention: Mr. Mark Newbery, Chair
c/o Prince Rupert Port Authority
200 – 215 Cow Bay Road, Prince Rupert, BC Canada V8J 1A2
Phone: (250) 627-8899 Fax: (250) 627-8980
ANNUAL REPORT AND NEW STRATEGIC PLAN FOR CTA
The Canadian Transportation Agency released its 2010-2011 Annual Report and 2011-2014 Strategic Plan, providing an overview of how the Agency has supported – and will continue to support – a competitive, efficient and accessible national transportation system.
The fiscal year 2010-2011 marked the completion of the Agency's first-ever triennial Strategic Plan. In addition to reporting on the past fiscal year, the Annual Report highlights the accomplishments realized from 2008 to 2011, including:
- Upgraded case management tools and practices to improve dispute resolution processing, resulting in the elimination of a backlog of disputes;
- Developed action plans to address areas for improvement identified in its client satisfaction surveys; and
- Significantly increased the number of public consultations to support modernization of the Agency's regulatory regime.
CALIFORNIA ARB HAS ALL SIDES FIRED UP
The California Air resources Board has managed to simultaneously upset the marine industry and ENGOs following changes to the state's ocean going vessels (OGV) Clean Fuel Regulations. The primary changes announced on July 25 are:
- a delay from January 1 2012 to January 1 2014 in tightening the sulphur limit for distillate fuels to 0.1%,
- an extension of the regulated zone further offshore the California mainland
- reductions in noncompliance fees
The Pacific Merchant Shipping Association (PMSA), supported by the World Shipping Council, the Chamber of Shipping of America, Cruise Lines International Association, the International Association, INTERTANKO) and the International Chamber of Shipping, is continuing its fight against ARB’s authority in principle to regulate off-shore waters beyond 3 nautical miles given that ARB requires vessels to use either marine gas oil (MGO) with a maximum 1.50% sulphur, or marine diesel oil (MDO), with a maximum 0.50% sulphur, within 24 nautical miles off California's coast.
Under MARPOL Annex VI Emission Control Area regulations, vessels will be restricted to a limit of 1% fuel sulphur content from August 1, 2012 within 200 nautical miles off the coast of the US and Canada, falling to 0.1% sulphur from January 1 2015. Annex V1 also allows for the use abatement technology to achieve equivalent emission reductions. ARB's decision to implement the 0.1% sulphur rule from 2014, one year prior to the ECA implementation date one year later, as well as dictating the type of fuel to be used has drawn strong industry criticism. Hanjin Shipping, has already posted a public comment to ARB to express concern that there will be insufficient supplies of 0.1% distillate fuels by 2014 in primary Asian bunker ports. CARB has announced that “appropriate modifications to the regulation may be considered in light of written comments received before an August 9, 2011 deadline”.
On the other side of the planet, August 1 was the date of implementation of another MARPOL resolution banning heavy fuel oils from the Antarctic. Either as cargo or bunkers, heavy fuel oil is now prohibited in the region.
ICS CAUTIONS EU ON UNILATERAL MEASURES AGAINST SHIPPING
Mr. Spyros Polemis, Chairman of the International Chamber of Shipping has written to the EU Commissioner for Climate Action, Ms. Connie Hedegaard, to caution against unilateral action on reducing ship CO2 emissions. Mr. Polemis pointed specifically to the recent success of the IMO’s Marine Environment Protection Committee (MEPC) in adopting the Energy Efficiency Design Index (EEDI) for new buildings and the Ship Energy Efficiency Management Plan (SEEMP) for all ships, both from 2013. In so doing, he predicted that the industry can deliver more than a 20% reduction in emissions per ton per km of cargo by 2020. The letter predicts that unilateral action in Europe would risk serious market distortion, with measures applying on a regional basis not serving the need for concerted global action. The full letter is attached.
US PROPOSAL TO SANCTION CLASSIFICATION SOCIETIES
Classification Societies doing business with Iran, North Korea, North Sudan or Syria have suddenly found themselves under the spotlight in Washington. Under the “Ethical Shipping Inspections Act of 2011” proposed in the US Senate, Classification Societies that are approved to carry out inspections of ships on behalf of the US government will forfeit their approval if they are also working on behalf of so called “pariah states” which are publicly blacklisted under US foreign policy. Germanischer Lloyd, Lloyd’s Register, Bureau Veritas and DNV are all considered to be vulnerable under the proposed terms of the legislation as they are the societies currently authorized by the USCG to undertake inspections on their behalf.
The act itself has a long process to go through before it can become law but it may of course have the desired effect even if it does not become law.
CONTAINER RATES STRUGGLING DUE TO CAPACITY GROWTH
In its latest analysis of the container industry, to nobody’s surprise Alphaliner points out that vessel utilization has fallen in last 12 months on account of slowing demand whilst container vessel capacity has grown by around 10%. The world’s active fleet reached 14.95 million 20-foot equivalent units on August 1, an increase of 1.33 million TEUs over the past year. Despite capacity cuts, rates on the dominant Asia-Europe route remains are suffering badly with only an 84% utilization rate on account of a 12% year-on-year increase in capacity. The situation in the trans-Pacific trades is not much better on account of 6% growth in capacity. As a consequence, the average spot rate for shipping a container from China to the US West Coast fell almost 7% to its lowest point in 20 months, a clear indication of hard times for sales at Wal Mart. The benchmark rate from Hong Kong to Los Angeles is down to $1500 per or even below. The 15 container lines that belong to the Transpacific Stabilization Agreement have announced peak season surcharge of $400 per FEU effective of August 15 through to November 30.
On a more cheerful note, five of the world’s leading container carriers have joined forces in a bid to eradicate cargo-related “bad practices” and reduce the number of accidents. Maersk, MSC, CMA CGM, Evergreen, and Hapag-Lloyd have been piloting an online reporting scheme for the past few months which will be formalized in September when owners and operators from across the industry will be invited to participate. The “Cargo Incident Notification System Network” (CISNET) objective is for carriers to share information on accidents or potentially dangerous incidents in order to ensure safety issues are promulgated across the industry and lessons learned.
HAROLD DAGGETT ELECTED NEW PRESIDENT OF ILA
Mr. Harold Daggett, was been elected as the new President of the International Longshoremen’s Association on July 28. In a short interview on becoming elected, Mr. Daggett commented on terminal automation, the use of chassis, union organizing and the prospects for cooperation with the ILWU. Mr. Daggett, previously the ILA’s Executive Vice President and head of the union’s 1,500-member New Jersey maintenance Local 1804-1, testified last year along with officials of the New York-New Jersey port’s other ILA locals in the fifth in a series of commission hearings on waterfront pay and practices. At the start of the hearing, Mr. Daggett read a statement heavily criticizing the Waterfront Commission of New York Harbor, which was created in 1954, to combat waterfront crime.
FEMALE MARINE PILOTS MAKE HISTORY IN DURBAN
Precious Dube (left) and Pinky Zungu (right)
Three Durban women have made history by becoming South Africa’s first black female marine pilots. Precious Dube, Bongiwe Mbambo and Pinky Zungu have each obtained a full harbour pilot’s license. Dube admitted that she is routinely questioned by masters about her experience and Mbambo admitted that the captain of the first vessel she piloted was so amazed that he took photographs and recorded a video of her doing the job. The three were among the first candidates hired by Transnet, the National Ports Authority, to encourage more black participation in the country’s ports.
CLIPPER ROUND THE WORLD YACHT RACE LEAVES SOUTHAMPTON ON FIRST LEG
The Clipper World Yacht Race set sail from Southampton last weekend. The 40,000 nautical mile track is unique in that it is the only race in the world where the organizers supply a fleet of ten identical, 68-foot, stripped down racing yachts, each sponsored by a city, a region or a country, and man them with ten fully trained skippers. It is also described as the only race in the world where taxi drivers rub shoulders with chief executives, whilst vicars mix with housewives, students work alongside bankers, nurses work with vets and doctors team up with rugby players.
Sir Robin Knox-Johnston who is the founder and Chairman of the Clipper Round the World Yacht Race used the words of Mark Twain to describe the event as follows:
“Twenty years from now, you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines, sail away from the safe harbor, catch the trade winds in your sails. Explore, dream, discover.”
Back to the real world and indicative perhaps of the reality that the primary commodity in global demand right now is sun tan oil, the Baltic Dry Index closed marginally down on the week at 1268 points compared to 1278 points last week and 1325 points the week previously.
Cape Size Panamax Supramax
Index 1807 1475 1253
Last week 1767 1524 1262
Spot time charter $10,800 /day $11,800/day $13,100/day
Last week $ 9,700/day $12,200/day $13,200/day
Tankers: Better to focus on the pleasant summer weather than this sector. Spot rates for VLCC’s from the Arabian Gulf to Asia are effectively in negative territory at close to minus $2,000 per day. The price of heavy bunker fuel at $700/day is only serving to make an awful situation even worse.
Upcoming Meetings and Events
CYCLE FOR SEAFARERS
Sep 17 – Join the Mission to Seafarers on their 4th Annual Cycling for Seafarers. Cyclists can choose from a 40km and 100km route. Further information and participant sign up is available at www.flyingangel.ca/events.
WORLD MARITIME DAY CELEBRATION
Sep 21 – Save the Date – The Mission to Seafarers will host a dinner at the Royal Vancouver Yacht Club to commemorate the International Maritime Organization’s World Maritime Day.
COS BUSINESS OF SHIPPING COURSE
Sep 22 – The next Chamber of Shipping full day Business of Shipping course will be held at the Vancouver Club. Seats for this session are limited. See attached program for more information and registration details.
Aug 6 An Evening at the Vancouver Maritime Museum Fundraiser
Aug 9 CIABC Board of Directors Meeting
Sep 5 Statutory Holiday – Labour Day – Office Closed
Sep 7 COS Liner Committee Meeting @ 09:30
Sep 7 COS Board of Directors Meeting @ 11:30
Sep 8 COS Navigation & Pilotage Committee Meeting @ 10:00
Sep 13 COS Ship & Port Operations Committee
Sep 14 Regional CMAC @ 08:30
Sep 17 Mission to Seafarer’s 4th Annual Cycle for Seafarers Event
Sep 21 World Maritime Day / Mission to Seafarers Dinner
Sep 22 Business of Shipping Course
Oct 12-14 Sustainable Shipping Conference
John Sharples passed away on August 2nd after a terrible battle with Corticobasal Degeneration. A Celebration of Life for John will be held on Sunday, August 7th from 10:00 am to 2:00 pm at the Kerrisdale Legion, 2177 West 42nd Avenue (right across the street from the Kerrisdale Community Centre).
(WILLIAM) CRAIG MCKAY 1944-2011
Craig McKay, well-known freight forwarder and customs broker, passed away peacefully on July 26, 2011 following a courageous battle with brain cancer. A ceremony and celebration of life was held yesterday for friends and family. Donations in lieu of flowers can be sent to Laurel Place Hospice in Surrey, BC.
Ship of the Week
Built: 2010 in Oshima Shipyard, Japan
Class: DNV, Baltic 1C
DWT 35,300 MT on 10.78m draft
Federal Yukina is the first of three new handysize bulk vessels ordered for the Fednav Group. As with most of the group’s vessels she is designed for the restrictions and challenges of trading into the St. Lawrence Seaway System and the Great Lakes. The vessel was built with several aspects of improved environmental performance and technology efficiency in mind. In terms of fuel consumption she is rated as 12% more efficient than previously built vessels in the fleet of a similar size.
in Port Kembla, Australia, November 2010
The Fednav Group is Canada's largest ocean-going, dry-bulk shipowning and chartering group. The group's companies include Fednav Limited, Fednav International Ltd., FALLine, Federal Marine Terminals, Inc., Fednav Direct, Canarctic, and Enfotec. The group is headquartered in Montreal and has offices in London, Tokyo, Antwerp, Hamburg, Brisbane, and Rio de Janeiro along with several offices in Canada and the United States. The Group was established in 1944 in Toronto and has been owned by the Pathy family of Hungarian-origin since its creation. Today it operates a fleet of some 70 owned or chartered vessels serving the Great Lakes/St. Lawrence, Atlantic, Pacific and Arctic trades. Nearly 30 of the ships are ice-class. These include those which were involved in the renowned Baffinland project.
A Fednav vessel negotiating the “Seaway”
Two of the company’s better known ships are the Arctic, 28,000 tons DWT, the world's first ice-breaking bulk carrier, and the newer Umiak 1, 31,500 tons DWT, the most powerful vessel of its kind, and delivered to Fednav in 2006. Both are under the Canadian-flag. Since mining production began in the late 1970s in the Canadian Arctic, Fednav claims to have carried most of the ore concentrates exported from the region. Last year marked a milestone in Fednav's relationship with Teck Alaska, previously known as Teck Cominco Alaska. Since the Red Dog mine 20 years ago, more than 20 million tonnes of zinc and lead concentrates have been shipped to world markets.
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