COS Weekly News - 16 December 2011

Friday, 16 December 2011 15:46

COS News – Week ending 16 December 2011
Issue No. 188

 

SENATE PASSES BILL C-18 ENDING CWB MONOPOLY

Bill C-18 was passed at third and final reading in the Senate on Thursday to eliminate the Canadian Wheat Board’s monopoly marketing wheat and barley grown by Western farmers.  Shortly after the vote, Governor General David Johnston gave the bill royal assent.  With royal assent and then the government immediately proclaiming the bill, the eight-farmer directors are off the board and the legal challenge dropped. Farmers can begin to negotiate contracts with flour mills or grain companies as long as the delivery date is August 1, 2012 or later.

CN REACHES TENTATIVE AGREEMENTS

CN has reached tentative agreements with both the Teamsters Canada Rail Conference (TCRC) , representing approximately 1,800 CN locomotive engineers in Canada and the United Steelworkers (USW) Local 2004, represents approximately 2,800 maintenance-of-way employees who inspect, maintain and repair CN's track, bridges and structures in Canada.  Both agreements are scheduled to expire on Dec. 31, 2011 and details the new agreements are being withheld pending ratification by the members. The ratification process is expected to take approximately 60 days.

CP’S GRAIN FRANCHISE SEES IMPROVEMENTS

In its crop year-to-date, Canadian Pacific has achieved a 19 per cent increase in empty order fulfillment by reducing scheduling variability and increasing access to rail car supply.   CP’s new simplified grain network groups over 165 prairie based elevators into eight separate operating hubs.  Within these hubs, the railway commits locomotives and a dedicated scheduled day of week service to each elevator. This operating model has delivered a 26 per cent improvement in on-time performance.

ALGOMA CENTRAL MARINE AND CAPTAINS AND CHIEFS ASSOCIATION REACH FIRST AGREEMENT

Algoma Central Marine and the Captains and Chiefs Association representing 56 captains, masters and chief engineers who are responsible for the operation of ships and diversified ship repair throughout the Great Lakes-St. Lawrence Seaway settled on its first collective agreement with the assistance of a mediator from the Labour Program’s Federal Mediation and Conciliation Service. The collective agreement is valid from March 1, 2011, to February 28, 2013.

OCCUPY DISRUPTS US PORTS

 

                              Main Street access to DP World on Monday

Hundreds of anti-Wall Street protesters blocked gates and delayed trucks at the ports of Oakland, Portland and Longview on Monday this week. Here In Vancouver, there were a handful of arrests, but no major clashes. Demonstrators say they are standing up for workers against the port companies, which have had recent high-profile clashes with union workers. Longshoremen in Longview, for example, have had a longstanding dispute with EGT, which employs workers from a different union to staff its terminal. While the protests attracted far fewer people than the 10,000 who turned out Nov. 2 to shut down Oakland's port, organizers declared victory and promised more demonstrations.

 

Government Updates

TRANSPORT CANADA PUBLISHES AMPS PROPOSALS

In the Canada Gazette, Part I – December 17, 2011 proposed Regulations Amending the Administrative Monetary Penalties Regulations under the Canada Shipping Act are published.   The proposed amendments would contain an expanded schedule designating certain provisions of seven regulations for the purpose of AMPs, as follows:

Schedule Part	Designated Regulations	Scope of Typical Provisions Designated for Administrative Monetary Penalties	Range of Penalties ($)
Part 2	Cargo, Fumigation and Tackle Regulations	Provisions related to the loading, unloading and carriage of cargo for marine transportation, as it relates to the safety of vessels and persons on board; safe fumigation practices on Canadian vessels and on foreign vessels in Canadian waters headed to and from Canadian ports; safe methods for using cargo gear used in material handling, shore-based power-operated ramps; and accommodation ladders used to access vessels.	250 to 25,000
Part 3	Collision Regulations	Provisions related to the general conduct specific to the navigational, steering and sailing rules, navigational lights and shapes to be displayed, and the sound and light signals to be used by every Canadian vessel, as well as pleasure craft and foreign vessels in Canadian waters, in order to avoid a collision situation. Also, provisions related to the Convention on the International Regulations for Preventing Collisions at Sea, 1972 (COLREG Convention), with additional requirements specific to the Canadian context.	250 to 25,000
Part 4	Load Line Regulations	Provisions applicable to circle and diamond load lines, including prohibitions; Authorized Representative’s duties; posting of certificates; and draught and freeboard notices.	250 to 25,000
Part 5	Marine Personnel Regulations	Requirements for qualifications, training and certification of crew members; requirements for the appropriate marine personnel on board vessels for safe and efficient operation; types of training certificates to hold or to obtain, and any requirements for the minimum complement that are applicable to Canadian vessels and to foreign vessels in Canadian waters; and labour working conditions and requirements on board vessels.	250 to 25,000
Part 6	Special-purpose Vessels Regulations	Requirements of vessels and equipment; requirements of guides; wearing of flotation and safety equipment; and keeping of records.	250 to 12,000
Part 7	Vessel Certificates Regulations	Provisions concerning inspections; possession and endorsement of required certificates; issuance and carriage of required documents; and crewing in accordance with required documents.	250 to 25,000
Part 8	Vessel Registration and Tonnage Regulations	Provisions concerning the requirement for an International Tonnage Certificate and calculation of tonnage for the Certificate of Registry.	1,250 to 25,000

Comments to the proposed regulations will be accepted within 60 days after the publication of this notice. 

DFO CUTS ANNOUNCED

It was announced earlier this week that about 400 Department of Fisheries and Oceans (DFO) employees across Canada will be impacted by government staff reductions. More than 200 of those receiving notices are biologists and other scientists, the vast majority of whom work outside Ottawa in areas of ocean management, fish habitat management, hydrography and aquaculture. Another 39 positions are being cut from the coast guard following a re-organization. The department has a nearly $2 billion budget with 11,025 employees in seven regions – 22% in the Pacific; 17% in the Maritimes, 16% in the Ottawa region, 16% in Newfoundland and Labrador; 13% in Quebec, 12% in Central and Arctic and 4% in the Gulf Region.

DFO was among the 12 departments that underwent strategic review last year to find savings and realign spending with the government's priorities. Fisheries found savings of $9.1 million for 2011-12; $18.9 million in 2012-13 and will reach $56.8 million for 2013-14. The moves are part of the Government’s efforts to balance the budget by trimming $4 billion from $80 billion of budgets over three years.

MOVEMENT OF DANGEROUS GOODS NEEDS BETTER OVERSIGHT

According to the Commissioner of the Environment and Sustainable Development, Transport Canada and the National Energy Board need to improve their oversight of organizations required to comply with regulations governing the movement of dangerous products within Canada.  In a recent audit presented to the Office of the Auditor General, the Commissioner noted that the National Energy Board has yet to review emergency procedures manuals for 32 regulated companies. In all of its manual reviews that the audit examined, the Board had found deficiencies but there was little indication that it followed up to verify that the companies had taken corrective action.

The audit also found that Transport Canada does not know to what extent organizations transporting dangerous goods are complying with regulations. Its review of emergency response plans submitted by organizations is not timely or adequate. It has given temporary approval for nearly half the plans required for the transport of the most dangerous regulated goods, such as types of ammonia, acids, and explosives. Temporary approvals are subject to less verification and have been in place for ten years and more in some cases.

BILL C-20 ADDS 30 NEW SEATS TO THE HOUSE OF COMMONS

Bill C-20, An act to amend the Constitution Act, 1867, the Electoral Boundaries Readjustment Act and the Canada Elections Act, was passed by the Senate this morning.   The Conservatives will add 15 seats in Ontario, six each in British Columbia and Alberta, and three in Quebec.  The total number of MPs increases to 338 from 308.

CANPOTEX POTASH TERMINAL PROJECT PUBLIC COMMENTS INVITED

The Canadian Environmental Assessment Agency (the Agency) is conducting a comprehensive study environmental assessment of the proposed Canpotex Potash Terminal Project located in British Columbia. The public is invited to comment on a summary report of the Environmental Impact Statement.  

BC PREMIER APPOINTMENTS

Premier Christy Clark announced the appointment of Ray Castelli to head the BC Jobs and Investment Board and Eliis Ross to chair the Aboriginal Business and Investment Council. The BC Jobs and Investment Board will focus on the eight key sectors in the BC Jobs Plan – forestry, mining, natural gas, agri-foods, technology, tourism, transportation (ports, marine and aerospace) and international education.  The Aboriginal Business and Investment Council will work with Aboriginal communities and the private sector to make recommendations to government on strategies to improve Aboriginal peoples’ participation in the economy, identify successful investment models between Aboriginals and the private sector, foster economic development in Aboriginal communities, and increase overall investment in the province.

CANADA ADOPTS ANTI-PROTECTIONIST PLEDGE

The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway helped lead efforts that resulted in a strongly worded pledge by 23 members of the World Trade Organization “to fight all forms of protectionism in the strongest terms.”   Minister Fast adopted the pledge in Geneva at the start of the eighth World Trade Organization (WTO) ministerial meeting, taking place there from December 15 to 17.

CANADIAN NORAD REGION ANNOUNCES SANTA’S ESCORT PILOTS

With Christmas rapidly approaching, the Canadian NORAD Region has finalized plans to track and escort Santa Claus during his visits to Canada with the selection of four CF-18 fighter pilots who will act as Santa's official escorts.

First to welcome Santa will be pilots Captains Gregory Myers and Aaron Dhillon of 425 Tactical Fighter Squadron who will launch from 3 Wing Bagotville, Que., as the sleigh approaches Canadian airspace. Taking over escort duties as Santa makes his way into Western Canada will be the Commanding Officer of 410 Tactical Fighter Squadron, Lieutenant Colonel Christopher Hamilton and his wingman for this mission will be Captain Corey Mask of 4 Wing Cold Lake, Alta.

The Canadian Air Defence Sector Operations Centre at 22 Wing in North Bay, Ont., will alert NORAD when their radar and satellite systems detect Santa approaching North America. The two CF-18 Hornet fighter jets from 3 Wing will welcome Santa off the coast of Newfoundland and Labrador, then handover their duties as he nears western Canada to the two CF-18 Hornets from 4 Wing who will escort him ensure for the remainder of his Christmas voyage.

Special NORAD ‘SantaCams’, positioned around the world, will take photos and video of Santa and his sleigh as he journeys around the world. The ‘SantaCams’ instantly download the photo and video imagery so that it may be viewed by children worldwide on the NORAD Tracks Santa website on December 24.  NORAD’s Tracks Santa program website is www.noradsanta.org.

Other News

DURBAN PLATFORM LEAVES SHIPPING STILL IN LIMBO

South Africa’s minister for international relations has called last week’s agreement reached at UN climate change talks in Durban “a historic deal to save the planet” but from a marine industry perspective, there remains a great deal of uncertainty. The final deal, called the Durban Platform, involves new talks with a commitment to agree by 2015 an “instrument” with “legal force” to come into effect by 2020. For shipping, the agreement does not clarify or advance where the industry stands, or spell out its likely obligations. If anything it seems to add to the uncertainty.

The design of a Green Climate Fund was one of the key elements agreed on Sunday after more than two weeks of talks between some 190 nations. The U.S. for its part removed any reference to specific financing sources, notably shipping, for the fund which is intended to transfer up to $100 billion annually by 2020 to poorer nations to help them adapt to climate change and cut emissions. The conference adopted a management framework involving the World Bank to manage this, however details on how it will work in practice remain quite vague. The International Maritime Organization will in any event continue its work on developing a market-based measure that will help curb shipping’s emissions. The formal International Chamber of Shipping report on the conference is attached to this week’s newsletter.

NORWAY MARKS CENTENARY OF FIRST SOUTH POLE EXPEDITION

Scientists and explorers have joined the Norwegian Prime Minister to mark 100 years since Roald Amundsen led the first expedition to the south pole. Prime Minister paid tribute to Amundsen as having made "one of the most outstanding achievements of mankind".  Acknowledgment was also given to Robert Scott, the UK explorer whom Amundsen beat to the pole but who died along with four companions on the return expedition after being caught in a blizzard. The Prime Minister unveiled an ice bust of Amundsen at the US scientific base station Amundsen Scott. Amundsen's triumph came only six years after Norway became an independent nation.

  

                 Pictures from Roald Amundsen’s 1912 voyage to the South Pole on the sailing ship Fram

Amundsen led the first Antarctic expedition to reach the South Pole between 1910 and 1912 and he was the first person to (undisputedly) reach both the North and South Poles.  He is also known as the first to traverse the Northwest Passage. He disappeared in June 1928 while taking part in a rescue mission.

JAPANESE OWNERS WIN TONNAGE TAX EXTENSION

Japanese ship owners have successfully argued for an extension to the country's tonnage tax system. From April 2012, the government will allow foreign-flagged vessel owned by domestic owners to join the system with a view to helping stay competitive.

LONGBEACH SEEKS TO DEVELOP NEW EXPORT GRAIN TERMINAL

The Port of Long Beach has released a draft environmental impact report on a proposal to build a grain export facility at the Total Terminals International container terminal at Pier T. The facility which would have a facility of up to 1.5 million tons/year would transfer grain from rail cars into containers. Hanjin Shipping and its vessel sharing partners call at the 385-acre TTI facility in Long Beach. The grain export facility would occupy about 10 acres of the Hanjin controlled terminal.

ALWAYS A GOOD IDEA TO CHECK THE AIR DRAUGHT

The skipper of a European container feeder barge is unlikely to overlook the simple task of checking his air draught following an embarrassing mishap last weekend.

 

The "Fides" loaded with more than 100 empty containers collided with the Burgum Bridge on the Princess Margriet Canal in The Netherlands.

VOLVO OCEAN RACE 2011-12 BEGINS 2ND LEG

The most competitive fleet ever to contest the Volvo Ocean Race is now into its 2nd leg from Capetown to Abu Dhabi. The 11 crew members allowed on each boat of the six competing teams are probably the cream of the crop amongst the world’s best sailors including Olympic gold medalists, world champions and America’s Cup winners. They represent 15 nations - New Zealand, Australia, France, Spain, United States, Great Britain, Ireland, South Africa, Sweden, United Arab Emirates, Germany, Norway, Brazil, China and Belgium. Notable firsts are a Chinese entry, Team Sanya, and the first United Arab Emirates entrant, Abu Dhabi Ocean Racing.

 

                                       Volvo Ocean Race - ports of all resting up in Capetown after the first leg

The 2011-12 Volvo Ocean Race began with the In-Port Race on 29 October in Alicante, Spain before setting off on the first leg of the formal race to Cape Town. The teams are now en-route to Abu Dhabi, Sanya (Hainan province PRC), Auckland, Itajaí (Brazil), Miami, Lisbon, Lorient and will conclude in Galway (Ireland) in early July 2012. The total race distance is 39,300 nautical miles.

  

The Puma team suffered loss of its mainmast when still 2,100 miles out from Capetown on the first leg of the race and had to motor to Tristan da Cuhna to await the arrival of the project cargo carrier Team Bremen which successfully completed a tricky operation in open sea to lift the crippled yacht onboard and deliver safely to Capetown. Following repairs, the Puma team has joined the 2nd leg of the race.

CAPESIZES HOLD ON TO GAINS

Capesize rates for iron ore from Western Australia to China have hit a 21-month high of over $13 per ton, as Chinese demand continues to absorb tonnage. Even though there are over 200 more Capesizes in service than in the same period last year, the Baltic Exchange average time charter rate has climbed to almost $33,000/day. The Chinese government forecasts that by 2015 the country will be consuming 750m tons of steel per year, an amount that would require over 1.1bn tonnes of finished iron per annum, most of which would be  imported. The total Capesize fleet now numbers 1,335, according to Clarksons’ data. On the negative side, second hand prices of Capesizes continue to fall – a sure fire indicator that longer term confidence in this sector is low.

On a longer term positive note, the International Energy has raised concerns about the global implications of China’s massive appetite for coal. The agency’s annual report highlights that China’s domestic coal market alone is more than three times the international global coal trade with only 15% of global coal demand being met through international trade. The report also expresses concern for the fact that six countries account for more than 80% of global coal exports which will inevitably lead to export infrastructure bottlenecks.

Nowhere is this more evident than in Australia and China where each currently has more than 100 Capesizes tied up in port congestion. The Queensland State Government this week announced the allocation of land for a new A$10Bn ($10Bn) coal port south of Mackay, a significant investment as  Australia this week revised its major dry-bulk export forecast upwards for the coming fiscal year, expecting an additional 12.8m tons, equivalent to 75 additional fully-loaded Capesizes.

For the first time on record the number of bulk carrier new buildings delivered will this year will exceed 1000 vessels in a calendar year. Already, In the first eleven months of 2011, 1,050 bulk carriers of a cumulative 88.5m DWT have been delivered according to data compiled by Clarksons.

 

Market Update

The Baltic Dry Index closed on Thursday largely unchanged for the week at 1889 points, up from 1882 points one week ago 1862 points the week previously.

                                                        Cape Size            Panamax          Supramax

Index                                                  3571                    1772                    1196
One week ago                                 3529                    1693                    1248
Spot time charter                       $31,500/day        $14,200/day       $23,500/day
One week ago                            $31,100/day        $13,500/day       $13,000/day

 Containers: Alphaliner estimates that some 210 container ships of a combined 526,000 TEU or 3.5% of the global fleet capacity are now unemployed.

Upcoming Events

ICMA XVIII – EARLY REGISTRATION – Vancouver, BC

May 2012 - The International Congress of Maritime Arbitrators is hosting its 18th Congress in Vancouver May 13-18th.  Register by December 31st to receive your early registration discount.  For more information and/or to register early visit http://www.icma2012.com/.

Dec 25              Christmas Day
Dec 26              Boxing Day – Office Closed
Dec 27              Office Closed
Jan 1                 New Year’s Day
Jan 2                 Office Closed
Jan 10              CIABC Board of Directors Meeting @ 10:30
Jan 10              Ship & Port Operations Committee Meeting @ 12:00
Jan 11              COS Board of Directors Meeting @ 11:30
Jan 11              ICS Canada Board of Directors Meeting @ 12:00
Jan 12              Plimsoll Club Board of Directors Meeting @ 12:00
Jan 18              COS Liner Committee Meeting @ 10:00
Jan 19              COS Navigation & Pilotage Committee Meeting @ 10:00
Jan 23              BC Marine Vessel Air Quality Meeting @ 09:00
Jan 24              ISSC Board of Directors Meeting @ 12:00
Jan 25              WMC PACMAR/NANS Meeting @ 10:30

Ship of the Week

                                           Rainbow Warrior III

LOA 58m
Beam 11m

In October this year the new Greenpeace flagship Rainbow Warrior III made its maiden voyage to London where it was showed to the media and public. The purpose-built vessel, which cost $33 million, is the third vessel to take the name. Every aspect of the design and build has been designed to make the ship as clean and green as possible. She will sail under wind power, but electric diesel engines with an upper speed of 15 knots are available when needed and heat from the engine and generators will be recycled to heat cabins and provide hot water . She is constructed to operate anywhere in the world outside the polar regions.

An onboard satellite communications system gives 24/7/365 broadband access anywhere in the world whilst media activity is also supported by a dedicated onboard press conference room. 

   

     communications centre                   Captain Joel Stewart on bridge

Video of arrival in London: http://www.guardian.co.uk/environment/video/2011/nov/10/greenpeace-rainbow-warrior-video

   Original Rainbow Warrior – sunk in New Zealand by France

In 1985, French secret service agents planted two bombs and sank the original Rainbow Warrior in New Zealand, one crew member being killed. The act was sanctioned by France in an attempt to “neutralize” the ship ahead of its planned protest against French nuclear testing in the Pacific. Initially, the French government denied all knowledge of the operation, but it became soon obvious that they were involved. Eventually, prime minister Laurent Fabius appeared on television and told a shocked public: “Agents of the DGSE (Secret Service) sank this boat. They acted on orders.”

The Rainbow Warrior was named after a North American Cree Indian prophecy: “When the world is sick and dying, the people will rise up like Warriors of the Rainbow…”

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