COS Weekly News - 25 May 2012
Friday, 25 May 2012 15:01
COS News – Week ending 25 May 2012
Issue No. 210
CP RAIL IN DISPUTE WITH TEAMSTERS
all at a standstill in CP Rail’s Port Coquitlam marshalling yard
The honeymoon for the new Canadian Pacific Rail Board of Directors was short and sweet following the failure of the company’s management and The Teamsters Canada Rail Conference, a union representing 4,800 engineers, conductors and rail traffic controllers, to reach agreement on a new collective agreement by Wednesday this week. TCRC claims to be trying to prevent CP from shifting its members to a cheaper pension plan, and that fatigue management issues haven’t been fully addressed. In return, the company is adamant that changes need to be made to the legacy pensions and post-retirement benefits to make CP competitive with other railways. CP contributed about $1.9 billion of solvency deficit contributions to its pension plan in the last three years. CP commuter trains and service within the U.S. are not directly impacted but suffice it to say, it’s hard to run a partial network.
There can be no doubt that this is a very negative development for the Gateway and one from which it will require several weeks for our national rail network and terminals to recover. Regretfully the push by COS to include a mandatory dispute resolution mechanism within the terms of reference of the recent Rail Freight Service Review was rejected as “out of scope” by the review panel although it did still receive mention in the final report. The related press statement issued by Port Metro Vancouver yesterday is attached and which the Chamber of Shipping fully endorses.
CP CANADIAN INTERMODAL TERMINALS
Canadian Pacific Rail has advised with the exception of our Vancouver Intermodal Facility, they will be closing all the Canadian terminals Friday, May 25th at 2359 hrs (per normal operating scheduled closure). The Vancouver Intermodal Facility will operate from 0700 to 1500 on Saturday, but will be closed on Sunday.
The CPR Intermodal Terminals will reopen Monday May 28th during the following hours (local time):
Montreal (Lachine), Toronto (Obico & Vaughan): 0600 to 1400 Monday to Friday
Winnipeg, Regina, Saskatoon, Calgary, Edmonton & Vancouver: 0700 to 1500 Monday to Friday
ALTERRA POSITIONS FOR KITIMAT PROJECTS
Alterra Power Corp. has bitten the bullet in acquiring from English Bay Energy Ltd. four wind farm sites within proximity to Kitimat with the proactive hope of contracts to provide clean energy wind power to the proposed LNG projects. The four sites have a generating capacity of 1,000 megawatts – roughly the equivalent of the proposed Site C dam. The sites are located at Banks Island, Porcher Island and McCauley Island, all within 150 kms of the LNG projects.
NPA OSPREY DELIVERED
LOA 39’
Beam: 12.5’
Top speed 27 knots
Twin Volvo D-6 370 Diesel Engines
Daigle Welding & Marine has delivered the Nanaimo Port Authority’s new 39’ Patrol/Pilot Vessel “NPA Osprey”. She will also be used for fire-fighting, and water ambulance service to the Southern Gulf Islands and the Nanaimo Harbour area.
COS WELCOMES PARTICIPANTS OF THE BELL BUOY EXERCISE
The Canadian Navy’s Maritime Forces Pacific hosted an international Naval Cooperation and Guidance for Shipping exercise between May 14 and 25th spread between three locations - Vancouver, Victoria and Prince Rupert. The Chamber of Shipping had the pleasure of hosting delegates from US, UK, Chile, Argentina, and Mexico and exchanging information on commercial shipping issues in Western Canada.
Government Updates
CANADIAN COAST GUARD ORGANIZATIONAL CHANGES
As noted in last week’s newsletter, the Canadian Coast Guard (CCG) is embarking on a number of changes including some significant ones to its organizational structure. Earlier this week the Western Marine Community Coalition received an overview of these changes from Susan Steele, Regional Director, Maritime Services in the Pacific. Attached is a summary from the CCG Commissioner.
WD AND SEASPAN MARINE HOST SUCCESSFUL SHIPBUILDING SUMMIT
The Honourable Lynne Yelich, Minister of State for Western Economic Diversification, and Andrew Saxton, Member of Parliament for North Vancouver and Parliamentary Secretary to the President of the Treasury Board and for Western Economic Diversification, opened the Western Canadian Shipbuilding Summit held in Vancouver on May 24th, outlining the Government‘s continuing support for Western Canada’s shipbuilding industry.
Western Economic Diversification Canada (WD) and Seaspan Marine Corporation partnered to host this event, which allowed western Canadian SMEs to learn about the National Shipbuilding Procurement Strategy and the business opportunities available to the West, and to Canada. The summit allowed nearly 600 business representatives from the West and all across Canada to establish valuable business connections in the shipbuilding industry and to connect with Seaspan Marine Corporation and Irving Shipbuilding, the prime contractors under NSPS. To be informed of future events relating to the NSPS, register with on WD’s website.
Other News
EU DEBATES COMPROMISE ON ECA STANDARDS
Under intense pressure from national governments and industry to recognize the likely economic impacts, the European Union (EU) continues to debate its position on sulphur content in marine fuels despite Members of the European Parliament’s Environment Committee recently voting in favour of a legislative report that calls for ever more stringent regulations. A meeting of the European Council, Commission and European Parliament has agreed that the ECA sulphur limit will fall to 0.10% from 2015, in line with MARPOL Annex VI and that beyond ECAs the EU will adopt a 0.50% sulphur limit for all ships operating in EU territorial waters from 2020, irrespective of whether the IMO decides to delay the global 0.50% sulphur limit to 2025. MARPOL Annex VI calls for a cut in the global 3.50% global sulphur limit to O.5% in either 2020 or 2025 depending on a fuel availability study to be completed by 2018. The Chamber of Shipping is co-hosting with the Pacific Merchant Shipping Association a one day conference on ECA implementation in North America on June 28 in Tacoma – flyer attached.
ICS COMMENTS ON PROPOSED PANAMA CANAL TOLL HIKES
The International Chamber of Shipping has written to the Panama Canal Authority to protest the latest round of transit toll increases scheduled for July – see attached letter from Secretary General Peter Hinchliffe. Also this week Mr. Spyros Polemis, who is stepping down as chairman of the International Chamber of Shipping, called for shipowners to be given far greater respect from politicians. “An industry that enables the global economy to tick should not be dictated to”, he says. “We should be at the table and treated as equals by governments.” Mr. Polemis was particularly critical of the “if in doubt regulate it’ approach of the European Commission for excessive interference in shipping matters and in particular, for trying to force European Union member states to vote as a block at the International Maritime Organization.
CHINA AND THE PHILLIPINES - SCARBOROUGH SHOAL STAND-OFF CONTINUES
The Philippines has accused China of sending more Chinese ships to the disputed Scarborough Shoal area despite ongoing talks on the dispute being underway. A statement from the Philippine Foreign Ministry this week noted the presence of five Chinese government operated vessels as well as dozens of fishing and utility boats. The Philippines currently has two vessels on station. The Scarborough Shoal, also known as Bajo de Masinloc in the Philippines and Huangyan Island in China, has been a source of ongoing tension in the region on account of rival claims of jurisdiction. The area is 100 miles from the Philippines and 500 miles from China
China is engaged in multiple disputes with its neighbours over the South China Sea, and in recent years has grown more assertive on the issue. The Philippine government has proposed taking the dispute to the International Tribunal for the Law of the Sea (ITLOS) as provided in Part XV of the United Nations Convention on the Law of the Sea, but the Chinese government has rejected this, insisting on bilateral discussions. The shoal was named after the East India Company tea-trade ship Scarborough which was wrecked on one of its rocks with everyone perishing on board in September 1784.
COSTA CONCORDIA DETAILED SALVAGE PLAN REVEALED
The plan to remove Costa Concordia, was revealed last week in Rome. US owned Titan Salvage is working with Italian firm Micoperi to execute the intact salvage of the wreck.
The initial step will be to stabilize the vessel to prevent further slippage down the inclined sea bed on which it rests by attaching "tieback chains" from the submerged starboard side of the ship which is closest to shore to a structure to be built onshore. Once the ship’s position is stabilized, a subsea platform will be built along the port side i.e. the non-submerged side, and huge caissons (steel boxes) will be welded to the exposed side of the ship. The caissons will be filled with water to provide the ship with extra buoyancy and also provide the “turning moment” to bring it to an upright position.
Hoists will then be connected to the subsea platform, and two cranes fixed to the platform which will pull the vessel upright assisted by the water-filled caissons. As the ship will still be flooded it won't float but will rest on the platform. Once the ship is upright, caissons will also be welded to the starboard side of the hull. The caissons on both sides will then be de-ballasted and filled with air and the vessel towed to an Italian port for disposal. Once the ship is removed, the intent is to fully restore the marine habitat that has been disturbed. http://www.youtube.com/watch?v=71AuW7kHQsY
GUIDANCE FOR PMSC AGREED BY IMO MSC
Interim guidance to private maritime security companies (PMSCs) was agreed by IMO's Maritime Safety Committee (MSC), when it met at the Organization's London Headquarters for its 90th session from 16 to 25 May 2012.
The guidance covers:
- PMSC Professional Certification, including the recommendation that PMSC should seek certification with relevant national and international private maritime security service standards when these are established;
- PMSC Company requirements, including the recommendation that PMSC should establish procedures to provide maritime security services to ship owners and ship operators and comply with all relevant legal requirements;
- Management, including recommendations on selection, vetting and training of personnel for a PCASP team;
- Deployment considerations, addressing the specific aspects of PCASP deployment and the role of the PMSC in ensuring efficient and successful deployments, including communications with the ship owner or operator, and including recommendations relating to management of firearms and ammunition from embarkation to disembarkation and use of force. (The PMSC should recognize that laws governing the use of force may differ over time and according to location. The applicable national law, including any criminal laws, for an incident on a ship from which PCASP will be operating will be principally that of the flag State. It may also include the laws and regulations of coastal, port and other States.)
The MSC agreed that the International Organization for Standardization (ISO) would be best placed to develop international standards for PMSCs based on the IMO-developed guidance and with relevant IMO liaison and participation in the ISO process for standards’ development.
IMO APPROVES INCREASE IN LIMITS OF LIABILITY
The 99th session of the IMO’s Legal Committee meeting in London this week has amended the Limitation of Liability for Maritime Claims Convention(LLMC) to increase limits of liability for ship owners by 51%. The previous limits were set in 1996 and the IMO took the view that experience gained from incidents and annual inflation meant that the limits were now “inadequate to cover the costs of claims, especially those arising from incidents involving bunker fuel spills”. The convention which sets specified limits of liability for two types of claims against ship owners; claims for loss of life or personal injury, and property claims will come into effect 36 months from the date of adoption i.e. on April 19, 2015.
GREENPEACE PROTESTS BRAZIL’S PIG IRON EXPORTS
In perhaps one of the more bizarre protests against shipping that we have seen in recent times, the handy size bulk carrier Clipper Hope was recently targeted by Greenpeace at the port of Sao Luis, Brazil, in protest against the export of pig iron. The argument from Greenpeace is that pig iron is exported from Brazil and used in the production of steel to make cars thereby helping destroy the Amazon rainforest and even contributing to slave labor in the region. The protest was launched from Greenpeace’s new vessel, the Rainbow Warrior, which is in the Amazon on a two month tour with the stated intent “to highlight the importance of protecting the rainforest, to expose who is responsible for its destruction and to champion the solutions needed to achieve the end of deforestation in Brazil”.
G8 SUMMIT TAKES TIME OUT FOR CHAMPIONS LEAGUE FINAL
The Champions League final, which is regarded as the ultimate prize in club soccer was responsible for a short distraction from the latest Euro crisis at last weekend’s G8 summit in Camp David. As this picture suggests, British Prime Minister David Cameron was fairly pleased when Chelsea beat Bayern Munich 3-2 in a shootout after the teams were level at 1-1 following normal time. Canadian Foreign Minister John Baird (far right) who was speaking here in Vancouver on Monday night also seems to have appreciated the excitement of the moment. Mrs. Merkel appeared less impressed.
Market Update
Port congestion in the bulk sector this week reached a three month high at Australian, Brazilian, Indian and Chinese ports, representing close to 60 million tons of idle tonnage. Australia in particular continues to struggle with an average of 50-60 ships at anchor off West Australian ports, plus around 40 off the coasts of Queensland and New South Wales. Despite the amount of unavailable tonnage, there is as yet no sign of a summer up-lift and Supramaxes are certainly the flavor of the month over Capes and Panamaxes. The Baltic Dry Index closed down on Thursday on 1058 points, compared to 1137 points last week and 1146 points the week before.
Cape Size Panamax Supramax
Index 1457 1130 1124
One week ago 1638 1258 1104
Spot time charter $6,800/day $ 9,000/day $11,600/day
One week ago $9,000/day $10,000/day $11,500/day
On the VLOC/Capesize front, the spat between Vale and Chinese owners continues unabated with Vale denying any market prejudice against Chinese vessels in moving iron ore from Brazil to China in retaliation for its Valemax carriers being denied access to Chinese ports.
Tankers: In a small but helpful boost to tanker tonne/miles, Venezuela has agreed to double the amount of money repayable in oil that it borrows from China. Barter trading in oil suits China very nicely right now as the country seeks to wean itself off reliance of Iranian oil.
Bunkers: Although not much in evidence at the pumps here in BC, oil prices have fallen like the proverbial stone in the last couple of weeks, due in part to over-supply in the US. In Singapore, the world’s biggest bunker port, the price of 380Cst HFO fell from $723.50/ton at the beginning of May to $652/ton earlier this week but there are also significant regional variations.
Upcoming Events
GREEN MARINE ANNUAL CONFERENCE – GREEN TECH 2012
May 29 – 30 – Green Tech 2012 will be held this year in Quebec City at the Loews Hotel Le Concorde.
This will be Green Marine’s 5th edition of its annual conference on green technologies and innovation in marine transportation. Detailed information and registration forms for exhibitors and participants are available on Green Tech 2012 website: www.green-marine.org/annual-conference.
PACIFIC PILOTAGE AUTHORITY ANNUAL GENERAL MEETING
May 31 – The PPA will hold its Annual General Meeting on Thursday, May 31st at 3pm at Simon Fraser University, Harbour Centre Room 7000, 515 West Hastings Street, Vancouver. The agenda includes the 2011 financial report, an operational overview and expectations for 2012 and beyond. To RSVP, please email Diane Street at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or phone 604-666-8688 by Monday, May 21st.
BC CHAMBER OF COMMERCE SUMMIT
June 4 – 5 – The BC Chamber of Commerce is hosting a Transportation Summit on “Shipping and Exports to the Asia Pacific”. To view details and to register, visit www.bcchambersummit.ca.
BUSINESS OF SHIPPING COURSE – NANAIMO, BC
June 7 – The Chamber of Shipping of BC and the Institute of Chartered Shipbrokers will hold its next full day course in Nanaimo. Details of the course content and registration form are attached.
VANCOUVER GRAIN EXCHANGE GOLF TOURNAMENT
June 15 - This year’s golf tournament will be held at Quilchena Golf & Country Club on June 15th. Proceeds from the 50/50 draw will benefit Wigs for Kids. For more information contact Caroline Simister at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
ARCTIC SHIPPING UPDATE
June 21 – A half-day morning session is planned to discuss developments in Arctic Shipping with the Canadian Coast Guard. Further details to follow.
PREPARING FOR THE ECA – TACOMA, WA
June 28 - The Chamber of Shipping in conjunction with the Pacific Merchant Shipping Association will be holding a US-Canada full day session on the implementation of the Emissions Control Area on Thursday, June 28th from 0800 to 1700 hrs in the Hotel Murano in Tacoma, WA. Registration is $95 and can be done on line at: http://www.regonline.com/PreparingfortheECA2012.
MARITIME SECURITY CHALLENGES (MSC) 2012
Oct 1–3 – The 5th annual conference presented by Maritime Forces Pacific and Royal Roads University will take place in Victoria, BC and will address the illegal movement of people and goods at sea, security issues in the Gulf of Guinea, maritime applications of unmanned and autonomous vehicles, and shipbuilding and future naval requirements. To register or for more information on the conference or sponsorship opportunities visit: http://mscconference.ca/
May 29 PMV Annual General Meeting @ 15:00
May 29-30 Green Marine Annual Conference – Green Tech, Quebec City
May 30 PACMAR / NANS Meeting @ 10:30
May 30 Plimsoll Club Board of Directors Meeting @ 12:00
May 31 ICMA Organizers Meeting @ 12:00
May 31 Pacific Pilotage Authority Annual General Meeting @ 15:00
Jun 5 BC Chamber of Commerce Transportation Summit
Jun 5 CIABC Board of Directors Meeting and Annual General Meeting
Jun 6 COS Board of Directors Meeting @ 11:30
Jun 7 Business of Shipping Course (full day) Vancouver Island Convention Centre, Nanaimo
Jun 12 Canadian Wheat Board – CPCA Meeting @ 10:00
Jun 12 COS Ship & Port Operations Committee Meeting @ 12:00
Jun 13 COS Liner Committee Meeting @ 10:00 hrs.
Jun 15 Vancouver Grain Exchange Golf Tournament
Jun 18 COS Island Committee Meeting @ 13:30
Jun 19 International Sailors’ Society Canada Annual General Meeting @ 12:00
Jun 19 COS Owners Committee Meeting @ 12:00
Jun 21 Arctic Shipping Session with CCG @ 08:30
Jun 22 COS Navigation & Pilotage Committee Meeting @ 10:00
Ship of the Week
MV Aiviq
In late March this year, Shell accepted delivery of the M/V Aiviq (pronounced ‘eye-vik’), a 360-foot ice class anchor handler built by Edison Chouest Offshore in Larose, Louisiana. Aiviq was constructed to specifically support Shell’s 2012 shallow-water drilling program off the coast of Alaska in the Beaufort and Chukchi Seas and is considered to be one of the most technically advanced polar-class vessels in the world, not to mention the first of its kind to be built in the United States.
Built 2012 by Edison Chouest Offshore, Louisiana
LOA 360 ft
Beam 80 ft
Draft 28ft
Classification: American Bureau of Shipping A3 ice-class
Speed: 15 knots in open water, 5 knots in ice
Accommodation: for 64 crew and technical staff
Main engines: four CAT C280-12 diesels of 5,444 BHP each
Aiviq was christened by a 12 year-old Nuiqsut student who won a naming contest hosted by Shell and her local school district asking students to submit their name of choice for the new vessel in the form of an essay. Incredibly, the vessel which is capable of breaking ice one meter thick at a speed of 5 knots cost $200 million to build which perhaps explains why not too many commercial vessels are built in the U.S. these days. Shell has tentative approval to drill four exploratory wells starting this July. The vessel was built to American Bureau of Shipping A3 class.
Follow us on Twitter www.twitter.com/COSBCTweets or visit the Chamber of Shipping website at www.cosbc.ca.
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