COS Weekly News - 8 June 2012
Friday, 08 June 2012 10:07
COS News – Week ending 08 June 2012
Issue No. 212
CP RAIL UPDATE
CP Rail has reported that it is almost back to normal production levels following it return to operation and severe thunderstorms through Southern Alberta and the BC Interior this week that resulted in high water and deposited debris at various locations impacting CP’s mainline between Lake Louise and Golden. Some shipments travelling through the area may experience delays up to 24 hours.
EDC SURVEY SEES STRONG REBOUND IN EXPORTER CONFIDENCE
Canadian exporter confidence has bounced back from one of the lowest points on record last fall, according to a survey by Export Development Canada (EDC) released today.
GREEN MARINE HONOURED AT THE AQTR EXCELLENCE IN TRANSPORTATION AWARDS GALA
Green Marine received the Association québécoise du transport et des routes’ Environment Award at the AQTR’s Excellence in Transportation Awards Gala (June 7, Le Capitole de Québec). The Environment Award recognizes an original, coherent, reproducible environmental project, which uses effective measuring tools to reduce transportation impacts on the environment thereby promoting sustainable development.
FMC COMMISSIONER DYE COMMENTS ON THE INQUIRY INTO CANADIAN PORTS
Commissioner Rebecca F. Dye commented on the inquiry at a meeting of the Canadian American Business Council yesterday and did indicate when the commission would complete its investigation and deliver its findings to US Congress.
The Federal Maritime Commission inquiry was initiated last fall following a letter from US senators Patty Murray and Maria Cantwell that pointed out that the US Harbor Maintenance Tax is not collected at border crossings when cargo enters the country on trains from Canada after arriving in North America via Canadian ports. Their complaints prompted some US lawmakers to mull over a US$140-per-container levy on cargo entering the United States after coming through BC ports.
US DEPARTMENT OF HOMELAND SECURITY NEW NORTHERN BORDER STRATEGY
The Department of Homeland Security (DHS) Secretary Janet Napolitano announced the release of the DHS Northern Border Strategy (NBS). The NBS is the first unified DHS strategy to guide the Department’s policies and operations along the U.S.-Canada border - providing a framework for enhancing security and resiliency while expediting lawful travel and trade throughout the Northern border region.
The DHS NBS is the first Department-wide strategy to guide policy and operations at the Northern border. TheNBS identifies three key goals for the Northern border:
- Deterring and preventing terrorism and smuggling, trafficking, and illegal immigration;
- Safeguarding and encouraging the efficient flow of lawful trade, travel, and immigration; and
- Ensuring community resiliency before, during, and after terrorist attacks and other disasters.
The Department will enhance coordination of U.S.-Canada joint interdictions and investigations, deploy technologies to aid joint security efforts along the border, and continue to update infrastructure to facilitate travel and trade.
Government Updates
WORLD OCEANS DAY – JUNE 8TH
On the occasion of World Oceans Day, the Honourable Keith Ashfield, Minister of Fisheries and Oceans, highlights in his statement
“As we celebrate World Oceans Day on June 8, it is an opportunity for us all to reflect on the importance of oceans to life on the planet. Canada’s oceans are central to the way of life and livelihoods of many communities, and are valued as an essential resource by all Canadians. World Oceans Day reminds us of the role that we all play in conserving and protecting our marine environment. It is a celebration that was first held in Canada two decades ago and has since been declared an international event by the United Nations.
The three oceans that surround Canada are national treasures and a life-giving resource. They supply us with fish, seafood, oxygen and recreation. They provide a natural highway for shipping and transportation, and are the source for both oil and gas and renewable energy.”
NATIONAL ACTION PLAN TO COMBAT HUMAN TRAFFICKING
The Government of Canada has launched its National Action Plan to Combat Human Trafficking. The Plan, with participation from 18 federal departments, is a comprehensive blueprint to guide the Government of Canada’s fight against the serious crime of human trafficking.
The National Action Plan will:
- Launch Canada’s first integrated law enforcement team dedicated to combating human trafficking.
- Increase front-line training to identify and respond to human trafficking and enhance prevention in vulnerable communities.
- Provide more support for victims of this crime, both Canadians and newcomers.
- Strengthen coordination with domestic and international partners who contribute to Canada’s efforts to combat human trafficking.
These new measures total $25 million over four years build on and strengthen Canada’s significant work to date to prevent, detect and prosecute human trafficking, such as targeted training for law enforcement officials and front-line service providers, and enhanced public awareness measures.
This announcement follows the arrest of a Toronto man in the MV Sun Sea case. RCMP has also laid charges against two individuals who are not believed to be in Canada at this time, and Canada-wide warrants have been issued for their arrest. The MV Sun Sea was the migrant vessel that brought 492 irregular migrants to Canada in August of 2010 as part of a migrant smuggling event. With the latest charges, a total of six men have now been charged for their involvement, three of whom are currently in Canadian police custody and one of whom is facing extradition from France.
CANADIAN NAVY TO PARTICIPATE IN RIM OF THE PACIFIC EXERCISE
Over 1,400 Canadian sailors, soldiers, and airmen and airwomen will participate in the Rim of the Pacific (RIMPAC) 2012 combined and joint exercise taking place near the Hawaiian Islands from June 29 to August 3. RIMPAC is the world’s largest multi-national exercise and is designed to prepare military forces from Pacific Rim nations to work together in missions ranging from providing humanitarian aid to full-combat operations.
Rear-Admiral Ron Lloyd will be the Deputy Commander Combined Task Force; Brigadier-General Michael Hood will be the Combined Forces Air Component Commander; and Commodore Peter Ellis will serve as the Commander Combined Task Force 176, an amphibious Task Group led by the United States Ship Essex.
HMCS Victoria will be the first Victoria Class submarine to participate in the exercise. Other Royal Canadian Navy units include HMCS Algonquin, Ottawa, Brandon, Saskatoon and Yellowknife. Two teams from Fleet Diving Unit (Pacific), including a dive team and the Explosive Ordnance Disposal Section, are also participating. More than 150 soldiers from the Canadian Army’s 2nd Battalion Princess Patricia’s Canadian Light Infantry will work with the United States Marine Corps and other coalition units in an exercise to practice the evacuation of non-combatants.
In addition to extensive CC-177 Globemaster and CC-150 Polaris Airlift support, the Royal Canadian Air Force will deploy four CP-140 Aurora long-range patrol aircraft; seven CF-188 Hornet fighter jets; a CC-150 Air to Air Refueller; a CC-130HT Air to Air Refueller; and two CH-124 Sea Kings. The Royal Canadian Air Force will further deploy key air expertise to form the nucleus of the RIMPAC Combined Air Operations Centre.
The Canadian Forces will also be providing over 100 personnel to joint positions ranging from the leadership level to logistical support within the RIMPAC 2012 exercise.
RIMPAC began as an annual exercise in 1971, and since 1974 has been scheduled every second year. Canada has participated in every exercise since its inception. This year’s exercise will involve more than 42 ships, six submarines, more than 200 aircraft, as well as 25,000 personnel from 22 participating nations.
Other News
HEBRON OIL FIELD PROJECT APPROVED
The Canada-Newfoundland and Labrador Offshore Petroleum Board last week approved plans by an Exxon Mobil Corp led group to develop the Hebron oil field off Newfoundland. The decision means that Exxon (36% stake) and its partners can proceed with development of the estimated 700 million barrel field, which will be the province's fourth offshore oil project. The project cost is estimated to range between C$5 billion and C$7 billion. ExxonMobil took control of the project from Chevron in October 2008.
The heavy oil Hebron field which lies under 300 feet of water, 217 miles southeast of St. John's was first discovered in 1981 but development was delayed by low oil prices and disagreement over royalty rates with the provincial government. The facility will produce up to 150,000 barrels per day. The other joint venture partners are Chevron Corp, with a 26.7% interest; Suncor Energy Inc, with 22.7%; Statoil ASA, with 9.7%; and the provincially owned Energy Corporation of Newfoundland and Labrador, which has a 4.9% stake.
SNC-LAVALIN PULLS OUT OF DAVIE YARD VENTURE
As reported last week SNC-Lavalin Group has decided to withdraw from the Davie Shipyard joint venture with Daewoo Shipbuilding & Marine Engineering Ltd. and the Upper Lakes Group that came together last year in an effort to secure a share in the government’s National Shipbuilding and Procurement Strategy. Cecon ASA, a Norwegian owner of pipe-laying ships, had previously reached an agreement to acquire the rights to a US$200million loan from Export Development Canada that allows the construction of three vessels that the company originally ordered from Davie in 2009 and is still waiting for. The yard also has an order to build two dual fuel hybrid ferries for the Quebec Government and a resumption of work had been expected to begin this month.
AIR RESOURCES BOARD WINS LATEST CHALLENGE TO LOW SULPHUR FUEL REGS
The California Air Resources Board (ARB) has gained the support of the US Solicitor General in its fight to regulate the sulphur content of the bunker fuel used within 24 nautical miles of the Californian coast. For its part, the Pacific Merchant Shipping Association (PMSA) had has long argued that the ARB was exceeding its powers but has not prevailed in convincing the legal establishment. In 2009, ARB adopted the regulations requiring ocean going 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 of California's coastline.
Meanwhile it has been revealed that CO2 emission control areas are being considered at inter-governmental level as an alternative strategy should international climate-change talks fail to secure an agreement. In effect , CO2 control areas could be introduced in a similar manner to the current round of Emissions Control Areas (ECAs) namely those currently in effect in the Baltic and North Seas, along with the North American Emissions Control Area which is due to come into effect this year. Driven by the European Union, the new CECAs might even be implemented outside of an IMO framework which is sure to motivate both the IMO and the UNFCCC to reach a credible agreement on reducing CO2 emissions or run the risk of being left behind.
SINGAPORE RECOGNIZED AS “BEST SEAPORT IN ASIA AND BEST GREEN SERVICE PROVIDER”
The Maritime and Port Authority of Singapore (MPA) was this week recognized as the “Best Seaport in Asia” and “Best Green Service Provider – Seaport” at the 26th Asian Freight and Supply Chain Awards (AFSCA) in Shanghai. The award is judged on a range of criteria, including cost competitiveness, container handling fees and provision of container related infrastructure. The “Best Green Service Provider – Seaport” award is judged on efforts to promote environmentally friendly shipping. In 2011 MPA launched a S$100 million Maritime Singapore Green Initiative consisting of the Green Ship Program, Green Port Program and Green Technology Program. In 2011, Singapore handled 29.9 million TEU and 530.5 million tons of cargo, not forgetting the supplying of 43 million tons of bunkers.
MANDATORY PRE-SHIPMENT SCANNING OF IMPORT CONTAINERS REMAINS ON U.S. AGENDA
Despite intense lobbying by all sectors of industry and many foreign governments, the US House of Representatives voted this week to pass the “Smart Port Security Act” which retains the July 2014 deadline for 100% scanning of U.S. import containers at port of loading. However, given the well documented difficulties of imposing this requirement and the likelihood of widespread reciprocity, the target date for enforcement, which has already been rolled back twice, seems likely to be moved again. The price tag for this initiative has been estimated at $16 billion.
CHINA TO CONSTRUCT FIRST FLOATING LNG LIQUEFACTION PLANT
Shanghai’s Wison Offshore & Marine Ltd. last week announced the award of a contract from the Exmar Group for the engineering, construction, installation and commissioning (EPCIC) of the world’s first Floating LNG Liquefaction, Regasification and Storage Unit (FLRSU). The facility will be used by Exmar under a “Build, Own and Operate” contract with Pacific Rubiales Energy Corporation off the Caribbean coast of Colombia. The FLRSU consists of a non-propelled barge equipped to convert natural gas into approximately 500,000 tons of LNG per annum. The facility will be moored alongside and supplied with gas from the La Creciente field located in Colombia’s Low Magdalenda Valley Basin.
Pacific Rubiales is a Canadian-based company and producer of natural gas and heavy crude oil. The company owns 100% of Meta Petroleum Corp., a Colombian oil operator which operates the Rubiales, Piriri and Quifa oil fields in the Llanos Basin in association with Ecopetrol, S.A., the Colombian national oil company, and 100 percent of Pacific Stratus Energy Corp. which operates the La Creciente natural gas field. The Company is focused on identifying opportunities primarily within the eastern Llanos Basin of Colombia as well as in other areas in Colombia and northern Peru. Exmar, headquartered in Antwerp Belgium, is a diversified and independent shipping group serving the international gas and oil industry.
VIGOR MARINE COMPLETES CONVERSION OF BARGE KLAMATH
Vigor Marine, a Vigor Industrial subsidiary, recently completed work on Barge Klamath, converting the vessel from a petroleum tank barge to an OSVR measuring 350’ x 76’ x 22’. The barge is owned by Crowley and leased to Shell as part of its comprehensive Alaskan oil spill response fleet in the Beaufort and Chuckchi seas.
“Vigor’s extensive expertise in ice classing vessels for arctic waters, combined with the geographic proximity of their facilities, has made them a strong partner for Shell’s planned offshore operations in Alaska,” said Curtis Smith, spokesman for Shell Alaska.
The Klamath was a petroleum tank barge when it arrived at Vigor’s Seattle yard. Vigor Marine teams fabricated and installed a 30 foot high section of one inch plate steel around the rake of the vessel to meet stringent ice class requirements. In the highly unlikely event of an oil spill, Klamath will play a key role in skimming and booming a spill.
“It’s a pleasure to work with both Crowley and Shell on the Alaskan fleet,” said Vigor Marine Project Manager Gordon Newell. “Both companies have a deep commitment to protecting the environment and operating quality vessels that will help ensure a safe exploratory drilling program. We are proud to be a part of that effort on this project and others currently underway at Vigor.”
Vigor Industrial LLC is a leader in the shipbuilding and ship repair industry with seven leading facilities in Oregon, Washington and Alaska. Vigor Industrial and its subsidiaries provide quality vessels built to last to satisfied customers across the US and around the world.
US NAVY TO MOVE MAJORITY OF SHIPS TO PACIFIC REGION BY 2020
Following President Obama’s declaration last November while in Australia that the Asia-Pacific region is a top priority, the US last week announced its intent to have around 60% of its naval fleet based in the Asia-Pacific region by 2020. The announcement came in a week when Huntington Ingalls was awarded a $2.38 billion fixed-price-incentive contract for the design and construction of the multipurpose amphibious assault ship new amphibious assault flagship which will be named as USS Tripoli.
artist’s impression USS Tripoli
Scheduled for delivery in June 2013, USS Tripoli will be 844 feet long, 106 feet wide, and carry a displacement of 44,971 long tons. A pair of gas turbine engines will provide roughly 70,000 total shaft horsepower enabling the ship to achieve speeds “in excess of 20 knots”. Similar to its predecessors built by the same yard, the ship will be able to operate as the flagship for an Expeditionary Strike Group. Tripoli’s eventual sister ship will be a new USS America.
ENTERPRISE MAKES FINAL VOYAGE
The Space Shuttle Enterprise made its final journey last weekend from JFK International Airport, New York, to its new home at the USS Intrepid Sea, Air & Space Museum. A prototype, Enterprise was completed in 1976, and then used for atmospheric test flights the following year. It never flew in space, unlike the other five members of the fleet.
ROYAL PAGEANT SETS NEW RECORD
The Guinness World Records has declared last weekend’s Thames Pageant to have set a new world record for the largest ever parade of boats. More than one million rain soaked people watched 1,000-boats weave their way along the Thames as the Queen's barge “Spirit of Chartwell” sailed among a flotilla of tugs, steamers, pleasure cruisers, dragon boats and kayaks. This most spectacular pageant on the River Thames in 350 years started at Albert Bridge with the ringing of Jubilee bells and ended three hours later as the last vessel completed the seven-mile route to Tower Bridge.
Market Update
The depressing weather in the UK for the Queen’s jubilee celebrations last weekend was exceeded only by the depression in the bulk markets this week. The Baltic Dry Index closed on Thursday on a lowly 872 points, compared to 923 points last week and 1058 points the week before. Despite a dip in oil prices to around $84/barrel and HFO bunker prices dipping under $600/ton for the first time in a while, these are desperate times for Capes and Panamaxes as charterers pile on the pressure whilst they can and near record iron ore stockpiles in China tell their own story.
Cape Size Panamax Supramax
Index 1232 882 1001
One week ago 1319 923 1034
Spot time charter $4,400/day $7,000/day $10,500/day
One week ago $5,000/day $7,300/day $10,800/day
The biennial Posidonia Shipping Conference in Athens this week was reported to be a fair bit smaller than in previous years – likely reflecting the overall much reduced state of the country’s tourist industry and the need for ship owners to conserve every dime right now.
Upcoming Events
WORLD OCEANS DAY FESTIVAL - JUNE 8th TO 10th
The Maritime Museum of BC and Ocean Networks Canada will partner with businesses and community organizations within the Victoria Inner Harbour and surrounding areas for their first annual World Oceans Day Festival, June 8th -10th. This event is free and will be open to the public June 9th and 10th from 11am-5pm outside in beautiful Bastion Square and inside at the Maritime Museum of BC. Visit the event website for more information, or call 250-385-4222, ext. 112.
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. Information flyer attached.
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.
ECA UPDATE SESSION
July 5th - Mark your calendars as the Chamber of Shipping will host its second information session on the implementation of the North American Emissions Control Area on Thursday, July 5th starting at 09:00 at the Pan Pacific Hotel, Vancouver, BC. Further details on the event will be circulated in due course.
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/
Jun 11 COS Liner Committee Meeting @ 12:00 hrs.
Jun 12 Canadian Wheat Board – CPCA Meeting @ 10:00
Jun 12 COS Ship & Port Operations Committee Meeting @ 12:00
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 20 Vancouver Maritime Arbitrators Association Annual General Meeting @ 16:30
Jun 21 Arctic Shipping Session with Canadian Coast Guard @ 08:30
Jun 22 COS Navigation & Pilotage Committee Meeting @ 10:00
Jun 25 Day of the Seafarer
Jun 27 WMC PACMAR/NANS Meeting
Jun 28 COS / PMSA ECA Conference, Tacoma, WA
Jun 28 Institute of Chartered Shipbrokers Board of Directors Meeting @ 15:00
Jun 28 Institute of Chartered Shipbrokers Annual General Meeting @ 16:00
Jul 1 Canada Day
Jul 2 Office Closed
Jul 5 COS ECA Update Session @ 09:00
Ships of the Week
A day of nautical history was recorded on June 5 when all three Cunard liners, Queen Mary 2, Queen Elizabeth and Queen Victoria sailed into Southampton UK and later departed in convoy under a spectacular fireworks display. The event was the company’s tribute to HM Queen Elizabeth at the end of four days of festivities to mark her Diamond Jubilee.
Queen Mary 2, Queen Victoria, Queen Elizabeth
Built by STX Europe Built by Built by
Chantiers de l'Atlantique, Saint-Nazaire Fincantieri Marghera shipyard, Italy Fincantieri Monfalcone Shipyard, Italy
Maiden voyage January 2004, GRT 148,528 Maiden voyage December 2007 Maiden voyage October 2010
2620 passengers 2014 passengers 2092 passengers
Speed 30 knots Speed 24 knots 24 knots
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