COS Weekly News - 22 June 2012
Monday, 25 June 2012 11:31
COS News – Week ending 22 June 2012
Issue No. 214
DAY OF THE SEAFARER
June 25 - The United Nations will observe the Day of the Seafarer on Monday, June 25th this year. Very few Canadians realize that the work of seafarers touches the lives of each and every one of us. With 90% of our global trade transported by sea at some stage during the journey from its place of origin to its final destination, it is important to recognize that this trade cannot happen without the work of our seafarers. For Canada, seafarers help deliver 460 million tonnes of cargo valued at $162 billion annually. For more information view the International Sailors’ Society Canada’s press release.
LOW LEVEL ROAD PROJECT APPROVED FOR CONTRUCTION IN PMV
Port Metro Vancouver has confirmed that $100 million project that will provide transportation improvements to the Low Level Road by spring 2014 was formally approved by City of North Vancouver Council last night. The Low Level Road Project is designed to address long-standing community and safety and traffic challenges, while also enhancing rail and port operations.
WEST OF ENGLAND P&I CLUB ISSUES ECA REMINDER
The West of England P&I Club has issued a reminder to members related to ECA enforcement in North American coastal waters effective August 1. The Chamber in the meantime is co-sponsoring a full day ECA workshop with the Pacific Merchant Shipping Association in Tacoma on June 28 to be followed by an ECA information session in Vancouver on the morning of July 12. See attached flyers.
CANADIAN COAST GUARD LAUCHES COUNTER SUIT OVER ARCTIC GROUNDING
The Canadian Coast Guard (CCG) has launched a counter suit against the U.S. owners of the pocket cruise ship Clipper Adventurer which grounded in the Arctic in 2010 breaching 13 tanks. A claim of $500,000 has been lodged in compensation for the costs incurred to ‘Canada”. The suit is in response to a claim by the vessel’s owners for $15m wherein it is claimed that the vessel was not alerted to the dangers of an uncharted rock shelf. CCG ice-breaker Amundsen rescued 128 passengers from the stricken vessel. The counter suit also claims that the rock shelf was a known hazard to mariners since September 2007.
Yesterday’s workshop on Arctic navigation with Captain Duke Snider, Regional Director Fleet Pacific with the Canadian Coastguard, Pacific, proved to be both enjoyable and informative for attendees. Captain Snider was recently appointed a Vice President of the Nautical Institute, the first Canadian to have this honour. He is also Chair of the Institute’s Ice Navigation Working Group which in April this year published his book entitled Polar Ship Operations – A practical Guide which is available from This e-mail address is being protected from spambots. You need JavaScript enabled to view it
CSL ORDERS TWO NEW BULKERS
Canada Steamship Lines ("CSL"), a division of the CSL Group, announced an order for two new gearless bulk vessels, bringing to six the number of "Trillium Class" ships to be built as part of its major fleet expansion program for the Great Lakes market. The two new vessels will be built at the Yangfan Shipyard in Zhejiang Province, China, and will enter service in the spring of 2014. CSL also has options for the construction of two additional gearless bulk vessels for delivery during the 2014 shipping season.
The 36,100-DWT bulkers will be Seaway max size and feature IMO Tier II compliant main engines with the latest environmental and safety systems.
NEW GRAIN HANDLING AGREEMENTS SIGNED
The Canadian Wheat Board (CWB) has established six new grain handling agreements with Western Canadian industry partners. Agreements signed with Viterra, Mission Terminal, West Central Road and Rail, Delmar Commodities, Linear Grain and Agro Source complement earlier ones signed with Cargill and Southwest Terminal and increase the CWB’s footprint across the west.
CWB programs are now available for farmer sign-up which gives farmers the unique new option of signing a CWB contract now and choosing their delivery points later with participating grain-handling companies.
Government Updates
CBSA ISSUES CN-12-019 CWB NO LONGER ISSUING EXPORT PERMITS
Effective August 1, 2012, the Canadian Wheat Board (CWB) will no longer issue export licenses for shipments of wheat, durum, and barley (including products) leaving Canada. This change in policy is a result of legislation passed by the Federal Government in December of 2011 that changed significantly the mandate of the CWB. With the passage of the Canadian Wheat Board (Interim Operations) Act, all types of export licenses currently managed by the CWB, including special licenses issued on an annual basis and individual licenses issued on an ad hoc basis will no longer be issued by the CWB.
For the current crop year (August 1, 2011 to July 31, 2012) individual export licenses will be issued by the CWB up to and including July 31, 2012. Exporters will need to apply through the CWB for an export license until that date. Also note that all special licenses issued by the CWB on an annual basis will automatically expire on July 31, 2012.
REGULATIONS AMENDING THE PACIFIC PILOTAGE TARIFF REGULATIONS
Published in Part I of the Canada Gazette - June 23, 2012 are proposed regulatory amendments which are intended to allow the Pacific Pilotage Authority (the Authority), a Crown corporation listed in Schedule III to the Financial Administration Act, to operate on a self-sustaining financial basis. Due to increased costs in 2012 and 2013 resulting from long-term contracts and collective agreements and general inflationary pressures, the Authority needs to amend the Pacific Pilotage Tariff Regulations (the Regulations) to ensure the revenue it receives from pilotage tariffs is sufficient to cover its costs of providing the pilotage services for its clients.
The following amendments to the Regulations are proposed:
- increase by 2.9% its general tariff for pilotage units and hours on October 1, 2012, and April 1, 2013;
- increase by 2.5% its general tariff for transportation charges on October 1, 2012, and April 1, 2013;
- increase by 1.5% its general tariff for pilot boat and helicopter charges on October 1, 2012, and 2.5% at April 1, 2013;
- cancel the $180 charge per assignment covering Launch Replacement Fees on October 1, 2012;
- cancel the $20 charge per assignment covering Portable Pilotage Units on October 1, 2012; and initiate a fuel charge per assignment for the Pine Island launch station on October 1, 2012.
International News
MANDATORY CONTAINER WEIGHING A STEP CLOSER
A coalition of ship owners, port operators and labour unions has renewed the call for all containers to be weighed prior to loading on a vessel. In support of an IMO proposal to force the issue, Denmark, the Netherlands, the United States, BIMCO, the International Association of Ports and Harbours (IAPH), the International Chamber of Shipping (ICS), the International Transport Workers’ Federation (ITF) and the World Shipping Council (WSC) have co-sponsored a resolution to IMO’s sub-committee on Dangerous Goods, Solid Cargoes and Containers (DSC) to consider the proposal at its next meeting in September. The initiative follows a number of high-profile incidents involving containers that were either over or below the weight declared by the shipper, and failed attempts to find a non-mandatory solution to the problem.
Still with containers, a federal judge was scheduled to hear arguments today on a National Labor Relations Board request for a court order prohibiting the ILWU from slowing operations at the Port of Portland, Oregon. Two ships have reportedly diverted to Oakland to avoid delays blamed on an ILWU dispute with an electricians’ union over a handful of jobs involving refrigerated containers at Terminal 6. Terminal operator ICTSI is arguing that their lease’s job guarantee trumps the ILWU-PMA coast wide contract. An ILWU-PMA coast arbitrator issued a ruling this week directing the ILWU to “cease and desist from illegal work stoppages”.
BUNKERING IN SINGAPORE
Please note the attachments to this week’s newsletter related to accusations of deliberate bunker “frothing” in Singapore in order to distort measurement of delivered quantities. The accusations are strongly denied by the Singapore Shipping Association.
US PORT INFRASTRUCTURE INVESTMENT GROWING
Committed investment in U.S. port infrastructure over the next five years is being estimated at around $46bn including $27.6bn from the private sector. On a less positive note, there is concern that state and federal investment in intermodal infrastructure and dredging will be a constraint on efficiency. The single major prospective investment is $3bn-$4bn by APM Terminals in the port of Virginia, should it be successful in securing a long term concession. In a telling statistic, the American Association of Port Authorities has underlined that in 2005 the World Economic Forum ranked the US number one in infrastructure economic competitiveness compared to 16th today. It is calculated that the U.S. spends 1.7% of GDP on transportation infrastructure while Canada spends 4% and China spends 9%.
Obviously “Ports America” which operates in 42 U.S. ports recognizes a deal when one is in the offing having just invested $45m to secure a 10% stake in Yang Ming’s Kaohsiung container terminal. Also APM Terminals has secured a significant contract with the Ningbo Port Group to invest Yuan4.3bn ($673.3 million) for a 25% stake in a container terminal expansion project. Ningbo is the world’s sixth largest container port with annual throughput of around 15 million TEU.
LNG MARKET TIGHTENS AGAIN
Despite a decision to re-start two of the country’s nuclear reactors, demand for LNG in Japan continues to increase just as some 9% of global capacity is currently offline for maintenance. Japanese LNG demand accounted for 25% of total global LNG demand in the first five months of the year. Indonesia and Malaysia are also joining the group of LNG importing countries, or at least in the case of Indonesia, keeping domestic LNG off the global market.
The 126,300 cbm LNG Aries was in the news this week when she was attacked by Somali prates firing rifles off the coast of Oman in a determined but ultimately unsuccessful hijack attempt despite there being no armed guards onboard.
UK INTERCEPTS SHIP CARRYING HELICOPTERS TO SYRIA
The UK this week intercepted a vessel allegedly carrying Russian-made attack helicopters en-route to Syria. MV Alaed had its insurance withdrawn by The Standard Club in London while it was about 50 miles off Scotland's north coast.
M.V.Alaed
While Russia has acknowledged shipments of helicopters to Syria claiming that they are being returned to the country following routine maintenance, the owners of the Alaed have denied any involvement in arms shipments. The vessel is being tracked as she heads back to Murmansk where it is reported she will be reflagged from Curacao to Russia and resume her voyage to Syria.
ANOTHER HUMAN TRAGEDY OFF CHRISTMAS ISLAND
In the latest incident involving attempts by Afghan asylum seekers to reach Australia, a boat containing about 200 people over-turned this week in rough seas off the coast of Indonesia whilst apparently headed to the Australian territory of Christmas Island. Following detection by an Australian surveillance plane, rescue ships have so far picked up 109 survivors but many are believed to have perished. Australia operates a large immigration detention centre on Christmas Island. "This accident again underscores the dangerous nature of these hazardous journeys, and the desperate and dangerous measures people will resort to when they are fleeing persecution in their home countries," the UN refugee agency said in a statement.
survivors being rescued by Australian naval craft and ferried to shore
GREECE RE-ESTABLISHES MINISTRY OF MERCHANT MARINE
Such is the influence of Greek ship owners on the country’s political establishment, the country’s new coalition government has confirmed intent to re-establish a stand-alone Ministry of Merchant Marine with immediate effect. The Ministry was abolished in 2009 and the decision appears to be designed to encourage owners to use the vast resources of the shipping community to help in national economic recovery.
TWIC RENEWALS JUST BECAME CHEAPER
The U.S. Federal Register has reported this week that the Transportation Security Administration will allow Transportation Worker Identification Credential (TWIC) cards which are set to expire before the end of 2014 to be extended for three years on payment of $60. Under current provisions, TWIC holders would have had to renew their cards for $130 and provide new biometric information even though the standards for the biometric readers needed to read the TWICs are not yet in place.
TEEKAY TOUTS CONVERSION OF SHUTTLE TANKERS TO WIND FARM INSTALLATION UNITS
Teekay hosted the company’s annual Investors Day in New York City earlier this week by including an announcement of a study to convert some of its 40 DP-equipped fleet of shuttle tankers into wind farm installation vessels. The company believes that the in-house experience in adjacent offshore markets, including harsh weather environments, places the company in a strong position to take advantage of opportunities in this sector and not least extend the operational lifespan of its shuttle fleet.
MAERSK LINE VIDEO OF 1960’S
A little nostalgia from another (and much missed) era to finish the week – see video.
Market Update
With some 245 Capesizes and 355 Panamaxes scheduled for delivery in the second half of 2012, the current dismal state of the market doesn’t have much to look forward to for a good while to come. The Baltic Dry Index closed slightly up at close of business on Thursday on 978 points, compared to 912 points last week and 872 points the week before.
Cape Size Panamax Supramax
Index 1152 1073 1167
One week ago 1162 1046 1038
Spot time charter $3,600/day $8,500/day $12,200/day
One week ago $3,700/day $8,300/day $10,600/day
Tankers: In modest but unplanned support for the tanker market, Iran is using around 17 VLCCs and 7 Suezmaxes to store around 42 million barrels of unsold crude oil, with an estimated 25m barrels also being held in onshore storage.
Containers: The idle container fleet now stands at only 264 ships with an aggregate capacity of 383,000 TEU or 2.4% of the active trading fleet. This compares to 711,000 TEU recorded as idle only four months ago.
Upcoming Events
DAY OF THE SEAFARER
June 25 - The United Nations will observe the Day of the Seafarer on Monday, June 25th this year. Very few Canadians realize that the work of seafarers touches the lives of each and every one of us. With 90% of our global trade transported by sea at some stage during the journey from its place of origin to its final destination, it is important to recognize that this trade cannot happen without the work of our seafarers. For Canada, seafarers help deliver 460 million tonnes of cargo valued at $162 billion annually. For more information view the International Sailors’ Society Canada’s press release.
INSTITUTE OF CHARTERED SHIPBROKERS AGM & PUB NIGHT
June 27 – ICS Canada will hold its Annual General Meeting on June 27th at 4:30 pm at the offices of Teekay Shipping and immediately following the AGM is the ICC Spring Pub Night from 5:30 pm at Mahoney & Sons Public House located at 1055 Canada Place. To RSVP, email This e-mail address is being protected from spambots. You need JavaScript enabled to view it no later than June 20th.
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. The revised agenda is attached.
ECA UPDATE SESSION
July 12th – 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 12th 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 25 Day of the Seafarer
Jun 27 WMC PACMAR/NANS Meeting
Jun 27 ICS Canada Annual General Meeting at 16:30
Jun 27 ICS Canada Pub Night @ 17:30
Jun 28 COS / PMSA ECA Conference, Tacoma, WA
Jul 1 Canada Day
Jul 2 Office Closed
Jul 12 COS ECA Update Session @ 09:00
Ship of the Week
Furness Australia
A recent visitor to Vancouver was Furness Australia, a standard Supramax bulk carrier and a ship carrying a famous name in the context of Canada’s shipping connections with Europe, both east coast and west, over many decades.
Built 2001 by Tsuneushi, Japan
Owner: Nikko Kisen, Japan
LOA: 190 m
Beam: 32 m
GRT 30,066
DWT 52,489 MT
The original Furness Withy was established in the UK in 1891 and for many decades until the early 1970’s was one of the UK’s largest shipping groups. Key services were provided to the east coast by different generations of Newfoundland and Nova Scotia whilst the Pacific Coast was served by different generations of Pacific ships. In 1980, the company was purchased by the C.Y. Tung Group and in 1990 was sold on to the Oetker Group which in addition to many other interests also owns Hamburg Sud, a primary operator in north-south liner trades into which Furness Withy’s services were merged. Today’s Furness Withy Chartering is a London and Melbourne based dry cargo ship operating and broking company.
Furness ships of the past serving Canada - S.S. Nova Scotia leaving St John’s NF (left) and Pacific Stronghold (right)
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