COS Weekly News - 6 July 2012
Monday, 09 July 2012 09:35
COS News – Week ending 06 July 2012
Issue No. 216
BUNKERING AT CARGILL TERMINAL
Cargill has advised that effective July 15, 2012 vessels will no longer be able to bunker at their North Vancouver terminal. COS is seeking further information on this decision particularly in view of the bunkering review process currently underway with Port Metro Vancouver.
CN CONSTRUCTING ADDITIONAL SIDINGS IN 2012
CN has announced plans to construct five extended sidings on its BC North Line in 2012 as part of a multi-year capital program to expand freight train capacity to handle growing freight volumes along its important Edmonton, Alta.-Prince Rupert, BC corridor. Traffic on this line could double by 2015.
US COMPROMISES ON BALLAST WATER TREATMENT TYPE APPROVALS
Ship owners have been successful in convincing the U.S. to recognize IMO type approved ballast water systems. The USCG last week issued a policy letter, which states that the manufacturer of a foreign type approved ballast water treatment system can apply for that system to be approved in the U.S. as an “Alternative Management System” and if approved, such systems will be allowed in U.S. waters for five years. However, AMS recognition does not preclude or supplant the manufacturer’s obligation to apply for a separate type-approval from the USCG and in fact encourages manufacturers to submit both applications simultaneously. New US ballast water discharge rules came into force on June 21.
LONG BEACH CAPS DAILY DOCKAGE CHARGES
Under a revised dockage program to be launched on August 1, the largest ships calling at the Port of Long Beach are to have their daily dockage fees capped at $8,641 per day for ships over 345 meters in length. Without the amendment, such ships would have paid over $11,000 a day. The port believes that the incentive will help protect its market share in an “increasingly competitive maritime market.” The port is also offering incentives to encourage the use of rail rather than trucks.
Meanwhile a U.S. District Court judge this week issued a temporary restraining order prohibiting the ILWU from engaging in work slowdowns at the Port of Portland’s Container Terminal 6. The terminal is suffering from an inter-union dispute between the ILWU and the International Brotherhood of Electrical Workers (IBEW) over the handling of refrigerated containers. The ILWU is taking the position that its contract with the Pacific Maritime Association (PMA), which represents waterfront employers on the West Coast, provides longshoremen with jurisdiction over what amounts to the equivalent of two jobs involving the plugging, unplugging and monitoring of reefer containers even though the IBEW has been performing that work since the 1970s. In 2010 the port signed an agreement with ICTSI to operate Terminal 6. ICTSI continued but last month the ILWU & PMA jointly sued the port and ICTSI for jurisdiction over on-terminal reefer work.
TURNER RE-APPOINTED AS PORT METRO VANCOUVER DIRECTOR
The Vancouver Fraser Port Authority board chair is pleased to announce the re-appointment of T. Richard Turner as Director for a second three year term, which expires June 18, 2015. Mr. Turner is a nominee of the Port Users.
CONGRATULATIONS TO DUNCAN WILSON
Duncan Wilson, Vice President Corporate Social Responsibility, will be one of the recipients of the Queen Elizabeth II Diamond Jubilee Medal Award which was created to mark the 2012 celebrations of the 60th anniversary of Her Majesty Queen Elizabeth II's accession to the Throne. Recipients are recognized for their significant contribution to a particular province, territory, region or community within Canada, or an achievement abroad that brings credit to Canada
Government Updates
PROPOSED AMENDMENTS TO VESSEL POLLUTION AND DANGEROUS CHEMICAL REGULATIONS
The proposed Regulations Amending the Vessel Pollution and Dangerous Chemicals Regulations were approved for pre-publication on June 19th and are anticipated to be published in Part I of the Canada Gazette by July 21, 2012. The proposed Regulations would implement the North American Emission Control Area and the regime to control sulphur oxides emissions from vessel in the Great Lakes and St Lawrence waters. As the North American Emission Control Area enters into force internationally on August 1, 2012, an advance copy of the proposed Regulations is attached to facilitate discussions of interim measures.
LEGISLATION ON SHARED SERVICES CANADA (SSC) RECEIVES ROYAL ASSENT
The Shared Services Canada Act received Royal Assent on June 29th, 2012. With its passage, the Government of Canada is re-affirming its commitment to streamline, consolidate and standardize information technology (IT) infrastructure services in order to reduce costs and improve email, data centre and networks across government and hopefully promote single window initiatives that will eliminate duplicate reporting by industry.
BULLETIN ON CHANGES TO AMPS AND INTEGRATED CUSTOMS SYSTEM (ICS)
Canada Border Services Agency has issued a bulletin informing of upcoming changes that will take effect in the Master Penatly Document (MPD) and ICS on July 4th, 2012. Included in the update is expiration of Customs Self Assessment (CSA) contraventions and clarification on other contraventions.
International News
PANAMA CANAL CONFIRMS CONSTRUCTION DELAYS
With ship owner criticism of tariff increases still ringing in its ears, The Panama Canal Authority has decided to deal with all the bad news at once and has formally acknowledged what was already well known in that the expansion project has fallen six months behind schedule. The delay is due to problems in achieving specified concrete quality in construction of the new locks and it now seems certain that the new locks will open for shipping only in 2015. Don’t book that Panama cruise too soon.
CHINA OFF-SHORE DRILLING NOW UNDERWAY
In the first independent deep-water oil drilling to be conducted by a Chinese company, China National Offshore Oil Corporation (CNOOC) began deep-water drilling in the South China Sea in May in an area 320 km southeast of Hong Kong. A government statement has declared that drilling will contribute to ensuring the country's energy security and sovereign right over territorial waters. The operation is being conducted by drill rig CNOOC 981 formally known as Haiyang Shiyou 981 or Oceanic Petroleum 981, which was delivered by China State Shipbuilding Corp. Shanghai in May 2011 at a cost of 6 billion Yuan ($952 billion) and which is designed to drill to depths of up to 12,000 metres. Drilling is expected to access an estimated 30 billion cubic meters of natural gas in an area which is believed to contain more than 700 million tons of oil and 1.2 trillion cubic meters of natural gas.
China is reliant on imports for more than 55% of crude oil and 20% off its natural gas and last week announced the opening of nine new blocks in the mid South China Sea to bids for exploration within Vietnam’s exclusive economic zone and where PetroVietnam and foreign oil companies are already exploring. Vietnam express “displeasure”.
US WARNS TANZANIA ON IRAN SANCTIONS
As international sanctions on Iran were taken to another level on July 1, the US spotlight turned to the unlikely culprit of Tanzania for sanctions busting following reports that the National Iranian Tanker Co (NITC) has reflagged more than 18 vessels from the Maltese and Cypriot registers to those of Tanzania and Tuvalu to avoid sanctions. Under the new EU sanctions, which include a ban on insuring any vessel carrying Iranian oil, NITC’s 39-tanker fleet could theoretically be the only vessels able to carry the country’s exports to its few remaining customers, primarily China and India. Under Executive Order 13608, signed May 1, 2012 the US government has authority to impose sanctions on any entity worldwide, including foreign governments, if they help Iran to evade US sanctions.
Strait of Hormuz, image from NASA
Iran’s National Security and Foreign Policy Committee has meanwhile drafted a bill calling on the government to stop tankers shipping crude through the Strait of Hormuz to countries that support sanctions against Tehran.
CHINA INITIATES MARINE OIL POLLUTION COMPENSATION FUND
China has decided to take another step in being prepared for maritime oil spills by imposing fees on shipping, independent of liability for pollution. Starting on July 1, China’s new Marine Oil Pollution Compensation Fund will be collecting a fee of 0.3 yuan ($0.05) per ton from cargo owners or agents through its maritime administrations. The fund's establishment is aimed at protecting the country's oceanic environment and promoting the sustainable and healthy development of marine transport industry, according to the country’s Ministry of Finance.
PORTS OF REFUGE AGAIN IN THE SPOTLIGHT
crippled tanker – Stolt Valor
In another disappointing example of procrastination when it comes to nominating ports of refuge, Stolt Valor was left to its fate for three months before receiving clearance to enter a port in the Arabian Gulf following a fatal explosion and fire on March 15 this year. Only on June 26 did Bahrain give the owners Stolt-Nielsen permission to bring the vessel to the Arab Shipbuilding and Repair Yard in Bahrain (ASRY). Prior to being allowed into port, contract salvors “Smit” were required to fully gas free the vessel, discharge all onboard oils and provide a structural assessment report. As the picture clearly illustrates, in open waters other than the Arabian Gulf, the vessel would have likely not survived.
SANKO FILES FOR COURT PROTECTION
Following the breakdown of restructuring negotiations and under intense pressure from creditors, Sanko Steamship has sadly been forced to file for bankruptcy protection in both Japan and the United States. The company controls a fleet of 185 ships of which 21 are owned and is Japan’s fourth largest shipping company after NYK, MOL and K Line. According to reports of Sanko’s filings, the company is set to declare a JPY110bn ($1.3bn) net loss for the financial year ending in March. The company has net assets of JPY 7.8bn and cash deposits of JPY 8.9bn. Mr. Hisashi Asafuji, newly appointed President of Sanko, is promising he will rebuild the company after putting it into court receivership but is warning owners he wants to renegotiate contracts and cancel its most costly charters. This is the second time that Sanko has filed for protection, the first time was in 1985 when the Japanese government lead a comprehensive restructuring of the company.
ENTIRE P&O CRUISE FLEET ASSEMBLES IN SOUTHAMPTON TO MARK 175TH ANNIVERSARY
The seven ships of the P&O cruise fleet, Adonia, Arcadia, Aurora, Azura, Oceana, Oriana and Ventura sailed into Southampton at dawn on July 3 to mark the 175th anniversary of the company.
A total of 30,000 passengers disembarked and embarked during the day, which finished with a royal salute as the ships left in convoy (right). P&O Cruises was originally part of the Peninsular & Oriental Steam Navigation Company, which won its first mail ship contract in 1837.
Still with cruise ships, it has been announced that conversion of Queen Elizabeth 2 to a 300 room hotel ship is to begin shortly where she currently lies in Port Rashid, Dubai. There will also be new shops and a maritime museum according to Istithmar World, the investment arm of the state-owned Dubai World which purchased the vessel in 2007 for $100 million from Cunard.
MAN OVERBOARD STORY
http://gcaptain.com/overboard-story-highly-rescue/
FRENCH TEAM GROUPAMA WINS VOLVO OCEAN RACE
For the interest of the yachties out there, the French lead team Groupama sealed victory in the 39th Volvo Ocean Race on Tuesday this week when they crossed the finishing line in Galway, Ireland, to build an unbeatable points lead and bring to a conclusion an epic nine month round the world voyage. Victory for Spanish-New Zealand team Camper in the final leg secured them second spot overall, with US team Puma finishing third on the day to seal third overall.
Market Update
The much anticipated arrival of summer in Vancouver this week provided us with a modest uplift as did the addition of a few points to the Baltic Dry Index. The index closed slightly up at close of business on Thursday on 1138 points, compared to 994 points last week and 978 points the week before.
Cape Size Panamax Supramax
Index 1455 1090 1293
One week ago 1184 968 1247
Spot time charter $7,600/day $8,700/day $13,500/day
One week ago $3,900/day $7,700/day $13,000/day
Tankers: VLCC rates have fallen to a new low for the year, as the supply of vessels continues to heavily exceed demand. The Baltic Exchange assessed the benchmark Arabian Gulf/Far East rate at Worldscale 38.86 or $7,167/day – barely enough to cover basic operating costs.
Lloyds List this week published ten things you need to know about ultra-large containerships
- There are 149 ultra-large containerships (ULCS) (of more than 10,000 TEU) on the water aggregating 1,897,000 TEU.
- 146 of these vessels have an average age of only two years, while the remaining three average six years.
- The largest ULCS operator is MSC with 52 vessels of 684,116 TEU either owned directly or chartered from the market.
- Maersk Line has 21 such vessels of 294,672 TEU , but operates the largest currently in service averaging 15,500 TEU each.
- Hapag Lloyd has ten 13,200 TEU vessels on order.
- CMA CGM is taking delivery this summer of three 16,000 TEU ships which for a short while will be the largest in the world
- The current ULCS orderbook (remainder of 2012 up to 2015) aggregates 1,774,000 TEU or 93% of what’s currently in service.
- So far in 2012, a total of 107 vessels of 773,049 TEU have been added to the cellular fleet, of which 38 vessels of 494, 282 TEU (i.e. 64% of all deliveries) has been in the ULCS category.
- In the ULCS category, 24 vessels of 305,721 TEU are still due to enter service before the end of 2012.
- According to Lloyd's List Intelligence’s latest idle survey, there are no ships of more than 10,000 TEU sitting idle currently.
Bunkers: Prices have been on a bit of a roller coaster ride for the past few days – not helped by Iran’s continued sabre rattling. Prices for HFO 380 bottomed out last week at $545 per ton in Rotterdam but rebounded to around $578 by the middle of this week. Singapore saw one of the biggest hikes of the week with HFO 380 now at just over $600 per ton this week compared to a low for the year of $558 just last week.
Upcoming Events
EMISSIONS CONTROL UPDATE SESSION
July 12 – The Chamber of Shipping is holding an information session to discuss the implementation of the North American Emissions Control Area. Please note the time changes, registration commencing at 08:00. See attached information to register or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it
CYCLING FOR SEAFARERS 2012
Sept 15 – The Mission to Seafarers’ 5th Annual Cycling for Seafarer invites participants to join in on the 40 or 100 km bike ride through Vancouver to Port Moody on Saturday, September 15th. Registration is now available and space is limited so don’t wait to register. See attached for more information or visit www.flyingangel.ca. This year’s target is to raise more than $40,000.
Our Manager of Accounting Services, Don MacInnes has organized a series of rides over the summer months to prepare participants for the event. The first training rides this Saturday, July 7th starting at the Mission to Seafarers – 401 East Waterfront Rd, at 10:00 am. For more information, on the schedule of training rides, contact Don at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or tel: 604-628-5318.
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/
Jul 10 COS Ship & Port Operations Committee Meeting @ 12:00
Jul 11 Supply Chain Efficiency Discussions @ 10:00
Jul 12 COS ECA Update Session @ 08:30
Jul 18 COS Liner Committee Meeting @ 10:00
Jul 18 Plimsoll Club Board of Directors Meeting @ 12:00
Jul 19 COS Navigation & Pilotage Committee Meeting @ 10:00
Ship of the Week
Emerald Ace – the world’s first hybrid car carrier
Mitsui O.S.K. Lines, Ltd., announced on June 29 the completion of the hybrid car carrier Emerald Ace built by Mitsubishi Heavy Industries, Ltd., Kobe shipyard. This unique vessel is designed to generate zero emissions while berthed alongside. The vessel’s hybrid electric power supply system combines a 160kW solar generation system − jointly developed by MHI, Energy Company of Panasonic Group, and MOL − with lithium-ion batteries that can store some 2.2MWh of electricity. Conventional power generation systems use diesel-powered generators to supply onboard electricity while berthed.
LOA 199.9 m
Beam 32.26 m
GRT 60,200
Capacity 6,400 cars
The 768 solar power panels installed on deck have an output capacity of 160 kilowatts, enough to power 50 average homes. Energy is stored in 324,000 lithium-ion batteries below decks and fed through to the engine. Excess energy is used to power the ship’s radar instruments, lighting, air conditioning and other equipment. The vessel completely shuts down its diesel generators and relies purely on batteries when in port and is thus the first ship in the world to produce zero emissions while not at sea.
The vessel’s hybrid system represents a significant step forward in realizing ISHIN-I, the concept for the next-generation car carrier that MOL announced in September 2009. The development of Emerald Ace was subsidized by Japan’s Ministry of Land, Infrastructure, Transport and Tourism as a project to help reduce CO2 emissions from ocean-going vessels, and received support from Nippon Kaiji Kyokai as a cooperative development project to reduce greenhouse gases produced by shipping.
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