COS Weekly News - 27 July 2012
Friday, 27 July 2012 12:26
COS News – Week ending 27 July 2012
Issue No. 219
US EMISSIONS CONTROL AREA IMPLEMENTATION
The US Coast Guard issued a policy letter providing guidelines for compliance and enforcement of the North American Emissions Control Area (ECA) that comes into effect on 1 August. It outlines the Coast Guard's methods and procedures for verifying compliance with MARPOL Annex VI Regulations 14 and 18 and how violations are documented and referred to the Environmental Protection Agency (EPA) for enforcement. In addition to the guidelines, USCG has posted its ECA Job Aid. The document is intended to provide its boarding officers with step-by-step guidance on how to conduct an onboard examination of a ship for compliance with the requirements of the North American ECA. The document will be of interest to owners, operators, and mariners who are trying to comply with the new regime.
FMC REPORT CRITICISES CANADA
Despite only 2.5% of cargo destined for the US being handled by Canadian ports, the Federal Maritime Commission (FMC) has voted 3-2 to adopt a report critical of Canada. The report followed an FMC inquiry launched in November 2011 at the request of west coast politicians. Despite robust and compelling arguments from Canada, Prince Rupert is singled out for criticism in marketing itself to handle US destined containers and, to a lesser extent, Vancouver. At the heart of the matter is the Harbor Maintenance Tax levied on import cargoes handled at US ports but not at Canadian ports.
However, it seems that hypocrisy has no boundaries as a US House Bill introduced on Wednesday seeks to restore the share of federal food aid which must be shipped in US-flagged ships (at heavily tax payer subsidized freight rates) from 50% to 75%. In reality there are less than 100 US-flagged vessels engaged in foreign trade and which carry only around 2% of US cargoes. The Bill (if approved) would extend the requirement for about US flag 16 vessels and 640 seafarer jobs, according to Maritime Administration estimates which incidentally estimates that US flag merchant vessels are on average 2.7 times more expensive to operate than those of international competitors. The US has also been demoted from the Port State Control white list to the gray list based on recent performance.
RIO TINTO ALCAN’S KITIMAT EMPLOYEES RATIFY NEW AGREEMENT
Employees at Rio Tinto Alcan's Kitimat aluminium smelter and Kemano hydroelectric plant in northwest British Columbia have ratified the labour agreement that was reached on 24 July 2012. The Kitimat smelter produced 168,000 tonnes in 2011. The ongoing US $3.3 billion modernisation project of the smelter will bring the production capacity to 420,000 tonnes per year.
Government Updates
NEW SAMPLING PROGRAMS CERTIFY GRAIN SHIPPED BY CONTAINER
The Canadian Grain Commission will launch its Accredited Container Sampler Program (ACSP) and Certified Container Sampling Program on August 1, following the successful completion of a four-year pilot project with industry partners. The programs are in response to an increased use of containers to ship grain to export markets and a demand for Canadian Grain Commission inspection of these shipments.
The ACSP allows grain companies to obtain official Canadian Grain Commission inspection of their container shipments based on a sample taken by an accredited third party. The Canadian Grain Commission issues an Official Inspection certificate to grain companies registered in the program.
With the CCSP, the Canadian Grain Commission certifies grain companies to take samples from their own shipping containers and submit these samples to us for inspection. For more information visit: www.grainscanada.gc.ca.
HARBOUR GREEN PARK HOME OF THE KOMAGATA MARU MONUMENT
Earlier this week Citizenship, Immigration and Multiculturalism Minister Jason Kenney unveiled a public monument commemorating the Komagata Maru, a ship that arrived in Vancouver harbour in 1914 carrying 376 East Indian passengers.
Most of the passengers were not allowed to land because the ship did not make a continuous journey to Canada, as was prescribed by Canadian immigration laws at the time. After almost two months in the harbour, the ship went to India where, in an altercation with British soldiers, approximately 20 passengers and a number of soldiers died.
The Community Historical Recognition Program (CHRP) provided a total of $667,407 to the Khalsa Diwan Society (KDS) of Vancouver for this project. CHRP, announced in 2006 and launched in 2008, has already committed approximately $13.5 million toward eligible projects that address historical events that affected the Indian, Italian, Chinese, and Jewish communities in Canada.
CENTREPORT CANADA RECEIVES 2.3M
CentrePort Canada Inc. will receive $2.3 million from the Government of Canada to implement its strategic priorities of enhancing the inland port’s transportation assets, coordinating land development, and increasing targeted business and investment attraction activities. In addition, this investment will allow CentrePort to continue to provide “single-window” services for investors, which includes providing unique access to federal Foreign Trade Zone (FTZ)-like programming, as well as continuing to promote increased trade and transportation along the Asia-Pacific Gateway, and the Mid-Continent Trade and Transportation Corridor.
CentrePort Canada is a 20,000-acre inland port and the first in the country to offer investors single-window access to Foreign Trade Zone-like benefits. Located in the heart of North America, CentrePort connects to major national and international trade gateways and corridors, and offers direct access to tri-modal transportation options including road, rail and air cargo.
International News
SALVAGE OF MSC FLAMIMIA CONTINUES IN MID-ATLANTIC
A Smit Salvage team has now boarded the abandoned container ship MSC Flaminia that has been on-fire in mid-Atlantic since an unexplained explosion in hold No. 4 almost two weeks ago. Salvors have successfully reactivated the ship’s firefighting system and provided an initial assessment of the considerable fire damage. Holds 4, 5 & 6 are essentially destroyed but the superstructure, engine room, bow and stern sections, including the steering gear, are thus far unaffected by the fire. Likely due to an accumulation of extinguishing water intake, the ship is listed at around 10 degrees. At the time of writing MSC Flaminia was under tow by the tug Fairmount Expedition at a speed of 4-5 knots, with the tugs Anglian Sovereign and Carlo Magno standing by. The vessel is expected to arrive in UK waters during the course of the weekend where an inspection will take place once the tremendous heat radiating from hundreds of burned out containers has dissipated.
In a freak incident this week, a lightning strike caused a major explosion and fire on the chemical/palm oil tanker, Bunga Alpinia (above) while alongside in Labuan, Malaysia. The vessel is said to have been loading methanol at the time. Sadly, two bodies have been recovered but three are still missing.
ICS CALLS ON IMO TO EXPEDITE FUEL AVAILABILITY STUDY
The International Chamber of Shipping (ICS) called this week for the IMO to get on with the fuel availability study that will ultimately determine whether the sulphur content in ships’ fuels will be reduced to 0.5% by 2020 or be postponed until 2025. As we know well from the uncertainties that still surround implementation of the North American ECA, this is no small issue and wishful thinking that “it will be alright on the night” is not particularly helpful. “Governments will surely want to avoid any perception that a blind eye has been turned to the practical implementation of the measures as the issue of fuel availability becomes increasingly pressing,” says ICS Secretary General, Peter Hinchliffe. “It is essential that a global fuel availability study is carried out sufficiently in advance of 2020 in order to give the refiners adequate time to invest and react.”
ENBRIDGE RELEASES REPORT ON MARSHALL MICHIGAN SPILL CLEAN UP
Leaving aside the competing political statements made this week in relation to the Enbridge Northern Gateway Project, the company has issued a video detailing its response to the Marshall, Michigan, pipeline failure in July 2010 when an estimated 20,000 barrels of crude oil leaked from Enbridge’s Line 6B pipeline near Marshall, Michigan. Oil from the spill entered Talmadge Creek and the Kalamazoo River. The US Environmental Protection Agency and the Michigan Department of Environmental Quality closed sections of the river system to public use, along with Morrow Lake, while clean-up operations were conducted.
ASIAN IMPORTS OF LNG FIRMLY UP IN FIRST HALF YEAR
Whilst Japan remains the world’s major importer of LNG, other Asian countries are now increasing their imports at a faster rate. Chinese imports of LNG grew by 15% in the first half of 2012 compared to 2011; Thailand which began importing LNG in 2001 increased by 100% from an obviously low base and India by 10%. For its part, Indonesia, imported its first LNG cargo into Jakarta in 2012.
Current Chinese terminal capacity allows for imports of 25m to 30m tons a year with two more terminals under construction and which are expected to be ready by 2015. However, China is building vessels to ensure that at least 50% of LNG is carried by nationally controlled vessels in line with State Council policy.
For its part Singapore LNG, (SLNG) the state-owned developer of the nation’s first LNG, is close the completing the first stage of a $1.3m project. Two storage tanks will be complete by early 2013 and a third a year later. The country imports its piped LNG from both Malaysia and Indonesia and is developing Asia’s first LNG bunkering facility with the technical collaboration of DNV. Increased LNG consumption in Asia is in contrast to the situation in Europe where consumption is predicted to fall by around 20% this year. From a shipping perspective, this converts to healthy rates for LNG carriers as shipments to Asia represent a considerable increase in ton/miles compared to servicing of the European market.
SHIPS TO RE-ROUTE TO AVOID WHALES OFF SAN FRANCISCO
A plan developed by the National Oceanic and Atmospheric Administration (NOAA), Pacific Merchant Shipping Association, Whale Researchers and the USCG to protect the marine mammals has received federal approval. The plans, which will be reviewed by the IMO, include measures to track their locations. The westbound lane in the approaches to San Francisco Bay will extend three miles past the continental shelf and a new northbound lane would also be extended beyond the shelf thereby restricting vessels to an extended traffic separation scheme and away from the primary area where the whales congregate. The plan calls for the establishment of a real time whale monitoring network that would use trained crew on commercial vessels to report when and where they see whales.
REPLACEMENT OF GERALD DESMOND BRIDGE IN LONG BEACH APPROVED
artist’s impression of new bridge
In a sign of determination not to lose out on the prospect of ever larger container ships, a contract to build a new bridge spanning the port of Long Beach in place of the 1968 built Gerald Desmond Bridge has been approved by the Long Beach Board of Harbor Commissioners. Contract price is $649.5m with construction scheduled to begin in 2013. Procurement is a joint venture between the California Department of Transportation, Caltrans, Los Angeles County Metro, the Port and the US Department of Transportation. It is estimated that some 15% of all US containerized cargo passes under the bridge.
ROUND THE WORLD YACHT RACE ENDS IN SOUTHAMPTON
Yachts competing in the Round the World clipper race returned to Southampton last weekend. All 10 masthead cutters arrived safely from a 40,000-mile (64,500km) 51 week race. More than 500 amateur sailors from 40 countries competed in the race which was won by Gold Coast Australia with Visit Finland the runner up and Singapore taking the bronze medal. A requirement of the race is that all yachts are built with identical specifications and are sponsored by cities world-wide. The yachts were led in double arrow formation up Southampton Water by Sir Robin Knox-Johnston in Suhaili, the yacht which he sailed when he became the first non-stop solo circumnavigator in 1968-69. Sir Robin had earlier carried the Olympic torch through Greenwich (above right).
Market Update
Another depressing week as the Baltic Dry Index closed down on Thursday on 958 points compared to 1053 points last week and 1121 points the week before.
Cape Size Panamax Supramax
Index 1224 1058 1099
One week ago 1276 1183 1212
Spot time charter $4,900/day $8,400/day $11,500/day
One week ago $5,400/day $9,400/day $12,700/day
Tankers: the below graph say it all, at least so far as the VLCC market goes.
Upcoming Events
VANCOUVER TRANSPORTATION CLUB GOLF TOURNAMENT
Aug 9th - The Vancouver Transportation Club's annual golf tournament will be held at Greenacres. To register see the attached form.
PLIMSOLL CLUB RETURNS TO NAT BAILEY STADIUM
Aug 15th - Join members of the Plimsoll Club for an afternoon game and barbeque at Nat Bailey Stadium. Registrations must be submitted by August 1st to Renae - see the attached flyer.
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.
WORLD MARITIME DAY BANQUET
Sept 27 - The Mission to Seafarers' 3rd Annual World Maritime Day Banquet will be held on September 27th this year. This year the Banquet will recognize the 50th anniversary of the Canadian Coast Guard and recognize the IMO theme for 2012, 100 years after the Titanic. The Banquet will return to the Royal Vancouver Yacht Club – please see attached for booking details and sponsorship opportunities.
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 31 CBSA Conference Call on Carrier Codes @ 10:00
Aug 9 Vancouver Transportation Club Golf Tournament
Aug 15 Plimsoll Club @ Nat Bailey Stadium
Sep 4 COS Board of Directors Meeting @ 12:00
Sep 12 Regional CMAC
Sep 18 COS Ship & Port Operations Committee Meeting at 12:00
Sep 18 VMAA Board of Directors Meeting
Sep 19 COS Liner Committee Meeting
Sep 21 COS Navigation & Pilotage Committee Meeting @ 10:00
Sep 25 COS Northern Committee Meeting
Sep 26 WMCC PACMAR/NANS Meeting
Sep 27 COS Owners Committee Meeting @ 12:00
Sep 27 World Maritime Day Banquet
Ship of the Week
The World
A rare sight in Vancouver, the cruise ship The World was berthed at Canada Place for a few days last week. The World was the brain child of Mr. Knut U. Kloster, a renowned cruise industry entrepreneur. She serves as a residential community owned by residents from around 40 different countries living on board as she travels the globe, staying in port for an average of 3 days. While a few residents live on board full time, most visit the ship periodically throughout the year. Through an elected board of directors and a network of committees, residents “provide guidance” to the management about the ship's future itinerary, finances and on-board lifestyle. The World has 165 residential units including 106 apartments, 19 studio apartments, and 40 studios.
Built by Fosen Mek. Verksted, Rissa, Norway in 2002 (hull built in Landskrona, Sweden)
Owner & Operator ResidenSea, Miramar, Florida
LOA 196.35m
Beam 29.8m
GRT 43,188
Speed 18.5 knots
Passengers maximum 699 (normally around 400)
Onboard facilities are much the same as those on board a regular cruise ship, and also a few that are unique to the residential nature of guests. They include a small grocery store and delicatessen, a boutique, athletic facilities that include a golf simulator, putting green, full-sized tennis court, jogging track and gym. There are six restaurants that supplement the kitchens or kitchenettes in most of the apartments and dining ashore. For on-board entertainment there is a movie theatre, library and music performances. In addition to arranged shore excursions, classes are offered in multiple topics of interest to guests. In 2012 she will visit 31 countries.
The World is also the first ship of its size to burn only marine diesel rather than heavy bunker fuel, making for a much more environmentally friendly ship and allowing her to operate in those geographical areas where ships burning heavy fuel are banned. The World is also the first ship to feature the Scanship wastewater cleaning system in which wastes are filtered by means of a flotation system.
A 328 sq ft studio has a list price of USD $600,000 whilst a 2 bedroom, 2.5 bath room is list priced at USD $2,950,000. The “World Suite” has a list price of a mere USD $13,500,000. Homeowner dues start $20,000 per month for smaller units to cover the cost of fuel, crew, maintenance and meals. Makes Vancouver strata fees look like a bargain.
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