Japan’s Fair Trade Commission has handed down rulings to several major car carrier owners for allegedly violating anti-trust law. The action comes more than a year after investigations into possible price-fixing first began. K-Line, NYK and Wallenius Wilhelmsen Logistics are all believed to be initially affected but others may follow. Similar investigations are continuing in Europe and North America.
The loaded chemical tanker Maritime Maisie suffered a catastrophic fire last week after colliding with the car carrier Gravity Highway which was on sea trials off the coast of Busan, South Korea. Fortunately, all 91 personnel, 27 from the tanker and 64 from the car carrier, were rescued by coast guard and navy crews with no major injuries.
Also between Christmas and New Year, the fully loaded Qatari chartered and part-owned Q-Flex LNG carrier Al Gharrafa was in collision with the container ship Hanjin Italy (capacity 10,114 TEU) in the Singapore Strait. There were no crew injuries on either vessel, no damage to the LNG cargo containment system and no pollution, however as can be seen from the pictures, the bow of the Al Gharrafa is in need of a little repair work and the Hanjin Italy will need to take a time out for a few weeks to get straightened out. Arrangements are being made to discharge her containers in the Singapore area.
The Investigation into the incident that resulted in the flooding of the engine room on the mega container ship Emma Maersk (15,500 EU) last February has concluded that a series of technical failures compromised the watertight integrity of the vessel as she was about to begin a southbound Suez Canal transit. Three propeller blades of a stern thruster broke off and the consequent excessive vibration resulted in the breakdown of structural watertight barriers, due in part to cable penetration seals which had been incorrectly installed. The situation was further compounded by problems with the emergency bilge suction and the fact that the crew found themselves responding simultaneously to multiple emergency alarms.
However, the report goes on to state “that the events of the accident did not result in more severe consequences were due to the behaviour of the crew who managed to adapt to the situation and prioritise the recovery effort to meet the unfolding events. Due to the adaptive behaviour of the crewmembers, the shipboard organisation remained resilient despite the breakdown of the structural barriers, and even though no one had complete knowledge about the situation. The master had knowledge about the navigational situation, but limited knowledge about the events in the engine room. The chief engineer only had knowledge about the situation in the engine room”.
Whilst the Panama Canal Authority (ACP) maintains that it is committed to completing the waterway’s expansion in 2015, it is clear that all is not well with the finances surrounding the project. The lock construction consortium Grupo Unidos del Canal (GUPC) had threatened last week to suspend work on construction of the third set of locks claiming $1.6bn in cost overruns which are the responsibility of ACP. This spat has actually been escalating since ACP rejected the contractors’ original concrete mix for the locks, which set back the target completion date from October 2014 to June 2015. The locks are estimated to be around 65% constructed, with the overall expansion about 72% complete.
Following a Spanish government attempt to mediate in the dispute, ACP was more conciliatory this week and proposed that it and GUPC jointly contribute $283 million to the project which would allow GUPC to continue construction on the locks while claims for cost overruns are resolved under the three-step process established under the original contract between the two sides. However, Mr. Salini Impregilo, Chief Executive of GUPC partner company Pietro Salini did not mince his words in reminding ACP that the consortium is “not a charity”. He also suggested that ACP “stop telling fairy tales”.
To the north, and perhaps to nobody’s surprise, Nicaragua has announced that the start of construction of a $40 billion rival canal has been postponed to 2015. The government last year approved a plan that would see Chinese based financing of the project. Work was originally intended to start this year and take less than six years to complete the 286km new coast to coast waterway.
Shanghai handled a record 33.6 million TEU in 2013, an increase of 3.4% over 2012. For its part, Singapore also set a new record at 32.6 million TEU, up 2.9% on 2012 and a record tonnage of 557.5 million tons of cargo overall. Despite the cancellation of a few supplier licenses, Singapore also maintained status as the world’s largest bunkering port with 42.5 million tons sold.
Following on yet another train derailment, this time in Plaster Rock, New Brunswick, the Honourable Lisa Raitt, Minister of Transport, announced proposed regulatory amendments to further improve the safety of the transportation of dangerous goods by rail. These amendments are published in the Canada Gazette, Part I, on January 11, 2014.
The proposed regulations will introduce new standards for certain rail tank cars, replacing existing standards referenced in the Transportation of Dangerous Goods Regulations. For example, it will require that new DOT 111 tank cars be built with thicker steel requirements, as well as adding top fitting and head shield protection to the tank car. DOT 111 tank cars are used for transporting dangerous goods of high and medium danger, such as crude oil.
The pilot at the con of the Capesize bulker Cape Apricot when it was involved in the accident at Westshore terminals in December 2012 has admitted partial liability for the incident. However, judgments over much of the complex legal argument surrounding this case are required before there can be certainty as to what the liabilities of the various parties will be. Additionally, the Transportation Safety Board’s report into the incident has yet to be released.
Cape Apricot was chartered to K-Line, controlled by Japan’s Tokei Kaiun and owned by its affiliated company Leo Ocean. Westshore is believed to be claiming $50 million for physical damage and business disruption but lawyers for Leo Ocean are counter arguing that liability should be limited to a $26m security agreement already signed. The limitation of liability of a pilot under the Canadian Pilotage Act is also a matter subject to a ruling in this case.
On January 1, California set a leading edge in being the first jurisdiction in the world to require that container ships begin using shore power while at berth. The new “Vessels at Berth Regulations” will be phased in over the next six years with 50% of every container carrier’s fleet calling in California now being required to hook up to shore power, increasing to 70% on January 1, 2017, and 80% on Jan. 1, 2020. However, in showing some much needed pragmatism for a change, on Dec. 23, 2013 CARB issued an advisory that the “commissioning” of vessels could continue through June 30, 2014. At the same time, the allowable sulphur limit for both gas and diesel oil being burned in California’s waters was reduced to 0.1%, one year in advance of ECA regulations requiring same.
Unrelated to the above, vessels calling at California ports will also soon face new rules to curb bio-fouling. Draft regulations from the California State Land Commission are being prepared for implementation on January 1, 2015. The new rules which stipulate that a hull must have less than 5% bio-fouling or in a niche area less than 10%, have the same aim as ballast water regulations in so much as they seek to curb the spread of invasive aquatic species by specifying the percentage of biofouling permitted on the underwater parts of the ship’s hull. Niche areas are the sea chest and gratings, bow and stern thruster and gratings, fin stabilizers and recesses, propeller shaft, propeller and rudders. As is the case with ballast water rules, the bio-fouling rules will require presentation of a specific bio-fouling management plan and record book, listing dockings and cleaning activity. Australia and New Zealand have both played a role in crafting the regulations since they too are intent on adopting something similar and are believed to be preparing a case for IMO consideration.
After several months of unproductive lobbying, The Canadian Shipowners Association (CSA) has publicly voiced concern over the US Environmental Protection Agency’s (EPA) new Vessel General Permit (VGP), which came into effect on December 19. The new VGP regulates discharges from commercial vessels, including ballast water but a report released by CSA has concluded that the installation of ballast water management systems on Canadian domestic vessels beginning in 2014 will cost the Canadian economy $1.1 billion over the next five years. However there is more to the story given that shipowners cannot comply with the regulations “since the technology to do so does not exist" underlines CSA President Robert Lewis-Manning. As a consequence of the deadlock, CSA announced this week that it has decided to formally petition the U.S. Court of Appeals of the Second Circuit for a review of the VGP, and more specifically, the Jan 1, 2014 compliance deadline.
It was announced this week that the Canadian Environmental Assessment Agency will refer the proposed Roberts Bank Terminal 2 project to an environmental assessment by an independent review panel. Timelines for the assessment will be as follows:
An important Christmas gift arrived with the opening of the elevated roadway over Stewart Street on the south shore on Wednesday morning this week. The overpass spans 10 intensively used at-grade rail crossings which can now be entirely bypassed to help alleviate long standing south shore traffic congestion. However, it’s not yet plain sailing as until the end of January, there will be a requirement to close the overpass to traffic in the evenings to allow for final touches.
The US Federal Maritime Commission (FMC) this week hosted a so called “global summit” to discuss the proposed P3 Network comprising Maersk, MSC & CMA CGM. Regulators from the US, the European Commission and China were reported to have had “open and candid discussions” on their differing regulatory frameworks and the potential effects of carrier co-operation on international trade. It appears that no significant conclusions were reached. The proposed Alliance would initially entail the pooling of 252 ships representing 2.6m TEU of capacity to be deployed in the Asia-Europe, Transpacific and Transatlantic trade lanes. Meanwhile, the G6 Alliance agreement update was submitted to the FMC on December 2 and will become active on January 16, unless the FMC submits questions within the timeline.
Published in the Canada Gazette Part II on December 19th are minor amendments made to the following regulations under the Canada Shipping Act, 2001:
and amend the following Regulations made under the Marine Liability Act:
The amendments are the result of a Standing Joint Committee for the Scrutiny of Regulations (SJCSR) reviews matters of legality and the procedural aspects of federal regulations. The SJCSR reviewed the regulations listed below and noted some inconsistencies between the English and French versions.
As well, three minor amendments have been made to the Small Vessel Regulations. These errors were identified after the publication of the Small Vessel Regulations (SOR/2010-91) in Part II of the Canada Gazette on May 12, 2010. Three minor errors in the French version of the Vessel Pollution and Dangerous Chemicals Regulations are also being addressed. These errors were identified after the publication of theRegulations Amending the Vessel Pollution and Dangerous Chemicals Regulations (SOR/2013-68) in Part II of the Canada Gazette on May 8, 2013.
Prime Minister Stephen Harper and Barack Obama, President of the United States, welcomed the release of the second annual Beyond the Border Action Plan Implementation Report. This report outlines the progress made by Canada and the United States to implement the Beyond the Border Action Plan - an agreement that was put in place to enhance our mutual security, prosperity and economic competitiveness.
An aggressive but short lived protest against the Fraser Surrey Docks coal handling proposal occurred on Monday morning this week. Six members of so called “Rising Tide Vancouver” dressed as Father Christmas gained access to Port Metro Vancouver offices before being summarily ejected by staff. City police were called in but no charges were laid. The Chamber of Shipping unreservedly deplores this form of action and urges all parties with a point of view to share do so through well established channels, free of intimidation or trespass.
In addition to the three LNG export licenses previously granted, the National Energy Board has now approved four more 25 year export licenses applicable to the following projects:
proposed new berth configuration at Westridge
Trans Mountain Pipeline ULC operated by Kinder Morgan Canada and owned by Kinder Morgan Energy Partners, L.P. filed a formal Facilities Application on Monday this week with the National Energy Board (NEB), for authorization to build and operate the facilities for the company’s proposed $5.4 billion Trans Mountain expansion project. The application addresses those issues previously identified by the NEB, including environmental, socio-economic, Aboriginal engagement, landowner and public consultation, marine risk assessments and engineering components of the proposed expansion project. With this filing, the project will undergo a comprehensive public regulatory review. The next step will be for the NEB to establish a hearing schedule that corresponds to the federal government’s legislated 15-month review and decision timeframe. If approvals are received, the expansion is expected to be operational in late 2017. If approved, the project will increase capacity on TransMountain from approximately 300,000 bpd to 890,000 bpd.
The Facilities Application consists of more than 15,000 pages, approximately 2 metres in height, contained in 37 binders and 2.48 GB (compressed). The full Application is available online: http://application.transmountain.com/