COS News – Week ending 23 December 2011
Issue No. 189

CAPTAIN JOHN CLARKSON TO LEAVE BCIT FOR TRANSPORTATION SAFETY BOARD

John Clarkson, Associate Dean of the Marine Campus at British Columbia Institute of Technology (BCIT) School of Transportation has been confirmed by Governor in Council as a Member of the Board of the Transportation Accident Investigation Safety Board of Canada.

Capt. John Clarkson

Captain Clarkson was born in Leeds, UK before immigrating to Canada with his family in 1962. After initially settling in Southern Ontario, his family moved to B.C. in 1967. After completing high school in Victoria, John began his sea career in as a deck officer cadet with Furness Withy. In 1980, he joined Irving Oil Ltd in St John, New Brunswick, as first mate on their ocean going tankers and was promoted to Master in 1983. By 1985, he was in HMC Dockyard in Esquimalt as Relief Master on harbour tugs and the fleet oiler. In 1986, he joined the then Coast Guard Marine Safety as a Marine Surveyor/Inspector. In 1998, he was promoted to Manager of Compliance and Enforcement in Transport Canada's Vancouver Marine Safety office, and then moved to Ottawa in 1999 as Principal Nautical Examiner. He also served as an officer in the Canadian Naval Reserve for twenty years.

In 2000, John was appointed Director of Marine Personnel Standards and Pilotage at Transport Canada Marine Safety. In this role, he was responsible for marine training and certification of Canadian mariners, marine occupational safety and health as well as the federal pilotage portfolio including Head of the Delegation representing Canada at the International Marine Organization's (IMO) Sub Committee on Standards, Training and Watchkeeping. In December 2002, he accepted the position with BCIT having overall responsibility for the highly successful deck and engineer cadet training program for the past nine years. Most recently, John has worked diligently in overseeing the upgrading of BCIT’s bridge simulator to a world class facility. He has also been a prominent voice, on behalf of BCIT within the Western Marine Community Coalition and as a Director of the Mission to Seafarers. Please join us in wishing John every success in his new appointment – his local presence will be missed but his expertise will be used for the greater good in Ottawa.

NEW SEAL STANDARDS ANNOUNCED

Please note that effective March 1, 2012, the current International Organization for Standardization (ISO) mechanical seal standard (ISO / PAS 17712) will be replaced with a new ISO standard – ISO 17712:2010.  The new standard has the following compliance requirements: 

1)      Testing to determine a seal’s classification for physical strength (as barriers of entry);

2)      Process auditing of the manufacturer’s security-related business practices;

3)      Testing (and PASS grade) of a seals ability to indicate evidence of tampering;

4)      A new 18mm minimum width diameter for bolt seals.

The new seal standard requires documentation of compliance by properly accredited test laboratories or business process auditors, which must have ISO 17712 included in their scope of competence. Mechanical seals, which have not been certified as complying with the new compliance requirements after March 1, 2012, will not be accepted as ISO compliant seals. Industry is encouraged to utilize existing seals already in stock and to carefully plan future seal purchases to ensure that seals affixed to containers as of March 1, 2012 are compliant with ISO IS 17712:2010. 

Benefits of the new seal standards include the reduced possibility of:

• Cargo theft or tampering;
• Unauthorized material being inserted into the container;
• Shipping delays that result when seals are missing or broken.

PIP recognizes that seals are costly and we do not expect you to discard seals currently in stock, you are free to use your existing seal stocks until they are gone. For more information please visit the World Customs Organization (WCO) website at www.wcoomd.org or contact the PIP program.
 

MAERSK LINE CEO MOVES TO DANSKE BANK

The head of Maersk Line and the company’s container division, Mr. Eivind Kolding, has announced his resignation and will move to Danske Bank as Chief Executive Officer. He is currently Chair of the bank in which A.P. Moller-Maersk has a 20% shareholding. Mr.Kolding is also Chair of the so called “Box Club” comprising most of the world’s container lines and was named by Lloyd’s List as the most influential person in shipping in 2011. Mr. Kolding’s replacement will be Mr. Søren Skou, Chief Executive of Maersk Tankers for the past ten years. He is also active outside the AP Moller-Maersk Group, holding external board memberships in the International Tanker Owners Pollution Federation Ltd, Danish Shipowners’ Association, International Chamber of Commerce Denmark, DFDS, Höegh Autoliners and The Danish Shipping Board.

In his first comments to the media following the announcement of his appointment, Mr. Skou said that “the container industry was in need of a further shake-out, with some smaller players best absorbed by bigger lines”. Hardly a day later, six leading container lines announced a new vessel network for the Asia-Europe trades from April 2012 merging members of the Grand Alliance and the New World Alliance to create the G6 Alliance. The partnership will deploy 90 vessels in nine services that cover more than 40 ports in Asia, Europe and the Mediterranean. Members of the Grand Alliance are NYK, Hapag-Lloyd, and OOCL. Members of the New World Alliance are APL, Hyundai Merchant Marine, and Mitsui OSK Lines. Mediterranean Shipping Co and CMA CGM, the second and third-largest container lines, responded earlier this month, creating an alliance deploying 53 ships, including 33 in the 14,000 TEU range on the Asia-Europe trade.

EU TEAM INVESTIGATING INTERNATIONAL GROUP OF P&I CLUBS STALLED

Key members, including the Chair, of the European Union investigation team looking into the activities of the International Group of P&I Clubs, have been replaced. The investigation which has already been underway for two years is likely to be delayed by another year as the new  investigation team finds its feet. In May this year, a spokesperson for the team said “the review did not aim to destroy the IG system or to question the mutual character of the P&I Clubs: it aimed to ensure shipowners benefit from effective competition between clubs and between clubs and commercial insurers”. Since that statement, the commission has been silent, fuelling speculation as to what kind of reforms it might impose on the International Group.

CHINA REGULATIONS ON THE PREVENTION AND CONTROL OF MARINE POLLUTION FROM SHIPS

FAQs providing further guidance from the International Group of P&I Clubs regarding the implementation of the Regulations On the Prevention and Control of Marine Pollution from Ships (the “Regulations”) has been issued – see attached.  As previously advised, the requirement for owners/operators of (a) any ship carrying polluting and hazardous cargoes in bulk or (b) any other vessel above 10,000 gt, to contract with an approved SPRO before entering a Chinese port, will be enforced from 1 January 2012. 
 

GUARAV PREM MASTER STILL DETAINED IN U.S.

Questionable legal ethics surrounding the detention of the Master and Chief Engineer of the Panamax bulk carrier Gaurev Prem continues to dismay onlookers. Captain Prastana Taohim and Chief Engineer Payongyut Vongvichuankul were originally detained in the port of  Mobile, Alabama in September following an alleged pollution infraction. Subsequently a judge ordered the government to complete its investigation and either charge Capt Taohim or allow him to return home by December 9, an order confirmed by a second judge last month following an attempt by the government to overturn the ruling. 

                Gaurev Prem

However, still not satisfied, prosecutors found a new judge and launched charges of criminal complaint with a new hearing set for January 5. “This clearly is an effort on the part of the government to do an end-around Magistrate Cassady’s original order which had set a clear timetable for Captain Taohim’s release” said the lawyer acting for the defence.

Meanwhile, the Master and Second Officer of the containership Rena which grounded off Tauranga, New Zealand in October are facing further charges. They are alleged to have “wilfully attempted to pervert the course of justice” by altering ship’s documents subsequent to the grounding. The Master already faces four charges and the Second Officer three charges. Each charge carries a maximum penalty of seven years imprisonment. On Wednesday this week, both appeared in the Tauranga District Court and were remanded on bail without plea on all charges until 29 February 2012. 

  Rena – container salvage underway

Sharks have caused a setback to Rena salvage operations this week after container-seeking sonar equipment was damaged in an attack. Some 230 containers have so far been removed from the stranded vessel.
 

D’AMATO TANKER FEED BY PIRATES AFTER 11 MONTHS
The crew of the Italian owned tanker Savina Caylyn received a welcome Christmas present this week after their vessel was freed by Somali pirates following 11 months in captivity. Largely thanks to U.S. Navy intervention, for the second time in a year, the Suezmax tanker Nordic Apollo was also  unsuccessfully attacked this week just south of Yemen. Spare a thought for 9 ships and around 150 seafarers still detained  by Somali pirates, often under horrendous conditions, this Christmas. IMO Secretary General Efthimios Mitropoulos who has worked tirelessly on behalf of seafarers during his tenure issued his official retirement message this week – see attached.
 

NEW STCW REQUIREMENTS TAKE EFFECT JANUARY 1

Ship owners are preparing for the implementation of revisions to the International Convention on Standards of Training, Certification and Watchkeeping (STCW) for Seafarers, labeled the Manila amendments, which enter into force on January 1 2012, with a five-year transitional period until January 1 2017. For the first time under STCW, mandatory limits for alcohol consumption are being introduced (a limit of not greater than 0.05% blood alcohol level or 0.25 mg/l alcohol in the breath), although individual flag states may choose to apply stricter limits. New STCW rest hour requirements state that seafarers must now always have at least 10 hours’ rest in any 24-hour period. This change was developed to comply with the International Labour Organisation’s (ILO) Maritime Labour Convention, which is expected to enter into force in 2013.
 

MORE IRANIAN FRONT COMPANIES IDENTIFIED

The United States and the European Union have sanctioned 10 more Malta based companies for acting as fronts for Iran’s shipping line IRISL. Congress is meantime trying to broaden these moves further. Last week, the House passed a bill that would bar vessels that had recently visited Iran, North Korea and Syria from entering US ports. A Section of the Bill provides that a vessel which has called at ports in these countries in the previous 180 days will be prohibited from landing at a US port to load or unload cargo or engaging in the trade of goods or services. The measure will be enforced through a process of “enhanced inspections” to be prescribed by regulation not later than 180 days from the date of enactment (section b).  The Bill provides also that the regulations will require each vessel wishing to land at a US port to certify that it is not prohibited from landing under the legislation.  Any false certification will be punishable by a two-year prohibition on that vessel from landing at a US port and will also expose the ship owner to prosecution under the US Criminal Code.  A total of 69 vessels still beneficially owned by IRISL are active and calling at major Iranian trading partners including China, India and Russia. Please see the attached detailed ICS circular letter.

Meanwhile police and customs officials in Finland have detained two people after finding 69 Patriot missiles and 150 tonnes of nitroguardine, labeled “fireworks”, on the cargo ship Thor Liberty in the port of Kotka.
 

RUSSIAN FISHING BOAT TO ENDURE FROZEN CHRISTMAS

The Russian fishing boat Sparta with a crew of 32, sent out a distress call a week ago from near the Antarctic ice shelf in Ross Bay about 2,000 nautical miles southeast of New Zealand, when it was holed by ice and began to list. Efforts to stabilize the vessel were initially successful but hampered by inadequate pumping capacity leading to an emergency drop by the New Zealand Air Force.

Aerial photographs of the stranded fishing boat Sparta and the modern South Korean ice breaker Araon which is underway to the scene

The Araon was earlier scheduled to head for Korea's research base Jang Bo-go in the Antarctic. It is still unclear why the non ice strengthened Sparta was even in the area.

SYDNEY TO HOBART YACHT RACE BEGINS DECEMBER 26

The Rolex Sydney Hobart Yacht Race 2011 will start on 26 December. Over the past 66 years, the Sydney to Hobart Race has become an Australian icon with no regular annual yachting event in the world attracting such huge media coverage. This year’s race has attracted an approved international fleet of 89 yachts. In last year’s race, 87 yachts competed with 18 of those subsequently retiring.

Market Update

We knew it was probably too good to last. Capesizes and Panamaxes were struggling this week and the Baltic Dry Index eventually closed on Thursday at 1787 points, compared to 1888 points one week ago and 1882 points the week previously.

                                                                 Cape Size            Panamax            Supramax

Index                                                          3406                     1676                     1183
One week ago                                          3571                     1772                     1196
Spot time charter                             $28,900/day      $13,400/day       $12,400/day
One week ago                                   $31,500/day     $14,200/day        $13,500/day

The dire state of shipping markets was perhaps best illustrated this week with the announcement that TBS International has surrendered the company’s new building series of six 34,000 DWT tween deckers delivered from China between 2009 and 2011 to the Royal Bank of Scotland as the price to avoid bankruptcy. The sextet of Rockaway Belle, Dakota Princess, Montauk Maiden, Omaha Belle, Comanche Maiden and Maya Princess has de facto been repossessed by the RBS-led syndicate, with deliveries to the bank scheduled at the conclusion of the ships’ current voyages. In return, RBS has forgiven TBS the mortgage loan of $150m taken out at $25m per ship, out of which $131m was outstanding at the end of 2010 according to TBS’ annual report.

LNG: The daily rate for a one-year time charter of large LNG carriers has risen $5,000 in a the past week to hit $155,000 per day as charterers’ demand for the vessels reflects increasing LNG consumption in Europe and Asia.

Tankers: According to London based Gibsons, the world’s double-hull fleet of Aframaxes, Suezmaxes and VLCCs now accounts for 97% of the total 1,892 vessels in these sectors in service at the end of 2011.

Upcoming Events

CONFINED SPACE ENTRY & RESCUE, & FIRE & FIRE CONTAINMENT 

SEAFIRE & the AMSBC have developed a short course aimed at those professionals such as surveyors, adjusters, and various others who have limited exposure to these risks - really anyone who has occasion to enter confined spaces. The course will take place in two 3-hours modules between 1800 and 2100 on the 11th and 18th January at the Mission to Seaman in Downtown Vancouver. The course runs $125+HST per module, and includes issuance of a certificate at the end of the course. Space is limited, but if there is sufficient take-up we can schedule further courses."The AMSBC co-ordinator contact details are below.
Captain Don Rose
604 312 4074
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ICMA XVIII – EARLY REGISTRATION – Vancouver, BC

May 2012 - The International Congress of Maritime Arbitrators is hosting its 18th Congress in Vancouver May 13-18th.  Register by December 31st to receive your early registration discount.  For more information and/or to register early visit http://www.icma2012.com/.

Dec 25              Christmas Day
Dec 26              Boxing Day – Office Closed
Dec 27              Office Closed
Jan 1                 New Year’s Day
Jan 2                 Office Closed
Jan 5                 VMAA Board of Directors Meeting @ 12:00
Jan 10              CIABC Board of Directors Meeting @ 10:30
Jan 10              Ship & Port Operations Committee Meeting @ 12:00
Jan 11              COS Board of Directors Meeting @ 11:30
Jan 11              ICS Canada Board of Directors Meeting @ 12:00
Jan 12              Plimsoll Club Board of Directors Meeting @ 12:00
Jan 18              COS Liner Committee Meeting @ 10:00
Jan 19              COS Navigation & Pilotage Committee Meeting @ 10:00
Jan 20              TC/CBSA meeting with ocean carriers re data sharing
Jan 24              ISSC Board of Directors Meeting @ 12:00
Jan 25              WMC PACMAR/NANS Meeting @ 10:30
Feb 21              Business of Shipping Course – Full day focus on expanded Legal and Chartering modules in the tanker, bulk and container sectors

SHIP OF THE WEEK

                                HMS Protector – Royal Navy Antarctic Survey Vessel

The Royal Navy’s new ice patrol ship HMS Protector (ex Polar Bjorn) sailed on her maiden voyage under the White Ensign in November to begin eight months surveying and patrolling the frozen continent. The 5,000-tonne icebreaker completed an intensive period of sea trials and training prior to deploying to the Antarctic region. She has three ‘work periods’ lined up around Antarctica, using her multi-beam echo sounder and her survey motor boat to provide highly-accurate hydrographic data and imagery for the UK Hydrographic Office, which provides 80% of the nautical charts used by the world’s mariners. The ship will also assist with the re-supply of British Antarctic Survey stations in the region.

Built in 2001 by Havyard Leirvik, Norway

LOA 89.7m

Beam 18.0m

GRT 4985

Speed 15 knots                                                                                                                                                                      

HMS Protector is leased as an interim replacement for HMS Endurance which suffered flood damage when she was operating in the South Atlantic in 2008. Protector was commissioned into the Royal Navy in June on the 50th anniversary of the Antarctic Treaty and the centenary year of Scott’s expedition to the South Pole. In the last eight months she underwent extensive conversion for her specialist mission. Her helicopter flight deck was moved from the bridge roof to the stern (see original picture on the right below); a multi-beam echo sounder survey system was fitted; the main engines and gearboxes were overhauled; a comprehensive communications and navigation suite was installed; and naval markings, including her A173 pennant number; and, most importantly, a giant penguin crest has been fixed to the funnel.

Protector is equipped with a flotilla of small boats, including: the state-of-the-art survey motor launch, James Caird IV, (named for the Scottish philanthropist who funded Earnest Shackleton’s 1914 expedition to the ice), the work boat Terra Nova (named for Scott’s ship on the ill-fated expedition to reach the Pole), and two Pacific 22 sea boats (Aurora and Nimrod). In addition, Protector is carrying three of the Royal Marines’ BV206 all-terrain vehicles and four quad bikes, complete with trailers; the ship’s powerful crane can lift them on and off the ice to assist with the re-supply of British Antarctic Survey scientific stations.

May 2012 bring our members and many valued friends across the industry everything you wish for – our next newsletter will be published on January 6

COS News – Week ending 16 December 2011
Issue No. 188

SENATE PASSES BILL C-18 ENDING CWB MONOPOLY

Bill C-18 was passed at third and final reading in the Senate on Thursday to eliminate the Canadian Wheat Board’s monopoly marketing wheat and barley grown by Western farmers.  Shortly after the vote, Governor General David Johnston gave the bill royal assent.  With royal assent and then the government immediately proclaiming the bill, the eight-farmer directors are off the board and the legal challenge dropped. Farmers can begin to negotiate contracts with flour mills or grain companies as long as the delivery date is August 1, 2012 or later.

CN REACHES TENTATIVE AGREEMENTS

CN has reached tentative agreements with both the Teamsters Canada Rail Conference (TCRC) , representing approximately 1,800 CN locomotive engineers in Canada and the United Steelworkers (USW) Local 2004, represents approximately 2,800 maintenance-of-way employees who inspect, maintain and repair CN's track, bridges and structures in Canada.  Both agreements are scheduled to expire on Dec. 31, 2011 and details the new agreements are being withheld pending ratification by the members. The ratification process is expected to take approximately 60 days.

CP’S GRAIN FRANCHISE SEES IMPROVEMENTS

In its crop year-to-date, Canadian Pacific has achieved a 19 per cent increase in empty order fulfillment by reducing scheduling variability and increasing access to rail car supply.   CP’s new simplified grain network groups over 165 prairie based elevators into eight separate operating hubs.  Within these hubs, the railway commits locomotives and a dedicated scheduled day of week service to each elevator. This operating model has delivered a 26 per cent improvement in on-time performance.

ALGOMA CENTRAL MARINE AND CAPTAINS AND CHIEFS ASSOCIATION REACH FIRST AGREEMENT

Algoma Central Marine and the Captains and Chiefs Association representing 56 captains, masters and chief engineers who are responsible for the operation of ships and diversified ship repair throughout the Great Lakes-St. Lawrence Seaway settled on its first collective agreement with the assistance of a mediator from the Labour Program’s Federal Mediation and Conciliation Service. The collective agreement is valid from March 1, 2011, to February 28, 2013.

OCCUPY DISRUPTS US PORTS

                              Main Street access to DP World on Monday

Hundreds of anti-Wall Street protesters blocked gates and delayed trucks at the ports of Oakland, Portland and Longview on Monday this week. Here In Vancouver, there were a handful of arrests, but no major clashes. Demonstrators say they are standing up for workers against the port companies, which have had recent high-profile clashes with union workers. Longshoremen in Longview, for example, have had a longstanding dispute with EGT, which employs workers from a different union to staff its terminal. While the protests attracted far fewer people than the 10,000 who turned out Nov. 2 to shut down Oakland's port, organizers declared victory and promised more demonstrations.

Government Updates

TRANSPORT CANADA PUBLISHES AMPS PROPOSALS

In the Canada Gazette, Part I – December 17, 2011 proposed Regulations Amending the Administrative Monetary Penalties Regulations under the Canada Shipping Act are published.   The proposed amendments would contain an expanded schedule designating certain provisions of seven regulations for the purpose of AMPs, as follows:

Comments to the proposed regulations will be accepted within 60 days after the publication of this notice. 

DFO CUTS ANNOUNCED

It was announced earlier this week that about 400 Department of Fisheries and Oceans (DFO) employees across Canada will be impacted by government staff reductions. More than 200 of those receiving notices are biologists and other scientists, the vast majority of whom work outside Ottawa in areas of ocean management, fish habitat management, hydrography and aquaculture. Another 39 positions are being cut from the coast guard following a re-organization. The department has a nearly $2 billion budget with 11,025 employees in seven regions – 22% in the Pacific; 17% in the Maritimes, 16% in the Ottawa region, 16% in Newfoundland and Labrador; 13% in Quebec, 12% in Central and Arctic and 4% in the Gulf Region.

DFO was among the 12 departments that underwent strategic review last year to find savings and realign spending with the government's priorities. Fisheries found savings of $9.1 million for 2011-12; $18.9 million in 2012-13 and will reach $56.8 million for 2013-14. The moves are part of the Government’s efforts to balance the budget by trimming $4 billion from $80 billion of budgets over three years.

MOVEMENT OF DANGEROUS GOODS NEEDS BETTER OVERSIGHT

According to the Commissioner of the Environment and Sustainable Development, Transport Canada and the National Energy Board need to improve their oversight of organizations required to comply with regulations governing the movement of dangerous products within Canada.  In a recent audit presented to the Office of the Auditor General, the Commissioner noted that the National Energy Board has yet to review emergency procedures manuals for 32 regulated companies. In all of its manual reviews that the audit examined, the Board had found deficiencies but there was little indication that it followed up to verify that the companies had taken corrective action.

The audit also found that Transport Canada does not know to what extent organizations transporting dangerous goods are complying with regulations. Its review of emergency response plans submitted by organizations is not timely or adequate. It has given temporary approval for nearly half the plans required for the transport of the most dangerous regulated goods, such as types of ammonia, acids, and explosives. Temporary approvals are subject to less verification and have been in place for ten years and more in some cases.

BILL C-20 ADDS 30 NEW SEATS TO THE HOUSE OF COMMONS

Bill C-20, An act to amend the Constitution Act, 1867, the Electoral Boundaries Readjustment Act and the Canada Elections Act, was passed by the Senate this morning.   The Conservatives will add 15 seats in Ontario, six each in British Columbia and Alberta, and three in Quebec.  The total number of MPs increases to 338 from 308.

CANPOTEX POTASH TERMINAL PROJECT PUBLIC COMMENTS INVITED

The Canadian Environmental Assessment Agency (the Agency) is conducting a comprehensive study environmental assessment of the proposed Canpotex Potash Terminal Project located in British Columbia. The public is invited to comment on a summary report of the Environmental Impact Statement.  

BC PREMIER APPOINTMENTS

Premier Christy Clark announced the appointment of Ray Castelli to head the BC Jobs and Investment Board and Eliis Ross to chair the Aboriginal Business and Investment Council. The BC Jobs and Investment Board will focus on the eight key sectors in the BC Jobs Plan – forestry, mining, natural gas, agri-foods, technology, tourism, transportation (ports, marine and aerospace) and international education.  The Aboriginal Business and Investment Council will work with Aboriginal communities and the private sector to make recommendations to government on strategies to improve Aboriginal peoples’ participation in the economy, identify successful investment models between Aboriginals and the private sector, foster economic development in Aboriginal communities, and increase overall investment in the province.

CANADA ADOPTS ANTI-PROTECTIONIST PLEDGE

The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway helped lead efforts that resulted in a strongly worded pledge by 23 members of the World Trade Organization “to fight all forms of protectionism in the strongest terms.”   Minister Fast adopted the pledge in Geneva at the start of the eighth World Trade Organization (WTO) ministerial meeting, taking place there from December 15 to 17.

CANADIAN NORAD REGION ANNOUNCES SANTA’S ESCORT PILOTS

With Christmas rapidly approaching, the Canadian NORAD Region has finalized plans to track and escort Santa Claus during his visits to Canada with the selection of four CF-18 fighter pilots who will act as Santa's official escorts.

First to welcome Santa will be pilots Captains Gregory Myers and Aaron Dhillon of 425 Tactical Fighter Squadron who will launch from 3 Wing Bagotville, Que., as the sleigh approaches Canadian airspace. Taking over escort duties as Santa makes his way into Western Canada will be the Commanding Officer of 410 Tactical Fighter Squadron, Lieutenant Colonel Christopher Hamilton and his wingman for this mission will be Captain Corey Mask of 4 Wing Cold Lake, Alta.

The Canadian Air Defence Sector Operations Centre at 22 Wing in North Bay, Ont., will alert NORAD when their radar and satellite systems detect Santa approaching North America. The two CF-18 Hornet fighter jets from 3 Wing will welcome Santa off the coast of Newfoundland and Labrador, then handover their duties as he nears western Canada to the two CF-18 Hornets from 4 Wing who will escort him ensure for the remainder of his Christmas voyage.

Special NORAD ‘SantaCams’, positioned around the world, will take photos and video of Santa and his sleigh as he journeys around the world. The ‘SantaCams’ instantly download the photo and video imagery so that it may be viewed by children worldwide on the NORAD Tracks Santa website on December 24.  NORAD’s Tracks Santa program website is www.noradsanta.org.

Other News

DURBAN PLATFORM LEAVES SHIPPING STILL IN LIMBO

South Africa’s minister for international relations has called last week’s agreement reached at UN climate change talks in Durban “a historic deal to save the planet” but from a marine industry perspective, there remains a great deal of uncertainty. The final deal, called the Durban Platform, involves new talks with a commitment to agree by 2015 an “instrument” with “legal force” to come into effect by 2020. For shipping, the agreement does not clarify or advance where the industry stands, or spell out its likely obligations. If anything it seems to add to the uncertainty.

The design of a Green Climate Fund was one of the key elements agreed on Sunday after more than two weeks of talks between some 190 nations. The U.S. for its part removed any reference to specific financing sources, notably shipping, for the fund which is intended to transfer up to $100 billion annually by 2020 to poorer nations to help them adapt to climate change and cut emissions. The conference adopted a management framework involving the World Bank to manage this, however details on how it will work in practice remain quite vague. The International Maritime Organization will in any event continue its work on developing a market-based measure that will help curb shipping’s emissions. The formal International Chamber of Shipping report on the conference is attached to this week’s newsletter.

NORWAY MARKS CENTENARY OF FIRST SOUTH POLE EXPEDITION

Scientists and explorers have joined the Norwegian Prime Minister to mark 100 years since Roald Amundsen led the first expedition to the south pole. Prime Minister paid tribute to Amundsen as having made "one of the most outstanding achievements of mankind".  Acknowledgment was also given to Robert Scott, the UK explorer whom Amundsen beat to the pole but who died along with four companions on the return expedition after being caught in a blizzard. The Prime Minister unveiled an ice bust of Amundsen at the US scientific base station Amundsen Scott. Amundsen's triumph came only six years after Norway became an independent nation.

                 Pictures from Roald Amundsen’s 1912 voyage to the South Pole on the sailing ship Fram

Amundsen led the first Antarctic expedition to reach the South Pole between 1910 and 1912 and he was the first person to (undisputedly) reach both the North and South Poles.  He is also known as the first to traverse the Northwest Passage. He disappeared in June 1928 while taking part in a rescue mission.

JAPANESE OWNERS WIN TONNAGE TAX EXTENSION

Japanese ship owners have successfully argued for an extension to the country's tonnage tax system. From April 2012, the government will allow foreign-flagged vessel owned by domestic owners to join the system with a view to helping stay competitive.

LONGBEACH SEEKS TO DEVELOP NEW EXPORT GRAIN TERMINAL

The Port of Long Beach has released a draft environmental impact report on a proposal to build a grain export facility at the Total Terminals International container terminal at Pier T. The facility which would have a facility of up to 1.5 million tons/year would transfer grain from rail cars into containers. Hanjin Shipping and its vessel sharing partners call at the 385-acre TTI facility in Long Beach. The grain export facility would occupy about 10 acres of the Hanjin controlled terminal.

ALWAYS A GOOD IDEA TO CHECK THE AIR DRAUGHT

The skipper of a European container feeder barge is unlikely to overlook the simple task of checking his air draught following an embarrassing mishap last weekend.

The "Fides" loaded with more than 100 empty containers collided with the Burgum Bridge on the Princess Margriet Canal in The Netherlands.

VOLVO OCEAN RACE 2011-12 BEGINS 2ND LEG

The most competitive fleet ever to contest the Volvo Ocean Race is now into its 2nd leg from Capetown to Abu Dhabi. The 11 crew members allowed on each boat of the six competing teams are probably the cream of the crop amongst the world’s best sailors including Olympic gold medalists, world champions and America’s Cup winners. They represent 15 nations - New Zealand, Australia, France, Spain, United States, Great Britain, Ireland, South Africa, Sweden, United Arab Emirates, Germany, Norway, Brazil, China and Belgium. Notable firsts are a Chinese entry, Team Sanya, and the first United Arab Emirates entrant, Abu Dhabi Ocean Racing.

                                       Volvo Ocean Race - ports of all resting up in Capetown after the first leg

The 2011-12 Volvo Ocean Race began with the In-Port Race on 29 October in Alicante, Spain before setting off on the first leg of the formal race to Cape Town. The teams are now en-route to Abu Dhabi, Sanya (Hainan province PRC), Auckland, Itajaí (Brazil), Miami, Lisbon, Lorient and will conclude in Galway (Ireland) in early July 2012. The total race distance is 39,300 nautical miles.

The Puma team suffered loss of its mainmast when still 2,100 miles out from Capetown on the first leg of the race and had to motor to Tristan da Cuhna to await the arrival of the project cargo carrier Team Bremen which successfully completed a tricky operation in open sea to lift the crippled yacht onboard and deliver safely to Capetown. Following repairs, the Puma team has joined the 2nd leg of the race.

CAPESIZES HOLD ON TO GAINS

Capesize rates for iron ore from Western Australia to China have hit a 21-month high of over $13 per ton, as Chinese demand continues to absorb tonnage. Even though there are over 200 more Capesizes in service than in the same period last year, the Baltic Exchange average time charter rate has climbed to almost $33,000/day. The Chinese government forecasts that by 2015 the country will be consuming 750m tons of steel per year, an amount that would require over 1.1bn tonnes of finished iron per annum, most of which would be  imported. The total Capesize fleet now numbers 1,335, according to Clarksons’ data. On the negative side, second hand prices of Capesizes continue to fall – a sure fire indicator that longer term confidence in this sector is low.

On a longer term positive note, the International Energy has raised concerns about the global implications of China’s massive appetite for coal. The agency’s annual report highlights that China’s domestic coal market alone is more than three times the international global coal trade with only 15% of global coal demand being met through international trade. The report also expresses concern for the fact that six countries account for more than 80% of global coal exports which will inevitably lead to export infrastructure bottlenecks.

Nowhere is this more evident than in Australia and China where each currently has more than 100 Capesizes tied up in port congestion. The Queensland State Government this week announced the allocation of land for a new A$10Bn ($10Bn) coal port south of Mackay, a significant investment as  Australia this week revised its major dry-bulk export forecast upwards for the coming fiscal year, expecting an additional 12.8m tons, equivalent to 75 additional fully-loaded Capesizes.

For the first time on record the number of bulk carrier new buildings delivered will this year will exceed 1000 vessels in a calendar year. Already, In the first eleven months of 2011, 1,050 bulk carriers of a cumulative 88.5m DWT have been delivered according to data compiled by Clarksons.

Market Update

The Baltic Dry Index closed on Thursday largely unchanged for the week at 1889 points, up from 1882 points one week ago 1862 points the week previously.

                                                        Cape Size            Panamax          Supramax

Index                                                  3571                    1772                    1196
One week ago                                 3529                    1693                    1248
Spot time charter                       $31,500/day        $14,200/day       $23,500/day
One week ago                            $31,100/day        $13,500/day       $13,000/day

 Containers: Alphaliner estimates that some 210 container ships of a combined 526,000 TEU or 3.5% of the global fleet capacity are now unemployed.

Upcoming Events

ICMA XVIII – EARLY REGISTRATION – Vancouver, BC

May 2012 - The International Congress of Maritime Arbitrators is hosting its 18th Congress in Vancouver May 13-18th.  Register by December 31st to receive your early registration discount.  For more information and/or to register early visit http://www.icma2012.com/.

Dec 25              Christmas Day
Dec 26              Boxing Day – Office Closed
Dec 27              Office Closed
Jan 1                 New Year’s Day
Jan 2                 Office Closed
Jan 10              CIABC Board of Directors Meeting @ 10:30
Jan 10              Ship & Port Operations Committee Meeting @ 12:00
Jan 11              COS Board of Directors Meeting @ 11:30
Jan 11              ICS Canada Board of Directors Meeting @ 12:00
Jan 12              Plimsoll Club Board of Directors Meeting @ 12:00
Jan 18              COS Liner Committee Meeting @ 10:00
Jan 19              COS Navigation & Pilotage Committee Meeting @ 10:00
Jan 23              BC Marine Vessel Air Quality Meeting @ 09:00
Jan 24              ISSC Board of Directors Meeting @ 12:00
Jan 25              WMC PACMAR/NANS Meeting @ 10:30

Ship of the Week

                                           Rainbow Warrior III

LOA 58m
Beam 11m

In October this year the new Greenpeace flagship Rainbow Warrior III made its maiden voyage to London where it was showed to the media and public. The purpose-built vessel, which cost $33 million, is the third vessel to take the name. Every aspect of the design and build has been designed to make the ship as clean and green as possible. She will sail under wind power, but electric diesel engines with an upper speed of 15 knots are available when needed and heat from the engine and generators will be recycled to heat cabins and provide hot water . She is constructed to operate anywhere in the world outside the polar regions.

An onboard satellite communications system gives 24/7/365 broadband access anywhere in the world whilst media activity is also supported by a dedicated onboard press conference room. 

     communications centre                   Captain Joel Stewart on bridge

Video of arrival in London: http://www.guardian.co.uk/environment/video/2011/nov/10/greenpeace-rainbow-warrior-video

   Original Rainbow Warrior – sunk in New Zealand by France

In 1985, French secret service agents planted two bombs and sank the original Rainbow Warrior in New Zealand, one crew member being killed. The act was sanctioned by France in an attempt to “neutralize” the ship ahead of its planned protest against French nuclear testing in the Pacific. Initially, the French government denied all knowledge of the operation, but it became soon obvious that they were involved. Eventually, prime minister Laurent Fabius appeared on television and told a shocked public: “Agents of the DGSE (Secret Service) sank this boat. They acted on orders.”

The Rainbow Warrior was named after a North American Cree Indian prophecy: “When the world is sick and dying, the people will rise up like Warriors of the Rainbow…”

COS News – Week ending 9 December 2011
Issue No. 187

NEW US/CANADA PERIMETER ACTION PLAN WELCOMED

On December 7^th Prime Minister Stephen Harper and US President Barack Obama introduced the long-awaited Action Plans on Perimeter Security and Economic Competitiveness and on Regulatory Cooperation.  The action plans are designed to speed up legitimate trade and travel, improve security in North America, and align regulatory approaches between the two countries.

Key items included in the Action Plans for our industry include:

• Enhancing marine domain awareness – identifying gaps and vulnerabilities, creating a new vision for deploying new technology to address the gaps; 
• Harmonized screening of inbound cargo – cargo will be clearance once, accepted twice (Cdn/US).  By June 30, 2012 a common set of advance data elements for all modes of transport will be identified.  Prince Rupert will be the pilot for the Canada Border Services Agency – Transport Canada Cargo Targeting Initiative for perimeter vetting and examination of inbound marine cargo destined for Chicago by rail;
• Expediting legitimate travellers – US Customs and Border Protection will conduct pre-clearance of travellers and accompanying goods at Vancouver for passenger rail and cruise ship traffic destined to US;
• Feasibility study on wood packaging – identify and address any policy, program or operations changes to move inspections for wood packaging material away from Canada-US border to the perimeter;
• Ratification of the shiprider program – enabling regular deployment of cross-border policing teams between ports of entry;
• Coordinated efforts to facilitate maritime commerce recovery – identifying and disseminating best practices;
• Aligning marine transportation security requirements – prevent duplication of services and remove impediments to cross-border operations and incorporate the ability to use alternative security arrangements in Canadian regulations;
• Moving to common standards marine safety equipment – particularly life jackets
• Containment of dangerous goods – aligning standards

For more information on the action plans visit: www.borderactionplan.gc.ca.

OCCUPY MOVEMENT THREATENS PORT DISRUPTION

As we reported last week, the US “Occupy” movement has called for a shutdown of US west coast ports on December 12. Members should be aware that they have also called for Canadian support, the consequences of which are unclear. The movement has put out a clip on Youtube. 

Meanwhile, the previously reported dispute between Ports of Auckland and the Maritime Union of New Zealand has comes to a head following the decision by Maersk to shift one of its weekly services to neighbouring Tauranga. This constitutes the loss of some 80,000 TEU per year or 10% of Auckland’s container throughput.

BC COAST PILOTS AND PILOTAGE AUTHORITY SETTLE ON 5-YEAR DEAL

On December 7^th the Pacific Pilotage Authority and the BC Coast Pilots reached a settlement under binding arbitration through the Final Offer Selection process.  The terms of the 5-year agreement take effect January 1, 2012.  The PPA will now pursue discussions with industry on amendments to the Pacific Pilotage Tariff Regulations which will need to be approved and published in the Canada Gazette prior to implementation.  Any revisions to the tariff are expected to take effect in mid-2012.

SEASPAN AND GUILD SETTLE

The Canadian Merchant Services Guild representing Seaspan’s licensed seagoing employees ratified a new three-year collective agreement with Seaspan Marine Corporation yesterday.    The new contract will expire at the end of September 2013.

FEDERAL COURT RULES IN FAVOUR OF THE CANADIAN WHEAT BOARD

Federal Court judge Douglas Campbell ruled earlier this week that the Conservative government broke the law in recently introducing legislation to end the Wheat Board’s 76-year old monopoly over the sale of all wheat and barley grown in Western Canada.  In his ruling, Judge Campbell noted that while a majority government has the right to introduce and pass legislation, it must still follow rules established in laws set by previous Parliaments. In the case of the Wheat Board, those rules date back to 1998 when the Canadian Wheat Board Act was amended to increase farmer control over the agency. The amendments included provisions requiring consultation and a vote by farmers before any major changes were made to the Act or the board’s operations.

However, the Conservatives say they will invoke closure in the Senate to ensure a bill to end the Canadian Wheat Board monopoly on grain sales passes next week.  Agricultural Minister Gerry Ritz has stated that the federal government will not withdraw or amend the bill following the court's decision.

Rather, while the appeal is working its way through the courts, Ritz said the government will pass the bill before the end of this year, "to bring certainty and clarity to farmers, to the industry overall and, of course, our customers both domestically and abroad."

CBSA RELEASE INFORMATION ON RADIOACTIVE GOODS INTERCEPTED

Canada Border Services Agency (CBSA) issued a news release advising of the interception and detention of 19 marine containers testing positive for low levels of man-made radiation at the Port of Vancouver and Prince Rupert since early October.  CBSA identified the source of the radiation as Cobalt-60, a man-made radioactive material that has many industrial applications and is commonly used for medical treatments.   A majority of these contaminated containers are coming from factories in China where the material is not pre-screened for radioactive content prior to use in the manufacturing process.

SEASPAN FERRIES ACQUIRES VAN ISLE BARGE SERVICES LTD

Seaspan Ferries Corporation has acquired the business of Van Isle Barge Services Ltd.  This includes three barges and operating rights to Surrey and Duke Point, as well as a charter party agreement with Sea-Link Marine Services Ltd. to provide pusher tug services. 

GREEN MARINE NEWSLETTER

The latest edition of Green Marine’s newsletter is now available on on-line at www.green-marine.org.

Government Updates

CBSA CN 11-023 SUMMARY REPORTING PROGRAM REVIEW

As noted in a previous newsletter, Canada Border Services Agency is moving towards mandatory reporting of exports for containerized cargo starting now June 1, 2012.  For bulk and breakbulk cargo, CBSA is in the process of reviewing its export Summary Reporting Program (SRP). The SRP allows exporters who meet the criteria identified in Section 4 of the Reporting of Exported Goods Regulations to report required export data in a single, monthly summary report.   CN11-023 is to advise that CBSA is requiring all current Summary Reporting Program exporter participants to complete and submit a new application form BSF613 for approval no later than January 30, 2012 to continue in the program. 

An approved application will be valid for five years and the participant must re-apply at least 90 days before the effective expiry date to continue to use the export summary reporting option to report their exports.

The existing SRP identification numbers will run concurrently with the new numbers for 60 days after the application deadline. This will allow for a two-month grace period with no applicable administrative monetary penalties issued until April 1, 2012.

RELEASE OF CAED VERSION 2012

The 2012 version of the Canadian Automated Export Declaration (CAED) software will be released on December 19, 2011 with the 211 version expiring on January 30, 2012.  CAED participants should upgrade to CAED 2012 by downloading the software from the CAED Web site along with the release notes at www.statcan.gc.ca/exp.

COASTING TRADE D-MEMO UPDATED

Canada Border Services Agency has updated Memorandum D3-5-7 for the Temporary Importation of Vessels – to update contact information and paragraph 40 to reflect an exception to the rule that once a vessel leaves Canadian waters and goes International, the Coasting Trade Licence is no longer valid and will be cancelled by the CBSA.  The exception to this rule are tankers and cruise vessels that have as part of its licence conditions, potential stops at foreign ports, where the last leg of the transportation is destined for a Canadian location.

Other News

DURBAN CLIMATE CHANGE CONFERENCE

The marine industry’s efforts to avoid being used as a cash cow to fund mitigation of climate change in developing countries is facing opposition following circulation of draft proposals circulated at the UN climate talks in Durban. The wording is said to suggest that money raised by “specific actions” to reduce emissions from maritime bunker fuels, currently being discussed at the IMO, should go towards a so-called “Green Climate Fund”. The call for shipping revenues to be earmarked for the Fund is the first time a concrete source of funding has appeared in a UN text. Groups such as Oxfam and the World Wildlife Fund want a carbon price of $25 per tonne to be applied to bunkers, arguing that this would help to cut emissions. The World Bank and IMF have estimated it could raise $26bn a year and is estimated to add 0.2% to shipping costs, or $2 for every $1000 traded. The draft plan is for $16bn a year to go to developing countries to offset higher import costs and $10bn to go to the green fund. Several nations including the U.S. and Australia have voiced concern with the proposal.
 

PRC OIL SPILL RESPONSE REGISTRATION

Please note the attached notice from the Swedish Club with respect to the procedure for contracting with Spill Response Organizations (SPROs) that have been approved by the China Maritime Safety Agency (MSA). The circular issued by the Swedish Club this week is attached.  All Clubs in the International Group have issued similar circulars. As previously advised, the requirement for owners/operators of (a) any ship carrying polluting and hazardous cargoes in bulk or (b) any other vessel above 10,000 gt, to contract with an approved SPRO before entering a Chinese port, will be enforced from January 1, 2012. 

JAPANESE WHALING FLEET SETS SAIL

Japan’s whaling fleet sailed last weekend to begin its controversial annual hunt in the Southern Ocean. The factory ship Nisshin Maru and two harpoon vessels sailed with coast guard officers on board and a fisheries escort vessel in case of clashes with the Sea Shepherd conservation group. Sea Shepherd restricted the whalers to a fraction of their target of about 1000 whales last year and has vowed an even stronger stance in the new season. There had previously been some expectation that the decline in popularity of whale meat and the pressure on Japan’s finances in the wake of the tsunami would curtail the hunt completely.

                                      Nisshin Maru sets sail

NEW IRAN SANCTIONS PLACES SHIPPING IN A BIND

The decision of the US and the European Union to increase trade sanctions on Iran is seen as further complicating the debate for struggling tanker owners since someone still needs to carry a source of oil that the world cannot live without. Iran’s exports represent around 6% of global seaborne crude trade equating to some 2.3m barrels per day or a fully loaded VLCC. Another oil price shock is probably the last thing the world’s economies need right now and not least a spike in the cost of marine bunkers.

China buys around 25% of Iranian oil with India and Japan each taking around 15%. However Iranian oil is also fed into the Red Sea port of Ain Sukhna and transhipped via the Suez-Mediterranean (SUMED) pipeline and pumped to Sidi Kerir on Egypt’s Mediterranean coast. In the first ten months of 2011, it is estimated that more than 21m tons of Iranian oil was discharged into the pipeline, almost half of the volume carried. Most of this was ultimately destined for the EU.

   Sumed pipeline-Red Sea to Mediterranean

P&I Clubs have also raised the prospect that the latest round of sanctions on Iran will make claims transactions involving that country almost impossible as any non-US bank which needs to have access to the US financial system will be unwilling to put themselves at risk by dealing with Iranian financial institutions.

LOOKING BEYOND TODAY’S CONTAINER INDUSTRY SLUMP

In 2010, the global container port industry handled approximately 550m TEU and it is expected to be raised by 7% this year to around 590m TEU. If we project a 5% annual growth rate, then in a matter of 15 years the market will be twice as big as it is today.”

Drewry has also been looking to develop methodology by which equity control of various terminals can be measured. The concept of “equity-TEU” has been launched as represented by pie diagram above right. The four main global terminal operators in containers are well known: HPH, PSA, DP World and APM Terminals, who together in 2010 accounted for 151m equity-TEU of the 220m equity-teu handled by the top 15 companies, according to Drewry.

RECENT APPOINTMENTS

Morley Strachan has been appointed President of Coast 2000 Terminals Ltd.  Morley will assume his responsibilities as Coast’s President on December 12, 2011.  Kevin Ouellette will continue to serve as Coast’s President until that date and then assist in the transition to December 31, 2011.

Darcy Clarkson is now the Managing Director for Westnav Container Services Ltd. and Cheryl Robertson, Terminal Manager.

Mike Corrigan will replace David Hahn as president and CEO of BC Ferries in January. Corrigan has spent the last nine years as chief operating officer and executive vice president of business development at BC Ferries.

Market Update

The Baltic Dry Index closed on Thursday largely unchanged for the week at 1882 points, up from 1862 points one week ago 1814 points the week previously.

                                                           Cape Size            Panamax            Supramax

Index                                                     3529                    1693                      1248
One week ago                                    3386                     1710                      1347
Spot time charter                           $31,100/day        $13,500/day         $13,000/day
One week ago                               $29,000/day        $13,600/day         $14,100/day

Tankers: Four tanker owners are to form a new VLCC pool with a view to collectively addressing unrealistically low freight rates. Partners are to be Mitsui OSK Lines, Phoenix Tankers, Maersk Tankers, Samco Shipholding and Ocean Tankers. The pool will comprise around 50 relatively new vessels and plans to be operational early in 2012.  VLCCs on the Baltic Exchange’s benchmark route from Saudi Arabia to Japan are averaging around $8,000 per day in earnings so far this year, more than $2,000 below daily operating costs, even before a contribution to financing. An estimated 135 new VLCCs are scheduled to enter the already over-tonnaged fleet of around 570 vessels in this sector over the next couple of years.

The LNG market has tightened considerably in the last couple of weeks with large vessels fetching close to $150,000/day.

Upcoming Events

ICMA XVIII – EARLY REGISTRATION – Vancouver, BC

May 2012 - The International Congress of Maritime Arbitrators is hosting its 18th Congress in Vancouver May 13-18th.  Register by December 31st to receive your early registration discount.  For more information and/or to register early visit http://www.icma2012.com/.

Dec 13              Discussion with CFIA and CBSA on Straw @ 11:00
Dec 13              COS Liner Committee Meeting @ 12:00
Dec 13              Discussion on Grain Loading via Feeder Holes @ 14:00
Dec 14              CBSA Bay Plan Reporting Webinar @ 10:30
Dec 15              Vancouver Transportation Club Christmas Dinner
Dec 25              Christmas Day
Dec 26              Boxing Day – Office Closed
Dec 27              Office Closed
Jan 1                 New Year’s Day
Jan 2                 Office Closed

Ship of the Week

                     Umm Salal – United Arab Shipping Co.

Built by Samsung Shipbuilding, South Korea 2011
LOA 366m
Beam 48.4m
GRT 135,000
DWT 165,300 MT
Summer Draft 15.5m
Capacity 13,296 TEU
Speed 25 knots

United Arab Shipping Company (UASC) took delivery of its first 13,500 TEU capacity container vessel, Umm Salal, at the Samsung Heavy Industries shipyard in Geoje, South Korea in April this year. The new vessel is the first in a series of nine A13 class container ships that UASC has on order at SHI, at a combined contract price of around $1.5 billion. The remaining eight sisterships will enter service during the first four months of 2012. Powered by a Doosan MAN B&W 12K98ME7 main engine, the Umm Salal can operate at a service speed of around 25 knots. The design incorporates capacity for 800 40ft reefer containers on deck and has three holds designed for hazardous cargoes. As well as being more economical, Umm Salal and her sisters are also environmentally-friendly vessels, incorporating waste heat recovery systems and silicone paint coated hulls designed to reduce water resistance and so reduce fuel consumption.

Umm Salal is initially deployed within a service that UASC launched in March 2011, together with China Shipping Container Line, CMA CGM and Evergreen, which connects ports in China and Malaysia with Le Havre, Rotterdam, Hamburg and Zeebrugge in northern Europe. When the full fleet of nine A13 vessels has been delivered, UASC will use these vessels to establish a stand-alone service covering the Europe-Asia trades, with direct calls in the Middle East, the company’s core market. UASC currently owns and operates a total of 63 container ships.

COS News – Week ending 2 December 2011
Issue No. 186

$60-MILLION NEPTUNE TERMINALS INVESTMENT CREATES JOBS 

Ramsay Machine Works in Sidney, B.C. expects to double their workforce early next year to build new loading equipment to handle the growing demand for coal exports at Neptune Terminals in North Vancouver.   Neptune Terminals has signed a $20-million contract with EMS-Tech of Belleville, Ontario to build a new stacker-reclaimer at Ramsay Machine Works in Sidney. The contract is part of a larger $63.5-million terminal investment program at Neptune Terminals. As the terminal increases volumes, 60 permanent jobs will be added at Neptune through the expansion program. The Vancouver Island fabricator, Ramsay Machine Works, expects to hire up to 20 or 25 additional tradespeople for this project.

LEDCOR LAUNCHES MARINE SERVICE AND ACQUIRES RENEW RESOURCES

Ledcor Resources and Transportation, a division of the Ledcor Group of Companies has taken delivery of twelve new barges and acquired Renew Resources, a BC based company that specializes in the processing of wood fibre in the interior. The Ledcor Group is investing $70 million, making it the only company of its kind to provide all of the related supply chain services from fibre sourcing and harvesting to the processing and delivery of that fibre to end users. The company is based in BC and employs 200, which includes a significant number of First Nations people with whom the company has also formed a number of strategic alliances.

RIO TINTO GIVES FORMAL APPROVAL TO ALCAN SMELTER MODERNIZATION

Rio Tinto has confirmed further investment of $US2.7 billion to modernize its aluminium smelter in Kitimat. The investment will allow the company to complete the entire $US3.3bn project by 2014 and increase the smelter's production capacity by around 48%, to about 420,000 tons a year. "The modernization of Kitimat will transform its performance and cut greenhouse-gas emissions by about half," said Jacynthe Cote, Chief Executive of Rio Tinto Alcan this week. The Kitimat project will secure approximately 1,000 stable, specialized jobs for the long-term, and 2,500 jobs during the peak period of the construction phase.

SQUAMISH TERMINALS NEWSLETTER AVAILABLE

The latest edition of Tides, Squamish Terminals Winter 2011 / 2012 Newsletter by clicking on the link  

Winter 2011 / 2012 (3.53MB PDF).

Government Updates

CBSA BAY PLAN REPORTING WEBINAR

CBSA will be hosting a webinar to discuss the Bay Plan ECCRD version 2.0.7 on Wednesday December 14, 2011 10:30am - 1pm.  Members interested in participating should contact Alino Busa by email This e-mail address is being protected from spambots. You need JavaScript enabled to view it   to reserve a spot. Further instructions on the Webinar will sent to participates in advance of the Webinar. 

NEW PORT STATE MEASURES AGAINST CARRIAGE OF ILLEGAL FISH IN CONTAINERS

In November 2010, Canada signed the Port State Measures Agreement to help prevent illegal fish and seafood products from entering the market and is currently working towards its ratification. In order to ratify the Agreement, minor amendments to the Coastal Fisheries Protection Act and its Regulations are being proposed. The Department of Fisheries and Oceans (DFO) has prepared an overview, which outlines proposed legislative amendments which is available until January 31, 2012 at http://www.dfo-mpo.gc.ca/international/isu-iuu-port-eng.htm

Chamber of Shipping interest in this issue stems from the potential for carriers to unknowingly carry illegal fish in containers. The primary aspects of this legislation are:

• Amend the definition of “fishing vessel” to include any vessel (including container vessel) used in transhipping fish or marine plants that have not previously been landed;
• Amend the inspection, search and seizure and related enforcement powers of protection officers to include any place, including containers, warehouses, storage areas, vehicles and all ports of entry;
• Improve authorities for sharing information between Fisheries and Oceans Canada and Canada Border Services Agency as it relates to the importation of fish, seafood products and marine plants; and,
• Prohibit the importation into Canada of fish or marine plants taken, possessed, transported, distributed or sold contrary to any measure of an international fisheries management organization or arrangement; international treaties to which Canada is a party; or law of any foreign State, and make it an offence to contravene this prohibition

CANADIAN COAST GUARD LAUNCHES 50^TH ANNIVERSARY WEBSITE

The Honourable Keith Ashfield, Minister of Fisheries and Oceans, invites all Canadians to help celebrate the upcoming 50th Anniversary of the Canadian Coast Guard by visiting the new Golden Jubilee Web site. On January 26, 2012, the Canadian Coast Guard will officially mark 50 years of dedicated service. Events to commemorate this important milestone will be held throughout the year, in communities across the country.

FEDERAL GOVERNMENT ANNOUNCES INVESTMENT IN CLEAN AIR

Environment Minister Peter Kent and Veterans Affairs Minister Steven Blaney announced an investment of $600.8 million over five years to renew the Clean Air Regulatory Agenda, (CARA), which has served as the framework for the Government to reduce greenhouse gas emissions and improve air quality since 2006.

• Align greenhouse gas regulations with the United States where appropriate;
• Finalize and implement a national air quality management system;
• Strengthen commitments to reduce transboundary air pollution under the Canada-U.S. Air Quality Agreement;
• Improve indoor air quality; and,
• Nation-wide implementation of the Air Quality Health Index to help Canadians make informed decisions to protect their health.

Other News

EXPANDED CALIFORNIA LOW SULPHUR FUEL ZONE TAKES EFFECT DECEMBER 1

The new and expanded boundary for California’s mandatory low sulphur fuel zone now includes the region 24 nautical miles (nm) from the California shoreline, including 24 nm from the shoreline of the Channel Islands.   

Fuel                                                                             Effective                        % Sulphur Content Limit
Requirement                                                               Date                           

1. No change from the existing requirements.
2. Marine gas oil sulfur limit reduced from 1.5% to 1%. No change in marine diesel oil limit.
3. Implementation delayed from 2012 to 2014.

* Additional information with respect to implementation and mandatory record keeping can be found at http://www.arb.ca.gov/marine

DURBAN CLIMATE CHANGE CONFERENCE

The International Chamber of Shipping is representing the world’s ship owners at the United Nations Framework Conference on Climate Change (UNFCCC) in Durban this week and next.  In this connection, the attached press statement was released on November 29 in addition to a Joint Statement with Oxfam and the World Wildlife Fund.

                                                Durban street parade ahead of COP17

The conference was opened by South African president Jacob Zuma telling delegates representing 191 countries that climate change in the developing world was a "matter of life and death". Durban is hosting some 20,000 official delegates plus many thousands of ENGO representatives.

AUSTRALIA ANNOUNCES WORLD’S LARGEST MARINE RESERVE

The Australian government has announced plans to establish the world's largest marine reserve of almost 990,000 sq km in the Coral Sea off North East Australia. The protected zone which would cover an area more than one-and-a-half times the size of France will include new restrictions on fishing with exploration for oil and gas banned. The proposal is subject to a 90-day consultation.

The Coral Sea is also the resting place of three American and five Japanese warships sunk in the Battle of the Coral Sea in 1942 including an aircraft carrier from each side. This major naval engagement was fought from 4–8 May 1942, between the Imperial Japanese Navy and Allied naval and air forces from the United States and Australia. The battle was notable as the first fleet action in which aircraft carriers engaged each other but in which neither side's ships sighted or fired directly upon the other. Over 1600 seamen and airmen were lost between the two sides. Seventy years later, the battle is still widely known throughout Australia with many Aussies referring to it as "The battle that saved Australia." 

PIRATES RELEASE BULK CARRIER AND CHEMICAL TANKER

The Italian Panamax bulk carrier Rosalia D'Amato has been released by Somalia pirates after seven months in detention. She was then escorted under her own power by the Italian warship Andrea Doria to Salalah, Oman. Several technical crew from the warship also provided direct onboard assistance. In a press statement, the owners “extended deep thanks to the crew for the courage and fortitude that they have shown throughout their long ordeal, and to their families for their patience, support and trust in such difficult circumstances." Also released this week was the Chemical tanker Gemini, again after being held for seven months. Of major concern is that only 21 of the 25 crew members were freed, the four Koreans onboard being detained, apparently in retaliation for those pirates killed by South Korean commandos during the rescue of the Samho Jewelry earlier this year. 

                Rosalia D’Amato                                    Italian destroyer Andrea Doria                Chemical tanker Gemini

It has recently become evident that some shipping banks are refusing to facilitate the payment of ransoms on account of perceived damage to their international reputation. The U.S. in particular remains strongly critical of ransom payments. Greece is meanwhile the latest European country to draft new legislation allowing ships under its flag to employ armed guards in piracy impacted waters.

VALE GIANT ORE CARRIERS SHRINK TO 380,000 DWT

Rongsheng Heavy Industries handed over the  402,000 DWT Vale China last week, the 4th Very Large Ore Carrier (VLOC) in a $2.3bn order of 19 vessels, However, to much surprise, references to the 12 built (or to be built) in China quoted a 5% capacity reduction to 380,000 DWT.

Vale has been struggling with gaining access to Chinese ports by these mega ships in the face of strong opposition from the China Shipowners Association which has accused Vale of attempting to generate a monopoly over the iron ore trade lanes. It is therefore well known that Vale has been in talks with Chinese shipowners to charter out these vessels on long-term contracts, or engage in sale or leaseback arrangements.

CONTAINER OPERATING MARGINS AVERAGE -9% IN Q3

Average operating margins for 15 leading container carriers surveyed by Alphliner fell to -9% in Q3 2011 with only one carrier reporting profitability. latest merchandise trade figures in dollar value terms from the Organisation of Economic Co-operation and Development (OECD) confirm the sharp slowdown in trade during Q3 in the world’s major economies.

For the G7 nations — the US, Canada, Japan, the UK, France, Germany and Italy —and the BRIC countries of Brazil, India and China, total imports contracted quarter-on-quarter by 1%, a slump from the 4.2% growth in the second quarter. Exports managed to remain in positive territory, but growth slowed to just 1%, compared with 4.6% in the previous quarter. Countries in Europe suffered the most, with exports and imports contracting in all major European countries in Q3 whilst In the US, imports contracted by 2.7% in the third quarter and export growth slowed to 2.5%.

Spot container freight rates in the trans-Pacific have fallen further to the lowest level in 23 months. The Drewry Container Benchmark Rate for shipments from Hong Kong to Los Angeles have fallen to $1,436 per FEU, down 26.8% on the $1,961 per FEU in the same week last year. It was also announced this week that Mediterranean Shipping Co and CMA CGM, the world’s second and third-largest container shipping companies have inked an agreement that will see a broad-based operating partnership spanning several trades, including Asia-Northern Europe, Asia-Southern Africa and all of the South American markets.

RENA SALVAGE COSTLY FOR CARGO OWNERS

Under a declaration of General Average, cargo owners look set to be charged could as much as 80% of the value of their possessions on the container vessel Rena which remains aground off Tuaranga NZ. If confirmed this is believed to be the highest charge in history to return shipwrecked goods. Salvage company Svitzer appointed by the vessel’s owners have resumed removing containers from the grounded vessel after poor weather forced a break of three days. Some 120 containers have so far been lifted from the wreck.

The law of general average is a legal principle of maritime law under which all parties in a sea venture proportionally share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency. While general average traces its origins in ancient maritime law, it remains part of the admiralty law of most countries.

VANCOUVER MARITIME MUSEUM – NEW EXHIBIT

Chátwilh: The Craft and Culture of the Squamish Canoe will offer visitors a look back at ancient crafts and traditions as well as insight into how the Squamish Nation’s uniquely adapted watercraft. The exhibition’s curators have aimed to go far beyond the usual folklore and clichés that often conceal the realities of First Nations life.  The display focuses on showing the deep relationship of the Squamish to the natural world along with some of the remarkable places and traditions of Vancouver’s early history. Through illustration of the making of traditional watercraft, visitors will experience the fundamental role canoes have for the Squamish Nation and how they have became a centre piece of their culture.

BRIAN CARTER JOINS SMC AS PRESIDENT – SEASPAN SHIPYARDS

Seaspan Marine Corporation (SMC) announced that Brian Carter is joining the Corporations as President – Seaspan Shipyards.  Brian will assume this role full-time beginning January 9, 2012.  In this role, Brian is responsible for delivering the long-term strategic plans of Seaspan’s three shipyard operations (Vancouver Drydock, Vancouver Shipyards and Victoria Shipyards). In addition to working with Seaspan’s senior management team at both the corporate and shipyard level, one of Brian’s key areas of focus will be aligning the shipyard group for long-term success under the new $8 billion Federal Fleet Renewal Program. Brian joins Seaspan from Brizo Maritime, a consulting company he founded in 2010 to assist maritime companies with strategic development initiatives.

PORT METRO VANCOUVER – OPERATIONS COORDINATOR (CASUAL)

The Harbour Master’s department has a casual position available for an Operations Coordinator.  For more information, visit the Careers Section on our website.

DOUG RAMSAY TO RETIRE

After a lengthy and very successful career in the Canadian shipping industry, Doug Ramsay, General Manager of Westnav Container Services Ltd., will retire on December 16, 2011.  We wish him a very restful retirement.

LEWIS-MANNING RECEIVES ORDER OF MILITARY MERIT

Robert Lewis-Manning, Vice President of the Canadian Shipowners Association was invested as an Officer of the Order of Military Merit in a ceremony at Rideau Hall for outstanding meritorious services in duties of responsibility.  The Order of Military Merit was created in 1972, to recognize meritorious service and devotion to duty by members of the Canadian Forces.

Market Update

Driven by demand for Capesizes out of Western Australia, the Baltic Dry Index closed stronger for the week on Thursday at 1862 points, down from 1814 points one week ago 1898 points the week previously.

                                                   Cape Size              Panamax            Supramax

Index                                              3386                      1710                     1347
One week ago                             3042                      1822                     1382
Spot time charter                   $29,000/day         $13,600/day        $14,100/day
One week ago                        $25,800/day         $14,600/day        $14,400/day

Tankers 

Upcoming Events

WINTER WANDER IN VANIER PARK

Dec 3 - The cultural institutions of Vanier Park will be hosting the first “Winter Wander in Vanier Park” very kindly sponsored by Port Metro Vancouver. This initiative is being led by the Maritime Museum and includes participation by Museum of Vancouver, Space Centre, Vancouver Archives, Vancouver Park Board, Bard on the Beach, Vancouver Music Academy. Kits Point Residents Association has been included in planning for this event.

Dec 6               Customs Working Group Meeting @ 10:00
Dec 7               Port Metro Vancouver Sustainability Report Review Panel @ 09:30
Dec 7               COS Members’ Reception
Dec 8               COS Navigation & Pilotage Committee Meeting @ 10:00
Dec 8               COS Owners Committee Meeting @ 14:00
Dec 8               CIFFA Christmas Lunch
Dec 9               WMCC Board of Directors Meeting @ 12:00
Dec 13             COS Ship & Port Operations Committee Meeting @ 10:00
Dec 13             COS Liner Committee Meeting @ 12:00
Dec 14             CBSA Bay Plan Reporting Webinar @ 10:30
Dec 15             Vancouver Transportation Club Christmas Dinner
Dec 25             Christmas Day
Dec 26             Boxing Day – Office Closed
Dec 27             Office Closed
Jan 1                New Year’s Day
Jan 2                Office Closed

Ship of the Week

                                          Glovis car/truck carrier Vany Rickmers

 The 4900 vehicle capacity pure car/truck carrier Vany Rickmers, built by Xiamen Shipbuilding Co, was delivered in February 2010 to the Rickmers Group and immediately chartered to the GLOVIS subsidiary of the Hyundai Kia Auto Group. Hankook Logitech Co. Ltd was formed in February 2001 before changing its name to GLOVIS in June 2003. The company has since developed to provide ocean, air and inland transportation, logistics consulting, storage, packaging services as well as supply chain management services.

LOA 183m
Beam 32m
GRT 47,090
DWT 11,650 MT

                                                entering Southampton UK

GLOVIS won the Korea e-Business Award from the Ministry of Commerce, Industry and Energy in 2007 and the Korea RFID Industrialization and Grand Prize in 2008 for its innovations in building RFID-based logistics computerization. The company also won the Presidential Medal at the 17th Korea Logistics Grand Award ceremony for its contribution in establishing global SCM and modernizing logistics systems. Wilh. Wilhelmsen ASA also holds a 15% share interest in the company which has recently ordered new buildings worth $134m.

The roots of Rickmers date back to the year 1834, when R.C. Rickmers founded the Rickmers shipyard in Bremerhaven. Today, Rickmers Group employs more than 3 200 crew on board and more than 450 staff ashore worldwide.