Despite company and driver dissatisfaction with some aspects of both PMV’s revamped Truck Licensing System and with provincially decreed rates for truck drivers, normal service at Vancouver’s container terminals has been maintained this week. Yesterday (January 15) the Federal Transportation Minister Lisa Raitt and BC Provincial Transportation Minister Todd Stone met with representatives of UNIFOR and UTA to hear complaints that the new rates do not meet what was agreed in the 15 point plan that ended the March 2014 trucking disruption. A further meeting is scheduled for February 1.
This is a particularly crucial time as volumes ramp up ahead of the pre-Chinese new year rush to clear the decks of inventories in that country. As of today, 53 companies have been conditionally approved for TLS registration representing a total of about 1300 truck tags. PMV has also publicized a number of potential consequences for drivers who might be tempted to protest grievances by a participation in disruption.
Imperial Oil Resources, the Canadian affiliate of US major ExxonMobil, has filed with the British Columbia Environmental Assessment Office to kick start the permitting process for their West Coast Canada (WCC) LNG project, a plant and terminal proposed for Tuck Inlet near Prince Rupert. Both a traditional onshore liquefaction plant or Floating LNG facility are under consideration with an initial annual production capacity of 15 million tons and plans to eventually double this generating 400 vessel calls/year. A final investment decision is likely in 2018 with an “in service” date of 2023-24.
Transport Canada has released a new Ship Safety Bulletin 01/2015 advising of changes to the acceptable level of a fumigant on board domestic and international vessels operating in Canada. Transport Canada will apply Health Canada's acceptable maximum concentration of phosphine which is reduced from a Threshold Limit Value (TLV) of 0.3 to 0.1 ppm. These measures are intended to protect crew members and others that may be on board during or after fumigation.
Vessels that undergo fumigation will be requested to adhere to Health Canada's standards and demontrate compliance with the new TLV under the Cargo, Fumigation and Tackle Regulations (CFTR) as noted in the Bulletin. Amendments to the CTFR to reflect Health Canada's TLV will fall under Transport Canada's regulatory reform process.
Far from calming the situation, the appointment of a federal mediator last week has prompted further mud-slinging between the Pacific Maritime Association and ILWU. The tradition of labour slow-downs and deliberate shorting of skilled ratings to pressure for an employer cave-in has now been underway for almost two months bringing U.S. West Coast ports to the brink of “complete gridlock,” the Pacific Maritime Association declared this week. The PMA also elected this week to cancel all night short work – break bulk included. One of the contractual sticking points is future automation as North America seeks to play catch up with highly efficient automated European terminals. The current back-up of anchored container ships is 10 vessels off LA/LB but in the absence of a settlement, it seems likely that this will increase ahead of the traditional Chinese new year spike in volumes.
By no means are we the only jurisdiction with trucking issues – indeed it’s an escalating problem worldwide. Another example where the temperature in rising is New York – New Jersey where truckers are in a battle with the The New York Terminal Conference over a tariff amendment which allows terminals to refuse to compensate truckers for waiting time caused by late ships, chassis shortages or other reasons beyond the terminal’s control. The revisions also allow terminals to charge a $50 administrative fee when drivers visit a trouble window to resove documentation issues that the terminal believes could have been handled in advance using terminal technology. New York Terminal Conference members, which includes all local container terminals except Maher, have FMC-granted anti-trust immunity to jointly set rates. How nice.
Amid much fanfare, the 2m Alliance beween Maersk Line and Mediterranean Shipping Cowas launched in Dalian last weekend bythe 18,270 TEU capacity Munkebo Maersk (above right), the latest and 14th of 20 Triple-E class vessels to be delivered to the company. The vessel sailed directly from her builders, Daiwoo Shipbuilding and Marine Engineering shipyard in Okpo, to join Maersk's AE5 loop. From Dalian, her voyage takes her to Busan, Qingdao, Ningbo, Xiamen, and Tanjung Pelepas before transiting the Suez Canal and on to Northern Europe.
The International Tanker Owners Pollution Federation has reported that incidents of oil spills from shipping continues to decline. During 2014, ITOPF recorded a single spill of bitumen, about 3,000 tonnes, from a tanker in the South China Sea, and four medium spills of various oil types, totalling five spills of seven tonnes and over. Closer to home, the Fraser Institute, an independent, non-partisan Canadian public policy think-tank has this week issued a report stating that despite a dramatic rise in worldwide oil tanker traffic since the 1980s, the number of oils spills has dropped significantly.
Teekay’s LNG carrier Magellan Spirit (165,500 cbm) grounded last week while departing Nigeria’s Bonny LNG plant in the Niger Delta. An operation is underway to refloat the vessel with the 138,000 cbm capacity Floating Storage and Regasification Units (FSRU) Excellence (above right), operated by Antwerp based Exmar for Excelerate Energy of the US, on its way to undertake a ship-to-ship transfer of cargo. Magellan Spirit was loaded with a full cargo for the Gwangyang LNG terminal in South Korea.
As we mentioned last week, the Panama Canal Authority (ACP) has published its proposed two-tier tariff for transits to take effect in February 2016 when the expansion project is expected to be complete. What this amounts to is a round trip transit fee of just under $700,000 for standard capacity LNG carriers in the 165-175,000 cubic metres range. Approximately 80% of the existing global LNG fleet will be able to use the expanded canal, the exception being Qatar’s Q-Max fleet. Under the proposals, LNG carriers will be charged $2.50 per cbm for the first 60,000 cbm, $2.15 per cbm for the next 30,000 cbm, $2.07 per cbm on the subsequent 30,000 cbm and $1.96 per cbm on the remainder. LNG carriers in ballast would qualify for a discount if returning within a given time frame, saving around $35,000.
The International Chamber of Shipping has this week applied for ‘NGO observer status’ with the Arctic Council. The governments which belong to the Arctic Council are not just restricted to Arctic nations (i.e. Canada, Denmark with Faroe Islands and Greenland, Finland, Iceland, Norway, Sweden, Russia and United States) but now also include several other permanent observers (China, France, Germany, India, Italy, Japan, Netherlands, Korea, Poland, Singapore, Spain and the United Kingdom).A decision on whether to grant observer status will be taken by the Council at its next Ministerial Meeting in April and hopefully ICS will be successful as the Chamber has called on the Government of Canada to lend support.
Not known for its aggressive stance, the New Zealand navy is nevertheless engaged in a cat-and-mouse game with two fishing boat caught illegally fishing for toothfish in the Southern Ocean. The naval patrol vessel HMNZS Wellington is shadowing the two vessels which are sailing under the flag of Equatorial Guinea but are believed to have beneficial ownership in Spain. Unsurprisingly, the fishing boats are currently unwilling to allow inspection by the NZ navy. The Southern Ocean fishery is tightly regulated and cannot be fished by countries that do not belong to a multi-national conservation body.
A restriction imposed in November 2014 on large cruise ships from passing through Italy’s historic Guidecca Canal in the city of Venice has been lifted by the city’s regional court of appeal. The restriction also limited the number of ships over 40,000 from sailing along the route to just five a day. Following the imposition of restrictions, cruise lines had agreed to wait for an alternative route to be developed. An environmental impact assessment on its construction is expected in March. The Venice Tourism Bureau had predicted losses of just under 300,000 passengers a year as a result of the ban.
As the Volvo Ocean Race nears Sanya in Southern China, the Dongfeng Race Team, skippered by Frenchman Charles Caudrelier, fittingly took a slender lead in the 3rd leg of the 41-year-old race. The 4,670 nautical mile stage from Abu Dhabi to China is one of the most hazardous in the nine month, 38,739 mile race which is scheduled to finish in Gothenburg on June 27. The fleet is expected to arrive in Sanya in late January having safely navigated (we hope) their passage through the Malacca Strait, one of the busiest shipping lanes in the world.
The Capesize market came somewhat out of intensive care this week thanks to a small spike in demand for vessels to shift coal from Colombia to Europe. The Baltic Dry Index closed yesterday on 749 points, marginally improved after closing last week on a mere 724 points.
Spot time charter
One week ago
Bunkers: Despite the efforts of major ocean carriers to hold the line, bunker prices have fallen to a level where slow steaming is in many cases costing more than it is saving in particular on the major container trades. The saving grace may prove to be that many modern container vessels were built for the now common slower speeds in the range of 18-19 knots and when all is said and done, the industry would suffer enormously if additional capacity were to be released into the market. IFO 380 prices in Singapore and Rotterdam were $265 pmt and $234 pmt respectively, MGO $485 pmt and $448 pmt respectively. MGO in Vancouver was still commanding a premium price at $730 pmt.
The seminar listing for the Cargo Logistics Canada conference and registration is now available at: http://www.cargologisticscanada.com/. The Cargo Logistics Canada Expo & Conference is the largest and most diverse gathering of stakeholders in Canadian supply chains to be assembled in Canada.
The arrival in Vancouver of Lavinia Oldendorff in late 2014 to load at Westshore Terminals underlined the faith of Oldendorff Carriers to venture into investment in Capesize and so called Newcastlemax bulk carriers. However, prior to delivery, the vessel was sold in June 2013 to Greek ship owner Laskaridis Shipping with a ten-year bareboat charter back.
Built by Hyundai heavy Industries, Gunsan, South Korea – delivery September 2014 LOA 300m Beam 50m GRT 124,200 tons DWT 206,444 MT 9 holds/ hatches Service speed 14 knots Sister ships: Linda Oldendorff (delivered September 2014), Leopold Oldendorff, Ludolf Oldendorff, Lydia Oldendorff and Luise Oldendorff will be delivered between January and May 2015.
Hyundai and Oldendorff advise that on summer draft these vessel are the lowest consumption Newcastlemax type in the world. Newcastlemax vessels are purpose-designed for the port of Newcastle, Australia (just north of Sydney and now part of New South Wales Port Authority) which is the world’s largest coal export port with a capacity of just over 200 million tons/year. In late 2014, a proposed fourth coal terminal was recommended for approval adding a further 70 million tons of capacity at a cost of AUS$4.8 billion, despite the softening coal market and amid strong objections from the local community.
Oldendorff’s confirmed new building program currently consists of more than 50 new buildings for delivery between 2015 and 2017 from Chinese, Korean and Japanese yards.