The unprecedented weather which has been battering Europe’s breakwater (the UK) for several weeks shows no sign of improvement. Large areas of the country are under water and the armed forces have been extensively deployed in emergency flood relief. In one ingenious move, containers have been placed on the coastline at Dawlish in SW England in a desperate move to prevent further coastline erosion which has already resulted in the breaching of the main rail line into the area.
The UK’s National Gallery has made its first acquisition of a painting by the American artist George Bellows. The 1912 painting, Men of the Docks, depicts a group of workers standing by the waterfront in Brooklyn.The museum paid $25.5m) for the painting. Mr. Bellows, who died at the age of 42 from appendicitis, documented the hardship of working life as New York emerged into the 20th Century.
The former Chair of Hapag Lloyd, Mr. Hans Jakob Kruse has died at the age of 84 following a long illness. Mr Kruse was one of the drivers and high profile personalities in container shipping throughout the 1970s and 1980s. He was also a founder of the International Council of Containership Operators (The Box Club) whose membership is restricted to the chairmen and chief executives of the world’s major container lines. He held many industry positions, including chairman of the Maritime and Surface Commission of the International Chamber of Commerce in Paris, chairman of the supervisory board of Tui, a member of the supervisory boards of Deutsche Aerospace Airbus, Mobil Oil, Hamburg, and a member of the advisory council of Deutsche Bank.
the perfect storm
Rail service to and from our major west coast ports remains critical with vessels in all sectors seriously impacted. In the container sector, the rush of imports ahead of Chinese New Year provided for the Perfect Storm on account of severe cold weather impacting rail operations everywhere from the Rockies to the Atlantic coast. CN in particular is struggling to get back on track (no pun intended) after the cold weather reduced velocity across their system by around 30% and resulted in shorter but more frequent trains requiring more manpower. CN has 20% more rail capacity overall than even one year ago but this has not helped to mitigate the disruption. On the bulk side, grain has been very badly hit and several vessels have been waiting for more than a month to load with still no prospects of cargo in sight.
Were this not enough to deal with the Teamsters Canada Rail Conference representing some 3000 of CN’s Conductors, Trainpersons and Yardpersons across Canada, gave the company 72 hours’ notice of its intention to strike at 0001 hours Eastern Standard Time on Feb. 8. This came about after the union failed to ratify tentative agreements reached last October and following only two days of re-convened talks with management. Fortunately, a return to the bargaining table and a short negotiation resulted in a three year agreement which will again be taken to the union for ratification. For its part, the federal government had prepared a Plan B in the form of back to work legislation but in the event it was not required.
Further south, there are also weather related delays compounded in Los Angeles and Long Beach by chassis shortages resulting in long delays to truckers. There too, truckers were already suffering through gate congestion because of strong container volumes in recent weeks. As with most other ports in the U.S., the transition to a non chassis model in the container terminals is proving easier said than done.
After a period of relative quiet it has been revealed that another vessel has fallen foul of the USCG for violation of ECA regulations. The Italian flagged Suezmax tanker Four Bay was recently detained because: “The master could not provide the proper documentation that efforts were made to procure compliant fuel oil and that notifications to the United States and the vessel’s flag administration were made prior to entering the North American ECA in accordance with Marpol Annex VI, Regulation 18.”
Canada Border Services Agency has released an updated Memorandum D3-5-2 on Marine Cargo – Import Movements. We will be reviewing the document and clarifying changes in the definitions with CBSA as they pertain particularly to the new bond requirements for in-transit cargo changes and the reporting of Conveyance Arrival Certification Messages.
The Canada Border Services Agency (CBSA) officers seized 244 kg of suspected cocaine at the Port of Montréal. The narcotics were found on January 30, hidden in a container on a ship coming from Paraguay. Acting on information received by international authorities, the CBSA conducted exhaustive research that led to the container’s identification. The declared goods were scrap metal. However, an X-ray inspection using mobile HCV-M detection technology showed the presence of a dense mass at the back of the container. When the contents were searched, border services officers discovered 16 metal boxes holding 244 kg of suspected cocaine.
British Columbia has filed an application to be an intervenor in the National Energy Board’s review of Kinder Morgan’s Trans Mountain Expansion project. The Government reiterated its five key requirements that must be met before the Province will consider support of any heavy oil pipeline are:
all work stopped
What was described as irreconcilable differences over the cost of building new locks for the Panama Canal have finally resulted in a breakdown in negotiations between the construction consortium (GUPC) and the Panama Canal Authority (ACP) and all work has stopped. A Spanish report has indicated that the talks broke down over a request by the consortium not to have to return $784m paid up front by the ACP. GUPC wants to repay the amount owed only after the construction work is completed. ACP actually called for the advance to be returned last year, but GUPC threatened to suspend construction claiming more than $1.6bn in cost overruns. ACP claims the consortium is trying to renegotiate contract terms however the US engineering group Bechtel, which lost out on the contract to GUPC has claimed that the consortium’s bid was always too low to cover construction costs.
The President of the UK Chamber of Shipping, Kenneth MacLeod OBE, this week called for push back against the European Union’s interference in shipping regulation. In a strongly worded speech at the Chamber’s annual membership dinner he argued that “EU institutions must recognize that shipping is a globally regulated industry for a reason. Ships can move anywhere in the world at a moment’s notice, move in and out of national jurisdictions on a daily basis, and we have the International Maritime Organization to provide the global level playing field we need.” Mr MacLeod described the EU’s environmentally and economically illiterate regulations of sulphur as “interference in a global regulatory regime resulting in the spending millions of pounds of taxpayers’ money on coming up with the wrong answer to the wrong question and sometimes that means accepting that the best thing they can do is do nothing at all”. Quite the rant.
Container carriers have cautioned that shippers and forwarders could be fined for failure to comply with new Chinese regulations which enter force on February 15. These seek to restrict ocean carriers to entering contracts only with shippers and NVOCs that are government registered. It appears that tariffs must be filed 30 days before vessel departure and customer-negotiated rates 24 hours before vessel departure. Non compliance can include cancellation of a carrier’s business license to operate in China or compulsory reduction of port calls.
The sad tale of Costa Conordia continues with the death of a Spanish diver last weekend. The diver was working as part of a large team tasked with attaching 30 large tanks which are to be filled with air to lift the vessel off the cradles resting on the seabed where she now sits. The largest maritime salvage operation in history is expected to conclude in June this year.
Still with an Italian flavor, the two marines as part of a security team on the tanker Enrica Lexie, who in 2012 shot and killed two Indian fisherman mistaken for pirates, are continuing to languish in an Indian prison. However, matters are coming to a head after the Indian supreme court this week gave the government a week to decide if it will invoke a maritime security law that carries the death sentence against the two men. India’s Home Ministry last month gave the country’s National Investigation Agency permission to prosecute the Italians under the law but that decision was then put under review. Defense lawyers for the marines this week protested that “not even a single piece of paper has been filed and nothing has been done and it is almost two years. Our main demand is that they should be allowed to go home.” India has meanwhile cancelled a 560-million-euro helicopter contract with Italy.
In an extraordinary tale of survival, a Mexican fisherman has survived 13 months adrift in an open boat. Jose Salvador Albarengo was found last week on an isolated Atoll in the Marshall Islands and taken to the capital Majuro. He apparently managed to survive on rain water, seabirds and fish. A fellow fisherman is reported to have died some months ago.
Ports across North America are struggling with the pre-Chinese new year increased container volumes and the continuing severe weather across most of the continent. In the Canadian central and eastern provinces, both CN & CP are experiencing almost uniquely difficult conditions affecting the movement of most rail traffic. The situation has manifested itself most obviously in the container terminals which have become log jammed to the extent that some vessels are being delayed in berthing and only then working at partial capacity due to dock space constraints. Consequently, container dwell times are well above normal levels both in Vancouver and Prince Rupert.
With respect also to delays in the movement of grain PMV’s Director of Trade Development, Katherine Bamford has advised that “the port handled near-record grain volumes in 2013 and is currently fluid for grain handling, with available terminal capacity, berth capacity, and rail unloading capacity among the separate grain terminals at the port. As of 6 am on 30 January, the port registered six grain vessels at berth and 16 grain vessels at anchorage which is an average number of grain vessels in port for this time of year, as grain shipments tend to peak in the late autumn and early winter. With respect to rail, Canada's record 2013 grain harvest coupled with changes to market access, have resulted in high rail car demand. In recent weeks, the combination of shorter winter-length trains and sustained extreme weather conditions across the Prairies has challenged rail delivery of grain to tidewater”.
Work at Portland’s Teminal 6 container terminal operated by ICTSI was disrupted yet again last week, reportedly due to the company’s refusal to offer side deals during the Martin Luther King Jr. Day working holiday. The consequence was a shortage of labor last Monday as labor’s demands for compensation beyond the entitlements under the west coast’s collective agreement proved to be inadequate to get people to work. ICTSI is reported to be desperate to reduce its operating costs in Portland where it is losing serious amounts of money and has therefore been attempting to eliminate side deals. ICTSI is also trying to pursuade Hanjin not to give up on the port as it has threatened to. Were that to happen, 70% of Portland’s container volume would be lost.
Also frustrated by chronic delays at container terminals, financially hurting truck drivers at the Port of New York and New Jersey are becoming increasingly restless with the lack of progress in addressing their issues.
Delays peaked again this month when cold weather brought already over-subscribed terminals to a complete halt. Several drivers said “terminals could improve operations immediately through such steps as improving traffic flow and cracking down on poor treatment by International Longshoremen’s Association personnel”. High seas, snow, freezing rain and icy roads also resulted in port closures over a broad area of the South-Eastern U.S. from Virginia to Texas.
CN said today that the Teamsters Canada Rail Conference - Conductors, Trainpersons and Yardpersons (TCRC-CTY) has advised the Company that the tentative labour agreements negotiated with the union in October 2013 have failed to ratify. The TCRC-CTY represents approximately 3,000 CN train conductors, trainpersons, yardpersons and traffic coordinators on CN's network in Canada.
Jim Vena, CN executive vice-president and chief operating officer, said: "Last fall, after extensive negotiations, we reached progressive agreements with the union leadership of the TCRC-CTY representing our Canadian employees. We are disappointed to learn that those agreements failed to ratify. We have agreed to meet with the TCRC-CTY leaders next week to review the ratification results and discuss solutions on how we move forward from here."