Brazil’s state prosecutor called this week for the replacement of state controlled Petrobras entire senior management and punishment of everyone involved in an alleged scheme to funnel kickbacks from contracts to President Dilma Rousseff’s Workers’ Party and ruling coalition. While no stranger to institutional corruption at the highest level of government, Brazilians have been shocked to learn just how bad this multibillion dollar bribe and money laundering scandal is with many millions of $$$ having been traced to Swiss bank accounts. The company’s shares have plunged as the revelations continue to hit the Brazilian media. Petrobras is a major charterer of tankers and off-shore supply, service and FPSO tonnage.
Taking a cue from the Hong Kong student umbrella protests, thousands of people marched through the streets of Nicaragua's capital, Managua, this week to protest against the proposal to build a new 278 km canal through the country linking the Atlantic and Pacific Oceans. The main gripe of the demonstrators is the forced annexation of their farmland without compensation to make way for the project. Work on the first phase of construction is due to start on December 22.
It has been announced that the UK is to establish a permanent base in the Middle East for the first time since military withdrawl in 1971. The Royal Navy is to re-establish a base at the Mina Salman Port in Bahrain. The UK already has four Mine Hunters, based at the port, but there are now plans to increase the number of warships in the region “in order to address threats to regional security.
Celebrity Cruises has signed a Letter of Intent (LOI) with STX France for the construction of two new 117,000 ton, 2,900 guest capacity cruise ships under the project name EDGE. The first ship will deliver in Fall of 2018 and the second vessel in early 2020 in a contract valued at 1.2 billion euros ($1.5 billion). “Our new class of ship will set the standard for premium world travel and deliver the next generation of modern luxury experiences that our guests know and love,” said Michael Bayley, President and CEO of Celebrity Cruises.
It has also been announced that Richard Branson’s Virgin Group has now formally launched Virgin Cruises with the backing of Bain Capital Partners LLC. The company will be based in Miami area and plans call for the design and construction of two new ships but Virgin has not disclosed when or where they will operate or who will build them.
A tentative agreement has been reached between CN and the United Steelworkers Union local 2004 representating approximately 3,000 maintenance-of-way employees that inspect, maintain and repair CN's track, bridges and structures. The current CN-USW labour agreement is scheduled to expire on Dec. 31, 2014.
Cargo Logisitcs Canada has introduced to its Expo and Conference in Vancouver in January 2015, three Awards of Excellence to recognize, celebrate and shine the spotlight on the important role of logistics professionals. The categories will recognize best safety innovation, women in supply chain and sustainabilty. To nominate a colleague or customer, visit: http://cargologisticscanada.com/newsletter/cargo_141125_external.htm
We are saddened to learn of the passing of a very well known personality on the Vancouver waterfront, Mr. Lea Washington, a superintendent with Western Stevedoring. Lea died on November 28 at Lions Gate Hospital in North Vancouver after a brief battle with respiratory disease. Lea joined Western in 1974 and was gradually easing into retirement following a very long and dedicated career with the company. Our sincerest condolences to Lea’s family and what he regarded as his second family, his many long time friends and colleagues at Western Stevedoring.
A final investment decision on the $11.4 billion Pacific Northwest LNG project has been delayed thereby placing a question mark over the hoped for 2019 completion date. Project leader Petronas this week announced that estimated construction costs are too high especially against the background of falling oil prices which in turn puts pressure on the sales price of LNG. Pacific NorthWest LNG selected three global engineering contractors in May 2013 to take part in a competitive process for the project’s front-end engineering and design, the bidders being Bechtel Group based in San Francisco, and two joint ventures – the KBR Inc. and JGC Corp. team and a group comprising Paris-based Technip, Samsung Engineering Co. Ltd. and China Huanqiu Contracting & Engineering Corp.
Petronas holds a 62% interest in the project, Sinopec (China Petroleum & Chemical Corp) 15%, Indian Oil Corp. 10%, Japan Petroleum Exploration 10% and Petroleum Brunei 3%. The Canadian Environmental Assessment Agency is scheduled to rule on Pacific NorthWest LNG in mid-2015.
The federal government has announced an extension of the minimum grain volume movement requirements until March 28, 2015. Each week until Dec. 20, the railways must move 345,000 tons falling to 200,000 tons from Dec. 21 to Jan. 3 but ramping back up from January 4 when they will be required to move 325,000 tons each week through to February 21. From then until March 22, the requirement is to move 345,000 tons weekly and from March 22 to March 28, 465,000 tons. The government is also retaining the threat of fines of $100,000 per violation.
It has been announced that Mr. Donald Roussel’s permanent appointment to the position of Associate Assistant Deputy Minister (ADM), Safety and Security will be effective as of December 8, 2014. Mr. Roussel was previously in an “Acting” position after serving as the Director General Marine Safety and Security from 2008, a key position in terms of the government’s interface with the marine industry. Mr. Roussel holds a Master’s Degree in Maritime Resources Management, Marine Transportation, and a Bachelor’s Degree in Maritime Transportation, both from the Université du Québec.
It was also confirmed that Ms. Jody Thomas, has been appointed to Commissioner of the Canadian Coast Guard on the retirement of Mr. Marc Gregoire after 31 years of service to the Government of Canada. Ms. Thomas most recently served as Special Advisor to the Deputy Secretary to the Cabinet (Operations),Privy Council Officeand prior to that asDeputy Commissioner Operations, Canadian Coast Guard. Ms. Thomas holds a Bachelor of Commerce from the University of Calgary and a Bachelor of Arts from Carleton University. Congratulations to them both.
The big talking point remains US West Coast contract negotiations. Talks resumed on December 2 but with seemingly little progress being made and work slowdowns continuing to generate chaos, the ILWU is to caucus in San Francisco in the week beginning December 15 to decide on next steps. Calls for federal mediation are falling on deaf ears in Washington, DC despite the heavy toll that the lack of a waterfront contract is having on many other industries and worker groups. Longshore hours in November were reported to be 25% higher than in the same month of 2013 against only a 4% increase in throughput. According to the PMA annual report for 2013, the average annual earnings for a full-time Class “A” longshoreman who worked at least 2,000 hours last year were $137,253. The average earnings for an ILWU marine clerk who worked at least 2,000 hours were $154,842, while the average earnings for full-time ILWU foremen in 2013 were $213,120. The average earnings will certainly be higher this year due to the extra hours being worked.
Cargo diversions to Canada are again on the rise with both Deltport and Prince Rupert extremely busy, further complicated by uncertain scheduling of vessels arriving via the US. This in turn is negatively impacting qualification under PMV’s on-time arrival incentive scheme. Cargo volumes in December are generally slack but usually ramp up again by mid-January in the pre-Chinese New Year rush to clear inventories.
The US Federal Maritime Commission last week unanimously agreed to allow a discussion agreement to proceed between the ports of Seattle and Tacoma - an important step for the two ports to unify their planning, marketing and management of related functions under one entity sometime in 2015. The commissions of both ports will now vote on a final Seaport Alliance agreement and submit to the FMC for final approval. Seattle and Tacoma had just less than an 11% combined market share of North American west coast container volumes in the first three quarters of this year.
Once again determined to do its own thing, the European Union announced last week that beginning January 1, 2018 the marine industry will be required to monitor its carbon emissions. The legislation which will apply to vessels of 5,000 GRT and above introduces a mechanism for monitoring, reporting and verifying (MRV) shipping emissions. Greece, Cyprus, Malta and Poland voted against the new law, but were unsuccessful in blocking it. International shipping currently represents approximately 3% of the world’s emissions of CO2, however the new proposal by the EU has come under heavy criticism on account of its unilateral nature and likely undermining of efforts to achieve an international agreement on global CO2 reduction at the IMO.
Several harbour towage companies were raided by Dutch and German competition authorities in Rotterdam and Hamburg last week. Companies visited included Fairplay, Kotug, Bugsier, Kotug and Smit. The raids follow a similar pattern in recent years where EU authorities appear to be constantly on the prowl for anti-competitive behaviour. All companies were believed to be cooperating with the investigations.
The International Chamber of Shipping (ICS) this week issued advice on the likely aggressive enforcement by Port State Control authorities of the new fuel standards in Emission Control Areas (ECAs) effective January 1 2015, when vessels are required to burn fuel having a sulphur content not exceeding 0.1%. The European Union has long been warned by ship owners that the high cost of the new standards will be detrimental to short sea shipping and just this week Dutch shortsea operator Transfennica announced that its service linking Bilbao, Portsmouth, and Zeebrugge is to be terminated at the end of December on account of unsustainable fuel costs. See ICS advice on ECA enforcement.
The International Maritime Organization’s Maritime Safety Committee (MSC) has formally approved mandatory requirements to weigh loaded containers before they are loaded on a vessel. The “verified weight” can be determined in two ways, either direct scale weighing or by individual calculation of contents added to empty container weight. Denmark in particular has been one of the proponents of the new stricter requirements for reasons of safety. The new regulations will take effect on June 1, 2016.
The Strike Club marine mutual has announced general rate increases of 5-10% for 2015 policy year in addition to imposing a release call of 30%.The Strike Club which specializes in maritime delay insurance is justifying premium increases on the back of difficult political situations in several countries including the Ebola impacted countries of West Africa. The Club lists 2014 flash points for claims arising inVancouver, Ningbo, Seattle and Tacoma, Port Hedland, Rosario, Mombasa, Marseille, Haifa and Puerto Limon (Costa Rica). For sure, the current problems in Los Angeles and Long Beach will also be added to that illustrious list.