It had to happen eventually and now someone has had the courage to state the obvious – the ports of Los Angeles and Long Beach, which between them handled 42% of all U.S. container traffic in 2013, need to merge. Los Angeles 2020 Commission this week recommended that the rival adjacent ports look to merge in order to reduce bureaucracy and increase business investment responsiveness. The commission comprises business, labor and civic leaders. The recommendation comes hot on the heels of news that Seattle and Tacoma are finally talking instead of slugging it out.
The good people of Kitimat vote tomorrow in a non-binding referendum on the Northern Gateway project to ship crude oil exports through Kitimat. The District Council voted in January to hold the referendum whose question will be: Do you support the final report recommendations of the Joint Review Panel of the Canadian Environmental Assessment Authority and National Energy Board that the Enbridge Northern Gateway Project be approved subject to 209 conditions set out in volume 2 of the JRP’s final report?” Council is remaining neutral on the project and City Mayor Joanne Monaghan has rejected the complaints of local MP Nathan Cullen NDP who has criticized the efforts of Northern Gateway’s Kitimat office during the campaign.
and maps, and alert landowners whose property may be crossed and advise them how they can voice any concerns on the proposed route. The company is seeking feedback on the new routing options until April 17. More information can be found at www.transmoutain.com.
The Provincial Government has this week signed LNG revenue sharing agreements with the Lax Kw'alaams and Metlakatla First Nations, for LNG export projects being development in the Grassy Point area, just north of Prince Rupert. Australia's Woodside, China National Offshore Oil Corp. and Japan's Inpex Corp. are the currently impacted project proponents.
The search continues after several pings apparently from the black boxes of MH 370 were detected last weekend, first by a Chinese vessel and then in a different area by our “Ship of the Week” for April 4 – Ocean Shield. Aircraft black-box pingers, emit a sound signature on a standard frequency of 37.5 KHZ which is outside the range of human hearing. Ocean Shield picked up two sets of pulses consistent with black-box signals, hence the initial optimism that they were close to the estimated crash site. Yesterday, an Australian aircraft also detected pings in the same area but there is real concern that the black box battery life is nearing an end.
As the difficulties in achieving ratification of the Ballast Water Management Convention refuse to go away, a proposal by Norway to last week’s 66th session of the IMO’s “Marine Environment Protection Committee” (MEPC) has been accepted. In brief, a new study will be conducted into how well typeapproved BWMS currently installed on vessels are actually able to meet the performance standard described in regulation D-2 of the Convention which regulates concentrations of living organisms in ballast water discharges. Many owners and national administrations believe the existing (G8) type approval process is not robust enough but whether this fairly open ended study will alleviate concerns remains unclear.The attached press release issued on April 8 is co-sponsored by ICS, BIMCO, Intercargo, Intertanko, WSC, CLIA and IPTA is designed to summarize industry’s frustration with the current state of affairs on this issue.
The IMO continues to make the International Code of safety for ships operating in polar waters (Polar Code) a priority issue with a target adoption date of May 2015. MEPC 66, last week acknowledged last week that there was still a lot of work to be done but if the 2015 adoption can be achieved, implementation will be in the fall of 2015 or early in 2017.
The IMO Code on Noise Levels Onboard Ships Is to become mandatory for new vessels starting July 1, 2014. The code details requirements for new ships to be constructed to limit noise levels and to reduce seafarers’ exposure to noise under an amendment to SOLAS.
The Marine Environment Protection Committee (MEPC) has also moved forward with approved guidelines for reducing underwater noise from commercial shipping protect marine life.
With some $200 billion of LNG projects under construction, Australia is suffering major budget over-runs due to labor costs. Examples quoted this week are welders making A$400,000 per year, cooks A$350,000 per year and laundry hands A$325,000. The Maritime Union of Australia is blaming the failure of LNG companies to better prepare for labor demand with training programs “to ensure that skilled workers were available at the right times”.
Also this week, BG GROUP announced that it will shift the company’s global marketing centre from London to Singapore and the country continues to develop itself into an Asian LNG trading hub. With Asia now the world’s largest market for LNG, this is clearly where the action is for the major players.
The Australian government has initiated consultations that could see the country’s coastal cabotage rules scrapped . A document entitled “Approaches to Regulating Coastal Shipping in Australia” states that “cabotage regulations are damaging the Australian economy due to increased shipping costs and by restricting access to timely and flexible services through either high freight rates or the loss of freight to the road and rail sectors.” Australia is heavily dependent on shipping, with 99% of international trade volumes moved by ship, Australian ports already handle 10% of the world’s trade by sea and volumes expected to double by 2030.
In a bizarre incident last week, police in Salvador, Brazil, claim to have rescued 11 crew members working in "slave-like conditions" on the Itlalian cruise ship MSC Magnifica. Vessel owners MSC Crociere have rejected the allegations pointing out that the company is “in full compliance with national and international labour regulations and has not received any evidence or legal notification from the Brazilian labour ministry”.
Tall Ships 2014 is once again expected to attract close to 100 Tall Ships from around the world. Races will start with a grand port event in Harlingen, The Netherlands from where they will race to Fredrikstad, Norway. From Fredrikstad vessels and crew will take a leisurely “Cruise-in-Company” to Bergen where an estimated 500,000 visitors are expected to visit the vessels over four days. The final leg is a race from Bergen to Esbjerg, Denmark, for a major maritime celebration.
Viterra announced this week plans to implement $100 million worth of operational improvements and upgrades at Pacific Terminal to increase total throughput on its existing site in Vancouver Harbour. Included in the project are a new ship loader to allow for the loading of post-Panamx vessels, bulk weighers, upgrades to shipping conveyors and rotary cleaners, and improved electrical and dust control systems. Completion is expected by 2016, resulting in an increase in annual capacity up to 6 million metric tonnes. These plans are in addtion to Viterra new grain elevator to built in Kindersley, Saskatchewan to provide additional 34,000 metric tonnes of storage capacity and a 108 railcar spot.
Citizenship and Immigration Canada has announced key changes that will be introduced to the immigration process in January 2015 to provide greater flexibility and responsiveness to deal with regional labour shortages for which there are no available Canadian workers. The process will expedite qualified applications for permanent residency and be tied to an improved provincial and federal on-line job bank.
Just a week after Ottawa confirmed the issuing of four licences to LNG export projects with a combined export capacity of 74 million tons per year, BC Premier Christy Clark lead a mission to Ottawa this week “to build national consensus on LNG export policy”. The mission team comprised of Premier Clark, Shirley Bond, Minister of Jobs, Tourism and Skills Training and Minister Responsible for Labour; Rich Coleman, Minister of Natural Gas Development and Minister Responsible for Housing; Mary Polak, Minister of Environment; and John Rustad, Minister of Aboriginal Relations and Reconciliation along with representatives from LNG proponents and First Nations leaders. One of the primary objectives was to discuss potential solutions to the shortage of skilled labour to build LNG plants and infrastructure. The Premier's LNG Working Group final report is now available.
This has been a tough first full week back at work for the container drayage industry after operating at a very low level for almost a month. As terminals seek to clear the backlog of imports, reservations for exports have been very difficult to secure and off-dock stuffing / de-stuffing facilities remain very congested. Also this week, the industry has been working to translate the details of the 15 point return to work plan worked out between the Province and drivers last week into agreements that all sides can accept.
The Journal of Commerce ran an informative article this week on the wider problems of contrainer drayage across North America with Los Angeles / Long Beach being highlighted on the west coast, New York / New Jersey and the Port of Virginia on the East Coast. JOC points out that severe as they were, disruptions from this winter’s intense cold and storms weren’t the sole source of the drayage crisis. Instead, they amplified existing challenges of congested terminals, chassis supply, driver recruitment and retention, hours of service restrictions, equipment costs and stagnant rates. Transportation consultant Tioga Group has estimated that drayage delays add $348 million a year in unnecessary costs to the supply chain including 15 million hours of lost work time.
The ongoing battle between container terminal (T6) operator ICTSI, the ILWU and the Port of Portland shows no sign of easing off even after the decision of the port to subsidize operations to keep container operations alive. Dismal productivity has been institutionalized and law suits are flying around everyone’s ears. ICTSI submitted an anti-trust claim against the ILWU and the Pacific Maritime Association (PMA) alleging that the relationship constitutes a monopoly. That claim has been dismissed by a District Court judge.
The judge has also dismissed the port’s claim that the ILWU and PMA had intentionally interfered with the port’s contractual relationships even as the port and ICTSI continue to jointly seek damages for the ILWU boycott and slowdowns at T6 since 2012. Not content with all that, the judge also ruled this week that there is no evidence, as claimed by the ILWU, that the port authority used taxpayer’s money to fund incentive programs.