A bipartisan Bill from Congress The Coast Guard and Maritime Transportation Act of 2014 seeks to reform the U.S. Federal Maritime Commission (FMC) and require the Maritime Administration to create a National Maritime Strategy. The Bill would reauthorize the FMC at current funding levels ($22.8 million) but prevent FMC commissioners from serving more than one year after their five-year term expires, limit their tenure to two terms and defines conflicts of interest. The push back from Congress is a reflection of the perceived unnecessary intrusion of the FMC on a number of files whilst simultaneously over-seeing continued shrinkage of the U.S. merchant fleet.
Russia’s Ministry of Defense is promoting a plan to develop a “Center of Arctic shipbuilding” in Murmansk either through the development of a new shipyard or re-investment into existing yards. These yards have long supported Russia’s Northern Fleet which is in expansion mode but needs re-investment to support offshore oil and gas development of the Russian arctic and the rapid expansion of trade through the Northern Sea Route during summer months.
The Italian government has blasted an Indian decision to try two Italian marines accused of killing two fisherman under the country’s anti-piracy and anti-terrorism act. The decision can only serve to further strain relations between the two countries and appears to be in response to street protests calling for harsh penalties for the marines. The anti-piracy and anti-terrorism act provides for capital punishment but it has been made clear by India that death sentences would be excluded as a possible penalty. Italy’s justice minister responded by saying “the government will fight the use of the law in all ways possible and our commitment to bring home Massimiliano Lattore and Salvatore Girone is stronger than ever.” The two men are on bail living in the Italian embassy in New Dehli but cannot leave India. NATO this week warned India that using anti-terrorism legislation to try the marines would undermine international efforts to combat piracy.
Mitsui OSK Line (MOL) has initiated legal action against Mitsubishi Heavy Industries (MHI) the builder of the 8,100teu MOL Comfort, which broke in half and sank in the Indian Ocean in July last year. The company is also seeking compensation from MHI for the cost of strengthening the hulls of six sister ships, after inspections by ClassNK found “buckling-type deformations” on their bottom shell plates. Should the claim succeed there is the likelihood of thousands of consequential claims related to responsibility for the loss of 4,382 containers.
In yet another case of unreturned phone calls to an owner seeking a port of refuge, Singapore’s Aurora Tankers the owners of the chemical tanker Maritime Maisie, which was in a collision in late December are still seeking a solution. The vessel burned for 19 days before salvors were successful in extinguishing the fire but efforts to bring the vessel to Japan or South Korea for safe harbour and transfer her remaining hazardous cargo have no so far been successful after salvors concluded that it would be too dangerous to do so at sea. The effectiveness of IMO Resolution A 949 (23) on port of refuge which was accepted 10 years ago is once again being seriously questioned.
Acting on a tip-off, the Colombian authorities have located an estimated 75 kgs of cocaine hidden in three suitcases on a US flagged Capesize coal loader Athens bound for the UK. The haul which is estimated to be worth around $6.6 million was discovered in the engine room. No crew members have been arrested as there was no evidence linking them to the find.
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.