COS Weekly Newsletter - Friday, 29 October 2021

Last Friday, the container vessel Zim Kingston ran into stormy weather that resulted in over 100 containers falling overboard near Tofino. The following day while the vessel was anchored at Constance Bank, a fire broke out in one of the affected stacks. The Seaspan Raven and last week's featured ship of the week, the Maersk Tender, and the Maersk Trader assisted in the fire-fighting efforts.  The fire, challenged by hazardous materials contained in two containers onboard, has now been extinguished and salvage efforts to recover the containers off the west coast of Vancouver Island are underway.

A pioneer of lithium-ion battery technology in maritime applications, Corvus Energy proudly announces a major milestone for the company: the 500th project order. The order is one of the largest in Corvus’ history and is for the supply of the 5,288 kWh batteries for each of three zero-emission harbor tugs. The tugs will be built by Sanmar Shipyards for delivery to HaiSea Marine. HaiSea Marine, majority-owned by the Haisla Nation in partnership with Seaspan ULC, will operate the three battery-powered harbour tugs to berth/unberth liquified natural gas (LNG) carriers at the LNG Canada export terminal in Kitimat, B.C., Canada following the commissioning of the plant around the middle of the decade. Corvus has grown from being one of the pioneers in battery systems to a trusted brand in the marine industry.  Recently the company launched their hydrogen fuel cell initiative for maritime applications with the world leader on fuel cell technology, Toyota Corporation.

To support the advancement of reconciliation and economic self-determination for British Columbia's First Nations, Tlowitsis Nation and Council of Marine Carriers have reached an agreement to reposition the existing Cutter Cove Towboat Reserve in order to accommodate the proposed tenure for the new Tlowitsis salmon farm - the Ga-guump site in Chatham Channel north of Campbell River. The Council of Marine Carriers has requested the Ministry of Forests, Lands, Natural Resource Operations & Rural Development create an alternative reserve nearby in the Minstrel Island area.

Gordon Payne, Chairman of Harbour Link Container Services Inc., passed away peacefully at Peace Arch Hospital on October 22, 2021 just 3 days prior to his 81st birthday. He was well recognized both locally and globally as a brilliant visionary and was a mentor to many. For decades Gordon advocated tirelessly for the Transportation Industry, is viewed as one of the pioneers of the local container industry, and was key in several of the progressions we see today in the Port of Vancouver, etc. Gordon is a Director of the Delta Chamber of Commerce, a member of WESTAC, a founding member and past Chair of the BC Cruise Industry Association and the Metro Vancouver Container Trucking Association, past Director of the Vancouver Board of Trade and the British Columbia Maritime Employers Association. He will surely be missed as one of the true Industry leaders of our time.

Details on Canada's mandatory vaccination policy in the transportation sector that take effect October 30th were released earlier today. While employees and travellers in federally regulated transportation sectors are required to be vaccinated against COVID-19, exemptions are expected to remain in place for international seafarers. An update to Transport Canada's Ship Safety Bulletin on the mobility of asymptomatic seafarers will be released on Monday.  It is expected to confirm that seafarers departing Canada must be fully vaccinated or provide results of a COVID-19 molecular (PCR) test dated within 72 hours of the scheduled departure from Canada.  Unrestricted shore leave will be extended to those seafarers that are fully vaccinated. Indications are that access to the single-dose, J&J vaccine, will be made available to provinces in mid-November.

In an effort to improve cargo movement amid congestion and record volume, the ports of Long Beach and Los Angeles will begin assessing a surcharge to ocean carriers for import containers that dwell on marine terminals. Under the new policy starting November 1st, the ports will charge ocean carriers $100 per day for each container that falls into one of two categories - those moving by truck dwelling nine days or more and those moving by rail dwelling for three days or more. Before the pandemic-induced import surge began in mid-2020, on average, containers for local delivery sat on container terminals under four days, while containers destined for trains dwelled less than two days. Those numbers have increased significantly, making it difficult to clear cargo off the terminals and bring in ships at anchor. Fees collected from dwelling cargo will be re-invested by the two ports for programs designed to enhance efficiency, accelerate cargo velocity, and address congestion impacts throughout the San Pedro Bay. The policy was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, US Department of Transportation, and multiple supply chain stakeholders. The Port of Los Angeles and Port of Long Beach are the two largest container ports in the nation, and combined are the ninth-largest port complex in the world. Trade that flows through the San Pedro Bay ports reaches every Congressional district across the country and generates more than 3 million jobs nationwide.

Starting on November 8, non-citizen, non-immigrant air travelers to the United States will be required to be fully vaccinated and to provide proof of COVID-19 vaccination status prior to boarding an airplane to fly to the US, with only limited exceptions. Air travellers must provide proof that they are fully vaccinated and have tested negative for COVID-19 within the last 72 hours.  International seafarers are eligible to travel to the US if they are not fully vaccinated, provided they have a D and C1 (transit) visa, present a negative COVID test within 24 hours of scheduled airline departure, and sign an attestation upon arrival in the US stating that they will take another test within 3 to 5 days. The website Requirements for Air Travelers to the US recognizes seafarers as emergency travelers who do not have timely access to a vaccine.

The United States has imposed sanctions against companies and individuals related to Iran's unmanned aerial vehicle (UAV) programs. The sanctions include the commander of the military drone unit of Iran's Islamic Revolutionary Guard Corps (IRGC) who was responsible for the drone attack three months ago on the Mercer Street vessel, which was off the coast of Oman at the time -- an assault that ratcheted up tensions in the region, prompted unified outcry from the G7 coalition of nations, and vows from the US of a coordinated response.

The Baltic Exchange’s dry bulk sea freight index dropped on Friday, registering its biggest monthly percentage fall since January 2020, dragged down by a decline in rates across all vessel segments. The overall index, which factors in rates for capesize, panamax, supramax and handysize vessels, fell 111 points, or 3.1%, to 3,519, its lowest since Aug. 12. The index fell more than 30% this month and was down 20.2% this week. Concerns over the health of the Chinese economy have led to a sharp decline in the dry bulk sector, which was already "exasperated due to the (China) Evergrande situation," Alibra Shipping London said. The brokerage, however, added that the outlook for the sector remained firm due to high demand for commodities.

From April 2022 shipping companies will be offered tax incentives if they fly the UK’s historic merchant shipping flag, the red ensign. The chancellor, Rishi Sunak, announced in the budget on Wednesday that shipping companies which fly the red flag with the union jack would have a greater chance of being able to join the UK tonnage tax break scheme. The arrangement, which was introduced in 2000, allows shipping companies access to an “alternative method of calculating corporation tax profits by reference to the net tonnage of the ship operated”. The tonnage tax scheme allows shipping firms to pay predictable, much lower taxes, which one expert said created a “close to zero tax environment”. Ships that are working to help the UK’s net zero carbon emissions are also more likely to be accepted to the scheme. This includes scientific research vessels and ships that lay cables to help create windfarms. The red ensign, also known as the red duster, has been flown by British merchant or passenger ships since 1707.

Wärtsilä Exhaust Treatment and Solvang ASA, a Norwegian shipping company, have agreed on a full-scale pilot retrofit installation of a carbon capture and storage (CCS) system on one of Solvang’s ethylene carriers, the 21,000-cbm Clipper Eos. Wärtsilä Exhaust Treatment designs the retrofitted unit while it also completes a land-based 1MW test system at its Moss headquarters in Norway. The land-based unit will be completed in autumn 2021, and the companies expect to retrofit the pilot CCS system on the Clipper Eos by 2023. The CCS is expected to reduce CO₂ emissions at the point of exhaust by 70%.

The vessel, “Clipper Eos” has been time chartered by Marubeni Corp., Tokyo since her delivery from the shipyard in 2019. Marubeni, having more than 40 years' experience trading and handling ethylene, advise that they are committed to cooperating with Solvang and Wärtsilä to enable the parties to perform relevant testing and installation of equipment on the vessel in a mutual effort to drastically reduce the CO2 footprint of the vessel.