COS Weekly Newsletter - Friday, 14 January 2022

CN has submitted a notice of intent requesting that the US Surface Transportation Board (STB) condition any approval of the CP Railway and Kansas City Southern merger with a requirement to divest the Springfield line between Kansas City and East St. Louis, Illinois. The Springfield Line is a direct competitive alternative to CP’s route from Kansas City to Chicago, and beyond to Detroit and eastern Canada. CP and KCS have made it clear in their merger application that they plan no investment on the Springfield Line, and instead will de-emphasize it in favor of CP’s existing parallel line. Under CN’s proposal, CN would invest up to US$250 million in capital investments to improve operating speed and terminals, yield environmental benefits, and provide additional pro-competitive options and access for auto and intermodal customers. The responsive application will be filed on February 28th with the STB.

The Port of Montreal has joined PIONEERS (PORTable Innovation Open Network for Efficiency and Emissions Reduction Solutions), an ambitious green innovation project led by the Port of Antwerp that channels the efforts of 46 partners.vWith its objective to put forward solid solutions for reducing greenhouse gases in ports, the PIONEERS project makes it possible for the range of participants—international ports, terminal operators, freight forwarders, technology developers and public agencies—to work on different projects dealing with all aspects of port operations: clean energy production and supply, sustainable infrastructure design, flow optimization, digital transformation and more. Its initiatives include: producing renewable energy; deploying electric, hydrogen and methanol vehicles; renovating building and heating networks for energy efficiency; implementing circular economy approaches in infrastructure works; and rolling out digital platforms to promote modal shift and ensure the optimization of vehicle, vessel and container movements.

Following some confusion, the federal government released a statement on Thursday confirming that as of January 15, 2022 Canada Border Services Agency will be enforcing the vaccine mandate for cross-border commercial drivers. Unvaccinated Canadian truck drivers entering Canada will need to meet requirements for pre-entry, arrival and Day 8 testing, as well as quarantine requirements. As of January 15, 2022, unvaccinated or partially vaccinated foreign national truck drivers, coming to Canada from the US by land, will be directed back to the United States.  Up to 26,000 of the 160,000 drivers who make regular cross-border trips will be sidelined as a result of the mandate, adding further bottlenecks and potential price hikes to the flow of goods ranging from produce to auto parts and medical devices, say the Canadian Trucking Alliance and the American Trucking Associations. The US vaccination mandate reportedly comes into effect on January 22, 2022.

Canada Border Services Agency (CBSA) has updated Customs Notice 21-15 which provides new information regarding the end of the zero-rated penalty period granted to freight forwarders under the Administrative Monetary Penalty System (AMPS) for electronic house bills that began on January 4, 2021. The transitionary period will end January 30, 2022. Electronic house bills, house bill close messages and supplementary cargo data for consolidate cargo arriving on or after January 31, 2022, may be subject to AMPS penalties if freight forwarders are not compliant with freight forwarder requirements per the Reporting of Imported Goods Regulations.

Back-to-back weeks of two-day holidays followed by the outbreak of the Omicron variant among the workforce are not providing any relief to ships waiting for an available berth at the start of 2022, keeping imports sitting for longer on the docks. About 800 dockworkers—roughly 1 in 10 of the daily workforce at the ports of Los Angeles and Long Beach—were unavailable for Covid-related reasons as of Monday, according to the Pacific Maritime Association and in New York - New Jersey the end of 2021 saw about 275 workers quarantine due to COVID-19. Last Friday, the number hit 525, New York Shipping Association. However, more longshore workers are able to return to the ports faster thanks to federal guidelines that require only a five-day quarantine from potential exposure.

Container shipping giant A.P. Moller-Maersk now plans to achieve net-zero emissions in its business by 2040, a decade earlier than previously announced. The decision was driven by technological advances on the vessel side in tandem with increasing demand for carbon-neutral supply chains from big corporates such as Amazon and IKEA.  Maersk set a 2030 interim target for a 50% reduction in emissions per transported container, and a 70% cut in absolute emissions from fully controlled terminals. The 2040 target would cover its entire business, including indirect emissions, and not only its vessels.  Maersk has ordered twelve vessels able to run on carbon-neutral methanol, and aims to transport a quarter of its seaborne freight using greener fuels in 2030.

Unforeseen events of recent years have demonstrated how beneficial it can be for parties to contractually “expect the unexpected”. To help parties prepare and resolve situations arising from unexpected events impacting the performance of contracts, BIMCO has published a Force Majeure Clause 2022.  It is a “model” clause designed for use with all types of agreements. This means that parties may need to adapt it to suit the specific needs of their contract and should look carefully at the wording and the explanatory notes before using the clause.

The Marilyn Bell I ferry, which connects passengers, vehicles and supplies to Billy Bishop Toronto City Airport, is now the first electric ferry service in Canada to be powered by a zero-emission, lithium-ion power and propulsion system containing no diesel components. PortsToronto, owners and operators of Billy Bishop Airport, celebrated the return to service of the Marilyn Bell I on December 5th following its conversion to 100 percent electric power. In operation since 2010, and upgraded to bio-diesel fuel in 2018, the vessel’s diesel generators and engines were removed in 2021 to make way for a new electric power and propulsion system and a suite of lithium-ion batteries fueled by 100 percent Bullfrog Power renewable electricity. Powered entirely by electricity from clean wind and solar sources provided by Bullfrog Power, the retrofitted Marilyn Bell I has eliminated greenhouse gas emissions from the ferry operation, reducing the airport’s direct emissions by approximately 530 tonnes per year. In addition to operating more efficiently and eliminating related air emissions, the retrofitted vessel builds on the airport’s award-winning Noise Management Program, as it will operate far more quietly, dramatically reducing related noise in the surrounding community.