COS Weekly Newsletter - Friday, 14 October 2022

SAAM Towage and Teck Resources have announced an agreement to deploy two electric tugs at Neptune Terminal in the Port of Vancouver. This agreement will support Teck's climate goals to reduce emissions across its supply chain and achieve a 40% reduction in shipping emission intensity by 2030.

Under the agreement SAAM will furnish two ElectRA 2300SX designed by Vancouver-based Robert Allan and built at Sanmar Shipyards in Turkey. The tugboats are powered by two separate battery Li-ion energy storage systems, making them 100% electric and zero-emissions ships. They will be charged by British Columbia’s hydroelectric power grid. SAAM Towage expects the delivery of the tugs during the second half of 2023

The Maritime Employers Association (MEA) has launched its artificial intelligence project, Galileo, designed in collaboration with Airudi and with the contribution of Scale AI.  Galileo is a revolutionary tool designed to improve the planning surrounding the dispatch of the port workforce. Taking into account port traffic, the weather, and the quantity and type of merchandise, Galileo will propose an optimal scenario for the dispatch of the labour force that both respects the collective agreements, and factors in the availability of port workers and the required classifications. Terminal operators will therefore have an additional resource at their disposal to help them make better decisions regarding their labour needs. Expected benefits include reduction in labour shortages, optimized training programs, and better coordination between stakeholders with improved visibility on labour capacity. Video.

First Phosphate Corp. has announced that it has signed a memorandum of understanding (MOU) with Port of Saguenay, a further step in the implementation of the Company’s six-phase integration plan for the North American lithium iron phosphate (LFP) battery market. The MOU engages discussions between the parties to provide the Company with potential deep-sea access to ship phosphate concentrate internationally and greenfield land on which to build its facilities. The deal comes on the heels of newly-re-elected Quebec Premier Francois Legault’s electoral commitment to invest $117.2 million in infrastructure at the Port of Saguenay. Former international journalist and Canadian Member of Parliament Peter Kent was appointed as President of First Phosphate at the end of September.

The British Columbia Assembly of First Nations (BCAFN) is launching a new Centre of Excellence in First Nations Economic Development to help advance the role of First Nations in BC’s inclusive economy and to work toward true and lasting reconciliation. The BC government is providing more than $1.2 million to the BCAFN this year to launch the centre. It will increase the capacity of First Nations in BC to engage in economic priorities and initiatives highlighted in the Declaration on the Rights of Indigenous Peoples Act Action Plan, distribute best practices and policy papers about economic development to First Nations, and provide consulting services on opportunities such as joint ventures and impact benefit agreements. Working toward lasting and meaningful reconciliation, now and in the future, with Indigenous Peoples is fundamental to British Columbia and central to the StrongerBC Economic Plan.

The Vancouver Fraser Port Authority has published a Notice of Amendments for their 2023 fees. In summary, the amendments for the auto, cargo and container sectors reflect a 3.4% CPI increase for Berthage and Wharfage rates. Harbour Dues rates reflect an increase of 6.5% and include a new discount rate as well as new and revised criteria to qualify for Harbour Dues discounts.  Included as well are the annually adjusted rates for GIF, and the new Gateway Infrastructure Fee 2 (GIF2) which include two new areas for fee recovery - Second Narrows East Terminals, and Fraser River Trade Area. Persons interested in making written representations to the VFPA on the subject of the proposed fee amendments or any other matter in this notice may do so, on or prior to December 13, 2022.

Over the Thanksgiving weekend, Westshore Terminals and ILWU Local 502 reached a tentative agreement that enabled operations to resume on the afternoon of October 9th. The new six-year agreement, which expires on January 31, 2028 is subject to a ratification vote by end of October 2022.  Westshore advises that the ILWU 502 agreement is the first of three collective agreements to be negotiated and that negotiations with Locals 514 and 517 will be scheduled in the near future.

The annual throughput volume for 2022 is now estimated at 24-25 million tonnes in view of the labour disruptions and expected performance from BNSF for the second half of the year.

Clear Seas has just announced a joint research project with the University of British Columbia (UBC) and the National Research Council of Canada’s (NRC) Ocean, Coastal and River Engineering Research Centre that aims to play a key role in reducing the environmental footprint of shipping, which accounts for nearly three per cent of global human-caused carbon emissions. The Zero-Impact Marine Shipping study is a multi-year project that will highlight research and development efforts, support policy decisions, and recommend technologies that can be used to retrofit existing ships, and which can be incorporated into new ship designs.

This week the Minister of Transport, the Honourable Omar Alghabra, travelled across Canada to make several supply-chain-related funding announcements following last week's release of the National Supply Chain Task Force’s final report.  In Halifax, the conclusion of the Ports Modernization Review was announced with promises to amend the Canada Marine Act to better position ports as enablers of trade and traffic and put ports in a greater leadership role in advancing climate.  In Winnipeg, the Minister announced $17 million to be spent over five years on new initiatives aimed and improving the movement of goods by rail, marine, and air modes. Initiatives include working towards a Maritime Single Window; amending the Canada Transportation Act to allow Transport Canada to offer digital service delivery to transportation operators across modes; and collaborating with industry to develop an approach to eliminate paperwork and shift to the use of electronic shipping documents for the transportation of dangerous goods.  Today in Vancouver, a $136 million Advancing Industry-Driven Digitalization of Canada's Supply Chain initiative was announced to improve planning and coordination of transportation activities to alleviate bottlenecks and reduce congestion and be more resilient to disruptions by collecting and sharing data and analytics in real-time.

As part of Supply Chain Week, the Government of Canada has announced up to nearly $8 million for DG CanEst Transit Inc. to update existing infrastructure and purchase new equipment for its facilities located in the Port of Montréal. The project, worth a total of $18 million, will increase the number of containers stored onsite, improve the quality of the grain-cleaning service, optimize traffic flow in the yard, and increase capacity for loading and handling containers.

The Pacific Coast Port Access Route Study (PAC-PARS) is the first comprehensive evaluation of maritime traffic patterns along the Pacific Coast. The US Coast Guard studied navigational conditions for vessels accessing ports and making coastal transits in light of evolving uses of coastal waters: offshore renewable energy, aquafarms, and space launch activities among others. The PAC-PARS is available now and it provides recommendations for new voluntary fairways along the Pacific Coast. The entire Draft PAC-PARS with all enclosures and appendices is posted and open for comment on the Federal Register.  It's also available in its entirety on the USCG Navigation Center's website. All comments should be submitted via the Federal Register website by the October 25th, 2022 deadline.

Water levels on the Mississippi River Basin are at their lowest point in more than a decade, and this combined with dredging shuttered barge traffic heading north and south on the Mississippi last week. At one point, more than 100 towboats and 2,000 barges were stuck waiting. The Mississippi River is the main artery for US crop exports, with 60% of all grain exported from the US shipped along the river through New Orleans and the Port of South Louisiana, and supports 35% of US coal exports. Major barge lines on the river are turning away spot business as they struggle to meet demand for grains, metals and other raw materials already contracted well in advance. Each reduced foot of water depth results in 150-200 fewer short tons loaded per barge, and shipping rates are soaring. According to the U.S. Department of Agriculture, the cost of moving grain via barge from St. Louis was 218% higher year over year during the week of Oct. 4. Shipments from Cincinnati and Louisville, Kentucky, popped by 196% over the same time period.

California is calling for project proposals that would be financed in part by $1.2 billion the state has allocated for supply chain infrastructure improvements. Gov. Gavin Newsom signed an executive order a year ago vowing to address the crippling congestion at the state’s ports, particularly Los Angeles and Long Beach.  70 percent of the funding for the new Port and Freight Infrastructure Program will support projects to help move goods through Los Angeles-Long Beach, with the other 30 percent earmarked for elsewhere in the state. Project applications are due Jan. 13, with the winning projects to be announced in March.

Russia and Ukraine are both seeking changes to their landmark grain-export deal as part of discussions to extend the initiative beyond the current deadline next month, according to the United Nations. Russia wants to see a pipeline that transports its ammonia to Ukraine’s Odesa port for shipment reopened as part of the new terms and Ukraine is seeking to extend the deal by more than a year, and include Mykolayiv as a fourth exporting port. The actual volume of grain exports by Ukraine since the beginning of the 2022/2023 marketing year as of October 14 is 10.5 million tons, down 34% or 5.41 million tons year over year.  US wheat futures rebounded on Thursday from two days of declines on concerns that a Black Sea export corridor deal may not be renewed next month, which could again disrupt grain shipments from Ukraine.

 

EY teams conducted a survey about the sustainable supply chain approaches at 525 large corporations representing various sectors across Argentina, Brazil, Canada, Mexico and the United States (US). The research shows that while many executives have long-term sustainability goals for their supply chains, few have the visibility, technology and comprehensive programs in place to measure their progress. Focusing on supply chains is key to overall environmental, social and governance (ESG) efforts because more than 90% of an organization's greenhouse gas emissions, and 50% to 70% of operating costs, are attributable to supply chains. Beyond risk avoidance and compliance, organizations are seeking ways to create long-term value by embedding sustainability into supply chain operations.

In April 2016, Vancouver-based Waterfront Shipping Company Ltd. (WFS) took delivery of the Mari Jone, the first-of-its kind MAN B&W ME-LGI 2-stroke dual-fuel engines that can run on methanol, fuel oil, marine diesel oil, or gas oil.  WFS had invited three shipping companies, Marinvest/Skagerack Invest (Marinvest), Mitsui O.S.K. Lines, Ltd. (MOL), and Westfal-Larsen Management (WL) to collaborate on the project and in December 2013 announced plans to commission three dual-fuel vessels - Mari Jone, Mari Boyle and Taranaki Sun.

The Mari Jone was named in honour of Jone Hognestad who at the time had served as Waterfront's President for 17 years. We are very sad to report that Jone Hognestad died in a tragic accident in Pender Harbour this past weekend at the age of 67.  Our condolences go out to his family, friends and colleagues.