COS Weekly Newsletter - Friday, 2 December 2022

Gitxaala Nation, through Gitxaala Enterprises Corporation, has partnered with Seaspan Marine to announce the launch of their Prince Rupert ship escort and docking service. Beginning January 1, 2023, the partnership between Gitxaala Nation and Seaspan will have modern, high efficiency 65T bollard tugs stationed at Prince Rupert. These tugs will be crewed 24 hours a day, 365 days a year, and will be available for ship docking and ship escort in the region. This new service in Prince Rupert complements Seaspan’s existing fleet in Vancouver, Roberts Bank and Vancouver Island.

Cruise Critic®, the world's leading cruise reviews site and online cruise community, has named the winners of its 14^th annual Cruise Critic Editors' Picks Awards – the industry's most comprehensive awards – recognizing the best cruise lines of the year, as chosen by the site's international team of cruise experts. This is our first full set of Editors' Picks Awards since before the pandemic, which marks a huge milestone for the industry. Vancouver was named this year's Best North American Homeport, with 2022 marking the first time in two years that the port welcomed cruisers to its city.  According to Cruise Critic Editors: "It's hard to beat this western Canadian homeport for sheer beauty and convenience. The city's vibrant dining scene and historic attractions are easily walkable from the pier."

According to Statistics Canada, Canadian farmers reported producing more wheat, canola, barley, corn for grain, soybeans, and oats in 2022 compared with 2021. Higher production was driven largely by better yields, especially in western Canada where growing conditions were generally more favourable than in 2021. Good conditions allowed farm operators to complete harvest in a timely manner across most of the country. Total wheat production rose by 51.7% to 33.8 million tonnes in 2022, the highest production since 2020 and the third highest production on record, largely attributable to higher production in the Prairies.

The Government of Canada has launched two upcoming calls for proposals to help decarbonize the medium- and heavy-duty vehicle sector, which includes delivery vans, buses and certain long-haul freight trucks. The first call will seek project proposals under the nearly $200-million Green Freight Program to help fleets reduce their fuel consumption and GHG emissions. The second call for proposals will focus on awareness and education projects through the Zero-Emission Vehicle Awareness Initiative’s (ZEVAI) new medium- and heavy-duty stream. This expansion of the Awareness Initiative will support outreach, education and capacity-building projects related to low-emission and zero-emission medium- and heavy-duty vehicles (MHDV). Both calls for proposals will be open to applicants on December 12 on Natural Resources Canada’s website.

The Canada Border Services Agency (CBSA) and United Parcel Service Canada Ltd (UPS Canada) have concluded a Virtual Cargo Pre-Screening proof of concept, held from May to November 2022, that provided an opportunity to enhance the way goods are risk assessed prior to their arrival in Canada. For the proof of concept, UPS Canada provided the CBSA with advance X-ray images for a select number of shipments coming from Europe. This gave Border Services Officers earlier access to supplemental information to aid decision-making about shipments before their arrival in Canada. The procedural and operational lessons learned from this proof of concept project will be valuable in informing the development of future commercial and trade modernization initiatives and improved border processes.

As part of the Government of Canada's Indo-Pacific Strategy announced earlier this week, $31.8 million was included to establish Canada’s first agriculture office in the region to increase and diversify agriculture and agri-food exports to the Indo-Pacific.  The Strategy is outlined in five interconnected strategic objectives -(1) promoting peace, resilience and security, (2) expanding trade, investment and supply-chain resilience, (3) investing in and connecting people, (4) building a sustainable and green future, and (5) ensuring Canada is an active and engaged partner in the Indo-Pacific.

US President Joe Biden signed into law on Friday a bill forcing labour unions and companies to accept a compromise agreement he brokered over the summer, averting a looming nationwide rail shutdown. For the first time in 30 years, Congress intervened to avert a rail strike. Biden had implored lawmakers to quickly pass the measure, emphasizing that the economic fallout that would result from a rail strike would be catastrophic and would cost hundreds of thousands of jobs. The House of Representatives passed the bill on Wednesday, followed by the Senate on Thursday. Both chambers lent overwhelming support.

The US Federal Maritime Commission (FMC) is reporting a strong rise in charge complaints as shippers respond positively to the Ocean Shipping Reform Act of 2022. This comes as the FMC continues to take steps to define the processes and fulfill the mandate from the US Congress requiring key milestones in the enactment and enforcement of the changes governing ocean shipping. Today, the FMC announced its interim procedures to review, investigate, and adjudicate Charge Complaints. Since the law’s enactment in June, the FMC reports it has received more than 175 filings in less than six months. Ultimately the FMC will decide if the charge is in compliance, if a refund or waiver is due and if a separate civil penalty proceeding is appropriate.

The California Air Resources Board (CARB) has published the Interim Evaluation Report as required by the Control Measure for Ocean-Going Vessels At Berth. This Report assesses the current state of at berth emissions control technologies for OGVs and the status of any landside infrastructure improvements needed to support emissions control technologies at berth; evaluates the progress being made towards complying with the emissions control requirements of the Regulation; and serves as a tool to help guide potential future CARB actions for reducing emissions from OGVs (including the feasibility of potential control requirements for bulk/general cargo vessels and vessels at anchor). Additionally, the Report includes recommendations for CARB Board consideration about future amendments or rulemakings based on staff’s findings.

Container, reefer, and cruise vessels/terminals have the earliest compliance deadline, with emissions reductions beginning on January 1, 2023. The Report indicates that these
vessel types will continue to primarily use shore power for compliance with the Regulation, while ro-ro and tanker vessels plan to utilize shore power in addition to other technologies such as capture and control.

This week European Union (EU) legislators reached a landmark deal to bring maritime transport into the EU's emission trading scheme (ETS), in a world first for any carbon market. Under the current plan, ships travelling within the EU will be required to pay for 100 percent of their carbon dioxide, methane, and nitrogen dioxide emissions for journeys within the bloc, and 50 percent of emissions of journeys to or from a non-EU destination.  The percentage of emissions covered for intra-EU journeys would ratchet up over time, starting at 40 percent in 2025, before rising to 70 percent in 2025, and 100 percent in 2026.  Smaller vessels would be exempt from the legislation, which is to apply on all ships above 5,000 gross tonnes.

While countries have agreed to adding shipping to the EU ETS, the details of the legislation will need to be endorsed by member states before being passed into law. The hope is that shipping's inclusion in the ETS will encourage shipowners and builders to invest in clean technologies and solutions so as to reduce their carbon credit bill.

The European Union's sanctions on Russian oil will take effect on Monday, and energy markets are headed for uncharted waters in the months ahead. Meanwhile, EU officials have agreed to set a price cap on Russian oil at $60 a barrel as OPEC+ meets Sunday to discuss crude production, adding more uncertainty to the immediate future. Shipping costs for Russian crude are skyrocketing as more tanker owners shun the trade days before the sanction take effect. Owners who are still willing to load Russian crude are attempting to charge more for the risk. Baltic Sea-to-India rates are being discussed at about $15 million -- or $20 a barrel --- for loadings after Dec. 5 when new EU restrictions kick in, said shipbrokers. That’s a sharp increase from $9 million to $11.5 million before. The US has said ships loaded with Russian oil before December 5 and unloaded at destinations before January 19 won't be subject to the price cap. The lack of clarity surrounding exemptions is paving the way for a shift to the so-called dark fleet, or tankers held by undisclosed owners who are willing to continue handling Russian oil despite the threat of sanctions. These ships mostly comprise of older vessels and many with a track record of dealing with sanctioned regimes.

The International Maritime Organization held an event to commemorate the 40th anniversary of the United Nations Convention on the Law of the Sea (UNCLOS).  The event addressed topics related to the forty years of cooperation between IMO and UNCLOS, and IMO’s contribution to the implementation of the Convention. Gillian Grant, Canada's Alternate Representative to the IMO and Chair of the Legal Committee recognized UNCLOS as a living instrument that needs to evolve to better address fraudulent registrations and Maritime Autonomous Surface Ships (MASS).

Next week the MV Shofu Maru will be calling in at Trigon Pacific Terminal in Prince Rupert.  The MV Shofu Maru is the world's first vessel equipped with Wind Challenger - a system, developed mainly by MOL and Oshima Shipbuilding that uses a telescoping hard sail that harnesses wind power to propel the vessel.  The vessel will transport coal mainly from Australia, Indonesia, and North America as a dedicated vessel for Tohoku Electric Power Co.  The introduction of the Wind Challenger is expected to reduce greenhouse gas (GHG) emissions about 5% on a Japan-Australia voyage and about 8% on a Japan-North America West Coast voyage, compared to a conventional vessel of the same type, and contribute to curbing GHG emissions during fuel transportation. MOL and Tohoku Electric Power Co. will continue to work toward both stable transport of energy resources and reduction of their environmental impact.

SHO FU means "pine (matsu in Japanese)" and "wind (kaze in Japanese)". The vessel name is derived from ‘Kaze no Matsubara’, the black pine trees planted for the purpose of erosion control in Noshiro, Akita Prefecture, and Wind from Wind Challenger, with the hope that the vessel will operate powerfully even under harsh conditions.