COS Weekly Newsletter - Friday, 26 May 2023
Lummi Nation challenges Roberts Bank T2 decision
The Lummi Nation in Washington state, whose traditional territory includes parts of BC, is challenging the federal government's approval of a controversial marine terminal expansion in the Lower Mainland. The Nation was not consulted on the project and claims that if the Roberts Bank Terminal 2 initiative goes forward, its fishing rights will be gravely impacted. A judicial review on the approval of Roberts Bank T2 is expected to be filed on the premises of a Supreme Court ruling that implies the Lummi Nation is owed the same rights of consultation as Indigenous groups in Canada. The Lummi feel they had the right to be consulted about the project – and were not. If the Nation in Washington state succeeds, it will clear a path for others south of the border to seek financial compensation from industrial projects on Canadian soil.
Ukrainian seafarers can now seek Canadian recognition of their CoC's
As per Transport Canada's latest bulletin
, Canada and Ukraine have signed a reciprocal arrangement for the recognition of certain STCW (Standards of Training, Certification, and Watchkeeping for Seafarers) certificates. This arrangement shall allow Ukrainian seafarers with valid STCW certificates to apply online for a Canadian endorsement if they intend to work on Canadian-flagged vessels. The arrangement is similar to those already in place between Canada and Australia, France, Georgia, Norway, the Philippines, and the U.K.
An IMO Circular Letter will be taken into consideration when determining the expiry date of a Canadian endorsement for a Ukrainian seafarer with an expired certificate of competency. The requirement to renew the endorsement six months before the expiry date does not apply to Ukrainian seafarers.
To apply for a Canadian endorsement, Ukrainian seafarers need to download and follow the instructions provided in the Application for a Canadian Endorsement form and the Declaration from an Authorized Representative form. They must also demonstrate relevant in-service experience related to the STCW certificate they are seeking endorsement for.
Canadian Coast Guard to receive CAD 2.5 billion for major small-fleet renewal
The Canadian government has announced a CAD 2.5 billion investment
to renew the Canadian Coast Guard's small vessel fleet. This investment aims to support the agency's operations in shallow coastal waters, inland lakes, and rivers where larger ships are unable to operate effectively.
The funding will be used to acquire up to 61 small vessels and replace existing craft, barges, and work boats with modern equipment. The planned acquisitions include six Mid-shore Multi-Mission Vessels, one Near-Shore Fishery Research Vessel, and 16 Specialty Vessels, which consist of two Special NavAids Vessels, four Special Shallow Draft Buoy Tenders, four Inshore Science Vessels, four Special Enforcement Vessels, two Lake Class Vessels, four Air Cushion Vehicles, and 34 Cape Class Search and Rescue Lifeboats.
These procurement efforts will provide opportunities for smaller shipyards and suppliers across Canada. The acquisitions will be carried out under Canada's National Shipbuilding Strategy, which has previously delivered 16 small vessels, including 14 Search and Rescue lifeboats and two Channel Survey and Sounding Vessels, to the Canadian Coast Guard.
Ocean Network Express to pay $1.7M detention/demurrage fine.
Ocean Network Express (ONE) has agreed to pay a $1.7 million civil penalty to the US Federal Maritime Commission (FMC) to avoid a formal investigation. The settlement
, which was announced publicly, was reached prior to the FMC initiating enforcement action against the carrier. As part of the settlement, ONE will refund or waive the contested detention and demurrage fees to the shippers involved in the case. Although ONE did not admit to any violation of the law, the company has committed to complying with the Ocean Shipping Reform Act of 2022 (OSRA-22) and the FMC's interpretive rule on detention and demurrage. The FMC Chairman, Daniel Maffei, stated that the agreement sends a clear message to the international shipping community regarding the need for ocean carriers to fully comply with US legal obligations. The FMC has collected a total of $4.65 million in civil penalties from shipping lines over the past year, including penalties imposed on Wan Hai
. Additionally, the FMC has helped waive or refund over $1 million in disputed fees to shippers in the last 11 months.
Viterra in talks to merge with U.S rival Bunge
Global grain trader Viterra is engaged in discussions to merge with its U.S. competitor Bunge Ltd, as reported by Reuters
. The potential merger between the two companies, which would significantly impact the top tier of global grains merchants, is still uncertain and the terms of the deal are being negotiated. Regulators would closely scrutinize any agreement due to concerns about concentrated control over staple crop trade and global food security. Bunge, a major corn and soy exporter in Brazil, would benefit from the merger, bringing it closer in revenue to rival Archer-Daniels-Midland. Both companies have experienced strong profits recently, benefiting from disruptions in the global crop market. A merger would grant Viterra access to export terminals in the U.S., strengthening its position as a global grains merchant. Viterra previously attempted to acquire Bunge in 2017, but the offer was rejected. The companies involved, including Glencore (part-owner of Viterra), declined to comment on the ongoing talks.
Further draft restrictions for drought-hit Panama Canal
Due to a drought affecting the Panama Canal, draft restrictions are being implemented, impacting maritime traffic. The Panama Canal Authority has announced
two draft restrictions, the first starting May 24th and the second scheduled for the following week. The decreased rainfall has led to a significant drop in water levels, with concerns that Lake Gatun could reach historic lows by July. As a result, neo-Panamax vessels will have reduced drafts, starting at 13.56 meters
and eventually decreasing to 13.41 meters
. This will result in reduced cargo capacity for some container ships. Several shipping companies have responded to the restrictions by implementing surcharges, while shippers are considering alternative routes, such as the all-water route via the Suez Canal, to reach the US East Coast from Asia. The Panama Canal has faced similar drought challenges since its expansion seven years ago, still, the current dry spell is particularly concerning as meteorologists predict the arrival of El Niño, which typically brings drier conditions to Central America.
BIMCO and Nautilus labs implore the industry to rethink charter parties
A white paper by BIMCO and Nautilus Labs proposes reevaluating the practice of "sail-fast-then-wait" (SFTW) behaviour in the shipping industry. SFTW involves vessels travelling at high speeds to arrive quickly, even if the berth is unavailable, to trigger the lay-time clock and maximize demurrage charges. The paper highlights that this behaviour leads to unnecessary fuel consumption and emissions, negatively impacting a vessel's Carbon Intensity Indicator (CII) rating.
The authors argue that current charter party frameworks create imbalanced incentives between owners and charterers, resulting in inefficiency. They suggest modifying charter party conditions to align incentives, reduce claims, and encourage collaborative approaches to vessel efficiency. Advances in machine learning software and high-frequency ship data enable a new approach to charter parties and dynamic performance tables. The proposed changes could potentially reduce emissions by 15 to 20%, amounting to 150 to 200 million metric tonnes of emissions and saving tens of billions of dollars in fuel annually. The white paper, titled 'The Wrong Speed for all the Wrong Reasons'
essentially stresses the fact that- In the age of decarbonization, traditional key charter party clauses are no longer fit for purpose and need to be reviewed to address these systemic inefficiencies.
Russia to commence year-round voyages from Arctic to Asia
Russia is set to begin year-round voyages from the Arctic to Asia along the eastern section of the Northern Sea Route (NSR) starting in 2024. This development
has significant implications for global seaborne trade. The decision, made in collaboration with Novatek, aims to launch year-round navigation in the eastern part of the NSR, marking a historic milestone for the Arctic's development and the Russian economy. Novatek has been developing LNG plants in the Arctic to cater to Asian customers. The shrinking Arctic sea ice has opened up shipping channels, allowing vessels to bypass the Panama and Suez Canals. The Russian government, led by Vladimir Putin, has made substantial investments in developing ports, bunkering facilities, and icebreakers to enhance maritime traffic in the region. Researchers predict a significant increase in Arctic shipping in the coming decades, providing more resilient trade routes. China has been actively pursuing its ambitions to utilize the Northern Sea Route for shipping goods to Europe. Various non-governmental organizations have been advocating for reduced carbon emissions in Arctic shipping at the International Maritime Organization.
Seaspan unveils new ammonia-powered boxship design
The Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping has unveiled the design of a 15,000 TEU container vessel powered by ammonia. The project, in collaboration with Seaspan, the largest boxship lessor, features a dual-fuel engine running on very low sulfur fuel oil (VLSFO) and ammonia. The ship includes an 11,600 cubic meter non-pressurized ammonia tank and can travel at 16 knots for 12,000 nautical miles, with extended fuel endurance allowing for 18,500 nautical miles. The initiative is connected to the SABRE Consortium
, which aims to develop and demonstrate an ammonia supply chain in Singapore. The International Energy Agency (IEA) predicts that ammonia will account for approximately 45% of marine fuel demand by 2050. Last week, Mediterranean Shipping Company (MSC) also announced plans for an ammonia dual-fuel operation on a future containership, collaborating with Lloyd's Register, MAN Energy Solutions, and Shanghai Merchant Ship Design & Research Institute (SDARI) for the vessel's design.
Ship of the Week
May 26 - Oyster Bay
M/V Oyster Bay
is a Pacific Basin Shipping-owned geared bulk carrier with a 55,000 tonne-deadweight capacity with a safe working load (SWL) of 30 metric tonnes per each of its 4 cranes. She is fitted with an exhaust gas cleaning system and is Oshima Supramax vessel built in built 2016.
The vessel loaded steel products (Beams, Pipes, plates and Pilings) at Changshu and Xingang, China and shall call Everett, Washington (USA) and New Westminster, BC Canada to discharge its cargo. She would subsequently load a full cargo of logs on and under the deck at the Port of Nanaimo and Crofton as backhaul cargo bound for Lanshan, China. Interestingly, M/V Oyster Bay’
s maiden voyage was a cargo of Alumina into Kitimat, BC followed by logs from Stewart and Gold River bound for South Korea and China.
As one of Pacific Basin's four Oshima Supramax vessels, she is among the largest loggers in the ship owner’s fleet. Additionally, these are the largest vessels that have the ability to load logs on Vancouver Island.