COS Weekly Newsletter - Friday, 30 June, 2023

COS Weekly Newsletter - Friday, 30 June, 2023

COS Weekly Newsletter - Friday, 30 June, 2023


Happy Canada Day

We'd like to recognize our members who make substantive contributions to the Canadian economy.  As a trading nation, international trade has contributed to more than half the value of Canada’s GDP over many decades. Next to road transport, marine shipping is the most common mode of transport for international trade. This means shipping matters. We are wishing everyone a happy and safe Canada Day weekend.

Local News

VFPA appoints Victor Pang, interim President and CEO

After 14 years as president and CEO of the Vancouver Fraser Port Authority, Robin Silvester’s last day at the organization is Friday, June 30, 2023. The decision to select a new president and CEO will be made by the port authority’s board of directors, who will  lead a comprehensive search. As an executive search of this nature may take some time, Victor Pang, the port authority’s chief financial officer, has been appointed as interim president and CEO while the board conducts its search. Victor will continue in his role as CFO during the transition.

ILWU Canada Serves Strike Notice

Please see the recent update provided by the BC Maritime Employers Association (BCMEA) confirming the ILWU Canada has served a 72-hour strike notice effective 08:00 (PT) on July 1, 2023.

Further updates will be available on the BCMEA negotiations website here. Any questions should be directed to the BCMEA.

HaiSea Marine commences floating tug boat base construction

HaiSea Marine, in collaboration with Pacific Marine Construction, has started constructing of a floating tugboat base facility in the Kitimat region. The project prioritizes inclusivity, local hiring, and community involvement. The facility will have a workshop, common spaces, a gym, and accommodations for eight shore-based personnel. It is designed to withstand the extreme tidal range in the area. HaiSea is involving the Haisla, Gitga'at, and Gitxaala communities in a naming contest for the facility. The goal is to create a safe, healthy, and inclusive environment for all workers. The facility is intended to serve HaiSea's fleet and the Kitimat community for the long term.

Canada becomes 3rd largest importer of U.S. grain

Canada experienced a significant increase in imports of U.S. grain in the 2021-22 marketing campaign, driven largely by the western Canadian drought. Canada imported 13.33 million tonnes of U.S. grain, valued at $6 billion, making it the third-largest importer behind Mexico and China. The import figures include U.S. grain used in products like ethanol, pork, poultry, and beef. Corn was the top revenue generator, followed by ethanol and pork. Although Canadian purchases of U.S. grains have decreased by 29% in the first eight months of the 2022-23 marketing campaign due to improved Canadian harvests, the numbers remain relatively high. Ethanol imports from the U.S. have increased by 30%, while imports of other products, except for barley, have slightly decreased. The Canada-United States-Mexico Agreement has played a role in facilitating trade between the two countries.

Changes to Canada Grain Act to target duplicate grain inspection fee

Canada's Agriculture Minister, Marie-Claude Bibeau, intends to introduce legislation to modernize the Canada Grain Act by the end of the year. The proposed changes aim to reflect current practices in the buying, selling, delivery, and handling of grain.  The legislation is expected to address is the problem of duplicate grain inspection fees, which currently burden grain producers. Overseas customers often demand third-party inspections both at the time of loading in Canada and offloading in their own countries. As a result, an estimated 70% of grain leaving Canadian ports is double-inspected, leading to unnecessary costs of approximately $60 million annually for growers. The Wheat Growers Association advocates for a system similar to the U.S. where third parties provide inspection services and the government's role is reduced to oversight. Concerns have been raised about the impact on trade with China and Japan if Canada shifts to a third-party inspection system, but the association points out that these countries regularly purchase grain from the U.S., which employs such a system.

NTEC coal from Montana to be transported by BNSF to Westshore

The Surface Transportation Board (STB) has issued a preliminary injunction requiring BNSF Railway Co. to transport 4.2 million tons of coal from Navajo Transitional Energy Co.'s (NTEC) Spring Creek mine in Montana to the Westshore Terminals export facility in British Columbia during 2023. An additional 1 million tons will be transported this year as train sets and crews become available. The STB ordered BNSF to move 23 trains per month initially and six additional trains per month when more resources are available. Both parties are required to report the number of trains moved and their efforts to obtain more resources on a weekly basis. The decision was made in response to NTEC's complaint that BNSF had violated its common carrier obligation. The STB found in favor of NTEC, stating that BNSF had the capacity to provide the requested service and that it was in the public interest to do so. NTEC's reputation and the importance of its role in the Navajo Nation's economy were also considered. STB Chairman Martin Oberman emphasized the significance of the common carrier obligation in the railroad industry. Two STB members dissented from the decision.


Seafarer shortage prompts Canada to allow more foreign nationals on its vessels

Transport Canada has expanded its Reciprocal Arrangement Program to address the shortage of Canadian seafarers by signing agreements with Georgia, the Philippines, and the United Kingdom. The program allows certified seafarers from these countries to work on Canadian vessels. The move has caused concern among Canadian mariners who are already facing a shortage of personnel, particularly those with high-level certificates of competency. The Canadian Merchant Service Guild has called for programs to assess the qualifications of new Canadians who previously worked as seafarers in other countries. The guild emphasizes the need to prioritize qualified Canadians for available positions and closely monitor the impact of using foreign nationals. They stress the importance of consulting unions and ensuring that foreign seafarers meet legal requirements and are only employed when no qualified Canadians are available.

CFIA D98-08 Wood Dunnage Program Extended

On January 6, 2023, the Canadian Food Inspection Agency (CFIA) released directive D-98-08: Entry Requirements for Wood Packaging Material in to Canada to update the management program for shipborne dunnage in to Canada. The directive introduces a new Prevention Control Plan and a 96-hour advance reporting requirement for shipborne dunnage. Initially, the implementation deadline for the directive was set for July 6, 2023.

CFIA's forestry section has now extended the deadline by four months to provide more time for the industry to address any implementation issues that may arise. Consequently, the full implementation of D98-08 will now be required by November 6, 2023.


Ceres Terminals acquired by Carrix

Carrix, a leading marine terminal operator in the U.S. and the Americas, has agreed to acquire Ceres Terminals from Macquarie Infrastructure Partners III. The financial terms of the deal have not been disclosed. Ceres Terminals, established over 60 years ago, operates in 18 locations across North America and provides terminal services for shipping containers, roll-on roll-off cargo, breakbulk cargo, and cruise passengers. Carrix, the parent company of SSA Marine, is a global operator with operations at over 250 port and rail locations worldwide. The acquisition expands Carrix's presence and strengthens its position in the marine terminal industry. Ceres Terminals is currently owned by Macquarie Infrastructure Partners III.


Hong Kong Convention's entry into force with Bangladesh and Liberian ratification

The International Maritime Organization (IMO) has announced the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships is set to enter into force after 24 months. The convention, which was adopted over 14 years ago, aims to ensure that ships being recycled at the end of their operational lives do not pose risks to human health, safety, and the environment. The ratification of the convention by Bangladesh and Liberia, two key players in the ship recycling industry, has met the necessary criteria for its entry into force. Beginning June 26, 2025, ships destined for recycling will be required to carry an Inventory of Hazardous Materials, and authorized ship recycling facilities will need to provide specific Ship Recycling Plans. Governments will also be responsible for ensuring compliance with the convention's regulations in recycling facilities within their jurisdiction. Currently, 22 countries have ratified the convention, representing approximately 45.81% of the world's merchant shipping by gross tonnage. The news has been welcomed by industry organizations, including the International Chamber of Shipping and BIMCO, as a significant step towards a safe and environmentally sustainable ship-recycling industry.

Torrential rain provides relief to Panama Canal operations

The recent arrival of rains in Central America brings positive news for global supply chain planners. As a result of the improved weather conditions, the Panama Canal Authority has decided to postpone further draft restrictions that were originally scheduled for June 25th and July 9. The region is expecting heavy rainfall throughout the week. The Panama Canal had previously implemented draft restrictions due to a severe drought, resulting in reduced maximum authorized draft levels for ships passing through the Neopanamax and Panamax locks. The Neopanamax locks will continue to accommodate ships with drafts up to 13.41 meters, while the Panamax locks will allow drafts of up to 12.04 meters. These draft levels have already decreased by more than 1.5 meters compared to their maximum levels, which were affected by months of dry weather. The backlog of ships waiting to transit the canal has been increasing throughout June, with queues forming on both sides of the waterway.

Ship of the Week


June 30 - M/V New Pinnacle

M/V New Pinnacle is a Drax-operated geared bulk carrier with a 39,042 tonne-deadweight capacity with a safe working load (SWL) of 30.5 metric tonnes per each of its 4 cranes. A vessel built at Shikoku Dockyard in 2020, she has recently undergone minor hold refinements and hull coating enhancements which drive significant operating efficiencies and reduce its ocean transportation costs and carbon footprint.

The vessel loaded Drax wood pellets at Westview Terminal, Prince Rupert and shall call Soma & Kinuura, Japan to discharge its cargo. As one of three of Drax owned and operated long-term charter vessels, MV New Pinnacle carries approximately 210,000 metre-tonne-second of biomass annually to Asian discharge ports.

Delivering shipments where Drax manages the vessel operations through to the destination allows for maximum delivery efficiency, flexibility, service and support to our valued and long-standing customers, supporting their journey to decarbonization.