B.C. Tugboat 2014

TUGBOAT

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How to be a tugboat operator in Canada Fuel tools: hedging to protect from rising costs Federal government introduces new safety measures for tankers

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2014

President: David Langstaff Publisher: Jason Stefanik Managing Editor: Shayna Wiwierski shayna@delcommunications.com Contributing Writers: John Eldridge Melanie Franner Don Lindsey

Editor’s Message.....................................................................................

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Federal government introduces new safety measures for tankers.......

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BC Ferries is registered in the Certificate of Recognition program – Are you?......................................

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Navigating the art of working on Canadian vessels Multi-nationals face strict guidelines......................................................

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Editor’s Message

Shayna Wiwierski

The number one question I get asked as the editor of B.C. Tugboat is “how do I become a tugboat operator in Canada?”.

The tugboat industry is a thriving one, and there are many operators all over the world who want to break into the business here in our home and native land.

The magic of the Internet is that people from all over the world can access our magazine. If you haven’t yet logged onto bctugboat.com, I highly suggest you do so and join in the conversation. We have had comments from South America, Africa, Europe, you name it, all with the same question – I want to be a tugboat operator/captain in Canada, how can I go about doing so? Well, dear readers, we listened and if you turn to page 8 you can find out all the details on how to break into the industry.

Unfortunately, I would love to say that anyone can hit the high waters here, but that’s not the case. Transport Canada, the government agency responsible for licensing individuals to work on Canadian vessels, requires a valid license or Canadian Certificate of Competency, as well as either Canadian citizenship or permanent residency. So that means, if you aren’t a Canadian, you unfortunately may be out of luck. But, as you will read in the story, that hasn’t stopped many people who now call Canada home, legal resident or not, from being involved in the industry.

The 2014 issue of the magazine is also filled with many other fascinating stories, including the federal government’s new safety measures for tankers, hybrid tugboats, and much more.

You can even have a chance to win a prize from the British Columbia Maritime Employers Association on page 7.

I truly hope you enjoy this issue of B.C. Tugboat magazine. And as always, if you have any questions, concerns, or story ideas, feel free to pass them my way.

Shayna Wiwierski R

Federal government introduces new safety measures for tankers Every year, over 700 tankers arrive at Canadian ports and

“With a world-class oil tanker regime, our government can pro-

80-million tonnes of oil move along Canada’s East and West

tect the safety of Canadians and the environment,” said Lisa

coasts.

Raitt, Minister of Transport. “Our current tanker safety system

The federal government has several safety measures in place to protect Canada’s waters from ship-source pollution and to ensure that tankers travel safety through Canadian waters.

While the current system meets today’s needs, shipments of oil and substances, such as liquefied natural gas are growing.

As a result, Canada is developing a world-class tanker safety system as part of a plan for Responsible Resource Development.

The system is built on four pillars: prevention, preparedness, response, and liability and compensation.

4

B.C. Tugboat | 2014

has served us well for many years, but as the transportation of Canadian exports is expected to grow and create many highquality jobs in Canada, it is essential that we strengthen it to meet future needs.”

There are eight new measures – announced in March 2012 – coming into effect that will strengthen Canada’s tanker safety system to protect the safety of Canadians and our environment.

These measures include: 1. Tanker inspections: The number of inspections is increasing

to ensure that all foreign tankers are inspected on their first

response capacity, and propose new ways to bring Canada’s

visit to Canada, and annually thereafter, to ensure they com-

tanker safety system to a world-class status. The panel’s re-

ply with rules and regulations, especially with respect to

port, A Review of Canada’s Ship-Source Oil Spill Preparedness

double hulls.

and Response Regime—Setting the Course for the Future, was

2. Systematic surveillance and monitoring of ships: The government has expanded the National Aerial Surveillance Program. This program involves three aircrafts that monitor shipping activities over all waters under Canadian jurisdiction using sophisticated state-of-the-art remote-sensing equip-

released in December and can be viewed at: www.tc.gc.ca/ eng/tankersafetyexpertpanel/menu.htm.

In response to receiving the report, the Honourable Lisa Raitt, Minister of Transport, said, “I look forward to studying the re-

ment that can identify potential spills from satellite images.

port, speaking with stakeholders about their views, and dis-

3. Incident Command System: The government will establish

all necessary actions to prevent oil spills, clean them up should

a Canadian Coast Guard Incident Command System, which will allow it to respond more effectively to an incident and integrate its operations with key partners.

4. Pilotage programs: All tanker operators operating within a compulsory pilotage area must take on board a marine pilot with local knowledge. The boarding pilot’s extensive knowl-

cussing it with my cabinet colleagues. The government will take they happen, and ensure that polluters pay.”

Oil has been safely transported in Canadian waters for decades, without major incident – thanks to responsible players such as the tugboat industry, and a strong tanker safety system – however, every system requires review and updates over time.

edge of the local waterway can guide the vessel safely to its

The recently announced World-Class Tanker Safety System is

destination. We will review existing pilotage and tug escort

designed to protect our environment while promoting jobs and

requirements to see what more will be needed in the future.

economic growth– now and in the future. R

5. Public port designations: More ports will be designated for traffic control measures, starting with Kitimat, B.C. 6. Scientific research: The government will conduct scientific research on non-conventional petroleum products, such as diluted bitumen, to enhance understanding of these substances and how they behave when spilled in the marine environment.

7. New and modified aids to navigation: The Canadian Coast Guard (CCG) will ensure that a system of aids to navigation, comprised of buoys, lights and other devices to warn of obstructions and to mark the location of preferred shipping routes, is installed and maintained.

8. Modern navigation system: The CCG will develop options for enhancing Canada’s current navigation system (e.g. aids to navigation, hydrographic charts, etc.).

In addition to these measures, the federal government created a Tanker Safety Expert Panel to review Canada’s current tanker safety system and propose further measures to strengthen it.

The panel consulted with key stakeholders to enhance the government’s knowledge and understanding of how well the current system is working, review the current preparedness and B.C. Tugboat

5

BC Ferries is registered in the Certificate of Recognition program –

Are you?

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Since the BCMEA COR program started in 2008, there have been 41 large employers registered, and 17 are certified in the program.

Waterfront employers who implement health and safety management systems are rewarded through a balanced and transparent WorkSafeBC employer incentive program. The COR program allows for up to a 15 per cent rebate of your WorkSafeBC premiums. The incentive is based on rebates of 10 per cent for the Health and Safety COR and five per cent for the Injury Management COR. When both a Health and Safety and Injury Management COR have been attained, the opportunity to receive up to a 15 per cent rebate is attainable.

Since the BCMEA COR program started in 2008, there have been 41 large employers registered, and 17 are certified in the program. The COR audit process was originally intended for large employers with an employee count of 20 or more but now includes a SECOR program for small employers with less than 20 employees.

The SECOR pilot program was successfully completed in spring 2012. Since then, there have been six small employers registered, and four are certified in the program.

BCMEA COR is proud to say that one of their largest COR-registered employers to date, BC Ferries, is in the process of obtaining its COR certification as it continues to maintain the safety and security of its customers and staff in all aspects of doing business.

Fifty years ago, BC Ferries started out with two ships, two terminals, and 200 employees. BC Ferries has certainly come a long way since then and is currently one of the largest ferry operators in the world, with a fleet of 35 vessels, 47 ports of call, more than 500 sailings every day, and serviced by 3,800 to 4,700 employees, dependent

upon the season. BC Ferries serves as an

Health and safety is an imperative part

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of work in general, and is essential for

communities and facilitates the movement

the business of waterfront employers

of people, goods, and services.

and the wellbeing of their staff. R

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Marine Simulator at BCIT’s Marine Campus.

Photo by Scott McAlpine/BCIT

Navigating the art of working on Canadian vessels Multi-nationals face strict guidelines

By Melanie Franner Meet Arpit Baweja. At 25 years old,

has encountered more than a couple of

or Canadian Certificate of Competency

Baweja already has close to five years of

roadblocks.

(CoC), as well as either Canadian citizen-

cargo vessel experience under his belt.

He attained his marine license from his

Only in Canada

ship or permanent residency.

According to Jillian Glover, communi-

home country of India and has most re-

With a long history in shipping and trans-

cently worked on a contract basis with

port, Canada is well recognized as a coun-

one of the world’s largest international

try with strong job opportunities for indi-

container transportation and shipping

viduals interested in pursuing a career on

companies. He moved to Canada just a

the water. Transport Canada is the gov-

few months ago in the hope of getting a

ernment agency responsible for licens-

“A Certificate of Competency is issued

job within the Canadian shipping indus-

ing individuals to work on Canadian ves-

once an individual has met all of the cri-

try. And in pursuance of this dream, he

sels. The agency requires a valid license

teria for said Certificate of Competency,”

8

B.C. Tugboat | 2014

cations advisor, Transport Canada, the agency issued a total of 3,500 CoCs in the past year. These included both nautical and engineering CoCs.

Matt Taylor, vessel manager and Garfield Marsden, chief officer, conducting ballast tank inspections on the Barge Lambert Spirit.

Arpit Baweja.

states Glover. “These criteria include

Successful completion of such programs, in conjunction with Canadian citizenship or permanent resident status, and the awarding of a CoC from Transport Canada, would allow an individual to work on a Canadian tugboat.

citizenship or permanent residency.

via a traditional Canadian cadet route, the

On the outside looking in

before registering into a marine program

training would typically involve a three- or

The route to working on tugboats for those individuals who have attained their CoC outside of Canada is a little more complicated and time consuming. The individual must first submit his records to Transport Canada for validation and review. Transport Canada will compare the individual’s record against the required Canadian standards and will issue a letter informing the individual of the courses (if any) that are required in order to attain the equivalent CoC.

exams, training and medical fitness evaluations.”

There are several institutions in Canada where an individual can attain his CoC. If said individual were to attain his license

four-year diploma program from a recognized entity, such as: the Fisheries and Marine Institute in St. John’s, N.L.; the Nova Scotia Community College (NSCC) in Nova Scotia; the Quebec Maritime Institute in Rimouski, Que.; Great Lakes International

Marine

Training

and

Research Centre in Owen Sound, Ont.; and the British Columbia Institute of Technology in Vancouver, B.C. These institutions are among the government-approved education facilities within Canada. Upon completion of programs at these institutions, graduates must undergo further examination by Transport Canada before the agency will issue a Standards for Training, Certification and Watch Keeping (STCW) License CoC or a domestic license CoC.

Foreign students who successfully complete a marine training program at a recognized Canadian institution will not be issued a Canadian CoC. “All foreign students are informed that at a Canadian university/college that they can complete the training program, at the end of which they will be issued with a course completion program certificate from the institute, which they have to take back to their own country for issue of a Certificate of Competency by their own government,” explains Glover. “A Canadian Certificate of Competency will not be issued by Transport Canada. By law, a Canadian Certificate of Competency can only be issued to a Canadian citizen/ permanent resident in Canada.”

“Depending on the kind of Certificate of Competency and the candidate, this process can take anywhere from six months for a CoC at master, which is limited for a vessel of less than 60 gross tonnage,” explains Glover.

Of course, the other impediment to working on a Canadian tugboat is Canadian

Working within the system Many individuals who have already attained their CoC in countries other than Canada apply to Transport Canada to attain their equivalent CoC while, at the same time, applying to Immigration Canada for permanent residency. Unfortunately, the B.C. Tugboat

9

latter is not guaranteed and if approved, can take several years to attain.

McKeil Marine Limited’s tug Leonard M and barge Huron Spirit, transporting 10,000 T of aggregates on Lake Huron.

Georgian College’s simulator was built and installed in 2008 for approximately $8.5 million dollars. It comprises four large full mission navigation bridges, one classroom with 12 separate part task trainer bridges and a marine engineering simulator with one large simulated full-mission engine room and an eight-station engine simulator classroom.

The navigation simulator is designed by Transas USA, while the engineering simulator was designed by Kongsberg of Norway.

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B.C. Tugboat | 2014

“Permanent residency is an immigration issue,” states Captain Colin MacNeil, master mariner, marine programs coordinator, Georgian College, Great Lakes International Marine Training and Research Centre (GLIMTRC). “I know it can take a number of years. But it does happen. We currently have a lot of permanent residents working on Canadian fleets.”

Of course, there is always the option of working on non-Canadian fleets.

“The world has interesting shipping regimes,” MacNeil explains. “A lot of countries are called ‘flags of convenience’ countries. An example is Panama, where there are fewer requirements for nationalities. Canada is one of the last flags in the world in which a ship owner will register a ship.”

Those cases in which an owner does register his ship under a Canadian flag occur because of the “Cabotage” shipping policy, which essentially “protects” Canadian seafarers by requiring that any cargo being transported domestically must be done on a ship registered under the Canadian flag, if such a ship is available.

The policy is similar to the U.S. “Jones Act”, which goes one step further by additionally necessitating the ship in question not only be registered, operated and manned in the U.S. and by U.S. citizens, but that the ship in question be built in the U.S. as well. (Of note, adds MacNeil, is that the lifting of the import duty on foreign-built ships, which had been in place in Canada for a generation, has resulted in an immediate and ongoing fleet renewal – which has resulted in a huge boost to Canadian shipping and potentially to seafarers themselves.)

“The Canadian tugboat industry is very regional,” explains MacNeil. “The West Coast is its own entity. The Great Lakes region, which includes the St. Lawrence, is also distinct. And the East Coast is another separate area, with a lot of tugs and barges because of the specialized equipment being moved from place to place for project work and also to service the oil industry.”

Canada calling Back when Arpit Baweja first thought about working in Canada, he was influenced by the country’s size and reputation.

“Canada is a very big country in shipping,” he explains. “A lot of people come to Canada for the opportunity.”

In his previous shipping experience as a navigating officer, Baweja worked on ships for long, extended contracts. As such, he ended up being away from his family in India for as much as eight or 10 months at a time.

“In Canada, the contracts are more like two months on and two months off,” he explains. “This would enable me to spend more time with my family.”

But because Baweja doesn’t have permanent resident status, his chances of getting work as a navigational officer on a Canadian vessel are zero. He is in the midst of submitting his records to Transport Canada to find out what courses he would need to attain his equivalent CoC, but he is well aware that the immigration issue is another big obstacle in his path. So, in the meantime, he has made other arrangements.

“I am not a Canadian citizen, so I know that I can’t work on a Canadian ship,” he states.

For this reason, Baweja has enrolled in – and successfully completed the first of two semesters – in a College Supply Chain Management program.

Transport Canada is the government agency responsible for licensing individuals to work on Canadian vessels. The agency requires a valid license or Canadian Certificate of Competency (CoC), as well as either Canadian citizenship or permanent residency.

“I like to study and I wanted to use my sailing and logistics experience to benefit Canadian companies here,” he explains, adding that the reason for enrolling in the program in Canada is to enable him to meet Canadian standards. “But I wish the rules were more flexible so that I could be part of the sailing fleet.”

Canadian born and bred Matt Taylor is a graduate of the Georgian College’s GLIMTRC marine program. He attained his certificate in marine technology in 2008 and went on to work with a company that specialized in shipping cargo on the Great Lakes.

“This is a bit of a second career for me,” he explains. “I took the advice of my dad and got a business degree and worked for a bit before getting the chance to try out the marine program at Georgian. I ended up loving it.”

Although Taylor relished the sense of adventure that came from working on the vessels, he always had the ultimate goal of working on shore. That opportunity came a bit earlier than he expected when he was asked to work in the office for McKeil Marine Limited, a long-established marine transportation and project service provider offering tug and barge services through the Great Lakes and into Eastern Canada and the Arctic. Taylor had applied to McKeil Marine during the winter months, when his regular work was laid up due to weather.

“The individual who hired me ended up with an opportunity elsewhere, so after about five months I was identified as a potential candidate to replace him,” states

Taylor. “I have now been here at McKeil for close to three years.”

Guiding mariners for over 100 years.

According to Taylor, McKeil Marine does employ multi-nationals. But it is required by law to employ only Canadian nationals on all of its Canadian flagged vessels.

Being in the office, Taylor doesn’t technically need his Canadian marine license.

But regardless, he is glad that he has it and will continue to update it, as required, every five years.

“I certainly benefitted from my education at Georgian College,” adds Taylor, whose company continues to work in partnership with the institute. “I was just up there in the middle of last November to present my company to the first-year cadets. We also work with Canadian institutions through their co-op programs. McKeil had about six students come through the Georgian College co-op program last year.”

A license by any other name For students like Arpit Baweja, gaining entry into the Canadian tugboat industry can be a very long and arduous one. Many individuals recognize this, and seeing the difficulties, set their sights elsewhere.

The chances of Transport Canada amending the requirement of Canadian citizenship or permanent residency as a necessity of attaining a Canadian CoC are very small and would require changes to the actual Canadian Shipping Act. And, in fact, according to MacNeil, although there is a shortage of seafarers in Canada, there are sufficient Canadian officers to work on Canadian ships or

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B.C. Tugboat

11

tugboats. Finding officers with relevant experience, however, is

In an effort to broaden the number of foreign students accepted

a constant struggle for ship owners. The demand, he adds, is

into Canadian marine institutions, some Canadian institutions are

from foreigners who would like to obtain a Canadian CoC.

researching the possibility of partnering with foreign countries.

“Licensing of foreigners with a Canadian CoC would not af-

“In this scenario, for example, countries like Nigeria would send

fect Canadian jobs,” states MacNeil. “It would enable those in-

their students to Canada for the educational and training compo-

dividuals who don’t have access to domestic marine programs to obtain a Canadian license, allowing them to work in those countries that do not have the citizenship or permanent residency restriction.”

MacNeil goes on to cite the example of Great Britain, which accepts and issues STWC licenses to foreign students.

“In Great Britain, for example,” he says, “foreign students are accepted into their marine programs and are issued a British STCW license by the British maritime authorities, which enables them to work on ships flying flags from countries that do not have this residency restriction. There is a distinct difference between a Canadian STCW CoC and a STCW marine license from another country. A Canadian CoC is valid internationally, enabling holders to work for foreign flags, as well as Canadian flag ships. A non-Canadian STCW CoC, on the other hand, enables an individual to work on ships around the world – but not on Canadian flag vessels.”

nents, and upon successful completion, the graduates of the program would be issued a CoC from Nigeria instead of Canada,” explains MacNeil.

Such a scenario would enhance Canada’s capability of helping foreign students – and Canadian institutions – without affecting the rules that govern Canadian CoCs. They would also take advantage of available placements in Canadian institutions.

According to MacNeil, for example, the GLIMTRC alone typically has about 24 marine students in each of its marine navigation and engineering programs.

“We’ve got two or three foreign students enrolled here,” he states.

“But we could handle 20 to 30 more if we didn’t have the CoC restriction that discourages foreign students from studying in Canada.”

The seas of change For now, however, Canada remains one of the few countries in the world to place significant restrictions on the issuing of a Canadian CoC. Foreign students looking to attain an equivalent Canadian

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“Sailing is my first choice,” concludes Baweja. “But if I can’t work on a Canadian ship, I will be happy to work in a Canadian shipping office.” R

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Hybrid propulsion –

The new main stream!

By John Eldridge, hybrid team leader It has been five years since Foss Maritime’s Carolyn Dorothy became the world’s first hybrid tugboat. When that project started in 2007, hybrid technology was something that was only on the radar of a very few innovative and forward-thinking companies.

Aspin Kemp & Associates (AKA) and their technology partner XeroPoint Energy worked with the Foss Maritime team to develop a propulsion system that would effectively address the inefficiencies associated with a tugboat’s highly variable duty cycle.

The result was the XeroPoint Hybrid System, which was subsequently deployed in the ports of Los Angeles and Long Beach.

Independent third-party testing, on both of Foss’ hybrid vessels, confirmed that the resulting hybrid technology was a very successful means for operators to reduce both emissions and fuel consumption.

Other innovative maritime operators, such as KOTUG, have demonstrated a long-term commitment to environmental stewardship. Kotug, a leading towage operator offering its innovative services to ports and terminals on a global scale, have an active “Go Green” policy. They see sustainability and innovation as a key component of their identity and have worked these values into their business strategies. One of the most visible demonstrations of this commitment was the conversion of the RT Adriaan to become

Europe’s first hybrid tugboat in 2012. The success of that project has led KOTUG to build two additional “E-KOTUG Hybrids” for their growing fleet.

AKA continues to lead the marine industry in the development and deployment of their award-winning and environmentally friendly XeroPoint Hybrid technology. The continuous development and enhancement of the system’s features and capabilities has resulted in several significant milestones.

2013 was particularly noteworthy for the following reasons: EPA verification: In July, following rigorous testing and investigation, the United States Environmental Protection Agency (EPA) verified the XeroPoint Hybrid Tug Retrofit System as an emission-reducing technology. EPA verification of the hybrid system’s emission test results is a significant achievement for both AKA and Foss Maritime, the operators of the Carolyn Dorothy and the Campbell Foss, the first two hybrid vessels. It is further evidence that AKA is changing the way that the world thinks of marine power generation and propulsion efficiency.

Expanded patent protection: The initial XeroPoint Hybrid patent was granted in the United States in 2011. Since then, patents have been allowed in Singapore and

ART 80-32 Rotor®tug - hybrid ready.

B.C. Tugboat

13

The initial XeroPoint Hybrid patent was granted in the United States in 2011. In late 2013, Canada became the most recent jurisdiction to allow all of the claims in the patent.

Cat-Powered Marine Hybrid System.

Australia and are pending in several other

RT Adriaan, Europe’s first hybrid tugboat.

regions. In late 2013, Canada became the most recent jurisdiction to allow all of the claims in the patent.

Caterpillar joint marketing agreement: A significant development for hybrid technology in the last year was AKA’s agreement with Caterpillar Marine to work together and market Cat-Powered Marine Hybrid Systems. This collaboration ensures that clients all over the world have access to hybrid technology through the Cat Dealer Network, which will also provide lifecycle service and support.

This agreement is a giant step forward in hybrid systems being accepted as a

the development of their new “Advanced

mainstream option.

Rotor®tug” vessels. These tugs were the

RotorTug BV: This Dutch company, re-

first in the world to be specifically designed

sponsible for the development and mar-

as “hybrid ready”. In essence, design ele-

keting of the innovative Rotor®tug de-

ments that are necessary to facilitate these

sign has embraced hybrid technology in

vessels either being built as, or retrofitted

14

B.C. Tugboat | 2014

to hybrid, have been included as part of the standard package.

AKA and their industry partners remain committed to making hybrid propulsion the logical choice when designing vessels with varied duty cycles. R

Kitimat:

A marvel of nature and industry Nestled at the head of Douglas Channel in Northwestern British Columbia, the District of Kitimat enjoys both natural beauty and a strong industrial heritage.

Kitimat is located in one of the few wide, flat, coastal valleys in British Columbia, with a stunning backdrop of the rugged Coast Mountains and glacier-fed Kitimat River. Carved out of the wilderness in the 1950s, it has become a vibrant community of approximately 10,000 residents. Kitimat is a tourist attraction offering world-renowned salt- and fresh-water fishing, and sailing and power boating on the Douglas Channel. Skiing and hiking options abound, and the challenging 18-hole Hirsch Creek golf course offers an unparalleled golfing experience in a pristine wilderness setting. Safe neighbourhoods and ample recreational opportunities make Kitimat a welcoming community.

Throughout its history, Kitimat has had a diverse and varied economy primarily based on value-added manufacturing and natural resource processing. The town was initially built in the

Kitimat is located in one of the few wide, flat, coastal valleys in British Columbia, with a stunning backdrop of the rugged Coast Mountains and glacier-fed Kitimat River.

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B.C. Tugboat | 2014

early 1950s to house the employees of Alcan, an aluminum smelter, which is set to be replaced by a new facility following completion of the $3.3 billion (US) Kitimat Modernization Project near the end of 2014. Now owned by Rio Tinto Alcan, this smelter has been shipping goods globally through the Douglas Channel since 1954. The Eurocan Pulp and Paper mill opened in 1969, producing linerboard and kraft paper for more than 30 years until closing in 2010. Ocelot Industries/Methanex operated from 1982 to 2005, producing 500,000 tonnes of methane and ammonia annually. The same features that attracted Alcan, Eurocan, and Methanex to locate their operations in Kitimat are today drawing interest from numerous and varied proponents.

After nearly 60 years of heavy industry, the essential infrastructure, an experienced labour force and a comprehensive supply and service sector are in place. Northwest Community College and Kitimat Valley Institute offer industry training programs and employment skills geared to the needs of local industry. Location,

harbour, growth potential, and industrial heritage make Kitimat

As a result of this industrial activity, Kitimat’s economic develop-

one of the most promising trade and manufacturing locations in

ment office is busy fielding inquiries from various sectors. New

North America.

businesses and residents are coming to Kitimat, recognizing the

Thanks to the significant strategic advantages to attract busi-

unique opportunity and potential in the region.

nesses to locate here – including the ice-free, wide, deep-sea

Kitimat is an emerging energy hub and transportation link for

harbour, and a seamlessly integrated international transporta-

Asia-North America trade. With access to Western Canada’s

tion network – Kitimat is bursting with new activity. Billions

natural resources and proximity to key Asian markets, Kitimat is

of dollars in direct inward investments have been announced

an increasingly popular location for manufacturing, processing

and work has begun on several major projects. Kitimat LNG,

and transportation operations. Kitimat’s port is the third-largest

a 50/50 partnership between Chevron Canada and Apache

on the west coast of Canada, with all existing port facilities built,

Canada, is the most advanced of the liquefied natural gas pro-

owned, and operated by private enterprise. There is no federal

posals. Preparatory activities are ongoing and the Engineering,

port authority and no harbour dues – just steady, productive lev-

Procurement and Construction (EPC) contract for the terminal,

els of shipping. The port has vehicle clearance to 320,000 Dead

to be built on Haisla Nation reserve land at Bish Cove, was

Weight Tonnes (DWT).

recently awarded to a joint venture involving JGC Corp. and Fluor Corp.

The provincial and federal governments are dedicated to working with industry to make British Columbia’s ports the preferred

Among the other projects announced is LNG Canada, a joint

gateway for Asia-Pacific trade, the most competitive port system

venture involving Shell (40 per cent), KOGAS, Mitsubishi and

and supply chain on the West Coast of the Americas. This com-

PetroChina Company (each 20 per cent) to develop a four-train

mitment builds on Canada’s longstanding and strong cultural and

(at full build out) LNG export facility on the former Methanex site.

economic ties with Asia. In the new global economy, Canada’s

Three natural gas pipeline projects have also been announced.

Pacific Gateway is the path to the future. R

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Fuel tools:

Hedging to protect from rising costs Volatile fuel prices are a concern for any company in the trans-

The benefits of a hedging strategy should be clearly understood

portation business. Surcharges and volume pricing are common

before entering into a hedge.

lines of defence for carriers, but hedging is becoming an increasingly popular tool for companies looking to stabilize input costs in order to gain a possible competitive advantage.

Hedging is a commonly misunderstood term that covers a collection of strategies designed to offset your current risks. One way to imagine hedging is to think of it as insuring your fuel costs by making a “paper” investment in fuel. If a price spike in fuel comes, then the higher prices paid at the pump will be offset by the increase in value of the “paper” investment.

Despite the beliefs of some, hedging is not a means for compa-

Some of the benefits of a hedging strategy are: • A plan put in place to control a cost over which you otherwise have no control or influence.

• Having a process to reduce the effect fuel-price volatility will have on your business.

• A management tool used to control a cost, net revenue, and net profit into the future.

• A means of freeing you to manage the costs and events you can influence.

• A technique you can use to gain a competitive advantage.

nies to gamble on the price of fuel - in fact it is quite the opposite.

Hedging does not have to be independent of other risk manage-

A company should only engage in hedging to reduce the prob-

ment strategies. When used in tandem with surcharges, hedges

ability that it would be negatively affected by rising fuel prices.

can add an additional layer of protection for your profit margins.

ELL BRACEaW ns

me

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B.C. Tugboat | 2014

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Do you have hedging DNA? Imagine that you had a tank, which could hold one years worth of fuel. If prices dropped significantly from today’s costs, would you fill the tank?

Alternatively, carriers can take advantage of the lower fuel input costs provided by their hedging strategy to offer their shippers compelling rates. A carrier that can deliver at a constant, predictable and competitive cost will often win new business.

Fuel price movements are difficult to predict (although it seems that they are always going to go higher); however, there are seasonal patterns to energy pricing. Most readers will be familiar with the summer driving season and the painfully predictable rise in fuel prices. A company that is proactive can take advantage of the seasonality of fuel prices by entering contracts during periods of what are often seasonal lows. Seasonal patterns are absolutely not guaranteed or always accurate, but they are a useful consideration during the decision-making process.

The hedging process begins with an examination of your current fuel procurement strategy. Begin by forming a brainstorming team.

Gather your president, chief financial officer and the others most

involved. Then kick-start the session by asking these questions: • What is the effect of fuel price volatility on our company’s financial position?

• How many litres of fuel are we buying each month that are not billable toward a fuel surcharge?

• Which of our customers would be interested in removing fuelprice volatility from their transportation costs?

Generally, the larger the operation, the more sophisticated the hedging strategies that are employed. In order to take advantage of risk management strategies you must buy and sell derivatives contracts. This can be done internally via an online brokerage account or with a licensed commodities broker. Rarely does a company have the time or sophistication to monitor their hedges in-house.

The most common hedging techniques use either a futures contract or an option on a futures contract, or a combination of both – ultimately, the desired outcome is to create a strategy which locks in or limits higher fuel costs for a pre-determined period of time. It is vital that the strategy is consistent with the company’s long-term objectives, price outlook and risk tolerance.

Keeping fuels costs within a predictable range protects you from unexpected changes in the price of fuel, changes that could otherwise seriously impact your budget and profit margin. R

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19

Providing the forefront of innovation Superior-Lidgerwood-Mundy For 150 years, Superior-LidgerwoodMundy (SLM) has been at the forefront of innovation for the marine sector.

Focusing on the strict Navy and USACE standards for much of that time has given them a unique perspective to build the longest lasting and reliable products in the marketplace today. In 2010, SLM seized the opportunity to split its resources into commercial and defense divisions. SLM’s commercial division initially reviewed their history to see where their experience of designing and building heavy-duty deck machinery would fit in the commercial marketplace. Listening to customer feedback and reviewing past successes, the commercial team developed two standardized styles of equipment for the commercial field: the S-Series Winch Line, and the M-Series Deck Machinery Line.

The S-Series winch line offers heavyduty gear-driven winches ranging from 10 HP to 100+ HP. While base designs are available, they are fully customizable to the application requested, effectively eliminating the cookie-cutter approaches to winching systems. The primary industry that the S-Series has served since its launch has been barge terminal applications. Their “two winch,

their customizable approach to winch

one joystick” approach for operation

systems has rapidly made SLM and its

improves safety by allowing precise and

S-Series the brand of choice for any

accurate positioning of a barge along

winch applications.

the terminal wall. The specialized controls also significantly reduce the learn-

The M-series line of equipment in-

ing curve for training new operators.

cludes the highly successful M-2000

Combining modern technology with

Capstan Design. Unlike conventional

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B.C. Tugboat | 2014

capstans, the SLM engineering team chose cutting-edge right-angle spiralbevel speed reducers that utilize cycloidal technology providing quiet, reliable operation. The benefit of these gears is that they provide infinite lifecycles while achieving 94 per cent efficiency and 300 per cent shock load capacity.

Building off of the success of the M‐2000 Capstan, SLM recently developed their M-Series Gypsy Winch/Anchor Windlass to provide the market with a high-quality low-cost more-efficient anchor-handling winch that is readily available. Available in double or single drum models, the

Standard winch.

M-Series Gypsy Winch is a versatile product that can be adapted for nearly any situation. As with the M-2000 Capstan, the Gypsy Winch is customizable as well, providing explosion proof and 50 Htz models when required. The M-Series line of equipment provides their customers with the unbeatable combination of high performance and low cost.

Gypsy winch.

SLM recently developed new distribution channels to further the M-Series equipment expansion into the commercial field.

Contact one of your local distributors for more information regarding the M-Series line of equipment.

M-Series Capstan are available through: ACE MARINE AND RIGGING 600 Arendell Street Morehead City, NC 28557

Single-head gypsy.

(252) 726-6620 BYRNE RICE AND TURNER 1172 Camp Street New Orleans, LA 70130 (504)-525-7137 DONOVAN MARINE 6316 Humphrey’s Street Harahan, LA 70123 (504)-729-2520 M-Series Gypsy Winch/Anchor Windlass: DONOVAN MARINE 6316 Humphrey’s Street Harahan, LA 70123 (504)-729-2520 R B.C. Tugboat

21

Full forward to full reverse

By Don Lindsey, director of sales & marketing, Mill Log Marine, Burnaby, B.C. Full forward to full reverse has been the cardinal sin for all workboat skippers.

Since the dawn of log towing on the mighty Fraser River, and no matter the size of the tug or how “technologically advanced” the powertrain was at the time, one thing that every captain learned early on in his career was not to go from full-forward engagement to full-reverse engagement in an instant. Those that found themselves in the unfortunate situation of having to do so faced certain failure of the boat’s powertrain. The limitation of not having the means to suddenly slow the vessel down in an emergency situation is a significant challenge that all captains must face. What would they do if the tug was going to run aground? Or maybe out of seemingly nowhere, a barge or log boom was in the boat’s path. Or worse yet, the dreaded and sudden lurch forward of the boat, sensing the horrible, but yet familiar feeling of knowing that there is a break in the side stick and bundles of logs were now floating down the river. Having the ability to go from full forward to full reverse is a function that all skippers wished they had time and time again, especially those that have spent their careers battling the strong current of the Fraser River towing up to 115 sections of logs with assist tugs, and navigating the many swing bridges on the river. Whether there was a “break” in the boom, or the tow was successfully navigated, there is a lot of money at stake and for most, something that money cannot buy, such as a skipper’s reputation. A sudden stop and constant back and forth shifting has 22

B.C. Tugboat | 2014

always been a challenge for tug captains. Those that found their boat in an emergency situation usually held their breath as they pulled the tugs forward levers to full reverse. The unmistakable sound of the engines revving with increased RPM’s, and the clanging and groaning of the transmissions as they howled due to the massive amount of stress that was being forced upon them, is enough to cause a great deal of anxiety in even the most experienced captains.

boat captain with unsurpassed control.

Harnessing up to 2,000 horsepower can be quite a challenge for some, but for Twin Disc, it is just another day at the office with its EC300 Engine Controls and Electronic Quickshift transmissions. With this revolutionary technology, the captain can now go from full forward to full reverse in a moment’s notice and be confident in knowing that the powertrain will perform as required.

With the older mechanical transmissions, engagement time from full forward to full reverse could take several

Harnessing up to 2,000 horsepower can be quite a challenge for some, but for Twin Disc, it is just another day at the office with its EC300 Engine Controls and Electronic Quickshift transmissions.

seconds. With today’s new Twin Disc Quickshift transmissions, engagement time is almost instantaneous with full engagement within 1.5 seconds. This technology has given today’s skippers the ability to maximize the horsepower being produced by the engines and apply it at the very instant that it is needed, all while being confident in knowing that the boat’s systems will continue to perform. How is this possible? Well, Twin Disc has developed some very propri-

As with other industries, technology has emerged within the marine industry that not only gives the captain superior control of his tug, but also avoids the stress that some maneuvers would put on the older systems. No longer does the captain have to worry as he pulls the levers from full forward to full reverse in anticipation of certain failure. With the emergence of electronics, Twin Disc has created state-of-the-art electronic engine controls and transmissions that integrate with today’s electronic diesel engines to provide the

etary technology that is by far superior to anything on the market today.

In order to properly explain how this technology works, I would encourage you to call your local authorized distributor- such as Mill Log Marine, and ask for a personal visit to discuss how you can get Twin Disc’s Quickshift technology for your boat today.

Twin Disc’s mantra of “You’ve got to feel it to believe it” is really the only way that you can fully appreciate this amazing technology. R

Mill Log Group of Companies

Mill Log Marine 425-251-3434 18547 East Valley Hwy Kent, WA 98032

Mill Log Marine 604-879-6731 6741 Cariboo Rd., Unit 205 Burnaby, BC V3N 4A3

www.milllog.com

Index to advertisers Aspin Kemp & Associates................................................ 15

North Island College.......................................................... 12

Bcmea...................................................................................7

Pacific Wire Rope Ltd..........................................................6

Bracewell Marine Group................................................... 18

Redden Net & Rope/Samson Rope............................OBC

Catherwood Towing Ltd.................................................... 10

Roton Industries................................................................. 17

CMC Electronics..................................................................11

Seacom Marine Electronics............................................. 12

Cokely Wire Rope Ltd........................................................ 19

Superior Lidgerwood Mundy........................................... 21

Jastram Technologies Ltd.............................................. IFC

United Engineering............................................................ 18

Mill Log Marine................................................................... 23

Washington Chain & Supply Inc........................................5

B.C. Tugboat

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